Industrial Logistics Properties Trust (ILPT) closed on a $1.235 billion debt financing with a final maturity date of Oct. 9, 2027. The financing is secured by a portfolio of 104 industrial properties containing approximately 18.6 million square feet across 31 states. As of June 30, 2022, the 104 properties were 96.8% occupied with a weighted average remaining lease term of approximately 10.5 years.
Simultaneously with the closing of the debt financing, ILPT fully repaid its $1.385 billion bridge loan due in February 2023 with proceeds from the financing and excess cash. The bridge loan was used by ILPT to finance the acquisition of Monmouth Real Estate Investment Corporation earlier this year.
The $1.235 billion debt financing is comprised of a $1.1 billion mortgage and a $135 million mezzanine loan. The loans are interest-only, five-year floating rate loans with two-year initial terms and three one-year extension options, subject to the satisfaction of certain conditions, and carry a total weighted average interest rate of SOFR plus 3.93% per annum. ILPT has purchased an interest rate cap limiting SOFR to 2.25% through October 2024. The loans also allow for a portion of the borrowings to be prepaid without penalty.
“We are pleased to have closed this $1.235 billion debt financing in the midst of difficult market conditions,” Yael Duffy, President and Chief Operating Officer of ILPT, said. “This debt financing enabled us to fully repay our $1.385 billion bridge loan due in February 2023 with debt that has a final maturity date in October 2027 and excess cash. ILPT currently has no near-term debt maturities but maintains flexibility to repay significant debt and reduce leverage in the future through prepayment options. This is important because we continue to evaluate strategies to strengthen ILPT’s balance sheet and reduce leverage.”
The loan was provided by Citigroup, UBS Investment Bank, Bank of America, BMO Capital Markets and Morgan Stanley. Skadden, Arps, Slate, Meagher & Flom provided legal counsel to ILPT in this transaction.