NEWTON, Mass.--(BUSINESS WIRE)--Industrial Logistics Properties Trust (Nasdaq: ILPT) today announced that it has closed on a $350 million mortgage loan that matures in November 2029. The loan is secured by a portfolio of 11 of ILPT’s mainland properties located in eight states containing approximately eight million square feet. ILPT’s cost basis in this portfolio of properties is $556.8 million, and as of September 30, 2019, the weighted average remaining lease term (by annualized rental revenue) for these properties was 7.1 years and occupancy was 100%.
The 10-year loan is non-amortizing and carries a fixed interest rate of 3.33% per annum, which is lower than the current borrowing cost on ILPT’s unsecured revolving credit facility. ILPT expects to use the proceeds of this loan to reduce outstanding borrowings under its $750 million unsecured revolving credit facility.
“We are pleased to take advantage of the current low interest rate environment to replace a portion of our floating rate debt with attractive long term, interest only, fixed rate debt,” said John Murray, ILPT’s President and Chief Executive Officer. “This financing increases our fixed rate debt to 79% of total debt, extends the average maturity of our debt to over 7.5 years, and provides positive leverage on this high quality mainland industrial portfolio.”
The loan was provided by Morgan Stanley, UBS Investment Bank and Bank of America. Tremont Realty Advisors 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. (Nasdaq: 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 the loan had a weighted average remaining lease term of 7.1 years and occupancy of 100% as of September 30, 2019. An implication of this statement is that ILPT will be able to maintain a similar level of average remaining lease term and occupancy in the future. However, the current terms of the leases will decline as time passes and any renewals or new leases upon expiration of those leases may not result in the portfolio having a similar weighted average lease term as it did as of September 30, 2019, and the weighted average lease term could decline. In addition, ILPT’s ability to maintain 100% occupancy at these properties is subject to risks and ILPT may realize reduced occupancy at these properties in the future.
- This press release states that ILPT expects to use the proceeds from the loan to reduce outstanding borrowings under ILPT’s $750 million unsecured revolving credit facility. However, ILPT may use the proceeds for other purposes.
- Mr. Murray’s statement that the loan will replace a portion of ILPT’s floating rate debt (i.e., borrowings under ILPT’s $750 million unsecured revolving credit facility) may imply that ILPT will limit its floating rate debt in the future. However, ILPT expects to borrow amounts under its $750 million unsecured revolving credit facility in the future, which will obligate ILPT to pay interest on the borrowings at a variable rate, which may be higher than the fixed rate of the loan. Further, ILPT may incur additional debt in the future and ILPT may be obligated to pay interest on any such borrowings at variable rates.
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.