Industrial Logistics Properties Trust (ILPT) 2023 Q3 法說會逐字稿

Good morning and welcome to Industrial Logistics Properties Trust third-quarter 2023 financial results conference call. (Operator Instructions) Please note this event is being recorded. I would now like to turn the call over to Stephen Colbert, Director of Investor Relations. Please go ahead.

早安，歡迎參加工業物流地產信託 2023 年第三季財務業績電話會議。 （操作員說明）請注意此事件正在被記錄。我現在想將電話轉給投資者關係總監 Stephen Colbert。請繼續。

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 the analyst. Please note that the recording and retransmission of today's conference call is prohibited without the prior written consent of the company. Also 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.

早安.與我一起參加今天電話會議的還有總裁兼營運長 Yael Duffy；以及財務長兼財務主管 Tiffany Sy。今天的電話會議包括管理層的演講，以及隨後與分析師的問答環節。請注意，未經公司事先書面同意，禁止錄製和轉播今天的電話會議。另請注意，今天的電話會議包含 1995 年《私人證券訴訟改革法案》和其他證券法含義內的前瞻性陳述。

These forward-looking statements are based on ILPT's beliefs and expectations as of today, October 26, 2023, and actual results may differ materially from those that we project. The company undertakes no obligations to revise or publicly release the results of new to the forward-looking statements made in today's conference call. Additional information concerning factors that could cause those differences is contained in our filings with the Securities and Exchange Commission or the SEC, which can be assessed from our website, ilptreit.com or the SEC's website.

這些前瞻性聲明是基於 ILPT 截至今天（2023 年 10 月 26 日）的信念和預期，實際結果可能與我們的預測有重大差異。該公司不承擔修改或公開發布今天電話會議中前瞻性陳述的新結果的義務。有關可能導致這些差異的因素的更多資​​訊包含在我們向美國證券交易委員會或 SEC 提交的文件中，您可以透過我們的網站 ilptreit.com 或 SEC 網站進行評估。

Investors are cautioned not to place undue reliance upon any forward-looking statements. In addition, we will be discussing non-GAAP financial numbers during this call including normalized funds from operations, or normalized FFO, adjusted EBITDA, and cash basis net operating income or cash basis NOI. A reconciliation of the non-GAAP figures to net income is available in our financial results and supplemental information presentation, which can be found on our website. With that I will turn the call over to Yael.

投資者應注意不要過度依賴任何前瞻性陳述。此外，我們將在本次電話會議中討論非 GAAP 財務數據，包括標準化營運資金或標準化 FFO、調整後 EBITDA 以及現金基礎淨營業收入或現金基礎 NOI。我們的財務表現和補充資訊演示中提供了非公認會計準則資料與淨利潤的對賬，這些資料可以在我們的網站上找到。然後我會將電話轉給 Yael。

Thank you, Stephen and good morning. Before we begin, I would like to welcome Tiffany Sy, who joined ILPT as our Chief Financial Officer and Treasurer on October 1. On today's call, I will begin with an update on our disposition activity and then review ILPTs operating and leasing performance before turning the call over to Tiffany to discuss our financial results.

謝謝你，史蒂芬，早安。在我們開始之前，我要歡迎Tiffany Sy，她於10 月1 日加入ILPT，擔任我們的財務長和財務主管。在今天的電話會議上，我將首先介紹我們的處置活動的最新情況，然後在轉向之前審查ILPT 的營運和租賃業績打電話給蒂芙尼討論我們的財務表現。

Last quarter, we reported that we had three properties, two of that are encumbered under agreement to sell for an aggregate sales price of $65.3 million. We also discussed that while dispositions are challenging in this economic environment, ILPT may face additional difficulties given the property release provisions under our debt agreements.

上季度，我們報告稱，我們擁有三處房產，其中兩處根據協議出售，總售價為 6530 萬美元。我們也討論了，雖然在這種經濟環境下處置具有挑戰性，但考慮到我們的債務協議中的財產釋放條款，ILPT 可能會面臨更多困難。

During the diligence process, one property fell out of agreements as the buyer was unable to receive the required licensing needed to operate its business and another terminated due to delays in the transaction timeline. The third property which is unencumbered, continues to be under agreement to sell for $21.5 million.

在盡職調查過程中，一處房產因買方無法獲得經營其業務所需的許可而未能達成協議，另一處房產則因交易時間延遲而終止。第三處房產沒有抵押，繼續以協議以 2,150 萬美元的價格出售。

Turning to our operating and leasing performance. As of September 30, 2023, our portfolio, which consists of 413 warehouse and distribution properties, achieved same property NOI and cash basis NOI growth of 5.3% and 6% respectively, compared to the third quarter of 2022. We are finally beginning to see the positive impact of the 5.2 million square feet of leasing we completed over the last year.

轉向我們的營運和租賃業績。截至 2023 年 9 月 30 日，我們的投資組合由 413 個倉庫和配送物業組成，與 2022 年第三季相比，相同物業 NOI 和現金基礎 NOI 分別成長 5.3% 和 6%。我們終於開始看到我們去年完成的520 萬平方英尺租賃的正面影響。

As a point of reference, the impact of this activity is an increase of $7.4 million in annualized rental revenue, which represents 2% of ILPTs total annualized revenue. With 11.2 million square feet set to expire through 2025, we believe there's continued opportunity to generate organic cash flow growth.

作為參考，這項活動的影響是年化租金收入增加了 740 萬美元，佔 ILPT 年化總收入的 2%。由於 1,120 萬平方英尺的土地將於 2025 年到期，我們相信仍有機會產生有機現金流成長。

Turning to the quarter, we executed 12 new and renewal leases for nearly 758,000 square feet, resulting in modest GAAP and cash leasing spreads of 13.5% and 10.3% respectively. The impact of this activity is an increase of $841,000 of annualized rental revenues.

談到本季度，我們執行了 12 份新租約和續租租約，面積近 758,000 平方英尺，導致 GAAP 和現金租賃利差分別為 13.5% 和 10.3%。這項活動的影響是年化租金收入增加了 841,000 美元。

These leases have a weighted average lease term of 4.1 years, which is strategically shorter than what we typically report. As asking rents continue to increase, we are selectively completing short-term renewal with certain tenants to take advantage of market conditions. Highlighted in our results is continued demand from ILPTs largest tenant FedEx.

這些租賃的加權平均租賃期限為 4.1 年，策略上比我們通常報告的要短。隨著租金要價持續上漲，我們有選擇地與某些租戶完成短期續約，以利用市場條件。我們的業績突顯了 ILPT 最大租戶 FedEx 的持續需求。

We completed three renewals totaling 213,000 square feet in Texas, Georgia, and Illinois at a roll up in rent of 15.9%. As FedEx works through its drive program initiatives, our leasing and asset management teams have been engaged in discussions with FedEx decision makers as they work through their long-term plans.

我們在德克薩斯州、喬治亞州和伊利諾伊州完成了三項總面積為 213,000 平方英尺的更新，租金上漲了 15.9%。在聯邦快遞實施其推動計畫措施的過程中，我們的租賃和資產管理團隊一直在與聯邦快遞決策者進行討論，因為他們正在製定長期計畫。

Our leasing pipeline includes 1.6 million square feet across 14 properties that is specific to FedEx with only two known vacates through 2024, which represents less than 40 basis points of annualized rent revenue. Furthermore, over 71% of our FedEx portfolio and the associated $92 million in annualized revenue is secure, given it is long-term lease with expirations in 2027 and beyond.

我們的租賃管道包括聯邦快遞專用的 14 處房產，面積達 160 萬平方英尺，到 2024 年只有兩處已知空置，這意味著年化租金收入不到 40 個基點。此外，我們超過 71% 的聯邦快遞投資組合以及相關的 9,200 萬美元年化收入是安全的，因為它是長期租賃，將於 2027 年及以後到期。

Leasing in Hawaii was minimal this quarter with just over 21,000 square feet. We believe this muted activity is a function of timing as our Hawaii leasing pipeline currently exceeds 3 million square feet. Lastly, as we have communicated in the past, we are focused on improving ILPT's leverage, which has declined 1.4 times since last year.

本季夏威夷的租賃面積極小，僅超過 21,000 平方英尺。我們相信這種低迷的活動是時間的函數，因為我們夏威夷的租賃管道目前超過 300 萬平方英尺。最後，正如我們過去所傳達的那樣，我們的重點是提高 ILPT 的槓桿率，自去年以來已下降了 1.4 倍。

However, given the ongoing uncertainty in the capital market, any improvement in the short term will be organic with no near-term debt maturities and a cash flowing portfolio. ILPT will continue to focus on tenant retention, maximizing mark-to-market rent growth opportunities, and reducing operating expenses. I'll now turn the call over to Tiffany.

然而，鑑於資本市場持續存在的不確定性，短期內的任何改善都將是有機的，沒有短期債務到期和現金流投資組合。 ILPT 將繼續專注於保留租戶、最大限度地提高按市值計價的租金成長機會以及降低營運費用。我現在將把電話轉給蒂芙尼。

Thank you, Yael. Good morning, everyone. Starting with our consolidated financial results for the third quarter of 2023, normalized funds from operation was flat on a sequential quarter basis at $7.9 million or $0.12 per share and a decline compared to the prior year quarter. Adjusted EBITDAre was $83.2 million, an increase of both sequential quarter and year-over-year basis.

謝謝你，雅艾爾。大家，早安。從我們 2023 年第三季的綜合財務業績開始，正常化營運資金與上一季持平，為 790 萬美元，即每股 0.12 美元，與去年同期相比有所下降。調整後 EBITDA 為 8,320 萬美元，環比和年比均有所成長。

Our leasing activity generated increases in cash rents on a same-property basis of $7.2 million or 7.4% year over year, partially offset by operating expense increases of $2.7 million or 12.2%, which resulted in net 6% increase in same property cash basis NOI for the third quarter. Interest expense was $72.9 million for the quarter, an increase of $1.1 million sequentially and reflects a full-quarter's impact of the mortgage loans we refinanced in May.

我們的租賃活動使同物業現金租金年增 720 萬美元，即 7.4%，但部分被營運費用增加 270 萬美元或 12.2% 所抵消，導致同物業現金租金 NOI 淨增長 6%第三季度。本季利息支出為 7,290 萬美元，比上一季增加 110 萬美元，反映了我們 5 月再融資的抵押貸款對整個季度的影響。

Our fourth quarter estimated interest expense was approximately $73 million consisting of $56 million of cash interest expense, including the benefit from our in the money interest rate caps and $7 million of non-cash amortization of financing costs.

我們第四季的預期利息支出約為 7,300 萬美元，其中包括 5,600 萬美元的現金利息支出，包括我們的貨幣利率上限帶來的收益和 700 萬美元的非現金攤提融資成本。

Turning to our balance sheet, ILPT ended the quarter with a net debt to total assets ratio of 68.5% compared to 69.9% a year ago. And our net debt coverage ratio declined to 12.3 times compared to 13.7 on a year-over-year basis. All of our debt is currently carried at a fixed rate a fixed to interest rate cap for the total weighted average interest rate of 5.47%. Including extension options, ILPT has no debt maturities until 2027.

看看我們的資產負債表，ILPT 本季末的淨負債與總資產比率為 68.5%，而去年同期為 69.9%。我們的淨債務覆蓋率較去年同期下降至 12.3 倍，而去年同期為 13.7 倍。我們所有的債務目前均以固定利率計息，固定利率上限為總加權平均利率 5.47%。包括延期選項在內，ILPT 在 2027 年之前沒有債務到期日。

Our first extension option on the $1.4 billion floating rate loan under our consolidated joint venture occurred in March 2024, subjects to the replacement of the related interest rate cap. Based on today's pricing, replacement cap would range from $20 million to $30 million.

我們對合併合資企業下的 14 億美元浮動利率貸款的第一次延期選擇發生在 2024 年 3 月，但須更換相關利率上限。根據今天的定價，更換上限將在 2000 萬美元至 3000 萬美元之間。

As of September 30, we had approximately $83 million of cash on hand and $139 million of restricted cash in our consolidated joint venture. As Yael mentioned earlier, we will continue to evaluate opportunities to reduce our leverage and build liquidity. However, we currently have no plans to market properties for sale.

截至 9 月 30 日，我們的合併合資企業手頭現金約為 8,300 萬美元，限制現金為 1.39 億美元。正如 Yael 之前提到的，我們將繼續評估降低槓桿率和建立流動性的機會。然而，我們目前沒有計劃出售房產。

In closing, while the current economic environment has its challenges, our portfolio remain compelling some exceptional tenant roster near full occupancy and rising rents across our portfolio. We expect that ILPT will continue to benefit from demand for high-quality industrial real estate like ours. That concludes our prepared remarks. Operator, please open the lines for questions.

最後，儘管當前的經濟環境面臨挑戰，但我們的投資組合仍然吸引著一些優秀的租戶，這些租戶接近全部入住，並且我們的投資組合的租金不斷上漲。我們預計 ILPT 將繼續受益於像我們這樣的高品質工業房地產的需求。我們準備好的演講到此結束。接線員，請打開提問線。

(Operator Instructions) Bryan Maher, B. Riley FBR.

（操作員說明）Bryan Maher，B. Riley FBR。

Thank you. And good morning, Yael and Tiffany. Maybe sticking with the caps for a minute. Tiffany, did you say that was $28 million to $30 million $20 to $30 million? I didn't quite catch that.

謝謝。早安，雅艾爾和蒂芙尼。也許堅持一分鐘。蒂芙尼，你說的是 2800 萬到 3000 萬美元，2000 到 3000 萬美元嗎？我不太明白。

I said $20 million to $30 million that is based on today's pricing, but also our expectations of the strike price. So there's some range there as well.

我說的 2000 萬至 3000 萬美元是基於今天的定價，也是我們對執行價格的預期。所以那裡也有一定的範圍。

And was that for one of the caps or was that for both of the 2024 caps?

這是其中一場帽子戲法，還是 2024 年兩場帽子戲法？

That is for one of the caps.

這是針對其中一頂帽子的。

And how does that pricing compared to the cap cost that was put on that loan back in 2022?

與 2022 年貸款的上限成本相比，該定價如何？

Well, the most recent cap that we purchased was September '22. And that was $47 million that we've got at much of that lower strike price; however, it is also a two-year period. So it's not necessarily apples to apples, but I hope so that pricing has slightly increased since the last time we purchased.

嗯，我們最近買的上限是 22 年 9 月。我們以較低的執行價格中的大部分獲得了 4700 萬美元；然而，這也是一個兩年的時期。因此，這不一定是同類的，但我希望自上次購買以來價格略有上漲。

Okay. That's helpful. And then when we think about organic deleveraging, I think you mentioned or Yael mentioned that it's come down from 13.7 times to, I think 12.3 times. Should we suspect that all else being equal over the next 12 months, we should see a similar amount of organic deleveraging, or do you think that moderates a little bit?

好的。這很有幫助。然後，當我們考慮有機去槓桿化時，我想你提到過，或者 Yael 提到過，它已經從 13.7 倍下降到了，我認為是 12.3 倍。我們是否應該懷疑，在未來 12 個月其他條件相同的情況下，我們應該會看到類似程度的有機去槓桿化，還是您認為情況會有所緩和？

No, I think that's a good proxy for run rate. Hence, we will continue to pay down our mortgages. It should steadily continue to decline in that fashion.

不，我認為這是運行率的一個很好的代表。因此，我們將繼續償還抵押貸款。它應該以這種方式穩步繼續下降。

Okay. And then just maybe for Yael on the asset dispositions. I caught all what you said on the three going into one. And I think you said you weren't actively marketing properties. But are you still receiving inbound inquiries into some of your properties? And how are those progressing?

好的。然後也許是雅埃爾的資產處置。我聽到了你所說的三合一的全部。我想你說過你沒有積極行銷房產。但是您是否仍收到對您的某些房產的入站詢問？這些進展如何？

So we have then. I will say that I think the unsolicited offers have slowed in the last quarter or so. And so with each offer that we get, we really do review if it makes sense to sell. And I think we've talked about this on the prior last quarter's call. But it really is. It's hard for us to sell things that have the collateral pools given the amount to release the property from the collateral pool must be the greater of 115% of that allocated loan value or 100% of the net sale proceeds.

所以我們就有了。我想說的是，我認為主動提供的報價在上個季度左右有所放緩。因此，對於我們收到的每一份報價，我們都會認真審查是否有意義出售。我想我們在上個季度的電話會議上已經討論過這個問題。但確實如此。我們很難出售有抵押池的東西，因為從抵押池中釋放財產的金額必須是分配貸款價值的 115% 或淨銷售收益的 100% 中的較大者。

And so on top of that, we also have to maintain required debt service coverage ratio. So really, we have to look at the value of the property today versus the value when we closed on the loan. And I think we can all agree that there's been some shift in valuations. So it's hard to make the math work.

除此之外，我們還必須維持所需的償債覆蓋率。因此，實際上，我們必須將當前房產的價值與我們結束貸款時的價值進行比較。我認為我們都同意估值發生了一些變化。所以很難讓數學發揮作用。

And then, if we're going to target underperforming properties for sale, we have to improve our debt yields when we remove it from the collateral pool. But it's hard to sell a property that's underperforming. So there's a lot that's going into it, but this opportunity is right. And it makes sense. We'll do it. But it's been far and few between.

然後，如果我們打算出售表現不佳的房產，當我們將其從抵押品池中移除時，我們必須提高債務收益率。但表現不佳的房產很難出售。所以有很多事情要做，但這個機會是正確的。這是有道理的。我們會做的。但兩者之間已經相差甚遠。

Okay, thanks. And just maybe last for me a quick one on the dividend. When we look at the rolling fourth quarter trailing CAD being, I think it's $0.54 or so and you're paying out basically $0.04. Is there any thought to taking that dividend up even a little or is the focus just solely on paying down the debt and keeping dry powder for cap costs?

好的謝謝。最後也許我會快速了解一下股息。當我們查看第四季度的滾動加元時，我認為它是 0.54 美元左右，而您基本上支付的是 0.04 美元。是否有考慮將股息提高一點，或者重點只是償還債務並為上限成本保留乾粉？

It is the latter. Currently, we're focusing on reducing our leverage. We'd like to get to a lower level, at least -- and then we could have a real discussion or considerations. But that will (multiple speakers) right now --

是後者。目前，我們的重點是降低槓桿。我們希望至少達到一個較低的水平——然後我們可以進行真正的討論或考慮。但現在（多位發言者）將會——

I'm sorry, I didn't catch that. Did you say you want to get leveraged down to 10 before you rethink that?

抱歉，我沒聽清楚。您是否說過在重新考慮之前您希望將槓桿率降至 10？

Yeah. I think the Board is looking at it, Bryan. But I think right now, really, we need to have liquidity to -- we make sure that we have liquidity to buy the caps and then also to run the business. If we have some leasing that's coming up and then if FedEx comes to us and wants to do a building expansion or parking lot project, we want to make sure that we have the liquidity to partner with our tenants to meet their need.

是的。我認為董事會正在考慮這個問題，布萊恩。但我認為現在我們確實需要擁有流動性——我們確保擁有流動性來購買上限，然後也可以經營業務。如果我們即將進行一些租賃，然後如果聯邦快遞來找我們並想要進行建築擴建或停車場項目，我們希望確保我們有足夠的流動性與租戶合作以滿足他們的需求。

Right, but to the extent that 10 is the bogey before the Board starts to think about it, that's helpful from our standpoint as we model out the company now through to 2026. Where you hit that and where there could be thought process, a bit of a slight dividend increase, nothing crazy, but anyways, food for thought. And thank you for all those comments.

是的，但在董事會開始考慮之前，10 是一個忌諱，從我們的角度來看，這在我們為公司建模到 2026 年時是有幫助的。股息略有增加，沒什麼瘋狂的，但無論如何，值得深思。感謝您的所有評論。

(Operator Instructions) Mitch Germain, JMP Securities.

（操作員指令）Mitch Germain，JMP 證券。

Yeah. You had mentioned that there were some FedEx move out in 2024. Are there any other known move outs for the year?

是的。您曾提到聯邦快遞將在 2024 年進行一些搬遷。今年還有其他已知的搬遷嗎？

So we have the one property that we had under agreement to sell in Indiana. That's a 535,000 square feet property and that lease expires in June of 2024. So we know that tenant is moving to a built-to-suit location. We are in discussions with them potentially for short-term renewal because I think there construction has been delayed. But that's really the major one on the mainland.

因此，我們擁有根據協議在印第安納州出售的一處房產。這是一處 535,000 平方英尺的房產，租約將於 2024 年 6 月到期。因此我們知道租戶正在搬到一個定制的位置。我們正在與他們討論短期更新的可能性，因為我認為施工已經被推遲。但這確實是大陸的主要問題。

And then as we've talked about in the past, the parcel in Hawaii, the 2.2 million square feet, that was previously leased to Home Depot. That one will be coming back to us at the end of Q1.

然後，正如我們過去談到的，夏威夷的那塊 220 萬平方英尺的地塊，之前租給了家得寶 (Home Depot)。這個問題將在第一季末回到我們身邊。

On that, yeah, I think last quarter you had mentioned that there was some activity on that. Is there any update?

對此，是的，我想上個季度您曾提到在這方面有一些活動。有更新嗎？

We continue to see good activity. Nothing far enough along to announce, but we do feel confident that we'll be able to lease that with minimal downtime.

我們繼續看到良好的活動。目前還沒有什麼可以宣布的，但我們確實有信心以最短的停機時間出租它。

Okay. And the last one for me, I think you explained the shorter term on the new leasing during the quarter. Is there anything we can attribute the new lease rental changes to because it has also changed quarter over quarter here.

好的。對我來說，最後一個問題是，我認為您解釋了本季新租賃的短期情況。我們可以將新的租賃租金變動歸因於什麼，因為這裡的租金變動也逐季變動。

No, I think in some of the past quarters, we've had really long-lease terms, which have resulted in a bigger gap rent increases. And so with the shorter WALT, we're not seeing that same robust strike increase. But I would also say, we did release one property which negatively impacted our results at a roll-down in rent because we had previously leased to FedEx and it had amortizing TI, which was inflating their rent numbers. So without that property, we excluded that, we would be at 17%, 18% rollup. So that was part of the outlier this quarter.

不，我認為在過去的一些季度中，我們的租賃條款非常長，這導致租金上漲幅度更大。因此，隨著 WALT 的縮短，我們並沒有看到同樣強勁的罷工增加。但我還要說，我們確實釋放了一處房產，這對我們的業績產生了負面影響，因為我們之前租給了聯邦快遞，而且它攤銷了 TI，這導致了他們的租金數字上漲。因此，如果沒有這個屬性，我們排除了這一點，我們將處於 17%、18% 的總和狀態。所以這是本季異常情況的一部分。

Sure. Got it. Thank you.

當然。知道了。謝謝。

Thank you.

謝謝。

This concludes our question-and-answer session. I'd like to turn the conference back over to Yael Duffy for any closing remarks.

我們的問答環節到此結束。我想將會議轉回雅艾爾·達菲 (Yael Duffy) 進行閉幕致辭。

Thanks for joining us. Have a good day.

感謝您加入我們。祝你有美好的一天。

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

會議現已結束。感謝您參加今天的演講。您現在可以斷開連線。