Q1 2024 Industrial Logistics Properties Trust Earnings Call Transcript
Key Points
- Industrial Logistics Properties Trust reported a 19% year-over-year increase in normalized FFO and a 17% increase on a sequential quarter basis.
- The company executed new and renewal leases for nearly 2 million square feet, reaching a total occupancy of 99%.
- GAAP and cash leasing spreads were 38.3% and 25% respectively, indicating strong rent roll-ups over the past six quarters.
- ILPT's portfolio is anchored by tenants with strong business profiles, with 77% of revenues coming from investment-grade rated tenants or secure Hawaii land leases.
- The company has a robust pipeline with 41 deals for more than 7.5 million square feet, expected to yield an average rent roll-up of 20% on the mainland and 30% in Hawaii.
- Interest expenses increased by 3.5% year-over-year, with further slight increases expected in the upcoming quarter.
- The company noted a potential vacancy period of up to a year for a 600,000 square foot property in Indianapolis.
- There is a noted increase in competition from new industrial products coming online, particularly in the Indianapolis area.
- The cost for an interest rate cap was slightly higher than expected, at $26.2 million compared to the forecasted $25 million.
- ILPT is holding a significant amount of cash to cover future cap costs and tenant expansion needs, which could imply a cautious approach to current market conditions.
Hello, and welcome to the Industrial Logistics Properties Trust first quarter 2024 earnings conference call. (Operator Instructions) Please note this event is being recorded.
I would now like to turn the conference over to Kevin Brady, Director of Investor Relations. Please go ahead.
Thanks, Cindy, and good morning. Joining me on today's call are Yael Duffy, President and Chief Operating Officer; and Tiffany Sy, Chief Financial Officer and Treasurer. Today's call includes the presentation by management, followed by a question and answer session with analysts.
Please note that the recording and retransmission of today's conference call is prohibited. Without the prior written consent of the company. Also, please 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
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