Industrial Logistics Properties Trust Launches $680M JV with Asian Investor

NEWTON, MA—Locally-based Industrial Logistics Properties Trust reports it has entered a $680 million joint venture whereby it will sell 39% interest in a 12-property portfolio totaling 9.2 million square feet in nine states.

The unnamed Asian investor will contribute approximately $108 million for a 39% equity interest in the joint venture and ILPT will own the remaining 61% equity interest in the joint venture.

ILPT closed the joint venture with 11 properties and the investor will initially contribute approximately $82 million. The joint venture also assumed $350 million of existing secured debt on the portfolio. A 12th property and $57 million of additional associated debt is expected to be contributed later, subject to certain conditions, ILPGT states.

The Newton-based firm expects to use the proceeds from this transaction to reduce outstanding borrowings under its $750-million unsecured revolving credit facility.

As of Sept. 30, 2019, the 12 properties in the Midwest, Northeast and Southeast were 100% leased for a weighted average remaining lease term (by annualized rental income) of 7.6 years.

The 11 properties now part of the joint venture are: 5500 SE Delaware Avenue, Ankeny, IA (leased to The Toro Company); 945 Monument Drive, Lebanon, IN (leased to Subaru of America); 2150 Stanley Road, Plainfield, IN (leased to Siemens Corporation and MD Logistics); 2801 Airwest Boulevard, Plainfield, IN (leased to Whirlpool Corporation); 4237-4255 Anson Boulevard, Whitestown, IN (leased to Amazon.com); 20 Logistics Boulevard, Walton, KY (leased to Cummins, Inc.); 16101 Queens Court, Upper Marlboro, MD (leased to La-Z-Boy); 5148 North Hanley Road, St. Louis, MO (leased to SKF); 1800 Union Airpark Boulevard, Union, OH (leased to Proctor & Gamble: 5 Logistics Drive, Carlisle, PA (leased to Polaris Industries, Inc.) and 5000 Commerce Way, Petersburg, VA (leased to Amazon.com).

The 12th property that will be part of the joint venture at a later date will be 3350 Laurel Ridge Ave. in Ruskin, FL that is leased to Amazon.com.

“Completion of this joint venture transaction underscores the value of our mainland portfolio, reduces leverage and establishes a private capital partner for possible future growth at ILPT,” said John Murray, president and CEO of ILPT.

He added that a majority of the joint venture properties were acquired by ILPT in 2019 as part of two portfolio acquisitions. Less than a year later the JV equity interest in the 12-property portfolio is being sold at a 5.5% cap rate based on full year 2019 actual cash NOI.

Industrial Logistics Properties Trust released today its fourth quarter and full-year 2029 financial results.

Net income for the quarter ended Dec. 31, 2019 was $11.7 million, or $0.18 per share, compared to $18.3 million, for the same quarter last year. Normalized funds from operations, or Normalized FFO, for the quarter ended Dec. 31, 2019 were $29.7 million, or $0.46 per share, compared to $25.9 million for the same quarter last year.

Net income for the year ended Dec. 31, 2019 was $52.5 million, or $0.81 per share, compared to $74.4 million, for the same period last year. Normalized FFO for the year ended Dec. 31, 2019 were $114.4 million, or $1.76 per share, compared to $103.0 million for the same period last year.