ILPT Completes $4B Acquisition of Monmouth Real Estate Investment

John Murray, President & CEO, Industrial Logistics Properties Trust. Image courtesy of ILPT

Industrial Logistics Properties Trust, of Newton, Mass., has completed its approximately $4.0 billion acquisition of Monmouth Real Estate Investment Corp., the REIT announced Monday.

The acquisition was an all-cash transaction for $21.00 per Monmouth share and included committed Monmouth acquisitions, transaction costs and the assumption of about $323 million of debt.

The Monmouth portfolio consists of 126 Class A, single-tenant, net-leased, e-commerce–focused industrial properties totaling more than 26 million square feet of space. The portfolio has a weighted average lease term of about eight years, is 99.7 percent occupied and is more than 80 percent leased to investment-grade tenants.

In a prepared statement, ILPT President & CEO John Murray highlighted the enhanced scale, larger portfolio with better exposure to key markets, and greater tenant and geographic diversity the acquisition provides to ILPT.

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Simultaneously, ILPT entered into a new joint venture with an institutional investor for 95 of the Monmouth properties, to which the investor contributed about $587 million for a 39 percent non-controlling equity interest.

The joint venture in turn entered into a $1.4 billion floating rate CMBS loan secured by 82 of the properties and assumed $323 million of existing Monmouth mortgage debt.

ILPT used the proceeds from the joint venture to partially fund the Monmouth purchase. ILPT funded its equity interest in the joint venture and the balance of the Monmouth purchase price with proceeds from a $1.4 billion draw on a bridge loan facility secured by 109 Monmouth and ILPT properties and proceeds from a $700 million fixed-rate CMBS loan secured by 17 existing ILPT properties.

ILPT expects to repay the $1.4 billion bridge loan facility with proceeds from the sale of about 30 Monmouth properties and from borrowings under a new credit facility it plans to enter by mid-year. ILPT also plans to sell additional equity interests in the joint venture.

A long pursuit

Citigroup Global Markets Inc. was the exclusive financial advisor, Hunton Andrews Kurth LLP was legal advisor on the acquisition, Skadden, Arps, Slate, Meagher & Flom LLP was the 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.

The bridge loan’s joint lead arrangers and bookrunners were Citigroup Global Markets Inc. and UBS Investment Bank.

The deal was announced early last November, capping a history of bids for Monmouth going back to December 2020. ILPT at that point was already planning to sell a slice of the Monmouth portfolio into a joint venture.