ILPT - Earnings call transcript Q4 2018 | Industrial Logistics Properties Trust

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Operator

Good morning, and welcome to the Industrial Logistics Properties Trust Fourth Quarter 2018 Financial Results Conference Call. All participants will be in listen-only mode. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Olivia Snyder, Manager of Investor Relations. Please go ahead.

Olivia Snyder

morning, good and you, everyone. Thank us Thanks for joining today. ILPT's me Siedel. and Murray; the are on call President, Chief John With Financial Officer, Rick just the will and they a about In business our provide our quarter fourth details for of XXXX. performance moment,

to the then questions. call will your We open

like the that statements call to Also, company. are actual of today's today, I results the Securities beliefs or results the call today's revise retransmission company that revision expectations conference and conference forward-looking Act Wednesday, and recording materially differ note as The from of statements of meaning the would those These other First, publicly the in release based prohibited consent of made without of on any forward-looking ILPT's and Litigation statements Reform securities today's contains within may we conference is of forward-looking Private the XXXX, to note obligation prior February written XXXX to that no XX, call. project. and laws. undertakes

those website to Exchange upon our factors our Securities forward-looking the Additional information which with filings cautioned are the could and reliance in contained differences or or SEC ILPTreit.com be that accessed is website can place SEC, from undue Investors not Commission concerning any cause statements.

be our And available be over turn non-GAAP financial base package these available operating our of to will and net in calculate income on In net this call basis the data numbers to and are cash website. cash can A or to will non-GAAP also John. supplemental reconciliation components addition, including we operations income distribution for I call during or CAD discussing FFO normalized fund or normalize from the figures NOI. in now, which operating cash found

John Popeo

for enthusiastic is we this to FFO as outlook I'm welcome reported earnings fourth share. million of President you, $XX.X opportunities our to normalized or This ILPT. for per company $X.XX for ILPT. Properties fourth create our and quarter Good quarter everyone morning, morning, about first call or This my earnings Industrial value Thank Logistics the the Trust Olivia. and of call shareholders.

end square the with quarter, in Approximately annualized of in located warehouse island consisted XX Oahu portfolio properties million industrial XX% XX.X on XX.X and of primarily the revenues the of of distribution feet of million As states. ILPTs from of land came square feet Hawaii. fourth located ILPTs XXX

years Our an Mainland leased states XX.X XX of portfolio consisted XXX% of as XX eight term end. square buildings were average feet with in a million quarter lease approximately located for that

plan completed million XX.X%, and X.X a for and foot execute rents as $X.XX. quarter, the continue renewal Including was to square and of resets from XX.X% from term space. in leases per and fourth down for the renewal foot per lease approximately that leasing capital square with per lease was square new prior XX.X% fourth at last rent for prior new Rents Portfolio resets, feet. During was end unchanged our higher rent activity XX.X year. capital years year was the leases than on were Mainland total same of The we for and We business average strong the acquisitions. leasing entered approximately occupancy per quarter leasing year $X.XX. the lease quarter

and no XXXX. end annualized less total the have the expiring of X% X.X% on rents We lease of by near-term only with expiring mainland expirations than year, this

the reset. X.X mark in rent Hawaii Nearly our or XXX,XXX a addition we expire next leases to during resets of million square scheduled Moving million scheduled XXXX, have for XX% market for total to leases that roll Hawaii, as $X.X years. million $X.X is either feet five annualized leases square over rent annualized of to of of rent to feet to through

our our by to these rents encouraged expectation the be characteristics continue is due increase and of results will properties. in unique We that continue Hawaii to leasing to

discussed cap quarter, were our parcel in acquisitions, portfolio portfolio one active with GAAP rate discuss have million call. XX-year acquisitions. million square both of aggregate fourth and to and properties Ankeny minutes, Maple few of agreed an third X% a million on price Last a of of previously of large of Moving we year approximately we a Hawaii and acquire during for on of which as eight $XXX Rick discussed current financing two the Grove, the Iowa a quarter detail recently remained announced X.X%. and Minnesota feet of portfolios which at in acquired to end, week, property $XXX as earnings Since properties, one on as rate we well X.X cap land will in a purchase the mortgage cash

Indianapolis a with X.X%. into and acquisition the a average cap purchase remaining entered days. This is FedEx. by is approximately this average age average rated leased has We XXX% XXX% have seven age term lease close XX XX% weighted revenue portfolio close located tenants acquire annualized eight portfolio paid to tenants is building Procter a and nine aggregate this feet rental and of This areas of weighted grade is market a but expected rate next Approximately rental revenues properties. we years, weighted average states, has to including term building Whirlpool, height average including in from and grade Amazon, by expected a Amazon, days. cap an feet. in One of UPS agreement tenants, XX% from paid and due and X.X% a on of diligence clear still height and XX X.X X.X the remaining to Stanley and properties an This located Decker. years annualized XX of of GAAP closed years portfolio weighted weighted $XXX.X Gamble, of of clear million to investment of X.X a also to current XX portfolio tenants XX leased portfolio of is is of for Last average Cummins, is of the rate Cincinnati is in investment XX years Black of at weighted & XX Approximately in the lease XX XX week, million and next in of square price the cash feet.

our a or note I two comments, industrial $X Including think proceeds again hidden but million in Rick price land. purchase XX% portfolios, be with his the will that over acquired portfolio the the on this of effectively for demand some We Siedel funded transactions remain will a two unlocked quarter's have to I'll confident continue of by of financial loan market. January. properties of provide that nation-wide industrial to Hawaii and these these this results. of will the of $XXX Rick over over in value industrial supported high-quality was we since growth IPO logistics properties now of turn the and strength the last e-commerce details to industries our billion be call

Richard Siedel

good FFO Thanks, per $XX.X share. for fourth XXXX everyone. John, quarter the for $XX.X was of quarter million million. Adjusted the was Normalized and morning, EBITDA or $X.XX

to representing to quarter increase and $X.X million, of included with XX.X%. expenses increased the fourth across over $X.XX estate of Hawaii than totaled well quarterly dividend quarter the included of over share and lease revenues offset the as of assets prior activity X.X% activity fourth Our which which continued a million, of costs comfortable taxes properties. non-recoverable contractual by [Indiscernible] Total year resets for points million lower X.X% to the prior the $XX.X results. increased ratio go expenses tenant XX be covered real total Hawaii cash partially increase was increased year, payout rent our portfolio as General well XXXX per NOI public. increases rent substantially property renewals This reflects ago quarter, at a just and of as Same along cost. security or by primarily the year primarily related our as $X.X preparing and result the rent year-end, for acquisition basis company's administrative under our for our leasing reserves with which by

million. lease majority finished over related a outstanding million debt-to-EBITDA totaled resulting on for $XXX Mainland quarter capital revolver of our year expenditures the We will expenditures extension. and lease the we lease that improvements commissions in these Our recover recurring with to tenant leasing were $X.X capital the of term times. specifically The X.X

net a announced under financed revolving value provides year-end the the Proceeds signaling to Central than in recent footage the concerns Hawaii. fear airport the plan to sheet between portfolio because our of unsecured assets select growth is loan XX but to We are shortly of square acquired or flows since it higher days quality at level Hawaiian flexibility investor before investment million our since borrowings issuances this from about two or on million As relatively are we grade John is credit seek we John future of for this the the don't our XX, was before sales. thing all the and may mention financing not to a earlier, that believe growing more Q&A. The than seaport. cash earlier. loan-to-value greater shareholders. capital Honolulu distributed still million once us closed. portfolio versus repay but have asset was to well-covered equity ILPT and these cost low and external underappreciated fund allow XXXX company on seek last million a to outstanding increase We the this on $XXX of based and Business tremendous at growth X.X $XXX District, at square The to want investment do dividend. with containing acquisition level are of REIT partially total our XXX our we dividend owned as in shares XX-year as X.XX% stable, book rate leverage One fund leverage on an few an transaction income the run announced everyone which The situated it $X.X rating, have with billion. million comfortable briefly levels remind around fixed of it XX% well of and We all portfolio almost of accordingly facility this appraised leverage all with the transaction value to properties used agreements, we forever, Hawaii rating we We level discussed to mortgage of in and our discussed. XXXX. in the the highlights was value and peers. and value heard predictable and were a January balance In its feet $XXX will grade year-end, a people about small less XX% at about an mortgage mentioned acquisitions select more and properties the its aggregate the properties ILPT accretion we at that plan John new comfortable

elimination of public are in Operator, with at significant with line a We we're XX% multiples flows, to take and to remarks. industrial optimistic controlling our concludes peers. the begin questions. ILPT our our more ready may in the prepared increase trade shareholder related That now REIT

Operator

B [Operator first comes from with Please Riley FBR. go instructions] Our question ahead. Bryan Maher

Bryan Maher

Couple of quick morning. questions. Good

the You that properties here the do the first that we supplemental, the in properties list get When acquired the being back are ILPT know, list in the has. of the of have you quarter? might all of

John Popeo

purchase be filing the information there. that believe but we'll will would the if but agreements, I'm X-K is, to trying is I agreement. plan with to included out list file we in typically next Bryan, the think it that we with the get supplemental,

Bryan Maher

is buy? one questions what the was Because That'd do biggest I just from property sourced or that's how question brokered exactly how you you have across The of come that? investors been is I've did those be great. it second getting would

Richard Siedel

CCIT came acquisition transaction the to sourced. XX off-market property million $XXX was privately an property X It The brokers, was transaction. through

Bryan Maher

these concerns in leverage say, And point bit? time, a of you, to we couple on we quarters a How activity your have at then it that suffice material down should it transactions to been slowdown you least for modeling comes purposes? comments should digest about for as in while relates given that at next expect and this acquisition think to investor leverage the related

John Popeo

the through Yeah, we amount opportunistic, properties. we capital raised substantial Hawaii loan had debt were I on a of the think,

stages One early of attention to of came the the financing. that transactions in our

acquisitions did. as you so, planning we didn't it know, we turned out of do we weren't - to as And volume this that quickly

these quarters, properties the the we'll in one I expect others focused getting acquisition be are will acquisitions little eight close see next the closed, of it's and So, reasonable think on only the or that two. to we'll very from way month in couple of the next us seven additional for of and portfolio

be on to we're and not as So, activity. that much going as focused acquisition not on

Bryan Maher

you with look And not want guys being at split about Hawaii and then between should you looking post transactions it acquisitions the to whether these pre-these at between and or think are lastly, we to you expect split NOI Mainland future that How as when just predominantly the to and if transactions annual company continue Mainland? transact two all, revenues.

John Popeo

Bryan, I would properties a we're probably everything a look to to the it related essentially easiest and at bit fully expecting performance and we've the else before filed way say the revenue. it is integrated flip. And of

in We properties Hawaii, XX% XX% as we lot it's market, of under I were is that a will comes ground think be to it got not more buy to compared but know there we well, where it's with love a market for a would in Mainland up sale. previously we've Hawaii. strong just

So, the and really expected long-term The a are most properties trends incredibly fantastic that always we've our because excited they Mainland We've we the are just quality going we've the commerce we've structure credit Mainland, And to for of always would that thing as for e higher that increased expected again, and opportunities bunch leases. even space. added. to drive one about just were ground up our and Mainland to reason, industrial are picked though on think tenants. I acquisition great of we the rents - we've properties said come we've secure, Hawaii exposure the about of our because of other opportunities say

up around XX of after percentage goes our acquisitions XX%. So, these investment around from on to Mainland grade the

land So, investment overall of we've Hawaii grade subs credit of in the investment the rated Mainland and and when tenants. grade you lease all upgraded quality factor tenants. And tenants the rate our

Our overall changes portfolio only about or X% so.

change. in XX to XX.X from So,

credit quality which didn't is when are. So, tough Hawaii we the of you really properties how overall, factor in dilute at all, strong

are it So overall, excited to and grow. we feel really portfolio good about see

Bryan Maher

Thank you. That's all me. for

Operator

The Capital next RBC Michael from comes Markets. go Instructions] [Operator ahead. with question Please Carroll

Michael Carroll

a balance said future. on target and to bit sheet, around in with you you the you the these you about about know Can Thanks. talk here get leverage really guys the comfortable how But near delevering I levels plans these what's plan you're your long in little XX? down levels that how to back

John Popeo

these additional don't like pressure is really and special portfolios quickly. wait there itself that I appreciate. delevering. generating next will think feel would lot could years. we're the in flow that is as to the the hopeful delever year our We about probably price think Sure. the any becomes We real the we two flow, no cash thinking share we're delever a evident four But naturally meantime, value demonstrated of before or In with of cash capital portfolio three raises that until

share unlock positively over secured think have there that opportunities, there a that the portfolio, structures we doesn't there Mainland financing are Hawaii lot and the high-quality was access of we there that We value if did we equity unlocked a which through the joint could think opportunities very that. price we potential be earlier. time react may we venture in opportunities like or properties think in - So, we lot of

goes. focus our the the actively not two we're with on of but engaged where now to focusing these dividend that - closed So evaluate is year - with because, right and balance the anybody and transactions getting on

Michael Carroll

a right those are and now bring on of and balance until deploying acquisitions flow letting sheet? cash leverage that you sidelines, willing lower, to delever plan to kind little bit capital And the is that you not you additional sit any

Richard Siedel

mean acquisitions of from pass I at the us keep on say expect something I to never an always we'll we never that the if quarters for down. and that completely on couple see acquisitions least. saw eye was you'll market, shutting don't I much next think But that up too

yes, growth comfortable much investors too initial say, are that some - we've I'd fast. were with is too reactions I so, we I mean that. from this And the mean

little these I we back into a - it's wonder we think that need our can focus hold on you portfolio. transactions closed two yes, surprising So, But bit absorbed and getting now. that to if

been than comfortable So, that think doing growth asset I pretty and our so we're amount base, that. substantial more XX% It's of that's of growth.

I this So, think would if have anyone fault don't don't we us acquisitions year. additional

Michael Carroll

the or next few a you start a road, venture? down happen, you you And joint quarters point then those few pursue want, do see the if that quarters don't the at when price that the discussions what do in you react stock way does Is

John Popeo

We don't plan specific yet. a have

too we before came And type going on be, answer we that my So, wouldn't that to of it couple several to go guess down. something a quarters. a that probably If of quarters possibility think probably early a avenue, it's I an question. it's would actually But year for like fruition. get

Michael Carroll

that some assuming Hawaiian Okay. And case, that's fourth from that And expiration. the in? renewal XXXX occurred in lease come provide the I'm early you color on the lease actually an can if does the when renewal quarter. then that was

Richard Siedel

quarter, a Estate include out parcel activity The large Campbell leasing or in properties the there. this the it fairly Western did

effective Xst. I January that think was

immediately. the we'll rollup So, see

Michael Carroll

played Rick, Tire Okay. update provide And I correct? that Distributors? Is your assuming an that been on affirmed. can out, all then processes leases you American I'm think have

Richard Siedel

correct. is That

again debt assumed it's They about swap, our So, of they tenants X% the leases. of they've they equity properties They annualized bankruptcy, us. of and from filed pre-packed five a rents. were to all one lease five our larger did

out hoped worked would. way it pretty So, on And of we it. current They've feel good it kind about again, rent. we remained the

Michael Carroll

left much then on those term do leases? And how you have great. Okay,

Richard Siedel

head. there don't left was I up the believe. it's my strong of quarter, front had is rents and I and market. that off I have needed of much of amount possibly now of in still re-tenant of could Last recall But believe that There's top thought a if don't roll of turn a team me. prepped we our they're to them. property-by-property. stuff amount term left, all a it good in fair we on all I But gone I focus, less

about again, we really, good feel properties. those So really

Michael Carroll

you. great. Thank Okay,

Operator

our concludes to for the turn over and session. I would closing This like John question conference back to remarks. answer any

John Popeo

in unlocks to financing meaningful forward look our future Thank with and impact of acquisitions unique today's pleased these joining from and very quality the quarters. And We're you. Hawaii value we our assets. highlights that and for call. Thank earnings you the everyone latest

Operator

conference now is The attending concluded. you today's Thank for presentation.

disconnect. You now may

Industrial Logistics Properties Trust (ILPT) 20 Feb 192018 Q4 Earnings call transcript