Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2020 | Jul. 27, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2020 | |
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 | 65,209,564 | |
Entity Central Index Key | 0001717307 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Real estate properties: | ||
Land | $ 759,009 | $ 747,794 |
Buildings and improvements | 1,644,996 | 1,588,170 |
Total real estate properties, gross | 2,404,005 | 2,335,964 |
Accumulated depreciation | (153,979) | (131,468) |
Total real estate properties, net | 2,250,026 | 2,204,496 |
Acquired real estate leases, net | 130,153 | 138,596 |
Cash and cash equivalents | 33,256 | 28,415 |
Restricted cash | 13,703 | 6,135 |
Rents receivable, including straight line rents of $62,399 and $58,336, respectively | 67,292 | 62,782 |
Deferred leasing costs, net | 6,161 | 6,581 |
Debt issuance costs, net | 2,215 | 2,954 |
Due from related persons | 1,023 | 1,504 |
Other assets, net | 1,771 | 3,438 |
Total assets | 2,505,600 | 2,454,901 |
LIABILITIES AND EQUITY | ||
Revolving credit facility | 320,000 | 310,000 |
Mortgage notes payable, net | 1,048,226 | 1,096,608 |
Assumed real estate lease obligations, net | 16,353 | 17,508 |
Accounts payable and other liabilities | 18,002 | 16,475 |
Rents collected in advance | 7,495 | 9,442 |
Security deposits | 6,597 | 6,680 |
Due to related persons | 2,316 | 2,498 |
Total liabilities | 1,418,989 | 1,459,211 |
Commitments and contingencies | ||
Equity: | ||
Common shares of beneficial interest, $.01 par value: 100,000,000 shares authorized; 65,209,564 and 65,180,628 shares issued and outstanding, respectively | 652 | 652 |
Additional paid in capital | 1,007,223 | 999,302 |
Cumulative net income | 169,822 | 142,155 |
Cumulative common distributions | (189,440) | (146,419) |
Total equity attributable to common shareholders | 988,257 | 995,690 |
Total equity attributable to noncontrolling interest | 98,354 | 0 |
Total equity | 1,086,611 | 995,690 |
Total liabilities and equity | $ 2,505,600 | $ 2,454,901 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Straight line rents | $ 62,399 | $ 58,336 |
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) | 65,209,564 | 65,180,628 |
Common shares, shares outstanding (in shares) | 65,209,564 | 65,180,628 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
REVENUES: | ||||
Rental income | $ 65,110 | $ 60,090 | $ 129,388 | $ 106,077 |
Expenses: | ||||
Real estate taxes | 8,932 | 7,495 | 17,743 | 13,060 |
Other operating expenses | 5,041 | 4,198 | 10,222 | 7,584 |
Depreciation and amortization | 18,525 | 16,709 | 36,815 | 26,320 |
General and administrative | 4,846 | 4,856 | 9,677 | 8,656 |
Total expenses | 37,344 | 33,258 | 74,457 | 55,620 |
Interest income | 2 | 138 | 113 | 499 |
Interest expense (including net amortization of debt issuance costs, premiums and discounts of $642, $494, $1,229 and $897, respectively) | (13,205) | (13,924) | (27,724) | (21,520) |
Gain on early extinguishment of debt | 120 | 0 | 120 | 0 |
Income before income tax expense and equity in earnings of an investee | 14,683 | 13,046 | 27,440 | 29,436 |
Income tax expense | (126) | (60) | (189) | (68) |
Equity in earnings of an investee | 0 | 130 | 0 | 534 |
Net income | 14,557 | 13,116 | 27,251 | 29,902 |
Net loss attributable to noncontrolling interest | 264 | 0 | 416 | 0 |
Net income attributable to common shareholders | 14,821 | 13,116 | 27,667 | 29,902 |
Other comprehensive income: | ||||
Equity in unrealized gains of an investee | 0 | 71 | 0 | 137 |
Other comprehensive income | 0 | 71 | 0 | 137 |
Comprehensive income attributable to common shareholders | $ 14,821 | $ 13,187 | $ 27,667 | $ 30,039 |
Weighted average common shares outstanding - basic (in shares) | 65,089 | 65,039 | 65,082 | 65,035 |
Weighted average common shares outstanding - diluted (in shares) | 65,091 | 65,043 | 65,087 | 65,042 |
Net income attributable to common shareholders (in dollars per share) | $ 0.23 | $ 0.20 | $ 0.42 | $ 0.46 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Statement [Abstract] | ||||
Amortization of debt issuance costs and premium | $ 642 | $ 494 | $ 1,229 | $ 897 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands | Total | Common shares | Additional Paid-in Capital | Cumulative Net Income | Cumulative Other Comprehensive Income | Cumulative Common Distributions | Total Equity Attributable to Common Shareholders | Total Attributable to Noncontrolling Interest |
Beginning balance (in shares) at Dec. 31, 2018 | 65,074,791 | |||||||
Beginning balance at Dec. 31, 2018 | $ 1,028,273 | $ 651 | $ 998,447 | $ 89,657 | $ 0 | $ (60,482) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | 16,786 | 16,786 | ||||||
Equity in unrealized gains of an investee | 66 | 66 | ||||||
Share grants | 73 | 73 | ||||||
Distributions to common shareholders | (21,474) | (21,474) | ||||||
Ending balance (in shares) at Mar. 31, 2019 | 65,074,791 | |||||||
Ending balance at Mar. 31, 2019 | 1,023,724 | $ 651 | 998,520 | 106,443 | 66 | (81,956) | ||
Beginning balance (in shares) at Dec. 31, 2018 | 65,074,791 | |||||||
Beginning balance at Dec. 31, 2018 | 1,028,273 | $ 651 | 998,447 | 89,657 | 0 | (60,482) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | 29,902 | |||||||
Equity in unrealized gains of an investee | 137 | |||||||
Ending balance (in shares) at Jun. 30, 2019 | 65,088,189 | |||||||
Ending balance at Jun. 30, 2019 | 1,015,752 | $ 651 | 998,836 | 119,559 | 137 | (103,431) | ||
Beginning balance (in shares) at Mar. 31, 2019 | 65,074,791 | |||||||
Beginning balance at Mar. 31, 2019 | 1,023,724 | $ 651 | 998,520 | 106,443 | 66 | (81,956) | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | 13,116 | 13,116 | ||||||
Equity in unrealized gains of an investee | 71 | 71 | ||||||
Share grants (in shares) | 15,000 | |||||||
Share grants | 345 | 345 | ||||||
Share repurchases (in shares) | (1,362) | |||||||
Share repurchases | (28) | (28) | ||||||
Share forfeitures (in shares) | 240 | |||||||
Share forfeitures | (1) | (1) | ||||||
Distributions to common shareholders | (21,475) | (21,475) | ||||||
Ending balance (in shares) at Jun. 30, 2019 | 65,088,189 | |||||||
Ending balance at Jun. 30, 2019 | 1,015,752 | $ 651 | 998,836 | 119,559 | $ 137 | (103,431) | ||
Beginning balance (in shares) at Dec. 31, 2019 | 65,180,628 | |||||||
Beginning balance at Dec. 31, 2019 | 995,690 | $ 652 | 999,302 | 142,155 | (146,419) | $ 995,690 | $ 0 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | 12,694 | 12,846 | 12,846 | (152) | ||||
Share grants (in shares) | 6,000 | |||||||
Share grants | 326 | 326 | 326 | |||||
Share repurchases (in shares) | (951) | |||||||
Share repurchases | (18) | (18) | (18) | |||||
Distributions to common shareholders | (21,510) | (21,510) | (21,510) | |||||
Contributions from noncontrolling interest | 107,640 | 6,972 | 6,972 | 100,668 | ||||
Ending balance (in shares) at Mar. 31, 2020 | 65,185,677 | |||||||
Ending balance at Mar. 31, 2020 | 1,094,822 | $ 652 | 1,006,582 | 155,001 | (167,929) | 994,306 | 100,516 | |
Beginning balance (in shares) at Dec. 31, 2019 | 65,180,628 | |||||||
Beginning balance at Dec. 31, 2019 | 995,690 | $ 652 | 999,302 | 142,155 | (146,419) | 995,690 | 0 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | 27,251 | |||||||
Equity in unrealized gains of an investee | 0 | |||||||
Ending balance (in shares) at Jun. 30, 2020 | 65,209,564 | |||||||
Ending balance at Jun. 30, 2020 | 1,086,611 | $ 652 | 1,007,223 | 169,822 | (189,440) | 988,257 | 98,354 | |
Beginning balance (in shares) at Mar. 31, 2020 | 65,185,677 | |||||||
Beginning balance at Mar. 31, 2020 | 1,094,822 | $ 652 | 1,006,582 | 155,001 | (167,929) | 994,306 | 100,516 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net income (loss) | 14,557 | 14,821 | 14,821 | (264) | ||||
Equity in unrealized gains of an investee | 0 | |||||||
Share grants (in shares) | 24,500 | |||||||
Share grants | 654 | 654 | 654 | |||||
Share repurchases (in shares) | (613) | |||||||
Share repurchases | (13) | (13) | (13) | |||||
Distributions to common shareholders | (21,511) | (21,511) | (21,511) | |||||
Distributions to noncontrolling interest | (1,898) | (1,898) | ||||||
Ending balance (in shares) at Jun. 30, 2020 | 65,209,564 | |||||||
Ending balance at Jun. 30, 2020 | $ 1,086,611 | $ 652 | $ 1,007,223 | $ 169,822 | $ (189,440) | $ 988,257 | $ 98,354 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net income | $ 27,251 | $ 29,902 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation | 22,789 | 16,197 |
Net amortization of debt issuance costs, premiums and discounts | 1,229 | 897 |
Amortization of acquired real estate leases and assumed real estate lease obligations | 13,025 | 8,854 |
Amortization of deferred leasing costs | 610 | 460 |
Straight line rental income | (4,063) | (2,981) |
Gain on early extinguishment of debt | (120) | 0 |
Other non-cash expenses | 980 | 417 |
Equity in earnings of an investee | 0 | (534) |
Change in assets and liabilities: | ||
Rents receivable | (447) | 128 |
Deferred leasing costs | (273) | (261) |
Due from related persons | 481 | 564 |
Other assets | 1,380 | 1,620 |
Accounts payable and other liabilities | 2,269 | 5,077 |
Rents collected in advance | (1,947) | 2,322 |
Security deposits | (83) | 384 |
Due to related persons | (182) | 1,486 |
Net cash provided by operating activities | 62,899 | 64,532 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Real estate acquisitions and deposits | (71,628) | (852,152) |
Real estate improvements | (3,089) | (3,144) |
Distributions in excess of earnings from Affiliates Insurance Company | 287 | 0 |
Net cash used in investing activities | (74,430) | (855,296) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Proceeds from issuance of mortgage notes payable | 0 | 650,000 |
Borrowings under revolving credit facility | 180,000 | 653,000 |
Repayments of revolving credit facility | (170,000) | (458,000) |
Repayment of mortgage note payable | (48,750) | 0 |
Payment of debt issuance costs | 0 | (5,517) |
Distributions to common shareholders | (43,021) | (42,949) |
Proceeds from noncontrolling interest, net | 107,640 | 0 |
Distributions to noncontrolling interest | (1,898) | 0 |
Repurchase of common shares | (31) | (28) |
Net cash provided by financing activities | 23,940 | 796,506 |
Increase in cash, cash equivalents and restricted cash | 12,409 | 5,742 |
Cash, cash equivalents and restricted cash at beginning of period | 34,550 | 9,608 |
Cash, cash equivalents and restricted cash at end of period | 46,959 | 15,350 |
SUPPLEMENTAL DISCLOSURES: | ||
Interest paid | 26,914 | 17,663 |
Income taxes paid | 199 | 64 |
NON-CASH INVESTING ACTIVITIES: | ||
Real estate acquired by assumption of mortgage note payable | 0 | (56,980) |
Assumption of mortgage note payable | 0 | 56,980 |
SUPPLEMENTAL DISCLOSURE OF CASH, CASH EQUIVALENTS AND RESTRICTED CASH: | ||
Total cash, cash equivalents and restricted cash shown in the statements of cash flows | $ 46,959 | $ 15,350 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2020 | |
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 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, 2019 , or our 2019 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. Reclassifications have been made to the prior year’s condensed consolidated financial statements to conform to the current year’s presentation. 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. In February and March 2020, we entered into agreements related to a joint venture for 12 of our properties located in the mainland United States. We have determined that this joint venture is a variable interest entity, or VIE, as defined under the Consolidation Topic of the Financial Accounting Standards Board, or FASB, Accounting Standards Codification. We concluded that we must consolidate this VIE because we are the entity with the power to direct the activities that most significantly impact the VIE’s economic performance and we have the obligation to absorb losses of, and the right to receive benefits from, the VIE that could be significant to the VIE, and therefore are the primary beneficiary of the VIE. The assets of this VIE were $660,958 as of June 30, 2020 and consist primarily of the real estate owned by the joint venture. The liabilities of this VIE were $408,181 as of June 30, 2020 and consist primarily of mortgage debts secured by the properties owned by the joint venture. The joint venture investor's interest in this consolidated entity is reflected as noncontrolling interest in our condensed consolidated financial statements. See Note 11 for further information about this joint venture. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements In June 2016, the FASB issued Accounting Standards Update No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which requires that entities use a new forward looking “expected loss” model that generally will result in the earlier recognition of allowance for credit losses. The measurement of expected credit losses is based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. We adopted this standard which was effective as of January 1, 2020 using the modified retrospective approach. The implementation of this standard did not have a material impact in our condensed consolidated financial statements. |
Real Estate Properties
Real Estate Properties | 6 Months Ended |
Jun. 30, 2020 | |
Real Estate [Abstract] | |
Real Estate Properties | Real Estate Properties As of June 30, 2020 , we owned 301 properties with a total of approximately 43,759,000 rentable square feet, including 226 buildings, leasable land parcels and easements with a total of approximately 16,756,000 rentable square feet of primarily industrial lands located on the island of Oahu, HI, or our Hawaii Properties, and 75 properties with a total of approximately 27,003,000 rentable square feet of industrial properties located in 30 other states, or our Mainland Properties, including 12 properties with approximately 9,227,000 rentable square feet owned by a joint venture in which we own a 61% equity interest. We operate in one business segment: ownership and leasing of properties that include industrial and logistics buildings and leased industrial lands. For the three months ended June 30, 2020 and 2019, approximately 41.3% and 42.2% , respectively, of our rental income was from our Hawaii Properties. For the six months ended June 30, 2020 and 2019, approximately 41.2% and 47.9% , respectively, of our rental income was from our Hawaii Properties. In addition, a subsidiary of Amazon.com, Inc., which is a tenant at certain of our Mainland Properties, accounted for $ 10,399 , or 16.0% , and $8,700 , or 14.5% , of our rental income for the three months ended June 30, 2020 and 2019, respectively, and $20,061 , or 15.5% , and $13,565 , or 12.8% , of our rental income for the six months ended June 30, 2020 and 2019, respectively. During the six months ended June 30, 2020 , we completed the acquisition of an industrial property containing 820,384 rentable square feet for a purchase price of $71,628 , including acquisition related costs of $147 . This acquisition was accounted for as an asset acquisition. We allocated the purchase price for this acquisition based on the estimated fair value of the acquired assets as follows: Number Rentable Buildings Acquired of Square Purchase and Real Estate Date Market Area Properties Feet Price Land Improvements Leases February 2020 Phoenix, AZ 1 820,384 $ 71,628 $ 11,214 $ 54,676 $ 5,738 1 820,384 $ 71,628 $ 11,214 $ 54,676 $ 5,738 During the six months ended June 30, 2020 , we committed $ 687 for expenditures related to tenant improvements and leasing costs for leases executed during the period for approximately 363,000 square feet. Committed but unspent tenant related obligations based on existing leases as of June 30, 2020 were $561 . Certain of our industrial lands in Hawaii may require environmental remediation, especially if the use of those lands is changed; however, we do not have any present plans to change the use of those lands. As of both June 30, 2020 and December 31, 2019 , accrued environmental remediation costs of $6,940 were included in accounts payable and other liabilities in our condensed consolidated balance sheets. These accrued environmental remediation costs relate to maintenance of our properties for current uses, and, because of the indeterminable timing of the remediation, these amounts have not been discounted to present value. In general, we do not have any 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. Although 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. |
Leases
Leases | 6 Months Ended |
Jun. 30, 2020 | |
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 the leases; therefore, we have determined to evaluate our leases as lease arrangements. Our leases provide for base rent payments and in addition may 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 $11,640 and $ 9,483 for the three months ended June 30, 2020 and 2019, respectively, of which tenant reimbursements totaled $11,395 and $ 9,483 , respectively, and $23,160 and $ 17,764 for the six months ended June 30, 2020 and 2019, respectively, of which tenant reimbursements totaled $22,670 and $ 16,602 , respectively. We increased rental income to record revenue on a straight line basis by $2,096 and $2,002 for the three months ended June 30, 2020 and 2019, respectively, and $4,063 and $2,981 for the six months ended June 30, 2020 and 2019, respectively. Rents receivable include $62,399 and $58,336 of straight line rents at June 30, 2020 and December 31, 2019, respectively. Certain of our tenants have requested relief from their obligations to pay rent due to us in response to the current economic conditions resulting from the COVID-19 pandemic. As of July 27, 2020 , we granted requests for certain of our tenants to defer rent payments totaling $2,799 . These tenants will be obligated to pay, in most cases, the deferred rents in 12 equal monthly installments commencing in September 2020 . We have elected to use the FASB relief package regarding the application of lease accounting guidance to lease concessions provided as a result of the COVID-19 pandemic. The FASB relief package provides entities with the option to account for lease concessions resulting from the COVID-19 pandemic outside of the existing lease modification guidance if the resulting cash flows from the modified lease are substantially the same as the original lease. Because the deferred rents referenced above will be repaid over a 12 -month period, the cash flows from the respective leases are substantially the same as before the rent deferrals. These deferred amounts did not impact our results for the three and six months ended June 30, 2020 and as of June 30, 2020, we recognized an increase in our accounts receivable related to these deferred amounts of $2,317 . |
Indebtedness
Indebtedness | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Indebtedness | Indebtedness As of June 30, 2020, our outstanding indebtedness consisted of the following: Net Book Value Principal Balance as of of Collateral June 30, December 31, Interest At June 30, 2020 (1) 2019 (1) Rate Maturity 2020 Unsecured revolving credit facility (2) $ 320,000 $ 310,000 1.59 % Dec 2021 $ — Mortgage note payable (secured by one property in Florida) (3) 56,980 56,980 4.22 % Oct 2023 104,893 Mortgage note payable (secured by 186 properties in Hawaii) 650,000 650,000 4.31 % Feb 2029 491,937 Mortgage note payable (secured by 11 Mainland Properties) (3) 350,000 350,000 3.33 % Nov 2029 493,432 Mortgage note payable (secured by one property in Virginia) — 48,750 N/A N/A N/A 1,376,980 1,415,730 $ 1,090,262 Unamortized debt issuance costs, premiums and discounts (8,754 ) (9,122 ) $ 1,368,226 $ 1,406,608 (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) The maturity date of our revolving credit facility is December 29, 2021 and we have the option to extend the maturity date for two , six month periods through December 29, 2022. (3) The properties encumbered by these mortgages are owned by a joint venture in which we own a 61% equity interest. We have a $750,000 unsecured revolving credit facility that is available for our general business purposes, including acquisitions. The maturity date of our revolving credit facility is December 29, 2021. We may borrow, repay and reborrow funds under our revolving credit facility until maturity, and no principal repayment is due until maturity. Interest on borrowings under our revolving credit facility is calculated at floating rates based on LIBOR plus a premium that varies based on our leverage ratio. We have the option to extend the maturity date of our revolving credit facility for two , six month periods, subject to payment of extension fees and satisfaction of other conditions. We are also required to pay a commitment fee on the unused portion of our revolving credit facility. The agreement governing our revolving credit facility, or our credit agreement, also includes a feature under which the maximum borrowing availability under our revolving credit facility may be increased to up to $1,500,000 in certain circumstances. As of June 30, 2020 , interest payable on the amount outstanding under our revolving credit facility was LIBOR plus 140 basis points and our commitment fee was 25 basis points . As of June 30, 2020 and December 31, 2019 , the interest rate payable on borrowings under our revolving credit facility was 1.59% and 3.26% , respectively. The weighted average interest rate for borrowings under our revolving credit facility was 2.04% and 3.76% for the three months ended June 30, 2020 and 2019, respectively, and 2.80% and 3.77% for the six months ended June 30, 2020 and June 30, 2019, respectively. As of June 30, 2020 and July 27, 2020 , we had $320,000 outstanding under our revolving credit facility, and $ 430,000 available to borrow under our revolving credit facility. Our credit agreement provides for acceleration of payment of all amounts due thereunder upon the occurrence and continuation of certain events of default, such as a change of control of us, which includes The RMR Group LLC, or RMR LLC, ceasing to act as our business manager and property manager. Our credit agreement also contains a number of covenants, including covenants that restrict our ability to incur debts or to make distributions in certain circumstances, and generally requires us to maintain certain financial ratios. We believe we were in compliance with the terms and conditions of the covenants under our credit agreement at June 30, 2020 . In May 2020, we prepaid at par plus accrued interest a mortgage note secured by one of our properties with an outstanding principal balance of approximately $48,750 , an annual interest rate of 3.48% and a maturity date in November 2020. As a result of the prepayment of this mortgage note, we recorded a gain on early extinguishment of debt of $120 for the three and six months ended June 30, 2020 to write off unamortized debt premiums. |
Fair Value of Assets and Liabil
Fair Value of Assets and Liabilities | 6 Months Ended |
Jun. 30, 2020 | |
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, our revolving credit facility, mortgage notes payable, accounts payable, rents collected in advance, security deposits and amounts due from or to related persons. At June 30, 2020 and December 31, 2019 , 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 June 30, 2020 At December 31, 2019 Carrying Estimated Carrying Estimated Value (1) Fair Value Value (1) Fair Value Mortgage notes payable $ 1,048,226 $ 1,112,956 $ 1,096,608 $ 1,143,437 (1) Includes unamortized debt issuance costs, premiums and discounts of $8,754 and $9,122 as of June 30, 2020 and December 31, 2019 , respectively. We estimate the fair value of our mortgage notes payable using discounted cash flow analyses and currently prevailing market rates as of the measurement date (Level 3 inputs). Because Level 3 inputs are unobservable, our estimated fair value may differ materially from the actual fair value. |
Shareholders' Equity
Shareholders' Equity | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Shareholders' Equity | Shareholders’ Equity Common Share Awards: On February 21, 2020, in connection with the election of two of our Trustees we awarded to each such Trustee 3,000 of our common shares, valued at $23.54 per share, the closing price of our common shares on The Nasdaq Stock Market LLC, or Nasdaq, on that day. On May 28, 2020, in accordance with our Trustee compensation arrangements, we awarded to each of our seven Trustees 3,500 of our common shares, valued at $18.77 per share, the closing price of our common shares on Nasdaq on that day. Common Share Purchases: During the six months ended June 30, 2020, we purchased our common shares from certain former officers and employees of RMR LLC in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of our common shares, valued at the closing price of our common shares on Nasdaq on the purchase dates, as follows: Date Purchased Number of Shares Price per Share 1/9/2020 420 $ 22.01 3/13/2020 531 $ 17.75 6/30/2020 613 $ 20.55 Distributions: During the six months ended June 30, 2020, we declared and paid a regular quarterly distribution to common shareholders as follows: Record Date Payment Date Distribution Per Share Total Distribution January 27, 2020 February 20, 2020 $0.33 $21,510 April 16, 2020 May 21, 2020 $0.33 $21,511 On July 16, 2020, we declared a regular quarterly distribution of $0.33 per common share, or approximately $21,500 , to shareholders of record on July 27, 2020. We expect to pay this distribution on or about August 20, 2020. |
Weighted Average Common Shares
Weighted Average Common Shares | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Weighted Average Common Shares | Per Common Share Amounts We calculate basic earnings per common share by dividing net income 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 share awards and other potentially dilutive common shares, and the related impact on earnings, are considered when calculating diluted earnings per share. The calculation of basic and diluted earnings per share is as follows: Three Months Ended June 30, Six Months ended June 30, 2020 2019 2020 2019 Numerators: Net income attributable to common shareholders $ 14,821 $ 13,116 $ 27,667 $ 29,902 Income attributable to unvested participating securities (24 ) (8 ) (45 ) (19 ) Net income attributable to common shareholders used in calculating earnings per share $ 14,797 $ 13,108 $ 27,622 $ 29,883 Denominators: Weighted average common shares outstanding - basic 65,089 65,039 65,082 65,035 Effect of dilutive securities: unvested share awards 2 4 5 7 Weighted average common shares outstanding - diluted 65,091 65,043 65,087 65,042 Net income attributable to common shareholders per common share - basic $ 0.23 $ 0.20 $ 0.42 $ 0.46 Net income attributable to common shareholders per common share - diluted $ 0.23 $ 0.20 $ 0.42 $ 0.46 |
Business and Property Managemen
Business and Property Management Agreements with RMR LLC | 6 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
Business and Property Management Agreements with RMR LLC | Business and Property Management Agreements with RMR LLC We have no employees. The personnel and various services we require to operate our business are provided to us by RMR LLC. We have two agreements with RMR LLC 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 LLC, we recognized net business management fees of $3,277 and $6,584 for the three and six months ended June 30, 2020 , respectively, and $3,092 and $5,285 for the three and six months ended June 30, 2019, respectively. T he net business management fees we recognized for the three and six months ended June 30, 2020 include $347 and $ 476 , respectively, of management fees related to our subsidiary level management agreement with RMR LLC entered in connection with our joint venture arrangement, which arrangement is further described in Note 11. Based on our common share total return, as defined in our business management agreement, as of June 30, 2020 and 2019, no incentive fees are included in the net business management fees we recognized for the three or six months ended June 30, 2020 or 2019. The actual amount of annual incentive fees for 2020, if any, will be based on our common share total return, as defined in our business management agreement, for the period from January 12, 2018 to December 31, 2020 and will be payable in 2021. We did no t incur any incentive fee payable to RMR LLC for the year ended December 31, 2019. We include business management fees in general and administrative expenses in our condensed consolidated statements of comprehensive income. Pursuant to our property management agreement with RMR LLC, we recognized aggregate property management and construction supervision fees of $1,860 and $3,783 for the three and six months ended June 30, 2020 , respectively, and $1,922 and $3,269 for the three and six months ended June 30, 2019, respectively. These amounts are included in other operating expenses or have been capitalized, as appropriate, in our condensed consolidated financial statements. We are generally responsible for all our operating expenses, including certain expenses incurred or arranged by RMR LLC on our behalf. We are generally not responsible for payment of RMR LLC’s employment, office or administrative expenses incurred to provide management services to us, except for the employment and related expenses of RMR LLC’s employees assigned to work exclusively or partly at our properties, our share of the wages, benefits and other related costs of RMR LLC’s centralized accounting personnel, our share of RMR LLC’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 LLC. We reimbursed RMR LLC $1,217 and $2,416 for these expenses and costs for the three and six months ended June 30, 2020 , respectively, and $1,026 and $1,929 for the three and six months ended June 30, 2019, respectively. These amounts are included in other operating expenses and general and administrative expenses, as applicable, in our condensed consolidated statements of comprehensive income. See Note 10 for further information regarding our relationships, agreements and transactions with RMR LLC. |
Related Person Transactions
Related Person Transactions | 6 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Person Transactions | Related Person Transactions We have relationships and historical and continuing transactions with RMR LLC, The RMR Group Inc., or RMR Inc., and others related to them, including other companies to which RMR LLC or its subsidiaries provide management services and some of which have trustees, directors or officers who are also our Trustees or officers. RMR LLC 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., a managing director and the president and chief executive officer of RMR Inc. and an officer and employee of RMR LLC. John Murray, our other Managing Trustee and our President and Chief Executive Officer, also serves as an executive officer of RMR LLC, and each of our other officers is also an officer and employee of RMR LLC. Some of our Independent Trustees also serve as independent trustees or independent directors of other public companies to which RMR LLC or its subsidiaries provide management services. Adam Portnoy serves as chair of the boards of trustees or boards of directors of several of these public companies and as a managing director or managing trustee of these public companies. Other officers of RMR LLC, including Mr. Murray and certain of our other officers, serve as managing trustees, managing directors or officers of certain of these companies. Our Manager, RMR LLC . We have two agreements with RMR LLC to provide management services to us. See Note 9 for further information regarding our management agreements with RMR LLC. OPI. Office Properties Income Trust, or OPI, owed to us $1,023 and $1,504 as of June 30, 2020 and December 31, 2019, respectively, for rents that it collected on our behalf from certain of our tenants. A predecessor of OPI previously owned those properties and those tenants first became tenants at those properties prior to our ownership. OPI paid these amounts due to us or collected on our behalf in July 2020 and January 2020, respectively. AIC. Until its dissolution on February 13, 2020, we, ABP Trust and five other companies to which RMR LLC provides management services owned Affiliates Insurance Company, or AIC, an Indiana insurance company, in equal amounts. Certain of our Trustees and certain trustees or directors of the other AIC shareholders served on the board of directors of AIC, until its dissolution. We and the other AIC shareholders historically participated in a combined property insurance program arranged and insured or reinsured in part by AIC. The policies under that program expired on June 30, 2019, and we and the other AIC shareholders elected not to renew the AIC property insurance program; we have instead purchased standalone property insurance coverage with unrelated third party insurance providers. As of June 30, 2020 and December 31, 2019, our investment in AIC had a carrying value of $11 and $298 , respectively. These amounts are included in other assets in our condensed consolidated balance sheets. In June 2020, we received an additional liquidating distribution of approximately $287 from AIC in connection with its dissolution. We did no t recognize any income related to our investment in AIC for the three and six months ended June 30, 2020, respectively, and recognized $130 and $534 related to our investment in AIC for the three and six months ended June 30, 2019, respectively, which amounts are presented as equity in earnings of an investee in our condensed consolidated statements of comprehensive income. Our other comprehensive income included our proportionate share of unrealized gains on securities, if any, which were owned by AIC, related to our investment in AIC. For further information about these and other such relationships and certain other related person transactions, see our 2019 Annual Report. |
Noncontrolling Interest
Noncontrolling Interest | 6 Months Ended |
Jun. 30, 2020 | |
Noncontrolling Interest [Abstract] | |
Noncontrolling Interest | Noncontrolling Interest In February and March 2020, we entered into agreements related to a joint venture for 12 of our Mainland Properties with an Asian institutional investor. We contributed to the joint venture 11 of these properties in February 2020 and the remaining property in March 2020. We received from the investor $82,035 and $26,231 in February and March 2020, respectively, for a 39% equity interest in the joint venture, and we retained the remaining 61% equity interest. The joint venture assumed $406,980 of then existing mortgage debts on the properties we contributed. We incurred transaction costs of $626 in connection with the formation of this joint venture. We recognized a noncontrolling interest in our condensed consolidated balance sheets of $ 100,668 as of the completion of this transaction, which was equal to 39% of our aggregate carrying value of the total equity of the properties immediately prior to our respective contributions of the properties to the joint venture. The difference between the net proceeds received from this transaction and the noncontrolling interest recognized, which was $ 6,972 , has been reflected as an increase in additional paid in capital in our condensed consolidated balance sheets. The portion of the joint venture's net loss not attributable to us, or $264 and $416 for the three and six months ended June 30, 2020, respectively, is reported as noncontrolling interest in our condensed consolidated statements of comprehensive income. During the three and six months ended June 30, 2020, the joint venture made aggregate cash distributions of $ 1,898 to the other joint venture investor, which are reflected as a decrease in total equity attributable to noncontrolling interest in our condensed consolidated balance sheets. As of June 30, 2020, the joint venture held real estate assets with an aggregate net book value of $660,958 , including restricted cash of $13,703 , and had liabilities of $408,181 . |
Recent Accounting Pronounceme_2
Recent Accounting Pronouncements (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Standards Update and Change in Accounting Principle [Abstract] | |
Organization and basis of presentation | The accompanying condensed consolidated financial statements of Industrial Logistics Properties Trust and its consolidated subsidiaries, or 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, 2019 , or our 2019 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. Reclassifications have been made to the prior year’s condensed consolidated financial statements to conform to the current year’s presentation. |
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. |
Recent accounting pronouncements | In June 2016, the FASB issued Accounting Standards Update No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments , which requires that entities use a new forward looking “expected loss” model that generally will result in the earlier recognition of allowance for credit losses. The measurement of expected credit losses is based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. We adopted this standard which was effective as of January 1, 2020 using the modified retrospective approach. The implementation of this standard did not have a material impact in our condensed consolidated financial statements. |
Fair value of assets and liabilities | We estimate the fair value of our mortgage notes payable using discounted cash flow analyses and currently prevailing market rates as of the measurement date (Level 3 inputs). Because Level 3 inputs are unobservable, our estimated fair value may differ materially from the actual fair value. |
Real Estate Properties (Tables)
Real Estate Properties (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Real Estate [Abstract] | |
Schedule of real estate properties | We allocated the purchase price for this acquisition based on the estimated fair value of the acquired assets as follows: Number Rentable Buildings Acquired of Square Purchase and Real Estate Date Market Area Properties Feet Price Land Improvements Leases February 2020 Phoenix, AZ 1 820,384 $ 71,628 $ 11,214 $ 54,676 $ 5,738 1 820,384 $ 71,628 $ 11,214 $ 54,676 $ 5,738 |
Indebtedness (Tables)
Indebtedness (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of outstanding indebtedness | As of June 30, 2020, our outstanding indebtedness consisted of the following: Net Book Value Principal Balance as of of Collateral June 30, December 31, Interest At June 30, 2020 (1) 2019 (1) Rate Maturity 2020 Unsecured revolving credit facility (2) $ 320,000 $ 310,000 1.59 % Dec 2021 $ — Mortgage note payable (secured by one property in Florida) (3) 56,980 56,980 4.22 % Oct 2023 104,893 Mortgage note payable (secured by 186 properties in Hawaii) 650,000 650,000 4.31 % Feb 2029 491,937 Mortgage note payable (secured by 11 Mainland Properties) (3) 350,000 350,000 3.33 % Nov 2029 493,432 Mortgage note payable (secured by one property in Virginia) — 48,750 N/A N/A N/A 1,376,980 1,415,730 $ 1,090,262 Unamortized debt issuance costs, premiums and discounts (8,754 ) (9,122 ) $ 1,368,226 $ 1,406,608 (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) The maturity date of our revolving credit facility is December 29, 2021 and we have the option to extend the maturity date for two , six month periods through December 29, 2022. (3) The properties encumbered by these mortgages are owned by a joint venture in which we own a 61% equity interest. |
Fair Value of Assets and Liab_2
Fair Value of Assets and Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of carrying value and the estimated fair market value of mortgage notes payable | At June 30, 2020 and December 31, 2019 , 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 June 30, 2020 At December 31, 2019 Carrying Estimated Carrying Estimated Value (1) Fair Value Value (1) Fair Value Mortgage notes payable $ 1,048,226 $ 1,112,956 $ 1,096,608 $ 1,143,437 (1) Includes unamortized debt issuance costs, premiums and discounts of $8,754 and $9,122 as of June 30, 2020 and December 31, 2019 , respectively. |
Shareholders' Equity (Tables)
Shareholders' Equity (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Schedule of share repurchases | During the six months ended June 30, 2020, we purchased our common shares from certain former officers and employees of RMR LLC in satisfaction of tax withholding and payment obligations in connection with the vesting of awards of our common shares, valued at the closing price of our common shares on Nasdaq on the purchase dates, as follows: Date Purchased Number of Shares Price per Share 1/9/2020 420 $ 22.01 3/13/2020 531 $ 17.75 6/30/2020 613 $ 20.55 |
Schedule of distributions declared and paid | During the six months ended June 30, 2020, we declared and paid a regular quarterly distribution to common shareholders as follows: Record Date Payment Date Distribution Per Share Total Distribution January 27, 2020 February 20, 2020 $0.33 $21,510 April 16, 2020 May 21, 2020 $0.33 $21,511 |
Weighted Average Common Shares
Weighted Average Common Shares (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of weighted average number of shares | We calculate basic earnings per common share by dividing net income 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 share awards and other potentially dilutive common shares, and the related impact on earnings, are considered when calculating diluted earnings per share. The calculation of basic and diluted earnings per share is as follows: Three Months Ended June 30, Six Months ended June 30, 2020 2019 2020 2019 Numerators: Net income attributable to common shareholders $ 14,821 $ 13,116 $ 27,667 $ 29,902 Income attributable to unvested participating securities (24 ) (8 ) (45 ) (19 ) Net income attributable to common shareholders used in calculating earnings per share $ 14,797 $ 13,108 $ 27,622 $ 29,883 Denominators: Weighted average common shares outstanding - basic 65,089 65,039 65,082 65,035 Effect of dilutive securities: unvested share awards 2 4 5 7 Weighted average common shares outstanding - diluted 65,091 65,043 65,087 65,042 Net income attributable to common shareholders per common share - basic $ 0.23 $ 0.20 $ 0.42 $ 0.46 Net income attributable to common shareholders per common share - diluted $ 0.23 $ 0.20 $ 0.42 $ 0.46 |
Basis of Presentation - Narrati
Basis of Presentation - Narrative (Details) $ in Thousands | Jun. 30, 2020USD ($)property | Dec. 31, 2019USD ($) |
Variable Interest Entity [Line Items] | ||
Value of VIE assets, net | $ | $ 2,505,600 | $ 2,454,901 |
Twelve Mainland Properties | ||
Variable Interest Entity [Line Items] | ||
Number of properties contributed | property | 12 |
Real Estate Properties - Narrat
Real Estate Properties - Narrative (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||
Jun. 30, 2020USD ($)ft²statepropertybuilding | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)ft²statepropertysegmentbuilding | Jun. 30, 2019USD ($) | Feb. 29, 2020property | Dec. 31, 2019USD ($) | |
Real Estate Properties [Line Items] | ||||||
Number of properties owned | property | 301 | 301 | ||||
Net rentable area | ft² | 43,759,000 | 43,759,000 | ||||
Number of business segments | segment | 1 | |||||
Rental income | $ | $ 65,110 | $ 60,090 | $ 129,388 | $ 106,077 | ||
Commitments related to tenant improvements and leasing costs | $ | $ 687 | |||||
Net rentable area | ft² | 363,000 | 363,000 | ||||
Committed bus unspent tenant related obligations | $ | $ 561 | $ 561 | ||||
Accrued environmental remediation costs | $ | 6,940 | 6,940 | $ 6,940 | |||
Amazon Inc Subsidiaries | ||||||
Real Estate Properties [Line Items] | ||||||
Rental income | $ | $ 10,399 | $ 8,700 | $ 20,061 | $ 13,565 | ||
Sales Revenue, Net | Customer Concentration Risk | Amazon Inc Subsidiaries | ||||||
Real Estate Properties [Line Items] | ||||||
Percentage of revenues | 16.00% | 14.50% | 15.50% | 12.80% | ||
Hawaii | ||||||
Real Estate Properties [Line Items] | ||||||
Net rentable area | ft² | 16,756,000 | 16,756,000 | ||||
Number of buildings, leasable land parcels easements | building | 226 | 226 | ||||
Hawaii | Sales Revenue, Net | Geographic Concentration Risk | ||||||
Real Estate Properties [Line Items] | ||||||
Percentage of revenues | 41.30% | 42.20% | 41.20% | 47.90% | ||
Other States | ||||||
Real Estate Properties [Line Items] | ||||||
Number of properties owned | property | 75 | 75 | ||||
Net rentable area | ft² | 27,003,000 | 27,003,000 | ||||
Number of states where real estate is located | state | 30 | 30 | ||||
Indianapolis and Cincinnati | ||||||
Real Estate Properties [Line Items] | ||||||
Net rentable area | ft² | 820,384 | 820,384 | ||||
Acquisition related costs | $ | $ 147 | |||||
Office and Industrial Properties | ||||||
Real Estate Properties [Line Items] | ||||||
Net rentable area | ft² | 820,384 | 820,384 | ||||
Payments to acquire property, plant, and equipment | $ | $ 71,628 | |||||
Twelve Mainland Properties | ||||||
Real Estate Properties [Line Items] | ||||||
Net rentable area | ft² | 9,227,000 | 9,227,000 | ||||
Number of properties contributed | property | 12 | 12 | 11 | |||
Ownership interest | 61.00% | 61.00% | 61.00% |
Real Estate Properties - Schedu
Real Estate Properties - Schedule of Real Estate Properties (Details) $ in Thousands | 1 Months Ended | 6 Months Ended | |
Feb. 29, 2020USD ($)ft²property | Jun. 30, 2020USD ($)ft²property | Dec. 31, 2019USD ($) | |
Real Estate [Line Items] | |||
Rentable Square Feet | ft² | 43,759,000 | ||
Land | $ 759,009 | $ 747,794 | |
Buildings and Improvements | 1,644,996 | 1,588,170 | |
Acquired Real Estate Leases | $ 130,153 | $ 138,596 | |
Office and Industrial Properties | |||
Real Estate [Line Items] | |||
Number of properties acquired | property | 1 | ||
Rentable Square Feet | ft² | 820,384 | ||
Purchase Price | $ 71,628 | ||
Land | 11,214 | ||
Buildings and Improvements | 54,676 | ||
Goodyear, AZ | Office and Industrial Properties | |||
Real Estate [Line Items] | |||
Number of properties acquired | property | 1 | ||
Rentable Square Feet | ft² | 820,384 | ||
Purchase Price | $ 71,628 | ||
Land | 11,214 | ||
Buildings and Improvements | 54,676 | ||
Acquired Real Estate Leases | Office and Industrial Properties | |||
Real Estate [Line Items] | |||
Acquired Real Estate Leases | $ 5,738 | ||
Acquired Real Estate Leases | Goodyear, AZ | Office and Industrial Properties | |||
Real Estate [Line Items] | |||
Acquired Real Estate Leases | $ 5,738 |
Leases - Narrative (Details)
Leases - Narrative (Details) | Jul. 27, 2020USD ($)payment | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Dec. 31, 2019USD ($) |
Lessor, Lease, Description [Line Items] | ||||||
Certain variable payments | $ 11,640,000 | $ 9,483,000 | $ 23,160,000 | $ 17,764,000 | ||
Tenant reimbursements | 11,395,000 | 9,483,000 | 22,670,000 | 16,602,000 | ||
Straight line rental income | 2,096,000 | $ 2,002,000 | 4,063,000 | $ 2,981,000 | ||
Straight line rents | $ 62,399,000 | 62,399,000 | $ 58,336,000 | |||
Increase to accounts receivable from deferred payments | $ 2,317,000 | |||||
Subsequent Event | ||||||
Lessor, Lease, Description [Line Items] | ||||||
Amount of rent assistance provided | $ 2,799,000 | |||||
Number of monthly installment payments | payment | 12 | |||||
Deferred rent assistance repayment term | 12 months |
Indebtedness - Summary of Outst
Indebtedness - Summary of Outstanding Indebtedness (Details) $ in Thousands | 1 Months Ended | 6 Months Ended | |
May 31, 2020USD ($)property | Jun. 30, 2020USD ($)propertyoption | Dec. 31, 2019USD ($) | |
Debt Instrument [Line Items] | |||
Principal Balance | $ 1,376,980 | $ 1,415,730 | |
Unamortized debt issuance costs, premiums and discounts | (8,754) | (9,122) | |
Carrying value | 1,368,226 | 1,406,608 | |
Net Book Value of Collateral | 1,090,262 | ||
Revolving credit facility | |||
Debt Instrument [Line Items] | |||
Principal Balance | $ 320,000 | 310,000 | |
Interest rate (as a percent) | 1.59% | ||
Net Book Value of Collateral | $ 0 | ||
Number of options to extend maturity date | option | 2 | ||
Period of extension of maturity date | 6 months | ||
Mortgage note payable | Mortgage note payable (secured by one property in Florida) | |||
Debt Instrument [Line Items] | |||
Principal Balance | $ 56,980 | 56,980 | |
Interest rate (as a percent) | 4.22% | ||
Net Book Value of Collateral | $ 104,893 | ||
Mortgage note payable | Mortgage note payable (secured by 186 properties in Hawaii) | |||
Debt Instrument [Line Items] | |||
Principal Balance | $ 650,000 | 650,000 | |
Interest rate (as a percent) | 4.31% | ||
Net Book Value of Collateral | $ 491,937 | ||
Mortgage note payable | Mortgage note payable (secured by 11 Mainland Properties) | |||
Debt Instrument [Line Items] | |||
Principal Balance | $ 350,000 | 350,000 | |
Interest rate (as a percent) | 3.33% | ||
Net Book Value of Collateral | $ 493,432 | ||
Mortgage note payable | Mortgage note payable (secured by one property in Virginia) | |||
Debt Instrument [Line Items] | |||
Number of properties used as collateral | property | 1 | ||
Principal Balance | $ 48,750 | $ 0 | $ 48,750 |
Virginia | |||
Debt Instrument [Line Items] | |||
Number of properties used as collateral | property | 1 | ||
Florida | |||
Debt Instrument [Line Items] | |||
Number of properties used as collateral | property | 1 | ||
Hawaii | |||
Debt Instrument [Line Items] | |||
Number of properties used as collateral | property | 186 | ||
Mainland Properties | |||
Debt Instrument [Line Items] | |||
Number of properties used as collateral | property | 11 | ||
Eleven Mainland Properties | |||
Debt Instrument [Line Items] | |||
Ownership interest | 61.00% |
Indebtedness - Narrative (Detai
Indebtedness - Narrative (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||
May 31, 2020USD ($)property | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)option | Jun. 30, 2019USD ($) | Jul. 27, 2020USD ($) | Dec. 31, 2019USD ($) | |
Debt Instrument [Line Items] | |||||||
Revolving credit facility | $ 320,000,000 | $ 320,000,000 | $ 310,000,000 | ||||
Long-term Debt, Gross | 1,376,980,000 | 1,376,980,000 | 1,415,730,000 | ||||
Gain on early extinguishment of debt | 120,000 | $ 0 | 120,000 | $ 0 | |||
Revolving credit facility | |||||||
Debt Instrument [Line Items] | |||||||
Maximum borrowing capacity of revolving credit facility and term loan | 750,000,000 | $ 750,000,000 | |||||
Number of options to extend maturity date | option | 2 | ||||||
Period of extension of maturity date | 6 months | ||||||
Option to increase maximum borrowing capacity | $ 1,500,000,000 | $ 1,500,000,000 | |||||
Commitment fee percentage | 0.25% | ||||||
Interest rate at the end of the period (as a percent) | 1.59% | 3.26% | 1.59% | 3.26% | |||
Weighted average interest rate (as a percent) | 2.04% | 3.76% | 2.80% | 3.77% | |||
Revolving credit facility | $ 320,000,000 | $ 320,000,000 | |||||
Remaining borrowing capacity | 430,000,000 | 430,000,000 | |||||
Long-term Debt, Gross | 320,000,000 | 320,000,000 | 310,000,000 | ||||
Mortgage note payable | Mortgage note payable (secured by one property in Virginia) | |||||||
Debt Instrument [Line Items] | |||||||
Number of properties used as collateral | property | 1 | ||||||
Long-term Debt, Gross | $ 48,750,000 | $ 0 | $ 0 | $ 48,750,000 | |||
Debt Instrument, Interest Rate, Stated Percentage | 3.48% | ||||||
London Interbank Offered Rate (LIBOR) | Revolving credit facility | |||||||
Debt Instrument [Line Items] | |||||||
Basis spread on variable rate | 1.40% | ||||||
Subsequent Event | Revolving credit facility | |||||||
Debt Instrument [Line Items] | |||||||
Revolving credit facility | $ 320,000 | ||||||
Remaining borrowing capacity | $ 430,000 |
Fair Value of Assets and Liab_3
Fair Value of Assets and Liabilities (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Fair Value of Financial Instruments | ||
Mortgage notes payable | $ 1,048,226 | $ 1,096,608 |
Carrying Value | ||
Fair Value of Financial Instruments | ||
Mortgage notes payable | 1,048,226 | 1,096,608 |
Estimated Fair Value | ||
Fair Value of Financial Instruments | ||
Mortgage notes payable | 1,112,956 | 1,143,437 |
Mortgage note payable | ||
Fair Value of Financial Instruments | ||
Unamortized premium | $ 8,754 | $ 9,122 |
Shareholders' Equity (Details)
Shareholders' Equity (Details) $ / shares in Units, $ in Thousands | Jul. 16, 2020USD ($)$ / shares | Jun. 30, 2020$ / sharesshares | May 28, 2020employee$ / sharesshares | May 21, 2020USD ($)$ / shares | Mar. 13, 2020$ / sharesshares | Feb. 21, 2020employee$ / sharesshares | Feb. 20, 2020USD ($)$ / shares | Jan. 09, 2020$ / sharesshares | Jun. 30, 2020USD ($)$ / shares | Mar. 31, 2020USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) |
Shareholders' Equity | ||||||||||||
Dividends paid (in dollars per share) | $ 0.33 | $ 0.33 | ||||||||||
Dividends paid | $ | $ 21,511 | $ 21,510 | $ 21,511 | $ 21,510 | $ 21,475 | $ 21,474 | ||||||
Common shares | ||||||||||||
Shareholders' Equity | ||||||||||||
Number of Shares (in shares) | shares | 613 | 531 | 420 | |||||||||
Price per Share (in dollars per share) | $ 20.55 | $ 17.75 | $ 22.01 | $ 20.55 | ||||||||
Trustees | ||||||||||||
Shareholders' Equity | ||||||||||||
Number of officers elected | employee | 2 | |||||||||||
Number of officers | employee | 7 | |||||||||||
Trustees | Common shares | ||||||||||||
Shareholders' Equity | ||||||||||||
Common shares granted (in shares) | shares | 3,000 | |||||||||||
Per share value of common shares granted (in dollars per share) | $ 18.77 | $ 23.54 | ||||||||||
Shares granted in period (in shares) | shares | 3,500 | |||||||||||
Subsequent Event | ||||||||||||
Shareholders' Equity | ||||||||||||
Dividends paid (in dollars per share) | $ 0.33 | |||||||||||
Dividends paid | $ | $ 21,500 |
Weighted Average Common Share_2
Weighted Average Common Shares (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Numerators: | ||||
Net income attributable to common shareholders | $ 14,821 | $ 13,116 | $ 27,667 | $ 29,902 |
Income attributable to unvested participating securities | (24) | (8) | (45) | (19) |
Net income attributable to common shareholders used in calculating earnings per share | $ 14,797 | $ 13,108 | $ 27,622 | $ 29,883 |
Denominators: | ||||
Weighted average common shares for basic earnings per share (in shares) | 65,089 | 65,039 | 65,082 | 65,035 |
Effect of dilutive securities: unvested share awards (in shares) | 2 | 4 | 5 | 7 |
Weighted average common shares for diluted earnings per share (in shares) | 65,091 | 65,043 | 65,087 | 65,042 |
Net income attributable to common shareholders per common share - basic | $ 0.23 | $ 0.20 | $ 0.42 | $ 0.46 |
Net income attributable to common shareholders per common share - diluted | $ 0.23 | $ 0.20 | $ 0.42 | $ 0.46 |
Business and Property Managem_2
Business and Property Management Agreements with RMR LLC (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2020USD ($)employeeagreement | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)employeeagreement | Jun. 30, 2019USD ($) | Dec. 31, 2019USD ($) | |
Related Party Transaction [Line Items] | |||||
Number of employees | employee | 0 | 0 | |||
Business management fees | $ 347,000 | $ 476,000 | |||
Incentive fee expense | $ 0 | ||||
Reit Management And Research L L C | |||||
Related Party Transaction [Line Items] | |||||
Number of management service agreements | agreement | 2 | 2 | |||
Business management fees | $ 3,277,000 | $ 3,092,000 | $ 6,584,000 | $ 5,285,000 | |
Construction supervision fees | 1,860,000 | 1,922,000 | 3,783,000 | 3,269,000 | |
Related party reimbursement expense | $ 1,217,000 | $ 1,026,000 | $ 2,416,000 | $ 1,929,000 |
Related Person Transactions - N
Related Person Transactions - Narrative (Details) | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020USD ($)agreement | Jun. 30, 2020USD ($)agreement | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)agreement | Jun. 30, 2019USD ($) | Dec. 31, 2019USD ($) | |
Related Party Transaction [Line Items] | ||||||
Due from related persons | $ 1,023,000 | $ 1,023,000 | $ 1,023,000 | $ 1,504,000 | ||
Distributions in excess of earnings from Affiliates Insurance Company | 287,000 | $ 0 | ||||
Income in AIC investment | 0 | $ 130,000 | 0 | 534,000 | ||
AIC | ||||||
Related Party Transaction [Line Items] | ||||||
Investments in AIC | 11,000 | 11,000 | 11,000 | 298,000 | ||
Distributions in excess of earnings from Affiliates Insurance Company | 287,000 | |||||
Income in AIC investment | $ 130,000 | 0 | $ 534,000 | |||
Select Income REIT | ||||||
Related Party Transaction [Line Items] | ||||||
Due from related persons | $ 1,023,000 | $ 1,023,000 | $ 1,023,000 | $ 1,504,000 | ||
Reit Management And Research L L C | ||||||
Related Party Transaction [Line Items] | ||||||
Number of management service agreements | agreement | 2 | 2 | 2 |
Noncontrolling Interest (Detail
Noncontrolling Interest (Details) | 1 Months Ended | 2 Months Ended | 3 Months Ended | 6 Months Ended | |||||
Mar. 31, 2020USD ($) | Feb. 29, 2020USD ($)property | Mar. 31, 2020USD ($) | Jun. 30, 2020USD ($)property | Mar. 31, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)property | Jun. 30, 2019USD ($) | Dec. 31, 2019USD ($) | |
Noncontrolling Interest [Line Items] | |||||||||
Contributions from noncontrolling interest | $ 107,640,000 | ||||||||
Net income (loss) attributable to noncontrolling interest | $ 264,000 | $ 0 | $ 416,000 | $ 0 | |||||
Cash distributions from joint ventures | 1,898,000 | 107,640,000 | $ 0 | ||||||
Value of VIE assets, net | $ 2,505,600,000 | $ 2,505,600,000 | $ 2,454,901,000 | ||||||
Twelve Mainland Properties | |||||||||
Noncontrolling Interest [Line Items] | |||||||||
Number of properties contributed | property | 11 | 12 | 12 | ||||||
Noncontrolling interest | $ 26,231,000 | $ 82,035,000 | |||||||
Noncontrolling interest, ownership percentage by noncontrolling owners | 39.00% | ||||||||
Ownership interest | 61.00% | 61.00% | 61.00% | ||||||
Transactions costs | $ 626,000 | ||||||||
Noncontrolling Interest in Joint Ventures | $ 100,668,000 | $ 100,668,000 | |||||||
Twelve Mainland Properties | Mortgage note payable | |||||||||
Noncontrolling Interest [Line Items] | |||||||||
Outstanding mortgage debt | 406,980,000 | 406,980,000 | |||||||
Variable Interest Entity | Twelve Mainland Properties | |||||||||
Noncontrolling Interest [Line Items] | |||||||||
Value of VIE assets, net | 660,958,000 | 660,958,000 | |||||||
Restricted cash | 13,703,000 | 13,703,000 | |||||||
Non-recourse liabilities | $ 408,181,000 | 408,181,000 | |||||||
Additional Paid-in Capital | |||||||||
Noncontrolling Interest [Line Items] | |||||||||
Contributions from noncontrolling interest | $ 6,972,000 | ||||||||
Additional Paid-in Capital | Twelve Mainland Properties | |||||||||
Noncontrolling Interest [Line Items] | |||||||||
Contributions from noncontrolling interest | $ 6,972,000 |