Industrial Logistics Properties Trust Q1 FY2026 earnings call

Highlighted the consolidated joint venture successfully pricing $1.6 billion of fixed-rate interest-only debt at 5.71%. Reported strong earnings growth with same property cash basis NOI up over 4% year over year, normalized FFO grew over 60%, leased 862,000 square feet with 26.3% weighted average rent roll-up, renewals accounted for ~70% of activity, consolidated occupancy 94.6%, and anticipated fully leasing 535,000 square foot vacancy in Indianapolis in June 2026.

For second quarter 2026, expects interest expense of $61.5 million (including $59 million cash interest and $2.5 million non-cash amortization), adjusted EBITDA RE between 85.5 - 86.5 million, and normalized FFO between 31 - 33 cents per share. For full year 2026, guides to interest expense ~$245 million (cash interest $234.5 million, non-cash interest $10.5 million), adjusted EBITDA RE between $344 - $349 million, and normalized FFO between $1.27 - $1.34 per share. Guidance reflects consolidated joint ventures refinance and assumption of Indianapolis vacancy leased in June 2026, excluding Hawaii land parcel lease.

Q: Can you guys provide some sensitivity from the top to the bottom end of the guidance range and perspective on the Indianapolis lease and recent debt's covenant flexibility and asset sales?

A: Sensitivity related to one-time reimbursements/fees. Anticipate Indianapolis lease signed in June with minimal free rent, 24-month lockout period in new debt, and leasing of Indianapolis property allows flexibility on $1.16 billion debt for selling assets.

Q: Walk us through what the 1.1 million of one time items were in the quarter and how cash balance is utilized?

A: 650,000 of percentage rent trued up and $450,000 one-time remediation fee. Evaluating options for cash balance, considering tenants' needs and early discussions with tenants for building expansions, not seeing immediate acquisition of properties given leverage, and current quarter CapEx spending was an anomaly