ILPT - Earnings call transcript Q1 2024 | Industrial Logistics Properties Trust

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Operator

Good day, and welcome to the Industrial Logistics Properties Trust First Quarter 2024 Earnings Conference Call. [Operator Instructions] This event is being recorded. I would now like to turn the conference over to Kevin Brady, Director of Investor Relations. Please go ahead.

Kevin Brady

Thanks, Cindy. morning. Good

meaning retransmission conference that prohibited call management publicly Litigation and statements of forward-looking today's we revision from call Tiffany Duffy, and based prior Sy, consent differ includes that presentation contains release Act on Operating The and other and expectations Treasurer. Today's X, are the statements please company. Also, those results the Reform securities today's beliefs question-and-answer are of a or conference and a May as Officer; Chief ILPT's forward-looking may analysts. by Private Please statements project. the XXXX, to recording the note Securities today's of of results made note any written the call of undertakes and of conference me call. no President is without Yael in today, that within laws. the Chief call session Joining today's XXXX company materially with the obligation These revise on actual by followed Financial and Officer to forward-looking

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

our our cash which adjusted NOI. non-GAAP and is during be including basis in earnings normalized call, of EBITDAre these financial net funds or this on we or can net addition, figures numbers In operations normalized be presentation, income reconciliation found discussing FFO, non-GAAP will operating available website. A from to cash basis income

over turn the to that, Yael. With will call I

Yael Duffy

by to saw XXXX. will operating high-quality continued good the an trends for and we today's compared provide total with FFO basis sequential cash year started portfolio, period nearly and call, leasing renewal square grew reached NOI X.X% review on Tiffany Notably, rental Supported with update occupancy throughout XX% executed call the basis, quarter normalized a and you, Kevin, and performance, higher new morning. over increased our XX% same by on consistent results. We million the X year. to On for to leases the Thank feet financial ILPT's XX%. and income, and respectively. We then turn demand same-property and I last year-over-year our

years XXX of As land of feet distribution properties weighted a of remaining March has lease and approximately XX XX.X portfolio average square consisted million XXXX, states, total includes business in tenants cash of warehouse rental from tenants XX, square secure by industrial come feet, strong from Hawaii. ILPT's half X properties portfolio ILPT's term anchored with XX which totaling and profiles million annualized of nearly in leases. land Hawaii XX for tenants of XX% our our our revenues and stable flows. ILPT's investment-grade rated revenues and or account top

XXXX. activity During which this lease is the in was Included organic XX% of quarter, showcase roll-up generate into which XX% spreads square Carolina rent These and growth roll-up years. X $X.X in this leasing will feet realized and stability. Renewals be X tenant for of this increase reset these X XX% revenue, renewal annualized rents results This strongest XX.X% a retention, the annualized over and XXXX. renewal ILPT's reflects go This million for of The portfolio average last continue first weighted July activity term XX%, GAAP million that Rock XX% quarter, in continued with of of impact highlights at ability an South the Exel, subsidiary rental while drove and rent respectively, is of in of maintaining quarter. represents for assets activity the will DHL square strong results of flow in million to rents. in quarters. our a to $X.X in cash increase we entered of X GAAP XXX,XXX a at leases a XX Hill, feet resulted leasing effect new which and cash demand approximately in an and our in X-year

ahead, Looking end feet of XXXX. revenue ILPT's square million X.X roll is to by or scheduled annualized the XX.X% of

XX% are rent We Once further expect roll-ups in X.X more in portfolio. the of strength of illustrating deals mainland tracking square our currently XX% average for leases XX our on feet. yield in million these we than will the pipeline executed, and Hawaii,

Hawaii X. foot pipeline Included square became our out the April parcel available proposals in that on are multiple land to X.X million in users for

replacement While we progress calls. have update strong hope you to we not and yet our been future on a do tenant, has interest on

call the data to of regarding make our wanted Report. turn managers' publication the of Group's you I and Annual highlights aware I to Sustainability to Before report over RMR The Tiffany, insights, The long-term ESG recent goals. accomplishments commitment

ILPT's ESG practices disclosure. enhance sustainability and We our progress the strengthen to are and transparency proud of made

to an complete links as well ILPT find can ilptreit.com. Tiffany? specific the website as our on sheet You tear report at

Tiffany Sy

Thank everyone. you, Good Yael. morning,

I consolidated floating loan. JV. first In Mountain JV March, of would financing venture, highlight activities exercised its joint extend the maturity rate cover date recent its X-year like $X.X related of to Mountain quarter results, to I options first Before our billion X, to our

higher $XX X-year that of interest for a SOFR strike rate of X.XX% February JV our rate million. the slightly million, $XX.X a guidance part cap than extension, As purchased with of

of X.X% quarter and sequential each year year-over-year basis improvement increased and $XX.X $X.X increased also turning Now cash compared FFO $XX.X of increased $X.XX of quarter a million the quarter a NOI compared our and share and sequential on or on Normalized ago million same million and same GAAP basis. first XX.X% XX.X% to quarter a Adjusted and of year on The to per these basis. a year to our to slightly on expense sequential ago, the increased in ago an compared quarter benefit million X.X% second results. amortization a quarter the cash across the cap of EBITDAre $XX.X basis. to in rate increase interest our of quarter financing increase million strong received basis. million a reflects expense cap, of increased of portfolio. Interest sequential $XX.X noncash our and metrics activities X.X% including driven interest costs. by and period expense, $XX.X a cash We estimate with interest same of from the and rental quarter income rate million $XX leasing slightly the interest

balance sheet. to our Turning

the an of ago. a As was of total March period compared improvement year to same ratio XX, our basis assets net debt XXX to points XX.X%,

debt higher continued of paydown first basis XX ratio declined year-over-year points a amortizing of debt. EBITDAre and quarter The adjusted reflecting the net XX.Xx basis, coverage on our

carried XXXX. a a or rate interest through interest Including at fixed weighted no rate average ILPT our X.XX%. rate with fixed options, caps debt of currently extension until All is maturities has total debt of

representing XX, positioned the ILPT had venture. In its portfolio. That on industrial to questions. occupancy Operator, an of rates As revenue remarks. and million driven remains tenant rate from annualized demonstrated is concludes we cash of high-quality in and approximately million profile line estate. XX%, benefit $XXX please closing, of hand of XX% strong, continued of well revenue restricted our $XXX across demand March for consolidated joint our real cash as for an the portfolio rising investment-grade The the prepared open by momentum by

Operator

of Bryan Riley question comes FBR. Our B. Maher from Instructions] first [Operator

Bryan Maher

with the Tiffany, and wondering, quarter. the on And rent the pretty just me for couple this for we're your Yael roll-ups mainland, and morning. for a expectations commentary the I heard We that I impressed XX%. in us How from bit Can any color are any think, regard? more little But you you going? of give XX%, tenants? those in Hawaii a getting the negotiations were pushback are just

Yael Duffy

Sure.

continued seen So strong. we our And leasing has activity we have demand. been mentioned, as

think XX been X for the longer. for process that I transact leases and But expiring these renewals of a new even years ago. just to the and at taking ago, bit a longer lot has years are minimum were prospects, some of a some the sign it's negotiation little sometimes of them

we'll meaningful So signed roll-ups just expect shifted so still we because see markets have when they significantly the original leases. that since their do

Bryan Maher

cost know get kind know million we have for higher thoughts you is we that And that maybe a to And a $XX when cap little sit $XX million. I do might on that Tiffany, the what the But bit of as away. today, you cap than October over here expected cost was fall? lifetime in Okay. any I

Tiffany Sy

in today's expect would cap we Based information, million the $XX cost low for forward-looking the to on cap. October the

Bryan Maher

amount through I is Okay. cash. utilize on mean is decent a Or costs? of cash goal any expectation to to And any just to the you're these cap sitting there of that? harbor get

Yael Duffy

Yes.

that planning do to we're but hold for being. we're anything I the planning time cash not think --

we'll well buy mentioned, to to in expansion needs have be need you any As a caps as we position of our tenants. that address as

ourselves. for want provide just to flexibility we so And ample

Bryan Maher

on any recently where There's Okay. been have California, And that of in anything I there. couple the some Empire been don't in articles markets do there just weakness California, there's for know are but a Inland me. where some you softening demand? seeing operate you in out you last

Yael Duffy

No.

there's think product online. been new I coming some

coming just deliver. think are starting delayed to COVID, there was out that I were and I some projects of think

given associated a And competition tenants new interested think the the I relocate. we them so we short-term think do where the think be -- have I with seeing versus are been we potentially, I in business, disruption renewing market, one rates in as be specifically, are But might interest to I their costs supply, and now. to is continue and in would some this seeing blip evaluate area. But product Indianapolis guess, relocating the say

new of the seeing haven't coming projects many too We out been ground.

Operator

next of [Operator Germain question Mitch from Instructions] Citizens comes Our JMP.

Mitch Germain

percentage comes in believe, rest from there was first upside from we kind to the quarter? the when to our -- some should your the this for quarter. flow Should just that sort Or kind model we make through of this clean any in you was think on fluctuation wanted of tenants realized and is it it should I I It XQ? is some rent, year? quarter. of consider sure, Congrats recognized of of I the Hawaii XQ

Tiffany Sy

You're some noise. quarter, recognized right. of have some We the that onetime offset was in other that rent was percentage but during did

So out. they kind of other canceled each

this run currently. rate is we So feel like good a

Mitch Germain

what you've have forecasting expense. you over just to hedge through, I some recognize and couldn't hear how that in just I the specifically while XQ? I regards comments refi prepared big correct? the we it were Can that amortization what you know flows discussing purchased. your you Tiffany, you've interest with were came you, Great. about when got I expense go should got think interest to

Tiffany Sy

that's Yes, right.

able not So apologies me. to for hear being

of cash of would cap cap. also then million costs. financing deferred $XX our $XX.X includes So and cash amortization of costs both we interest to the million of receive expense, noncash amortization related And expect that that we

Mitch Germain

pipeline, Great. deal million you you're talking square your That's it referenced million. I super about when X X.X helpful. over think was feet, Yael,

there were the Home offers said you that think does multiple out So -- I Depot space. for

So think how is space? that? million should plus we -- X consider that X.X should of -- Or about that is I that one like on okay, million just it

Yael Duffy

No, no. Yes.

the X.X it the million go prospects, million So ones. ahead. once Yes, we X.X Even count less pipeline. in our only have we sorry, if multiple

Mitch Germain

No, no, no.

I'm look quarter-over-quarter, actual you of curious success actually sure rate? an think of you've while the kind track to this of kind kind provide So like, pipeline terms should about pipeline of how was kind now. finalized this in percentage your to do at being we how enough a I I'm lease? been curious of you like this for So

Yael Duffy

Yes.

a advanced stage the negotiation. we do usually about talk what's an So -- of it's good

advanced about, we in I So advanced side, on of for it XX% think, negotiation. stages closer about in And to I would have is XX% -- stages. renewal then deals, the new

Mitch Germain

That's super helpful.

Yael Duffy

it's how document is classify. a final means of Yes. we an LOI form in we're which either Yes, lease or

Mitch Germain

done onetime out be your schedule or some X a pointed see But great back out the Great. you of or And look should the expiration anything that of? known part year then for maybe I of that Depot I transparency Home anything out? that circumstance space. sort be at have or in we notes. terms looked, Is pointed towards in should guys couldn't a my even job move next quarters be the aware think next you should like there when I Maybe

Yael Duffy

Yes.

get parcel Hawaii there the about, to besides we've expect land that at that's in June. back the that about XXX,XXX one of square So is other talked end feet property Indianapolis we

we're always ins but are good. those those usually, besides pretty outs major Hawaii, and that, So pretty quickly. And released known X get There's the some in vacates. feeling

Mitch Germain

Yes.

had well. that You last one as referenced quarter

more was But So that I other was helpful. anything that's -- it think than super I than that, one.

Operator

B. Okay. from Maher the question I have next again Bryan Riley of FBR.

Bryan Maher

out leads Just on XXX,XXX that, up how Is go guys question long? following in your Indianapolis. property expectations that in that and have for currently? you Mitch's dark that market? could the Do for are square on that feet What

Yael Duffy

been have marketing a while now. So it for we

far to some would maybe assume for be nothing have excited might up vacant a enough be that's but proposals, that year. I had We about. advanced it to

Operator

This Yael concludes conference for back any closing like Duffy, I over Chief and question-and-answer to President turn session. remarks. our the would Officer, Operating to

Yael Duffy

for in Thanks interest continued ILPT. joining today us and your

Operator

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

You may now disconnect.

Industrial Logistics Properties Trust (ILPT) 1 May 242024 Q1 Earnings call transcript