ILPT 10-K & 10-Q changes, risk factors and insider trading

•unfavorable market and commercial real estate industry conditions due to, among other things, uncertainties surrounding interest rates and inflation, changing tariffs and trade policies and related uncertainty, supply chain disruptions, volatility in the public equity and debt markets, pandemics, geopolitical instability and tensions, pandemics, any U.S. government shutdown, economic downturns or a possible recession, labor market conditions, changes in real estate utilization and other conditions beyond our control, have had and may continue to have a material adverse effect on our and our tenants’ results of operations and financial conditions, and our tenants may be unable to satisfy their lease obligations to us;

•our distributions to our shareholders may remainbe at $0.01 per share for an indefinite periodreduced or be eliminated and the form of payment could change;

We have a substantial amount of debt and we are subject to risks related to our debt, including our ability to refinance maturing debt and the cost of any such refinanced debt.

We are subject to numerous risks associated with our debt, including the risk that our cash flows could be insufficient for us to make required payments and risks associated with highchanging interest rates for an extended period of time.rates. There are no limits in our organizational documents on the amount of debt we may incur; however, our current leverage effectively limits us from incurring additional debt at this time. Our debt may increase our vulnerability to adverse market and economic conditions, limit our flexibility in planning for changes in our business and place us at a disadvantage in relation to competitors that have lower debt levels. Our debt could increase our costscost of capital, limit our ability to incur additional debt in the future and increase our exposure to floating interest rates. High interest rates have significantly increased our borrowing costs. Although we have options to extend the maturity date of certain of our debt upon payment of a fee and meeting othercertain conditions, the applicable conditions may not be met or we may incur significant costs complying with such conditions, including in connection with obtaining any required interest rate caps, and we may be required to repay or refinance the outstanding borrowings with new debt on less favorable terms. Excessive or expensive debt could reduce the available cash flow to fund, or limit our ability to obtain financing for, lease obligations, working capital, capital expenditures, refinancing, acquisitions, development or redevelopment projects or other purposes and hinder our ability to pay distributions to our shareholders.

Our debt agreements contain financial and/or operating covenants. Certain of these covenants limit our operational flexibility. For example, certain of our debt agreements require lender approval to sell the properties securing the debt, which approval is subject to us meeting certain financial thresholds that are difficult to achieve in light of current market conditions,conditions or may require significant payments to lenders, among other things. These requirements therefore restrict our ability to reduce our leverage. We may not be able to satisfy all of these conditions or may default on some of these covenants for various reasons, including for reasons beyond our control. If any of the covenants in these debt agreements are breached and not cured within the applicable cure period, we could be required to repay the debt immediately, even in the absence of a payment default, or be prevented from refinancing maturing debt or issuing new debt. As a result, covenants which limit our operational flexibility or a default under applicable debt covenants could have an adverse effect on our business, financial condition and results of operations.

Our business depends on our tenants satisfying their lease obligations. The financial capacities of our tenants to pay us rent will depend upon their abilities to successfully operate their businesses, which may be adversely affected by factors over which we and they have no control, including market and economic conditions, such as uncertainties surrounding interest rates and inflationinflation, changing tariffs and trade policies and related uncertainty, economic downturns or a possible recession.recession and labor market conditions. In addition, emerging technologies and changes in consumer behaviors could reduce the demand for industrial and logistics space. The failure of our tenants and any applicable parent guarantor to satisfy their lease obligations to us, whether due to a downturn in their business or otherwise, could materially and adversely affect us.

We face significant competition for tenants at our properties. Some competing properties may be newer, better located or more attractive to tenants. Competing properties may have lower rates of occupancy than our properties, which may result in competing owners offering available space at lower rents or with greater concessions than we offer at our properties. In addition, strong demand for industrial and logistics properties in recent years encouraged new development of these properties; however, such development has slowed. If the development of new industrial and logistics properties exceeds the increase in demand, our existing properties may be unable to successfully compete for tenants with newer developed buildings and our income and the values of our properties may decline. Competition may make it difficult for us to attract and retain tenants and may reduce the rents we are able to charge and the values of our properties.

We also face significant competition for acquisition opportunities from other investors, including publicly traded and private REITs, numerous financial institutions, individuals, foreign investors and other public and private companies.investors. We believe that the growth in e-commerce sales will continue to result in strong demand and increase the competition for industrial real estate. Some of our competitors may have greater financial and other resources than us,us and may be able to accept more risk than we can prudently manage, including risks with respect to the creditworthiness of tenants and guarantors and the extent of leverage used in their capital structure. Due to competition for acquisitions, we may be unable to acquire desirable properties or we may pay higher prices for, and realize lower net cash flows than we hope to achieve from, acquisitions.

We face challenges from uncertainties regarding interest rates, and sustained high interest rates have significantly increased our interest expense and may otherwise materially and negatively affect us.

•one of the factors that investors typically consider important in deciding whether to buy or sell our common shares is the distribution rate on our common shares relative to prevailing interest rates. Our quarterly cash distribution rate on our common shares is currently $0.01$0.05 per common shareshare. inIf order to enhance our liquidity until our leverage profile otherwise improves. At currentmarket interest rate levels,levels increase, investors may expect a higher distribution rate than we are able to pay, which may increase our cost of capital, or they may sell our common shares and seek alternative investments with higher distribution rates. Sales of our common shares may cause a decline in the market price of our common shares;

•property values are often determined, in part, based upon a capitalization of rental income formula. When interest rates are high, such as they are currently, real estate transaction volumes slow due to increased borrowing costs and property investors often demand higher capitalization rates, which causes property values to decline. High interest rates could therefore lower the value of our properties and cause the value of our securities to decline.

We have purchasedan outstanding interest rate capscap as required pursuant to the terms of certain of our debt, and we may elect or be required to use similar or other derivatives to manage our exposure to interest rate volatility on debt instruments in the future, including hedging for future debt issuances, as well as to increase our exposure to floating interest rates. There can be no assurance that any such hedging arrangements will have the desired beneficial impact, or that we will be able to purchase additional interest rate caps or similar or other derivatives in the future cost effectively or at all. Such arrangements, which can include a number of counterparties, may expose us to additional risks, including failure of any of our counterparties to perform under these contracts, and may involve extensive costs, such as transaction fees or breakage costs, if we terminate them. Hedging may reduce the overall returns on our investments, which could reduce our cash available for distribution to our shareholders. The REIT provisions of the IRC may limit our ability to utilize advantageous hedging techniques or cause us to implement some hedges through a TRS, which could further reduce our overall returns. In addition, under certain of our debt, failure to purchase an interest rate cap is an event of default, which would permit the lenders under such debt to demand immediate payment of such debt and sell the mortgaged properties securing such debt. Failure to hedge effectively against interest rate changes may materially adversely affect our financial condition, results of operations and cash flow.

A significant number of our properties are located on the island of Oahu, Hawaii, which creates geographic concentration risks.risk. Oahu’s remote location on a volcanic island makes our properties there vulnerable to certain risks from natural disasters, such as tsunamis, hurricanes, flooding, volcanic eruptions and earthquakes, as well as possible rising sea riselevels as a result of climate change, which could cause damage to our properties, affect our Hawaii tenants’ abilities to pay rent to us and cause the values of our properties and our securities to decline. Further, the operating results and values of our Hawaii Properties can be impacted by local market conditions, including economic downturns or a possible recession as a result of inflationary conditions or otherwise, as well as possible government action that may limit our ability to increase rents.

We are subject to risks and could be exposed to additional costs from adverse weather, natural disasters and adverse impacts from global climate change. For example, our properties could be severely damaged or destroyed from either singular extreme weather events (such as floods, storms and wildfires) or through long-term impacts of climatic conditions (such as precipitation frequency, weather instability and rise ofrising sea levels). We own a significant number of properties in the southeastern United States which has been increasingly impacted by severe weather and rising sea levels in recent years. Severe weather events and climatic conditions could also adversely impact us and the tenants of our properties if we or they are unable to operate our or their businesses due to damage resulting from such events. Insurance may not adequately cover all losses sustained by us or the tenants of our properties. If we fail to adequately prepare for such events, our revenues, results of operations and financial condition may be impacted. In addition, we may incur significant costs in preparing for possible future climate change and we may not realize desirable returns on those investments.

In recent years, the global economy, including the U.S. economy, experienced supply chain disruptions, and these supply chain challenges reduced the availability of goods and materials, which caused price inflation and increased the time from order to receipt of goods and materials. Although supply chain conditions have since stabilized, we cannot assure that there will not be future, similar supply chain disruptions. In addition, increasing market and government concerns about climate change may cause changes in the process for manufacturing, producing and transporting of goods and materials. Market and governmental responses to supply chain challenges and climate change could result in reduced transporting of goods and lower demand for industrial and logistics properties. For example, if increased nearshoring of manufacturing, decreased global trade and increased localization of commercial ecosystems occur, there may be reduced volume of, and travel distance for, transporting goods, which may reduce demand for our properties. In addition, emerging technologies could reduce the demand for industrial and logistics properties. For example, if 3D printing technology, which allows for more localized manufacture and production of products, expands and gains wide market acceptance, the demand for transporting and storing goods at our properties may decrease and other technological changes could be developed and adopted in the future that have a similar effect. If so, our properties may decline in value and our business, operations and financial condition could be adversely impacted.

Our quarterly cash distribution rate on our common shares is currently $0.01 per share and future distributions may remainbe at this level for an indefinite periodreduced or be eliminated and the form of payment could change.

For these reasons, among others, our distribution rate may not increase for an indefinite perioddecline or we may cease paying distributions to our shareholders.

The SEC has adopted rules requiring publicPublic companies are required to disclose material cybersecurity incidents on Form 8-K and periodic disclosure of a registrant’s cybersecurity risk management, strategy and governance in annual reports. With the SECSEC’s particularlycontinued focusedfocus on cybersecurity, we expect increased scrutiny of RMR’s policies and systems designed to manage our cybersecurity risks and our related disclosures. In addition, the SEC has indicated that one of its examination priorities for the Office of Compliance Inspections and Examinations is to continue to examine cybersecurity procedures and controls, including testing the implementation of these procedures and controls.

Any failure by RMR or other third party vendors to maintain the security, proper function and availability of their respective information technology and systems or to adequately protect personal data, or any failure by RMR, our or other third party vendors to provide the appropriate regulatory and other notifications in a timely manner could result in financial losses, interrupt our operations, damage our reputation, cause us to be in default of material contracts and subject us to liability claims or regulatory penalties, any of which could materially and adversely affect our business and the value of our securities.

RMR is incorporatingincorporates artificial intelligence, or AI,intelligence into some of its business workflows and processes, and challenges with properly managing its use could result in reputational harm, competitive harm, legal liability and increased regulatory costs and could adversely affect our results of operations.

RMR hasuses begungenerative usingartificial AIintelligence and/or machine learning technologiestechnologies, or collectively, AI Technologies, to enhance certain workflows and processes used in its business, and its research into and continued deployment of such capabilities remain ongoing. AI isTechnologies stillare in its early stages,evolving, and the introduction and incorporation of AI technologiesTechnologies may result in unintended consequences or other new or expanded risks and liabilities and RMR may not be able to anticipate, prevent, mitigate or remediate all potential risks and liabilities. If the content, analyses or recommendations that AI Technologies applications assist in producing are, or are alleged to be, deficient, inaccurate or biased, such as due to limitations in AI Technologies algorithms, insufficient or biased base data or flawed training methodologies, our business, financial condition, results of operations and reputation may be adversely affected. Additionally, AI technologyTechnologies isare continuously evolving, and RMR may adopt and deploy AI technologiesTechnologies that could become obsolete earlier than expected, and there can be no assurance that we will realize the desired or anticipated benefits from AI.AI Technologies. Also, our competitors or other third parties may incorporate AI Technologies into their products and services more quickly or more successfully than RMR, which could impair our ability to compete effectively and adversely affect our results of operations.

The use of AI Technologies applications to support business processes carries inherent risks related to data privacy and security, such as unintended or inadvertent transmission of proprietary or sensitive information, including personal data. AI presentsTechnologies present emerging ethical issues, and RMR may be unsuccessful in identifying and resolving these issues before they arise. If RMR’s use of AI Technologies becomes controversial, it may experience brand or reputational harm, competitive harm or legal liability. There is uncertainty in the legal and regulatory landscape for AI,AI Technologies, which is not fully developed, and any laws, regulations or industry standards adopted in response to the emergence of AI Technologies may be burdensome, could entail significant costs and may restrict or impede RMR’s ability to successfully develop, adopt and deploy AI technologiesTechnologies efficiently and effectively.

There remains a continued focus from regulators, investors, tenants and other stakeholders concerning corporate sustainability. ForWe example,are, theand SECexpect hasto continue to be, subject to various proposed, new and evolving sustainability laws and requirements adopted climate change related regulations andby certain states haveand enactedregulators, climateincluding focusedboth voluntary and mandatory disclosure lawsrequirements that may impact how we conduct business, and we may incur significant costs in compliance with such rules if and when such regulations become effective. Some investors may use ESG factors to guide their investment strategies and, in some cases, may choose not to invest in us, or otherwise do business with us, if they believe our or RMR’s policies relating to corporate sustainability are inadequate.not aligned with their own policies. Third party providers of corporate sustainability ratings and reports on companies have increased in number, resulting in varied and, in some cases, inconsistent standards. In addition, the criteria by which companies’ corporate sustainability practices are assessed are evolving, which could result in greater expectations of us and RMR and cause us and RMR to undertake costly initiatives to satisfy such new criteria. Alternatively, ifIf we or RMR elect not to or are unable to satisfy such newthe criteria by which companies’ corporate responsibility practices are assessed or do not meet the criteria of a specific third party provider, some investors may conclude that our or RMR’s policies with respect to corporate sustainability are inadequate. Pursuant to RMR’s zero emissions goal, RMR has pledged to reduce its Scope 1 and 2 emissions to net zero by 2050 with a 50% reduction commitment by 2029 from a 2019 baseline. We and RMR may face reputational damage in the event that our or their corporate sustainability procedures or standards do not meet the goals that we or RMR have set or the standards set by various constituencies. In addition, there are efforts by some stakeholders and governmental authorities to reduce companies’ efforts regarding ESG, including human capital management-related matters, and anti-ESG or anti-diversity, equity and inclusion, or DEI, sentiment has gained momentum across the United States, with several states and governmental authorities enacting or proposing anti-ESG or anti-DEI policies or legislation and filing suits alleging that ESG or DEI measures or initiatives violate law. Additionally, in January 2025, President Trump signed a number of executive orders focused on DEI, which indicate continued scrutiny of DEI initiatives and potential related investigations of certain private entities with respect to DEI initiatives, including publicly traded companies. If our and RMR’s practices and programs are deemed to be in contradiction of such initiatives, we and RMR could be subject to government investigations or lawsuits that could negatively impact us and RMR and affect our business, financial condition or reputation. Increasingly, different stakeholder groups and government authorities have divergent views on ESG matters, which increases the risk that any action or lack thereof with respect to ESG matters will be perceived negatively by at least some stakeholders or governmental authorities and adversely impact our reputation and business. If we and RMR fail to comply with ESG and anti-ESG related regulations and to satisfy the expectations of investors and our tenants and other stakeholders or our or RMR’s announced goals and other initiatives are not executed as planned, our and RMR’s reputation could be adversely affected, and our revenues, results of operations and ability to grow our business may be negatively impacted. In addition, we may incur significant costs in attempting to comply with regulatory requirements, ESG and anti-ESG policies or third party expectations or demands.

MatthewYael P. Jordan,Duffy, our other Managing Trustee, is an executive vice presidentTrustee and the chief financial officer and treasurer of RMR Inc. and an officer and employee of RMR, and Yael Duffy, our President and Chief OperatingExecutive Officer, and Tiffany R. Sy, our Chief Financial Officer and Treasurer, and Marc A. Krohn, our Vice President, are also officers and employees of RMR. Mr.Ms. JordanDuffy is also a managing trustee of Seven Hills Realty Trust, or SEVN, and Ms. Duffy is also the president and chief operatingexecutive officer of Office Properties Income Trust, or OPI. Messrs. Portnoy and JordanKrohn and Mses. Duffy and Sy have duties to RMR, Mr. Jordan has duties to SEVN and Ms. Duffy has duties to OPI, as well as to us, and we do not have their undivided attention. They and other RMR personnel may have conflicts in allocating their time and resources between us and RMR and other companies to which RMR or its subsidiaries provide services. Some of our Independent Trustees also serve as independent trustees of other public companies to which RMR or its subsidiaries provide management services.

We are party to transactions with related parties, including with entities controlled by Adam D. Portnoy or to which RMR or its subsidiaries provide management services. Our agreements with related parties or in respect of transactions among related parties may not be on terms as favorable to us as they would have been if they had been negotiated among unrelated parties. Our shareholders or the shareholders of RMR Inc. or other related parties may challenge any such related party transactions. If any challenges to related party transactions were to be successful, we might not realize the benefits expected from the transactions being challenged. Moreover, any such challenge could result in substantial costs and a diversion of our management’s attention, could have a material adverse effect on our reputation, business and growth and could adversely affect our ability to realize the benefits expected from the transactions, whether or not the allegations have merit or are substantiated.

•required qualifications for an individual to serve as a Trustee and a requirement that certain of our Trustees be “Managing Trustees” and other Trustees be “Independent TrusteesTrustees,”, as defined in our governing documents;

Our declaration of trust and indemnification agreements require us to indemnifyindemnify, to the maximum extent permitted by Maryland law, any present or former Trustee or officer who is made or threatened to be made a party to a proceeding by reason of his or her service in these and certain other capacities. In addition, we may be obligated to pay or reimburse the expenses incurred by our present and former Trustees and officers without requiring a preliminary determination of their ultimate entitlement to indemnification.

Distributions to shareholders generally will not qualify for reduced tax rates applicable to “qualified dividendsdividends.”.

Dividends payable by U.S. corporations to noncorporate shareholders, such as individuals, trusts and estates, are generally eligible for reduced federal income tax rates applicable to “qualified dividends.” Distributions paid by REITs generally are not treated as “qualified dividends” under the IRC and the reduced rates applicable to such dividends do not generally apply. However, for tax years beginning before 2026, REIT dividends paid to noncorporate shareholders are generally taxed at an effective tax rate lower than applicable ordinary income tax rates due to the availability of a deduction under the IRC for specified forms of income from passthrough entities. More favorable rates will nevertheless continue to apply to regular corporate “qualified” dividends, which may cause some investors to perceive that an investment in a REIT is less attractive than an investment in a non-REIT entity that pays dividends, thereby reducing the demand and market price of our common shares.

We are a REIT organized under Maryland law. As of December 31, 2024,2025, our portfolio was comprised of 411409 properties containing approximately 59,890,00059,604,000 rentable square feet located in 39 states with 94.4%94.5% occupancy leased to overapproximately 300 different tenants. As of December 31, 2024,2025, we also owned a 22% equity interest in the unconsolidated joint venture.

Hawaii Properties. Certain of our Hawaii Properties are lands leased for rents that periodically reset based on fair market values, generally every 10 years. Revenues from our Hawaii Properties have generally increased as rents under the leases for those properties have been reset or renewed. Lease renewals, lease extensions, new leases and rental rates for our Hawaii Properties in the future will depend on prevailing market conditions when these lease renewals, lease extensions, new leases and rental rates are set. As rent reset dates or lease expirations approach at our Hawaii Properties, we generally negotiate with existing or new tenants for new lease terms. If we are unable to reach an agreement with a tenant on a rent reset, our Hawaii Properties’ leases typically provide that rent is reset based on an appraisal process. Due to the limited availability of land suitable for industrial uses that might compete with our Hawaii Properties, we believe that our Hawaii Properties offer the potential for future rent growth as a result of periodic rent resets, lease extensions and new leasing. Certain of our Hawaii Properties are lands leased for rents that periodically reset based on fair market values, generally every 10 years.

As of December 31, 2024,2025, our remaining lease expirations by year were as follows (square feet in thousands):

As of December 31, 2024, subsidiaries of2025, FedEx and Amazon leased 22.6%22.7% and 8.0%8.1% of our total leased square feet, respectively, and represented 29.1%27.9% and 6.8%7.3% of our total annualized rental revenues, respectively.

As of December 31, 2024,2025, $15,005,$16,800, or 3.4%,3.8%, of our annualized rental revenues are included in leases scheduled to expire by December 31, 20252026 and 5.6%5.5% of our rentable square feet are currentlywere vacant. Rental rates for which available space may be leased in the future will depend on prevailing market conditions when lease extensions, lease renewals or new leases are negotiated. Whenever we extend, renew or enter new leases for our properties, we intend to seek rents that are equal to or higher than our historical rents for the same properties. Despite our prior experience with rent resets, lease extensions and new leases in Hawaii, our ability to increase rents when rents reset, leases are extended or leases expire depends upon market conditions, which are beyond our control. Accordingly, we cannot be sure that the historical increases achieved at our Hawaii Properties will continue in the future.

n/m - not meaningful (1)Consists of properties that we have owned continuously since January 1, 2023.2024.

Rental income. Rental income increased primarily due to increases from our net leasing activity and anrent increaseresets, inpartially tenant reimbursement income drivenoffset by highera decrease in real estate taxestax reimbursements and vacancies at certain of our properties in 2024.properties.

Real estate taxes. Real estate taxes increaseddecreased primarily due to higherreimbursements received from the prior year during 2025 and lowered assessed values as a result of successful tax appeals at certain of our properties and the expiration of a payment in lieu of taxes program at one of our Mainland Properties,properties, partially offset by anhigher abatementtax rates at onecertain of our Mainland Properties in 2023.properties.

GeneralOther andoperating administrative.expenses. The decrease in generalother and administrativeoperating expenses is primarily due to refundsdecreases ofin franchiseinsurance and transfer taxesexpenses and professional fees, partially offset by increases in oursnow trustee share awardsremoval and inelectricity expenses at certain of our business management fees during 2024.properties.

Loss on impairment of real estate. During 2023,2025, we recognized a loss on impairment of real estate onto reduce the carrying value of one property that was classified as held for sale.sale property to its fair value less estimated costs to sell.

Interest and other income. The increasedecrease in interest and other income is primarily due to higherlower average cash balances and interest rates during 2024,2025 as compared to 2023.2024.

GainLoss on sale of real estate. During 2023,2025, we recognized a gainnet loss on sale of real estate of $2,684 as a result of the sale of two properties in Asheville,Monaca, NCPA and Mesquite,Augusta, TX, partially offset by a loss on sale of real estate of $974 as a result of the sale of a portion of a land parcel in Everett, WA.GA.

Loss on early extinguishment of debt. LossDuring 2025, we recognized a loss on early extinguishment of debt relates to prepayment penalties incurred by our consolidated joint venture related to refinancing activities in 2023.connection with the repayment of the ILPT Floating Rate Loan.

Equity in earnings of unconsolidated joint venture. Equity in earnings of unconsolidated joint venture represents the change in the fair value of our investment in the unconsolidated joint venture. The increase in 2025 was primarily due to an increase in the fair value of the underlying real estate owned by the unconsolidated joint venture.

We calculate FFO attributable to common shareholders and Normalized FFO attributable to common shareholders as shown below. FFO attributable to common shareholders is calculated on the basis defined by The National Association of Real Estate Investment Trusts, which is: (1) net loss attributable to common shareholders calculated in accordance with GAAP, excluding (i) any recovery or loss on impairment of real estate, (ii) any gain or loss on sale of real estate and (iii) equity in earnings or losses of unconsolidated joint venture; (2) plus (i) real estate depreciation and amortization and (ii) our proportionate share of FFO from unconsolidated joint venture properties; (3) minus FFO adjustments attributable to noncontrolling interestinterests; and (4) certain other adjustments currently not applicable to us. In calculating Normalized FFO attributable to common shareholders, we adjust for certain nonrecurring items shown below, including adjustments for such items related to the unconsolidated joint venture, if any, loss on extinguishment of debt, if any, and incentive management fees, if any.

FFO attributable to common shareholders and Normalized FFO attributable to common shareholders are among the factors considered by our Board of Trustees when determining the amount of distributions to our shareholders. Other factors include, but are not limited to, requirements to maintain our qualification for taxation as a REIT, the then current and expected needs for and availability of cash to pay our obligations and fund our investments, limitations in the agreements governing our debt,debt agreements, the availability to us of debt and equity capital, our dividend yield and our dividend yield compared to the dividend yields of other REITs and our expectation of future capital requirements and operating performance. Other real estate companies and REITs may calculate FFO attributable to common shareholders and Normalized FFO attributable to common shareholders differently than we do.

The decreaseincrease in net cash provided byfrom operating activities for the year ended December 31, 20242025 compared to 20232024 is primarily due to lower interest expense, excluding the timingimpact of payablessettlement inof 2024,our partiallyinterest offsetrate bycaps, and higher cash flows and reimbursements from our properties. The decrease in net cash provided byfrom investing activities for the year ended December 31, 20242025 compared to 20232024 is primarily due to costsa associated with the purchase of interest rate caps for an aggregate of $43,150decrease in 2024 and proceeds from sales of real estate and distributions from the unconsolidated joint venture in 2023, partially offset by a reduction in real estate improvements and increased proceeds from the settlement of our interest rate caps and an increase in 2024.real estate improvements, partially offset by reduced interest rate cap purchase costs and the sale of two unencumbered vacant properties during 2025. The changeincrease in net cash used in financing activities for the year ended December 31, 20242025 compared to net2024 cash provided by financing activities for 2023 wasis primarily due to ourthe consolidatedrepayment jointof venture’sthe refinancingILPT activitiesFloating relatedRate Loan and increases in debt issuance costs and distributions to certaincommon ofshareholders, itspartially offset by the net proceeds received from our $1,160,000 mortgage notes payable in 2023.loan.

•control our operating cost increases, including interest and other financing costs.

As of December 31, 2024,2025, we had cash and cash equivalents, excluding restricted cash and cash equivalents, of $131,706.$94,812. To maintain our qualification for taxation as a REIT under the IRC, we generally are required to distribute at least 90% of our REIT taxable income annually, subject to specified adjustments and excluding any net capital gain. This distribution requirement limits our ability to retain earnings and thereby provide capital for our operations or acquisitions. We may use our cash and cash equivalents on hand, the cash flow from our operations, net proceeds from any sales of assets and net proceeds of any offerings of equity or debt securities to fund our distributions to our shareholders.

WhenAs our debt approaches maturity or we desire to reduce our leverage or refinance debt, we intend tomay explore refinancing alternatives, property sales or sales of equity interests in joint ventures. Such alternatives may include incurring term debt, obtaining financing secured by mortgages on properties we own, issuing new equity or debt securities, obtaining a revolving credit facility, participating or selling equity interests in joint ventures or selling properties. Further, any issuances of our equity securities may be dilutive to our existing shareholders. We may also assume mortgage loans or incur debt in connection with future acquisitions, developments and redevelopments. Although we cannot be sure that we will be successful in completing any particular type of financing, we believe that we will have access to financing, such as debt or equity offerings, to fund capital expenditures, future acquisitions, development, redevelopment and other activities and to pay our obligations. We expect to fund any future property acquisitions, developments and redevelopments with proceeds we may receive in connection with any additional properties we may sell to our joint ventures, equity contributions from any third party investors in our joint ventures or any future joint ventures, net proceeds from offerings of equity or debt securities and cash on hand.

Real EstateDisposition Activities

In 2023,2025, we received gross proceeds of $25,460,$3,900, excluding closing costs of $1,160,costs, and recognized a net gainloss on sale of real estate of $1,710$1,376 as a result of the sale of two propertiesunencumbered andvacant a portion of a land parcel.properties.

For further information regarding realour estatedisposition activities, see Note 3 to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K.

We own a 61% equity interest in our consolidated joint venture. We control this consolidated joint venture and therefore account for the properties owned by this joint venture on a consolidated basis in our consolidated financial statements. We also own a 22% equity interest in the unconsolidated joint venture. We account for the unconsolidated joint venture using the equity method of accounting under the fair value option. The unconsolidated joint venture made aggregate cash distributions to us of $3,960 andfor $9,900each forof the years ended December 31, 20242025 and 2023, respectively.2024.

As of December 31, 2024,2025, we had an aggregate principal amount of $4,307,829$4,214,036 of indebtedness, primarily including: (1) our $1,235,000$1,160,000 loan,mortgage or the ILPT Floating Rate Loan,loan; (2) our consolidated joint venture’s $1,400,000 loan, or the Mountain Floating Rate Loan,Loan; (3) our $700,000 mortgage loan; and (4) our $650,000 mortgage loan, with maturity dates after giving effect to potential exercises of all extension options between 2027 and 2038.

In MayJune 2023,2025, our consolidated joint venturewe obtained a $91,000$1,160,000 fixed rate, interest only mortgage loan secured by four101 properties owned byof our consolidated joint venture.properties. This mortgage loan matures in JuneJuly 2030 and requires that interest be paid at an annual rate of 6.25%.6.40%. ASubject portionto the satisfaction of certain conditions, we have the option to prepay our $1,160,000 mortgage loan in full or in part with a premium prior to January 9, 2030 and at par with no premium on or after January 9, 2030. We used the net proceeds from thisour $1,160,000 mortgage loan wasand usedcash on hand to repay fourin thenfull outstandingthe mortgageILPT loansFloating Rate Loan. The ILPT Floating Rate Loan was secured by 104 of our consolidatedproperties, jointwas venturescheduled withto mature in October 2025 and required that interest be paid at an aggregateannual outstanding principal balancerate of $35,910secured andovernight financing rate, or SOFR, plus a weighted average interest ratepremium of 3.70%.3.93%. WeDuring year ended December 31, 2025, we recognized a $5,070 loss on early extinguishment of debt ofrelated $359 in conjunction withto the repayment of thesethe mortgageILPT loans.Floating Rate Loan.

The agreements and related documents governing theour ILPT$1,160,000 Floatingmortgage Rate Loan,loan, the Mountain Floating Rate Loan, our $700,000 mortgage loan and our $650,000 mortgage loan contain customary covenants, provide for acceleration of payment of all amounts due thereunder upon the occurrence and continuation of certain events of default and, in the case of the $650,000 mortgage loan, also require us to maintain a minimum consolidated net worth of at least $250,000 and liquidity of at least $15,000. As of December 31, 2024,2025, we believe that we were in compliance with all of the covenants and other terms under the agreements governing these loans.

For further information regarding our indebtedness and historical weighted average interest rates under our floating rate caps,loans, see Notes 5 and 11 to our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K.

During the year ended December 31, 2024,2025, we paid regular quarterly cash distributions to ourcommon shareholders totaling $2,638$7,973 using cash on hand.

On January 16,15, 2025,2026, we declared a regular quarterly distribution to common shareholders of record on January 27,26, 20252026 of $0.01$0.05 per share, or approximately $661,$3,333. and weWe expect to pay this distribution on or about February 20,19, 20252026 using cash on hand.

We are a real estate investment trust, or REIT, organized under Maryland law. As of MarchJune 31,30, 2026, our portfolio was comprised of 409 properties containing approximately 59,604,00059,609,000 rentable square feet located in 39 states with 94.6%99.1% occupancy, leased to approximately 300 different tenants. As of MarchJune 31,30, 2026, we also owned a 22% equity interest in the unconsolidated joint venture.

Our portfolio as of MarchJune 31,30, 2026 is summarized below (square feet in thousands):

(1)Based on annualized rental revenues as of MarchJune 31,30, 2026.

Occupancy data for our portfolio as of MarchJune 31,30, 2026 and 2025 were as follows (square feet in thousands):

(2)Leased square feet is pursuant to existing leases as of MarchJune 31,30, 2026, and includes space being fitted out for occupancy, if any, and space which is leased but is not occupied, if any.

The average effective rental rates per square foot representsrepresent total rental income divided by the average rentable square feet leased during the periods specified for our properties. For the three and six months ended MarchJune 31,30, 2026 and 2025, the average effective rental rates per square foot of our properties were as follows:

During the three and six months ended MarchJune 31,30, 2026, we entered into new and renewal leases as summarized in the following table, excluding the impact of rent resets (square feet in thousands):

During the threesix months ended MarchJune 31,30, 2026, we completed rent resets for approximately 122,000153,000 square feet of land at our Hawaii Properties at rental rates that were 30.6%33.7% higher than prior rental rates.

The following table provides the annualized rental revenues scheduled to reset at our Hawaii Properties as of MarchJune 31,30, 2026:

As of MarchJune 31,30, 2026, our remaining lease expirations by year were as follows (square feet in thousands):

(1)Leased square feet is pursuant to existing leases as of MarchJune 31,30, 2026, and includes space being fitted out for occupancy, if any, and space which is leased but is not occupied, if any.

As of MarchJune 31,30, 2026, FedEx and Amazon leased 22.7%22.5% and 8.1%7.7% of our total leased square feet, respectively, and represented 27.7%27.8% and 7.6%7.4% of our total annualized rental revenues, respectively.

As of MarchJune 31,30, 2026, $16,556,$14,211, or 3.7%,3.1%, of our annualized rental revenues were included in leases scheduled to expire by MarchJune 31,30, 2027 and 5.4%0.9% of our rentable square feet were vacant. Rental rates for which available space may be leased in the future will depend on prevailing market conditions when lease extensions, lease renewals or new leases are negotiated. Whenever we extend, renew or enter new leases for our properties, we intend to seek rents that are equal to or higher than our historical rents for the same properties. Despite our prior experience with rent resets, lease extensions and new leases in Hawaii, our ability to increase rents when rents reset, leases are extended or leases expire depends upon market conditions, which are beyond our control. Accordingly, we cannot be sure that the historical increases achieved at our Hawaii Properties will continue in the future.

Three Months Ended MarchJune 31,30, 2026 Compared to Three Months Ended MarchJune 31,30, 2025 (dollars and share amounts in thousands, except per share data)

(2)See our definition of net operating income, or NOI,NOI and our reconciliation of net loss to NOI below under the heading “Non-GAAP Financial Measures”.

References to changes in the income and expense categories below relate to the comparison of results for the threesix months ended MarchJune 31,30, 2026 compared to the threesix months ended MarchJune 31,30, 2025.

Rental income. Rental income increased primarily due to increases from our net leasing activity and increases in real estate tax reimbursements at certain of our properties, partially offset by a $2,575 bad debt reserve for six of our Hawaii properties.

Real estate taxes. Real estate taxes increased primarily due to a refund received during the threesix months ended MarchJune 31,30, 2025 as a result of a successful real estate tax appeal at one of our Mainland Properties and higher tax rates at certain of our properties during the threesix months ended MarchJune 31,30, 2026.

Other operating expenses. The decrease in other operating expenses is primarily due to decreases in payroll costs reimbursable to RMR and repairs and maintenance expenses, other professional fees and insurance expenses, partially offset by increases in snow removal expenses atduring certainthe ofsix ourmonths properties.ended June 30, 2026.

Depreciation and amortization. The decrease in depreciation and amortization primarily reflects the impact of certain acquired real estate leases fully amortizing and the disposition of two properties since AprilJanuary 1, 2025, partially offset by increased depreciation related to improvements made to certain of our properties since AprilJanuary 1, 2025.

General and administrative. The increase in general and administrative expenses is primarily due to increases in accrued incentive management fees, legalbusiness costsmanagement fees and trustee and RMR employee share award expenseexpenses during the threesix months ended MarchJune 31,30, 2026 compared to the threesix months ended MarchJune 31,30, 2025.

Interest and other income. The decreaseincrease in interest and other income is primarily due to the discontinuation of hedge accounting upon repayment of the Mountain Floating Rate Loan during the six months ended June 30, 2026, partially offset by decreases due to lower average cash balances and lower interest rates during the 2026 period as compared to the 2025 period.

Interest expense. The decrease in interest expense is primarily due to the repaymentdiscontinuation of hedge accounting for interest rate caps related to the ILPT Floating Rate Loan in June 2025 and the discontinuationMountain ofFloating hedgeRate accountingLoan, forresulting the related interest rate cap. As a result,in no further amortization of the related interest rate cap was recognized during the 2026 period. Additionally, amortization of interest rate cap costs ofand oura consolidatedlower jointoutstanding ventureprincipal decreasedbalance duringcompared to the 20262025 period.

Equity in earnings (losses) of unconsolidated joint venture. Equity in earnings (losses) of unconsolidated joint venture represents the change in the fair value of our investment in the unconsolidated joint venture.

The following table presents the reconciliation of net loss to NOI for the three and six months ended MarchJune 31,30, 2026 and 2025:

The following table presents our calculation of FFO attributable to common shareholders and Normalized FFO attributable to common shareholders and reconciliations of net loss attributable to common shareholders to FFO attributable to common shareholders and Normalized FFO attributable to common shareholders for the three and six months ended MarchJune 31,30, 2026 and 2025:

Our principal sources of funds to meet our operating and capital obligations, pay our debt service obligations and make distributions to our shareholders are rents from tenants at our properties. As of MarchJune 31,30, 2026, investment grade rated tenants, subsidiaries of investment grade rated entities or our Hawaii land leases represented 76.9%78.7% of our annualized rental revenues and only 3.7%3.1% of our annualized rental revenues were from leases expiring over the next 12 months. We believe that these sources of funds will be sufficient to meet our operating and capital obligations, pay our debt service obligations and make distributions to our shareholders for the next 12 months and for the foreseeable future thereafter.

The increase in net cash from operating activities for the threesix months ended MarchJune 31,30, 2026 compared to the 2025 period is primarily due to higher cash flows and reimbursements from our properties and lower interest expense, excluding the impact of settlement of our interest rate caps. The decrease in net cash used in investing activities for the threesix months ended MarchJune 31,30, 2026 compared to the 2025 period is primarily due to reduced interest rate cap purchase costscosts, anddecreased real estate improvements and proceeds from the sale of our consolidated joint venture’s interest rate cap in 2026. These decreases were partially offset by reduced proceeds from the settlement of our interest rate caps. The increasechange in net cash used in financing activities for the threesix months ended MarchJune 31,30, 2026, is due to proceeds received from our consolidated joint venture’s $1,620,000 fixed rate mortgage loan during the 2026 period compared to the repayment of the ILPT Floating Rate Loan during the 2025 periodperiod. isProceeds duefrom the $1,620,000 fixed rate mortgage loan were used to increasesrepay inthe Mountain Floating Rate Loan and $204,999 of our consolidated joint venture’s amortizing debt during the 2026 period. During the 2025 period, our consolidated joint venture used proceeds of $1,160,000 from its fixed rate mortgage loan to repay the ILPT Floating Rate Loan. In addition to these debt transactions during the 2026 and 2025 periods, our distributions to noncontrolling interests and common shareholders increased in 2026.

As of MarchJune 31,30, 2026, we had cash and cash equivalents, excluding restricted cash and cash equivalents, of $99,500.$135,326. To maintain our qualification for taxation as a REIT under the Internal Revenue Code of 1986, as amended, we generally are required to distribute at least 90% of our REIT taxable income annually, subject to specified adjustments and excluding any net capital gain. This distribution requirement limits our ability to retain earnings and thereby provide capital for our operations or acquisitions. We may use our cash and cash equivalents on hand, the cash flow from our operations, net proceeds from any sales of assets and net proceeds of any offerings of equity or debt securities to fund our distributions to our shareholders.

As of MarchJune 31,30, 2026, committed, but unspent, tenant related obligations based on existing leases were $4,868,$12,599, of which $3,900$12,115 is expected to be spent during the next 12 months.

We own a 61% equity interest in our consolidated joint venture. We control this consolidated joint venture and therefore account for the properties owned by this joint venture on a consolidated basis in our condensed consolidated financial statements. WeOur also own a 22% equity interest in the unconsolidated joint venture. We account for the unconsolidated joint venture using the equity method of accounting under the fair value option. The unconsolidatedconsolidated joint venture made aggregate cash distributions of $38,000 during the three and six months ended June 30, 2026, of which $14,820 was distributed to the unrelated third party investor. The remaining $23,180 distributed to us ofwas $1,188reclassified from restricted cash and $990cash forequivalents theto three months ended March 31, 2026cash and 2025,cash respectively.equivalents in our condensed consolidated balance sheets.

As of MarchJune 31,30, 2026, we had an aggregate principal amount of $4,209,229$4,221,000 of indebtedness, primarily including: (1) our $1,160,000 mortgage loan; (2) the Mountain Floating Rate Loan; (3) our $700,000 mortgage loan; (43) our $650,000 mortgage loan; and (54) our consolidated joint venture’s $91,000$1,711,000 mortgagein loan; and (6) $208,229 of our consolidated joint venture’s amortizingaggregate mortgage loans, with maturity dates between 20272029 and 2038.2032.

The agreements and related documents governing our $1,160,000 mortgage loan, theour Mountain$700,000 Floatingmortgage Rate Loan,loan, our $700,000$650,000 mortgage loan and our $650,000consolidated joint venture’s $1,620,000 mortgage loan contain customary covenants, provide for acceleration of payment of all amounts due thereunder upon the occurrence and continuation of certain events of default and, in the case of the $650,000 mortgage loan, also require us to maintain a minimum consolidated net worth of at least $250,000 and liquidity of at least $15,000. As of MarchJune 31,30, 2026, we believe that we were in compliance with all of the covenants and other terms under the agreements governing these loans.

During the threesix months ended MarchJune 31,30, 2026, we declared and paid a regular quarterly distributiondistributions to common shareholders totaling $3,333$6,666 using cash on hand.

On AprilJuly 9, 2026, we declared a regular quarterly distribution to common shareholders of record on AprilJuly 21,20, 2026 of $0.05$0.10 per share, or approximately $3,333.$6,675. We expect to pay this distribution on or about MayAugust 14,13, 2026 using cash on hand.