Industrial Logistics Properties Trust

Good morning and welcome to the Industrial Logistics Properties Trust third quarter 2021 earnings conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Kevin Berry, Director of Investor Relations. Please go ahead.

Good morning, everyone, and thank you for joining us today. With me on the call are ILPT's Chief Executive Officer, John Murray, Chief Financial Officer, Rick Seidel, and Chief Operating Officer, Yael Duffy. In just a moment, they will provide details about our business and our performance for the third quarter of 2021, followed by a question and answer session with sell-side analysts. First, I would like to note that the recording and retransmission of today's conference call is prohibited without the prior written consent of the company. Also note that today's conference call contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and other securities laws. These forward-looking statements are based on ILPP's beliefs and expectations as of today, Thursday, October 28th, 2021, and actual results may differ materially from those that we project. The company undertakes no obligation to revise or publicly release the results of any revision to the forward-looking statements made in today's conference call. Additional information concerning factors that could cause those differences is contained in our filings with the Securities and Exchange Commission, or SEC, which can be accessed from our website, ILPTREIT.com, or the SEC's website. Investors are cautioned not to place undue reliance upon any forward-looking statements. In addition, we will be discussing non-GAAP numbers during this call, including normalized funds from operations, or normalized FFO, adjusted EBITDA, and cash-based net operating income, or cash basis NOI. A reconciliation of these non-GAAP figures to net income and the components to calculate cash available for distribution, or CAD, are available in our supplemental operating and financial data package, which can also be found on our website. With that, I will now turn the call over to John.

Thank you, Kevin. Good morning, everyone, and welcome to the third quarter earnings call for Industrial Logistics Properties Trust. In a moment, I will highlight ILPT's third quarter performance and recent acquisitions. Then I'll turn the call over to Yael and Rick for details on ILPT's portfolio statistics, leasing activity, and financial results. We reported third quarter results that were highlighted by solid growth and same property cash NOI, strong leasing trends, 99% portfolio occupancy, and continued expansion of ILPT's high-quality industrial logistics portfolio. Normalized FFO came in at $0.46 per share, which was stable year over year, despite the deconsolidation of our joint venture. Cash NOI growth on the same property basis increased 3.4% in the third quarter over the third quarter last year. We entered new and renewal leases and completed rent resets for approximately 818,000 square feet of industrial space that weighted average rental rates that were over 20% higher than prior rental rates in the same space. This accelerating rental rate growth reflects continued strong demand for ILPT's properties as well as ongoing market strength within the broader industrial real estate sector. Turning to acquisitions, we remain focused on acquiring high-quality properties with stable cash flows and a favorable risk-adjusted return profile. During the quarter, we closed on a portfolio of three Class A industrial buildings, totaling approximately 1.3 million square feet in the Memphis industrial market for $100 million, representing a gap cap rate of 4.7%. The buildings are 100%, leased to five tenants, and well there. Buildings are 100% leased to five tenants and well-located with excellent airport, rail, and interstate highway access. The industrial real estate sector continues to benefit from strong fundamental tailwinds, leading to intense competition for acquisitions. Our pipeline of opportunities remains active. However, we continue to maintain a disciplined approach to potential investments as cap rates continue to trend lower. With modest leverage on our balance sheet and healthy liquidity, we remain well-positioned to pursue additional opportunities that complement our portfolio and drive cash flow growth. Now I'll turn the call over to Yael to review ILPT's portfolio and leasing activity for the quarter.