Industrial Logistics Properties Trust Announces First Quarter 2021 Results
Industrial Logistics Properties Trust (Nasdaq: ILPT) reported strong financial results for Q1 2021, with net income of $19.3 million ($0.30 per diluted share), a 50% increase year-over-year. Normalized FFO rose to $30.7 million ($0.47 per diluted share), up 2.2%. The company successfully executed leases covering 620,000 square feet, achieving rental rates 16% higher than previous rates, with occupancy at 98.6%. ILPT has substantial liquidity of over $550 million and announced the acquisition of a Class A building in Columbus, expected to close in Q2 2021. The dividend remains well covered.
- Net income increased by 50% to $19.3 million.
- Normalized FFO rose by 2.2% to $30.7 million.
- Leased 620,000 square feet with rental rates 16% higher than before.
- Occupancy rate reached 98.6%.
- Over $550 million in liquidity available for portfolio growth.
- Acquisition of a 358,000 square foot property in Columbus, fully leased.
- Net operating income decreased by 16.5% to $41.9 million.
- Same property cash basis NOI slightly declined by 0.9%.
Industrial Logistics Properties Trust (Nasdaq: ILPT) today announced financial results for the quarter ended March 31, 2021.
John Murray, President and Chief Executive Officer of ILPT, made the following statement:
“This quarter’s results reflect growth in Normalized FFO and strong leasing activity. We entered new and renewal leases for approximately 620,000 square feet, reflecting progress on our efforts to renew leases expiring next year in Hawaii. This leasing activity resulted in weighted average rental rates that were
We have a pipeline of attractive investment opportunities, capacity to fund portfolio growth with more than
Earlier this month we announced our regular quarterly distribution to shareholders. Our dividend remains well covered.”
Quarterly Results:
-
Net income attributable to common shareholders of
$19.3 million , or$0.30 per diluted share. -
Normalized funds from operations, or Normalized FFO, attributable to common shareholders of
$30.7 million , or$0.47 per diluted share.
(dollars in thousands, except per share data) |
Three Months Ended |
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Financial |
March 31, 2021 |
March 31, 2020 |
Change |
Net income attributable to common shareholders per share |
|
|
|
Normalized FFO attributable to common shareholders per share |
|
|
|
Net operating income (NOI) |
|
|
(16.5)% |
Same property cash basis NOI |
|
|
(0.9)% |
Reconciliations of net income attributable to common shareholders determined in accordance with U.S. generally accepted accounting principles, or GAAP, to funds from operations, or FFO, attributable to common shareholders and Normalized FFO attributable to common shareholders for the quarters ended March 31, 2021 and 2020 appear later in this press release. Reconciliations of net income determined in accordance with GAAP to net operating income, or NOI, and Cash Basis NOI, and a reconciliation of NOI to same property NOI and calculation of same property Cash Basis NOI for the quarters ended March 31, 2021 and 2020, also appear later in this press release.
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Three Months Ended |
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Occupancy |
March 31, 2021 |
December 31, 2020 |
March 31, 2020 |
Occupancy |
|
|
|
Same property occupancy |
|
|
|
|
Three Months Ended |
Leasing Activity |
March 31, 2021 |
Leasing activity for new and renewal leases and rent resets (square feet) |
620,000 |
Weighted average lease term for new and renewal leases (by square feet) |
11.7 years |
Weighted average rental rate change versus prior rental rate for same space (by square feet) |
|
Commitments for leasing capital and concessions for new and renewal leases (per square foot per year) |
|
Acquisition Activity:
-
In March 2021, ILPT entered into an agreement to acquire a newly built net leased property located near the Rickenbacker intermodal terminal and airport in Columbus, Ohio containing approximately 358,000 rentable square feet for a purchase price of
$31.5 million , excluding acquisition related costs. This property is100% leased to a single tenant with a remaining lease term of approximately seven years. This acquisition is expected to close during the second quarter of 2021.
Liquidity:
-
As of March 31, 2021, ILPT had approximately
$26.1 million of cash and cash equivalents, and$533 million available to borrow under its revolving credit facility.
Conference Call:
On Tuesday, April 27, 2021 at 10:00 a.m. Eastern Time, John Murray, Chief Executive Officer, Richard Siedel, Chief Financial Officer, and Yael Duffy, Chief Operating Officer, will host a conference call to discuss ILPT’s first quarter 2021 financial results.
The conference call telephone number is (877) 418-4826. Participants calling from outside the United States and Canada should dial (412) 902-6758. No pass code is necessary to access the call from either number. Participants should dial in about 15 minutes prior to the scheduled start of the call. A replay of the conference call will be available through 11:59 p.m. on Tuesday, May 4, 2021. To access the replay, dial (412) 317-0088. The replay pass code is 10153753.
A live audio webcast of the conference call will also be available in a listen-only mode on ILPT’s website, at www.ilptreit.com. Participants wanting to access the webcast should visit ILPT’s website about five minutes before the call. The archived webcast will be available for replay on ILPT’s website following the call for about one week. The transcription, recording and retransmission in any way of ILPT’s first quarter conference call are strictly prohibited without the prior written consent of ILPT.
Supplemental Data:
A copy of ILPT’s First Quarter 2021 Supplemental Operating and Financial Data is available for download at ILPT’s website, which is located at www.ilptreit.com. ILPT’s website is not incorporated as part of this press release.
ILPT is a real estate investment trust, or REIT, that owns and leases industrial and logistics properties throughout the United States. ILPT is managed by the majority owned operating subsidiary of The RMR Group Inc. (Nasdaq: RMR), an alternative asset management company that is headquartered in Newton, MA.
Non-GAAP Financial Measures:
ILPT presents certain “non-GAAP financial measures” within the meaning of applicable rules of the Securities and Exchange Commission, or SEC, including FFO attributable to common shareholders, Normalized FFO attributable to common shareholders, NOI and 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 or net income attributable to common shareholders as indicators of ILPT’s operating performance or as measures of ILPT’s liquidity. These measures should be considered in conjunction with net income and net income attributable to common shareholders as presented in ILPT’s condensed consolidated statements of income. ILPT considers these non-GAAP measures to be appropriate supplemental measures of operating performance for a REIT, along with net income and net income 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 ILPT’s 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.
Please see the pages attached hereto for a more detailed statement of ILPT’s operating results and financial condition and for an explanation of ILPT’s calculation of NOI, Cash Basis NOI, same property NOI, same property Cash Basis NOI, FFO attributable to common shareholders and Normalized FFO attributable to common shareholders and a reconciliation of those amounts to amounts determined in accordance with GAAP.
Industrial Logistics Properties Trust
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Three Months Ended March 31, |
||||||
|
|
2021 |
|
2020 |
||||
|
|
|
|
|
||||
Rental income |
|
$ |
54,217 |
|
|
$ |
64,278 |
|
|
|
|
|
|
||||
Expenses: |
|
|
|
|
||||
Real estate taxes |
|
7,247 |
|
|
8,811 |
|
||
Other operating expenses |
|
4,976 |
|
|
5,181 |
|
||
Depreciation and amortization |
|
12,678 |
|
|
18,290 |
|
||
General and administrative |
|
3,756 |
|
|
4,831 |
|
||
Total expenses |
|
28,657 |
|
|
37,113 |
|
||
|
|
|
|
|
||||
Interest income |
|
— |
|
|
111 |
|
||
Interest expense (including net amortization of debt issuance costs, premiums and discounts of |
|
(8,741 |
) |
|
(14,519 |
) |
||
Income before income tax expense and equity in earnings of investees |
|
16,819 |
|
|
12,757 |
|
||
Income tax expense |
|
(63 |
) |
|
(63 |
) |
||
Equity in earnings of investees |
|
2,581 |
|
|
— |
|
||
Net income |
|
19,337 |
|
|
12,694 |
|
||
Net loss attributable to noncontrolling interest |
|
— |
|
|
152 |
|
||
Net income attributable to common shareholders |
|
$ |
19,337 |
|
|
$ |
12,846 |
|
|
|
|
|
|
||||
Weighted average common shares outstanding - basic |
|
65,139 |
|
|
65,075 |
|
||
Weighted average common shares outstanding - diluted |
|
65,177 |
|
|
65,082 |
|
||
|
|
|
|
|
||||
Per common share data (basic and diluted): |
|
|
|
|
||||
Net income attributable to common shareholders |
|
$ |
0.30 |
|
|
$ |
0.20 |
|
Industrial Logistics Properties Trust
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Three Months Ended March 31, |
||||||
|
|
2021 |
|
2020 |
||||
|
|
|
|
|
||||
Net income attributable to common shareholders |
|
$ |
19,337 |
|
|
$ |
12,846 |
|
Depreciation and amortization |
|
12,678 |
|
|
18,290 |
|
||
Equity in earnings of unconsolidated joint venture |
|
(2,581 |
) |
|
— |
|
||
Share of FFO from unconsolidated joint venture |
|
1,236 |
|
|
— |
|
||
FFO adjustments attributable to noncontrolling interest |
|
— |
|
|
(977 |
) |
||
FFO attributable to common shareholders and Normalized FFO attributable to common shareholders |
|
30,670 |
|
|
30,159 |
|
||
|
|
|
|
|
||||
Weighted average common shares outstanding - basic |
|
65,139 |
|
|
65,075 |
|
||
Weighted average common shares outstanding - diluted |
|
65,177 |
|
|
65,082 |
|
||
|
|
|
|
|
||||
Per common share data (basic and diluted): |
|
|
|
|
||||
FFO attributable to common shareholders and Normalized FFO attributable to common shareholders |
|
$ |
0.47 |
|
|
$ |
0.46 |
|
Distributions declared |
|
$ |
0.33 |
|
|
$ |
0.33 |
|
(1) |
|
ILPT calculates FFO attributable to common shareholders and Normalized FFO attributable to common shareholders as shown above. FFO attributable to common shareholders is calculated on the basis defined by The National Association of Real Estate Investment Trusts, which is net income attributable to common shareholders, calculated in accordance with GAAP, excluding any gain or loss on sale of real estate and equity in earnings of an unconsolidated joint venture, plus real estate depreciation and amortization of consolidated properties and its 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 above including similar adjustments for ILPT’s 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 ILPT’s 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 ILPT’s debt, the availability to ILPT of debt and equity capital, ILPT’s distribution rate as a percentage of the trading price of its 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 ILPT’s 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. |
Industrial Logistics Properties Trust
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Three Months Ended March 31, |
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|
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2021 |
|
2020 |
||||
Calculation of NOI and Cash Basis NOI: |
|
|
|
|
||||
Rental income |
|
$ |
54,217 |
|
|
$ |
64,278 |
|
Real estate taxes |
|
(7,247 |
) |
|
(8,811 |
) |
||
Other operating expenses |
|
(4,976 |
) |
|
(5,181 |
) |
||
NOI |
|
41,994 |
|
|
50,286 |
|
||
Non-cash straight line rent adjustments included in rental income |
|
(2,044 |
) |
|
(1,967 |
) |
||
Lease value amortization included in rental income |
|
(180 |
) |
|
(200 |
) |
||
Lease termination fees included in rental income |
|
(507 |
) |
|
— |
|
||
Cash Basis NOI |
|
$ |
39,263 |
|
|
$ |
48,119 |
|
|
|
|
|
|
||||
Reconciliation of Net Income to NOI and Cash Basis NOI: |
|
|
|
|
||||
Net income |
|
$ |
19,337 |
|
|
$ |
12,694 |
|
Equity in earnings of investees |
|
(2,581 |
) |
|
— |
|
||
Income tax expense |
|
63 |
|
|
63 |
|
||
Income before income tax expense and equity in earnings of investees |
|
16,819 |
|
|
12,757 |
|
||
Interest expense |
|
8,741 |
|
|
14,519 |
|
||
Interest income |
|
— |
|
|
(111 |
) |
||
General and administrative |
|
3,756 |
|
|
4,831 |
|
||
Depreciation and amortization |
|
12,678 |
|
|
18,290 |
|
||
NOI |
41,994 |
|
|
50,286 |
|
|||
Non-cash straight line rent adjustments included in rental income |
|
(2,044 |
) |
|
(1,967 |
) |
||
Lease value amortization included in rental income |
|
(180 |
) |
|
(200 |
) |
||
Lease termination fees included in rental income |
|
(507 |
) |
|
— |
|
||
Cash Basis NOI |
|
$ |
39,263 |
|
|
$ |
48,119 |
|
(1) |
|
The calculations of NOI and Cash Basis NOI exclude certain components of net income 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 above. 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 ILPT 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. Other real estate companies and REITs may calculate NOI and Cash Basis NOI differently than ILPT does. |
Industrial Logistics Properties Trust
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Three Months Ended March 31, |
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|
2021 |
|
2020 |
|||||
Reconciliation of NOI to Same Property NOI (2): |
|
|
|
|
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FAQ
What were the financial results of ILPT for Q1 2021?
How much did ILPT's occupancy rate increase?
What is the rental rate change achieved by ILPT in Q1 2021?
What is the acquisition announced by ILPT in March 2021?
What is ILPT's dividend status?
