ILPT Closes Its $4B Monmouth Acquisition; Forms New JV

Industrial Logistics Property Trust has completed its acquisition of Monmouth Real Estate Investment for $21 per share in an all-cash transaction valued at approximately $4 billion.

ILPT expects the Monmouth portfolio to generate annualized rental revenues of approximately $175 million in 2022 and expects the transaction to be accretive to normalized funds from operations, or Normalized FFO, per share.

ILPT Forms JV 

Simultaneous with closing the Monmouth transaction, ILPT entered into a new joint venture with an institutional investor for 95 Monmouth properties that are expected to generate approximately $137 million in annualized net operating income, or NOI, in 2022. 

The investor contributed approximately $587 million for a 39% non-controlling equity interest and ILPT retained a 61% equity interest in the joint venture. The joint venture also entered into a $1.4 billion floating rate CMBS loan secured by 82 of the acquired properties and assumed $323 million of existing Monmouth mortgage debt.

ILPT used the proceeds from the joint venture to partially fund the Monmouth purchase. 

In connection with the closing of the Monmouth transaction, ILPT also terminated its existing $750 million revolving credit facility.

In December, ILPT announced it would be adding six industrial properties to its existing joint venture with institutional investors for an aggregate price of approximately $206 million.

The Monmouth portfolio includes 126 single-tenant, net-leased, e-commerce focused industrial properties containing over 26 million square feet of space.

Transaction Creates Enhanced Scale

“This accretive transaction is complementary to our existing portfolio and increases ILPT’s exposure to key markets that offer attractive long-term investment prospects,” ILPT president and CEO John Murray said in prepared remarks. 

 It also further demonstrates our strong and growing relationships with “private capital investors, providing ILPT with access to efficient capital to support future growth.”

ILPT expects to repay the $1.385 billion bridge loan facility with proceeds from the sale of approximately 30 Monmouth properties and from borrowings under a new credit facility it plans to enter by mid-2022. 

Citigroup Global Markets acted as exclusive financial advisor, Hunton Andrews Kurth LLP served as legal advisor on the transaction, Skadden, Arps, Slate, Meagher & Flom LLP served as legal advisor on the bridge and CMBS financings, and Sullivan & Worcester LLP served as legal advisor on the joint venture and corporate and tax structuring. Joint lead arrangers and bookrunners for the bridge loan were Citigroup Global Markets Inc. and UBS Investment Bank.