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Industrial Logistics Properties Trust Announces $650 Million Mortgage Financing on Select Portfolio of Hawaii Properties

NEWTON, Mass.--(BUSINESS WIRE)--

Properties Financed at Less Than 50% Loan-to-Value and 4.31% Interest Rate

Properties Used to Secure the Loan Had a Net Book Value of Less Than $500 Million at Year End 2018

Industrial Logistics Properties Trust (ILPT) today announced that it has closed on a $650 million mortgage loan that matures in February 2029. The loan is secured by a select portfolio of industrial assets located on the island of Oahu in Hawaii, comprising 186 properties (178 land parcels and 8 buildings) containing in aggregate approximately 9.6 million square feet. This loan also applies to approximately 57% of ILPT’s total owned square footage in Hawaii. As of December 31, 2018, the current weighted average remaining lease term for these properties was more than 14 years and the occupancy of the properties was nearly 100%.

The 10-year loan is non-amortizing and carries a fixed interest rate of 4.31% per annum. ILPT expects to use the proceeds of this loan to repay all outstanding borrowings under ILPT’s $750 million unsecured revolving credit facility and for general business purposes, including potential future acquisitions.

“We are pleased to term out our floating rate debt with attractive long term fixed rate debt and to demonstrate the tremendous value of these unique Hawaiian assets,” said John Murray, ILPT’s President and Chief Executive Officer. “While the underlying assets had a net book value of less than $500 million at year end 2018, this loan provides us with $650 million of capital to fund value-enhancing external growth opportunities. We believe that with a loan-to-value (LTV) ratio of less than 50%, this transaction further demonstrates the value of ILPT’s high quality properties, which are leased to a diversified tenant base and produce stable cash flows from long term leases.”

The loan was provided by Morgan Stanley, Citi, UBS and J.P. Morgan. Eastdil Secured acted as ILPT’s advisor and Sullivan & Worcester LLP provided legal counsel to ILPT in this transaction.

Industrial Logistics Properties Trust is a real estate investment trust, or REIT, that owns and leases industrial and logistics properties throughout the United States. ILPT is managed by the operating subsidiary of The RMR Group Inc. (RMR), an alternative asset management company that is headquartered in Newton, MA.

WARNING REGARDING FORWARD LOOKING STATEMENTS

THIS PRESS RELEASE 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 UPON ILPT'S PRESENT BELIEFS AND EXPECTATIONS, BUT THESE STATEMENTS AND THE IMPLICATIONS OF THESE STATEMENTS ARE NOT GUARANTEED TO OCCUR AND MAY NOT OCCUR FOR VARIOUS REASONS, SOME OF WHICH ARE BEYOND ILPT'S CONTROL. FOR EXAMPLE:

  • THIS PRESS RELEASE STATES THAT THE PORTFOLIO USED TO SECURE THIS LOAN HAS A WEIGHTED AVERAGE REMAINING LEASE TERM OF MORE THAN 14 YEARS AND OCCUPANCY OF NEARLY 100%. AN IMPLICATION OF THIS STATEMENT IS THAT ILPT WILL BE ABLE TO MAINTAIN THE SAME LEVEL OF AVERAGE REMAINING LEASE TERM AND OCCUPANCY IN THE FUTURE. THERE IS NO GUARANTEE THAT ILPT WILL BE ABLE TO DO SO.
  • THIS PRESS RELEASE STATES THAT THE HAWAII PROPERTIES SECURING THE LOAN ILPT CLOSED TODAY REPRESENTS APPROXIMATELY 57% OF ILPT’S TOTAL OWNED SQUARE FOOTAGE IN HAWAII. THIS MAY IMPLY THAT ILPT’S OTHER HAWAII PROPERTIES MAY BE A SOURCE FOR SIMILAR OR BETTER FUTURE FINANCINGS FOR ILPT. HOWEVER, ILPT MAY NOT ELECT TO SEEK ADDITIONAL FINANCINGS SECURED BY THOSE OR OTHER OF ITS PROPERTIES. FURTHER, IF ILPT DID SEEK TO USE THOSE PROPERTIES TO OBTAIN FUTURE FINANCINGS, IT MAY NOT BE ABLE TO OBTAIN SIMILAR TERMS AS THE TERMS OF THE LOAN CLOSED TODAY.
  • THIS PRESS RELEASE STATES THAT THE PROCEEDS FROM THE LOAN THAT ILPT CLOSED TODAY WILL BE USED TO REPAY OUTSTANDING BORROWINGS UNDER ILPT’S CREDIT FACILITY AND ILPT’S PRESIDENT AND CHIEF EXECUTIVE OFFICER NOTES THAT THE FIXED RATE LOAN THAT CLOSED TODAY WILL REPLACE FLOATING RATE DEBT (I.E., BORROWINGS UNDER ILPT’S CREDIT FACILITY). HOWEVER, ILPT EXPECTS TO BORROW AMOUNTS UNDER ITS CREDIT FACILITY IN THE FUTURE, WHICH WILL OBLIGATE ILPT TO PAY INTEREST ON THE BORROWINGS AT A VARIABLE RATE. FURTHER, ILPT MAY INCUR ADDITIONAL DEBT IN THE FUTURE AND ILPT MAY BE OBLIGATED TO PAY INTEREST ON ANY SUCH BORROWINGS AT VARIABLE RATES.
  • THIS PRESS RELEASE STATES THAT ILPT MAY USE A PORTION OF THIS MORTGAGE LOAN FOR GENERAL BUSINESS PURPOSES, INCLUDING POTENTIAL FUTURE ACQUISITIONS. HOWEVER, ILPT’S ABILITY TO ACQUIRE PROPERTIES DEPENDS IN PART ON MARKET CONDITIONS, WHICH OFTEN CHANGE AND ARE BEYOND ILPT’S CONTROL. ILPT MAY NOT BE SUCCESSFUL MAKING ACQUISITIONS IN THE FUTURE.
  • ILPT’S PRESIDENT AND CHIEF EXECUTIVE OFFICER STATES ILPT’S BELIEF THAT ITS HAWAII PROPERTIES THAT SECURE THE LOAN THAT CLOSED TODAY HAVE TREMENDOUS VALUE. THIS MAY IMPLY THAT THOSE PROPERTIES AND OTHER ILPT PROPERTIES WILL MAINTAIN AND INCREASE IN VALUE. HOWEVER, ILPT’S PROPERTIES COULD DECLINE IN VALUE IF ILPT DOES NOT SUCCESSFULLY OPERATE THEM, IF IT INCURS LIABILITIES WITH RESPECT TO THE PROPERTIES, IF REGULATORY REQUIREMENTS THAT MAY APPLY TO THE PROPERTIES RESTRICT THEIR VALUE OR DUE TO MARKET CONDITIONS OR OTHER REASONS.

THE INFORMATION CONTAINED IN ILPT’S FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION, OR THE SEC, INCLUDING UNDER THE CAPTION “RISK FACTORS” IN ILPT’S PERIODIC REPORTS OR INCORPORATED THEREIN, COULD CAUSE ILPT’S ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE STATED OR IMPLIED IN THIS PRESS RELEASE.

ILPT’S FILINGS WITH THE SEC ARE AVAILABLE AT THE SEC’S WEBSITE AT WWW.SEC.GOV.

FOR THESE REASONS, AMONG OTHERS, INVESTORS ARE CAUTIONED NOT TO PLACE UNDUE RELIANCE UPON ANY FORWARD LOOKING STATEMENTS IN THIS PRESS RELEASE.

EXCEPT AS REQUIRED BY LAW, ILPT DOES NOT INTEND TO UPDATE OR CHANGE ANY FORWARD LOOKING STATEMENTS AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.

A Maryland Real Estate Investment Trust with transferable shares of beneficial interest listed on the Nasdaq.
No shareholder, Trustee or officer is personally liable for any act or obligation of the Trust.

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