Industrial Logistics Properties Trust

Good morning and welcome to Industrial Logistics Properties Trust's second quarter 2025 Financial Results Conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing star then zero on your telephone keypad. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your telephone keypad. 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 Matt Murphy, Manager of Investor Relations. Please go ahead.

Good morning. Joining me on today's call are ILPT's President and Chief Operating Officer, Yael Duffy, Chief Financial Officer and Treasurer, Tiffany Tsai, and Vice President, Mark Crone. In just a moment, they will provide details about our business and our performance for the second quarter of 2025, followed by a question and answer section with sell-side analysts. Please 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 ILPT's beliefs and expectations as of today, July 30, 2025, 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, which can be accessed from our website, ILPTREVE.com. Investors are cautioned not to place undue reliance upon any forward-looking statements. In addition, we will be discussing non-GAAP financial measures during this call, including A reconciliation of these non-GAAP measures to net income is available in our financial results package, which can be found on our website. I will now turn the call over to Yael.

Thank you, Matt, and good morning. Before we begin, I want to acknowledge the reports of a tsunami warning issued for Hawaii last night. Fortunately, the warning has since been lifted and early assessments suggest there was no significant flooding. We currently expect little to no impact to our tenants or properties. ILPT reported another strong quarter and made significant progress in improving its balance sheet and positioning the company for future growth. Cash basis NOI grew by .1% compared to the same period last year, and normalized FFO increased 54% year over year. We made notable progress on our strategic priorities this quarter. First, American Tire, our fourth largest tenant, emerged from bankruptcy proceedings in May without terminating or modifying any of its five leases with us and thereby securing $7.5 million in annualized revenue through 2029. Second, in June, we successfully refinanced our $1.235 billion of floating rate debt into $1.16 billion of fixed rate debt. And lastly, earlier this month, we announced a material increase of our quarterly dividend from $0.01 per share to $0.05. As of June 30, 2025, ILPT's portfolio consisted of 411 distribution and logistics properties across 39 states, totaling 60 million square feet with a weighted average lease term of 7.6 years. Our well-diversified portfolio is further highlighted by our unique Hawaii footprint consisting of 226 properties totaling 16.7 million square feet. More than 76% of our annualized revenues come from investment-grade rated tenants or from our secure Hawaii leases. Following a robust first quarter in which we executed 2.3 million square feet of leasing, second quarter activity totalled 171,000 square feet at a weighted average lease term of 4.8 years and a weighted average rental rate that were .1% higher than prior rental rates for the same space. More importantly, leasing activity -to-date is expected to increase ILPT's annualized rental revenue by approximately $3.2 million, of which one-third has yet to be realized. Mark will provide further details on our leasing activity and pipeline shortly. Turning to our goals for the second half of the year, we remain focused on evaluating opportunities to improve our balance sheet and reduce leverage. Accordingly, as part of our recent refinancing, it was important that we were able to successfully negotiate improved terms to release properties under the new loan provision. By doing so, we'll have greater flexibility as we evaluate potential asset sales to enhance liquidity and support our broader capital strategy. That being said, we continue to believe in the strength of our properties and will remain disciplined when considering future sales to ensure that we maximize value. To that end, through an unsolicited offer from an owner-user, one property was classified as held for sale at quarter end at what we believe is an attractive valuation of $50 million. A portion of the proceeds from this potential sale will be used to partially repay ILPT's $700 million fixed-rate mortgage loan, which comes due in 2032. We anticipate a close in late 2025 or early 2026 and look forward to updating you on our progress on future calls. Additionally, we are closely monitoring the capital markets to evaluate opportunities to refinance our consolidated joint venture's $1.4 billion of debt. This loan matures in March 2026 and has one remaining one-year extension option, which provides us continued flexibility as we evaluate our options. Lastly, we remain committed to driving value by executing new and renewal leasing with strong economics through the second half of the year. The growth of our leasing pipeline is a testament to ILPT's portfolio of high-quality assets and diversified tenant roster. While ongoing macroeconomic uncertainty may ultimately delay tenant decision-making or hinder leasing velocity, we have not seen any weakening demand within our portfolio. We believe ILPT remains well positioned to navigate the current market conditions and capitalize on the long-term fundamentals of our industry. I will now turn the call over to Mark.