ILPT Narrows Loss 58% as Rent Rolls Accelerate for Sixth Straight Quarter
The industrial logistics landlord posted $0.33 a share in normalized funds from operations, up from $0.20 a year earlier, as leasing spreads widened and its Mountain JV locked in fixed-rate financing.
Industrial Logistics Properties Trust (ILPT), the industrial and logistics real estate investment trust, reported first-quarter 2026 results that showed a sharp narrowing of its net loss alongside accelerating cash-flow growth. The company's net loss attributable to common shareholders shrank to $9.4 million from $21.5 million a year earlier, a 57.6% improvement, while normalized funds from operations attributable to common shareholders climbed 63% year over year.
The quarter marked a continuation of a trajectory that has been building for more than a year. Normalized FFO per share reached $0.33, up from $0.20 in the first quarter of 2025, tracing a steady climb through each intervening quarter. Rental income rose to $116.4 million, the highest in at least five quarters, from $111.9 million a year prior. Cash-basis net operating income grew 4.2% year over year, accelerating from 2.9% for full-year 2025 and 2.0% in the first half of that year.
Leasing economics drove the improvement. The company posted a 26.3% cash-basis rental-rate roll-up on executed leases, its sixth consecutive quarter of double-digit rent growth and an acceleration from 25.2% in the fourth quarter of 2025 and 18.9% a year ago. Volume was lighter at 862,000 square feet compared with 2.3 million square feet in the year-ago period, though roughly 70% of the quarter's activity consisted of lease renewals, underscoring tenant retention. The leasing pipeline expanded to approximately six million square feet, with about two million square feet in advanced negotiation, up from 600,000 square feet in advanced talks a year earlier.
Occupancy held firm across the portfolio. Mainland wholly-owned properties stood at 95.7% occupied, while Hawaii occupancy improved to 86.2%. The Mountain joint venture was fully leased at 100%. Investment-grade tenants accounted for roughly 77% of annualized rental revenues, up from about 76% a year ago. In May 2026, ILPT fully leased a 532,000-square-foot vacancy in Indianapolis, a key objective for the year that the company expects to contribute mid-point NOI growth of approximately 2.8% versus full-year 2025.
A major balance-sheet shift accompanied the operating gains. The Mountain JV completed a $1.62 billion fixed-rate interest-only mortgage at 5.71% in May 2026, replacing $1.4 billion of floating-rate and $200 million of amortizing debt. The refinancing eliminated all variable-rate exposure across the consolidated entity — variable-rate debt as a share of net debt fell to zero from 34.4% as of the second quarter of 2025 — and is expected to unlock roughly $20 million in annual cash flow. Weighted-average debt maturity extended to 4.6 years from 3.9 years, with no maturities until 2029. Consolidated net debt to annualized adjusted EBITDAre improved to 11.6 times from 12.0 times, even as total debt held steady at approximately $4.2 billion.
For full-year 2026, ILPT guided to NOI of $357 million to $362 million, adjusted EBITDAre of $344 million to $349 million, and normalized FFO per share of $1.27 to $1.34. The outlook assumes a 2.2-million-square-foot Hawaii property remains vacant. The company ended the quarter with $99.5 million in cash on hand. The CAD payout ratio improved to 29.4% from 30.3% for full-year 2025.