10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

ý	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2018
or
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 001-38342

INDUSTRIAL LOGISTICS PROPERTIES TRUST

(Exact Name of Registrant as Specified in Its Charter)

Maryland	82-2809631
(State of Organization)	(IRS Employer Identification No.)

Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts 02458-1634

(Address of Principal Executive Offices) (Zip Code)

Registrant’s Telephone Number, Including Area Code: 617-219-1460

Securities registered pursuant to Section 12(b) of the Act:

Title Of Each Class	Name of Each Exchange On Which Registered
Common Shares of Beneficial Interest	The Nasdaq Stock Market LLC

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ý  No ¨

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes☐ No ý

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý  No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ý  No ☐

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ý

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ Non-accelerated filer ý Smaller reporting company ☐ Emerging growth company ý

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ý

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐  No ý

The aggregate market value of the voting common shares of beneficial interest, $.01 par value, or common shares, of the registrant held by non-affiliates was $447.0 million based on the $22.35 closing price per common share on The Nasdaq Stock Market LLC on June 29, 2018. For purposes of this calculation, an aggregate of 20,000 common shares held directly by, or by affiliates of, the trustees and the executive officers of the registrant, plus 45,000,000 common shares held by Select Income REIT, or SIR, as of June 30, 2018 have been included in the number of common shares held by affiliates. On December 27, 2018, SIR distributed all 45,000,000 common shares that SIR owned to SIR's shareholders of record as of the close of business on December 20, 2018.

Number of the registrant’s common shares outstanding as of February 19, 2019: 65,074,791.

References in this Annual Report on Form 10-K to the Company, ILPT, we, us or our mean Industrial Logistics Properties Trust and its consolidated subsidiaries unless otherwise expressly stated or the context indicates otherwise.

DOCUMENTS INCORPORATED BY REFERENCE

Certain information required by Items 10, 11, 12, 13 and 14 of Part III of this Annual Report on Form 10-K is incorporated by reference to our definitive Proxy Statement for the 2019 Annual Meeting of Shareholders, to be filed with the Securities and Exchange Commission within 120 days after the fiscal year ended December 31, 2018.

WARNING CONCERNING FORWARD LOOKING STATEMENTS

THIS ANNUAL REPORT ON FORM 10-K CONTAINS STATEMENTS THAT CONSTITUTE FORWARD LOOKING STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 AND OTHER SECURITIES LAWS. ALSO, WHENEVER WE USE WORDS SUCH AS “BELIEVE”, “EXPECT”, “ANTICIPATE”, “INTEND”, “PLAN”, “ESTIMATE”, “WILL”, “MAY” AND NEGATIVES OR DERIVATIVES OF THESE OR SIMILAR EXPRESSIONS, WE ARE MAKING FORWARD LOOKING STATEMENTS. THESE FORWARD LOOKING STATEMENTS ARE BASED UPON OUR PRESENT INTENT, BELIEFS OR EXPECTATIONS, BUT FORWARD LOOKING STATEMENTS ARE NOT GUARANTEED TO OCCUR AND MAY NOT OCCUR. FORWARD LOOKING STATEMENTS IN THIS REPORT RELATE TO VARIOUS ASPECTS OF OUR BUSINESS, INCLUDING:

• THE LIKELIHOOD THAT OUR TENANTS WILL PAY RENT OR BE NEGATIVELY AFFECTED BY CYCLICAL ECONOMIC CONDITIONS,

• THE LIKELIHOOD THAT OUR TENANTS WILL RENEW OR EXTEND THEIR LEASES OR THAT WE WILL BE ABLE TO OBTAIN REPLACEMENT TENANTS,

• OUR ACQUISITIONS OF PROPERTIES,

• OUR ABILITY TO COMPETE FOR ACQUISITIONS AND TENANCIES EFFECTIVELY,

• THE LIKELIHOOD THAT OUR RENTS WILL INCREASE WHEN WE RENEW OR EXTEND OUR LEASES, WHEN WE ENTER NEW LEASES, OR WHEN OUR RENTS RESET AT OUR HAWAII PROPERTIES,

• OUR ABILITY TO PAY DISTRIBUTIONS TO OUR SHAREHOLDERS AND TO SUSTAIN THE AMOUNT OF SUCH DISTRIBUTIONS,

• THE FUTURE AVAILABILITY OF BORROWINGS UNDER OUR REVOLVING CREDIT FACILITY,

• OUR POLICIES AND PLANS REGARDING INVESTMENTS, FINANCINGS AND DISPOSITIONS,

• OUR ABILITY TO RAISE DEBT OR EQUITY CAPITAL,

• OUR ABILITY TO PAY INTEREST ON AND PRINCIPAL OF OUR DEBT,

• OUR ABILITY TO APPROPRIATELY BALANCE OUR USE OF DEBT AND EQUITY CAPITAL,

• CHANGES IN THE SECURITY OF CASH FLOWS FROM OUR PROPERTIES,

• OUR TENANTS' ABILITY AND WILLINGNESS TO PAY THEIR RENT OBLIGATIONS TO US,

• OUR ABILITY TO SUCCESSFULLY AND PROFITABLY COMPLETE EXPANSION AND RENOVATION PROJECTS AT OUR PROPERTIES AND TO REALIZE OUR EXPECTED RETURNS ON THOSE PROJECTS,

• OUR EXPECTATION THAT WE BENEFIT FROM OUR RELATIONSHIPS WITH THE RMR GROUP INC., OR RMR INC.,

• OUR ABILITY TO QUALIFY AND MAINTAIN OUR QUALIFICATION FOR TAXATION AS A REAL ESTATE INVESTMENT TRUST, OR REIT,

• CHANGES IN FEDERAL OR STATE TAX LAWS,

• THE CREDIT QUALITIES OF OUR TENANTS,

• CHANGES IN ENVIRONMENTAL LAWS OR IN THEIR INTERPRETATIONS OR ENFORCEMENT AS A RESULT OF CLIMATE CHANGE OR OTHERWISE,

• OUR SALES OF PROPERTIES, AND

• OTHER MATTERS.

(i)

OUR ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE CONTAINED IN OR IMPLIED BY OUR FORWARD LOOKING STATEMENTS AS A RESULT OF VARIOUS FACTORS. FACTORS THAT COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR FORWARD LOOKING STATEMENTS AND UPON OUR BUSINESS, RESULTS OF OPERATIONS, FINANCIAL CONDITION, FUNDS FROM OPERATIONS, OR FFO, NORMALIZED FFO, NET OPERATING INCOME, OR NOI, CASH FLOWS, LIQUIDITY AND PROSPECTS INCLUDE, BUT ARE NOT LIMITED TO:

• THE IMPACT OF CONDITIONS IN THE ECONOMY AND THE CAPITAL MARKETS ON US AND OUR TENANTS,

• COMPETITION WITHIN THE REAL ESTATE INDUSTRY, PARTICULARLY FOR INDUSTRIAL AND LOGISTICS PROPERTIES IN THOSE MARKETS IN WHICH OUR PROPERTIES ARE LOCATED,

• COMPLIANCE WITH, AND CHANGES TO, FEDERAL, STATE AND LOCAL LAWS AND REGULATIONS, ACCOUNTING RULES, TAX LAWS AND SIMILAR MATTERS,

• LIMITATIONS IMPOSED ON OUR BUSINESS AND OUR ABILITY TO SATISFY COMPLEX RULES IN ORDER FOR US TO QUALIFY FOR TAXATION AS A REIT FOR U.S. FEDERAL INCOME TAX PURPOSES,

• ACTUAL AND POTENTIAL CONFLICTS OF INTEREST WITH OUR RELATED PARTIES, INCLUDING OUR MANAGING TRUSTEES, THE RMR GROUP LLC, OR RMR LLC, RMR INC., AFFILIATES INSURANCE COMPANY, OR AIC, AND OTHERS AFFILIATED WITH THEM, AND

• ACTS OF TERRORISM, OUTBREAKS OF SO CALLED PANDEMICS OR OTHER MANMADE OR NATURAL DISASTERS BEYOND OUR CONTROL.

FOR EXAMPLE:

• OUR ABILITY TO MAKE FUTURE DISTRIBUTIONS TO OUR SHAREHOLDERS AND TO MAKE PAYMENTS OF PRINCIPAL AND INTEREST ON OUR INDEBTEDNESS DEPENDS UPON A NUMBER OF FACTORS, INCLUDING OUR FUTURE EARNINGS, THE CAPITAL COSTS WE INCUR TO LEASE OUR PROPERTIES AND OUR WORKING CAPITAL REQUIREMENTS. WE MAY BE UNABLE TO PAY OUR DEBT OBLIGATIONS OR TO MAINTAIN OUR CURRENT RATE OF DISTRIBUTIONS ON OUR COMMON SHARES AND FUTURE DISTRIBUTIONS MAY BE REDUCED OR ELIMINATED,

• OUR ABILITY TO GROW OUR BUSINESS AND INCREASE OUR DISTRIBUTIONS DEPENDS IN LARGE PART UPON OUR ABILITY TO BUY PROPERTIES AND LEASE THEM FOR RENTS, LESS THEIR PROPERTY OPERATING COSTS, THAT EXCEED OUR CAPITAL COSTS. WE MAY BE UNABLE TO IDENTIFY PROPERTIES THAT WE WANT TO ACQUIRE AND WE MAY FAIL TO REACH AGREEMENT WITH THE SELLERS AND COMPLETE THE PURCHASES OF ANY PROPERTIES WE DO WANT TO ACQUIRE. IN ADDITION, ANY PROPERTIES WE MAY ACQUIRE MAY NOT PROVIDE US WITH RENTS LESS PROPERTY OPERATING COSTS THAT EXCEED OUR CAPITAL COSTS OR ACHIEVE OUR EXPECTED RETURNS,

• CONTINGENCIES IN OUR ACQUISITION AND SALE AGREEMENTS MAY NOT BE SATISFIED AND ANY EXPECTED ACQUISITIONS AND SALES MAY NOT OCCUR, MAY BE DELAYED OR THE TERMS OF SUCH TRANSACTIONS MAY CHANGE, 

• RENTS THAT WE CAN CHARGE AT OUR PROPERTIES MAY DECLINE UPON RENT RESETS, LEASE RENEWALS OR LEASE EXPIRATIONS BECAUSE OF CHANGING MARKET CONDITIONS OR OTHERWISE,

• LEASING FOR SOME OF OUR PROPERTIES DEPENDS ON A SINGLE TENANT AND WE MAY BE ADVERSELY AFFECTED BY THE BANKRUPTCY, INSOLVENCY, A DOWNTURN OF BUSINESS OR A LEASE TERMINATION OF A SINGLE TENANT,

• CERTAIN OF OUR HAWAII PROPERTIES ARE LANDS LEASED FOR RENTS THAT PERIODICALLY RESET BASED ON THEN CURRENT FAIR MARKET VALUES. REVENUES FROM OUR PROPERTIES IN HAWAII HAVE GENERALLY INCREASED DURING OUR AND OUR PREDECESSORS’ OWNERSHIP AS THE LEASES FOR THOSE PROPERTIES HAVE BEEN RESET, EXTENDED OR RENEWED. ALTHOUGH

(ii)

WE EXPECT THAT RENTS FOR OUR HAWAII PROPERTIES WILL INCREASE IN THE FUTURE, WE CANNOT BE SURE THEY WILL INCREASE. FUTURE RENTS FROM THESE PROPERTIES COULD DECREASE OR NOT INCREASE TO THE EXTENT THEY HAVE IN THE PAST OR BY THE AMOUNT WE EXPECT,

• OUR POSSIBLE DEVELOPMENT OR REDEVELOPMENT OF CERTAIN OF OUR PROPERTIES MAY NOT BE REALIZED OR BE SUCCESSFUL,

• OUR LEASING RELATED OBLIGATIONS MAY COST MORE AND MAY TAKE LONGER TO COMPLETE THAN WE EXPECT, AND OUR LEASING RELATED OBLIGATIONS MAY INCREASE IN THE FUTURE,

• ECONOMIC CONDITIONS IN AREAS WHERE OUR PROPERTIES ARE LOCATED MAY DECLINE IN THE FUTURE. SUCH CIRCUMSTANCES OR OTHER CONDITIONS MAY REDUCE DEMAND FOR LEASING INDUSTRIAL SPACE. IF THE DEMAND FOR LEASING INDUSTRIAL SPACE IS REDUCED, WE MAY BE UNABLE TO RENEW LEASES WITH OUR TENANTS AS LEASES EXPIRE OR ENTER NEW LEASES AT RENTAL RATES AS HIGH AS EXPIRING RENTS AND OUR FINANCIAL RESULTS MAY DECLINE,

• E-COMMERCE RETAIL SALES MAY NOT CONTINUE TO GROW AND INCREASE THE DEMAND FOR INDUSTRIAL AND LOGISTICS REAL ESTATE AS WE EXPECT,

• INCREASING DEVELOPMENT OF INDUSTRIAL AND LOGISTICS PROPERTIES MAY REDUCE THE DEMAND FOR, AND RENTS FROM, OUR PROPERTIES,

• OUR BELIEF THAT THERE IS A LIKELIHOOD THAT TENANTS MAY RENEW OR EXTEND OUR LEASES PRIOR TO THEIR EXPIRATIONS WHENEVER THEY HAVE MADE SIGNIFICANT INVESTMENTS IN THE LEASED PROPERTIES, OR BECAUSE THOSE PROPERTIES MAY BE OF STRATEGIC IMPORTANCE TO THEM, MAY NOT BE REALIZED,

• SOME OF OUR TENANTS MAY NOT RENEW EXPIRING LEASES, AND WE MAY BE UNABLE TO OBTAIN NEW TENANTS TO MAINTAIN OR INCREASE THE HISTORICAL OCCUPANCY RATES OF, OR RENTS FROM, OUR PROPERTIES,

• THE COMPETITIVE ADVANTAGES WE BELIEVE WE HAVE MAY NOT IN FACT EXIST OR PROVIDE US WITH THE ADVANTAGES WE EXPECT. WE MAY FAIL TO MAINTAIN ANY OF THESE ADVANTAGES OR OUR COMPETITION MAY OBTAIN OR INCREASE THEIR COMPETITIVE ADVANTAGES RELATIVE TO US,

• OUR INCREASED OPERATING EXPENSES AS A PUBLIC COMPANY MAY BE GREATER THAN WE EXPECT,

• WE INTEND TO CONDUCT OUR BUSINESS ACTIVITIES IN A MANNER THAT WILL AFFORD US REASONABLE ACCESS TO CAPITAL FOR INVESTMENT AND FINANCING ACTIVITIES. HOWEVER, WE MAY NOT SUCCEED IN THIS REGARD AND WE MAY NOT HAVE REASONABLE ACCESS TO CAPITAL,

• CONTINUED AVAILABILITY OF BORROWINGS UNDER OUR REVOLVING CREDIT FACILITY IS SUBJECT TO OUR SATISFYING CERTAIN FINANCIAL COVENANTS AND OTHER CREDIT FACILITY CONDITIONS THAT WE MAY BE UNABLE TO SATISFY,

• ACTUAL COSTS UNDER OUR REVOLVING CREDIT FACILITY WILL BE HIGHER THAN LIBOR PLUS A PREMIUM BECAUSE OF FEES AND EXPENSES ASSOCIATED WITH SUCH DEBT,

• WE MAY BE UNABLE TO REPAY OUR DEBT OBLIGATIONS WHEN THEY BECOME DUE,

• THE MAXIMUM BORROWING AVAILABILITY UNDER OUR REVOLVING CREDIT FACILITY MAY BE INCREASED TO UP TO $1.5 BILLION IN CERTAIN CIRCUMSTANCES. HOWEVER, INCREASING THE MAXIMUM BORROWING AVAILABILITY UNDER OUR REVOLVING CREDIT FACILITY IS SUBJECT TO OUR OBTAINING ADDITIONAL COMMITMENTS FROM LENDERS, WHICH MAY NOT OCCUR,

(iii)

• WE HAVE THE OPTION TO EXTEND THE MATURITY DATE OF OUR REVOLVING CREDIT FACILITY UPON PAYMENT OF A FEE AND MEETING OTHER CONDITIONS. HOWEVER, THE APPLICABLE CONDITIONS MAY NOT BE MET,

• THE PREMIUMS USED TO DETERMINE THE INTEREST RATE PAYABLE ON OUR REVOLVING CREDIT FACILITY AND THE UNUSED FEE PAYABLE ON OUR REVOLVING CREDIT FACILITY ARE BASED ON OUR LEVERAGE. CHANGES IN OUR LEVERAGE MAY CAUSE THE INTEREST AND FEES WE PAY TO INCREASE,

• WE MAY SPEND MORE FOR CAPITAL EXPENDITURES THAN WE CURRENTLY EXPECT,

• THE BUSINESS AND PROPERTY MANAGEMENT AGREEMENTS BETWEEN US AND RMR LLC HAVE CONTINUING 20 YEAR TERMS. HOWEVER, THOSE AGREEMENTS PERMIT EARLY TERMINATION IN CERTAIN CIRCUMSTANCES. ACCORDINGLY, WE CANNOT BE SURE THAT THESE AGREEMENTS WILL REMAIN IN EFFECT FOR CONTINUING 20 YEAR TERMS,

• WE BELIEVE THAT OUR RELATIONSHIPS WITH OUR RELATED PARTIES, INCLUDING RMR LLC, RMR INC., AIC AND OTHERS AFFILIATED WITH THEM MAY BENEFIT US AND PROVIDE US WITH COMPETITIVE ADVANTAGES IN OPERATING AND GROWING OUR BUSINESS. HOWEVER, THE ADVANTAGES WE BELIEVE WE MAY REALIZE FROM THESE RELATIONSHIPS MAY NOT MATERIALIZE, AND

• IT IS DIFFICULT TO ACCURATELY ESTIMATE DEVELOPMENT AND TENANT IMPROVEMENT COSTS. OUR DEVELOPMENT PROJECTS MAY COST MORE AND MAY TAKE LONGER TO COMPLETE THAN WE CURRENTLY EXPECT.

CURRENTLY UNEXPECTED RESULTS COULD OCCUR DUE TO MANY DIFFERENT CIRCUMSTANCES, SOME OF WHICH ARE BEYOND OUR CONTROL, SUCH AS ACTS OF TERRORISM, NATURAL DISASTERS, CHANGES IN OUR TENANTS’ FINANCIAL CONDITIONS, THE MARKET DEMAND FOR LEASED SPACE OR CHANGES IN CAPITAL MARKETS OR THE ECONOMY GENERALLY.

THE INFORMATION CONTAINED ELSEWHERE IN THIS ANNUAL REPORT ON FORM 10-K OR IN OUR OTHER FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION, OR SEC, INCLUDING UNDER THE CAPTION “RISK FACTORS”, OR INCORPORATED HEREIN OR THEREIN, IDENTIFIES OTHER IMPORTANT FACTORS THAT COULD CAUSE DIFFERENCES FROM OUR FORWARD LOOKING STATEMENTS. OUR FILINGS WITH THE SEC ARE AVAILABLE ON THE SEC’S WEBSITE AT WWW.SEC.GOV.    

YOU SHOULD NOT PLACE UNDUE RELIANCE UPON OUR FORWARD LOOKING STATEMENTS.

EXCEPT AS REQUIRED BY LAW, WE DO NOT INTEND TO UPDATE OR CHANGE ANY FORWARD LOOKING STATEMENTS AS A RESULT OF NEW INFORMATION, FUTURE EVENTS OR OTHERWISE.

STATEMENT CONCERNING LIMITED LIABILITY

THE AMENDED AND RESTATED DECLARATION OF TRUST ESTABLISHING INDUSTRIAL LOGISTICS PROPERTIES TRUST, DATED JANUARY 11, 2018, AS FILED WITH THE STATE DEPARTMENT OF ASSESSMENTS AND TAXATION OF MARYLAND, PROVIDES THAT NO TRUSTEE, OFFICER, SHAREHOLDER, EMPLOYEE OR AGENT OF INDUSTRIAL LOGISTICS PROPERTIES TRUST SHALL BE HELD TO ANY PERSONAL LIABILITY, JOINTLY OR SEVERALLY, FOR ANY OBLIGATION OF, OR CLAIM AGAINST, INDUSTRIAL LOGISTICS PROPERTIES TRUST. ALL PERSONS DEALING WITH INDUSTRIAL LOGISTICS PROPERTIES TRUST IN ANY WAY SHALL LOOK ONLY TO THE ASSETS OF INDUSTRIAL LOGISTICS PROPERTIES TRUST FOR THE PAYMENT OF ANY SUM OR THE PERFORMANCE OF ANY OBLIGATION.

(iv)

INDUSTRIAL LOGISTICS PROPERTIES TRUST

2018FORM 10-K ANNUAL REPORT

Table of Contents

		Page
	Part I
Item 1.	Business	1
Item 1A.	Risk Factors	27
Item 1B.	Unresolved Staff Comments	42
Item 2.	Properties	42
Item 3.	Legal Proceedings	43
Item 4.	Mine Safety Disclosures	44
	Part II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	45
Item 6.	Selected Financial Data	46
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	46
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	62
Item 8.	Financial Statements and Supplementary Data	64
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	64
Item 9A.	Controls and Procedures	64
Item 9B.	Other Information	64
	Part III
Item 10.	Directors, Executive Officers and Corporate Governance	65
Item 11.	Executive Compensation	65
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	65
Item 13.	Certain Relationships and Related Transactions, and Director Independence	65
Item 14.	Principal Accountant Fees and Services	65
	Part IV
Item 15.	Exhibits and Financial Statement Schedules	66
Item 16.	Form 10-K Summary	67
	Signatures

PART 1

Item 1.Business

Our Company

We are a real estate investment trust, or REIT, that was organized under Maryland law in 2017. We own and lease industrial and logistics properties throughout the United States. We intend to elect and qualify for taxation as a REIT for U.S. federal income tax purposes commencing with our taxable year ended December 31, 2018, and to maintain such qualification thereafter.

On January 17, 2018, we completed an initial public offering and listing on The Nasdaq Stock Market LLC, or Nasdaq, of 20,000,000 of our common shares, or our IPO. At that time, we owned 266 properties, or our Initial Properties, with a total of approximately 28.5 million rentable square feet (all square footage amounts included within this Annual Report on Form 10-K are unaudited). Our Initial Properties were contributed to us on September 29, 2017 by Select Income REIT, or SIR, a former publicly traded REIT that merged with a wholly owned subsidiary of Office Properties Income Trust (formerly Government Properties Income Trust), or OPI, on December 31, 2018. In connection with our formation and the contribution of our Initial Properties, we (i) issued to SIR 45,000,000 of our common shares, (ii) issued to SIR a $750.0 million non-interest bearing demand note, or the SIR Note, and (iii) assumed three mortgage notes totaling $63.1 million, excluding premiums, that were secured by three of our Initial Properties. In December 2017, we obtained a $750.0 million secured revolving credit facility, and we used the proceeds of an initial borrowing under this credit facility to pay the SIR Note in full. Also in December 2017, SIR prepaid on our behalf two of the mortgage notes totaling approximately $14.3 million that had encumbered two of our Initial Properties. Upon the closing of our IPO, our secured revolving credit facility converted into a four year unsecured revolving credit facility and we used substantially all of the net proceeds from our IPO to reduce amounts outstanding under our revolving credit facility. We also reimbursed SIR for costs that SIR incurred in connection with our formation and the preparation for our IPO. On December 27, 2018, SIR distributed all 45,000,000 of our common shares that SIR owned to SIR's shareholders of record as of the close of business on December 20, 2018.

As of December 31, 2018, we owned 270 properties that were approximately 99.3% leased to 248 tenants with a weighted average (by annualized rental revenues) remaining lease term of approximately 11 years. These properties consisted of 226 buildings, leasable land parcels and easements with a total of approximately 16.8 million rentable square feet that were primarily industrial lands located on the island of Oahu, HI, or our Hawaii Properties, and 44 buildings with a total of approximately 12.7 million rentable square feet that were industrial and logistics properties located in 25 other states, or our Mainland Properties.

As of December 31, 2018, our Hawaii Properties represented 58.1% of our annualized rental revenues and our Mainland Properties represented 41.9% of our annualized rental revenues. We define the term annualized rental revenues as used in this Annual Report on Form 10-K as the annualized contractual rents as of December 31, 2018, including straight line rent adjustments and excluding lease value amortization, adjusted for tenant concessions including free rent and amounts reimbursed to tenants, plus estimated recurring expense reimbursements from tenants.

Our principal executive offices are located at Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts 02458-1634, and our telephone number is (617) 219-1460.

Our Business and Growth Strategies

We own and lease industrial and logistics properties located throughout the United States. We believe our current properties provide a stable base of increasing income. We intend to expand our business by acquiring additional industrial and logistics properties in the United States that may benefit from the growth of e-commerce.

Internal Growth through Rent Resets and Leasing Activity, Fixed Increases in Our Leases and Selective Development. Certain of the leases for our Hawaii Properties provide for rents to be reset to fair market value periodically during the lease terms. Since our predecessors began acquiring our Hawaii Properties in December 2003, our Hawaii Properties have remained over 98.0% leased, and periodic rent resets, together with lease extensions and new leasing activity following lease expirations, at our Hawaii Properties have resulted in significant rent increases. Because of 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 rent growth as a result of periodic rent resets, lease extensions and new leasing following current lease expirations. In addition to the internal rent growth which may result from our rent resets and lease expirations at our Hawaii Properties, a majority of the leases at our Mainland Properties and certain leases at our Hawaii Properties include periodic set dollar amount or percentage increases that raise the cash rent payable to us.

1

Since the leases at certain of our Hawaii Properties were originally entered, in some cases, as long as 40 or 50 years ago, the characteristics of the neighborhoods in the vicinity of some of those properties have changed. In such circumstances, we and our predecessors have sometimes engaged in redevelopment activities to change the character of certain properties in order to increase rents (e.g., from industrial to retail use). Because our Hawaii Properties are currently experiencing strong demand from tenants for industrial and logistics uses, we do not currently expect redevelopment efforts in Hawaii to become a major activity of ours in the near term; however, we may undertake such activities on a selective basis. Also, we and our predecessors have sometimes built expansions for tenants at our Mainland Properties in return for lease extensions and rent increases, and we expect to continue such activities.

External Growth through Acquisitions. Our external growth strategy is to acquire additional industrial and logistics properties that we believe will produce net operating income, or NOI, in excess of our cost of capital used to purchase the properties. We intend to grow our business by investing primarily in industrial and logistics properties that serve the growing needs of e-commerce. We believe that e-commerce sales will continue to grow, in both dollar value and as a percentage of total retail sales, and that this will create strong demand for industrial and logistics properties and rental growth for the next several years. We are focused on acquiring industrial and logistics properties that are of strategic importance to our tenants’ businesses, such as build to suit properties, strategic distribution hubs or other properties in which tenants have invested a significant amount of capital. We target occupied properties, where tenants are financially responsible for all, or substantially all, property operating expenses, including increases with respect thereto. Because there are a limited number of industrial and logistics properties in Hawaii, we expect that most of our acquisitions will be in other states.

We believe we have two competitive advantages which may allow us to successfully implement our external growth strategy, as follows:

First, we have and expect to maintain a strong capitalization which may allow us to access reasonably priced capital throughout business cycles. As of February 19, 2019, we had approximately $758.8 million of total debt and approximately $1.4 billion of market value of common equity, and approximately $690.0 million of available borrowing capacity under our revolving credit facility.

Second, we believe we have an experienced management team to implement our growth strategies. Our executive officers have extensive experience acquiring and operating real estate. We believe our manager, The RMR Group LLC, or RMR LLC, a Maryland limited liability company, can and will provide us with an extensive array of services to assist with our acquisitions. The RMR Group Inc. (Nasdaq: RMR), a Maryland corporation, or RMR Inc., the majority owner of RMR LLC, is an alternative asset management company that has been managing commercial real estate companies and related businesses since 1986. As of December 31, 2018, RMR LLC had $29.7 billion of real estate assets under management. Because of the experience and depth of our management, we believe we will be able to acquire industrial and logistics properties throughout the United States and successfully compete with many of our competitors.

Our Investment Policies

Our target investments include all industrial and logistics buildings in top tier markets. Outside of top tier markets, our focus is on newer buildings, high credit quality tenants and longer lease terms. We target estimated capitalization rates of 5% - 7% for new investments. If and as market conditions change, our target investments and target estimated capitalization rates may change.

In evaluating potential property acquisitions, we consider various factors, including, but not limited to, the following:

• the location of the property;

• the historic and projected rents received and to be received from the property;

• our cost of capital compared to projected returns we may realize by owning the property;

• the experience and credit quality of the property’s tenants;

• the industries in which the tenants operate;

• the remaining term of the leases at the property and other lease terms;

2

• the type of property (e.g., distribution facility, light industrial, etc.);

• the tax and regulatory circumstances of the market area in which the property is located;

• the occupancy and demand for similar properties in the same or nearby locations;

• the construction quality, physical condition and design of the property;

• the expected capital expenditures that may be needed at the property;

• the price at which the property may be acquired as compared to the estimated replacement cost of the property;

• the price at which the property may be acquired as compared to the prices of comparable properties as evidenced by recent market sales;

• the strategic fit of the property with the rest of our portfolio; and

• the existence of alternative sources, uses or needs for our capital.

We have no limitations on the amount or percentage of our total assets that may be invested in any one property and no limits on the concentration of investments in any one location.

Our Board of Trustees may change our acquisition and investment policies at any time without a vote of, or advance notice to, our shareholders. We may in the future adopt policies with respect to investments in real estate mortgages or securities of other entities engaged in real estate activities. We may in the future consider the possibility of entering into mergers, strategic combinations or joint ventures with other companies.

Our Disposition Policies

We generally consider ourselves to be a long term owner of our properties. We have no current plans to sell any of our properties, but we may decide to sell some of our properties in the future. We expect our decision to sell properties will be based upon the following considerations, among others, which may be relevant to a particular property at a particular time:

• whether the property is leased and, if so, the remaining lease term and likelihood of lease renewal;

• whether the property’s tenants are current on their lease obligations;

• our evaluation of the property’s tenants’ abilities to pay their contractual rents;

• our ability to identify new tenants if the property has or is likely to develop vacancies;

• our evaluation of future rents which may be achieved from the property;

• the potential costs associated with finding replacement tenants, including tenant improvements, leasing commissions and concessions, the cost to operate the property while vacant, and required building improvement capital, if any, all as compared to our projected returns from future rents;

• the estimated proceeds we may receive by selling the property;

• the strategic fit of the property with the rest of our portfolio;

• our intended use of the proceeds we may realize from the sale of a property;

• the existence of alternative sources, uses or needs for capital; and

• the tax implications to us and our shareholders of any proposed disposition.

Our Board of Trustees may change our disposition policies at any time without a vote of, or notice to, our shareholders.

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Our Financing Policies

To qualify for taxation as a REIT under the Internal Revenue Code of 1986, as amended, or the IRC, we generally will be required to distribute annually at least 90% of our REIT taxable income, subject to specified adjustments and excluding any net capital gain. Accordingly, we may not be able to retain sufficient cash to fund our operations, repay our debts, invest in our properties or fund acquisitions or development or redevelopment projects. Instead, we expect to repay our debts, invest in our properties or fund acquisitions, developments or redevelopments by borrowing under our revolving credit facility, issuing equity or debt securities or using retained cash from operations that may exceed distributions paid. We expect that our operating and investment activities will be financed by rents from tenants at our properties in excess of planned distributions to our shareholders and by borrowings under our revolving credit facility. As the maximum borrowing under, or the maturity of, our revolving credit facility approaches, we expect to renew that facility or refinance that indebtedness with equity issuances or new debt. We will decide when and whether to issue equity or new debt depending upon market conditions. Because our ability to raise capital will depend, in large part, upon market conditions, we cannot be sure that we will be able to raise sufficient capital to repay our debts or to fund our growth strategies.

We currently have a $750.0 million unsecured revolving credit facility that we use for working capital and general business purposes, including for acquisition funding on an interim basis until we may refinance with equity or debt. In some instances, we may assume outstanding mortgage debt in connection with the acquisition of properties or obtain financing secured by mortgages on properties we own. In January 2019, we obtained a $650.0 million mortgage loan that matures in February 2029 that is secured by a portfolio of industrial assets on the island of Oahu, Hawaii, comprised of 186 properties (178 land parcels and eight buildings) containing approximately 9.6 million square feet. For more information regarding our financing sources and activities, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Our Investment and Financing Liquidity and Resources” of this Annual Report on Form 10-K.

We do not have policies limiting the amount of debt we may incur or the number or amount of mortgages that may be placed on our properties. Our Board of Trustees may change our financing policies at any time without a vote of, or notice to, our shareholders.

Structure and Formation of Our Company

Until January 17, 2018, we were a wholly owned subsidiary of SIR, a former publicly traded REIT that merged with a wholly owned subsidiary of OPI. We were originally formed in 2017, and, on September 29, 2017, SIR contributed our Initial Properties to us. In connection with our formation and this contribution, we issued to SIR 45,000,000 of our common shares and the SIR Note, and we assumed three mortgage notes totaling approximately $63.1 million, as of September 30, 2017, that were secured by three of our Initial Properties with a total net book value of approximately $87.4 million. In December 2017, SIR prepaid on our behalf two of the mortgage notes totaling approximately $14.3 million that had encumbered two of our Initial Properties with a total net book value of approximately $20.4 million. On December 29, 2017, we obtained a $750.0 million secured revolving credit facility and used the proceeds of an initial borrowing under this credit facility to pay the SIR Note in full. Upon the completion of our IPO, our secured revolving credit facility was converted into a four year unsecured revolving credit facility maturing on December 29, 2021. We used the net proceeds from our IPO, after deducting the underwriting discounts and commissions and expenses to reduce the amount outstanding under our revolving credit facility. During 2018, we reimbursed SIR for approximately $7.3 million of costs that SIR incurred in connection with our formation and preparation for our IPO.

On December 27, 2018, SIR distributed all 45,000,000 common shares of ILPT that SIR owned to SIR's shareholders of record as of the close of business on December 20, 2018.

Our only debt outstanding after the completion of our IPO were amounts due under our revolving credit facility and the remaining mortgage note that we assumed.

Our Leases

The following is an overview of the general lease terms for our properties. The terms of a particular lease may vary from those described below.

Mainland Properties’ Leases. In general, our Mainland Properties are subject to leases pursuant to which the tenants pay fixed annual rents on a monthly, quarterly or semi-annual basis, and also pay or reimburse us for all, or substantially all,

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property level operating and maintenance expenses, such as real estate taxes, insurance, utilities and repairs, including increases with respect thereto. Many of our Mainland Properties’ leases require us to maintain the roof, exterior walls, foundation and other structural elements of the buildings at our expense; however, because we believe our Mainland Properties have been well maintained, we do not believe these expenses will be material to us during the remaining lease terms.

Our Mainland Properties are fully leased, and we do not expect to have many opportunities to raise rents or redevelop these properties until these leases start to expire beginning in 2020. Nonetheless, some of the tenant renewal options at our Mainland Properties provide for rents to be reset to fair market values, and we may be able to raise rents if and as these options are exercised. Also, we regularly confer with tenants at our Mainland Properties to determine if they are interested in our expanding or otherwise improving their leased properties in return for increased rents and extended terms. For example: we have negotiated a build to suit expansion of 194,000 square feet for an existing tenant at our Ankeny, IA property that resulted in a lease extension of approximately seven years after completion of the expansion and a rent increase of 2% annually for the extended term.

Hawaii Properties’ Leases. In general, our Hawaii Properties are subject to leases pursuant to which the tenants pay fixed annual rent on a monthly, quarterly or semi-annual basis, and also pay or reimburse us for all, or substantially all, property level operating and maintenance expenses, such as real estate taxes, insurance, utilities and repairs, including increases with respect thereto. Certain of our Hawaii Properties are leased for fixed annual rents that periodically reset based on fair market values and others are subject to leases with fixed increases. In some cases, the resets are based on fair market value rent and in other cases a percentage of the fair market value of the leased land. Fair market value rent reset rates are generally determined through negotiations between us and individual tenants; however, when no agreement is achieved, our Hawaii Properties’ leases require an appraisal process. In the appraisal process for land leases that are periodically reset based on fair market value rents, the appraisers are required to determine the fair and reasonable rent, exclusive of improvements. In the appraisal process for land leases that are periodically reset based on a percentage of the fair market value of the land, the appraisers are required to determine the fair market value of the land, usually exclusive of improvements, with such fair market value being based on the highest and best use of such land and as though unencumbered by the lease, and then the appraisers apply a rent return rate to the land value which may be set in the lease or determined by the appraisers based on market conditions.

Environmental Matters

Ownership of real estate is subject to risks associated with environmental hazards. Under various laws, owners as well as tenants of real estate may be required to investigate and clean up or remove hazardous substances present at or migrating from properties they own, lease or operate and may be held liable for property damage or personal injuries that result from hazardous substances. These laws also expose us to the possibility that we may become liable to government agencies or third parties for costs and damages they incur in connection with hazardous substances. In addition, these laws also impose various requirements regarding the operation and maintenance of properties and recordkeeping and reporting requirements relating to environmental matters that require us or the tenants of our properties to incur costs to comply with.

In addition, we believe that some of our properties may contain asbestos. We believe any asbestos on our properties is contained in accordance with applicable laws and regulations, and we have no current plans to remove it. If we remove the asbestos or renovate or demolish the affected properties, certain environmental regulations govern the manner in which the asbestos must be handled and removed, and we could incur substantial costs complying with such regulations.

Certain of our properties are used or have been used for industrial purposes. Though we have reviewed these and our other properties for potential environmental liabilities and have established a reserve for potential costs that may be incurred as a result of environmental contamination, we cannot be sure that we have identified all potential environmental liabilities or that our reserve will be sufficient to cover any costs we may incur relating to environmental matters. Some of our properties contain, or may have contained, or are near other properties that contain, or may have contained underground storage tanks for the storage of petroleum products and other hazardous substances. The presence of such storage tanks may have resulted in or may result in the release of petroleum products or other hazardous or toxic substances onto our properties. In addition, certain of our properties are on or near other properties upon which others have engaged, or may in the future engage, in activities that may release petroleum products or other hazardous substances which migrate to our properties.

We do not have any insurance to limit losses that we may incur as a result of known or unknown environmental conditions. As of December 31, 2018, we have reserved approximately $6.9 million for potential environmental liabilities arising at our properties. Our environmental reserve is based in part on SIR’s experience when it owned our Initial Properties. During SIR’s ownership of our Initial Properties, the reserve historically did not vary significantly from year to year and the actual historical costs to remediate certain environmental issues did not deviate significantly from the corresponding reserve

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amount. Nevertheless, environmental exposures are difficult to assess and estimate for numerous reasons, including uncertainty about the extent of contamination, alternative treatment methods that may be applied, the location of the property which subjects it to differing local laws and regulations and their interpretations, as well as the time it may take to remediate contamination. In developing reserves for potential environmental liability on a property by property basis, we consider among other things, enacted laws and regulations, assessments of contamination and surrounding geology, the quality of information available, currently available technologies for treatment, alternative methods of remediation and our prior experience and the known experience of prior owners or occupants of our properties. Environmental reserves are based on estimates which are subject to significant change and are often adjusted as remediation treatments progress, as circumstances change and as environmental contingencies become more clearly defined and reasonably estimable. Although we do not believe that there are environmental conditions at any of our properties that will materially and adversely affect us, we cannot be sure that such conditions or costs we may be required to incur in the future to address environmental contamination will not materially and adversely affect us.

We cannot be sure that conditions are not present at our properties or that costs we may be required to incur in the future to remediate contamination will not have a material adverse effect on our business or financial condition or results of operations. Moreover, our tenants may not have sufficient resources to pay environmental liabilities.

When major weather or climate-related events, such as hurricanes, floods or wildfires, occur near our properties, our tenants may need to suspend operations of the impacted properties until the event has ended and the property is then ready for operation. We or the tenants of our properties may incur significant costs and losses as a result of these activities, both in terms of operating, preparing and repairing our properties in anticipation of, during and after a severe weather or climate-related event and in terms of potential lost business due to the interruption in operating our properties. Our insurance and our tenants’ insurance may not adequately compensate us or them for these costs and losses.

Concerns about climate change have resulted in various treaties, laws and regulations that are intended to limit carbon emissions and address other environmental concerns. These and other laws may cause energy or other costs at our properties to increase. We do not expect the direct impact of these increases to be material to our results of operations, because the increased costs either would be the responsibility of our tenants directly or in the longer term, passed through and paid by tenants of our properties. Although we do not believe it is likely in the foreseeable future, laws enacted to mitigate climate change may make some of our properties obsolete or cause us to make material investments in our properties, which could materially and adversely affect our financial condition or the financial condition of our tenants and their ability to pay rent to us. For more information regarding climate change and other environmental matters and their possible adverse impact on us, see “Risk Factors—Risks Related to Our Business—Ownership of real estate is subject to environmental risks,” “Risk Factors—Risks Related to Our Business—Ownership of real estate is subject to climate change risks,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Impact of Climate Change” and Note 2 to the Notes to Consolidated Financial Statements of this Annual Report on Form 10-K.

Competition

Investing in and operating real estate is a very competitive business. We compete against publicly traded and private REITs, numerous financial institutions, individuals and public and private companies. Some of our competitors may have greater financial and other resources than us. We believe the experience and abilities of our management and our manager, the quality of our properties, the diversity and credit qualities of our tenants, and the structure of our leases may afford us some competitive advantages and allow us to operate our business successfully despite the competitive nature of our business. For more information, see “Risk Factors—Risks Related to Our Business—We face significant competition” in this Annual Report on Form 10-K.

Our Manager

RMR Inc. is a holding company and substantially all of its business is conducted by its majority owned subsidiary, RMR LLC. One of our Managing Trustees, Adam D. Portnoy, as the sole trustee of ABP Trust, is the controlling shareholder of RMR Inc. and is a managing director and the president and chief executive officer of RMR Inc. and an officer and employee of RMR LLC. John G. Murray, our other Managing Trustee and our President and Chief Executive Officer, is also an officer and employee of RMR LLC. Our day to day operations are conducted by RMR LLC. RMR LLC originates and presents investment and divestment opportunities to our Board of Trustees and provides management and administrative services to us. RMR LLC has a principal place of business at Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts 02458-1634, and its telephone number is (617) 796-8390. RMR LLC or its subsidiaries also acts as the manager to Hospitality Properties Trust, or HPT, OPI, Senior Housing Properties Trust, or SNH, and Tremont Mortgage Trust, or TRMT, and provides management and other services to other private and public companies, including Five Star Senior Living Inc., or Five Star,

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TravelCenters of America LLC, or TA, and Sonesta International Hotels Corporation, or Sonesta. As of the date of this Annual Report on Form 10-K, the executive officers of RMR LLC are: Adam Portnoy, President and Chief Executive Officer; David M. Blackman, Executive Vice President; Jennifer B. Clark, Executive Vice President, General Counsel and Secretary; Matthew P. Jordan, Executive Vice President, Chief Financial Officer and Treasurer; John Murray, Executive Vice President; and Andrew J. Rebholz, Executive Vice President. Our Chief Financial Officer and Treasurer, Richard W. Siedel, Jr., is a Senior Vice President of RMR LLC. Messrs. Murray and Siedel and other officers of RMR LLC also serve as officers of other companies to which RMR LLC or its subsidiaries provide management services.

Employees

We have no employees. Services which would otherwise be provided to us by employees are provided by RMR LLC and by our Managing Trustees and officers. As of December 31, 2018, RMR LLC had more than 600 full time employees in its headquarters and regional offices located throughout the United States.

Insurance

The leases for our properties generally provide that our tenants are responsible for the costs of insurance for the properties we lease to them and the operations conducted on them, including for casualty, liability, fire, extended coverage and rental or business interruption losses. Under the leases for our Hawaii Properties, our tenants generally are responsible for maintaining insurance; and, under the leases for our Mainland Properties, our tenants generally are either required to reimburse us for the costs of maintaining the insurance coverage or to purchase such insurance directly and list us as an insured party. We participate with RMR LLC and other companies to which RMR LLC or its subsidiaries provide management services in a combined property insurance program through Affiliates Insurance Company, or AIC, and with respect to which AIC is an insurer or a reinsurer of certain coverage amounts. For more information, see "Management's Discussion and Analysis of Financial Condition and Results of Operations—Related Person Transactions" and Note 7 to the Notes to Consolidated Financial Statements included in Part IV, Item 15 of this Annual Report on Form 10-K.

Other Matters

Legislative and regulatory developments may occur at the federal, state and local levels that have direct or indirect impact on the ownership, leasing and operation of our properties. We may need to make expenditures due to changes in federal, state or local laws and regulations, or the application of these laws and regulations to our properties, including the Americans with Disabilities Act, fire and safety regulations, building codes, land use regulations or environmental regulations for containment, abatement or removal of hazardous substances. Under some of our leases, some of these costs are required to be paid or reimbursed to us by our tenants.

Internet Website

Our internet website address is www.ilptreit.com. Copies of our governance guidelines, our code of business conduct and ethics, or Code of Conduct, and the charters of our audit, compensation and nominating and governance committees are posted on our website and also may be obtained free of charge by writing to our Secretary, Industrial Logistics Properties Trust, Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts 02458-1634 or at our website. We also have a policy outlining procedures for handling concerns or complaints about accounting, internal accounting controls or auditing matters and a governance hotline accessible on our website that shareholders can use to report concerns or complaints about accounting, internal accounting controls or auditing matters or violations or possible violations of our Code of Conduct. We make available, free of charge, on our website, our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to these reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended, or the Exchange Act, as soon as reasonably practicable after these forms are filed with, or furnished to, the Securities and Exchange Commission, or SEC. Security holders may send communications to our Board of Trustees or individual Trustees by writing to the party for whom the communication is intended at c/o Secretary, Industrial Logistics Properties Trust, Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts 02458-1634 or by email at secretary@ilptreit.com. Our website address and the website addresses of one or more unrelated third parties are included several times in this Annual Report on Form 10-K as textual references only and the information in any such website is not incorporated by reference into this Annual Report on Form 10-K.

Segment Information

As of December 31, 2018, we had one operating segment: ownership and leasing of properties that include industrial and logistics buildings and leased industrial lands. For more information, see "Management's Discussion and Analysis of

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Financial Condition and Results of Operations" and our consolidated financial statements included in Part IV, Item 15 of this Annual Report on Form 10-K.

MATERIAL UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS

The following summary of material United States federal income tax considerations is based on existing law, and is limited to investors who own our shares as investment assets rather than as inventory or as property used in a trade or business. The summary does not discuss all of the particular tax considerations that might be relevant to you if you are subject to special rules under federal income tax law, for example if you are:

• a bank, insurance company or other financial institution;

• a regulated investment company or REIT;

• a subchapter S corporation;

• a broker, dealer or trader in securities or foreign currencies;

• a person who marks-to-market our shares for U.S. federal income tax purposes;

• a U.S. shareholder (as defined below) that has a functional currency other than the U.S. dollar;

• a person who acquires or owns our shares in connection with employment or other performance of services;

• a person subject to alternative minimum tax;

• a person who acquires or owns our shares as part of a straddle, hedging transaction, constructive sale transaction, constructive ownership transaction or conversion transaction, or as part of a “synthetic security” or other integrated financial transaction;

• a person who owns 10% or more (by vote or value, directly or constructively under the IRC) of any class of our shares;

• a U.S. expatriate;

• a non-U.S. shareholder (as defined below) whose investment in our shares is effectively connected with the conduct of a trade or business in the United States;

• a nonresident alien individual present in the United States for 183 days or more during an applicable taxable year;

• a “qualified shareholder” (as defined in Section 897(k)(3)(A) of the IRC);

• a “qualified foreign pension fund” (as defined in Section 897(l)(2) of the IRC) or any entity wholly owned by one or more qualified foreign pension funds;

• a person subject to special tax accounting rules as a result of their use of applicable financial statements (within the meaning of Section 451(b)(3) of the IRC); or

• except as specifically described in the following summary, a trust, estate, tax-exempt entity or foreign person.

The sections of the IRC that govern the federal income tax qualification and treatment of a REIT and its shareholders are complex. This presentation is a summary of applicable IRC provisions, related rules and regulations, and administrative and judicial interpretations, all of which are subject to change, possibly with retroactive effect. Future legislative, judicial or administrative actions or decisions could also affect the accuracy of statements made in this summary. We have not received a ruling from the U.S. Internal Revenue Service, or the IRS, with respect to any matter described in this summary, and we cannot be sure that the IRS or a court will agree with all of the statements made in this summary. The IRS could, for example, take a different position from that described in this summary with respect to our acquisitions, operations, valuations, restructurings or

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other matters, which, if a court agreed, could result in significant tax liabilities for applicable parties. In addition, this summary is not exhaustive of all possible tax considerations, and does not discuss any estate, gift, state, local or foreign tax considerations. For all these reasons, we urge you and any holder of or prospective acquiror of our shares to consult with a tax advisor about the federal income tax and other tax consequences of the acquisition, ownership and disposition of our shares. Our intentions and beliefs described in this summary are based upon our understanding of applicable laws and regulations that are in effect as of the date of this Annual Report on Form 10-K. If new laws or regulations are enacted which impact us directly or indirectly, we may change our intentions or beliefs.

Your federal income tax consequences generally will differ depending on whether or not you are a “U.S. shareholder.” For purposes of this summary, a “U.S. shareholder” is a beneficial owner of our shares that is:

• an individual who is a citizen or resident of the United States, including an alien individual who is a lawful permanent resident of the United States or meets the substantial presence residency test under the federal income tax laws;

• an entity treated as a corporation for federal income tax purposes that is created or organized in or under the laws of the United States, any state thereof or the District of Columbia;

• an estate the income of which is subject to federal income taxation regardless of its source; or

• a trust if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust, or, to the extent provided in Treasury regulations, a trust in existence on August 20, 1996 that has elected to be treated as a domestic trust;

whose status as a U.S. shareholder is not overridden by an applicable tax treaty. Conversely, a “non-U.S. shareholder” is a beneficial owner of our shares that is notan entity (or other arrangement) treated as a partnership for federal income tax purposes and is not a U.S. shareholder.

If any entity (or other arrangement) treated as a partnership for federal income tax purposes holds our shares, the tax treatment of a partner in the partnership generally will depend upon the tax status of the partner and the activities of the partnership. Any entity (or other arrangement) treated as a partnership for federal income tax purposes that is a holder of our shares and the partners in such a partnership (as determined for federal income tax purposes) are urged to consult their own tax advisors about the federal income tax consequences and other tax consequences of the acquisition, ownership and disposition of our shares.

Taxation as a REIT

We intend to elect to be taxed as a REIT under Sections 856 through 860 of the IRC, commencing with our 2018 taxable year, and the discussion in this section assumes that we will make that election by timely filing our U.S. federal income tax return as a REIT for our 2018 taxable year. Our REIT election, assuming continuing compliance with the then applicable qualification tests, will continue in effect for subsequent taxable years. Although we cannot be sure, we believe that from and after our 2018 taxable year we have been organized and have operated, and will continue to be organized and to operate, in a manner that qualified us and will continue to qualify us to be taxed as a REIT under the IRC. For periods ending on or before the date we ceased to be wholly-owned by SIR, each of us and any of our then existing subsidiaries was at all times either a qualified REIT subsidiary of SIR within the meaning of Section 856(i)(2) of the IRC or a noncorporate entity that for federal income tax purposes was not treated as separate from SIR under regulations issued under Section 7701 of the IRC. During such periods, we and any of our then existing subsidiaries were not taxpayers separate from SIR for federal income tax purposes; further, pursuant to a transaction agreement between us and SIR that governed our relationship with SIR, or the Transaction Agreement, OPI (as successor by merger to SIR) is solely responsible for such periods for the federal income tax with respect to our assets, liabilities and items of income, deduction and credit, as well as for the federal income tax filings in respect of our and any of our then existing subsidiaries’ operations.

As a REIT, we generally are not subject to federal income tax on our net income distributed as dividends to our shareholders. Distributions to our shareholders generally are included in our shareholders’ income as dividends to the extent of our available current or accumulated earnings and profits. Our dividends are not generally entitled to the preferential tax rates on qualified dividend income, but a portion of our dividends may be treated as capital gain dividends or as qualified dividend income, all as explained below. In addition, for taxable years beginning before 2026 and pursuant to the deduction-without-outlay mechanism of Section 199A of the IRC, our noncorporate U.S. shareholders are generally eligible for lowereffective tax

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rates on our dividends that are not treated as capital gain dividends or as qualified dividend income. No portion of any of our dividends is eligible for the dividends received deduction for corporate shareholders. Distributions in excess of our current or accumulated earnings and profits generally are treated for federal income tax purposes as returns of capital to the extent of a recipient shareholder’s basis in our shares, and will reduce this basis. Our current or accumulated earnings and profits are generally allocated first to distributions made on our preferred shares, of which there are none outstanding at this time, and thereafter to distributions made on our common shares. For all these purposes, our distributionsinclude cash distributions, any in kind distributions of property that we might make, and deemed or constructive distributions resulting from capital market activities (such as some redemptions), as described below.

Our counsel, Sullivan & Worcester LLP, is of the opinion that we have been organized and have qualified for taxation as a REIT under the IRC for our 2018 taxable year upon our filing of a timely federal income tax return for that year, and that our current and anticipated investments and plan of operation will enable us to continue to meet the requirements for qualification and taxation as a REIT under the IRC. Our counsel’s opinions are conditioned upon the assumption that our leases, our declaration of trust,and all other legal documents to which we have been or are a party have been and will be complied with by all parties to those documents, upon the accuracy and completeness of the factual matters described in this Annual Report on Form 10-K and upon representations made by us to our counsel as to certain factual matters relating to our organization and operations and our expected manner of operation. If this assumption or a description or representation is inaccurate or incomplete, our counsel’s opinions may be adversely affected and may not be relied upon. The opinions of our counsel are based upon the law as it exists today, but the law may change in the future, possibly with retroactive effect. Given the highly complex nature of the rules governing REITs, the ongoing importance of factual determinations, and the possibility of future changes in our circumstances, neither Sullivan & Worcester LLP nor we can be sure that we will qualify as or be taxed as a REIT for any particular year. Any opinion of Sullivan & Worcester LLP as to our qualification or taxation as a REIT will be expressed as of the date issued. Our counsel will have no obligation to advise us or our shareholders of any subsequent change in the matters stated, represented or assumed, or of any subsequent change in the applicable law. Also, the opinions of our counsel are not binding on either the IRS or a court, and either could take a position different from that expressed by our counsel.

Our continued qualification and taxation as a REIT will depend upon our compliance with various qualification tests imposed under the IRC and summarized below. While we believe that we have satisfied and will satisfy these tests, our counsel does not review compliance with these tests on a continuing basis. If we fail to qualify for taxation as a REIT in any year, we will be subject to federal income taxation as if we were a corporation taxed under subchapter C of the IRC, or a C corporation, and our shareholders will be taxed like shareholders of regular C corporations, meaning that federal income tax generally will be applied at both the corporate and shareholder levels. In this event, we could be subject to significant tax liabilities, and the amount of cash available for distribution to our shareholders could be reduced or eliminated.

If we continue to qualify for taxation as a REIT and meet the tests described below, we generally will not pay federal income tax on amounts we distribute to our shareholders. However, even if we continue to qualify for taxation as a REIT, we may still be subject to federal tax in the following circumstances, as described below:

• We will be taxed at regular corporate income tax rates on any undistributed “real estate investment trust taxable income,” determined by including our undistributed ordinary income and net capital gains, if any.

• If we have net income from the disposition of “foreclosure property,” as described in Section 856(e) of the IRC, that is held primarily for sale to customers in the ordinary course of a trade or business or other nonqualifying income from foreclosure property, we will be subject to tax on this income at the highest regular corporate income tax rate.

• If we have net income from “prohibited transactions”—that is, dispositions at a gain of inventory or property held primarily for sale to customers in the ordinary course of a trade or business other than dispositions of foreclosure property and other than dispositions excepted by statutory safe harbors—we will be subject to tax on this income at a 100% rate.

• If we fail to satisfy the 75% gross income test or the 95% gross income test discussed below, due to reasonable cause and not due to willful neglect, but nonetheless maintain our qualification for taxation as a REIT because of specified cure provisions, we will be subject to tax at a 100% rate on the greater of the amount by which we fail the 75% gross income test or the 95% gross income test, with adjustments, multiplied by a fraction intended to reflect our profitability for the taxable year.

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• If we fail to satisfy any of the REIT asset tests described below (other than a de minimis failure of the 5% or 10% asset tests) due to reasonable cause and not due to willful neglect, but nonetheless maintain our qualification for taxation as a REIT because of specified cure provisions, we will be subject to a tax equal to the greater of $50,000 or the highest regular corporate income tax rate multiplied by the net income generated by the nonqualifying assets that caused us to fail the test.

• If we fail to satisfy any provision of the IRC that would result in our failure to qualify for taxation as a REIT (other than violations of the REIT gross income tests or violations of the REIT asset tests described below) due to reasonable cause and not due to willful neglect, we may retain our qualification for taxation as a REIT but will be subject to a penalty of $50,000 for each failure.

• If we fail to distribute for any calendar year at least the sum of 85% of our REIT ordinary income for that year, 95% of our REIT capital gain net income for that year and any undistributed taxable income from prior periods, we will be subject to a 4% nondeductible excise tax on the excess of the required distribution over the amounts actually distributed.

• If we acquire a REIT asset where our adjusted tax basis in the asset is determined by reference to the adjusted tax basis of the asset in the hands of a C corporation, under specified circumstances we may be subject to federal income taxation on all or part of the built-in gain (calculated as of the date the property ceased being owned by the C corporation) on such asset. We generally do not expect to sell assets if doing so would result in the imposition of a material built-in gains tax liability; but if and when we do sell assets that may have associated built-in gains tax exposure, then we expect to make appropriate provision for the associated tax liabilities on our financial statements.

• If we acquire a corporation in a transaction where we succeed to its tax attributes, to preserve our qualification for taxation as a REIT we must generally distribute all of the C corporation earnings and profits inherited in that acquisition, if any, no later than the end of our taxable year in which the acquisition occurs. However, if we fail to do so, relief provisions would allow us to maintain our qualification for taxation as a REIT provided we distribute any subsequently discovered C corporation earnings and profits and pay an interest charge in respect of the period of delayed distribution.

• Our subsidiaries that are C corporations, includingour“taxable REIT subsidiaries” as defined in Section 856(l) of the IRC, orTRSs, generally will be required to pay federal corporate income tax on their earnings, and a 100% tax may be imposed on any transaction between us and one of our TRSs that does not reflect arm’s length terms.

If we fail to qualify for taxation as a REIT in any year, then we will be subject to federal income tax in the same manner as a regular C corporation. Further, as a regular C corporation, distributions to our shareholders will not be deductible by us, nor will distributions be required under the IRC. Also, to the extent of our current and accumulated earnings and profits, all distributions to our shareholders will generally be taxable as ordinary dividends potentially eligible for the preferential tax rates discussed below under the heading “—Taxation of Taxable U.S. Shareholders” and, subject to limitations in the IRC, will be potentially eligible for the dividends received deduction for corporate shareholders. Finally, we will generally be disqualified from taxation as a REIT for the four taxable years following the taxable year in which the termination of our REIT status is effective. Our failure to qualify for taxation as a REIT for even one year could result in us reducing or eliminating distributions to our shareholders, or in us incurring substantial indebtedness or liquidating substantial investments in order to pay the resulting corporate-level income taxes. Relief provisions under the IRC may allow us to continue to qualify for taxation as a REIT even if we fail to comply with various REIT requirements, all as discussed in more detail below. However, it is impossible to state whether in any particular circumstance we would be entitled to the benefit of these relief provisions.

REIT Qualification Requirements

General Requirements. Section 856(a) of the IRC defines a REIT as a corporation, trust or association:

(1) that is managed by one or more trustees or directors;

(2) the beneficial ownership of which is evidenced by transferable shares or by transferable certificates of beneficial interest;

(3) that would be taxable, but for Sections 856 through 859 of the IRC, as a domestic C corporation;

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(4) that is not a financial institution or an insurance company subject to special provisions of the IRC;

(5) the beneficial ownership of which is held by 100 or more persons;

(6) that is not “closely held,” meaning that during the last half of each taxable year, not more than 50% in value of the outstanding shares are owned, directly or indirectly, by five or fewer “individuals” (as defined in the IRC to include specified tax-exempt entities);

(7) that does not have (and has not succeeded to) the post-December 7, 2015 tax-free spin-off history proscribed by Section 856(c)(8) of the IRC; and

(8) that meets other tests regarding the nature of its income and assets and the amount of its distributions, all as described below.

Section 856(b) of the IRC provides that conditions (1) through (4) must be met during the entire taxable year and that condition (5) must be met during at least 335 days of a taxable year of 12 months, or during a proportionate part of a taxable year of less than 12 months. Section 856(h)(2) of the IRC provides that conditions (5) and (6) do not need to be met during a REIT’s first taxable year. Although we cannot be sure, we believe that we have met conditions (1) through (8) during each of the requisite periods ending on or before the close of our most recently completed taxable year, and that we will continue to meet these conditions in our current and future taxable years.

To help comply with condition (6), our declaration of trustrestricts transfers of our shares that would otherwise result in concentrated ownership positions. These restrictions, however, do not ensure that we have previously satisfied, and may not ensure that we will in all cases be able to continue to satisfy, the share ownership requirements described in condition (6). If we comply with applicable Treasury regulations to ascertain the ownership of our outstanding shares and do not know, or by exercising reasonable diligence would not have known, that we failed condition (6), then we will be treated as having met condition (6). Accordingly, we have complied and will continue to comply with these regulations, including by requesting annually from holders of significant percentages of our shares information regarding the ownership of our shares. Under our declaration of trust, our shareholders are required to respond to these requests for information. A shareholder that fails or refuses to comply with the request is required by Treasury regulations to submit a statement with its federal income tax return disclosing its actual ownership of our shares and other information.

For purposes of condition (6), an “individual” generally includes a natural person, a supplemental unemployment compensation benefit plan, a private foundation, or a portion of a trust permanently set aside or used exclusively for charitable purposes, but does not include a qualified pension plan or profit-sharing trust. As a result, REIT shares owned by an entity that is not an “individual” are considered to be owned by the direct and indirect owners of the entity that are individuals (as so defined), rather than to be owned by the entity itself. Similarly, REIT shares held by a qualified pension plan or profit-sharing trust are treated as held directly by the individual beneficiaries in proportion to their actuarial interests in such plan or trust. Consequently, five or fewer such trusts could own more than 50% of the interests in an entity without jeopardizing that entity’s qualification for taxation as a REIT.

The IRC provides that we will not automatically fail to qualify for taxation as a REIT if we do not meet conditions (1) through (7), provided we can establish that such failure was due to reasonable cause and not due to willful neglect. Each such excused failure will result in the imposition of a $50,000 penalty instead of REIT disqualification. This relief provision may apply to a failure of the applicable conditions even if the failure first occurred in a year prior to the taxable year in which the failure was discovered.

Our Wholly Owned Subsidiaries and Our Investments Through Partnerships. Except in respect of a TRS as discussed below, Section 856(i) of the IRC provides that any corporation, 100% of whose stock is held by a REIT and its disregarded subsidiaries, is a qualified REIT subsidiary and shall not be treated as a separate corporation for U.S. federal income tax purposes. The assets, liabilities and items of income, deduction and credit of a qualified REIT subsidiary are treated as the REIT’s. We believe that each of our direct and indirect wholly owned subsidiaries, other than the TRSs discussed below (and entities owned in whole or in part by the TRSs), will be either a qualified REIT subsidiary within the meaning of Section 856(i)(2) of the IRC or a noncorporate entity that for federal income tax purposes is not treated as separate from its owner under Treasury regulations issued under Section 7701 of the IRC, each such entity referred to as a QRS. Thus, in applying all of the REIT qualification requirements described in this summary, all assets, liabilities and items of income, deduction and credit of our QRSs are treated as ours, and our investment in the stock and other securities of such QRSs will be disregarded.

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We may in the futureinvest in real estate through one or more entities that are treated as partnerships for federal income tax purposes. In the case of a REIT that is a partner in a partnership, Treasury regulations under the IRC provide that, for purposes of the REIT qualification requirements regarding income and assets described below, the REIT is generally deemed to own its proportionate share, based on respective capital interests, of the income and assets of the partnership (except that for purposes of the 10% value test, described below, the REIT’s proportionate share of the partnership’s assets is based on its proportionate interest in the equity and specified debt securities issued by the partnership). In addition, for these purposes, the character of the assets and items of gross income of the partnership generally remains the same in the hands of the REIT. In contrast, for purposes of the distribution requirements discussed below, we would be required to take into account as a partner our share of the partnership’s income as determined under the general federal income tax rules governing partners and partnerships under Subchapter K of the IRC.

Subsidiary REITs. We may in the future form or acquire an entity that is intended to qualify for taxation as a REIT, and we expect that any such subsidiary would so qualify at all times during which we intend for its REIT election to remain in effect. When a subsidiary qualifies for taxation as a REIT separate and apart from its REIT parent, the subsidiary’s shares are qualifying real estate assets for purposes of the REIT parent’s 75% asset test described below. However, failure of the subsidiary to separately satisfy the various REIT qualification requirements described in this summary or that are otherwise applicable (and failure to qualify for the applicable relief provisions) would generally result in (a) the subsidiary being subject to regular U.S. corporate income tax, as described above, and (b) the REIT parent’s ownership in the subsidiary (i) ceasing to be qualifying real estate assets for purposes of the 75% asset test, (ii) becoming subject to the 5% asset test, the 10% vote test and the 10% value test generally applicable to a REIT’s ownership in corporations other than REITs and TRSs, and (iii) thereby jeopardizing the REIT parent’s own REIT qualification and taxation on account of the subsidiary’s failure cascading up to the REIT parent, all as described under “—Asset Tests” below. We may make protective TRS elections with respect to any subsidiary REIT that we form or acquire and may implement other protective arrangements intended to avoid a cascading REIT failure if any of our subsidiary REITs were not to qualify for taxation as a REIT, but we cannot be sure that such protective elections and other arrangements will be effective to avoid or mitigate the resulting adverse consequences to us.

Taxable REIT Subsidiaries. As a REIT, we are permitted to own any or all of the securities of a TRS, provided that no more than 20% of the total value of our assets, at the close of each quarter, is comprised of our investments in the stock or other securities of our TRSs. Very generally, a TRS is a subsidiary corporation other than a REIT in which a REIT directly or indirectly holds stock and that has made a joint election with its affiliated REIT to be treated as a TRS. Our ownership of stock and other securities in our TRSs is exempt from the 5% asset test, the 10% vote test and the 10% value test discussed below.

In addition, any corporation (other than a REIT) in which a TRS directly or indirectly owns more than 35% of the voting power or value of the outstanding securities is automatically a TRS. Subject to the discussion below, we believe that we and each of our TRSs have complied with, and will continue to comply with, the requirements for TRS status at all times during which we intend for the subsidiary’s TRS election to be in effect, and we believe that the same will be true for any TRS that we later form or acquire.

As discussed below, TRSs can perform services for our tenants without disqualifying the rents we receive from those tenants under the 75% gross income test or the 95% gross income test discussed below. Moreover, because our TRSs are taxed as C corporations that are separate from us, their assets, liabilities and items of income, deduction and credit generally are not imputed to us for purposes of the REIT qualification requirements described in this summary. Therefore, our TRSs may generally conduct activities that would be treated as prohibited transactions or would give rise to nonqualified income if conducted by us directly. As regular C corporations, TRSs may generally utilize net operating losses and other tax attribute carryforwards to reduce or otherwise eliminate federal income tax liability in a given taxable year. Net operating losses and other carryforwards are subject to limitations, however, including limitations imposed under Section 382 of the IRC following an “ownership change” (as defined in applicable Treasury regulations) and a limitation providing that carryforwards of net operating losses generally cannot offset more than 80% of the current year’s taxable income. Moreover, net operating losses may not be carried back, but may be carried forward indefinitely. As a result, we cannot be sure that our TRSs will be able to utilize, in full or in part, any net operating losses or other carryforwards that they may generate in the future.

Restrictions and sanctions are imposed on TRSs and their affiliated REITs to ensure that the TRSs will be subject to an appropriate level of federal income taxation. For example, if a TRS pays interest, rent or other amounts to its affiliated REIT in an amount that exceeds what an unrelated third party would have paid in an arm’s length transaction, then the REIT generally will be subject to an excise tax equal to 100% of the excessive portion of the payment. Further, if in comparison to an arm’s length transaction, a third-party tenant has overpaid rent to the REIT in exchange for underpaying the TRS for services rendered, and if the REIT has not adequately compensated the TRS for services provided to or on behalf of the third-party tenant, then the REIT may be subject to an excise tax equal to 100% of the undercompensation to the TRS. A safe harbor exception to this excise tax applies if the TRS has been compensated at a rate at least equal to 150% of its direct cost in

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furnishing or rendering the service. Finally, the 100% excise tax also applies to the underpricing of services provided by a TRS to its affiliated REIT in contexts where the services are unrelated to services for tenants of the REIT. While arrangements involving our TRSs would potentially be subject to the imposition of one or more of these restrictions or sanctions, we do not expect that we or our TRSs would be subject to these impositions.

Income Tests. We must satisfy two gross income tests annually to maintain our qualification for taxation as a REIT. First, at least 75% of our gross income for each taxable year must be derived from investments relating to real property, including “rents from real property” within the meaning of Section 856(d) of the IRC, interest and gain from mortgages on real property or on interests in real property, income and gain from foreclosure property, gain from the sale or other disposition of real property (including specified ancillary personal property treated as real property under the IRC), or dividends on and gain from the sale or disposition of shares in other REITs (but excluding in all cases any gains subject to the 100% tax on prohibited transactions). When we receive new capital in exchange for our shares or in a public offering of our five-year or longer debt instruments, income attributable to the temporary investment of this new capital in stock or a debt instrument, if received or accrued within one year of our receipt of the new capital, is generally also qualifying income under the 75% gross income test. Second, at least 95% of our gross income for each taxable year must consist of income that is qualifying income for purposes of the 75% gross income test, other types of interest and dividends, gain from the sale or disposition of shares or securities, or any combination of these. Gross income from our sale of property that we hold primarily for sale to customers in the ordinary course of business, income and gain from specified “hedging transactions” that are clearly and timely identified as such, and income from the repurchase or discharge of indebtedness is excluded from both the numerator and the denominator in both gross income tests. In addition, specified foreign currency gains will be excluded from gross income for purposes of one or both of the gross income tests.

Although we will use our best efforts to ensure that the income generated by our investments will be of a type that satisfies both the 75% and 95% gross income tests, we cannot be sure that we will be successfulin this regard.

In order to qualify as “rents from real property” within the meaning of Section 856(d) of the IRC, several requirements must be met:

• The amount of rent received generally must not be based on the income or profits of any person, but may be based on a fixed percentage or percentages of receipts or sales.

• Rents do not qualify if the REIT owns 10% or more by vote or value of stock of the tenant (or 10% or more of the interests in the assets or net profits of the tenant, if the tenant is not a corporation), whether directly or after application of attribution rules. We generally do not intend to lease property to any party if rents from that property would not qualify as “rents from real property,” but application of the 10% ownership rule is dependent upon complex attribution rules and circumstances that may be beyond our control. Our declaration of trust generally disallows transfers or purported acquisitions, directly or by attribution, of our shares to the extent necessary to maintain our qualification for taxation as a REIT under the IRC. Nevertheless, we cannot be sure that these restrictions will be effective to prevent our qualification for taxation as a REIT from being jeopardized under the 10% affiliated tenant rule. Furthermore, we cannot be sure that we will be able to monitor and enforce these restrictions, nor will our shareholders necessarily be aware of ownership of our shares attributed to them under the IRC’s attribution rules.

• There is a limited exception to the above prohibition on earning “rents from real property” from a 10% affiliated tenant where the tenant is a TRS. If at least 90% of the leased space of a property is leased to tenants other than TRSs and 10% affiliated tenants, and if the TRS’s rent to the REIT for space at that property is substantially comparable to the rents paid by nonaffiliated tenants for comparable space at the property, then otherwise qualifying rents paid by the TRS to the REIT will not be disqualified on account of the rule prohibiting 10% affiliated tenants.

• In order for rents to qualify, we generally must not manage the property or furnish or render services to the tenants of the property, except through an independent contractor from whom we derive no income or through one of our TRSs. There is an exception to this rule permitting a REIT to perform customary management and tenant services of the sort that a tax-exempt organization could perform without being considered in receipt of “unrelated business taxable income” as defined in Section 512(b)(3) of the IRC, or UBTI. In addition, a de minimis amount of noncustomary services will not disqualify income as “rents from real property” as long as the value of the impermissible tenant services does not exceed 1% of the gross income from the property.

• If rent attributable to personal property leased in connection with a lease of real property is 15% or less of the total rent received under the lease, then the rent attributable to personal property will qualify as “rents from real property”; if this 15% threshold is exceeded, the rent attributable to personal property will not so qualify. The portion of rental

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income treated as attributable to personal property is determined according to the ratio of the fair market valueof the personal property to the total fair market value of the real and personal property that is rented.

• In addition, “rents from real property” includes both charges we receive for services customarily rendered in connection with the rental of comparable real property in the same geographic area, even if the charges are separately stated, as well as charges we receive for services provided by TRSs that we may form or acquire when the charges are not separately stated. Whether separately stated charges received by a REIT for services that are not geographically customary and provided by a TRS are included in “rents from real property” has not been addressed clearly by the IRS in published authorities; however, our counsel, Sullivan & Worcester LLP, is of the opinion that, although the matter is not free from doubt, “rents from real property” also includes charges we receive for services provided by TRSs that we may form or acquire when the charges are separately stated, even if the services are not geographically customary. Accordingly, we expect that any revenues from TRS-provided services, whether the charges are separately stated or not, will qualify as “rents from real property” because the services will satisfy the geographically customary standard, because the services will be provided by a TRS, or for both reasons.

We believe that all or substantially all of our rents and related service charges have qualified and will continue to qualify as “rents from real property” for purposes of Section 856 of the IRC.

Absent the “foreclosure property” rules of Section 856(e) of the IRC, a REIT’s receipt of active, nonrental gross income from a property would not qualify under the 75% and 95% gross income tests. But as foreclosure property, the active, nonrental gross income from the property would so qualify. Foreclosure property is generally any real property, including interests in real property, and any personal property incident to such real property:

• that is acquired by a REIT as a result of the REIT having bid on such property at foreclosure, or having otherwise reduced such property to ownership or possession by agreement or process of law, after there was a default or when default was imminent on a lease of such property or on indebtedness that such property secured;

• for which any related loan acquired by the REIT was acquired at a time when the default was not imminent or anticipated; and

• for which the REIT makes a proper election to treat the property as foreclosure property.

Any gain that a REIT recognizes on the sale of foreclosure property held as inventory or primarily for sale to customers, plus any income it receives from foreclosure property that would not otherwise qualify under the 75% gross income test in the absence of foreclosure property treatment, reduced by expenses directly connected with the production of those items of income, would be subject to income tax at the highest regular corporate income tax rate under the foreclosure property income tax rules of Section 857(b)(4) of the IRC. Thus, if a REIT should lease foreclosure property in exchange for rent that qualifies as “rents from real property” as described above, then that rental income is not subject to the foreclosure property income tax.

Property generally ceases to be foreclosure property at the end of the third taxable year following the taxable year in which the REIT acquired the property, or longer if an extension is obtained from the IRS. However, this grace period terminates and foreclosure property ceases to be foreclosure property on the first day:

• on which a lease is entered into for the property that, by its terms, will give rise to income that does not qualify for purposes of the 75% gross income test (disregarding income from foreclosure property), or any nonqualified income under the 75% gross income test is received or accrued by the REIT, directly or indirectly, pursuant to a lease entered into on or after such day;

• on which any construction takes place on the property, other than completion of a building or any other improvement where more than 10% of the construction was completed before default became imminent and other than specifically exempted forms of maintenance or deferred maintenance; or

• which is more than 90 days after the day on which the REIT acquired the property and the property is used in a trade or business which is conducted by the REIT, other than through an independent contractor from whom the REIT itself does not derive or receive any income or a TRS.

Other than sales of foreclosure property, any gain that we realize on the sale of property held as inventory or other property held primarily for sale to customers in the ordinary course of a trade or business, together known as dealer gains, may be treated as income from a prohibited transaction that is subject to a penalty tax at a 100% rate. The 100% tax does not apply

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to gains from the sale of property that is held through a TRS, but such income will be subject to tax in the hands of the TRS at regular corporate income tax rates; we may therefore utilize our TRSs in transactions in which we might otherwise recognize dealer gains. Whether property is held as inventory or primarily for sale to customers in the ordinary course of a trade or business is a question of fact that depends on all the facts and circumstances surrounding each particular transaction. Sections 857(b)(6)(C) and (E) of the IRC provide safe harbors pursuant to which limited sales of real property held for at least two years and meeting specified additional requirements will not be treated as prohibited transactions. However, compliance with the safe harbors is not always achievable in practice. We intend to structure our activities to avoid transactions that are prohibited transactions, or otherwise conduct such activities through TRSs; but, we cannot be sure whether or not the IRS might successfully assert that one or more of our dispositions is subject to the 100% penalty tax. Gains subject to the 100% penalty tax are excluded from the 75% and 95% gross income tests, whereas real property gains that are not dealer gains or that are exempted from the 100% penalty tax on account of the safe harbors are considered qualifying gross income for purposes of the 75% and 95% gross income tests.

We believe that any gain from dispositions of assets thatwe might make in the future, including through any partnerships, will generally qualify as income that satisfies the 75% and 95% gross income tests, and will not be dealer gains or subject to the 100% penalty tax. This is because our general intent has been and is to: (a) own our assets for investment with a view to long-term income production and capital appreciation; (b) engage in the business of developing, owning, leasing and managing our existing properties and acquiring, developing, owning, leasing and managing new properties; and (c) make occasional dispositions of our assets consistent with our long-term investment objectives.

If we fail to satisfy one or both of the 75% gross income test or the 95% gross income test in any taxable year, we may nevertheless qualify for taxation as a REIT for that year if we satisfy the following requirements: (a) our failure to meet the test is due to reasonable cause and not due to willful neglect; and (b) after we identify the failure, we file a schedule describing each item of our gross income included in the 75% gross income test or the 95% gross income test for that taxable year. Even if this relief provision does apply, a 100% tax is imposed upon the greater of the amount by which we failed the 75% gross income test or the amount by which we failed the 95% gross income test, with adjustments, multiplied by a fraction intended to reflect our profitability for the taxable year. This relief provision may apply to a failure of the applicable income tests even if the failure first occurred in a year prior to the taxable year in which the failure was discovered.

Based on the discussion above, we believe that we have satisfied, and will continue to satisfy, the 75% and 95% gross income tests outlined above on a continuing basis beginning with our first taxable year as a REIT.

Asset Tests. At the close of each calendar quarter of each taxable year, we must also satisfy the following asset percentage tests in order to qualify for taxation as a REIT for federal income tax purposes:

• At least 75% of the value of our total assets must consist of “real estate assets,” defined as real property (including interests in real property and interests in mortgages on real property or on interests in real property), ancillary personal property to the extent that rents attributable to such personal property are treated as rents from real property in accordance with the rules described above, cash and cash items, shares in other REITs, debt instruments issued by “publicly offered REITs” as defined in Section 562(c)(2) of the IRC, government securities and temporary investments of new capital (that is, any stock or debt instrument that we hold that is attributable to any amount received by us (a) in exchange for our stock or (b) in a public offering of our five-year or longer debt instruments, but in each case only for the one-year period commencing with our receipt of the new capital).

• Not more than 25% of the value of our total assets may be represented by securities other than those securities that count favorably toward the preceding 75% asset test.

• Of the investments included in the preceding 25% asset class, the value of any one non-REIT issuer’s securities that we own may not exceed 5% of the value of our total assets. In addition, we may not own more than 10% of the vote or value of any one non-REIT issuer’s outstanding securities, unless the securities are “straight debt” securities or otherwise excepted as discussed below. Our stock and other securities in a TRS are exempted from these 5% and 10% asset tests.

• Not more than 20% of the value of our total assets may be represented by stock or other securities of our TRSs.

• Not more than 25% of the value of our total assets may be represented by “nonqualified publicly offered REIT debt instruments” as defined in Section 856(c)(5)(L)(ii) of the IRC.

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Our counsel, Sullivan & Worcester LLP, is of the opinion that, although the matter is not free from doubt, our investments in the equity or debt of a TRS, to the extent that and during the period in which theyqualify as temporary investments of new capital, will be treated as real estate assets, and not as securities, for purposes of the above REIT asset tests.

The above REIT asset tests must be satisfied at the close of each calendar quarter of each taxable year as a REIT. After a REIT meets the asset tests at the close of any quarter, it will not lose its qualification for taxation as a REIT in any subsequent quarter solely because of fluctuations in the values of its assets. This grandfathering rule may be of limited benefit to a REIT such as us that makes periodic acquisitions of both qualifying and nonqualifying REIT assets. When a failure to satisfy the above asset tests results from an acquisition of securities or other property during a quarter, the failure can be cured by disposition of sufficient nonqualifying assets withinthirtydays after the close of that quarter.

In addition, if we fail the 5% asset test, the 10% vote test or the 10% value test at the close of any quarter and we do not cure such failure within thirtydays after the close of that quarter, that failure will nevertheless be excused if (a) the failure is de minimis and (b) within six months after the last day of the quarter in which we identify the failure, we either dispose of the assets causing the failure or otherwise satisfy the 5% asset test, the 10% vote test and the 10% value test. For purposes of this relief provision, the failure will be de minimis if the value of the assets causing the failure does not exceed $10,000,000. If our failure is not de minimis, or if any of the other REIT asset tests have been violated, we may nevertheless qualify for taxation as a REIT if (a) we provide the IRS with a description of each asset causing the failure, (b) the failure was due to reasonable cause and not willful neglect, (c) we pay a tax equal to the greater of (1) $50,000 or (2) the highest regular corporate income tax rate imposed on the net income generated by the assets causing the failure during the period of the failure, and (d) within six months after the last day of the quarter in which we identify the failure, we either dispose of the assets causing the failure or otherwise satisfy all of the REIT asset tests. These relief provisions may apply to a failure of the applicable asset tests even if the failure first occurred in a year prior to the taxable year in which the failure was discovered.

The IRC also provides an excepted securities safe harbor to the 10% value test that includes among other items (a) “straight debt” securities, (b) specified rental agreements in which payment is to be made in subsequent years, (c) any obligation to pay “rents from real property,” (d) securities issued by governmental entities that are not dependent in whole or in part on the profits of or payments from a nongovernmental entity, and (e) any security issued by another REIT. In addition, any debt instrument issued by an entity classified as a partnership for federal income tax purposes, and not otherwise excepted from the definition of a security for purposes of the above safe harbor, will not be treated as a security for purposes of the 10% value test if at least 75% of the partnership’s gross income, excluding income from prohibited transactions, is qualifying income for purposes of the 75% gross income test.

We have maintained and will continue to maintain records of the value of our assets to document our compliance with the above asset tests and intend to take actions as may be required to cure any failure to satisfy the tests within thirty days after the close of any quarter or within the six month periods described above.

Based on the discussion above, we believe that we have satisfied, and will continue to satisfy, the REIT asset tests outlined above on a continuing basis beginning with our first taxable year as a REIT.

Annual Distribution Requirements. In order to qualify for taxation as a REIT under the IRC, we are required to make annual distributions other than capital gain dividends to our shareholders in an amount at least equal to the excess of:    

(1) the sum of 90% of our “real estate investment trust taxable income” and 90% of our net income after tax, if any, from property received in foreclosure, over

(2) the amount by which our noncash income (e.g., imputed rental income or income from transactions inadvertently failing to qualify as like-kind exchanges) exceeds 5% of our “real estate investment trust taxable income.”

For these purposes, our “real estate investment trust taxable income” is as defined under Section 857 of the IRC and is computed without regard to the dividends paid deduction and our net capital gain and will generally be reduced by specified corporate-level income taxes that we pay (e.g., taxes on built-in gains or foreclosure property income).

The IRC generally limits the deductibility of net interest expense paid or accrued on debt properly allocable to a trade or business to 30% of “adjusted taxable income,” subject to specified exceptions. Any deduction in excess of the limitation is carried forward and may be used in a subsequent year, subject to that year’s 30% limitation. Provided a taxpayer makes an election (which is irrevocable), the 30% limitation does not apply to a trade or business involving real property development, redevelopment, construction, reconstruction, acquisition, conversion, rental, operation, management, leasing, or brokerage,

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within the meaning of Section 469(c)(7)(C) of the IRC. We have not determined whether we or any of our subsidiaries will elect out of the new interest expense limitation or whether each of our subsidiaries is eligible to elect out.

Distributions must be paid in the taxable year to which they relate, or in the following taxable year if declared before we timely file our federal income tax return for the earlier taxable year and if paid on or before the first regular distribution payment after that declaration. If a dividend is declared in October, November or December to shareholders of record during one of those months and is paid during the following January, then for federal income tax purposes such dividend will be treated as having been both paid and received on December 31 of the prior taxable year.

The 90% distribution requirements may be waived by the IRS if a REIT establishes that it failed to meet them by reason of distributions previously made to meet the requirements of the 4% excise tax discussed below. To the extent that we do not distribute all of our net capital gain and all of our “real estate investment trust taxable income,” as adjusted, we will be subject to federal income tax at regular corporate income tax rates on undistributed amounts. In addition, we will be subject to a 4% nondeductible excise tax to the extent we fail within a calendar year to make required distributions to our shareholders of 85% of our ordinary income and 95% of our capital gain net income plus the excess, if any, of the “grossed up required distribution” for the preceding calendar year over the amount treated as distributed for that preceding calendar year. For this purpose, the term “grossed up required distribution” for any calendar year is the sum of our taxable income for the calendar year without regard to the deduction for dividends paid and all amounts from earlier years that are not treated as having been distributed under the provision. We will be treated as having sufficient earnings and profits to treat as a dividend any distribution by us up to the amount required to be distributed in order to avoid imposition of the 4% excise tax.

If we do not have enough cash or other liquid assets to meet the 90% distribution requirements, or if we so choose, we may find it necessary or desirable to arrange for new debt or equity financing to provide funds for required distributions in order to maintain our qualification for taxation as a REIT. We cannot be sure that financing would be available for these purposes on favorable terms, or at all.

We may be able to rectify a failure to pay sufficient dividends for any year by paying “deficiency dividends” to shareholders in a later year. These deficiency dividends may be included in our deduction for dividends paid for the earlier year, but an interest charge would be imposed upon us for the delay in distribution. While the payment of a deficiency dividend will apply to a prior year for purposes of our REIT distribution requirements and our dividends paid deduction, it will be treated as an additional distribution to the shareholders receiving it in the year such dividend is paid.

In addition to the other distribution requirements above, to preserve our qualification for taxation as a REIT we are required to timely distribute all C corporation earnings and profits that we inherit from acquired corporations, as described below.

Acquisitions of C Corporations

We may in the future engage in transactions where we acquire all of the outstanding stock of a C corporation. Upon these acquisitions, except to the extent wemake an applicable TRS election, each of our acquired entities and their various wholly-owned corporate and noncorporate subsidiarieswill become our QRSs. Thus, after such acquisitions, all assets, liabilities and items of income, deduction and credit of the acquired and then disregarded entities will be treated as ours for purposes of the various REIT qualification tests described above. In addition, we generally will be treated as the successor to the acquired (and then disregarded) entities’ federal income tax attributes, such as those entities’ (a) adjusted tax bases in their assets and their depreciation schedules; and (b) earnings and profits for federal income tax purposes, if any. The carryover of these attributes creates REIT implications such as built-in gains tax exposure and additional distribution requirements, as described below. However, when we make an election under Section 338(g) of the IRC with respect to corporations that we acquire, we generally will not be subject to such attribute carryovers in respect of attributes existing prior to such election.

Built-in Gains from C Corporations. Notwithstanding our qualification and taxation as a REIT, under specified circumstances we may be subject to corporate income taxation if we acquire a REIT asset where our adjusted tax basis in the asset is determined by reference to the adjusted tax basis of the asset as owned by a C corporation. For instance, we may be subject to federal income taxation on all or part of the built-in gain that was present on the last date an asset was owned by a C corporation, if we succeed to a carryover tax basis in that asset directly or indirectly from such C corporation and if we sell the asset during the five year period beginning on the day the asset ceased being owned by such C corporation. To the extent of our income and gains in a taxable year that are subject to the built-in gains tax, net of any taxes paid on such income and gains with respect to that taxable year, our taxable dividends paid in the following year will be potentially eligible for taxation to noncorporate U.S. shareholders at the preferential tax rates for “qualified dividends” as described below under the heading “—Taxation of Taxable U.S. Shareholders”. We generallydo not expect to sell assets if doing so would result in the imposition of a

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material built-in gains tax liability; but if and when we do sell assets that may have associated built-in gains tax exposure, then we expect to make appropriate provision for the associated tax liabilities on our financial statements.

Earnings and Profits. Following a corporate acquisition, we must generally distribute all of the C corporation earnings and profits inherited in that transaction, if any, no later than the end of our taxable year in which the transaction occurs, in order to preserve our qualification for taxation as a REIT. However, if we fail to do so, relief provisions would allow us to maintain our qualification for taxation as a REIT provided we distribute any subsequently discovered C corporation earnings and profits and pay an interest charge in respect of the period of delayed distribution. C corporation earnings and profits that we inherit are, in general, specially allocated under a priority rule to the earliest possible distributions following the event causing the inheritance, and only then is the balance of our earnings and profits for the taxable year allocated among our distributions to the extent not already treated as a distribution of C corporation earnings and profits under the priority rule. The distribution of these C corporation earnings and profits is potentially eligible for taxation to noncorporate U.S. shareholders at the preferential tax rates for “qualified dividends” as described below under the heading “—Taxation of Taxable U.S. Shareholders”.

Depreciation and Federal Income Tax Treatment of Leases

Our initial tax bases in our assets will generally be our acquisition cost. We will generally depreciate our depreciable real property on a straight-line basis over forty years and our personal property over the applicable shorter periods. These depreciation schedules, and our initial tax bases, may vary for properties that we acquire through tax-free or carryover basis acquisitions (for example, our initial properties contributed to us by SIR as discussed below), or that are the subject of cost segregation analyses.

The initial tax bases and depreciation schedules for the assets we held immediately after we separated from SIR depends upon whether the deemed exchange that resulted for federal income tax purposes from that separation, or the Deemed Exchange, was an exchange governed by Sections 351(a), 351(b) and 357(a) of the IRC. Our counsel, Sullivan & Worcester LLP, is of the opinion that the Deemed Exchange should be treated as an exchange governed by Sections 351(a) and 357(a) of the IRC, except for a modest amount of gain recognized by SIR under Section 351(b) of the IRC in respect of our obligation to reimburse SIR for certain offering costs, and we agreed with SIR to perform all of our tax reporting accordingly. This opinion is conditioned upon the assumption that the Transaction Agreement governing our separation has been and will be complied with by all parties thereto, upon the accuracy and completeness of the factual matters described in our Registration Statement on Form S-11 filed with the SEC on November 21, 2017, as amended through the date hereof (File No. 333-221708), and upon representations made by us and SIR as to specified factual matters. Therefore, we carried over SIR’s tax basis and depreciation schedule in each of the assets that we received from SIR, as adjusted by the gain SIR recognized under Section 351(b) of the IRC in the Deemed Exchange. This conclusion regarding the applicability of Sections 351(a), 351(b) and 357(a) of the IRC is dependent upon favorable determinations with regard to each of the following three issues: (a) Section 351(e) of the IRC did not apply to the Deemed Exchange, or else it would have disqualified the Deemed Exchange from Section 351(a) and 351(b) treatment altogether; (b) Section 357(a) of the IRC rather than Section 357(b) of the IRC applied to the Deemed Exchange, or else the liabilities assumed by us from SIR in the Deemed Exchange would have been taxable consideration (up to the amount of actual realized gains) to SIR; and (c) a judicial recharacterization rule, developed in Waterman Steamship v. Commissioner, 430 F.2d 1185 (5th Cir. 1970), and subsequent tax cases, did not apply to recharacterize our pre-transaction distributions paid to SIR as a taxable sale by SIR for cash. We cannot be sure that the IRS or a court would reach the same conclusion.

If, contrary to our belief and the opinion of our counsel, the Deemed Exchange was taxable to SIR because Section 351(a), 351(b) or 357(a) of the IRC did not apply, then we would be treated as though we acquired our initial assets from SIR in a mostly or fully taxable acquisition, thereby acquiring aggregate tax bases in our assets at such deemed acquisition cost, which would be greater than the amount that would have otherwise carried over from SIR but also very possibly depreciable over longer depreciable lives. In that event, our aggregate depreciation deductions for our first taxable year and many taxable years thereafter may be lower than we are anticipating from a carryover transaction. If the IRS were to successfully challenge our reported depreciation methods and the associated tax reporting, then, including for purposes of qualifying for taxation as a REIT, we could be required to amend our tax reporting, including tax information reporting sent to our shareholders, or could be required to pay deficiency dividends, including the associated interest charge, as discussed above.

We are entitled to depreciation deductions from our facilities only if we are treated for federal income tax purposes as the owner of the facilities. This means that the leases of our facilities must be classified for U.S. federal income tax purposes as true leases, rather than as sales or financing arrangements, and we believe this to be the case.

Distributions to our Shareholders

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As described above, we expect to make distributions to our shareholders from time to time. These distributions may include cash distributions, in kind distributions of property, and deemed or constructive distributions resulting from capital market activities. The U.S. federal income tax treatment of our distributions will vary based on the status of the recipient shareholder as more fully described below under the headings “—Taxation of Taxable U.S. Shareholders,” “—Taxation of Tax-Exempt U.S. Shareholders,” and “—Taxation of Non-U.S. Shareholders.”

Section 302 of the IRC treats a redemption of our shares for cash only as a distribution under Section 301 of the IRC, and hence taxable as a dividend to the extent of our available current or accumulated earnings and profits, unless the redemption satisfies one of the tests set forth in Section 302(b) of the IRC enabling the redemption to be treated as a sale or exchange of the shares. The redemption for cash only will be treated as a sale or exchange if it (a) is “substantially disproportionate” with respect to the surrendering shareholder’s ownership in us, (b) results in a “complete termination” of the surrendering shareholder’s entire share interest in us, or (c) is “not essentially equivalent to a dividend” with respect to the surrendering shareholder, all within the meaning of Section 302(b) of the IRC. In determining whether any of these tests have been met, a shareholder must generally take into account shares considered to be owned by such shareholder by reason of constructive ownership rules set forth in the IRC, as well as shares actually owned by such shareholder. In addition, if a redemption is treated as a distribution under the preceding tests, then a shareholder’s tax basis in the redeemed shares generally will be transferred to the shareholder’s remaining shares in us, if any, and if such shareholder owns no other shares in us, such basis generally may be transferred to a related person or may be lost entirely. Because the determination as to whether a shareholder will satisfy any of the tests of Section 302(b) of the IRC depends upon the facts and circumstances at the time that our shares are redeemed, we urge you to consult your own tax advisor to determine the particular tax treatment of any redemption.

Taxation of Taxable U.S. Shareholders

For noncorporate U.S. shareholders, to the extent that their total adjusted income does not exceed applicable thresholds, the maximum federal income tax rate for long-term capital gains and most corporate dividends is generally 15%. For those noncorporate U.S. shareholders whose total adjusted income exceeds the applicable thresholds, the maximum federal income tax rate for long-term capital gains and most corporate dividends is generally 20%. However, because we are not generally subject to federal income tax on the portion of our “real estate investment trust taxable income” distributed to our shareholders, dividends on our shares generally are not eligible for these preferential tax rates, except that any distribution of C corporation earnings and profits and taxed built-in gain items will potentially be eligible for these preferential tax rates. As a result, our ordinary dividends generally aretaxed at the higher federal income tax rates applicable to ordinary income (subject to the lower effective tax rates applicable to qualified REIT dividends via the deduction-without-outlay mechanism of Section 199A of the IRC, which is generally available to our noncorporate U.S. shareholders for taxable years before 2026). To summarize, the preferential federal income tax rates for long-term capital gains and for qualified dividends generally apply to:

(1) long-term capital gains, if any, recognized on the disposition of our shares;

(2) our distributions designated as long-term capital gain dividends (except to the extent attributable to real estate depreciation recapture, in which case the distributions are subject to a maximum 25% federal income tax rate);

(3) our dividends attributable to dividend income, if any, received by us from C corporations such as TRSs;

(4) our dividends attributable to earnings and profits that we inherit from C corporations; and

(5) our dividends to the extent attributable to income upon which we have paid federal corporate income tax (such as taxes on foreclosure property income or on built-in gains), net of the corporate income taxes thereon.

As long as we qualify for taxation as a REIT, a distribution to our U.S. shareholders that we do not designate as a capital gain dividend generally will be treated as an ordinary income dividend to the extent of our available current or accumulated earnings and profits (subject to the lower effective tax rates applicable to qualified REIT dividends via the deduction-without-outlay mechanism of Section 199A of the IRC, which is available to our noncorporate U.S. shareholders for taxable years before 2026). Distributions made out of our current or accumulated earnings and profits that we properly designate as capital gain dividends generally will be taxed as long-term capital gains, as discussed below, to the extent they do not exceed our actual net capital gain for the taxable year. However, corporate shareholders may be required to treat up to 20% of any capital gain dividend as ordinary income under Section 291 of the IRC.

In addition, we may elect to retain net capital gain income and treat it as constructively distributed. In that case:    

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(1) we will be taxed at regular corporate capital gains tax rates on retained amounts;

(2) each of our U.S. shareholders will be taxed on its designated proportionate share of our retained net capital gains as though that amount were distributed and designated as a capital gain dividend;

(3) each of our U.S. shareholders will receive a credit or refund for its designated proportionate share of the tax that we pay;

(4) each of our U.S. shareholders will increase its adjusted basis in our shares by the excess of the amount of its proportionate share of these retained net capital gains over the U.S. shareholder’s proportionate share of the tax that we pay; and

(5) both we and our corporate shareholders will make commensurate adjustments in our respective earnings and profits for federal income tax purposes.

If we elect to retain our net capital gains in this fashion, we will notify our U.S. shareholders of the relevant tax information within sixtydays after the close of the affected taxable year.

If for any taxable year we designate capital gain dividends for our shareholders, then a portion of the capital gain dividends we designate will be allocated to the holders of a particular class of shares on a percentage basis equal to the ratio of the amount of the total dividends paid or made available for the year to the holders of that class of shares to the total dividends paid or made available for the year to holders of all outstanding classes of our shares. We will similarly designate the portion of any dividend that is to be taxed to noncorporate U.S. shareholders at preferential maximum rates (including any qualified dividend income and any capital gains attributable to real estate depreciation recapture that are subject to a maximum 25% federal income tax rate) so that the designations will be proportionate among all outstanding classes of our shares.

Distributions in excess of our current or accumulated earnings and profits will not be taxable to a U.S. shareholder to the extent that they do not exceed the shareholder’s adjusted tax basis in our shares, but will reduce the shareholder’s basis in such shares. To the extent that these excess distributions exceed a U.S. shareholder’s adjusted basis in such shares, they will be included in income as capital gain, with long-term gain generally taxed to noncorporate U.S. shareholders at preferential maximum rates. No U.S. shareholder may include on its federal income tax return any of our net operating losses or any of our capital losses. In addition, no portion of any of our dividends is eligible for the dividends received deduction for corporate shareholders.

If a dividend is declared in October, November or December to shareholders of record during one of those months and is paid during the following January, then for federal income tax purposes the dividend will be treated as having been both paid and received on December 31 of the prior taxable year.

A U.S. shareholder will generally recognize gain or loss equal to the difference between the amount realized and the shareholder’s adjusted basis in our shares that are sold or exchanged. This gain or loss will be capital gain or loss, and will be long-term capital gain or loss if the shareholder’s holding period in our shares exceeds one year. In addition, any loss upon a sale or exchange of our shares held for six months or less will generally be treated as a long-term capital loss to the extent of any long-term capital gain dividends we paid on such shares during the holding period.

U.S. shareholders who are individuals, estates or trusts are generally required to pay a 3.8% Medicare tax on their net investment income (including dividends on our shares (without regard to any deduction allowed by Section 199A of the IRC) and gains from the sale or other disposition of our shares), or in the case of estates and trusts on their net investment income that is not distributed, in each case to the extent that their total adjusted income exceeds applicable thresholds. U.S. shareholders are urged to consult their tax advisors regarding the application of the 3.8% Medicare tax.

If a U.S. shareholder recognizes a loss upon a disposition of our shares in an amount that exceeds a prescribed threshold, it is possible that the provisions of Treasury regulations involving “reportable transactions” could apply, with a resulting requirement to separately disclose the loss-generating transaction to the IRS. These Treasury regulations are written quite broadly, and apply to many routine and simple transactions. A reportable transaction currently includes, among other things, a sale or exchange of our shares resulting in a tax loss in excess of (a) $10 million in any single year or $20 million in a prescribed combination of taxable years in the case of our shares held by a C corporation or by a partnership with only C corporation partners or (b) $2 million in any single year or $4 million in a prescribed combination of taxable years in the case of our shares held by any other partnership or an S corporation, trust or individual, including losses that flow through pass through entities to individuals. A taxpayer discloses a reportable transaction by filing IRS Form 8886 with its federal income

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tax return and, in the first year of filing, a copy of Form 8886 must be sent to the IRS’s Office of Tax Shelter Analysis. The annual maximum penalty for failing to disclose a reportable transaction is generally $10,000 in the case of a natural person and $50,000 in any other case.

Noncorporate U.S. shareholders who borrow funds to finance their acquisition of our shares could be limited in the amount of deductionsallowed for the interest paid on the indebtedness incurred. Under Section 163(d) of the IRC, interest paid or accrued on indebtedness incurred or continued to purchase or carry property held for investment is generally deductible only to the extent of the investor’s net investment income. A U.S. shareholder’s net investment income will include, only if an appropriate election is made by the shareholder, capital gain dividend distributions and qualified dividends received from us. In addition, a U.S. shareholder that utilizes the deduction under Section 199A of the IRC with respect to qualified REIT dividends received from us may also be required to make a similar election in order to include such qualified REIT dividends in the calculation of net investment income. Distributions treated as a nontaxable return of the shareholder’s basis will not enter into the computation of net investment income.

Taxation of Tax-Exempt U.S. Shareholders

The rules governing the federal income taxation of tax-exempt entities are complex, and the following discussion is intended only as a summary of material considerations of an investment in our shares relevant to such investors. If you are a tax-exempt shareholder, we urge you to consult your own tax advisor to determine the impact of federal, state, local and foreign tax laws, including any tax return filing and other reporting requirements, with respect to your acquisition of or investment in our shares.

Our distributions made to shareholders that are tax-exempt pension plans, individual retirement accounts or other qualifying tax-exempt entities should not constitute UBTI, provided that the shareholder has not financed its acquisition of our shares with “acquisition indebtedness” within the meaning of the IRC, that the shares are not otherwise used in an unrelated trade or business of the tax-exempt entity, and that, consistent with our present intent, we do not hold a residual interest in a real estate mortgage investment conduit or otherwise hold mortgage assets or conduct mortgage securitization activities that generate “excess inclusion” income.

Taxation of Non-U.S. Shareholders

The rules governing the U.S. federal income taxation of non-U.S. shareholders are complex, and the following discussion is intended only as a summary of material considerations of an investment in our shares relevant to such investors. If you are a non-U.S. shareholder, we urge you to consult your own tax advisor to determine the impact of U.S. federal, state, local and foreign tax laws, including any tax return filing and other reporting requirements, with respect to your acquisition of or investment in our shares.

We expect that a non-U.S. shareholder’s receipt of (a) distributions from us, and (b) proceeds from the sale of our shares, will not be treated as income effectively connected with a U.S. trade or business and a non-U.S. shareholder will therefore not be subject to the often higher federal tax and withholding rates, branch profits taxes and increased reporting and filing requirements that apply to income effectively connected with a U.S. trade or business. This expectation and a number of the determinations below are predicated on our shares being listed on a U.S. national securities exchange, such as Nasdaq. Each class of our shares has been listed on a U.S. national securities exchange; however, we cannot be sure that our shares will continue to be so listed in future taxable years or that any class of our shares that we may issue in the future will be so listed.

Distributions. A distribution by us to a non-U.S. shareholder that is not designated as a capital gain dividend will be treated as an ordinary income dividend to the extent that it is made out of our current or accumulated earnings and profits. A distribution of this type will generally be subject to U.S. federal income tax and withholding at the rate of 30%, or at a lower rate if the non-U.S. shareholder has in the manner prescribed by the IRS demonstrated to the applicable withholding agent its entitlement to benefits under a tax treaty. Because we cannot determine our current and accumulated earnings and profits until the end of the taxable year, withholding at the statutory rate of 30% or applicable lower treaty rate will generally be imposed on the gross amount of any distribution to a non-U.S. shareholder that we make and do not designate as a capital gain dividend. Notwithstanding this potential withholding on distributions in excess of our current and accumulated earnings and profits, these excess portions of distributions are a nontaxable return of capital to the extent that they do not exceed the non-U.S. shareholder’s adjusted basis in our shares, and the nontaxable return of capital will reduce the adjusted basis in these shares. To the extent that distributions in excess of our current and accumulated earnings and profits exceed the non-U.S. shareholder’s adjusted basis in our shares, the distributions will give rise to U.S. federal income tax liability only in the unlikely event that the non-U.S. shareholder would otherwise be subject to tax on any gain from the sale or exchange of these shares, as discussed below under the heading “—Dispositions of Our Shares.” A non-U.S. shareholder may seek a refund from the IRS of amounts

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withheld on distributions to it in excess of such shareholder’s allocable share of our current and accumulated earnings and profits.

For so long as a class of our shares is listed on a U.S. national securities exchange, capital gain dividends that we declare and pay to a non-U.S. shareholder on those shares, as well as dividends to a non-U.S. shareholder on those shares attributable to our sale or exchange of “United States real property interests” within the meaning of Section 897 of the IRC, or USRPIs, will not be subject to withholding as though those amounts were effectively connected with a U.S. trade or business, and non-U.S. shareholders will not be required to file U.S. federal income tax returns or pay branch profits tax in respect of these dividends. Instead, these dividends will generally be treated as ordinary dividends and subject to withholding in the manner described above.

Tax treaties may reduce the withholding obligations on our distributions. Under some treaties, however, rates below 30% that are applicable to ordinary income dividends from U.S. corporations may not apply to ordinary income dividends from a REIT or may apply only if the REIT meets specified additional conditions. A non-U.S. shareholder must generally use an applicable IRS Form W-8, or substantially similar form, to claim tax treaty benefits. If the amount of tax withheld with respect to a distribution to a non-U.S. shareholder exceeds the shareholder’s U.S. federal income tax liability with respect to the distribution, the non-U.S. shareholder may file for a refund of the excess from the IRS. Treasury regulations also provide special rules to determine whether, for purposes of determining the applicability of a tax treaty, our distributions to a non-U.S. shareholder that is an entity should be treated as paid to the entity or to those owning an interest in that entity, and whether the entity or its owners are entitled to benefits under the tax treaty.

If, contrary to our expectation, a class of our shares was not listed on a U.S. national securities exchange and we made a distribution on those shares that was attributable to gain from the sale or exchange of a USRPI, then a non-U.S. shareholder holding those shares would be taxed as if the distribution was gain effectively connected with a trade or business in the United States conducted by the non-U.S. shareholder. In addition, the applicable withholding agent would be required to withhold from a distribution to such a non-U.S. shareholder, and remit to the IRS, up to 21% of the maximum amount of any distribution that was or could have been designated as a capital gain dividend. The non-U.S. shareholder also would generally be subject to the same treatment as a U.S. shareholder with respect to the distribution (subject to any applicable alternative minimum tax and a special alternative minimum tax in the case of a nonresident alien individual), would be subject to fulsome U.S. federal income tax return reporting requirements, and, in the case of a corporate non-U.S. shareholder, may owe the up to 30% branch profits tax under Section 884 of the IRC (or lower applicable tax treaty rate) in respect of these amounts.

Dispositions of Our Shares. If as expected our shares are not USRPIs, then a non-U.S. shareholder’s gain on the sale of these shares generally will not be subject to U.S. federal income taxation or withholding. We expect that our shares will not be USRPIs because one or both of the following exemptions will be available at all times.

First, for so long as a class of our shares is listed on a U.S. national securities exchange, a non-U.S. shareholder’s gain on the sale of those shares will not be subject to U.S. federal income taxation as a sale of a USRPI. Second, our shares will not constitute USRPIs if we are a “domestically controlled” REIT. We will be a “domestically controlled” REIT if less than 50% of the value of our shares (including any future class of shares that we may issue) is held, directly or indirectly, by non-U.S. shareholders at all times during the preceding five years, after applying specified presumptions regarding the ownership of our shares as described in Section 897(h)(4)(E) of the IRC. For these purposes, we believe that the statutory ownership presumptions apply to validate our status as a “domestically controlled” REIT. Accordingly, we believe that we are and will remain a “domestically controlled” REIT.

If, contrary to our expectation, a gain on the sale of our shares is subject to U.S. federal income taxation (for example, because neither of the above exemptions were then available, i.e., that class of our shares were not then listed on a U.S. national securities exchange and we were not a “domestically controlled” REIT), then (a) a non-U.S. shareholder would generally be subject to the same treatment as a U.S. shareholder with respect to its gain (subject to any applicable alternative minimum tax and a special alternative minimum tax in the case of nonresident alien individuals), (b) the non-U.S. shareholder would also be subject to fulsome U.S. federal income tax return reporting requirements, and (c) a purchaser of that class of our shares from the non-U.S. shareholder may be required to withhold 15% of the purchase price paid to the non-U.S. shareholder and to remit the withheld amount to the IRS.

Information Reporting, Backup Withholding, and Foreign Account Withholding

Information reporting, backup withholding, and foreign account withholding may apply to distributions or proceeds paid to our shareholders under the circumstances discussed below. If a shareholder is subject to backup or other U.S. federal income tax withholding, then the applicable withholding agent will be required to withhold the appropriate amount with respect

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to a deemed or constructive distribution or a distribution in kind even though there is insufficient cash from which to satisfy the withholding obligation. To satisfy this withholding obligation, the applicable withholding agent may collect the amount of U.S. federal income tax required to be withheld by reducing to cash for remittance to the IRS a sufficient portion of the property that the shareholder would otherwise receive or own, and the shareholder may bear brokerage or other costs for this withholding procedure.

Amounts withheld under backup withholding are generally not an additional tax and may be refunded by the IRS or credited against the shareholder’s federal income tax liability, provided that such shareholder timely files for a refund or credit with the IRS. A U.S. shareholder may be subject to backup withholding when it receives distributions on our shares or proceeds upon the sale, exchange, redemption, retirement or other disposition of our shares, unless the U.S. shareholder properly executes, or has previously properly executed, under penalties of perjury an IRS Form W-9 or substantially similar form that:

• provides the U.S. shareholder’s correct taxpayer identification number;

• certifies that the U.S. shareholder is exempt from backup withholding because (a) it comes within an enumerated exempt category, (b) it has not been notified by the IRS that it is subject to backup withholding, or (c) it has been notified by the IRS that it is no longer subject to backup withholding; and    

• certifies that it is a U.S. citizen or other U.S. person.

If the U.S. shareholder has not provided and does not provide its correct taxpayer identification number and appropriate certifications on an IRS Form W-9 or substantially similar form, it may be subject to penalties imposed by the IRS, and the applicable withholding agent may have to withhold a portion of any distributions or proceeds paid to such U.S. shareholder. Unless the U.S. shareholder has established on a properly executed IRS Form W-9 or substantially similar form that it comes within an enumerated exempt category, distributions or proceeds on our shares paid to it during the calendar year, and the amount of tax withheld, if any, will be reported to it and to the IRS.

Distributions on our shares to a non-U.S. shareholder during each calendar year and the amount of tax withheld, if any, will generally be reported to the non-U.S. shareholder and to the IRS. This information reporting requirement applies regardless of whether the non-U.S. shareholder is subject to withholding on distributions on our shares or whether the withholding was reduced or eliminated by an applicable tax treaty. Also, distributions paid to a non-U.S. shareholder on our shares will generally be subject to backup withholding, unless the non-U.S. shareholder properly certifies to the applicable withholding agent its non-U.S. shareholder status on an applicable IRS Form W-8 or substantially similar form. Information reporting and backup withholding will not apply to proceeds a non-U.S. shareholder receives upon the sale, exchange, redemption, retirement or other disposition of our shares, if the non-U.S. shareholder properly certifies to the applicable withholding agent its non-U.S. shareholder status on an applicable IRS Form W-8 or substantially similar form. Even without having executed an applicable IRS Form W-8 or substantially similar form, however, in some cases information reporting and backup withholding will not apply to proceeds that a non-U.S. shareholder receives upon the sale, exchange, redemption, retirement or other disposition of our shares if the non-U.S. shareholder receives those proceeds through a broker’s foreign office.

Non-U.S. financial institutions and other non-U.S. entities are subject to diligence and reporting requirements for purposes of identifying accounts and investments held directly or indirectly by U.S. persons. The failure to comply with these additional information reporting, certification and other requirements could result in a 30% U.S. withholding tax on applicable payments to non-U.S. persons, notwithstanding any otherwise applicable provisions of an income tax treaty. In particular, a payee that is a foreign financial institution that is subject to the diligence and reporting requirements described above must enter into an agreement with the U.S. Department of the Treasury requiring, among other things, that it undertake to identify accounts held by “specified United States persons” or “United States owned foreign entities” (each as defined in the IRC and administrative guidance thereunder), annually report information about such accounts, and withhold 30% on applicable payments to noncompliant foreign financial institutions and account holders. Foreign financial institutions located in jurisdictions that have an intergovernmental agreement with the United States with respect to these requirements may be subject to different rules. The foregoing withholding regime generally applies to payments of dividends on our shares. In general, to avoid withholding, any non-U.S. intermediary through which a shareholder owns our shares must establish its compliance with the foregoing regime, and a non-U.S. shareholder must provide specified documentation (usually an applicable IRS Form W-8) containing information about its identity, its status, and if required, its direct and indirect U.S. owners. Non-U.S. shareholders and shareholders who hold our shares through a non-U.S. intermediary are encouraged to consult their own tax advisors regarding foreign account tax compliance.

Other Tax Considerations

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Our tax treatment and that of our shareholders may be modified by legislative, judicial or administrative actions at any time, which actions may have retroactive effect. The rules dealing with federal income taxation are constantly under review by the U.S. Congress, the IRS and the U.S. Department of the Treasury, and statutory changes, new regulations, revisions to existing regulations and revised interpretations of established concepts are issued frequently; in fact, significant administrative guidance has been promulgated in response to the substantial December 2017 amendments to the IRC, additional amendments to the IRC have been enacted subsequent to the December 2017 amendments to the IRC, and additional guidance or subsequent amendments to the IRC could be promulgated or enacted in the future. Likewise, the rules regarding taxes other than U.S. federal income taxes may also be modified. No prediction can be made as to the likelihood of passage of new tax legislation or other provisions, or the direct or indirect effect on us and our shareholders. Revisions to tax laws and interpretations of these laws could adversely affect our ability to qualify and be taxed as a REIT, as well as the tax or other consequences of an investment in our shares. We and our shareholders may also be subject to taxation by state, local or other jurisdictions, including those in which we or our shareholders transact business or reside. These tax consequences may not be comparable to the U.S. federal income tax consequences discussed above.

ERISA PLANS, KEOGH PLANS AND INDIVIDUAL RETIREMENT ACCOUNTS

General Fiduciary Obligations

The Employee Retirement Income Security Act of 1974, as amended, or ERISA, the IRC and similar provisions to those described below under applicable foreign or state law, individually and collectively, impose certain duties on persons who are fiduciaries of any employee benefit plan subject to Title I of ERISA, or an ERISA Plan, or an individual retirement account or annuity, or an IRA, a Roth IRA, a tax-favored account (such as an Archer MSA, Coverdell education savings account or health savings account), a Keogh plan or other qualified retirement plan not subject to Title I of ERISA, each a Non-ERISA Plan. Under ERISA and the IRC, any person who exercises any discretionary authority or control over the administration of, or the management or disposition of the assets of, an ERISA Plan or Non-ERISA Plan, or who renders investment advice for a fee or other compensation to an ERISA Plan or Non-ERISA Plan, is generally considered to be a fiduciary of the ERISA Plan or Non-ERISA Plan.

Fiduciaries of an ERISA Plan must consider whether:

• their investment in our shares or other securities satisfies the diversification requirements of ERISA;

• the investment is prudent in light of possible limitations on the marketability of our shares;

• they have authority to acquire our shares or other securities under the applicable governing instrument and Title I of ERISA; and

• the investment is otherwise consistent with their fiduciary responsibilities.

Fiduciaries of an ERISA Plan may incur personal liability for any loss suffered by the ERISA Plan on account of a violation of their fiduciary responsibilities. In addition, these fiduciaries may be subject to a civil penalty of up to 20% of any amount recovered by the ERISA Plan on account of a violation. Fiduciaries of any Non-ERISA Plan should consider that the Non-ERISA Plan may only make investments that are authorized by the appropriate governing instrument and applicable law.

Fiduciaries considering an investment in our securities should consult their own legal advisors if they have any concern as to whether the investment is consistent with the foregoing criteria or is otherwise appropriate. The sale of our securities to an ERISA Plan or Non-ERISA Plan is in no respect a representation by us or any underwriter of the securities that the investment meets all relevant legal requirements with respect to investments by the arrangements generally or any particular arrangement, or that the investment is appropriate for arrangements generally or any particular arrangement.

Prohibited Transactions

Fiduciaries of ERISA Plans and persons making the investment decision for Non-ERISA Plans should consider the application of the prohibited transaction provisions of ERISA and the IRC in making their investment decision. Sales and other transactions between an ERISA Plan or a Non-ERISA Plan and disqualified persons or parties in interest, as applicable, are prohibited transactions and result in adverse consequences absent an exemption. The particular facts concerning the sponsorship, operations and other investments of an ERISA Plan or Non-ERISA Plan may cause a wide range of persons to be treated as disqualified persons or parties in interest with respect to it. A non-exempt prohibited transaction, in addition to imposing potential personal liability upon ERISA Plan fiduciaries, may also result in the imposition of an excise tax under the

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IRC or a penalty under ERISA upon the disqualified person or party in interest. If the disqualified person who engages in the transaction is the individual on behalf of whom an IRA, Roth IRA or other tax-favored account is maintained (or his beneficiary), the IRA, Roth IRA or other tax-favored account may lose its tax-exempt status and its assets may be deemed to have been distributed to the individual in a taxable distribution on account of the non-exempt prohibited transaction, but no excise tax will be imposed. Fiduciaries considering an investment in our securities should consult their own legal advisors as to whether the ownership of our securities involves a non-exempt prohibited transaction.

“Plan Assets” Considerations

The U.S. Department of Labor has issued a regulation defining “plan assets.” The regulation, as subsequently modified by ERISA, generally provides that when an ERISA Plan or a Non-ERISA Plan otherwise subject to Title I of ERISA and/or Section 4975 of the IRC acquires an interest in an entity that is neither a “publicly offered security” nor a security issued by an investment company registered under the Investment Company Act of 1940, as amended, the assets of the ERISA Plan or Non-ERISA Plan include both the equity interest and an undivided interest in each of the underlying assets of the entity, unless it is established either that the entity is an operating company or that equity participation in the entity by benefit plan investors is not significant. We are not an investment company registered under the Investment Company Act of 1940, as amended.

Each class of our equity (that is, our common shares and any other class of equity that we may issue) must be analyzed separately to ascertain whether it is a publicly offered security. The regulation defines a publicly offered security as a security that is “widely held,” “freely transferable” and either part of a class of securities registered under the Exchange Act,or sold under an effective registration statement under the Securities Act of 1933, as amended, or the Securities Act, provided the securities are registered under the Exchange Act within 120 days after the end of the fiscal year of the issuer during which the offering occurred. Each class of our outstanding shares has been registered under the Exchange Act within the necessary time frame to satisfy the foregoing condition.

The regulation provides that a security is “widely held” only if it is part of a class of securities that is owned by 100 or more investors independent of the issuer and of one another. However, a security will not fail to be “widely held” because the number of independent investors falls below 100 subsequent to the initial public offering as a result of events beyond the issuer’s control. Although we cannot be sure, we believe our common shares have been and will remain widely held, and we expect the same to be true of any future class of equity that we may issue.

The regulation provides that whether a security is “freely transferable” is a factual question to be determined on the basis of all relevant facts and circumstances. The regulation further provides that, where a security is part of an offering in which the minimum investment is $10,000 or less, some restrictions on transfer ordinarily will not, alone or in combination, affect a finding that these securities are freely transferable. The restrictions on transfer enumerated in the regulation as not affecting that finding include:    

• any restriction on or prohibition against any transfer or assignment that would result in a termination or reclassification for federal or state tax purposes, or would otherwise violate any state or federal law or court order;

• any requirement that advance notice of a transfer or assignment be given to the issuer and any requirement that either the transferor or transferee, or both, execute documentation setting forth representations as to compliance with any restrictions on transfer that are among those enumerated in the regulation as not affecting free transferability, including those described in the preceding clause of this sentence;

• any administrative procedure that establishes an effective date, or an event prior to which a transfer or assignment will not be effective; and

• any limitation or restriction on transfer or assignment that is not imposed by the issuer or a person acting on behalf of the issuer.

We believe that the restrictions imposed under our declaration of truston the transfer of shares do not result in the failure of our shares to be “freely transferable.” Furthermore, we believe that there exist no other facts or circumstances limiting the transferability of our shares that are not included among those enumerated as not affecting their free transferability under the regulation, and we do not expect or intend to impose in the future, or to permit any person to impose on our behalf, any limitations or restrictions on transfer that would not be among the enumerated permissible limitations or restrictions.

Assuming that each class of our shares will be “widely held” and that no other facts and circumstances exist that restrict transferability of these shares, our counsel, Sullivan & Worcester LLP, is of the opinion that our shares will not fail to be

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“freely transferable” for purposes of the regulation due to the restrictions on transfer of our shares in our declaration of trust and that under the regulation each class of our currently outstanding shares is publicly offered and our assets will not be deemed to be “plan assets” of any ERISA Plan or Non-ERISA Plan that acquires our shares in a public offering. This opinion is conditioned upon certain assumptions and representations, as discussed above in “Material United States Federal Income Tax Considerations—Taxation as a REIT.”

Item 1A. Risk Factors

Our business is subject to a number of risks and uncertainties. Investors and prospective investors should carefully consider the risks described below, together with all of the other information in this Annual Report on Form 10-K.The risks described below may not be the only risks we face but are risks we believe may be material at this time. Additional risks that we do not yet know of, or that we currently think are immaterial, also may impair our business operations or financial results. If any of the events or circumstances described below occurs, our business, financial condition, results of operations or ability to make distributions to our shareholders and the value of our securities could be adversely affected. Investors and prospective investors should consider the following risks, the information contained under the heading “Warning Concerning Forward Looking Statements” and the risks described elsewhere in this Annual Report on Form 10-K before deciding whether to invest in our securities.

Risks Related to Our Business

Our investments are and will be concentrated in industrial and logistics properties.

Our properties are substantially all industrial and logistics properties and we intend to acquire similar additional properties. The market demand to lease industrial and logistics properties generally reflects conditions in the U.S. economy. If the general economy slows, the demand to lease industrial and logistics properties will be reduced and the value of our common shares may decline. Because we expect to be concentrated in industrial and logistics properties, the adverse impact of cyclical economic conditions affecting industrial and logistics properties may have a greater impact on the value of our common shares than if we were invested in several different types of properties, including residential, office or other properties, in addition to industrial and logistics properties.

The development of new industrial and logistics properties may exceed any increase in demand for such properties.

The current strong demand for industrial and logistics properties is encouraging new development of such properties. If the development of new industrial and logistics properties exceeds the increase in demand for such properties, our existing properties may be unable to successfully compete for tenants with newer developed buildings, our income may decline and the value of our common shares may decline.

We may be unable to lease our properties when our leases expire.

Although we typically will seek to renew our leases with current tenants when they expire, we cannot be sure that we will be successful in doing so. If our tenants do not renew their leases, we may be unable to obtain new tenants to maintain or increase the historical occupancy rates of, or rents from, our properties.

We may experience declining rents or incur significant costs to renew our leases with current tenants or lease our properties to new tenants.

When rents are reset under the leases at our Hawaii Properties, the rents may decline. When we renew our leases with current tenants or lease to new tenants, we may experience rent decreases, and we may have to spend substantial amounts for leasing commissions, tenant improvements or other tenant inducements. Moreover, many of our Mainland Properties have been specially designed for the particular businesses of our tenants; if the current leases for such properties are terminated or are not renewed, we may be required to renovate such properties at substantial costs, decrease the rents we charge or provide other concessions in order to lease such properties to new tenants.

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A significant number of our properties are located on the island of Oahu, HI, and we are exposed to risks as a result of this geographic concentration.

A significant number of our properties are located on the island of Oahu, HI. This geographic concentration creates risks. For example, 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, which could cause damage to our properties, affect our Hawaii tenants’ ability to pay rent to us and cause the value of our properties and our securities to decline.

Substantially all of our properties are leased to single tenants which may subject us to greater risks of loss than if each of our properties had multiple tenants.

Substantially all of our rental revenues from our properties as of December 31, 2018 were from properties leased to single tenants. The value of single tenant properties is materially dependent on the performance of those tenants under their respective leases. Many of our single tenant leases require that certain property level operating expenses and capital expenditures, such as real estate taxes, insurance, utilities, maintenance and repairs, including increases with respect thereto, be paid, or reimbursed to us, by our tenants. Accordingly, in addition to our not receiving rental income, a tenant default on such leases could make us responsible for paying these expenses. Because most of our properties are leased to single tenants, the adverse impact of individual tenant defaults or non-renewals is likely to be greater than would be the case if our properties were leased to multiple tenants.

Our business depends upon our tenants satisfying their lease obligations to us, which depends, to a large degree, on our tenants’ abilities to successfully operate their businesses.

The value of our business and the value of our common shares are dependent, in part, on our tenants’ abilities to meet their lease obligations to us. The financial capacities of our tenants may be adversely affected by factors over which we have no control. In particular, two subsidiaries of Amazon.com, Inc. together contribute approximately 9.5% of our annualized rental revenues, under three separate leases, which are guaranteed by Amazon.com, Inc., as of December 31, 2018. The inability 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.

Bankruptcy law may adversely impact us.

The occurrence of a tenant bankruptcy could reduce the rent we receive from such tenant’s lease. If a tenant becomes bankrupt, federal law may prohibit us from evicting such tenant based solely upon its bankruptcy. In addition, a bankrupt tenant may be authorized to reject and terminate its lease with us. Any claims against a bankrupt tenant for unpaid future rent would be subject to statutory limitations that may be substantially less than the contractually specified rent we are owed under the lease, and any claim we have for unpaid past rent, may not be paid in full. In October 2018, one of our tenants, American Tire Distributors, Inc., filed for Chapter 11 bankruptcy. American Tire Distributors, Inc. occupies five of our Mainland Properties with a total of approximately 722,000 rentable square feet. In December 2018, the bankruptcy court confirmed American Tire Distributors, Inc.’s Amended Joint Plan of Reorganization. Pursuant to that plan, American Tire Distributors, Inc. assumed all its leases with us. Although American Tire Distributors, Inc. has paid its rental obligations to us through February 2019, it may not be successful in its reorganization, it may not pay future rents to us or it may seek to renegotiate its lease obligations with us. In addition, another of our tenants, a subsidiary of Sears Holdings Corporation, has filed for Chapter 11 bankruptcy. Although this tenant represents less than 1% of our annualized rental revenues as of December 31, 2018, we had a receivable of approximately $3 million related to straight line rent with respect to this lease. If the tenant rejects this lease or its terms are changed, we may incur a charge to write off this straight line rent receivable and we may incur other costs as well.

Many of our tenants do not have credit ratings.

The majority of our tenants are not rated by any nationally recognized credit rating organization. It is more difficult to assess the ability of a tenant that is not rated to meet its obligations than that of a rated tenant. Moreover, tenants may be rated when we enter leases with them but their ratings may be later lowered or terminated during the term of the leases. Because we have many unrated tenants, we may experience a higher percentage of tenant defaults than landlords who have a higher percentage of highly rated tenants.

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When we reset rents, renew or extend leases or lease to new tenants at our Hawaii Properties, our rents may decrease, and our ability to increase rents may be limited in the future by government action.

Some of our Hawaii Properties require the rents to be reset periodically based on fair market values, which could result in rental increases or decreases. Our ability to increase rents when rent resets occur will depend upon then prevailing market conditions, which are beyond our control. While rent resets involving our Hawaii Properties have, in the aggregate, resulted in rent increases during the period of our, SIR’s and SIR’s predecessor’s ownership, in some instances rent resets have resulted in rent decreases. Accordingly, the historical increases achieved from rent resets involving our Hawaii Properties may not be repeated in the future.

In the past, the Hawaii state legislature has enacted legislation that would have limited rent increases at certain of our Hawaii Properties. The U.S. District Court in Hawaii later held that this legislation violated the U.S. Constitution and therefore was unenforceable. However, the Hawaii state legislature may in the future adopt laws to limit rent increases at our Hawaii Properties, and we may not be successful in any challenge we make to that legislation. Moreover, even if we were successful in challenging such laws, the cost of doing so may be significant.

REIT distribution requirements and limitations on our ability to access reasonably priced capital may adversely impact our ability to carry out our business plan.

We intend to elect for taxation as a REIT under the IRC. To maintain our qualification for taxation as a REIT under the IRC, we are required to distribute at least 90% of our annual REIT taxable income (excluding capital gains). Accordingly, we may not be able to retain sufficient cash to fund our operations, repay our debts, invest in our properties or fund our acquisitions or development or redevelopment efforts. Our business strategies therefore depend, in part, upon our ability to raise additional capital at reasonable costs. The volatility in the availability of capital to businesses on a global basis in most debt and equity markets generally may limit our ability to raise reasonably priced capital. We may also be unable to raise reasonably priced capital because of reasons related to our business, market perceptions of our prospects, the terms of our indebtedness, the extent of our leverage or for reasons beyond our control, such as market conditions. Because the earnings we are permitted to retain are limited by the rules governing REIT qualification and taxation, if we are unable to raise reasonably priced capital, we may not be able to carry out our business plan.

We may be unable to grow our business by acquisitions of additional properties.

Our business plans involve the acquisition of additional properties. Our ability to make profitable acquisitions is subject to risks, including, but not limited to, risks associated with:

• competition from other investors, including publicly traded and private REITs, numerous financial institutions, individuals, foreign investors and other public and private companies;

• our long term cost of capital;

• contingencies in our acquisition agreements; and

• the availability and terms of financing.

We might encounter unanticipated difficulties and expenditures relating to our acquired properties. For example:

• we do not believe that it is possible to understand fully a property before it is owned and operated for a reasonable period of time, and, notwithstanding pre-acquisition due diligence, we could acquire a property that contains undisclosed defects in design or construction;

• the market in which an acquired property is located may experience unexpected changes that adversely affect the property’s value;

• the occupancy of and rents from properties that we acquire may decline during our ownership;

• property operating costs for our acquired properties may be higher than anticipated, which may result in tenants that pay or reimburse us for those costs terminating their leases or our acquired properties not yielding expected returns;

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• we may acquire properties subject to unknown liabilities and without any recourse, or with limited recourse, such as liability for the cleanup of undisclosed environmental contamination or for claims by tenants, vendors or other persons related to actions taken by former owners of the properties; and

• acquired properties might require significant management attention that would otherwise be devoted to our other business activities.

For these reasons, among others, we might not realize the anticipated benefits of our acquisitions, and our business plan to acquire additional properties may not succeed or may cause us to experience losses.

Future leases may require us to pay property operating costs.

While our properties are generally leased to tenants that are financially responsible to pay or reimburse us for all, or substantially all, increases in property level operating and maintenance expenses, many industrial and logistics properties do not utilize this lease structure. In the future, we may enter into new leases or acquire properties subject to leases that make us responsible for property level operating costs; and we may be adversely affected if such costs increase.

We face significant competition.

We 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. Some of our competitors may have greater financial and other resources than us. Because of 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 also face 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 than we offer at our properties. Development activities may increase the supply of properties of the type we own in the leasing markets in which we own properties and increase the competition we face. Competition may make it difficult for us to attract and retain tenants and may reduce the rents we are able to charge.

Increasing interest rates may adversely affect us.

Since the most recent U.S. recession, the Board of Governors of the U.S. Federal Reserve System, or the U.S. Federal Reserve, has taken actions which have resulted in low interest rates prevailing in the marketplace for a historically long period of time. Recently, there have been some modest signs of inflationary price movements, and the U.S. Federal Reserve has been raising the federal funds rate since December 2016. Previously, the U.S. Federal Reserve had indicated that it expected to raise the federal funds rate further in 2019, although it recently indicated that it may delay making those increases. Market interest rates may continue to increase. In addition, as noted in Item 7A of this Annual Report, LIBOR is expected to be phased out in 2021. The interest rate under our credit facility is based on LIBOR and future debt we may incur may also be based on LIBOR. An alternative interest rate index that may replace LIBOR may result in our paying increased interest. Interest rate increases may materially and negatively affect us in several ways, including:

• Investors may consider whether to buy or sell our common shares based upon the distribution rate on our common shares relative to the then prevailing market interest rates. If market interest rates go up, 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 that offer higher distribution rates. Sales of our common shares may cause a decline in the value of our common shares.

• Amounts outstanding under our revolving credit facility require interest to be paid at floating interest rates. When interest rates increase, our interest costs will increase, which could adversely affect our cash flows, our ability to pay principal and interest on our debt, our cost of refinancing our fixed rate debts when they become due and our ability to make or sustain distributions to our shareholders. Additionally, if we choose to hedge our interest rate risk, we cannot be sure that the hedge will be effective or that our hedging counterparty will meet its obligations to us.

• Property values are often determined, in part, based upon a capitalization of rental income formula. When market interest rates increase, property investors often demand higher capitalization rates and that causes

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property values to decline. Increases in interest rates could lower the value of our properties and cause the value of our securities to decline.

Ownership of real estate is subject to environmental risks and liabilities.

Ownership of real estate is subject to risks associated with environmental hazards. Under various laws, owners as well as tenants of real estate may be required to investigate and clean up or remove hazardous substances present at or migrating from properties they own, lease or operate and may be held liable for property damage or personal injuries that result from hazardous substances. These laws also expose us to the possibility that we may become liable to government agencies or third parties for costs and damages they incur in connection with hazardous substances. The costs and damages that may arise from environmental hazards are difficult to assess and estimate for numerous reasons, including uncertainty about the extent of contamination, alternative treatment methods that may be applied, the location of the property which subjects it to differing local laws and regulations and their interpretations, as well as the time it may take to remediate contamination. In addition, these laws also impose various requirements regarding the operation and maintenance of properties and recordkeeping and reporting requirements relating to environmental matters that require us or the tenants of our properties to incur costs to comply with.

In addition, we believe that some of our properties may contain asbestos. We believe any asbestos on our properties is contained in accordance with applicable laws and regulations, and we have no current plans to remove it. If we remove the asbestos or renovate or demolish the affected properties, certain environmental regulations govern the manner in which the asbestos must be handled and removed, and we could incur substantial costs complying with such regulations.

We may incur substantial liabilities and costs for environmental matters.

We may incur environmental liabilities at our leased properties and our tenants may not indemnify us for those costs.

Our leases generally require our tenants to operate in compliance with applicable law and to indemnify us against any environmental liabilities arising from their activities on our properties. However, applicable law may make us subject to strict liability by virtue of our ownership interests. Also, our tenants may be unwilling or have insufficient financial resources to satisfy their indemnification obligations under our leases. Furthermore, such liabilities or obligations may affect the ability of some tenants to pay their rents to us. Further, in the Transaction Agreement, we have agreed to indemnify OPI (as successor by merger to SIR) for any preexisting environmental conditions at the properties SIR contributed to us in connection with our IPO.

As of December 31, 2018, we had reserved approximately $6.9 million for potential environmental liabilities arising at our properties.

Ownership of real estate is subject to risks from adverse weather and climate events.

Severe weather may have an adverse effect on certain properties we own. Rising sea levels could cause flooding at some of our properties, including some of our Hawaii Properties, which may have an adverse effect on individual properties we own. When major weather or climate-related events, such as hurricanes, floods and wildfires, occur at or near our properties, our tenants may need to suspend operations of the impacted property until the event has ended and the property is then ready for operation. We or the tenants of our properties may incur significant costs and losses as a result of these activities, both in terms of operating, preparing and repairing our properties in anticipation of, during and after a severe weather or climate-related event and in terms of potential lost business due to the interruption in operating our properties. Our insurance and our tenants’ insurance may not adequately compensate us or them for these costs and losses.

Also, concerns about climate change have resulted in various treaties, laws and regulations that are intended to limit carbon emissions and address other environmental concerns. These and other laws may cause energy or other costs at our properties to increase. Laws enacted to mitigate climate change may make some of our properties obsolete or cause us to make material investments in our properties, which could materially and adversely affect our financial condition or the financial condition of our tenants and their ability to pay rent to us and cause the value of our securities to decline.

Real estate ownership creates risks and liabilities.

In addition to the risks discussed above, our business is subject to other risks associated with real estate ownership, including:

• the illiquid nature of real estate markets, which limits our ability to sell our assets rapidly to respond to

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changing market conditions;

• the subjectivity of real estate valuations and changes in such valuations over time;

• current and future adverse national real estate trends, including increasing vacancy rates, declining rental rates and general deterioration of market conditions;

• costs that may be incurred relating to property maintenance and repair, and the need to make expenditures due to changes in government regulations; and

• liabilities and litigations arising from injuries on our properties or otherwise incidental to the ownership of our properties.

We have debt and we may incur additional debt.

As of December 31, 2018, our consolidated indebtedness was $462.2 million and our ratio of consolidated net debt to total gross assets (total assets plus accumulated depreciation) was 28.4%, and we had $337.0 million available for borrowing under our $750.0 million revolving credit facility. The agreement governing our revolving credit facility, or our credit agreement, includes a feature under which the maximum borrowing availability may be increased to up to $1.5 billion in certain circumstances. In addition, on January 29, 2019, we obtained a $650.0 million mortgage loan secured by certain of our properties located in Hawaii.

We are subject to numerous risks associated with our debt, including the risk that our cash flows could be insufficient to meet required payments on our debt. There are no limits in our organizational documents on the amount of debt we may incur, and we may incur substantial debt. Our debt obligations could have important consequences to our securityholders. Our incurring debt may increase our vulnerability to adverse economic, market and industry conditions, limit our flexibility in planning for, or reacting to, changes in our business, and place us at a disadvantage in relation to competitors that have lower debt levels. Our incurring debt could also increase the costs to us of incurring additional debt, increase our exposure to floating interest rates or expose us to potential events of default (if not cured or waived) under covenants contained in debt instruments that could have a material adverse effect on our business, financial condition and operating results. Excessive debt could reduce the available cash flow to fund, or limit our ability to obtain financing for working capital, capital expenditures, acquisitions, construction projects, refinancing, lease obligations or other purposes and hinder our ability to obtain investment grade ratings from nationally recognized credit rating agencies if we seek to obtain a rating or to make or sustain distributions to our shareholders.

If we default under any of our debt obligations, we may be in default under the agreements governing other debt obligations of ours which have cross default provisions, including our credit agreement. In such case, our lenders may demand immediate payment of any outstanding indebtedness and we could be forced to liquidate our assets for less than the values we would receive in a more orderly process.

Current government policies regarding interest rates and trade as well as any prolonged government shutdown may cause a recession.

The U.S. Federal Reserve policy regarding the timing and amount of future increases in interest rates, changing U.S. and other countries’ trade policies and a prolonged U.S. government shutdown may hinder the growth of the U.S. economy. It is unclear whether the U.S. economy will be able to withstand these challenges and continue sustained growth. Economic weakness in the U.S. economy generally or a new U.S. recession would likely adversely affect our financial condition and that of our tenants, could adversely impact the ability of our tenants to renew our leases or pay rent to us, and may cause the values of our properties and of our securities to decline.

We may fail to comply with the terms of our credit agreement, which could adversely affect our business and may prevent our making distributions to our shareholders.

Our credit agreement includes various conditions, covenants and events of default. 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. For example, our credit agreement requires us to maintain certain debt service ratios. Our ability to comply with such covenants will depend upon the net rental income we receive from our properties. If the occupancy at our properties declines or if our rents decline, we may be unable to borrow under our revolving credit facility. Complying with these covenants may limit our ability to take actions that may be beneficial to us and our securityholders.

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If we are unable to borrow under our revolving credit facility, we may be unable to meet our obligations or grow our business by acquiring additional properties. If we default under our revolving credit facility, our lenders may demand immediate payment and may elect not to fund future borrowings. During the continuance of any event of default under our credit agreement, we may be limited or in some cases prohibited from making distributions to our shareholders. Any default under our credit agreement that results in acceleration of our obligations to repay outstanding indebtedness or in our no longer being permitted to borrow under our revolving credit facility would likely have serious adverse consequences to us and would likely cause the value of our securities to decline.

In the future, we may obtain additional debt financing, and the covenants and conditions which apply to any such additional debt may be more restrictive than the covenants and conditions that are contained in our credit agreement.

Insurance may not adequately cover our losses.

The tenants at our properties are generally responsible for the costs of insurance, including for casualty, liability, fire, extended coverage and rental or business interruption loss insurance. In the future, we may acquire properties for which we are responsible for the costs of insurance. Losses of a catastrophic nature, such as those caused by hurricanes, flooding, volcanic eruptions and earthquakes, among other things, may be covered by insurance policies with limitations such as large deductibles or co-payments that we or a responsible tenant may not be able to pay. Insurance proceeds may not be adequate to restore an affected property to its condition prior to a loss or to compensate us for our losses, including the loss of future revenues from an affected property. Similarly, our other insurance, including our general liability insurance, may not provide adequate insurance to cover our losses. In addition, we do not have any insurance to limit losses that we may incur as a result of known or unknown environmental conditions.

Real estate construction and redevelopment creates risks.

We may develop new properties or redevelop some of our existing properties as the existing leases expire, as our tenants’ needs change or to pursue any other opportunities that we believe are desirable. The development and redevelopment of new and existing buildings involves significant risks in addition to those involved in the ownership and operation of leased properties, including the risks that construction may not be completed on schedule or within budget, resulting in increased construction costs and delays in leasing such properties and generating cash flows. Development activities are also subject to risks relating to the inability to obtain, or delays in obtaining, all necessary zoning, land use, building, occupancy, and other required government permits and authorizations. Once completed, any new properties may perform below anticipated financial results. The occurrence of one or more of these circumstances in connection with our development or redevelopment activities could have an adverse effect on our financial condition, results of operations and the value of our securities.

We may incur significant costs complying with the Americans with Disabilities Act and similar laws.

Under the Americans with Disabilities Act and certain similar state statutes, many commercial properties must meet specified requirements related to access and use by disabled persons. We may be required to make substantial capital expenditures at our properties to comply with these laws. In addition, non-compliance could result in the imposition of fines or an award of damages and costs to private litigants. These expenditures may have an adverse impact on our financial results and the value of our securities.

Our business could be adversely impacted if there are deficiencies in our disclosure controls and procedures or our internal control over financial reporting.

The design and effectiveness of our disclosure controls and procedures and our internal control over financial reporting may not prevent all errors, misstatements or misrepresentations. While management will continue to review the effectiveness of our disclosure controls and procedures and our internal control over financial reporting, we cannot guarantee that our disclosure controls and procedures and internal control over financial reporting will be effective in accomplishing all control objectives all of the time. Deficiencies, including any material weaknesses, in our disclosure controls and procedures or internal control over financial reporting could result in misstatements of our results of operations or our financial statements or could otherwise materially and adversely affect our business, reputation, results of operations, financial condition or liquidity.

RMR LLC relies on information technology and systems in its operations, and any material failure, inadequacy, interruption or security failure of that technology or those systems could materially and adversely affect us.

RMR LLC relies on information technology and systems, including the Internet, commercially available software and

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its internally developed applications, to process, transmit, store and safeguard information and to manage or support a variety of its business processes (including managing our building systems), including financial transactions and maintenance of records, which may include personal identifying information of employees and tenants and lease data. If RMR LLC experiences material security or other failures, inadequacies or interruptions of its information technology, it could incur material costs and losses and our operations could be disrupted as a result. Further, third party vendors could experience similar events with respect to their information technology and systems that impact the products and services they provide to RMR LLC or us. RMR LLC relies on commercially available systems, software, tools and monitoring, as well as its internally developed applications and internal procedures and personnel, to provide security for processing, transmitting, storing and safeguarding confidential tenant, customer and vendor information, such as personally identifiable information related to its employees and others and information regarding its and our financial accounts. RMR LLC takes various actions, and incurs significant costs, to maintain and protect the operation and security of its information technology and systems, including the data maintained in those systems. However, it is possible that these measures will not prevent the systems’ improper functioning or a compromise in security, such as in the event of a cyberattack or the improper disclosure of personally identifiable information.

Security breaches, computer viruses, attacks by hackers, online fraud schemes and similar breaches can create significant system disruptions, shutdowns, fraudulent transfer of assets or unauthorized disclosure of confidential information. For example, in June 2017, RMR LLC became aware that it had been a victim of criminal fraud in which a person pretending to be a representative of a seller in a property acquisition transaction provided fraudulent money wire instructions that caused money to be wire transferred to an account that was believed to be, but was not, the seller’s account. We were not involved in that transaction and we did not incur any loss from that transaction; however, there may be a risk that similar fraudulent activities could be attempted against us, RMR LLC or others with respect to our assets. The cybersecurity risks to RMR LLC, us and third party vendors are heightened by, among other things, the evolving nature of the threats faced, advances in computer capabilities, new discoveries in the field of cryptography and new and increasingly sophisticated methods used to perpetrate illegal or fraudulent activities against RMR LLC, including cyberattacks, email or wire fraud and other attacks exploiting security vulnerabilities in RMR LLC’s or other third parties’ information technology networks and systems or operations. Any failure to maintain the security, proper function and availability of RMR LLC’s information technology and systems, or certain third party vendors’ failure to similarly protect their information technology and systems that are relevant to RMR LLC’s or our operations, or to safeguard RMR LLC’s or our business processes, assets and information could result in financial losses, interrupt RMR LLC’s operations, damage RMR LLC’s reputation, cause RMR LLC to be in default of material contracts and subject RMR LLC to liability claims or regulatory penalties, any of which could materially and adversely affect our business and the value of our securities.

The reduced disclosure requirements applicable to us as an “emerging growth company” may make our common shares less attractive to investors.

We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, or the JOBS Act, and we may avail ourselves of certain exemptions from various reporting requirements of public companies that are not “emerging growth companies,” including, but not limited to, an exemption from complying with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirement of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We may remain an emerging growth company for up to five full fiscal years following our IPO. If some investors find our common shares less attractive as a result of the exemptions available to us as an emerging growth company, there may be a less active trading market for our common shares, and the trading price of our common shares may be more volatile than that of an otherwise comparable company that does not avail itself of the same or similar exemptions. We cannot predict if investors will find our common shares less attractive because we rely on the JOBS Act exemptions.

Changes in lease accounting standards may materially and adversely affect us.

The Financial Accounting Standards Board adopted new accounting rules that are effective for fiscal years ending after December 2018, which require companies to capitalize substantially all leases on their balance sheets by recognizing a lessee’s rights and obligations. Many companies that account for certain leases on an “off balance sheet” basis are now required to account for such leases “on balance sheet.” This change removes many of the differences in the way companies account for owned property and leased property and could have a material effect on various aspects of our tenants’ businesses, including the appearance of their credit quality and other factors they consider in deciding whether to own or lease properties. These rules could cause companies that lease properties to prefer shorter lease terms in an effort to reduce the leasing liability required to be recorded on their balance sheets or some companies may decide to prefer property ownership to leasing. Such decisions by our current or prospective tenants may adversely impact our business and the value of our securities.

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Risks Related to Our Relationships with RMR Inc. and RMR LLC

We are dependent upon RMR LLC to manage our business and implement our growth strategy.

We have no employees. Personnel and services that we require are provided to us by RMR LLC pursuant to our management agreements with RMR LLC. Our ability to achieve our business objectives depends on RMR LLC and its ability to effectively manage our properties, to appropriately identify and complete our acquisitions and dispositions and to execute our growth strategy. Accordingly, our business is dependent upon RMR LLC’s business contacts, its ability to successfully hire, train, supervise and manage its personnel and its ability to maintain its operating systems. If we lose the services provided by RMR LLC or its key personnel, our business and growth prospects may decline. We may be unable to duplicate the quality and depth of management available to us by becoming internally managed or by hiring another manager. In the event RMR LLC is unwilling or unable to continue to provide management services to us, our cost of obtaining substitute services may be greater than the fees we pay RMR LLC under our management agreements, and as a result our expenses may increase.

RMR LLC has broad discretion in operating our day to day business.

Our manager, RMR LLC, is authorized to follow broad operating and investment guidelines and, therefore, has discretion in identifying the properties that will be appropriate investments for us, as well as our individual operating and investment decisions. Our Board of Trustees periodically reviews our operating and investment guidelines and our operating activities and investments but it does not review or approve each decision made by RMR LLC on our behalf. In addition, in conducting periodic reviews, our Board of Trustees relies primarily on information provided to it by RMR LLC. RMR LLC may exercise its discretion in a manner that results in investment returns that are substantially below expectations or that results in losses.

Our management structure and agreements and relationships with RMR LLC and RMR LLC’s and its controlling shareholder’s relationships with others may create conflicts of interest, or the perception of such conflicts, and may restrict our investment activities.

RMR LLC is a subsidiary of RMR Inc. One of our Managing Trustees, Adam Portnoy, as the sole trustee of ABP Trust, is the controlling shareholder of RMR Inc. and is a managing director and the president and chief executive officer of RMR Inc. and an officer and employee of RMR LLC. RMR LLC or its subsidiary also acts as the manager for four other Nasdaq listed REITs: HPT, which owns hotels and travel centers; OPI, which primarily owns office properties leased to single tenants and high credit quality tenants, including government tenants; SNH, which primarily owns healthcare, senior living properties and medical office buildings; and TRMT, which primarily originates and invests in first mortgage loans secured by middle market and transitional commercial real estate. RMR LLC also provides services to other publicly and privately owned companies, including: Five Star, which operates senior living communities; TA, which operates and franchises travel centers, truck repair facilities and restaurants; and Sonesta, which operates, manages and franchises hotels, resorts and cruise ships. A subsidiary of RMR LLC is an investment adviser to the RMR Real Estate Income Fund, or RIF, a closed end investment company listed on the NYSE American, which invests in securities of real estate companies that are not managed by RMR LLC.

John Murray, our other Managing Trustee and our President and Chief Executive Officer, and Richard Siedel, Jr., our Chief Financial Officer and Treasurer, are also officers and employees of RMR LLC. Mr. Murray is also the president and chief executive officer and the managing trustee of HPT and Mr. Siedel is also the chief financial officer and treasurer of SNH. Messrs. Murray and Siedel have duties to RMR LLC, Mr. Murray has duties to HPT and Mr. Siedel has duties to SNH, as well as to us, and we do not have their undivided attention. They and other RMR LLC personnel may have conflicts in allocating their time and resources between us and RMR LLC and other companies to which RMR LLC or its subsidiaries provide services. Our Independent Trustees also serve as independent directors or independent trustees of other public companies to which RMR LLC or its subsidiaries provide management services.

In addition, we may in the future enter into additional transactions with RMR LLC, its affiliates or entities managed by it or its subsidiaries. In addition to his investments in RMR Inc. and RMR LLC, Adam Portnoy holds equity investments in other companies to which RMR LLC or its subsidiaries provide management services and some of these companies have significant cross ownership interests, including, for example: as of December 31, 2018, Adam Portnoy beneficially owned, in aggregate, 1.2% of our outstanding common shares, 35.7% of Five Star’s outstanding common stock, 1.1% of HPT’s outstanding common shares, 1.5% of OPI’s outstanding common shares, 1.1% of SNH’s outstanding common shares, 2.2% of RIF’s outstanding common shares; and, through RMR LLC and its subsidiaries, 4.1% of TA’s outstanding common shares and 19.0% of TRMT’s outstanding common shares. Our executive officers may also own equity investments in other companies to which RMR LLC or its subsidiaries provide management services. These multiple responsibilities, relationships and cross

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ownerships could give rise to conflicts of interest or the perception of such conflicts of interest with respect to matters involving us, RMR Inc., RMR LLC, our Managing Trustees, the other companies to which RMR LLC or its subsidiaries provide management services and their related parties. Conflicts of interest or the perception of conflicts of interest could have a material adverse impact on our reputation, business and the market price of our common shares and other securities and we may be subject to increased risk of litigation as a result.

In our management agreements with RMR LLC, we acknowledge that RMR LLC may engage in other activities or businesses and act as the manager to any other person or entity (including other REITs) even though such person or entity has investment policies and objectives similar to our policies and objectives and we are not entitled to preferential treatment in receiving information, recommendations and other services from RMR LLC. Accordingly, we may lose investment opportunities to, and may compete for tenants with, other businesses managed by RMR LLC or its subsidiaries. We cannot be sure that our Code of Conduct or our Governance Guidelines, or other procedural protections we adopt will be sufficient to enable us to identify, adequately address or mitigate actual or alleged conflicts of interest or ensure that our transactions with related persons are made on terms that are at least as favorable to us as those that would have been obtained with an unrelated person.

Our management agreements were not negotiated on an arm’s length basis and their fee and expense structure may not create proper incentives for RMR LLC, which may increase the risk of an investment in our common shares.

As a result of our relationships with RMR LLC and its current and former controlling shareholder(s), our management agreements were not negotiated on an arm’s length basis between unrelated parties, and therefore the terms, including the fees payable to RMR LLC, may not be as favorable to us as they would have been if they were negotiated on an arm’s length basis between unrelated parties. Our property management fees are calculated based on rents we receive and construction supervision fees for construction at our properties overseen and managed by RMR LLC, and our base business management fee is calculated based upon the lower of the historical costs of our real estate investments and our market capitalization. We pay RMR LLC substantial base management fees regardless of our financial results. These fee arrangements could incentivize RMR LLC to pursue acquisitions, capital transactions, tenancies and construction projects or to avoid disposing of our assets in order to increase or maintain its management fees and might reduce RMR LLC’s incentive to devote its time and effort to seeking investments that provide attractive returns for us. If we do not effectively manage our investment, disposition and capital transactions and leasing, construction and other property management activities, we may pay increased management fees without proportional benefits to us. In addition, we are obligated under our management agreements to reimburse RMR LLC for employment and related expenses of RMR LLC’s employees assigned to work exclusively or partly at our properties, our share of the wages, benefits and other related costs of RMR LLC’s centralized accounting personnel and our share of RMR LLC’s costs for providing our internal audit function. We are also required to pay for third party costs incurred with respect to us. Our obligation to reimburse RMR LLC for certain of its costs and to pay third party costs may reduce RMR LLC’s incentive to efficiently manage those costs, which may increase our costs.

The termination of our management agreements may require us to pay a substantial termination fee, including in the case of a termination for unsatisfactory performance, which may limit our ability to end our relationship with RMR LLC.

The terms of our management agreements with RMR LLC automatically extend on December 31st of each year so that such terms thereafter end on the 20th anniversary of the date of the extension. We have the right to terminate these agreements: (1) at any time on 60 days’ written notice for convenience, (2) immediately upon written notice for cause, as defined in the agreements, (3) on written notice given within 60 days after the end of any applicable calendar year for a performance reason, as defined in the agreements, and (4) by written notice during the 12 months following a manager change of control, as defined in the agreements. However, if we terminate a management agreement for convenience, or if RMR LLC terminates a management agreement with us for good reason, as defined in such agreement, we are obligated to pay RMR LLC a termination fee in an amount equal to the sum of the present values of the monthly future fees, as defined in the applicable agreement, payable to RMR LLC for the term that was remaining before such termination, which, depending on the time of termination, would be between 19 and 20 years. Additionally, if we terminate a management agreement for a performance reason, as defined in the agreement, we are obligated to pay RMR LLC the termination fee calculated as described above, but assuming a remaining term of 10 years. These provisions substantially increase the cost to us of terminating the management agreements without cause, which may limit our ability to end our relationship with RMR LLC as our manager. The payment of the termination fee could have a material adverse effect on our financial condition, including our ability to pay dividends to our shareholders.

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Our management arrangements with RMR LLC may discourage a change of control of us.

Our management agreements with RMR LLC have continuing 20 year terms that renew annually. As noted in the preceding risk factor, if we terminate either of these management agreements other than for cause or upon a change of control of our manager, we are obligated to pay RMR LLC a substantial termination fee. For these reasons, our management agreements with RMR LLC may discourage a change of control of us, including a change of control which might result in payment of a premium for our common shares.

We are party to transactions with related parties that may increase the risk of allegations of conflicts of interest, and such allegations may impair our ability to realize the benefits we expect from these transactions.

We are party to transactions with related parties, including with entities controlled by Adam Portnoy or to which RMR LLC 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. We are subject to the risk that our shareholders or the shareholders of RMR Inc. or other related parties may challenge any such related party transactions and the agreements entered into as part of them. If such a challenge 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.

We may be at an increased risk for dissident shareholder activities due to perceived conflicts of interest arising from our management structure and relationships.

Companies with business dealings with related persons and entities may more often be the target of dissident shareholder trustee nominations, dissident shareholder proposals and shareholder litigation alleging conflicts of interest in their business dealings. Our relationships with RMR Inc., RMR LLC, AIC, the other companies to which RMR LLC or its subsidiaries provide management services, Adam Portnoy and other related persons of RMR LLC may precipitate such activities. Certain proxy advisory firms which have significant influence over the voting by shareholders of public companies may recommend that shareholders withhold votes for the election of our incumbent Trustees, vote against management proposals or vote for shareholder proposals that we oppose. These recommendations by proxy advisory firms in the future may affect the outcome of future Board of Trustees elections, which may increase shareholder activism and litigation. These activities, if instituted against us, could result in substantial costs, and diversion of our management’s attention and could have a material adverse impact on our reputation and business.

We may experience losses from our business dealings with AIC.

We, ABP Trust, and five other companies to which RMR LLC provides management services each own 14.3% of AIC, and we have invested approximately $8.6 million in AIC. We and those other AIC shareholders participate in a combined property insurance program arranged and insured or reinsured in part by AIC and we may periodically consider the possibilities for expanding our relationship with AIC to other types of insurance. Our principal reason for investing in AIC and for purchasing insurance in these programs is to seek to improve our financial results by obtaining improved insurance coverages at lower costs than may be otherwise available to us or by participating in any profits which we may realize as an owner of AIC. While we believe we have in the past benefitted from these arrangements, these beneficial financial results may not occur in the future, and we may need to invest additional capital in order to continue to pursue these results. AIC’s business involves the risks typical of an insurance business, including the risk that it may not operate profitably. Accordingly, financial benefits from our business dealings with AIC may not be achieved in the future, and we may experience losses from these dealings.

Risks Related to Our Organization and Structure

Ownership limitations and certain provisions in our declaration of trust and agreements, as well as certain provisions of Maryland law, may deter, delay or prevent a change in our control or unsolicited acquisition proposals.

Our declaration of trust prohibits any shareholder but not RMR LLC and its affiliates (as defined under Maryland law) and certain persons who have been exempted by our Board of Trustees from owning, directly and by attribution, more than 9.8% of the number or value of shares (whichever is more restrictive) of any class or series of our outstanding shares of beneficial interest, including our common shares. This provision of our declaration of trust is intended to, among other purposes, assist with our REIT compliance under the IRC and otherwise promote our orderly governance. However, this

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provision may also inhibit acquisitions of a significant stake in us and may deter, delay or prevent a change in control of us or unsolicited acquisition proposals that a shareholder may consider favorable. Additionally, provisions contained in our declaration of trust and bylaws or under Maryland law may have a similar impact, including, for example, provisions relating to:

• the division of our Trustees into three classes, with the term of one class expiring each year, which could delay a change of control of us;

• limitations on shareholder voting rights with respect to certain actions that are not approved by our Board of Trustees;

• the authority of our Board of Trustees, and not our shareholders, to adopt, amend or repeal our bylaws and to fill vacancies on our Board of Trustees;

• shareholder voting standards which require a supermajority for approval of certain actions;

• the fact that only our Board of Trustees, or, if there are no Trustees, our officers, may call shareholder meetings and that shareholders are not entitled to act without a meeting;

• 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 Trustees,” as defined in our governing documents;

• limitations on the ability of our shareholders to propose nominees for election as Trustees and propose other business to be considered at a meeting of our shareholders;

• limitations on the ability of our shareholders to remove our Trustees;

• the authority of our Board of Trustees to create and issue new classes or series of shares (including shares with voting rights and other rights and privileges that may deter a change in control) and issue additional common shares;

• restrictions on business combinations between us and an interested shareholder that have not first been approved by our Board of Trustees (including a majority of Trustees not related to the interested shareholder); and

• the authority of our Board of Trustees, without shareholder approval, to implement certain takeover defenses.

In addition, our shareholders agreement with respect to AIC provides that AIC and the other shareholders of AIC may have rights to acquire our interests in AIC in the event that anyone acquires more than 9.8% of our shares or we experience some other change in control.

Our ownership interest in AIC may prevent shareholders from accumulating a large stake in us, from nominating or serving as our Trustees, or from taking actions to otherwise control our business.

As an owner of AIC, we are licensed and approved as an insurance holding company, and any shareholder who owns or controls 10% or more of our securities or anyone who wishes to solicit proxies for election of, or to serve as, one of our Trustees or for another proposal of business not approved by our Board of Trustees may be required to receive pre-clearance from the concerned insurance regulators. These pre-approval procedures may discourage or prevent investors from purchasing our securities, from nominating persons to serve as our Trustees or from taking other actions.

Our rights and the rights of our shareholders to take action against our Trustees and officers are limited.

Our declaration of trust limits the liability of our Trustees and officers to us and our shareholders for money damages to the maximum extent permitted under Maryland law. Under current Maryland law, our Trustees and officers will not have any liability to us and our shareholders for money damages other than liability resulting from:

• actual receipt of an improper benefit or profit in money, property or services; or

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• active and deliberate dishonesty by the Trustee or officer that was established by a final judgment as being material to the cause of action adjudicated.

Our declaration of trust and indemnification agreements require us to indemnify 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. As a result, we and our shareholders may have more limited rights against our present and former Trustees and officers than might otherwise exist absent the provisions in our declaration of trust and indemnification agreements or that might exist with other companies, which could limit our shareholders' recourse in the event of actions not in their best interest.

Disputes with RMR LLC and OPI (as successor by merger to SIR) may be referred to mandatory arbitration proceedings, which follow different procedures than in-court litigation and may be more restrictive to those asserting claims than in-court litigation.

Our agreements with RMR LLC and OPI (as successor by merger to SIR) provide that any dispute arising thereunder will be referred to mandatory, binding and final arbitration proceedings if we, or any other party to such dispute unilaterally so demands. As a result, we and our shareholders would not be able to pursue litigation in state or federal court against RMR LLC or OPI if we or any other parties against whom the claim is made unilaterally demands the matter be resolved by arbitration. In addition, the ability to collect attorneys’ fees or other damages may be limited in the arbitration proceedings, which may discourage attorneys from agreeing to represent parties wishing to bring such litigation.

Our bylaws designate the Circuit Court for Baltimore City, Maryland as the sole and exclusive forum for certain actions and proceedings that may be initiated by our shareholders, which could limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us or our Trustees, officers, manager, agents or employees.

Our bylaws currently provide that, unless the dispute has been referred to binding arbitration, the Circuit Court for Baltimore City, Maryland will be the sole and exclusive forum for: (1) any derivative action or proceeding brought on our behalf; (2) any action asserting a claim for breach of a duty owed by any Trustee, officer, manager, agent or employee of ours to us or our shareholders; (3) any action asserting a claim against us or any Trustee, officer, manager, agent or employee of ours arising pursuant to Maryland law, our declaration of trust or bylaws brought by or on behalf of a shareholder, either on his, her or its own behalf, on behalf of the Trust or on behalf of any series or class of shareholders of the Trust or shareholders against the Trust or any Trustee, officer, manager, agent or employee of the Trust, including any claims relating to the meaning, interpretation, effect, validity, performance or enforcement of our declaration of trust or bylaws; or (4) any action asserting a claim against us or any Trustee, officer, manager, agent or employee of ours that is governed by the internal affairs doctrine. The exclusive forum provision of our bylaws does not apply to any action for which the Circuit Court for Baltimore City, Maryland does not have jurisdiction. The exclusive forum provision of our bylaws does not establish exclusive jurisdiction in the Circuit Court for Baltimore City, Maryland for claims that arise under the Securities Act, the Exchange Act or other federal securities laws if there is exclusive or concurrent jurisdiction in the federal courts. Any person or entity purchasing or otherwise acquiring or holding any interest in our shares of beneficial interest shall be deemed to have notice of and to have consented to these provisions of our bylaws, as they may be amended from time to time. The exclusive forum provision of our bylaws may limit a shareholder’s ability to bring a claim in a judicial forum that the shareholder believes is favorable for disputes with us or our Trustees, officers, manager, agents or employees, which may discourage lawsuits against us and our Trustees, officers, manager, agents or employees.

We may change our operational, financing and investment policies without shareholder approval and we may become more highly leveraged, which may increase our risk of default under our debt obligations.

Our Board of Trustees determines our operational, financing and investment policies and may amend or revise our policies, including our policies with respect to our intention to qualify for taxation as a REIT, acquisitions, dispositions, growth, operations, indebtedness, capitalization and distributions, or approve transactions that deviate from these policies, without a vote of, or notice to, our shareholders. Policy changes could adversely affect the market price of our common shares and our ability to make distributions to our shareholders. Further, our organizational documents do not limit the amount or percentage of indebtedness, funded or otherwise, that we may incur. Our Board of Trustees may alter or eliminate our current policy on borrowing at any time without shareholder approval. If this policy changes, we could become more highly leveraged, which could result in an increase in our debt service costs. Higher leverage also increases the risk of default on our obligations. In addition, a change in our investment policies, including the manner in which we allocate our resources across our portfolio or

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the types of assets in which we seek to invest, may increase our exposure to interest rate risk, real estate market fluctuations and liquidity risk.

Risks Related to Our Taxation

Our failure to qualify or to remain qualified for taxation as a REIT under the IRC could have significant adverse consequences.

We intend to elect to be taxed as a REIT, commencing with our taxable year that ended December 31, 2018 and to maintain our qualification for taxation as a REIT thereafter. As a REIT, we generally do not pay federal or most state income taxes as long as we distribute all of our REIT taxable income and meet other qualifications set forth in the IRC. However, actual qualification for taxation as a REIT under the IRC depends on our satisfying complex statutory requirements, for which there are only limited judicial and administrative interpretations. We believe that we have been organized and have operated, and will continue to be organized and to operate, in a manner that will allow us to qualify and continue to qualify for taxation as a REIT under the IRC, pending our timely election with our first REIT income tax return. However, we cannot be sure that the IRS, upon review or audit, will agree with this conclusion. Furthermore, we cannot be sure that the federal government, or any state or other taxation authority, will continue to afford favorable income tax treatment to REITs and their shareholders.

Maintaining our qualification for taxation as a REIT under the IRC will require us to continue to satisfy tests concerning, among other things, the nature of our assets, the sources of our income and the amounts we distribute to our shareholders. In order to meet these requirements, it may be necessary for us to sell or forgo attractive investments.

If we fail to qualify or to remain qualified for taxation as a REIT under the IRC, then our ability to raise capital might be adversely affected, we will be in breach under our credit agreement, we may be subject to material amounts of federal and state income taxes and the market price of our common shares could decline. In addition, if we lose or revoke our qualification for taxation as a REIT under the IRC for a taxable year, we will generally be prevented from requalifying for taxation as a REIT for the next four taxable years.

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

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.

REIT distribution requirements could adversely affect our ability to execute our business plan.

We generally must distribute annually at least 90% of our REIT taxable income, subject to specified adjustments and excluding any net capital gain, in order to maintain our qualification for taxation as a REIT under the IRC. To the extent that we satisfy this distribution requirement, federal corporate income tax will not apply to the earnings that we distribute, but if we distribute less than 100% of our REIT taxable income, then we will be subject to federal corporate income tax on our undistributed taxable income. We intend to make distributions to our shareholders to comply with the REIT requirements of the IRC. In addition, we will be subject to a 4% nondeductible excise tax if the actual amount that we pay out to our shareholders in a calendar year is less than a minimum amount specified under federal tax laws.

From time to time, we may generate taxable income greater than our income for financial reporting purposes prepared in accordance with U.S. generally accepted accounting principles, or GAAP, or differences in timing between the recognition of taxable income and the actual receipt of cash may occur. If we do not have other funds available in these situations, among other things, we may borrow funds on unfavorable terms, sell investments at disadvantageous prices or distribute amounts that would otherwise be invested in future acquisitions in order to make distributions sufficient to enable us to pay out enough of our taxable income to satisfy the REIT distribution requirement and to avoid corporate income tax and the 4% excise tax in a particular year. These alternatives could increase our costs or reduce our shareholders’ equity. Thus, compliance with the REIT distribution requirements may hinder our ability to grow, which could cause the market price of our common shares to decline.

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Even if we qualify and remain qualified for taxation as a REIT under the IRC, we may face other tax liabilities that reduce our cash flow.

Even if we qualify and remain qualified for taxation as a REIT under the IRC, we may be subject to federal, state and local taxes on our income and assets, including taxes on any undistributed income, excise taxes, state or local income, property and transfer taxes, and other taxes. Also, some jurisdictions may in the future modify their income tax treatment of REITs, including limiting or eliminating favorable income tax deductions (including the dividends paid deduction), which could increase our income tax expense. In fact, the Hawaii state legislature is considering legislation that would eliminate the dividends paid deduction afforded to REITs under Hawaii tax laws and otherwise require REITs to either file a composite tax return or pay withholding tax attributable to distributions to non-Hawaii resident shareholders. In addition, in order to meet the requirements for qualification and taxation as a REIT under the IRC, prevent the recognition of particular types of non-cash income, or avert the imposition of a 100% tax that applies to specified gains derived by a REIT from dealer property or inventory, we may hold or dispose of some of our assets and conduct some of our operations through our TRSs or other subsidiary corporations that will be subject to corporate level income tax at regular rates. In addition, while we intend that our transactions with our TRSs will be conducted on arm’s length bases, we may be subject to a 100% excise tax on a transaction that the IRS or a court determines was not conducted at arm’s length. Any of these taxes would decrease cash available for distribution to our shareholders.

Legislative or other actions affecting REITs could materially and adversely affect us and our shareholders.

The rules dealing with U.S. federal, state, and local taxation are constantly under review by persons involved in the legislative process and by the IRS, the U.S. Department of the Treasury, and other taxation authorities. Changes to the tax laws, with or without retroactive application, could materially and adversely affect us and our shareholders. We cannot predict how changes in the tax laws might affect us or our shareholders. New legislation, Treasury regulations, administrative interpretations or court decisions could significantly and negatively affect our ability to qualify or to remain qualified for taxation as a REIT or the tax consequences of such qualification.

In addition, December 2017 legislation made substantial changes to the IRC. Among those changes are a significant permanent reduction in the generally applicable corporate income tax rate and the modification of tax policies, credits and deductions for businesses and individuals. This legislation also imposes additional limitations on the deduction of net operating losses, which may in the future cause us to make additional distributions that will be taxable to our shareholders to the extent of our current or accumulated earnings and profits in order to comply with the REIT distribution requirements. The effect of these and other changes made in this legislation is still uncertain in many respects, both in terms of their direct effect on the taxation of an investment in our common shares and their indirect effect on the value of properties owned by us. Furthermore, many of the provisions of the new law will require additional guidance in order to assess their effect. It is also possible that there will be technical corrections legislation proposed with respect to the new law, the effect of which cannot be predicted and may be adverse to us or our shareholders.

Risks Related to Our Securities

Our distributions to our shareholders may decline.

We intend to continue to make regular quarterly distributions to our shareholders. However:

• our ability to make or sustain the rate of distributions will be adversely affected if any of the risks described in this Annual Report on Form 10-K occur;

• our making of distributions is subject to compliance with restrictions contained in our credit agreement and may be subject to restrictions in future debt obligations we may incur; and

• the timing and amount of any distributions will be determined at the discretion of our Board of Trustees and will depend on various factors that our Board of Trustees deems relevant, including our financial condition, our results of operations, our liquidity, our capital requirements, our FFO, our Normalized FFO, restrictive covenants in our financial or other contractual arrangements, general economic conditions in the United States, including Hawaii, requirements under the IRC to qualify for taxation as a REIT and restrictions under the laws of Maryland.

For these reasons, among others, our distribution rate may decline or we may cease making distributions to our shareholders.

41

Changes in market conditions could adversely affect the value of our securities.

As with other publicly traded equity securities and REIT securities, the value of our common shares and other securities depends on various market conditions that are subject to change from time to time, including:

• the extent of investor interest in our securities;

• the general reputation of REITs and externally managed companies and the attractiveness of our equity securities in comparison to other equity securities, including securities issued by other real estate based companies or by other issuers less sensitive to rises in interest rates;

• our underlying asset value;

• investor confidence in the stock and bond markets, generally;

• market interest rates;

• national economic conditions;

• changes in tax laws; and

• general market conditions.

We believe that one of the factors that investors consider important in deciding whether to buy or sell equity securities of a REIT is the distribution rate, considered as a percentage of the price of the equity securities, relative to market interest rates. Interest rates have been at historically low levels for an extended period of time. There is a general market perception that REIT shares outperform in low interest rate environments and underperform in rising interest rate environments when compared to the broader market. Recently, there have been some modest signs of inflationary price movements, and the U.S. Federal Reserve has been raising the federal funds rate since December 2016. Previously, the U.S. Federal Reserve had indicated that it expected to raise the federal funds rate further in 2019, although it recently indicated that it may delay making those increases. If market interest rates continue to increase, or if there continues to be market expectation of such increases, prospective purchasers of REIT equity securities may want to achieve a higher distribution rate. Thus, higher market interest rates, or the expectation of higher interest rates, could cause the value of our securities to decline.

Further issuances of equity securities may be dilutive to current shareholders.

The interests of our existing shareholders could be diluted if we issue additional equity securities to finance future acquisitions or to repay indebtedness. Our ability to execute our business strategy depends on our access to an appropriate blend of debt financing, which may include secured and unsecured debt, and equity financing, which may include common and preferred shares.

Item 1B.Unresolved Staff Comments

None.

Item 2.Properties

As of December 31, 2018, we owned 270 properties located in 26 states containing approximately 29.5 million rentable square feet, including 226 buildings, leasable land parcels and easements located on the island of Oahu, HI containing approximately 16.8 million rentable square feet and 44 properties located in 25 states throughout the continental United States containing approximately 12.7 million rentable square feet. Most of our Hawaii Properties are lands leased to industrial and commercial tenants, many of whom own buildings and operate their businesses on our lands.

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The following table provides certain information about our properties as of December 31, 2018 (dollars in thousands):

		Undepreciated		Depreciated		Annualized
	Number of	Carrying		Carrying		Rental
State	Properties	Value (1)		Value (1)		Revenues (2)
AR	1	$	4,385	$	4,044	$	469
CO	4	28,690		26,257		2,801
CT	2	15,512		13,325		1,846
FL	2	45,221		44,004		2,536
HI	226	632,183		614,189		97,043
IA	3	43,156		35,635		4,315
ID	1	4,746		4,327		370
IL	2	4,484		4,169		615
LA	2	15,818		14,504		1,263
MD	2	103,498		96,343		7,732
MI	1	43,229		39,254		2,184
MN	2	26,993		26,695		2,738
MO	1	2,059		1,877		190
NC	1	2,014		1,866		202
ND	1	3,923		3,607		349
NE	1	10,718		9,884		1,094
NJ	2	71,990		65,778		5,704
NV	1	18,700		16,968		1,473
NY	1	11,284		10,272		1,114
OH	5	77,713		67,599		8,250
OK	1	7,450		7,085		789
PA	1	18,814		18,717		1,222
SC	2	99,860		90,663		7,694
TN	2	75,680		69,140		6,359
UT	1	8,413		7,736		1,071
VA	2	85,863		75,167		7,747
Total	270	$	1,462,396	$	1,369,105	$	167,170

(1) Excludes the value of real estate intangibles.

(2) Annualized rental revenues are calculated as the annualized contractual rents as of December 31, 2018, including straight line rent adjustments and excluding lease value amortization, adjusted for tenant concessions including free rent and amounts reimbursed to tenants, plus estimated recurring expense reimbursements from tenants.

At December 31, 2018, one of our properties with a net book value of $64.9 million had a mortgage note we assumed in connection with our acquisition of the property. The aggregate principal amount outstanding under the mortgage note as of December 31, 2018 was $48.8 million. The mortgage note is non-recourse, subject to certain limited exceptions and does not contain any material financial covenants.

On January 29, 2019, we obtained a $650.0 million mortgage loan secured by 186 of our properties (178 land parcels and eight buildings) containing approximately 9.6 million square feet located on the island of Oahu, Hawaii. The non-amortizing loan matures on February 7, 2029 and requires monthly interest payments at a fixed rate of 4.31% per annum.

Item 3.Legal Proceedings

From time to time, we may become involved in litigation matters incidental to the ordinary course of our business. Although we are unable to predict with certainty the eventual outcome of any litigation, we are currently not a party to any litigation which we expect to have a material adverse effect on our business.

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Item 4.Mine Safety Disclosures

Not applicable.

44

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Our common shares are traded on Nasdaq (symbol: ILPT).

As of January 31, 2019, there were 2,298 shareholders of record of our common shares.

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Item 6.Selected Financial Data

The following table sets forth selected financial data for the periods and dates indicated. This data should be read in conjunction with, and is qualified in its entirety by reference to, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and accompanying notes included in this Annual Report on Form 10-K. The operating information for the year ended December 31, 2018, and the balance sheet information as of December 31, 2018 have been derived from our audited consolidated financial statements for the period of time for which we have been a separate public company and from certain financial information of SIR for periods prior to our becoming a separate public company. The operating information for the years ended December 31, 2017, 2016 and 2015 and the balance sheet information as of December 31, 2017, 2016 and 2015 have been derived from the financial statements of SIR, as such information was allocated to us in connection with the preparation of our financial statements included elsewhere in this Annual Report on Form 10-K. The selected financial data below does not necessarily reflect what our results of operations and financial position would have been if we had operated as a stand alone company during all periods presented, and should not be relied upon as an indicator of our future performance. Amounts are in thousands, except for per share data.

	Year Ended December 31,
	2018			2017			2016			2015
Operating information:
REVENUES:
Rental income	$	139,311		$	134,826		$	132,518		$	128,302
Tenant reimbursements and other income	23,219			21,680			20,792			19,589
Total revenues	162,530			156,506			153,310			147,891
EXPENSES:
Real estate taxes	19,342			17,868			17,204			16,316
Other operating expenses	13,005			10,913			10,593			8,478
Depreciation and amortization	28,575			27,315			27,074			25,285
Acquisition and transaction related costs	—			1,025			35			15,291
General and administrative	11,307			16,799			9,200			8,745
Total expenses	72,229			73,920			64,106			74,115
Interest income	200			—			—			—
Interest expense	(16,081		)	(2,439		)	(2,262		)	(2,092		)
Income before income tax expense	74,420			80,147			86,942			71,684
Income tax expense	(32		)	(44		)	(44		)	(44		)
Net income	$	74,388		$	80,103		$	86,898		$	71,640
Weighted average common shares outstanding—basic	64,139			45,000			45,000			45,000
Weighted average common shares outstanding—diluted	64,140			45,000			45,000			45,000
Net income per common share—basic and diluted	$1.16			$1.78			$1.93			$1.59

	As of December 31,
	2018		2017		2016		2015
Balance sheet information:
Total real estate investments (before depreciation) (1)	$	1,462,396	$	1,343,602	$	1,336,728	$	1,335,363
Total assets	$	1,534,611	$	1,411,683	$	1,422,335	$	1,443,217
Total indebtedness, net	$	462,195	$	799,427	$	64,269	$	64,577
Total shareholders' equity	$	1,028,273	$	562,208	$	1,313,185	$	1,334,170

(1) Excludes the value of real estate intangibles.

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Item 7.Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following information should be read in conjunction with our consolidated financial statements and accompanying notes included elsewhere in this Annual Report on Form 10-K.

OVERVIEW

We are a REIT organized under Maryland law. As of December 31, 2018, we owned 270 properties with approximately 29.5 million rentable square feet, including 226 buildings, leasable land parcels and easements with approximately 16.8 million rentable square feet located on the island of Oahu, HI, and 44 properties with approximately 12.7 million rentable square feet located in 25 other states. As of December 31, 2018, our properties were approximately 99.3% leased (based on rentable square feet) to 248 different tenants with a weighted average remaining lease term (based on annualized rental revenues) of approximately 11 years.

Property Operations

As of December 31, 2018, 99.3% of our rentable square feet was leased, compared to 99.9% of our rentable square feet as of December 31, 2017. Occupancy data for our properties as of December 31, 2018 and 2017 is as follows (square feet in thousands):

	All Properties				Comparable Properties (1)
	As of December 31,				As of December 31,
	2018		2017		2018		2017
Total properties	270		266		266		266
Total rentable square feet (2)	29,535		28,540		28,550		28,540
Percent leased (3)	99.3	%	99.9	%	99.2	%	99.9	%

(1) Consists of 266 buildings leasable land parcels and easements that we owned (including for the period SIR owned our properties prior to our IPO) continuously since January 1, 2017.

(2) Subject to modest adjustments when space is re-measured or re-configured for new tenants and when land leases are converted to building leases.

(3) Percent leased includes (a) space being fitted out for occupancy pursuant to existing leases as of December 31, 2018, if any, and (b) space which is leased but is not occupied or is being offered for sublease by tenants, if any.

The average effective rental rates per square foot, as defined below, for our properties for the years ended December 31, 2018 and 2017 are as follows:

	Year Ended December 31,
	2018		2017
Average effective rental rates per square foot leased (1)
All properties	$	5.68	$	5.52
Comparable properties (2)	$	5.65	$	5.52

(1) Average effective rental rates per square foot leased represents total revenues during the period specified divided by the average rentable square feet leased during the period specified.

(2) Comparable properties for the year ended December 31, 2018 and 2017 consist of 266 buildings, leasable land parcels and easements that we owned (including the period that SIR owned our properties prior to our IPO) continuously since January 1, 2017.

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During the year ended December 31, 2018, we entered lease renewals and new leases for approximately 2.6 million square feet, including a 194,000 square foot expansion to be constructed at an existing property, at weighted average (by square feet) rental rates that were approximately 27.3% higher than prior rates for the same land area or building area (with leasing rate increases for vacant space based upon the most recent rental rate for the same space). The weighted average (by square feet) lease term for leases that were in effect for the same land area or building area during the prior lease term, which included commencement dates beginning in December 2003, was 15.6 years. Commitments for tenant improvements, leasing costs and concessions for leases entered during the year ended December 31, 2018 totaled $2.6 million, or $0.06 per square foot per year of the new weighted average lease term. Also, during the year ended December 31, 2018, we completed rent resets for approximately 630,000 square feet of land at our Hawaii Properties at rental rates that were approximately 19.9% higher than the prior rental rates.

As shown in the table below, approximately 1.7% of our rented square feet and approximately 1.3% of our total annualized rental revenues as of December 31, 2018 are included in leases scheduled to expire by December 31, 2019. As of December 31, 2018, our lease expirations by year are as follows (dollars and square feet in thousands):

										% of		Cumulative
				% of Total		Cumulative %				Annualized		% of
		Rented		Rented		of Total Rented		Annualized		Rental		Annualized
	Number of	Square Feet		Square Feet		Square Feet		Rental Revenues		Revenues		Rental Revenues
Period / Year	Tenants	Expiring (1)		Expiring (1)		Expiring (1)		Expiring		Expiring		Expiring
2019	14	511		1.7	%	1.7	%	$	2,141	1.3	%	1.3	%
2020	17	740		2.5	%	4.2	%	3,722		2.2	%	3.5	%
2021	26	1,159		4.0	%	8.2	%	7,384		4.4	%	7.9	%
2022	63	2,851		9.7	%	17.9	%	21,848		13.1	%	21.0	%
2023	24	1,613		5.5	%	23.4	%	12,429		7.4	%	28.4	%
2024	13	4,751		16.2	%	39.6	%	15,809		9.5	%	37.9	%
2025	9	850		2.9	%	42.5	%	4,473		2.7	%	40.6	%
2026	3	637		2.2	%	44.7	%	3,477		2.1	%	42.7	%
2027	10	4,355	(2)	14.9	%	59.6	%	21,471		12.8	%	55.5	%
2028	20	2,674		9.1	%	68.7	%	18,015		10.8	%	66.3	%
Thereafter	75	9,180		31.3	%	100.0	%	56,401		33.7	%	100.0	%
Total	274	29,321		100.0	%			$	167,170	100.0	%
Weighted average remaining lease term (in years)		10.3						11.0

(1) Rented square feet is pursuant to existing leases as of December 31, 2018, and includes (i) space being fitted out for occupancy, if any, and (ii) space which is leased but is not occupied or is being offered for sublease by tenants, if any.

(2) Rented square feet excludes a 194 square foot expansion to be constructed prior to the commencement of the lease.

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We generally receive rents from our tenants monthly in advance. As of December 31, 2018, tenants representing 1% or more of our total annualized rental revenues were as follows (square feet in thousands):

					% of Total		% of
			Rented		Rented		Annualized Rental
Tenant		Property Type	Sq. Ft. (1)		Sq. Ft. (1)		Revenues
1	Amazon.com.dedc, LLC / Amazon.com.kydc LLC	Mainland Industrial	3,048		10.4	%	9.5	%
2	Restoration Hardware, Inc.	Mainland Industrial	1,195		4.1	%	3.5	%
3	Federal Express Corporation / FedEx Ground Package System, Inc.	Mainland Industrial	613		2.1	%	3.1	%
4	American Tire Distributors, Inc. (2)	Mainland Industrial	722		2.5	%	3.0	%
5	Par Hawaii Refining, LLC	Hawaii Land and Easement	3,148		10.7	%	2.8	%
6	Servco Pacific Inc.	Hawaii Land and Easement	537		1.8	%	2.2	%
7	Shurtech Brands, LLC	Mainland Industrial	645		2.2	%	2.1	%
8	BJ's Wholesale Club, Inc.	Mainland Industrial	634		2.2	%	2.1	%
9	Safeway Inc.	Hawaii Land and Easement	146		0.5	%	2.0	%
10	Exel Inc.	Mainland Industrial	945		3.2	%	1.8	%
11	Trex Company, Inc.	Mainland Industrial	646		2.2	%	1.8	%
12	Avnet, Inc.	Mainland Industrial	581		2.0	%	1.7	%
13	Manheim Remarketing, Inc.	Hawaii Land and Easement	338		1.2	%	1.6	%
14	Warehouse Rentals Inc.	Hawaii Land and Easement	278		0.9	%	1.5	%
15	Coca-Cola Bottling of Hawaii, LLC	Hawaii Land and Easement	351		1.2	%	1.5	%
16	A.L. Kilgo Company, Inc.	Hawaii Land and Easement	310		1.1	%	1.4	%
17	Hellmann Worldwide Logistics Inc.	Mainland Industrial	240		0.8	%	1.4	%
18	The Net-A-Porter Group LLC	Mainland Industrial	167		0.6	%	1.3	%
19	General Mills Operations, LLC	Mainland Industrial	158		0.5	%	1.3	%
20	Honolulu Warehouse Co., Ltd.	Hawaii Land and Easement	298		1.0	%	1.3	%
21	The Toro Company	Mainland Industrial	450	(3)	1.5	%	1.1	%
22	LZB Manufacturing, Inc.	Mainland Industrial	221		0.8	%	1.1	%
23	AES Hawaii, Inc.	Hawaii Land and Easement	1,242		4.2	%	1.1	%
24	Bradley Shopping Center Company	Hawaii Land and Easement	334		1.1	%	1.0	%
25	Kaiser Foundation Health Plan, Inc.	Hawaii Land and Easement	217		0.7	%	1.0	%
	Total		17,464		59.5	%	52.2	%

(1) Rented square feet is pursuant to existing leases as of December 31, 2018, and includes (i) space being fitted out for occupancy, if any, and (ii) space which is leased but is not occupied or is being offered for sublease by tenants, if any.

(2) On December 19, 2018, American Tire Distributors, Inc., which occupies five of our Mainland Properties with a total of approximately 722 rentable square feet, had its Amended Joint Plan of Reorganization in Chapter 11 bankruptcy confirmed pursuant to which it assumed all of its leases with us. The tenant has paid its rental obligations through February 2019.

(3) Square feet excludes a 194 square foot expansion to be constructed prior to the commencement of the lease.

Mainland Properties. We generally will seek to renew or extend the terms of leases at our Mainland Properties as their expirations approach. Because of the capital many of the tenants in our Mainland Properties have invested in these properties and because many of these properties appear to be of strategic importance to the tenants’ businesses, we believe that it is likely that these tenants will renew or extend their leases prior to their expirations. If we are unable to extend or renew our leases, it may be time consuming and expensive to relet some of these properties.

Hawaii Properties. As of December 31, 2018, our Hawaii Properties represented approximately 58.1% of our annualized rental revenues. As of December 31, 2018, certain of our Hawaii Properties are lands leased for rents that periodically reset based on fair market values, generally every ten years. Revenues from our Hawaii Properties have generally increased under our or our predecessors’ ownership 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

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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. Despite our and our predecessors' 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.

The following chart shows the annualized rental revenues as of December 31, 2018 subject to rent reset at our Hawaii Properties:

Scheduled Rent Resets at Hawaii Properties

(dollars in thousands)

	Annualized
	Rental Revenues
	as of December 31, 2018
	Scheduled to Reset
2019	$	5,910
2020	2,527
2021	2,471
2022	4,050
2023	2,842
2024 and thereafter	11,560
Total	$	29,360

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; however, our ability to maintain or increase the rents for our current properties will depend in large part upon market conditions, which are beyond our control.

Since the leases at certain of our Hawaii Properties were originally entered, in some cases as long as 40 or 50 years ago, the characteristics of the neighborhoods in the vicinity of some of those properties have changed. In such circumstances, we and our predecessors have sometimes engaged in redevelopment activities to change the character of certain properties in order to increase rents. Because our Hawaii Properties are currently experiencing strong demand for their current uses, we do not currently expect redevelopment efforts in Hawaii to become a major activity of ours in the near term; however, we may undertake such activities on a selective basis.

Tenant Review Process. Our manager, RMR LLC, employs a tenant review process for us. RMR LLC assesses tenants on an individual basis and does not employ a uniform set of credit criteria. In general, depending on facts and circumstances, RMR LLC evaluates the creditworthiness of a tenant based on information concerning the tenant that is provided by the tenant and, in some cases, information that is publicly available or obtained from third party sources. RMR LLC also often uses a third party service to monitor the credit ratings of debt securities of our existing tenants whose debt securities are rated by a nationally recognized credit rating agency.

Investment Activities (dollars in thousands)

During the year ended December 31, 2018, we acquired four properties with a combined 985,235 rentable square feet for an aggregate purchase price of $120,025, excluding acquisition related costs of $1,360, and a land parcel adjacent to a property we own located in Ankeny, IA for a purchase price of $450, excluding acquisition related costs, to be used for a 194,000 square foot expansion for the existing tenant at such property.

In February 2019, we entered an agreement to acquire a portfolio of eight industrial properties located in the Indianapolis and Cincinnati market areas, that are leased to 10 tenants with an aggregate of approximately 4,202,000 rentable square feet for a purchase price of $280,000, excluding acquisition related costs. We completed the acquisition of seven of the eight properties on February 14, 2019. The acquisition of the remaining property is expected to occur by April 15, 2019.

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Also in February 2019, we entered an agreement to acquire a portfolio of 18 industrial properties located in 12 states that are leased to 13 tenants with an aggregate of approximately 8,694,000 rentable square feet for a purchase price of $625,300, excluding acquisition related costs and including the assumption of $57,000 of mortgage debt. The acquisition of these properties is expected to occur by April 15, 2019.

For more information regarding our investment activities, see Note 3 to the Notes to Consolidated Financial Statements included in Part IV, Item 15 of this Annual Report on Form 10-K.

Financing Activities (dollars in thousands)

On January 17, 2018, we completed our IPO, in which we issued 20,000,000 of our common shares for net proceeds of approximately $444,309, after deducting the underwriting discounts and commissions and expenses. Upon the completion of our IPO, our secured revolving credit facility converted into a four year unsecured revolving credit facility, and we used substantially all of the net proceeds from our IPO to reduce amounts outstanding under our revolving credit facility. We also reimbursed SIR $7,271 for costs that it incurred in connection with our formation and the preparation for our IPO.

On January 29, 2019, we obtained a $650,000 mortgage loan secured by 186 of our properties (178 land parcels and eight buildings) containing approximately 9.6 million square feet located on the island of Oahu, Hawaii. The non-amortizing loan matures on February 7, 2029 and requires monthly interest payments at a fixed rate of 4.31% per annum. We used the proceeds from this loan to repay outstanding borrowings under our $750,000 unsecured revolving credit facility and to fund acquisitions.

For more information regarding our financing activities, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources—Our Investment and Financing Liquidity and Resources” of this Annual Report on Form 10-K.

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RESULTS OF OPERATIONS

Year Ended December 31, 2018, Compared to Year Ended December 31, 2017 (dollars and share amounts in thousands, except per share data)

	Comparable Properties Results (1)								Acquired Properties Results (2)						Consolidated Results
	Year Ended December 31,								Year Ended December 31,						Year Ended December 31,
							%						$								$			%
	2018		2017		Change		Change		2018		2017		Change		2018			2017			Change			Change
Revenues:
Rental income	$	137,124	$	134,826	$	2,298	1.7	%	$	2,187	$	—	$	2,187	$	139,311		$	134,826		$	4,485		3.3	%
Tenant reimbursements and other income	22,857		21,680		1,177		5.4	%	362		—		362		23,219			21,680			1,539			7.1	%
Total revenues	159,981		156,506		3,475		2.2	%	2,549		—		2,549		162,530			156,506			6,024			3.8	%
Operating expenses:
Real estate taxes	19,104		17,868		1,236		6.9	%	238		—		238		19,342			17,868			1,474			8.2	%
Other operating expenses	12,824		10,913		1,911		17.5	%	181		—		181		13,005			10,913			2,092			19.2	%
Total operating expenses	31,928		28,781		3,147		10.9	%	419		—		419		32,347			28,781			3,566			12.4	%
Net operating income (3)	$	128,053	$	127,725	$	328	0.3	%	$	2,130	$	—	$	2,130	130,183			127,725			2,458			1.9	%
Other expenses:
Depreciation and amortization															28,575			27,315			1,260			4.6	%
Acquisition and transaction related costs															—			1,025			(1,025		)	N/M
General and administrative															11,307			16,799			(5,492		)	(32.7	)%
Total other expenses															39,882			45,139			(5,257		)	(11.6	)%
Interest income															200			—			200			N/M
Interest expense															(16,081		)	(2,439		)	(13,642		)	559.3	%
Income before income tax expense															74,420			80,147			(5,727		)	(7.1	)%
Income tax expense															(32		)	(44		)	12			(27.3	)%
Net income															$	74,388		$	80,103		$	(5,715	)	(7.1	)%
Weighted average common shares outstanding - basic															64,139			45,000			19,139			42.5	%
Weighted average common shares outstanding - diluted															64,140			45,000			19,140			42.5	%
Net income per common share - basic and diluted															$	1.16		$	1.78		$	(0.62	)	(34.8	)%
Reconciliation of Net Income to NOI (3):
Net income															$	74,388		$	80,103
Income tax expense															32			44
Income before income tax expense															74,420			80,147
Interest expense															16,081			2,439
Interest income															(200		)	—
General and administrative															11,307			16,799
Acquisition and transaction related costs															—			1,025
Depreciation and amortization															28,575			27,315
NOI															$	130,183		$	127,725
NOI:
Hawaii Properties															$	73,523		$	73,155
Mainland Properties															56,660			54,570
NOI															$	130,183		$	127,725

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Reconciliation of Net Income to Funds From Operations and Normalized Funds From Operations (4):	2018		2017
Net income	$	74,388	$	80,103
Plus: depreciation and amortization	28,575		27,315
FFO	102,963		107,418
Plus: acquisition and transaction related costs	—		1,025
Normalized FFO	$	102,963	$	108,443
FFO per common share - basic and diluted	$	1.61	$	2.39
Normalized FFO per common share - basic and diluted	$	1.61	$	2.41

(1) Consists of 266 buildings leasable land parcels and easements that we owned (including for the period that SIR owned our properties prior to our IPO) continuously since January 1, 2017.

(2) Consists of four properties that we acquired during the period from January 1, 2017 to December 31, 2018.

(3) The calculation of NOI excludes certain components of net income in order to provide results that are more closely related to our property level results of operations. We calculate NOI as shown above. We define NOI as income from our rental of real estate less our property operating expenses. NOI excludes amortization of capitalized tenant improvement costs and leasing commissions that we record as depreciation and amortization. We consider NOI to be an appropriate supplemental measure to net income because it may help both investors and management to understand the operations of our properties. We use NOI to evaluate individual and company wide property level performance, and we believe that NOI provides useful information to investors regarding our results of operations because it reflects only those income and expense items that are generated and incurred at the property level and may facilitate comparisons of our operating performance between periods and with other REITs. NOI does not represent cash generated by operating activities in accordance with GAAP and should not be considered an alternative to net income as an indicator of our operating performance or as a measure of our liquidity. This measure should be considered in conjunction with net income as presented in our consolidated statements of comprehensive income. Other real estate companies and REITs may calculate NOI differently than we do.

(4) We calculate FFO and Normalized FFO as shown above. FFO is calculated on the basis defined by The National Association of Real Estate Investment Trusts, or Nareit, which is net income, calculated in accordance with GAAP, plus real estate depreciation and amortization, as well as certain other adjustments currently not applicable to us. Our calculation of Normalized FFO differs from Nareit's definition of FFO because we include business management incentive fees, if any, only in the fourth quarter versus the quarter when they are recognized as expense in accordance with GAAP due to their quarterly volatility not necessarily being indicative of our core operating performance and the uncertainty as to whether any such business management incentive fees will be payable when all contingencies for determining such fees are known at the end of the calendar year and we exclude acquisition and transaction related costs expensed under GAAP. We consider FFO and Normalized FFO to be appropriate supplemental measures of operating performance for a REIT, along with net income. We believe that FFO and Normalized FFO provide useful information to investors because by excluding the effects of certain historical amounts, such as depreciation expense, FFO and Normalized FFO may facilitate a comparison of our operating performance between periods and with other REITs. FFO and Normalized FFO 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 qualify for taxation as a REIT, limitations in our credit agreement, the availability to us of debt and equity capital, our expectation of our future capital requirements and operating performance and our expected needs for and availability of cash to pay our obligations. FFO and Normalized FFO do not represent cash generated by operating activities in accordance with GAAP and should not be considered alternatives to net income as indicators of our operating performance or as measures of our liquidity. These measures should be considered in conjunction with net income as presented in our consolidated statements of comprehensive income. Other real estate companies and REITs may calculate FFO and Normalized FFO differently than we do.

References to changes in the income and expense categories below relate to the comparison of results for the year ended December 31, 2018, compared to the year ended December 31, 2017.

Rental income. The increase in rental income primarily results from our leasing activity and rent resets at certain of our comparable properties and our acquisition activity. Rental income includes non-cash straight line rent adjustments totaling approximately $4,739 for the 2018 period and approximately $5,762 for the 2017 period, and net amortization of acquired real estate leases and assumed real estate lease obligations totaling approximately $401 for the 2018 period and approximately $390 for the 2017 period.

Tenant reimbursements and other income. The increase in tenant reimbursements and other income primarily reflects increases in real estate tax reimbursements from tenants at certain of our comparable properties and our acquisition activity.

Real estate taxes. The increase in real estate taxes primarily reflects tax valuation and tax rate increases at certain of our comparable properties and our acquisition activity.

Other operating expenses. Other operating expenses primarily include snow removal, environmental remediation, bad debt, legal and property management fees. The increase in other operating expenses is primarily due to increases in snow removal, bad debt expense, repairs and maintenance expenses and legal fees at certain of our comparable properties and our acquisition activity.

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Depreciation and amortization. The increase in depreciation and amortization primarily reflects our acquisition activity and increased depreciation of capital improvements and leasing costs at our comparable properties.

Acquisition and transaction related costs. The decrease in acquisition and transaction related costs primarily reflects accounting fees related to our IPO that were required to be expensed under GAAP in the 2017 period.

General and administrative. Subsequent to our IPO, general and administrative expenses primarily include fees paid under our business management agreement, legal fees, audit fees, Trustee cash fees and equity compensation expense. Prior to our IPO, general and administrative expense were primarily allocated to us by SIR based on the historical cost of all of its properties. The decrease in general and administrative expenses primarily reflects higher costs incurred in 2017 associated with our IPO and our allocated portion of the estimated management incentive fees recognized by SIR in the 2017 period, partially offset by an increase in costs associated with our becoming a separate public company incurred in 2018.

Interest income. Interest income represents interest earned on our cash balances.

Interest expense. The increase in interest expense primarily reflects the change in our capital structure, including our IPO, and our acquisitions which resulted in changes in borrowings under our revolving credit facility during the 2018 period, partially offset by the prepayment of certain mortgage notes in December 2017.

Income tax expense. Income tax expense primarily reflects state income taxes payable in certain jurisdictions despite our expected qualification for taxation as a REIT for federal income tax purposes.

Net income. The decrease in net income for the 2018 period compared to the 2017 period reflects the changes noted above.

Weighted average common shares outstanding. The increase in weighted average common shares outstanding primarily reflects common shares that were outstanding for part or all of the year ended December 31, 2018, but only partially or not outstanding for any of the corresponding 2017 period, including (i) common shares issued to SIR in connection with the formation and contribution of our Initial Properties in September 2017, (ii) common shares sold in our IPO in January 2018, (iii) common shares granted to our Trustees in March, May and December 2018, and (iv) common shares granted to our officers and certain other employees of RMR LLC in September 2018.

Net income per common share - basic and diluted. Net income per common share reflects the changes to net income and weighted average common shares noted above.

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Year Ended December 31, 2017, Compared to Year Ended December 31, 2016(dollars and share amounts in thousands, except per share data)

	Year Ended December 31,
							$			%
	2017			2016			Change			Change
Revenues:
Rental income	$	134,826		$	132,518		$	2,308		1.7	%
Tenant reimbursements and other income	21,680			20,792			888			4.3	%
Total revenues	156,506			153,310			3,196			2.1	%
Operating expenses:
Real estate taxes	17,868			17,204			664			3.9	%
Other operating expenses	10,913			10,593			320			3.0	%
Total operating expenses	28,781			27,797			984			3.5	%
NOI (1)	127,725			125,513			2,212			1.8	%
Other expenses:
Depreciation and amortization	27,315			27,074			241			0.9	%
Acquisition related costs	1,025			35			990			2,828.6	%
General and administrative	16,799			9,200			7,599			82.6	%
Total other expenses	45,139			36,309			8,830			24.3	%
Interest expense	(2,439		)	(2,262		)	(177		)	7.8	%
Income before income tax expense	80,147			86,942			(6,795		)	(7.8	)%
Income tax expense	(44		)	(44		)	—			0.0	%
Net income	$	80,103		$	86,898		$	(6,795	)	(7.8	)%
Weighted average common shares outstanding - basic and diluted	45,000			45,000			—			0.0	%
Net income per common share - basic and diluted	$	1.78		$	1.93		$	(0.15	)	(7.8	)%
Reconciliation of Net Income to NOI (1):
Net income	$	80,103		$	86,898
Income tax expense	44			44
Income before income tax expense	80,147			86,942
Interest expense	2,439			2,262
General and administrative	16,799			9,200
Acquisition related costs	1,025			35
Depreciation and amortization	27,315			27,074
NOI	$	127,725		$	125,513
NOI:
Hawaii Properties	$	73,155		$	71,332
Mainland Properties	54,570			54,181
NOI	$	127,725		$	125,513
Reconciliation of Net Income to FFO and Normalized FFO (2):	2017			2016
Net income	$	80,103		$	86,898
Plus: depreciation and amortization	27,315			27,074
FFO	107,418			113,972
Plus: acquisition and transaction related costs	1,025			35
Normalized FFO	$	108,443		$	114,007
FFO per common share - basic and diluted	$	2.39		$	2.53
Normalized FFO per common share - basic and diluted	$	2.41		$	2.53

(1) See footnote (3) on page 52 for the definition of NOI.

(2) See footnote (4) on page 52 for the definitions of FFO and Normalized FFO.

References to changes in the income and expense categories below relate to the comparison of results for the year ended December 31, 2017, compared to the year ended December 31, 2016.

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Rental income. The increase in rental income primarily reflects an increase in occupancy in 2017 and increases from leasing activity and rent resets at certain of our Hawaii Properties. Rental income includes non-cash straight line rent adjustments totaling approximately $5,762 for the 2017 period and approximately $6,202 for the 2016 period, and net amortization of acquired real estate leases and assumed real estate lease obligations totaling approximately $390 for the 2017 period and approximately $403 for the 2016 period.

Tenant reimbursements and other income. The increase in tenant reimbursements and other income primarily reflects increases in real estate tax and other operating expense reimbursements from tenants at certain of our properties.

Real estate taxes. The increase in real estate taxes primarily reflects tax valuation and tax rate increases at certain of our properties.

Other operating expenses.The increase in other operating expenses primarily reflects increases in other property related expenses at certain of our properties.

Depreciation and amortization. The increase in depreciation and amortization primarily reflects increased depreciation of capital improvements at our properties.

Acquisition and transaction related costs. Acquisition and transaction related costs reflect costs expensed under GAAP that are related to our property acquisitions and investment activity. The increase in acquisition and transaction related costs primarily reflects accounting fees related to our IPO that were required to be expensed under GAAP.

General and administrative. General and administrative expenses were primarily allocated to us by SIR based on the historical cost of our properties as a percentage of SIR's historical cost of all of its properties. The increase in general and administrative expense reflects the related increase in SIR's general and administrative expenses allocated to our properties primarily as a result of business management incentive fees recognized by SIR in the 2017 period.

Interest expense. Interest expense reflects interest on borrowings under our revolving credit facility in 2017, as well as interest expense related to mortgage notes securing properties.

Income tax expense. Income tax expense reflects state income taxes payable in certain jurisdictions despite our expected qualification for taxation as a REIT for federal income tax purposes.

Net income. The decrease in net income for the 2017 period compared to the 2016 period reflects the changes noted above.

Net income per common share - basic and diluted. Net income per common share reflects the changes to net income noted above.

LIQUIDITY AND CAPITAL RESOURCES

Our Operating Liquidity and Resources (dollars in thousands)

Our principal sources of funds to meet our operating and capital expenses, pay debt service obligations and make distributions to our shareholders are rents from tenants at our properties and borrowings under our revolving credit facility. We believe that these sources of funds will be sufficient to meet our operating and capital expenses, pay debt service obligations and make distributions to our shareholders for the next 12 months and for the foreseeable future thereafter. Our future cash flows from operating activities will depend primarily upon our ability to:

• maintain the occupancy of, and maintain or increase the rental rates at, our properties;

• control our operating cost increases; and

• purchase additional properties that produce cash flows in excess of our costs of acquisition capital and property operating expenses.

Cash flows provided by (used in) operating, investing and financing activities were $96,763, ($135,527) and $48,372, respectively, for the year ended December 31, 2018 and $103,455, ($6,307) and ($97,148), respectively, for the year ended

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December 31, 2017. The decrease in net cash provided by operating activities for the year ended December 31, 2018 compared to in the prior year is primarily due to reimbursements to and from SIR for the costs it incurred in connection with our formation and the preparation for our IPO in 2017 and cash rents collected from our tenants by SIR in 2018 that SIR had not yet paid to us as of December 31, 2018. The increase in net cash used in investing activities for the year ended December 31, 2018 compared to the prior year is primarily due to our acquisition activity during the year ended December 31, 2018 as well as our investment in AIC. The change in net cash provided by (used in) financing activities for the year ended December 31, 2018 compared to the prior year is primarily due to net proceeds from our IPO in 2018 and net contributions from SIR related to our property operations prior to the completion of our IPO, partially offset by net activities under our revolving credit facility and distributions paid to our shareholders.

Our Investment and Financing Liquidity and Resources (dollars in thousands, except per share and per square foot data)

Our future acquisition or development activity cannot be accurately projected because such activity depends upon available opportunities that come to our attention and upon our ability to successfully acquire, develop and operate properties. We generally do not intend to purchase ‘‘turn around’’ properties, or properties that do not generate positive cash flows, and, to the extent we conduct construction or redevelopment activities on our properties, we currently intend to conduct those activities primarily to satisfy tenant requirements or on a build to suit basis for existing or new tenants.

As of December 31, 2018, we had cash and cash equivalents of $9,608. To qualify for taxation as a REIT under the IRC, we generally will be required to distribute annually at least 90% of our REIT taxable income, 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. In order to fund cash needs that may result from timing differences between our receipt of rents and our desire or need to make distributions, to pay operating or capital expenses or to fund any future property acquisitions, development or redevelopment efforts, we maintain a $750,000 unsecured revolving credit facility with a group of lenders. The maturity date of our revolving credit facility is December 29, 2021. We have the option to extend the maturity date of our revolving credit facility for two, six month periods, subject to payment of extension fees and satisfaction of other conditions. We pay interest on borrowings under our revolving credit facility at the rate of LIBOR plus a premium that varies based on our leverage ratio. We are required to pay a commitment fee on the unused portion of our revolving credit facility until and if such time as we make a ratings election, and thereafter we will be required to pay a facility fee in lieu of such commitment fee based on the maximum amount of our revolving credit facility. At December 31, 2018, the interest rate premium on our revolving credit facility was 130 basis points and our commitment fee was 15 basis points. We can borrow, repay and reborrow funds available under our revolving credit facility until maturity, and no principal repayment is due until maturity. As of December 31, 2018, the annual interest rate payable on borrowings under our revolving credit facility was 3.81%. As of December 31, 2018 and February 19, 2019, we had $413,000 and $60,000 respectively, outstanding under our revolving credit facility and $337,000 and $690,000, respectively, available to borrow under our revolving credit facility.

Our credit agreement includes a feature under which the maximum borrowing availability under the facility may be increased to up to $1,500,000 in certain circumstances.

On January 17, 2018, we completed our IPO, in which we issued 20,000,000 of our common shares for net proceeds of $444,309, after deducting the underwriting discounts and commissions and expenses. For more information regarding our IPO and our application of the net proceeds, see Notes 1, 7 and 8 to the Notes to Consolidated Financial Statements included in Part IV, Item 15 of this Annual Report on Form 10-K.

As of December 31, 2018, we had one mortgage note payable with a principal amount of $48,750, which is scheduled to mature in 2020.

On January 29, 2019, we obtained a $650,000 mortgage loan secured by 186 of our properties (178 land parcels and eight buildings) containing approximately 9.6 million square feet located on the island of Oahu, Hawaii. The non-amortizing loan matures on February 7, 2029 and requires monthly interest payments at a fixed rate of 4.31% per annum. We used the proceeds from this loan to repay outstanding borrowings under our $750,000 unsecured revolving credit facility and to fund acquisitions.

We expect to use borrowings under our revolving credit facility and net proceeds from offerings of equity or debt securities to fund any future property acquisitions, development or redevelopment efforts. We may also assume mortgage debt in connection with future acquisitions. When significant amounts are outstanding under our revolving credit facility or the maturities of our revolving credit facility or our other debt approach, we intend to explore refinancing alternatives. Such alternatives may include incurring term debt, obtaining financing secured by mortgages on properties we own, issuing new equity or debt securities, extending the maturity date of our revolving credit facility, participating in joint venture arrangements or selling

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properties. 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 and equity offerings, to fund capital expenditures, future acquisitions, development, redevelopment and other activities and to pay our obligations.

The completion and the costs of any future financings will depend primarily upon our success in operating our business and upon market conditions. In particular, the feasibility and cost of any future debt financings will depend primarily on our then current credit qualities and on market conditions. We have no control over market conditions. Potential lenders in future debt transactions will evaluate our ability to fund required debt service and repay principal balances when they become due by reviewing our financial condition, results of operations, business practices and plans and our ability to maintain our earnings, to stagger our debt maturities and to balance our use of debt and equity capital so that our financial performance and leverage ratios afford us flexibility to withstand any reasonably anticipated adverse changes. We intend to conduct our business activities in a manner which will afford us reasonable access to capital for investment and financing activities.

During the year ended December 31, 2018, we paid quarterly cash distributions to our shareholders aggregating $60,482 using existing cash balances and borrowings under our revolving credit facility. For more information regarding the distributions we paid during 2018, see Note 6 to the Notes to the Consolidated Financial Statements included in Part IV, of this Annual Report on Form 10-K.

On January 18, 2019, we declared a regular quarterly distribution of $0.33 per common share, or approximately $21,500, to shareholders of record on January 28, 2019. We expect to pay this distribution on or about February 21, 2019 using cash on hand and borrowings under our revolving credit facility.

During the years ended December 31, 2018 and 2017, amounts capitalized for tenant improvements, leasing costs, building improvements and development and redevelopment activities were as follows:

	Year Ended
	December 31,
	2018		2017
Tenant improvements (1)	$	1,431	$	464
Leasing costs (2)	1,723		628
Building improvements (3)	1,785		1,025
Development, redevelopment and other activities (4)	1,150		5,205
	$	6,089	$	7,322

(1) Tenant improvements include capital expenditures used to improve tenants’ space or amounts paid directly to tenants to improve their space.

(2) Leasing costs include leasing related costs, such as brokerage commissions, legal costs and tenant inducements.

(3) Building improvements generally include (i) expenditures to replace obsolete building components and (ii) expenditures that extend the useful life of existing assets.

(4) Development, redevelopment and other activities generally include (i) capital expenditures that are identified at the time of a property acquisition and incurred within a short time period after acquiring the property and (ii) capital expenditure projects that reposition a property or result in new sources of revenues.

As of December 31, 2018, we had estimated unspent leasing related obligations of $472. In addition, we have committed to expand an existing property at a remaining estimated cost of approximately $14,200.

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During the year ended December 31, 2018, commitments made for expenditures, such as tenant improvements and leasing costs in connection with leasing space, were as follows:

	New Leases (1)		Renewals		Totals
Square feet leased during the period (in thousands)	370		2,260		2,630
Total leasing costs and concession commitments (2)	$	1,795	$	819	$	2,614
Total leasing costs and concession commitments per square foot (2)	$	4.85	$	0.36	$	0.99
Weighted average lease term by square feet (years)	12.4		16.1		15.6
Total leasing costs and concession commitments per square foot per year (2)	$	0.39	$	0.02	$	0.06

(1) Square feet includes a 194 square foot expansion to be constructed prior to the commencement of the lease.

(2) Includes commitments made for leasing expenditures and concessions, such as leasing commissions, tenant improvements or other tenant inducements.

As of December 31, 2018, our contractual obligations were as follows:

	Payments Due by Period
			Less than		1-3		3-5		More than
Contractual Obligations	Total		1 Year		Years		Years		5 Years
Borrowings under revolving credit facility	$	413,000	$	—	$	413,000	$	—	$	—
Mortgage note payable	48,750		—		48,750		—		—
Tenant related obligations (1)	472		300		172		—		—
Other tenant related obligations (2)	14,200		14,200		—		—		—
Projected interest expense (3)	50,772		17,680		33,092		—		—
Total	$	527,194	$	32,180	$	495,014	$	—	$	—

(1) Committed tenant related obligations include leasing commissions, tenant improvements or other tenant inducements and are based on leases in effect as of December 31, 2018.

(2) In October 2018, we acquired a land parcel adjacent to a property we own located in Ankeny, IA, which will be used for a 194,000 square foot expansion for the existing tenant.

(3) Projected interest expense is attributable to only our debt obligations as of December 31, 2018 at existing rates and is not intended to project future interest costs which may result from debt prepayments, new debt issuances or changes in interest rates. Projected interest expense does not include interest which may become payable related to future borrowings under our revolving credit facility.

Off Balance Sheet Arrangements

As of December 31, 2018, we had no off balance sheet arrangements that have had or that we expect would be reasonably likely to have a material effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Debt Covenants(dollars in thousands)

Our principal debt obligations at December 31, 2018 were borrowings outstanding under our revolving credit facility and a mortgage note assumed in connection with one of our acquisitions. Our mortgage note is non-recourse, subject to certain limitations, and does not contain any material financial covenants. Our credit agreement provides for acceleration of payment of all amounts outstanding upon the occurrence and continuation of certain events of default, such as a change of control of us, which includes RMR LLC ceasing to act as our business and property manager. Our credit agreement contains a number of covenants which restrict our ability to incur debts, including debts secured by mortgages on our properties, in excess of calculated amounts, restrict our ability to make distributions to our shareholders in certain circumstances and generally require us to maintain certain financial ratios. As of December 31, 2018, we believe we were in compliance with all of the terms and covenants under our credit agreement.

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Our credit agreement does not contain provisions for acceleration which could be triggered by our leverage ratio. However, under our credit agreement, our leverage ratio is used to determine the fees and interest rates we pay. Accordingly, if our leverage ratio increases above the applicable thresholds, our interest expense and related costs under our credit agreement would increase.

Our revolving credit facility has cross default provisions to other indebtedness that is recourse of $25,000 or more and indebtedness that is non-recourse of $50,000 or more.

The loan agreement governing the aggregate $650,000 mortgage loan we obtained in January 2019 contains customary covenants and provides for acceleration of payment of all amounts due thereunder upon the occurrence and continuation of certain events of default. In addition, pursuant to the loan agreement and related documents, we are required to maintain a minimum consolidated net worth of at least $250,000 and liquidity of at least $15,000.

Related Person Transactions

We have relationships and historical and continuing transactions with RMR LLC, RMR Inc. and others related to them. For example: we have no employees and the personnel and various services we require to operate our business are provided to us by RMR LLC pursuant to our business and property management agreements with RMR LLC; RMR Inc. is the managing member of RMR LLC; Adam Portnoy, one of our Managing Trustees, is the sole trustee, an officer and the controlling shareholder of ABP Trust, which is the controlling shareholder of RMR Inc., and he is also a managing director and the president and chief executive officer of RMR Inc. and an executive officer and employee of RMR LLC; John Murray, our other Managing Trustee and our President and Chief Executive Officer, and each of our other officers is also an officer and employee of RMR LLC. We have relationships and historical and continuing transactions with other companies to which RMR LLC or its subsidiaries provide management services and some of which have trustees, directors or officers who are also trustees, directors or officers of us, RMR LLC or RMR Inc., including: SIR (prior to its merger into a wholly owned subsidiary of OPI, then known as Government Properties Income Trust, in December 2018), which owned 100% of our common shares until January 17, 2018 and remained our largest shareholder until December 27, 2018, the date on which SIR distributed all 45,000,000 of our common shares that SIR then owned to SIR's shareholders of record as of the close of business on December 20, 2018; AIC of which we, ABP Trust and five other companies to which RMR LLC provides management services each own 14.3% and which arranges and insures or reinsures in part a combined property insurance program for us and its six other shareholders. 

For further information about these and other such relationships and related person transactions, see Notes 7, 8 and 9 to the Notes to Consolidated Financial Statements included in Part IV, Item 15 of this Annual Report on Form 10-K, which are incorporated herein by reference, our other filings with the SEC, including our definitive Proxy Statement for our 2019 Annual Meeting of Shareholders, or our definitive Proxy Statement, to be filed with the SEC within 120 days after the fiscal year ended December 31, 2018. For further information about the risks that may arise as a result of these and other related person transactions and relationships, see elsewhere in this Annual Report on Form 10-K, including “Warning Concerning Forward Looking Statements,” Part I, Item 1, “Business” and Part I, Item 1A, “Risk Factors.” Our filings with the SEC and copies of certain of our agreements with these related persons, including our business and property management agreements with RMR LLC, our transaction agreement with SIR and our shareholders agreement with AIC and its six other shareholders, are available as exhibits to our public filings with the SEC and accessible at the SEC’s website, www.sec.gov. We may engage in additional transactions with related persons, including businesses to which RMR LLC or its subsidiaries provide management services.

Critical Accounting Policies

Our critical accounting policies are those that will have the most impact on the reporting of our financial condition and results of operations and those requiring significant judgments and estimates. We believe that our judgments and estimates have been and will be consistently applied and produce financial information that fairly presents our results of operations. Our most critical accounting policies involve our investments in real property. These policies affect our:

• allocation of purchase prices between various asset categories, including allocations to above and below market leases and the related impact on the recognition of rental income and depreciation and amortization expenses; and

• assessment of the carrying values and impairments of long lived assets.

We allocate the cost of each property investment to various property components such as land, buildings and improvements and intangibles based on their fair values, and each component generally has a different useful life. For acquired real estate, we record building, land and improvements, and, if applicable, the value of in-place leases, the fair market value of

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above or below market leases and tenant relationships at their relative fair value. We base purchase price allocations and the determination of useful lives on our estimates and, under some circumstances, studies from independent real estate appraisers to provide market information and evaluations that are relevant to our purchase price allocations and determinations of useful lives; however, our management is ultimately responsible for the purchase price allocations and determination of useful lives.

We compute depreciation expense using the straight line method over estimated useful lives of up to 40 years for buildings and improvements, and up to seven years for personal property. We do not depreciate the allocated cost of land. We amortize capitalized above market lease values as a reduction to rental income over the terms of the respective leases. We amortize capitalized below market lease values as an increase to rental income over the terms of the respective leases. We amortize the value of acquired in place leases exclusive of the value of above market and below market acquired in place leases to depreciation and amortization over the periods of the respective leases. If a lease is terminated prior to its stated expiration, all unamortized amounts relating to that lease are written off. Purchase price allocations require us to make certain assumptions and estimates. Incorrect assumptions and estimates may result in inaccurate charges to rental income and depreciation and amortization over future periods.

We periodically evaluate our properties for impairment. Impairment indicators may include declining tenant occupancy, our concerns about a tenant's financial condition (which may be affected by a rent default or other information which comes to our attention) or our decision to dispose of an asset before the end of its estimated useful life and legislative, as well as market or industry changes that could permanently reduce the value of a property. If indicators of impairment are present, we evaluate the carrying value of the related property by comparing it to the expected future undiscounted cash flows to be generated from that property. If the sum of these expected future cash flows is less than the carrying value, we reduce the net carrying value of the property to its fair value. This analysis requires us to judge whether indicators of impairment exist and to estimate likely future cash flows. If we misjudge or estimate incorrectly or if future tenant operations, market or industry factors differ from our expectations we may record an impairment charge that is inappropriate or fail to record a charge when we should have done so, or the amount of any such charges may be inaccurate.

These accounting policies involve significant judgments made based upon our experience and the experience of our management and our Board of Trustees, including judgments about current valuations, ultimate realizable value, estimated useful lives, salvage or residual value, the ability and willingness of our tenants to perform their obligations to us, current and future economic conditions and competitive factors in the markets in which our properties are located. Competition, economic conditions and other factors may cause occupancy declines in the future. In the future, we may need to revise our carrying value assessments to incorporate information which is not now known, and such revisions could increase or decrease our depreciation expense related to properties we own or decrease the carrying values of our assets.

Impact of Inflation

Inflation in the past several years in the United States has been modest, but recently there have been indications of inflation in the U.S. economy and some market forecasts indicate an expectation of increased inflation in the near to intermediate term. Future inflation might have both positive and negative impacts on our business. Inflation might cause the value of our assets to increase.

Increases in operating costs as a result of inflation are likely to have modest, if any, impacts on our operating results. This is because most of the operating costs arising in our business are incurred at our properties and our tenants pay most of the property operating cost increases directly or indirectly when we pass through such costs as additional rent under our leases. Increased debt capital costs as a result of inflation are not directly or immediately paid by, or passed through, to our tenants; therefore, such cost increases are more likely to impact our financial results. Over time, however, inflationary debt capital cost increases may be mitigated by rent resets at our Hawaii Properties or as leases at our properties expire and new leases are entered which reflect inflationary increases in market rents.

To mitigate the adverse impact of any increased cost of debt capital in the event of material inflation, we may enter into interest rate hedge arrangements. The decision to enter into these agreements will be based on various factors, including the amount of our floating rate debt outstanding, our belief that material interest rate increases are likely to occur, the costs of, and our expected benefit from, these agreements and upon possible requirements of our borrowing arrangements. In periods of rapid U.S. inflation, our tenants’ operating costs may increase faster than revenues, which may have an adverse impact upon us if our tenants’ operating income becomes insufficient to pay our rent. To mitigate the adverse impact of tenant financial distress upon us, we require some of our tenants to provide guarantees or security for our rent.

61

Generally, we do not expect inflation to have a material adverse impact on our financial results for the next 12 months or for the currently foreseeable future thereafter.

Impact of ClimateChange

Concerns about climate change have resulted in various treaties, laws and regulations that are intended to limit carbon emissions and address other environmental concerns. These and other laws may cause energy or other costs at our properties to increase. We do not expect the direct impact of these increases to be material to our results of operations, because the increased costs either would be the responsibility of our tenants directly or in the longer term, passed through and paid by tenants of our properties. Although we do not believe it is likely in the foreseeable future, laws enacted to mitigate climate change may make some of our properties obsolete or cause us to make material investments in our properties, which could materially and adversely affect our financial condition or the financial condition of our tenants and their ability to pay rent to us.

In an effort to reduce the effects of any increased energy costs in the future, we continuously study ways to improve the energy efficiency at all of our properties. Our property manager, RMR LLC, is a member of the Energy Star program, a joint program of the U.S. Environmental Protection Agency and the U.S. Department of Energy that is focused on promoting energy efficiency at commercial properties through its “ENERGY STAR” partner program, and a member of the U.S. Green Building Council, a nonprofit organization focused on promoting energy efficiency at commercial properties through its leadership in energy and environmental design, or LEED^®, green building program.

Some observers believe severe weather in different parts of the world over the last few years is evidence of global climate change. Severe weather may have an adverse effect on certain properties we own. Rising sea levels could cause flooding at some of our properties, including some of our Hawaii Properties, which may have an adverse effect on individual properties we own. We mitigate these risks by procuring, or requiring our tenants to procure, insurance coverage we believe adequate to protect us from material damages and losses resulting from the consequences of losses caused by climate change. However, we cannot be sure that our mitigation efforts will be sufficient or that future storms, rising sea levels or other changes that may occur due to future climate change could not have a material adverse effect on our financial results.

Item 7A.Quantitative and Qualitative Disclosures About MarketRisk (dollarsin thousands, except per share data)

We are exposed to risks associated with market changes in interest rates. We manage our exposure to this market risk by monitoring available financing alternatives. Other than as described below, we do not currently expect any significant changes in our exposure to fluctuations in interest rates or in how we manage this exposure in the near future.

Fixed Rate Debt

As of December 31, 2018, our outstanding fixed rate debt consisted of the following mortgage note:

			Annual		Annual			Interest
	Principal		Interest		Interest			Payments
Debt	Balance (1)		Rate (1)		Expense (1)		Maturity	Due
Mortgage note (one property in Chester, VA)	$	48,750	3.99	%	$	1,945	2020	Monthly

(1) The principal balance, annual interest rate and annual interest expense are the amounts stated in the applicable contract. In accordance with GAAP, our carrying value and recorded interest expense may differ from these amounts because of market conditions at the time we assumed this debt.

This mortgage note requires interest only payments until maturity. Because our mortgage note requires interest to be paid at a fixed rate, changes in market interest rates during the term of this mortgage note will not affect our interest obligations. If this mortgage note is refinanced at an interest rate which is one percentage point higher or lower than shown above, our annual interest cost would increase or decrease by approximately $488.

Changes in market interest rates would affect the fair value of our fixed rate debt obligations. Increases in market interest rates decrease the fair value of our fixed rate debt, while decreases in market interest rates increase the fair value of our fixed rate debt. Based on the balance outstanding at December 31, 2018 and a discounted cash flow analysis through the maturity date, and assuming no other changes in factors that may affect the fair value of our fixed rate debt obligation, a

62

hypothetical immediate one percentage point change in the interest rate would change the fair value of this obligation by approximately $887.

On January 29, 2019, we obtained a $650,000 mortgage loan secured by 186 of our properties (178 land parcels and eight buildings) containing approximately 9.6 million square feet located on the island of Oahu, Hawaii. The non-amortizing loan matures on February 7, 2029 and requires monthly interest payments at a fixed rate of 4.31% per annum. We used the proceeds from this loan to repay outstanding borrowings under our $750,000 unsecured revolving credit facility and to fund acquisitions.

Floating Rate Debt

At December 31, 2018, our floating rate debt consisted of $413,000 outstanding under our revolving credit facility. Our revolving credit facility matures on December 29, 2021 and, subject to the payment of extension fees and satisfaction of other conditions, we have the option to extend the maturity date for two, six month periods. No principal repayments are required under our revolving credit facility prior to maturity, and prepayments may be made at any time without penalty.

Borrowings under our revolving credit facility are in U.S. dollars and require interest to be paid at LIBOR plus a premium that varies based on our leverage ratio. Accordingly, we are vulnerable to changes in the U.S. dollar based short term rates, specifically LIBOR. In addition, upon renewal or refinancing of this obligation, we are vulnerable to increases in interest rate premiums due to market conditions or our perceived credit risk. Generally, a change in interest rates would not affect the value of our floating rate debt but would affect our operating results. The following table presents the approximate impact a one percentage point increase in interest rates would have on our annual floating rate interest expense at December 31, 2018:

	Impact of an Increase in Interest Rates
					Total Interest		Annual
	Interest Rate		Outstanding		Expense		Earnings Per
	Per Year		Debt		Per Year		Share Impact (1)
At December 31, 2018	3.81	%	$	413,000	$	15,735	$	0.25
One percentage point increase	4.81	%	$	413,000	$	19,865	$	0.31

(1) Based on the diluted weighted average common shares outstanding for the year ended December 31, 2018.

The following table presents the approximate impact a one percentage point increase in interest rate would have on our annual floating rate interest expense at December 31, 2018 if we were fully drawn on our revolving credit facility:

	Impact of an Increase in Interest Rates
					Total Interest		Annual
	Interest Rate		Outstanding		Expense		Earnings Per
	Per Year		Debt		Per Year		Share Impact (1)
At December 31, 2018	3.81	%	$	750,000	$	28,575	$	0.45
One percentage point increase	4.81	%	$	750,000	$	36,075	$	0.56

(1) Based on the diluted weighted average common shares outstanding for the year ended December 31, 2018.

The foregoing table shows the impact of an immediate 1% change in floating interest rates. If interest rates were to change gradually over time, the impact would spread over time. Our exposure to fluctuations in floating interest rates will increase or decrease in the future with increases or decreases in the outstanding amounts of our revolving credit facility and any other floating rate debt.

LIBOR Phase Out

LIBOR is currently expected to be phased out in 2021. We are required to pay interest on borrowings under our credit facility at floating rates based on LIBOR. Future debt that we may incur may also require that we pay interest based upon LIBOR. We currently expect that the determination of interest under our credit facility would be revised as provided under the agreement or amended as necessary to provide for an interest rate that approximates the existing interest rate as calculated in

63

accordance with LIBOR. Despite our current expectations, we cannot be sure that, if LIBOR is phased out or transitioned, the changes to the determination of interest under our agreements would approximate the current calculation in accordance with LIBOR. We do not know what standard, if any, will replace LIBOR if it is phased out or transitioned.

Item 8.Financial Statements and Supplementary Data

The information required by this item is included in Item 15 of this Annual Report on Form 10-K.

Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None.

Item 9A. Controls and Procedures

As of the end of the period covered by this Annual Report on Form 10-K, our management carried out an evaluation, under the supervision and with the participation of our President and Chief Executive Officer and our Chief Financial Officer and Treasurer, of the effectiveness of our disclosure controls and procedures pursuant to Rules 13a-15 and 15d-15 under the Exchange Act. Based upon that evaluation, our President and Chief Executive Officer and our Chief Financial Officer and Treasurer concluded that our disclosure controls and procedures are effective.

There have been no changes in our internal control over financial reporting during the quarter ended December 31, 2018 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Management Report on Assessment of Internal Control Over Financial Reporting

We are responsible for establishing and maintaining adequate internal control over financial reporting. Our internal control system is designed to provide reasonable assurance to our management and Board of Trustees regarding the preparation and fair presentation of published financial statements. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2018. In making this assessment, it used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework). Based on this assessment, we believe that, as of December 31, 2018, our internal control over financial reporting is effective.

This Annual Report on Form 10-K does not include an attestation report from our registered public accounting firm on our internal control over financial reporting due to the exemption for emerging growth companies created by the Jumpstart Our Business Startups Act of 2012.

Item 9B.Other Information

None.

64

PART III

Item 10.Directors, Executive Officers and Corporate Governance

We have a Code of Conduct that applies to our officers and Trustees, RMR Inc. and RMR LLC, senior level officers of RMR LLC, senior level officers and directors of RMR Inc. and certain other officers and employees of RMR LLC. Our Code of Conduct is posted on our website, www.ilptreit.com. A printed copy of our Code of Conduct is also available free of charge to any person who requests a copy by writing to Investor Relations, Industrial Logistics Properties Trust, Two Newton Place, 255 Washington Street, Suite 300, Newton, Massachusetts 02458-1634. We intend to satisfy the requirements under Item 5.05 of Form 8-K regarding disclosure of amendments to, or waivers from, provisions of our Code of Conduct that apply to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, on our website.

The remainder of the information required by Item 10 is incorporated by reference to our definitive Proxy Statement.

Item 11.Executive Compensation

The information required by Item 11 is incorporated by reference to our definitive Proxy Statement.

Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Equity Compensation Plan Information. We may grant common shares to our officers and other employees of RMR LLC under our 2018 Equity Compensation Plan, or the 2018 Plan. In addition, each of our Trustees receives common shares as part of his or her annual compensation for serving as a Trustee and such shares are awarded under the 2018 Plan. The terms of awards made under the 2018 Plan are determined by the Compensation Committee of our Board of Trustees at the time of the awards. The following table is as of December 31, 2018:

			Number of securities
	Number of securities		remaining available for future
	to be issued upon	Weighted-average	issuance under equity
	exercise of	exercise price of	compensation plan (excluding
	outstanding options,	outstanding options,	securities reflected in
	warrants and rights	warrants and rights	column (a))
Plan category	(a)	(b)	(c)
Equity compensation plans approved by security holders-2018 Plan	None.	None.	3,925,209 (1)
Equity compensation plans not approved by security holders	None.	None.	None.
Total	None.	None.	3,925,209 (1)

(1)Consists of common shares available for issuance pursuant to the terms of the 2018 Plan. Share awards that are repurchased or forfeited will be added to the common shares available for issuance under the 2018 Plan.

Payments by us to RMR LLC and RMR LLC employees are described in Notes 6 and 7 to the Notes to Consolidated Financial Statements included in Part IV, Item 15 of this Annual Report on Form 10-K. The remainder of the information required by Item 12 is incorporated by reference to our definitive Proxy Statement.

Item 13.Certain Relationships and Related Transactions, and Director Independence

The information required by Item 13 is incorporated by reference to our definitive Proxy Statement.

Item 14. Principal Accountant Fees and Services

The information required by Item 14 is incorporated by reference to our definitive Proxy Statement.

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PART IV

Item 15. Exhibits and Financial Statement Schedules

(a) Index to Financial Statements and Financial Statement Schedules

The following consolidated financial statements and financial statement schedules of Industrial Logistics Properties Trust are included on the pages indicated:

Report of Independent Registered Public Accounting Firm	F-1
Consolidated Balance Sheets as of December 31, 2018 and 2017	F-2
Consolidated Statements of Comprehensive Income for each of the three years in the period ended December 31, 2018	F-3
Consolidated Statements of Shareholders' Equity for each of the three years in the period ended December 31, 2018	F-4
Consolidated Statements of Cash Flows for each of the three years in the period ended December 31, 2018	F-5
Notes to Consolidated Financial Statements	F-6
Schedule II—Valuation and Qualifying Accounts	S-1
Schedule III—Real Estate and Accumulated Depreciation	S-2

All other schedules for which provision is made in the applicable accounting regulations of the SEC are not required under the related instructions, or are inapplicable, and therefore have been omitted.

(b) Exhibits

Exhibit Number	Description
2.1	Agreement of Purchase and Sale, dated as of February 14, 2019, by and among the Company and certain subsidiaries of GPT Operating Partnership LP. (Incorporated by reference to the Company's Current Report on Form 8-K dated February 14, 2019)
2.2	Agreement of Purchase and Sale, dated as of February 14, 2019 by and among the Company and certain indirect subsidiaries of Cole Office & Industrial REIT (CCIT II), Inc. (Incorporated by reference to the Company's Current Report on Form 8-K dated February 14, 2019.)
3.1	Amended and Restated Declaration of Trust of the Company, dated January 11, 2018. (Incorporated by reference to the Company’s Current Report on Form 8-K dated January 11, 2018.)
3.2	Amended and Restated Bylaws of the Company, adopted January 11, 2018. (Incorporated by reference to the Company’s Current Report on Form 8-K dated January 11, 2018.)
4.1	Form of Common Share Certificate. (Incorporated by reference to Amendment No. 2 to the Company’s Registration Statement on Form S-11, File No. 333-221708.)
8.1	Opinion of Sullivan & Worcester LLP as to certain tax matters. (Filed herewith.)
10.1	Transaction Agreement, dated as of January 17, 2018, between the Company and Office Properties Income Trust (f/k/a Government Properties Income Trust) (as successor to Select Income REIT). (Incorporated by reference to the Company’s Current Report on Form 8-K dated January 11, 2018.)
10.2	Credit Agreement, dated December 29, 2017, among the Company, Citibank, N.A., as administrative agent and collateral agent, and each of the other financial institutions initially a signatory thereto. (Incorporated by reference to Select Income REIT’s Current Report on Form 8-K dated December 29, 2017.)
10.3	Business Management Agreement, dated as of January 17, 2018, between the Company and The RMR Group LLC.(+) (Incorporated by reference to the Company’s Current Report on Form 8-K dated January 11, 2018.)
10.4	Amendment to Business Management Agreement, dated as of December 31, 2018, between the Company and The RMR Group LLC.(+) (Incorporated by reference to the Company's Current Report on Form 8-K dated December 31, 2018.)
10.5	Property Management Agreement, dated as of January 17, 2018, between the Company and The RMR Group LLC.(+) (Incorporated by reference to the Company’s Current Report on Form 8-K dated January 11, 2018.)

66

10.6	2018 Equity Compensation Plan.(+) (Incorporated by reference to the Company’s Current Report on Form 8-K dated January 11, 2018.)
10.7	Form of Share Award Agreement.(+) (Incorporated by reference to Amendment No. 3 to the Company’s Registration Statement on Form S-11, File No. 333-221708.)
10.8	Form of Indemnification Agreement.(+) (Filed herewith.)
10.9	Summary of Trustee Compensation.(+) (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2018.)
10.10	Loan Agreement, dated as of January 29, 2019, among certain of the Company’s subsidiaries, as co-borrowers, and Morgan Stanley Bank, N.A., Citi Real Estate Funding Inc., UBS AG and JPMorgan Chase Bank, National Association. (Filed herewith.) (Confidential treatment has been requested for portions of this document. The confidential portions will be omitted and filed separately, on a confidential basis, with the Securities and Exchange Commission.)
21.1	Subsidiaries of the Company. (Filed herewith.)
23.1	Consent of Ernst & Young LLP. (Filed herewith.)
23.2	Consent of Sullivan & Worcester LLP. (Contained in Exhibit 8.1.)
31.1	Rule 13a-14(a) Certification. (Filed herewith.)
31.2	Rule 13a-14(a) Certification. (Filed herewith.)
32.1	Section 1350 Certification. (Furnished herewith.)
99.1	Stock Purchase Agreement, dated as of December 28, 2018, between Select Income REIT and the Company. (Filed herewith.)
99.2	Amended and Restated Shareholders Agreement, dated May 21, 2012, by and among the Company (as successor to Select Income REIT), Affiliates Insurance Company, Five Star Senior Living Inc. (f/k/a Five Star Quality Care, Inc.), ABP Trust (as successor to The RMR Group LLC f/k/a Reit Management & Research LLC), Hospitality Properties Trust, Office Properties Income Trust, Senior Housing Properties Trust, TravelCenters of America LLC. (Incorporated by reference to Select Income REIT's Current Report on Form 8-K dated May 21, 2012, File No. 001-35442.)
99.3	Letter Agreement, dated as of January 29, 2019, between the Company and The RMR Group LLC. (Filed herewith.)
101.1	The following materials from the Company's Annual Report on Form 10-K for the year ended December 31, 2018 formatted in XBRL (eXtensible Business Reporting Language): (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Comprehensive Income, (iii) the Consolidated Statements of Shareholders' Equity, (iv) the Consolidated Statements of Cash Flows, and (v) related notes to these financial statements, tagged as blocks of text and in detail. (Filed herewith.)

(+) Management contract or compensatory plan or arrangement.

Item 16. Form 10-K Summary

None.

67

Report of Independent Registered Public Accounting Firm

To the Trustees and Shareholders of Industrial Logistics Properties Trust

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Industrial Logistics Properties Trust (the Company) as of December 31, 2018 and 2017, the related consolidated statements of comprehensive income, shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2018, and the related notes and financial statement schedules listed in the Index at item 15(a) (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2018 and 2017, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2018, in conformity with U.S. generally accepted accounting principles.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Ernst & Young LLP 

We have served as the Company’s auditor since 2017.

Boston, Massachusetts

February 20, 2019

F-1

INDUSTRIAL LOGISTICS PROPERTIES TRUST

CONSOLIDATED BALANCE SHEETS

(dollars in thousands, exceptper sharedata)

	December 31,
	2018			2017
ASSETS
Real estate properties:
Land	$	670,501		$	642,706
Buildings and improvements	791,895			700,896
	1,462,396			1,343,602
Accumulated depreciation	(93,291		)	(74,614		)
	1,369,105			1,268,988
Acquired real estate leases, net	75,803			79,103
Cash and cash equivalents	9,608			—
Rents receivable, including straight line rents of $54,916 and $50,177, respectively, net of allowance for doubtful accounts of $1,457 and $1,241, respectively	56,940			51,672
Deferred leasing costs, net	6,157			5,254
Debt issuance costs, net	4,430			1,724
Due from related parties	1,390			—
Other assets, net	11,178			4,942
Total assets	$	1,534,611		$	1,411,683
LIABILITIES AND SHAREHOLDERS' EQUITY
Revolving credit facility	$	413,000		$	750,000
Mortgage note payable, net	49,195			49,427
Assumed real estate lease obligations, net	18,316			20,384
Accounts payable and other liabilities	12,040			11,082
Rents collected in advance	6,004			5,794
Security deposits	6,130			5,674
Due to related persons	1,653			7,114
Total liabilities	506,338			849,475
Commitments and contingencies
Shareholders' equity:
Common shares of beneficial interest, $.01 par value: 100,000,000 shares authorized; 65,074,791 and 45,000,000 shares issued and outstanding, respectively	651			450
Additional paid in capital	998,447			546,489
Cumulative net income	89,657			15,269
Cumulative common distributions	(60,482		)	—
Total shareholders' equity	1,028,273			562,208
Total liabilities and shareholders' equity	$	1,534,611		$	1,411,683

The accompanying notes are an integral part of these consolidated financial statements.

F-2

INDUSTRIAL LOGISTICS PROPERTIES TRUST

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(amounts in thousands, except per share data)

	Year Ended December 31,
	2018			2017			2016
REVENUES:
Rental income	$	139,311		$	134,826		$	132,518
Tenant reimbursements and other income	23,219			21,680			20,792
Total revenues	162,530			156,506			153,310
EXPENSES:
Real estate taxes	19,342			17,868			17,204
Other operating expenses	13,005			10,913			10,593
Depreciation and amortization	28,575			27,315			27,074
Acquisition and transaction related costs	—			1,025			35
General and administrative	11,307			16,799			9,200
Total expenses	72,229			73,920			64,106
Interest income	200			—			—
Interest expense (including net amortization of debt issuance costs and premiums of $1,244, ($494) and ($292), respectively)	(16,081		)	(2,439		)	(2,262		)
Income before income tax expense	74,420			80,147			86,942
Income tax expense	(32		)	(44		)	(44		)
Net income	$	74,388		$	80,103		$	86,898
Weighted average common shares outstanding - basic	64,139			45,000			45,000
Weighted average common shares outstanding - diluted	64,140			45,000			45,000
Net income per common share - basic and diluted	$	1.16		$	1.78		$	1.93

The accompanying notes are an integral part of these consolidated financial statements.

F-3

INDUSTRIAL LOGISTICS PROPERTIES TRUST

CONSOLIDATED STATEMENTS OF SHAREHOLDERS'EQUITY

(dollars in thousands)

	Number of				Additional			Cumulative		Cumulative
	Common		Common		Paid In			Net		Common			Ownership
	Shares		Shares		Capital			Income		Distributions			Interest			Total
Balance at December 31, 2015	—		$	—	$	—		$	—	$	—		$	1,334,170		$	1,334,170
Net income	—		—		—			—		—			86,898			86,898
Contributions	—		—		—			—		—			46,210			46,210
Distributions	—		—		—			—		—			(154,093		)	(154,093		)
Balance at December 31, 2016	—		—		—			—		—			1,313,185			1,313,185
Net income	—		—		—			15,269		—			64,834			80,103
Contributions	—		—		30,244			—		—			42,563			72,807
Distributions	—		—		(37,348		)	—		—			(116,539		)	(153,887		)
Issuance of common shares and reclassification of ownership interest	45,000,000		450		553,593			—		—			(1,304,043		)	(750,000		)
Balance at December 31, 2017	45,000,000		450		546,489			15,269		—			—			562,208
Net income	—		—		—			74,388		—			—			74,388
Contributions	—		—		16,162			—		—			—			16,162
Distributions	—		—		(9,187		)	—		—			—			(9,187		)
Issuance of common shares, net	20,000,000		200		444,109			—		—			—			444,309
Share grants	77,400		1		926			—		—			—			927
Share grant forfeitures	(240	)	—		—			—		—			—			—
Share repurchases	(2,369	)	—		(52		)	—		—			—			(52		)
Distributions to common shareholders	—		—		—			—		(60,482		)	—			(60,482		)
Balance at December 31, 2018	65,074,791		$	651	$	998,447		$	89,657	$	(60,482	)	$	—		$	1,028,273

The accompanying notes are an integral part of these consolidated financial statements.

F-4

INDUSTRIAL LOGISTICS PROPERTIES TRUST

CONSOLIDATED STATEMENTS OF CASH FLOWS

(dollars in thousands)

	Year Ended December 31,
	2018			2017			2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	74,388		$	80,103		$	86,898
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	18,781			17,738			17,563
Net amortization of debt issuance costs and premiums	1,244			(494		)	(292		)
Amortization of acquired real estate leases and assumed real estate lease obligations	8,592			8,434			8,419
Amortization of deferred leasing costs	820			771			706
Provision for losses on rents receivable	1,198			704			257
Straight line rental income	(4,739		)	(5,762		)	(6,202		)
Other non-cash expenses	927			—			—
Change in assets and liabilities:
Rents receivable	(1,727		)	436			301
Deferred leasing costs	(1,745		)	(693		)	(910		)
Other assets	3,591			(4,431		)	56
Due from related persons	(1,390		)	—			—
Accounts payable and other liabilities	1,618			245			295
Rents collected in advance	210			(743		)	2,122
Security deposits	456			33			42
Due to related persons	(5,461		)	7,114			—
Net cash provided by operating activities	96,763			103,455			109,255
CASH FLOWS FROM INVESTING ACTIVITIES:
Real estate acquisitions	(121,891		)	(281		)	—
Real estate improvements	(5,004		)	(6,026		)	(1,356		)
Investment in Affiliates Insurance Company	(8,632		)	—			—
Net cash used in investing activities	(135,527		)	(6,307		)	(1,356		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common shares, net	444,309			—			—
Borrowings under revolving credit facility	193,000			750,000			—
Repayments of revolving credit facility	(530,000		)	—			—
Repayment of mortgage notes payable	—			(14,344		)	(16		)
Repayment of SIR note	—			(750,000		)	—
Payment of debt issuance costs	(5,378		)	(1,724		)	—
Distributions to common shareholders	(60,482		)	—			—
Repurchase of common shares	(52		)	—			—
Contributions	16,162			72,807			46,210
Distributions	(9,187		)	(153,887		)	(154,093		)
Net cash provided by (used in) financing activities	48,372			(97,148		)	(107,899		)
Increase in cash and cash equivalents	9,608			—			—
Cash and cash equivalents at beginning of period	—			—			—
Cash and cash equivalents at end of period	$	9,608		$	—		$	—

SUPPLEMENTAL DISCLOSURES:
Interest paid	$	14,749	$	2,752		$	2,554
NON-CASH FINANCING ACTIVITIES:
Distribution to SIR of ownership interest	$	—	$	(1,304,043	)	$	—
Issuance of SIR note	$	—	$	750,000		$	—
Issuance of common shares	$	—	$	554,043		$	—

The accompanying notes are an integral part of these consolidated financial statements.

F-5

INDUSTRIAL LOGISTICS PROPERTIES TRUST

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(dollars in thousands, except per share data)

Note 1. Organization

Industrial Logistics Properties Trust, or, collectively with its consolidated subsidiaries, we, us or our, is a real estate investment trust, or REIT, formed under Maryland law on September 15, 2017, as a wholly owned subsidiary of Select Income REIT, or SIR, a former publicly traded REIT that merged with a wholly owned subsidiary of Office Properties Income Trust (formerly Government Properties Income Trust), or OPI, on December 31, 2018.

Until January 17, 2018, we were a wholly owned subsidiary of SIR and SIR managed and controlled our cash management function through a series of commingled centralized accounts. As a result, the cash receipts collected by SIR on our behalf have been accounted for as distributions and the cash disbursements paid by SIR on our behalf have been accounted for as contributions within ownership interest through September 29, 2017. Subsequent to September 29, 2017, contributions and distributions have been accounted for as an increase or decrease, respectively, in additional paid in capital.

On January 17, 2018, we completed an initial public offering and listing on The Nasdaq Stock Market LLC, or Nasdaq, of 20,000,000 of our common shares, or our IPO. At that time, we owned 266 properties with a total of approximately 28,540,000 rentable square feet, or our Initial Properties (all square footage amounts included within these notes are unaudited). Our Initial Properties were contributed to us on September 29, 2017, by SIR. Two hundred twenty six (226) of these properties with a total of approximately 16,834,000 rentable square feet are located on the island of Oahu, Hawaii. The remaining 40 properties have a total of approximately 11,706,000 rentable square feet and are located in 24 other states. In connection with our formation and this contribution of properties, we (1) issued to SIR 45,000,000 of our common shares of beneficial interest, $.01 par value per share, or our common shares, (2) issued to SIR a $750,000 non-interest bearing demand note, or the SIR Note, and (3) assumed three mortgage notes totaling $63,069, excluding premiums, that were secured by three of our Initial Properties.

On December 27, 2018, SIR distributed all 45,000,000 of our common shares that SIR owned to SIR's shareholders of record as of the close of business on December 20, 2018.

Note 2. Summary of Significant Accounting Policies

Basis of Presentation. These consolidated financial statements include the accounts of us and our subsidiaries, all of which are 100% owned directly or indirectly by us. All intercompany transactions and balances with or among our consolidated subsidiaries have been eliminated.

The accounts of our Initial Properties are presented at SIR’s historical basis and are consolidated for prior periods presented as the transaction described in Note 1 has been accounted for as a reorganization of entities under common control in accordance with Financial Accounting Standards Board, or FASB, Accounting Standards Codification 805-50-30, Business Combinations. Substantially all of the rental income received from our tenants and SIR’s other tenants was deposited in and commingled with SIR’s general funds during the periods prior to January 17, 2018. Prior to January 17, 2018, general and administrative costs of SIR were primarily allocated to us based on the historical cost of our real estate investments as a percentage of SIR’s historical cost of all of its real estate investments. In accordance with applicable accounting guidance, we believe this method for allocating general and administrative expenses is reasonable. However, actual expenses may have been different from allocated expenses if we operated as a standalone company and those differences may be material.

Real Estate Properties. We record properties at our cost and have presented our Initial Properties at their historical cost basis. Our real estate investments in lands are not depreciated. We calculate depreciation on other real estate investments on a straight line basis over estimated useful lives generally ranging from seven to 40 years.

We allocate the purchase prices of our properties to land, building and improvements based on determinations of the fair values of these assets assuming the properties are vacant. We determine the fair value of each property using methods similar to those used by independent appraisers. In some circumstances, we engage independent real estate appraisal firms to provide market information and evaluations which are relevant to our purchase price allocations and determinations of depreciable useful lives; however, we are ultimately responsible for the purchase price allocations and determinations of useful lives. We allocate a portion of the purchase price to above market and below market leases based on the present value (using an interest rate which reflects the risks associated with acquired in place leases at the time each property was acquired by us) of

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the difference, if any, between (i) the contractual amounts to be paid pursuant to the acquired in place leases and (ii) our estimates of fair market lease rates for the corresponding leases, measured over a period equal to the terms of the respective leases. The terms of below market leases that include bargain renewal options, if any, are further adjusted if we determine that renewal to be probable. We allocate a portion of the purchase price to acquired in place leases and tenant relationships based upon market estimates to lease up the property based on the leases in place at the time of purchase. In making these allocations, we consider factors such as estimated carrying costs during the expected lease up periods, including real estate taxes, insurance and other operating income and expenses and costs, such as leasing commissions, legal and other related expenses, to execute similar leases in current market conditions at the time a property was acquired by us. We allocate this aggregate value between acquired in place lease values and tenant relationships based on our evaluation of the specific characteristics of each tenant’s lease. However, we have not separated the value of tenant relationships from the value of acquired in place leases because such value and related amortization expense is immaterial to the accompanying consolidated financial statements. If the value of tenant relationships becomes material in the future, we may separately allocate those amounts and amortize the allocated amount over the estimated life of the relationships.

We amortize capitalized above market lease values (included in acquired real estate leases in our consolidated balance sheets) and below market lease values (presented as assumed real estate lease obligations in our consolidated balance sheets) as a reduction or increase, respectively, to rental income over the terms of the associated leases. Such amortization resulted in increases in rental income of $401, $390 and $403 during the years ended December 31, 2018, 2017 and 2016, respectively. We amortize the value of acquired in place leases (included in acquired real estate leases in our consolidated balance sheets), exclusive of the value of above market and below market acquired in place leases, or lease origination value, over the terms of the associated leases. Such amortization, which is included in depreciation and amortization expense, totaled $8,993, $8,824 and $8,823 during the years ended December 31, 2018, 2017 and 2016, respectively. If a lease is terminated prior to its stated expiration, we write off the unamortized amounts relating to that lease.

As of December 31, 2018 and 2017, our acquired real estate leases and assumed real estate lease obligations were as follows:

	December 31,
	2018			2017
Acquired real estate leases:
Capitalized above market lease values	$	28,723		$	30,104
Less: accumulated amortization	(16,726		)	(16,440		)
Capitalized above market lease values, net	11,997			13,664
Lease origination value	99,727			93,646
Less: accumulated amortization	(35,921		)	(28,207		)
Lease origination value, net	63,806			65,439
Acquired real estate leases, net	$	75,803		$	79,103
Assumed real estate lease obligations:
Capitalized below market lease values	$	34,313		$	34,786
Less: accumulated amortization	(15,997		)	(14,402		)
Assumed real estate lease obligations, net	$	18,316		$	20,384

As of December 31, 2018, the weighted average amortization periods for capitalized above market lease values, lease origination value and capitalized below market lease values were 11.7 years, 8.8 years, and 14.1 years, respectively.  Future amortization of net intangible acquired real estate lease assets and liabilities to be recognized over the current terms of the associated leases as of December 31, 2018 are estimated to be $7,805 in 2019, $7,797 in 2020, $7,725 in 2021, $7,538 in 2022, $7,279 in 2023 and $19,343 thereafter.

We recognize impairment losses on real estate investments when indicators of impairment are present and the estimated undiscounted cash flow from our real estate investments is less than the carrying amount of such real estate investments. Impairment indicators may include declining tenant occupancy, lack of progress releasing vacant space, tenant bankruptcies, low long term prospects for improvement in property performance, weak or declining tenant profitability, cash flow or liquidity, our decision to dispose of an asset before the end of its estimated useful life and legislative, market or industry changes that could permanently reduce the value of a property. We review our properties for impairment quarterly, or

F-7

whenever events or changes in circumstances indicate that carrying amounts may not be recoverable. If indicators of impairment are present, we evaluate the carrying value of the related property by comparing it to the expected future undiscounted cash flows expected to be generated from that property. If the sum of these expected future undiscounted cash flows is less than the carrying value, we reduce the net carrying value of the property to its estimated fair value. The determination of undiscounted cash flow includes consideration of many factors including income to be earned from the investment, holding costs (exclusive of interest), estimated selling prices, and prevailing economic and market conditions. No impairments exist on any of our properties as of December 31, 2018 and 2017.

We believe some of our properties may contain asbestos. We believe any asbestos on our properties is contained in accordance with applicable laws and regulations and we have no current plans to remove it. If we removed the asbestos or renovated or demolished the affected properties, certain environmental regulations govern the manner in which the asbestos must be handled and removed, and we could incur substantial costs complying with such regulations. Due to the uncertainty of the timing and amount of costs we may incur, we cannot reasonably estimate such costs and we have not recognized a liability in our consolidated financial statements for these costs.

Certain of our industrial lands in Hawaii may require environmental remediation, especially if the use of those lands is changed; however, we do not have any present plans to change the use of those lands or to undertake this environmental cleanup. As of December 31, 2018 and 2017, accrued environmental remediation costs of $6,940 and $7,002, respectively, were included in accounts payable and other liabilities in our consolidated balance sheets. These accrued environmental remediation costs relate to maintenance of our properties for current uses, and, because of the indeterminable timing of the remediation, these amounts have not been discounted to present value. In general, we do not have any insurance designated to limit any losses that we may incur as a result of known or unknown environmental conditions which are not caused by an insured event, such as, for example, fire or flood, although some of our tenants may maintain such insurance that may benefit us. Although we do not believe that there are environmental conditions at any of our properties that will have a material adverse effect on us, we cannot be sure that such conditions are not present at our properties or that costs we incur to remediate contamination will not have a material adverse effect on our business or financial condition. Charges for environmental remediation costs, if any, are included in other operating expenses in our consolidated statements of comprehensive income.

Capitalization Policy. Costs directly related to the development of properties are capitalized. We capitalize development costs, including interest, real estate taxes, insurance, and other project costs, incurred during the period of development. Determinations of when a development project commences and capitalization begins, and when a development project is substantially complete and held available for occupancy and capitalization must cease, involve judgments. We begin the capitalization of costs during the pre-construction period, which we consider to begin when activities that are necessary to the development of the property commence. We consider a development project as substantially completed and held available for occupancy upon the completion of tenant improvements, but no later than one year from cessation of major construction activity.

Cash and Cash Equivalents. We consider highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents.

Deferred Leasing Costs. Deferred leasing costs include capitalized brokerage, legal and other fees associated with the successful negotiation of leases, which are amortized to depreciation and amortization expense on a straight line basis over the terms of the respective leases. Deferred leasing costs totaled $9,845 and $8,379 at December 31, 2018 and 2017, respectively, and accumulated amortization of deferred leasing costs totaled $3,688 and $3,125 at December 31, 2018 and 2017, respectively. Included in deferred leasing costs at December 31, 2018, was $24 of estimated costs associated with leases under negotiation. Future amortization of deferred leasing costs to be recognized during the current terms of our existing leases as of December 31, 2018, are estimated to be $836 in 2019, $757 in 2020, $673 in 2021, $552 in 2022, $386 in 2023 and $2,953 thereafter.

Debt Issuance Costs. Debt issuance costs include capitalized issuance costs related to borrowings, which are amortized to interest expense over the terms of the respective loans. As of December 31, 2018 and 2017, we had debt issuance costs for our revolving credit facility totaling $5,907 and $1,724, respectively, and accumulated amortization of debt issuance costs totaling $1,477 at December 31, 2018. There were no accumulated amortization of debt issuance costs at December 31, 2017. As of December 31, 2018, we had debt issuance costs of $1,413 for our $650,000 mortgage loan obtained in January 2019. Future amortization of debt issuance costs to be recognized with respect to our revolving credit facility and our $650,000 mortgage loan as of December 31, 2018 is estimated to be $1,618 in 2019, $1,618 in 2020, $1,618 in 2021, $142 in 2022, $142 in 2023 and $705 thereafter.

F-8

Other Assets. Other assets consist of our investment in Affiliates Insurance Company, or AIC, prepaid insurance and prepaid real estate taxes. As of December 31, 2017, other assets also included costs related to our formation and preparation for our IPO. We acquired shares of common stock of AIC from SIR on December 31, 2018 for $8,632. We own a 14.3% ownership interest in AIC. We account for our investment in AIC using the equity method of accounting. Significant influence is present through common representation on the boards of trustees or directors of us and AIC. One of our Managing Trustees, Adam D. Portnoy, as the sole trustee of ABP Trust, is the controlling shareholder of The RMR Group Inc., or RMR Inc. RMR Inc. is the managing member of our manager, The RMR Group LLC, or RMR LLC. Mr. Portnoy is also a managing director and president and chief executive officer of RMR Inc. and an officer and employee of RMR LLC. John G. Murray, our other Managing Trustee and our President and Chief Executive Officer, is also an officer and employee of RMR LLC. RMR LLC also provides management and administrative services to AIC, and most of our Trustees are directors of AIC. See Note 7 for further information regarding our investments in RMR Inc. and AIC.

Revenue Recognition. Rental income from operating leases is recognized on a straight line basis over the lives of lease agreements. We defer the recognition of contingent rental income, such as percentage rents, until the specific targets that trigger the contingent rental income are achieved. Contingent rental income recognized for the years ended December 31, 2018, 2017 and 2016 totaled $941, $650 and $846, respectively. Tenant reimbursements and other income include property level operating expenses and capital expenditures reimbursed by our tenants as well as other incidental revenues. Certain tenants are obligated to pay directly their obligations under their leases for insurance, real estate taxes and certain other expenses. These costs, which have been assumed by the tenants under the terms of their respective leases, are not reflected in our consolidated financial statements. To the extent any tenant responsible for these costs under their respective lease defaults on its lease or if it is deemed probable that the tenant will fail to pay for such costs, we would record a liability for such obligation.

Allowance for Doubtful Accounts. We maintain an allowance for doubtful accounts for estimated losses resulting from the inability or unwillingness of certain tenants to make payments required under their leases. The computation of the allowance is based on the tenants’ payment histories and current credit profiles, as well as other considerations.

Income Taxes. Until January 17, 2018, we were a wholly owned subsidiary of SIR, which was taxed as a REIT under the Internal Revenue Code of 1986, as amended, or the IRC. Accordingly, until January 17, 2018, we were a qualified REIT subsidiary and a disregarded entity for tax purposes. We intend to qualify for taxation as a REIT under the IRC for U.S. federal income tax purposes commencing with our taxable year ended December 31, 2018 and to maintain such qualification thereafter. Accordingly, we generally are not, and will not be, subject to U.S. federal income taxes provided we distribute our taxable income and meet certain other requirements to qualify for taxation as a REIT. We may, however, be subject to certain state and local taxes.

Use of Estimates. Preparation of these financial statements in conformity with U.S. generally accepted accounting principles, or GAAP, requires us to make estimates and assumptions that may affect the amounts reported in these consolidated financial statements and related notes. The actual results could differ from these estimates. Significant estimates in the consolidated financial statements include the allowance for doubtful accounts, purchase price allocations, useful lives of fixed assets and the assessments of the carrying values and impairments of long lived assets.

Ownership Interest. For the periods prior to January 17, 2018, our investment activities were financed by SIR. Amounts invested in or advanced to us did not carry interest and had no specific repayment terms.

Net Income Per Common Share. We calculate basic earnings per common share by dividing net income by the weighted average number of common shares outstanding during the period. We calculate diluted net income per share using the more dilutive of the two class method or the treasury stock method.

Segment Reporting. We operate in one business segment: ownership and leasing of properties that include industrial and logistics buildings and leased industrial lands.

Reclassifications. Reclassifications have been made to the prior years' consolidated financial statements to conform to the current year's presentation. For the year ended December 31, 2017, we reclassified $1,724 from other assets to deferred issuance costs, net, in our consolidated balance sheets.

New Accounting Pronouncements. On January 1, 2018, we adopted FASB Accounting Standards Update, or ASU, No. 2014-09 (and related clarifying guidance issued by the FASB), Revenue From Contracts With Customers, which outlines a comprehensive model for entities to use in accounting for revenue arising from contracts with customers. ASU No. 2014-09 states that “an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” A substantial

F-9

portion of our revenue consists of rental income from leasing arrangements, which is specifically excluded from ASU No. 2014-09. We have adopted ASU No. 2014-09 using the modified retrospective approach. The adoption of ASU No. 2014-09 did not have a material impact on the amount or timing of our revenue recognition in our consolidated financial statements.

On October 1, 2018, we adopted FASB ASU No. 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which aligns the measurement and classification guidance for share based payments to nonemployees with the guidance for share based payments to employees, with certain exceptions. The adoption of this standard did not have a material impact in our consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases. In July 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases and ASU No. 2018-11, Leases (Topic 842): Targeted Improvements. In December 2018, the FASB issued ASU No. 2018-20 Leases (Topic 842), Narrow-Scope Improvements for Lessors. Collectively, these standards set out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). ASU No. 2016-02 requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase of the leased asset by the lessee. This classification will determine whether the lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales type leases, direct financing leases and operating leases. These standards are effective as of January 1, 2019. Upon adoption, we applied the package of practical expedients that allows an entity to not reassess (i) whether any expired or existing contracts are or contain leases, (ii) lease classification for any expired or existing leases and (iii) initial direct costs for any expired or existing leases. Furthermore, we applied the optional transition method in ASU No. 2018-11, which allows entities to initially apply the new leases standard at the adoption date and recognize a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption, if any. Additionally, our leases met the criteria in ASU No. 2018-11 to not separate non-lease components from the related lease component; therefore, the accounting for these leases remained largely unchanged from the previous standard. The adoption of ASU No. 2016-02 and the related improvements did not have a material impact in our consolidated financial statements.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires that entities use a new forward looking “expected loss” model that generally will result in the earlier recognition of allowance for credit losses. The measurement of expected credit losses is based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. ASU No. 2016-13 will be effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. We are currently assessing the potential impact the adoption of ASU No. 2016-13 will have in our consolidated financial statements. We currently expect to adopt the standard using the modified retrospective approach.

Note 3. Real Estate Properties

As of December 31, 2018, we owned 270 properties with a total of approximately 29,535,000 rentable square feet, including 226 buildings, leasable land parcels and easements with a total of approximately 16,834,000 rentable square feet of primarily industrial lands located on the island of Oahu, HI, or our Hawaii Properties, and 44 buildings with a total of approximately 12,701,000 rentable square feet of industrial properties in 25 other states, or our Mainland Properties.

We operate in one business segment: ownership and leasing of properties that include industrial and logistics buildings and leased industrial lands. For the years ended December 31, 2018, 2017 and 2016, approximately 59.7%, 60.2% and 59.5%, respectively, of our total revenues were from our Hawaii Properties. In addition, two subsidiaries of Amazon.com, Inc., which are tenants at certain of our Mainland Properties, accounted for $16,047, $15,938 and $16,063 of our total revenues for the years ended December 31, 2018, 2017 and 2016, respectively.

F-10

2018 Acquisitions:

During the year ended December 31, 2018, we acquired 985,235 rentable square feet for an aggregate purchase price of $121,385, including acquisition related costs of $1,360. These acquisitions were accounted for as acquisitions of assets. We allocated the purchase prices of these acquisitions based on the estimated fair values of the acquired assets as follows:

		Number	Rentable							Acquired
		of	Square	Purchase				Buildings and		Real Estate
Date	Location	Properties	Feet	Price		Land		Improvements		Leases
June 2018	Doral, FL (1)	1	240,283	$	43,326	$	15,225	$	28,101	$	—
September 2018	Carlisle, PA	1	205,090	20,451		3,299		15,515		1,637
September 2018	Upper Marlboro, MD	1	220,800	29,801		5,296		21,833		2,672
October 2018	Maple Grove, MN	1	319,062	27,807		3,469		21,287		3,051
		4	985,235	$	121,385	$	27,289	$	86,736	$	7,360

(1) This property was acquired and simultaneously leased back to the seller.

In October 2018, we acquired a land parcel adjacent to a property we own located in Ankeny, IA for a purchase price of $450, excluding acquisition related costs. This land parcel will be used for a 194,000 square foot expansion for the existing tenant at such property.

In February 2019, we entered an agreement to acquire a portfolio of eight industrial properties located in the Indianapolis and Cincinnati market areas, that are leased to 10 tenants with an aggregate of approximately 4,202,000 rentable square feet for a purchase price of $280,000, excluding acquisition related costs. We completed the acquisition of seven of the eight properties on February 14, 2019. The acquisition of the remaining property is expected to occur by April 15, 2019.

Also in February 2019, we entered an agreement to acquire a portfolio of 18 industrial properties located in 12 states that are leased to 13 tenants with an aggregate of approximately 8,694,000 rentable square feet for a purchase price of $625,300, excluding acquisition related costs and including the assumption of $57,000 of mortgage debt. The acquisition of these properties is expected to occur by April 15, 2019.

During the year ended December 31, 2018, we committed $2,613 for expenditures related to tenant improvements and leasing costs for approximately 2,630,000 square feet of leases executed during the period. Committed but unspent tenant related obligations based on existing leases as of December 31, 2018 were $472.

2017 Acquisitions:

On January 13, 2017, we acquired a land parcel adjacent to one of our properties located in McAlester, OK for $281, including $55 of acquisition related costs. As of December 31, 2018, we completed the development of a 35,000 square foot expansion for the tenant which is located on this adjacent parcel.

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Future Minimum Lease Payments:

The future minimum lease payments scheduled to be received by us during the current terms of our leases as of December 31, 2018 are as follows:

	Minimum
	Lease
Year	Payment
2019	$	140,363
2020	139,440
2021	137,814
2022	132,124
2023	113,443
Thereafter	994,544
	$	1,657,728

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Note 4. Indebtedness

As of December 31, 2018 and 2017, our outstanding indebtedness consisted of the following:

	December 31,
	2018		2017
Revolving credit facility, due in 2021(1)	$	413,000	$	750,000
Mortgage note payable, 3.99%, due in 2020 (2)	48,750		48,750
Unamortized debt premiums	445		677
Carrying value	$	462,195	$	799,427

(1) We repaid certain amounts outstanding under our revolving credit facility on January 17, 2018 with part of the $444,309 of net proceeds from our IPO. Upon completion of our IPO, the maturity date of our revolving credit facility was extended to December 29, 2021 and we have the option to extend the maturity date for two, six month periods through December 29, 2022.

(2) We assumed this mortgage note in connection with our acquisition of a property. The stated interest rate for this mortgage debt is the contractually stated rate; we recorded the assumed mortgage note at estimated fair value on the date of acquisition. We amortize the fair value premium to interest expense over the respective term of the mortgage note to reduce interest expense to the estimated market interest rate as of the date of acquisition.

On December 29, 2017, we obtained a $750,000 secured revolving credit facility which initially had a maturity date of March 29, 2018. Upon the completion of our IPO, our secured revolving credit facility became a $750,000 unsecured revolving credit facility and the maturity date was extended to December 29, 2021. Following our IPO, borrowings under our revolving credit facility are available for our general business purposes, including acquisitions. We may borrow, repay and reborrow funds under our revolving credit facility until maturity, and no principal repayment is due until maturity. Interest on borrowings under our revolving credit facility is calculated at floating rates based on LIBOR plus a premium that varies based on our leverage ratio. We have the option to extend the maturity date of our revolving credit facility for two, six month periods, subject to payment of extension fees and satisfaction of other conditions. We are also required to pay a commitment fee on the unused portion of our revolving credit facility until and if such time as we make a ratings election, and thereafter we will be required to pay a facility fee in lieu of such commitment fee based on the maximum amount of our revolving credit facility. The agreement governing our revolving credit facility, or our credit agreement, also includes a feature under which the maximum borrowing availability under our revolving credit facility may be increased to up to $1,500,000 in certain circumstances. As of December 31, 2018, interest payable on the amount outstanding under our revolving credit facility was LIBOR plus 130 basis points. As of December 31, 2018 and 2017, the interest rate payable on borrowings under our revolving credit facility was 3.81% and 2.89%, respectively. The weighted average interest rate for borrowings under our revolving credit facility was 3.33% for the year ended December 31, 2018. As of December 31, 2018 and February 19, 2019, we had $413,000 and $60,000, respectively, outstanding under our revolving credit facility and $337,000 and $690,000, respectively, available to borrow under our revolving credit facility.

Our credit agreement provides for acceleration of payment of all amounts due thereunder upon the occurrence and continuation of certain events of default, such as, a change of control of us, which includes RMR LLC ceasing to act as our business manager and property manager. Our credit agreement also contains a number of covenants, including covenants that restrict our ability to incur debts or to make distributions in certain circumstances, and generally requires us to maintain certain financial ratios. We believe we were in compliance with the terms and conditions of the covenants under our credit agreement at December 31, 2018.

As of December 31, 2018, the principal amount outstanding under our mortgage note was $48,750. This mortgage note was secured by one of our properties with a net book value of $64,901. This mortgage note is non-recourse, subject to certain limited exceptions, and does not contain any material financial covenants.

On January 29, 2019, we obtained a $650,000 mortgage loan secured by 186 of our properties (178 land parcels and eight buildings) containing approximately 9.6 million square feet with a net book value of $492,620, located on the island of Oahu, Hawaii. The non-amortizing loan matures on February 7, 2029 and requires monthly interest payments at a fixed rate of 4.31% per annum. We used the proceeds from this loan to repay outstanding borrowings under our $750,000 unsecured revolving credit facility and to fund acquisitions.

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The required principal payments due during the next five years and thereafter under all our outstanding debt as of December 31, 2018 are as follows:

	Principal
Year	Payment
2019	$	—
2020	48,750
2021	413,000
2022	—
2023	—
Thereafter	—
	$	461,750	(1)

(1) Total debt outstanding as of December 31, 2018, including unamortized debt premiums, was $462,195.

Note 5. Fair Value of Assets and Liabilities

Our financial instruments include cash and cash equivalents, rents receivable, our revolving credit facility, mortgage note payable, accounts payable, rents collected in advance and amounts due from or to related persons. At December 31, 2018 and 2017, the fair value of our financial instruments approximated their carrying values in our consolidated financial statements, due to the short term nature of floating interest rates, except as follows:

	At December 31, 2018				At December 31, 2017
	Carrying		Estimated		Carrying		Estimated
	Value (1)		Fair Value		Value (1)		Fair Value
Mortgage note payable	$	49,195	$	48,642	$	49,427	$	48,919

(1) Includes unamortized premiums of $445 and $677 as of December 31, 2018 and 2017, respectively.

We estimate the fair value of our mortgage note payable using a discounted cash flow analysis and currently prevailing market rates as of the measurement date (Level 3 inputs). Because Level 3 inputs are unobservable, our estimated fair value may differ materially from the actual fair value.

Note 6. Shareholders’ Equity

Common Share Awards:

We have common shares available for issuance under the terms of our 2018 Equity Compensation Plan, or the 2018 Plan. During the year ended December 31, 2018, we awarded to our officers and other employees of RMR LLC annual share awards of 54,400 of our common shares, valued at $1,269, in aggregate. We also granted each of our then Trustees 1,000 of our common shares with an aggregate value of $104 ($21 per Trustee) as compensation for the period from our IPO to May 2018 and granted each of our then Trustees 3,000 common shares with an aggregate value of $314 ($63 per Trustee) as part of their annual compensation. We granted an additional 3,000 common shares in December 2018, with an aggregate value of $61 to one of our Managing Trustees, who was elected as a Managing Trustee in December 2018. The values of the share grants were based upon the closing price of our common shares trading on Nasdaq on the dates of grants. The common shares granted to our Trustees vested immediately. The common shares granted to our officers and certain other employees of RMR LLC vest in five equal annual installments beginning on the date of grant. We include the value of granted shares in general and administrative expenses ratably over the vesting period.

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A summary of shares granted, vested and forfeited under the terms of the 2018 Plan for the year ended December 31, 2018 is as follows:

			Weighted
			Average
	Number		Grant Date
	of Shares		Fair Value
2018 Activity:
Granted	77,400		$	22.60
Vested	(33,880	)	$	21.64
Forfeited	(240	)	$	23.33
Unvested shares at December 31, 2018	43,280		$	23.33

The 43,280 unvested shares as of December 31, 2018 are scheduled to vest as follows: 15,320 shares in 2019, 9,320 shares in 2020, 9,320 shares in 2021 and 9,320 in 2022. As of December 31, 2018, the estimated future compensation expense for the unvested shares was approximately $1,010. The weighted average period over which the compensation expense will be recorded is approximately 28 months. During the year ended December 31, 2018, we recorded $927 of compensation expense related to the 2018 Plan.

At December 31, 2018, 3,925,209 common shares remain available for issuance under the 2018 Plan.

2018 Common Share Purchases:

On September 24, 2018, we purchased an aggregate of 2,369 of our common shares, valued at $22.08 per share, the closing price of our common shares on Nasdaq on that day, from certain of our officers and certain other employees of RMR LLC in satisfaction of tax withholding and payment obligations in connection with awards of our common shares.

Distributions:

During the year ended December 31, 2018, we paid distributions on our common shares as follows:

Declaration	Record	Paid	Distributions		Total
Date	Date	Date	Per Share		Distributions
4/19/2018	4/30/2018	5/14/2018	$	0.27	$	17,551
7/19/2018	7/30/2018	8/13/2018	0.33		21,457
10/18/2018	10/29/2018	11/12/2018	0.33		21,474
			$	0.93	$	60,482

Distributions per share paid or payable by us to our common shareholders for the year ended December 31, 2018, was $0.93. The characterization of our distributions for 2018 was 100% ordinary income.

On January 18, 2019, we declared a regular quarterly distribution of $0.33 per common share, or approximately $21,500, to shareholders of record on January 28, 2019. We expect to pay this distribution on or about February 21, 2019.

Note 7. Related Person Transactions

We have relationships and historical and continuing transactions with RMR LLC, RMR Inc., AIC and others related to them, including other companies to which RMR LLC or its subsidiaries provide management services and some of which have trustees, directors or officers who are also our Trustees or officers. RMR LLC is a majority owned subsidiary of RMR Inc. One of our Managing Trustees, Adam Portnoy, as the sole trustee of ABP Trust, is the controlling shareholder of RMR Inc. and is a managing director and the president and chief executive officer of RMR Inc. and an officer and employee of RMR LLC. Barry M. Portnoy was our other Managing Trustee and a managing director and an officer of RMR Inc. and an officer and employee of RMR LLC until his death on February 25, 2018. John Murray, who succeeded John C. Popeo as our other Managing Trustee and President and Chief Executive Officer effective December 1, 2018, and each of our other officers is also an officer and employee of RMR LLC. Our Independent Trustees also serve as independent trustees or independent directors of other public companies to which RMR LLC or its subsidiaries provide management services. Adam Portnoy serves, and, until his death, Barry M. Portnoy served, as a managing director or managing trustee of these public companies, including SIR (prior to its

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merger into OPI’s subsidiary in December 2018). Other officers of RMR LLC serve as managing trustees or managing directors of certain of these companies. In addition, officers of RMR LLC and RMR Inc. serve as our officers and officers of other companies to which RMR LLC or its subsidiaries provide management services, including SIR prior to its merger into OPI’s subsidiary.

Our Manager, RMR LLC. We have two agreements with RMR LLC to provide management services to us: (i) a business management agreement, which relates to our business generally, and (ii) a property management agreement, which relates to our property level operations. See Note 9 for further information regarding our management agreements with RMR LLC.

Share Awards to RMR LLC Employees. As described in Note 6, we award shares to our officers and other employees of RMR LLC annually. Generally, one fifth of these awards vest on the grant date and one fifth vests on each of the next four anniversaries of the grant dates. In certain instances, we may accelerate the vesting of an award, such as in connection with the award holder’s retirement as an officer of us or an officer or employee of RMR LLC. These awards to RMR LLC employees are in addition to the share awards granted to our current and former Managing Trustees, as Trustee compensation, and the fees we paid to RMR LLC. See Note 6 for information regarding our share awards and activity as well as certain share purchases we made in connection with share award recipients satisfying tax withholding obligation on the vesting of share awards.

SIR. Until January 17, 2018, when we completed our IPO, we were a wholly owned subsidiary of SIR. SIR was our largest shareholder until December 27, 2018, when SIR distributed to its shareholders of record as of the close of business on December 20, 2018, all 45,000,000 of our common shares that SIR then owned. Effective December 31, 2018, SIR merged with and into a wholly owned subsidiary of OPI. Adam Portnoy, one of our Managing Trustees, was also a managing trustee of SIR prior to its merger with OPI’s subsidiary. John C. Popeo, before he resigned on November 30, 2018, was our other Managing Trustee and President and Chief Executive Officer, and he also served as the chief financial officer and treasurer of SIR prior to its merger with OPI’s subsidiary. RMR LLC provided management services to SIR until its merger into OPI’s subsidiary, and continues to provide management services to OPI and it provides management services to us. As a result of the merger, OPI succeeded to all of SIR’s rights and obligations, including with respect to SIR’s agreements with us.

IPO. In connection with our IPO, we and SIR entered a transaction agreement, or the Transaction Agreement, to govern our relationship with SIR. OPI is the successor to SIR under the Transaction Agreement. Pursuant to the Transaction Agreement:

• our current assets and current liabilities were settled between SIR (for the periods ending on and before the closing of our IPO) and us (for periods ending after the closing of our IPO);

• SIR agreed to indemnify us with respect to any of its liabilities, and we agreed to indemnify SIR with respect to any of our liabilities, after giving effect to the settlement between us and SIR of our current assets and current liabilities; and

• we and SIR agreed to cooperate to enforce the ownership limitations in our and SIR’s respective declaration of trust as may be appropriate to qualify for and maintain qualification for taxation as a REIT under the IRC and otherwise to ensure each receives the economics of its assets and liabilities and to file future tax returns, including appropriate allocations of taxable income, expenses and other tax attributes.

On January 17, 2018, we and SIR also entered a registration rights agreement, which granted SIR demand and piggyback registration rights, subject to certain limitations, with respect to our common shares then owned by SIR. This registration rights agreement expired on December 27, 2018 due to SIR no longer beneficially owning any of our common shares following SIR’s pro rata distribution of our common shares that it then held to its shareholders on such date.

AIC.  On December 28, 2018, we and SIR entered a stock purchase agreement, or the AIC Stock Purchase Agreement, pursuant to which we purchased all of SIR’s shares of common stock of AIC, an Indiana insurance company, effective December 31, 2018 for a purchase price of $8,632. As a result of this purchase, we, ABP Trust and five other companies to which RMR LLC provides management services currently own AIC in equal amounts and are parties to a shareholders agreement regarding AIC. All our Trustees (other than John Murray) and all the independent trustees and independent directors of the other AIC shareholders currently serve on the board of directors of AIC. RMR LLC provides management and administrative services to AIC pursuant to a management and administrative services agreement with AIC. Pursuant to this agreement, AIC pays to RMR LLC a service fee equal to 3.0% of the total annual net earned premiums payable under then active policies issued or underwritten by AIC or by a vendor or an agent of AIC on its behalf or in furtherance of AIC’s business.

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We and the other AIC shareholders participate in a combined property insurance program arranged and insured or reinsured in part by AIC. Historically, we participated in this program through SIR, as SIR’s subsidiary, and SIR allocated to us the portion of the premiums for this insurance program, including taxes and fees, covering our Initial Properties, which allocations were $266, $320 and $351 for the policy years ending June 30, 2019, 2018 and 2017, respectively, which amount for the policy year ending June 30, 2019 may be adjusted from time to time as we acquire or dispose of properties included in this insurance program. We paid or reimbursed SIR approximately $266 in respect of this insurance program for the policy year ending June 30, 2019.

As of December 31, 2018, our investment in AIC had a carrying value of $8,632. This amount is included in other assets in our consolidated balance sheets. There was no income recognized related to our investment in AIC for the year ended December 31, 2018.

Directors’ and Officers’ Liability Insurance. We, RMR Inc., RMR LLC and certain other companies to which RMR LLC or its subsidiaries provide management services participate in a combined directors’ and officers’ liability insurance policy. The current combined policy expires in September 2020. Prior to SIR’s distribution of our common shares to its shareholders, as a majority owned subsidiary of SIR, we were provided coverage under this policy and SIR allocated a portion of its cost of the policy to us. The cost of this insurance SIR allocated to us was $90, $116 and $93 for the years ended December 31, 2018, 2017 and 2016, respectively, and is included in general and administrative expenses in our consolidated statements of comprehensive income.

Note 8. Certain Arrangements, Allocations and Operations Prior to our IPO

In connection with our IPO, on September 29, 2017, SIR contributed to us 266 properties with a total of approximately 28,540,000 rentable square feet, including 16,834,000 rentable square feet of primarily industrial lands in Hawaii and approximately 11,706,000 rentable square feet of industrial and logistics properties in 24 other states. In connection with our formation and this contribution from SIR, we issued to SIR 45,000,000 of our common shares and the SIR Note, and we assumed three mortgage notes totaling $63,069, as of September 30, 2017, that were secured by three of our Initial Properties. In December 2017, we obtained a $750,000 secured revolving credit facility, and we used the proceeds of an initial borrowing under this credit facility to pay the SIR Note in full. Also in December 2017, SIR prepaid on our behalf two of the mortgage notes totaling approximately $14,319 that had encumbered two of our Initial Properties. In connection with our IPO, we reimbursed SIR for approximately $7,271 of costs that SIR incurred in connection with our formation and preparation for our IPO. In addition, SIR collected rents from certain of our tenants for the period subsequent to our IPO, of which SIR owed to us$865as of December 31, 2018, which amount is included in due from related persons in our consolidated balance sheet as of December 31, 2018. OPI (as successor by merger to SIR) paid this amount due to us in January 2019.

We do not have any employees. As a wholly owned subsidiary of SIR, until the completion of our IPO, we received services from RMR LLC under SIR’s management agreements with RMR LLC. In connection with our IPO, we entered two agreements with RMR LLC to provide management services to us that were substantially similar to the terms of the then management agreements between SIR and RMR LLC. See Note 9 for further information regarding our management agreements with RMR LLC.

For periods prior to the completion of our IPO on January 17, 2018, base management fees payable by SIR under SIR’s business management agreement with RMR LLC were calculated based on the historical costs of our Initial Properties and incentive management fees payable by SIR and allocated to us were based on the percentage of the base management fees allocated to us compared to the total base management fees paid by SIR. Base management fees paid by SIR allocated to us by SIR for the period from January 1, 2018 to January 16, 2018 and the years ended December 31, 2017 and 2016 were $308, $6,823 and $6,789, respectively. The incentive management fee allocated to us by SIR for the year ended December 31, 2017 and paid to RMR LLC in January 2018 was $7,660, and no incentive management fees were allocated to us by SIR for the year ended December 31, 2016. General and administrative expenses incurred by SIR, which include costs of the internal audit function provided by RMR LLC to the companies it or its subsidiaries manage, were allocated to us by SIR for periods prior to our IPO based on the percentage of the base management fees allocated to us compared to the total base management fees paid by SIR. The amounts allocated to us by SIR for internal audit costs for the period from January 1 to January 16, 2018 and the years ended December 31, 2017 and 2016 were $4, $84 and $74, respectively.

RMR LLC was paid, by SIR, property management fees equal to 3.0% of gross collected rents and construction supervision fees equal to 5.0% of construction costs. The aggregate property management and construction supervision fees allocated to us by SIR for the period from January 1 to January 16, 2018 and the years ended December 31, 2017 and 2016 were $230, $4,244 and $4,182, respectively. These amounts were calculated based upon gross collected rents and construction supervision services provided at or for our Initial Properties. These amounts are included in other operating expenses or have been capitalized, as appropriate, in our consolidated financial statements.

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Under SIR’s management agreements with RMR LLC, SIR was generally responsible for all of our operating expenses, including certain expenses incurred by RMR LLC on our behalf. Our property level operating costs are generally incorporated into rents charged to our tenants, including certain payroll and related costs incurred by RMR LLC. The total of these property management related reimbursements paid to RMR LLC for costs incurred by RMR LLC related to our Initial Properties for the period from January 1 to January 16, 2018 and the years ended December 31, 2017 and 2016 were $120, $2,512 and $2,448, respectively. These amounts are included in other operating expenses in our consolidated financial statements for these periods.

We also paid or reimbursed SIR for our allocated portion of certain insurance policies. The total of these insurance related reimbursements paid to SIR for costs for the period from January 1 to January 16, 2018 was $4. See Note 7 for further information.

See Notes 7 and 9 for further information regarding our relationships, agreements and transactions with RMR LLC and SIR.

Note 9. Business and Property Management Agreements with RMR LLC

We have no employees. The personnel and various services we require to operate our business are provided to us by RMR LLC. Upon completion of our IPO on January 17, 2018, we entered two agreements with RMR LLC to provide management services to us: (i) a business management agreement, which relates to our business generally, and (ii) a property management agreement, which relates to our property level operations. See Notes 7 and 8 for further information regarding our relationship, agreements and transactions with RMR LLC prior to our IPO.

Management Agreements with RMR LLC. Our management agreements with RMR LLC provide for an annual base management fee, an annual incentive management fee and property management and construction supervision fees, payable in cash, among other terms:

• Base Management Fee. The annual base management fee payable to RMR LLC by us for each applicable period is equal to the lesser of:

◦ the sum of (i) 0.5% of the average aggregate historical cost of the real estate assets acquired from a REIT to which RMR LLC provided business management or property management services, or the Transferred Assets, which includes our Initial Properties we acquired from SIR, plus (ii) 0.7% of the average aggregate historical cost of our real estate investments excluding the Transferred Assets up to $250,000, plus (iii) 0.5% of the average aggregate historical cost of our real estate investments excluding the Transferred Assets exceeding $250,000; and

◦ the sum of (i) 0.7% of the average closing price per share of our common shares on the stock exchange on which such shares are principally traded during such period, multiplied by the average number of our common shares outstanding during such period, plus the daily weighted average of the aggregate liquidation preference of each class of our preferred shares outstanding during such period, plus the daily weighted average of the aggregate principal amount of our consolidated indebtedness during such period, or, together, our Average Market Capitalization, up to $250,000, plus (ii) 0.5% of our Average Market Capitalization exceeding $250,000.

The average aggregate historical cost of our real estate investments includes our consolidated assets invested, directly or indirectly, in equity interests in or loans secured by real estate and personal property owned in connection with such real estate (including acquisition related costs and costs which may be allocated to intangibles or are unallocated), all before reserves for depreciation, amortization, impairment charges or bad debts or other similar non-cash reserves.

• Incentive Management Fee. The incentive management fee which may be earned by RMR LLC for an annual period is calculated as follows:

◦ An amount, subject to a cap, based on the value of our common shares outstanding, equal to 12.0% of the product of:

– if the relevant measurement period ends on or before December 31, 2020, $1,560,000 (our unadjusted equity market capitalization as calculated at our IPO) or, if the relevant measurement period ends

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thereafter, our equity market capitalization on the last trading day of the calendar year immediately prior to the relevant measurement period, and

– the amount (expressed as a percentage) by which the total return per share, as defined in the business management agreement and further described below, of our common shareholders (i.e., share price appreciation plus dividends) exceeds the total shareholder return of the applicable market index, or the benchmark return per share, for the relevant measurement period. Effective as of January 1, 2019 we amended our business management agreement with RMR LLC so that the SNL U.S. Industrial REIT Index will be used for periods beginning on and after January 1, 2019, with the SNL U.S. REIT Equity Index used for periods ending on or prior to December 31, 2018.

For purposes of the total return per share of our common shareholders, share price appreciation for a measurement period is determined by subtracting (i) if the measurement period ends on or before December 31, 2020, $24.00 per common share (our unadjusted initial share price, as defined under the business management agreement, based on our IPO price of our common shares) or, if the measurement period ends after December 31, 2020, the closing price of our common shares on Nasdaq on the last trading day of the year immediately before the first year of the applicable measurement period from (ii) the average closing price of our common shares on the 10 consecutive trading days having the highest average closing prices during the final 30 trading days in the last year of the measurement period.

◦ The calculation of the incentive management fee (including the determinations of our equity market capitalization, initial share price and the total return per share of our common shareholders) is subject to adjustments if additional common shares are issued during the measurement period.

◦ No incentive management fee is payable by us unless our total return per share during the measurement period is positive.

◦ The measurement periods are generally three year periods ending with the year for which the incentive management fee is being calculated, with shorter periods applicable in the case of the calculation of the incentive fee for 2020 (the period beginning on January 12, 2018, the first day our common shares began trading, and ending on December 31, 2020), 2019 (the period beginning on January 12, 2018 and ending on December 31, 2019) and 2018 (the period beginning on January 12, 2018 and ending on December 31, 2018).

◦ If our total return per share exceeds 12.0% per year in any measurement period, the benchmark return per share is adjusted to be the lesser of the total shareholder return of the applicable market index for such measurement period and 12.0% per year, or the adjusted benchmark return per share. In instances where the adjusted benchmark return per share applies, the incentive management fee will be reduced if our total return per share is between 200 basis points and 500 basis points below the applicable market index, by a low return factor, as defined in the business management agreement, and there will be no incentive management fee paid if, in these instances, our total return per share is more than 500 basis points below the applicable market index.

◦ The incentive management fee is subject to a cap. The cap is equal to the value of the number of our common shares which would, after issuance, represent 1.5% of the number of our common shares then outstanding multiplied by the average closing price of our common shares during the 10 consecutive trading days having the highest average closing prices during the final 30 trading days of the relevant measurement period.

◦ Incentive management fees we paid to RMR LLC for any period may be subject to “clawback” if our financial statements for that period are restated due to material non-compliance with any financial reporting requirements under the securities laws as a result of the bad faith, fraud, willful misconduct or gross negligence of RMR LLC and the amount of the incentive management fee we paid was greater than the amount we would have paid based on the restated financial statements.

Pursuant to our business management agreement with RMR LLC, we recognized net business management fees of $7,269 for the period from January 17, 2018 through December 31, 2018. The net business management fees we recognized are included in general and administrative expenses in our consolidated statements of

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comprehensive income for the year ended December 31, 2018. We did not incur an incentive management fee pursuant to our business management agreement for the period ended December 31, 2018.

• Property Management and Construction Supervision Fees. The property management fees payable to RMR LLC by us for each applicable period are equal to 3.0% of gross collected rents and the construction supervision fees payable to RMR LLC by us for each applicable period are equal to 5.0% of construction costs.

Pursuant to our property management agreement with RMR LLC, we recognized aggregate property management and construction supervision fees of $4,680 for the period from January 17, 2018 through December 31, 2018. These amounts are included in operating expenses or capitalized, as appropriate, in our consolidated statements of comprehensive income.

• Expense Reimbursement. We are generally responsible for all of our operating expenses, including certain expenses incurred or arranged by RMR LLC on our behalf. We are generally not responsible for payment of RMR LLC’s employment, office or administrative expenses incurred to provide management services to us, except for the employment and related expenses of RMR LLC’s employees assigned to work exclusively or partly at our properties, our share of the wages, benefits and other related costs of RMR LLC’s centralized accounting personnel, our share of RMR LLC’s costs for providing our internal audit function and as otherwise agreed. Our property level operating expenses are generally incorporated into rents charged to our tenants, including certain payroll and related costs incurred by RMR LLC. These amounts are included in operating expenses in our consolidated statements of comprehensive income for these periods. The amount we recognized as expense for payroll and related costs we reimbursed to RMR LLC was $2,672 for the period from January 17, 2018 through December 31, 2018. Our Audit Committee appoints our Director of Internal Audit and our Compensation Committee approves the costs of our internal audit function. The amount recognized as expense for internal audit costs was $236 for the year ended December 31, 2018. This amount is included in general and administrative expenses in our consolidated statements of comprehensive income for this period.

• Term. Our management agreements with RMR LLC have terms that end on December 31, 2038, and automatically extend on December 31st of each year for an additional year, so that the terms of our management agreements thereafter end on the 20th anniversary of the date of the extension.

• Termination Rights. We have the right to terminate one or both of our management agreements with RMR LLC: (i) at any time on 60 days’ written notice for convenience, (ii) immediately on written notice for cause, as defined therein, (iii) on written notice given within 60 days after the end of an applicable calendar year for a performance reason, as defined therein, and (iv) by written notice during the 12 months following a change of control of RMR LLC, as defined therein. RMR LLC has the right to terminate the management agreements for good reason, as defined therein.

• Termination Fee. If we terminate one or both of our management agreements with RMR LLC for convenience, or if RMR LLC terminates one or both of our management agreements for good reason, we have agreed to pay RMR LLC a termination fee in an amount equal to the sum of the present values of the monthly future fees, as defined therein, for the terminated management agreement(s) for the term that was remaining prior to such termination, which, depending on the time of termination would be between 19 and 20 years. If we terminate one or both of our management agreements with RMR LLC for a performance reason, we have agreed to pay RMR LLC the termination fee calculated as described above, but assuming a 10 year term was remaining prior to the termination. We are not required to pay any termination fee if we terminate our management agreements with RMR LLC for cause or as a result of a change of control of RMR LLC.

• Transition Services. RMR LLC has agreed to provide certain transition services to us for 120 days following an applicable termination by us or notice of termination by RMR LLC, including cooperating with us and using commercially reasonable efforts to facilitate the orderly transfer of the management and real estate investment services provided under our business management agreement and to facilitate the orderly transfer of the management of the managed properties under our property management agreement, as applicable.

• Vendors. Pursuant to our management agreements with RMR LLC, RMR LLC may from time to time negotiate on our behalf with certain third party vendors and suppliers for the procurement of goods and services to us. As part of this arrangement, we may enter agreements with RMR LLC and other companies to which RMR LLC or its subsidiaries provide management services for the purpose of obtaining more favorable terms from such vendors and suppliers.

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• Investment Opportunities. Under our business management agreement with RMR LLC, we acknowledge that RMR LLC may engage in other activities or businesses and act as the manager to any other person or entity (including other REITs) even though such person or entity has investment policies and objectives similar to ours and we are not entitled to preferential treatment in receiving information, recommendations and other services from RMR LLC.

Note 10. Selected Quarterly Financial Data (Unaudited)

The following is a summary of our unaudited quarterly results of operations for 2018 and 2017:

	2018
	First		Second		Third		Fourth
	Quarter		Quarter		Quarter		Quarter
Total revenues	$	40,605	$	39,420	$	40,431	$	42,074
Net income	$	19,232	$	18,726	$	18,142	$	18,288
Net income per common share—basic and diluted	$	0.31	$	0.29	$	0.28	$	0.28

	2017
	First		Second		Third		Fourth
	Quarter		Quarter		Quarter		Quarter
Total revenues	$	39,440	$	38,605	$	39,066	$	39,395
Net income	$	20,356	$	21,575	$	22,903	$	15,269
Net income per common share—basic and diluted	$	0.45	$	0.48	$	0.51	$	0.34

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INDUSTRIAL LOGISTICS PROPERTIES TRUST

SCHEDULE II

VALUATION AND QUALIFYING ACCOUNTS

December 31, 2018

(dollars in thousands)

	Balance at		Charged to					Balance
	Beginning		Costs and					at End
Description	of Period		Expenses		Deductions			of Period
Year ended December 31, 2016:
Allowance for doubtful accounts	$	413	$	257	$	(87	)	$	583
Year ended December 31, 2017:
Allowance for doubtful accounts	$	583	$	704	$	(46	)	$	1,241
Year ended December 31, 2018:
Allowance for doubtful accounts	$	1,241	$	1,198	$	(982	)	$	1,457

S-1

INDUSTRIAL LOGISTICS PROPERTIES TRUST

SCHEDULE III

REAL ESTATE AND ACCUMULATED DEPRECIATION

December 31, 2018

(dollars in thousands)

							Initial Cost to				Costs		Gross Amount Carried at
							Company				Capitalized		Close of Period(4)										Original
									Buildings and		Subsequent to				Buildings and				Accumulated			Date	Construction
	Property	Location	State	Property Type	Encumbrances(1)		Land		Equipment		Acquisition		Land		Equipment		Total(2)		Depreciation(3)			Acquired	Date
1	4501 Industrial Drive	Fort Smith	AR	Mainland Industrial	$	—	$	900	$	3,485	$	—	$	900	$	3,485	$	4,385	$	(341	)	1/29/2015	2013
2	955 Aeroplaza Drive	Colorado Springs	CO	Mainland Industrial	—		800		7,412		—		800		7,412		8,212		(726		)	1/29/2015	2012
3/4	13400 East 39th Avenue and 3800 Wheeling Street	Denver	CO	Mainland Industrial	—		3,100		12,955		46		3,100		13,001		16,101		(1,298		)	1/29/2015	1973
5	150 Greenhorn Drive	Pueblo	CO	Mainland Industrial	—		200		4,177		—		200		4,177		4,377		(409		)	1/29/2015	2013
6	2 Tower Drive	Wallingford	CT	Mainland Industrial	—		1,471		2,165		7		1,471		2,172		3,643		(668		)	10/24/2006	1978
7	235 Great Pond Drive	Windsor	CT	Mainland Industrial	—		2,400		9,469		—		2,400		9,469		11,869		(1,519		)	7/20/2012	2004
8	10450 Doral Boulevard	Doral	FL	Mainland Industrial	—		15,225		28,101		—		15,225		28,101		43,326		(468		)	6/27/2018	1996
9	2100 NW 82nd Avenue	Miami	FL	Mainland Industrial	—		144		1,297		454		144		1,751		1,895		(749		)	3/19/1998	1987
10	1000 Mapunapuna Street	Honolulu	HI	Hawaii Land and Easement	—		2,252		—		—		2,252		—		2,252		—			12/5/2003	—
11	1001 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—		15,155		3,312		92		15,155		3,404		18,559		(1,269		)	12/5/2003	—
12	1024 Kikowaena Place	Honolulu	HI	Hawaii Land and Easement	—		1,818		—		—		1,818		—		1,818		—			12/5/2003	—
13	1024 Mapunapuna Street	Honolulu	HI	Hawaii Land and Easement	—		1,385		—		—		1,385		—		1,385		—			12/5/2003	—
14	1027 Kikowaena Place	Honolulu	HI	Hawaii Land and Easement	—		5,444		—		—		5,444		—		5,444		—			12/5/2003	—
15	1030 Mapunapuna Street	Honolulu	HI	Hawaii Land and Easement	—		5,655		—		—		5,655		—		5,655		—			12/5/2003	—
16	1038 Kikowaena Place	Honolulu	HI	Hawaii Land and Easement	—		2,576		—		—		2,576		—		2,576		—			12/5/2003	—
17	1045 Mapunapuna Street	Honolulu	HI	Hawaii Land and Easement	—		819		—		—		819		—		819		—			12/5/2003	—
18	1050 Kikowaena Place	Honolulu	HI	Hawaii Land and Easement	—		1,404		873		—		1,404		873		2,277		(328		)	12/5/2003	—
19	1052 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—		1,703		—		240		1,703		240		1,943		(79		)	12/5/2003	—
20	1055 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—		1,216		—		—		1,216		—		1,216		—			12/5/2003	—
21	106 Puuhale Road	Honolulu	HI	Hawaii Building	—		1,113		—		229		1,113		229		1,342		(54		)	12/5/2003	1966
22	1062 Kikowaena Place	Honolulu	HI	Hawaii Land and Easement	—		1,049		598		—		1,049		598		1,647		(225		)	12/5/2003	—
23	1122 Mapunapuna Street	Honolulu	HI	Hawaii Land and Easement	—		5,781		—		—		5,781		—		5,781		—			12/5/2003	—
24	113 Puuhale Road	Honolulu	HI	Hawaii Land and Easement	—		3,729		—		—		3,729		—		3,729		—			12/5/2003	—
25	1150 Kikowaena Place	Honolulu	HI	Hawaii Land and Easement	—		2,445		—		—		2,445		—		2,445		—			12/5/2003	—
26	120 Mokauea Street	Honolulu	HI	Hawaii Building	—		1,953		—		655		1,953		655		2,608		(105		)	12/5/2003	1970
27	120 Sand Island Access Road	Honolulu	HI	Hawaii Building	—		1,130		11,307		1,298		1,130		12,605		13,735		(4,321		)	11/23/2004	2004
28	120B Mokauea Street	Honolulu	HI	Hawaii Building	—		1,953		—		—		1,953		—		1,953		—			12/5/2003	1970
29	125 Puuhale Road	Honolulu	HI	Hawaii Land and Easement	—		1,630		—		—		1,630		—		1,630		—			12/5/2003	—
30	125B Puuhale Road	Honolulu	HI	Hawaii Land and Easement	—		2,815		—		—		2,815		—		2,815		—			12/5/2003	—

S-2

						Initial Cost to		Costs	Gross Amount Carried at
						Company		Capitalized	Close of Period(4)						Original
							Buildings and	Subsequent to		Buildings and		Accumulated		Date	Construction
	Property	Location	State	Property Type	Encumbrances(1)	Land	Equipment	Acquisition	Land	Equipment	Total(2)	Depreciation(3)		Acquired	Date
31	1330 Pali Highway	Honolulu	HI	Hawaii Land and Easement	—	1,423	—	—	1,423	—	1,423	—		12/5/2003	—
32	1360 Pali Highway	Honolulu	HI	Hawaii Land and Easement	—	9,170	—	161	9,170	161	9,331	(103	)	12/5/2003	—
33	140 Puuhale Road	Honolulu	HI	Hawaii Land and Easement	—	1,100	—	—	1,100	—	1,100	—		12/5/2003	—
34	142 Mokauea Street	Honolulu	HI	Hawaii Building	—	2,182	—	1,455	2,182	1,455	3,637	(359	)	12/5/2003	1972
35	148 Mokauea Street	Honolulu	HI	Hawaii Land and Easement	—	3,476	—	—	3,476	—	3,476	—		12/5/2003	—
36	150 Puuhale Road	Honolulu	HI	Hawaii Land and Easement	—	4,887	—	—	4,887	—	4,887	—		12/5/2003	—
37	151 Puuhale Road	Honolulu	HI	Hawaii Land and Easement	—	1,956	—	—	1,956	—	1,956	—		12/5/2003	—
38	158 Sand Island Access Road	Honolulu	HI	Hawaii Land and Easement	—	2,488	—	—	2,488	—	2,488	—		12/5/2003	—
39	165 Sand Island Access Road	Honolulu	HI	Hawaii Land and Easement	—	758	—	—	758	—	758	—		12/5/2003	—
40	179 Sand Island Access Road	Honolulu	HI	Hawaii Land and Easement	—	2,480	—	—	2,480	—	2,480	—		12/5/2003	—
41	180 Sand Island Access Road	Honolulu	HI	Hawaii Land and Easement	—	1,655	—	—	1,655	—	1,655	—		12/5/2003	—
42	1926 Auiki Street	Honolulu	HI	Hawaii Building	—	2,874	—	1,562	2,874	1,562	4,436	(466	)	12/5/2003	1959
43	1931 Kahai Street	Honolulu	HI	Hawaii Land and Easement	—	3,779	—	—	3,779	—	3,779	—		12/5/2003	—
44	197 Sand Island Access Road	Honolulu	HI	Hawaii Land and Easement	—	1,238	—	—	1,238	—	1,238	—		12/5/2003	—
45	2001 Kahai Street	Honolulu	HI	Hawaii Land and Easement	—	1,091	—	—	1,091	—	1,091	—		12/5/2003	—
46	2019 Kahai Street	Honolulu	HI	Hawaii Land and Easement	—	1,377	—	—	1,377	—	1,377	—		12/5/2003	—
47	2020 Auiki Street	Honolulu	HI	Hawaii Land and Easement	—	2,385	—	—	2,385	—	2,385	—		12/5/2003	—
48	204 Sand Island Access Road	Honolulu	HI	Hawaii Land and Easement	—	1,689	—	—	1,689	—	1,689	—		12/5/2003	—
49	207 Puuhale Road	Honolulu	HI	Hawaii Land and Easement	—	2,024	—	—	2,024	—	2,024	—		12/5/2003	—
50	2103 Kaliawa Street	Honolulu	HI	Hawaii Land and Easement	—	3,212	—	—	3,212	—	3,212	—		12/5/2003	—
51	2106 Kaliawa Street	Honolulu	HI	Hawaii Land and Easement	—	1,568	—	169	1,568	169	1,737	(66	)	12/5/2003	—
52	2110 Auiki Street	Honolulu	HI	Hawaii Land and Easement	—	837	—	—	837	—	837	—		12/5/2003	—
53	212 Mohonua Place	Honolulu	HI	Hawaii Land and Easement	—	1,067	—	—	1,067	—	1,067	—		12/5/2003	—
54	2122 Kaliawa Street	Honolulu	HI	Hawaii Land and Easement	—	1,365	—	—	1,365	—	1,365	—		12/5/2003	—
55	2127 Auiki Street	Honolulu	HI	Hawaii Land and Easement	—	2,906	—	97	2,906	97	3,003	(25	)	12/5/2003	—
56	2135 Auiki Street	Honolulu	HI	Hawaii Land and Easement	—	825	—	—	825	—	825	—		12/5/2003	—
57	2139 Kaliawa Street	Honolulu	HI	Hawaii Land and Easement	—	885	—	—	885	—	885	—		12/5/2003	—
58	214 Sand Island Access Road	Honolulu	HI	Hawaii Building	—	1,864	—	485	1,864	485	2,349	(43	)	12/5/2003	1981
59	2140 Kaliawa Street	Honolulu	HI	Hawaii Land and Easement	—	931	—	—	931	—	931	—		12/5/2003	—

S-3

						Initial Cost to		Costs	Gross Amount Carried at
						Company		Capitalized	Close of Period(4)						Original
							Buildings and	Subsequent to		Buildings and		Accumulated		Date	Construction
	Property	Location	State	Property Type	Encumbrances(1)	Land	Equipment	Acquisition	Land	Equipment	Total(2)	Depreciation(3)		Acquired	Date
60	2144 Auiki Street	Honolulu	HI	Hawaii Building	—	2,640	—	7,088	2,640	7,088	9,728	(2,068	)	12/5/2003	1953
61	215 Puuhale Road	Honolulu	HI	Hawaii Land and Easement	—	2,117	—	—	2,117	—	2,117	—		12/5/2003	—
62	218 Mohonua Place	Honolulu	HI	Hawaii Land and Easement	—	1,741	—	—	1,741	—	1,741	—		12/5/2003	—
63	220 Puuhale Road	Honolulu	HI	Hawaii Land and Easement	—	2,619	—	—	2,619	—	2,619	—		12/5/2003	—
64	2250 Pahounui Drive	Honolulu	HI	Hawaii Land and Easement	—	3,862	—	—	3,862	—	3,862	—		12/5/2003	—
65	2264 Pahounui Drive	Honolulu	HI	Hawaii Land and Easement	—	1,632	—	—	1,632	—	1,632	—		12/5/2003	—
66	2276 Pahounui Drive	Honolulu	HI	Hawaii Land and Easement	—	1,619	—	—	1,619	—	1,619	—		12/5/2003	—
67	228 Mohonua Place	Honolulu	HI	Hawaii Land and Easement	—	1,865	—	—	1,865	—	1,865	—		12/5/2003	—
68	2308 Pahounui Drive	Honolulu	HI	Hawaii Land and Easement	—	3,314	—	—	3,314	—	3,314	—		12/5/2003	—
69	231 Sand Island Access Road	Honolulu	HI	Hawaii Land and Easement	—	752	—	—	752	—	752	—		12/5/2003	—
70	231B Sand Island Access Road	Honolulu	HI	Hawaii Land and Easement	—	1,539	—	—	1,539	—	1,539	—		12/5/2003	—
71	2344 Pahounui Drive	Honolulu	HI	Hawaii Land and Easement	—	6,709	—	—	6,709	—	6,709	—		12/5/2003	—
72	238 Sand Island Access Road	Honolulu	HI	Hawaii Land and Easement	—	2,273	—	—	2,273	—	2,273	—		12/5/2003	—
73	2635 Waiwai Loop A	Honolulu	HI	Hawaii Land and Easement	—	934	350	683	934	1,033	1,967	(132	)	12/5/2003	—
74	2635 Waiwai Loop B	Honolulu	HI	Hawaii Land and Easement	—	1,177	105	683	1,177	788	1,965	(40	)	12/5/2003	—
75	2760 Kam Highway	Honolulu	HI	Hawaii Land and Easement	—	703	—	143	703	143	846	—		12/5/2003	—
76	2804 Kilihau Street	Honolulu	HI	Hawaii Land and Easement	—	1,775	2	—	1,775	2	1,777	(1	)	12/5/2003	—
77	2806 Kaihikapu Street	Honolulu	HI	Hawaii Land and Easement	—	1,801	—	—	1,801	—	1,801	—		12/5/2003	—
78	2808 Kam Highway	Honolulu	HI	Hawaii Land and Easement	—	310	—	—	310	—	310	—		12/5/2003	—
79	2809 Kaihikapu Street	Honolulu	HI	Hawaii Land and Easement	—	1,837	—	—	1,837	—	1,837	—		12/5/2003	—
80	2810 Paa Street	Honolulu	HI	Hawaii Land and Easement	—	3,340	—	—	3,340	—	3,340	—		12/5/2003	—
81	2810 Pukoloa Street	Honolulu	HI	Hawaii Land and Easement	—	27,699	—	4	27,699	4	27,703	(4	)	12/5/2003	—
82	2812 Awaawaloa Street	Honolulu	HI	Hawaii Land and Easement	—	1,801	2	1	1,801	3	1,804	(2	)	12/5/2003	—
83	2814 Kilihau Street	Honolulu	HI	Hawaii Land and Easement	—	1,925	—	—	1,925	—	1,925	—		12/5/2003	—
84	2815 Kaihikapu Street	Honolulu	HI	Hawaii Land and Easement	—	1,818	—	5	1,818	5	1,823	(1	)	12/5/2003	—
85	2815 Kilihau Street	Honolulu	HI	Hawaii Land and Easement	—	287	—	—	287	—	287	—		12/5/2003	—
86	2816 Awaawaloa Street	Honolulu	HI	Hawaii Land and Easement	—	1,009	27	—	1,009	27	1,036	(10	)	12/5/2003	—
87	2819 Mokumoa Street - A	Honolulu	HI	Hawaii Land and Easement	—	1,821	—	—	1,821	—	1,821	—		12/5/2003	—
88	2819 Mokumoa Street - B	Honolulu	HI	Hawaii Land and Easement	—	1,816	—	—	1,816	—	1,816	—		12/5/2003	—
89	2819 Pukoloa Street	Honolulu	HI	Hawaii Land and Easement	—	2,090	—	33	2,090	33	2,123	(8	)	12/5/2003	—
90	2821 Kilihau Street	Honolulu	HI	Hawaii Land and Easement	—	287	—	—	287	—	287	—		12/5/2003	—

S-4

						Initial Cost to		Costs	Gross Amount Carried at
						Company		Capitalized	Close of Period(4)						Original
							Buildings and	Subsequent to		Buildings and		Accumulated		Date	Construction
	Property	Location	State	Property Type	Encumbrances(1)	Land	Equipment	Acquisition	Land	Equipment	Total(2)	Depreciation(3)		Acquired	Date
91	2826 Kaihikapu Street	Honolulu	HI	Hawaii Land and Easement	—	3,921	—	—	3,921	—	3,921	—		12/5/2003	—
92	2827 Kaihikapu Street	Honolulu	HI	Hawaii Land and Easement	—	1,801	—	—	1,801	—	1,801	—		12/5/2003	—
93	2828 Paa Street	Honolulu	HI	Hawaii Land and Easement	—	12,448	—	—	12,448	—	12,448	—		12/5/2003	—
94	2829 Awaawaloa Street	Honolulu	HI	Hawaii Land and Easement	—	1,720	2	—	1,720	2	1,722	(2	)	12/5/2003	—
95	2829 Kilihau Street	Honolulu	HI	Hawaii Land and Easement	—	287	—	—	287	—	287	—		12/5/2003	—
96	2829 Pukoloa Street	Honolulu	HI	Hawaii Land and Easement	—	2,088	—	—	2,088	—	2,088	—		12/5/2003	—
97	2830 Mokumoa Street	Honolulu	HI	Hawaii Land and Easement	—	2,146	—	—	2,146	—	2,146	—		12/5/2003	—
98	2831 Awaawaloa Street	Honolulu	HI	Hawaii Land and Easement	—	860	—	—	860	—	860	—		12/5/2003	—
99	2831 Kaihikapu Street	Honolulu	HI	Hawaii Land and Easement	—	1,272	529	56	1,272	585	1,857	(219	)	12/5/2003	—
100	2833 Kilihau Street	Honolulu	HI	Hawaii Land and Easement	—	601	—	—	601	—	601	—		12/5/2003	—
101	2833 Paa Street	Honolulu	HI	Hawaii Land and Easement	—	1,701	—	—	1,701	—	1,701	—		12/5/2003	—
102	2833 Paa Street #2	Honolulu	HI	Hawaii Land and Easement	—	1,675	—	—	1,675	—	1,675	—		12/5/2003	—
103	2836 Awaawaloa Street	Honolulu	HI	Hawaii Land and Easement	—	1,353	—	—	1,353	—	1,353	—		12/5/2003	—
104	2838 Kilihau Street	Honolulu	HI	Hawaii Land and Easement	—	4,262	—	—	4,262	—	4,262	—		12/5/2003	—
105	2839 Kilihau Street	Honolulu	HI	Hawaii Land and Easement	—	627	—	—	627	—	627	—		12/5/2003	—
106	2839 Mokumoa Street	Honolulu	HI	Hawaii Land and Easement	—	1,942	—	—	1,942	—	1,942	—		12/5/2003	—
107	2840 Mokumoa Street	Honolulu	HI	Hawaii Land and Easement	—	2,149	—	—	2,149	—	2,149	—		12/5/2003	—
108	2841 Pukoloa Street	Honolulu	HI	Hawaii Land and Easement	—	2,088	—	—	2,088	—	2,088	—		12/5/2003	—
109	2844 Kaihikapu Street	Honolulu	HI	Hawaii Land and Easement	—	1,960	14	—	1,960	14	1,974	(11	)	12/5/2003	—
110	2846-A Awaawaloa Street	Honolulu	HI	Hawaii Land and Easement	—	2,181	954	—	2,181	954	3,135	(359	)	12/5/2003	—
111	2847 Awaawaloa Street	Honolulu	HI	Hawaii Land and Easement	—	582	303	—	582	303	885	(114	)	12/5/2003	—
112	2849 Kaihikapu Street	Honolulu	HI	Hawaii Land and Easement	—	860	—	—	860	—	860	—		12/5/2003	—
113	2850 Awaawaloa Street	Honolulu	HI	Hawaii Land and Easement	—	286	173	—	286	173	459	(65	)	12/5/2003	—
114	2850 Mokumoa Street	Honolulu	HI	Hawaii Land and Easement	—	2,143	—	—	2,143	—	2,143	—		12/5/2003	—
115	2850 Paa Street	Honolulu	HI	Hawaii Land and Easement	—	22,827	—	—	22,827	—	22,827	—		12/5/2003	—
116	2855 Kaihikapu Street	Honolulu	HI	Hawaii Land and Easement	—	1,807	—	—	1,807	—	1,807	—		12/5/2003	—
117	2855 Pukoloa Street	Honolulu	HI	Hawaii Land and Easement	—	1,934	—	—	1,934	—	1,934	—		12/5/2003	—
118	2857 Awaawaloa Street	Honolulu	HI	Hawaii Land and Easement	—	983	—	—	983	—	983	—		12/5/2003	—
119	2858 Kaihikapu Street	Honolulu	HI	Hawaii Land and Easement	—	1,801	—	—	1,801	—	1,801	—		12/5/2003	—
120	2861 Mokumoa Street	Honolulu	HI	Hawaii Land and Easement	—	3,867	—	—	3,867	—	3,867	—		12/5/2003	—
121	2864 Awaawaloa Street	Honolulu	HI	Hawaii Land and Easement	—	1,836	—	6	1,836	6	1,842	(4	)	12/5/2003	—

S-5

						Initial Cost to		Costs	Gross Amount Carried at
						Company		Capitalized	Close of Period(4)						Original
							Buildings and	Subsequent to		Buildings and		Accumulated		Date	Construction
	Property	Location	State	Property Type	Encumbrances(1)	Land	Equipment	Acquisition	Land	Equipment	Total(2)	Depreciation(3)		Acquired	Date
122	2864 Mokumoa Street	Honolulu	HI	Hawaii Land and Easement	—	2,092	—	—	2,092	—	2,092	—		12/5/2003	—
123	2865 Pukoloa Street	Honolulu	HI	Hawaii Land and Easement	—	1,934	—	—	1,934	—	1,934	—		12/5/2003	—
124	2868 Kaihikapu Street	Honolulu	HI	Hawaii Land and Easement	—	1,801	—	—	1,801	—	1,801	—		12/5/2003	—
125	2869 Mokumoa Street	Honolulu	HI	Hawaii Land and Easement	—	1,794	—	—	1,794	—	1,794	—		12/5/2003	—
126	2875 Paa Street	Honolulu	HI	Hawaii Land and Easement	—	1,330	—	—	1,330	—	1,330	—		12/5/2003	—
127	2879 Mokumoa Street	Honolulu	HI	Hawaii Land and Easement	—	1,789	—	—	1,789	—	1,789	—		12/5/2003	—
128	2879 Paa Street	Honolulu	HI	Hawaii Land and Easement	—	1,691	—	44	1,691	44	1,735	(11	)	12/5/2003	—
129	2886 Paa Street	Honolulu	HI	Hawaii Land and Easement	—	2,205	—	—	2,205	—	2,205	—		12/5/2003	—
130	2889 Mokumoa Street	Honolulu	HI	Hawaii Land and Easement	—	1,783	—	—	1,783	—	1,783	—		12/5/2003	—
131	2906 Kaihikapu Street	Honolulu	HI	Hawaii Land and Easement	—	1,814	2	—	1,814	2	1,816	(1	)	12/5/2003	—
132	2908 Kaihikapu Street	Honolulu	HI	Hawaii Land and Easement	—	1,798	12	—	1,798	12	1,810	(1	)	12/5/2003	—
133	2915 Kaihikapu Street	Honolulu	HI	Hawaii Land and Easement	—	2,579	—	—	2,579	—	2,579	—		12/5/2003	—
134	2927 Mokumoa Street	Honolulu	HI	Hawaii Land and Easement	—	1,778	—	—	1,778	—	1,778	—		12/5/2003	—
135	2928 Kaihikapu Street - A	Honolulu	HI	Hawaii Land and Easement	—	1,801	—	—	1,801	—	1,801	—		12/5/2003	—
136	2928 Kaihikapu Street - B	Honolulu	HI	Hawaii Land and Easement	—	1,948	—	—	1,948	—	1,948	—		12/5/2003	—
137	2960 Mokumoa Street	Honolulu	HI	Hawaii Land and Easement	—	1,977	—	—	1,977	—	1,977	—		12/5/2003	—
138	2965 Mokumoa Street	Honolulu	HI	Hawaii Land and Easement	—	2,140	—	—	2,140	—	2,140	—		12/5/2003	—
139	2969 Mapunapuna Street	Honolulu	HI	Hawaii Land and Easement	—	4,038	15	—	4,038	15	4,053	(8	)	12/5/2003	—
140	2970 Mokumoa Street	Honolulu	HI	Hawaii Land and Easement	—	1,722	—	—	1,722	—	1,722	—		12/5/2003	—
141	33 S. Vineyard Boulevard	Honolulu	HI	Hawaii Land and Easement	—	844	—	—	844	—	844	—		12/5/2003	—
142	525 N. King Street	Honolulu	HI	Hawaii Land and Easement	—	1,342	—	—	1,342	—	1,342	—		12/5/2003	—
143	609 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—	616	—	8	616	8	624	(6	)	12/5/2003	—
144	619 Mapunapuna Street	Honolulu	HI	Hawaii Land and Easement	—	1,401	2	12	1,401	14	1,415	(1	)	12/5/2003	—
145	645 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—	882	—	—	882	—	882	—		12/5/2003	—
146	659 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—	860	20	—	860	20	880	(16	)	12/5/2003	—
147	659 Puuloa Road	Honolulu	HI	Hawaii Land and Easement	—	1,807	—	—	1,807	—	1,807	—		12/5/2003	—
148	660 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—	1,783	3	1	1,783	4	1,787	(3	)	12/5/2003	—
149	667 Puuloa Road	Honolulu	HI	Hawaii Land and Easement	—	860	2	—	860	2	862	(2	)	12/5/2003	—
150	669 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—	1,801	14	62	1,801	76	1,877	(18	)	12/5/2003	—
151	673 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—	1,801	—	—	1,801	—	1,801	—		12/5/2003	—
152	675 Mapunapuna Street	Honolulu	HI	Hawaii Land and Easement	—	1,081	—	—	1,081	—	1,081	—		12/5/2003	—

S-6

						Initial Cost to		Costs	Gross Amount Carried at
						Company		Capitalized	Close of Period(4)						Original
							Buildings and	Subsequent to		Buildings and		Accumulated		Date	Construction
	Property	Location	State	Property Type	Encumbrances(1)	Land	Equipment	Acquisition	Land	Equipment	Total(2)	Depreciation(3)		Acquired	Date
153	679 Puuloa Road	Honolulu	HI	Hawaii Land and Easement	—	1,807	3	—	1,807	3	1,810	(2	)	12/5/2003	—
154	685 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—	1,801	—	—	1,801	—	1,801	—		12/5/2003	—
155	673 Mapunapuna Street	Honolulu	HI	Hawaii Land and Easement	—	1,801	20	—	1,801	20	1,821	(16	)	12/5/2003	—
156	692 Mapunapuna Street	Honolulu	HI	Hawaii Land and Easement	—	1,798	—	—	1,798	—	1,798	—		12/5/2003	—
157	697 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—	994	811	—	994	811	1,805	(307	)	12/5/2003	—
158	702 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—	1,783	4	—	1,783	4	1,787	(3	)	12/5/2003	—
159	704 Mapunapuna Street	Honolulu	HI	Hawaii Land and Easement	—	2,390	685	—	2,390	685	3,075	(258	)	12/5/2003	—
160	709 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—	1,801	—	—	1,801	—	1,801	—		12/5/2003	—
161	719 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—	1,960	—	—	1,960	—	1,960	—		12/5/2003	—
162	729 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—	1,801	—	—	1,801	—	1,801	—		12/5/2003	—
163	733 Mapunapuna Street	Honolulu	HI	Hawaii Land and Easement	—	3,403	—	—	3,403	—	3,403	—		12/5/2003	—
164	739 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—	1,801	—	—	1,801	—	1,801	—		12/5/2003	—
165	759 Puuloa Road	Honolulu	HI	Hawaii Land and Easement	—	1,766	3	—	1,766	3	1,769	(3	)	12/5/2003	—
166	761 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—	3,757	1	1	3,757	2	3,759	(1	)	12/5/2003	—
167	766 Mapunapuna Street	Honolulu	HI	Hawaii Land and Easement	—	1,801	—	—	1,801	—	1,801	—		12/5/2003	—
168	770 Mapunapuna Street	Honolulu	HI	Hawaii Land and Easement	—	1,801	—	—	1,801	—	1,801	—		12/5/2003	—
169	789 Mapunapuna Street	Honolulu	HI	Hawaii Land and Easement	—	2,608	3	—	2,608	3	2,611	(2	)	12/5/2003	—
170	80 Sand Island Access Road	Honolulu	HI	Hawaii Land and Easement	—	7,972	—	—	7,972	—	7,972	—		12/5/2003	—
171	803 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—	3,804	—	—	3,804	—	3,804	—		12/5/2003	—
172	808 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—	3,279	—	—	3,279	—	3,279	—		12/5/2003	—
173	812 Mapunapuna Street	Honolulu	HI	Hawaii Land and Easement	—	1,960	25	628	2,613	—	2,613	—		12/5/2003	—
174	819 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—	4,821	583	30	4,821	613	5,434	(230	)	12/5/2003	—
175	822 Mapunapuna Street	Honolulu	HI	Hawaii Land and Easement	—	1,795	15	—	1,795	15	1,810	(12	)	12/5/2003	—
176	830 Mapunapuna Street	Honolulu	HI	Hawaii Land and Easement	—	1,801	25	—	1,801	25	1,826	(20	)	12/5/2003	—
177	841 Mapunapuna Street	Honolulu	HI	Hawaii Land and Easement	—	3,265	—	—	3,265	—	3,265	—		12/5/2003	—
178	842 Mapunapuna Street	Honolulu	HI	Hawaii Land and Easement	—	1,795	14	—	1,795	14	1,809	(11	)	12/5/2003	—
179	846 Ala Lilikoi Boulevard B	Honolulu	HI	Hawaii Land and Easement	—	234	—	—	234	—	234	—		12/5/2003	—
180	848 Ala Lilikoi Boulevard A	Honolulu	HI	Hawaii Land and Easement	—	9,426	—	—	9,426	—	9,426	—		12/5/2003	—
181	850 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—	2,682	2	—	2,682	2	2,684	(2	)	12/5/2003	—
182	852 Mapunapuna Street	Honolulu	HI	Hawaii Land and Easement	—	1,801	—	—	1,801	—	1,801	—		12/5/2003	—
183	855 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—	1,834	—	—	1,834	—	1,834	—		12/5/2003	—

S-7

						Initial Cost to		Costs	Gross Amount Carried at
						Company		Capitalized	Close of Period(4)						Original
							Buildings and	Subsequent to		Buildings and		Accumulated		Date	Construction
	Property	Location	State	Property Type	Encumbrances(1)	Land	Equipment	Acquisition	Land	Equipment	Total(2)	Depreciation(3)		Acquired	Date
184	865 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—	1,846	—	—	1,846	—	1,846	—		12/5/2003	—
185	889 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—	5,888	315	—	5,888	315	6,203	(48	)	11/21/2012	—
186	905 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—	1,148	—	—	1,148	—	1,148	—		12/5/2003	—
187	918 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—	3,820	—	—	3,820	—	3,820	—		12/5/2003	—
188	930 Mapunapuna Street	Honolulu	HI	Hawaii Land and Easement	—	3,654	—	—	3,654	—	3,654	—		12/5/2003	—
189	944 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—	1,219	—	—	1,219	—	1,219	—		12/5/2003	—
190	949 Mapunapuna Street	Honolulu	HI	Hawaii Land and Easement	—	11,568	—	—	11,568	—	11,568	—		12/5/2003	—
191	950 Mapunapuna Street	Honolulu	HI	Hawaii Land and Easement	—	1,724	—	—	1,724	—	1,724	—		12/5/2003	—
192	960 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—	614	—	—	614	—	614	—		12/5/2003	—
193	960 Mapunapuna Street	Honolulu	HI	Hawaii Land and Easement	—	1,933	—	—	1,933	—	1,933	—		12/5/2003	—
194	970 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—	817	—	—	817	—	817	—		12/5/2003	—
195	91-027 Kaomi Loop	Kapolei	HI	Hawaii Land and Easement	—	2,667	—	—	2,667	—	2,667	—		6/15/2005	—
196	91-064 Kaomi Loop	Kapolei	HI	Hawaii Land and Easement	—	1,826	—	—	1,826	—	1,826	—		6/15/2005	—
197	91-080 Hanua	Kapolei	HI	Hawaii Land and Easement	—	2,187	—	—	2,187	—	2,187	—		6/15/2005	—
198	91-083 Hanua	Kapolei	HI	Hawaii Land and Easement	—	716	—	—	716	—	716	—		6/15/2005	—
199	91-086 Kaomi Loop	Kapolei	HI	Hawaii Land and Easement	—	13,884	—	—	13,884	—	13,884	—		6/15/2005	—
200	91-087 Hanua	Kapolei	HI	Hawaii Land and Easement	—	381	—	—	381	—	381	—		6/15/2005	—
201	91-091 Hanua	Kapolei	HI	Hawaii Land and Easement	—	552	—	—	552	—	552	—		6/15/2005	—
202	91-102 Kaomi Loop	Kapolei	HI	Hawaii Land and Easement	—	1,599	—	—	1,599	—	1,599	—		6/15/2005	—
203	91-110 Kaomi Loop	Kapolei	HI	Hawaii Land and Easement	—	1,293	—	—	1,293	—	1,293	—		6/15/2005	—
204	91-119 Olai	Kapolei	HI	Hawaii Land and Easement	—	1,981	—	—	1,981	—	1,981	—		6/15/2005	—
205	91-141 Kalaeloa	Kapolei	HI	Hawaii Land and Easement	—	11,624	—	—	11,624	—	11,624	—		6/15/2005	—
206	91-150 Kaomi Loop	Kapolei	HI	Hawaii Land and Easement	—	3,159	—	—	3,159	—	3,159	—		6/15/2005	—
207	91-171 Olai	Kapolei	HI	Hawaii Land and Easement	—	218	—	47	218	47	265	(17	)	6/15/2005	—
208	91-174 Olai	Kapolei	HI	Hawaii Land and Easement	—	962	—	47	962	47	1,009	(16	)	6/15/2005	—
209	91-175 Olai	Kapolei	HI	Hawaii Land and Easement	—	1,243	—	43	1,243	43	1,286	(17	)	6/15/2005	—
210	91-185 Kalaeloa	Kapolei	HI	Hawaii Land and Easement	—	1,761	—	—	1,761	—	1,761	—		6/15/2005	—
211	91-202 Kalaeloa	Kapolei	HI	Hawaii Building	—	1,722	—	326	1,722	326	2,048	(45	)	6/15/2005	1964
212	91-210 Kauhi	Kapolei	HI	Hawaii Land and Easement	—	567	—	—	567	—	567	—		6/15/2005	—
213	91-210 Olai	Kapolei	HI	Hawaii Land and Easement	—	706	—	—	706	—	706	—		6/15/2005	—
214	91-218 Olai	Kapolei	HI	Hawaii Land and Easement	—	1,622	—	61	1,622	61	1,683	(17	)	6/15/2005	—

S-8

						Initial Cost to		Costs	Gross Amount Carried at
						Company		Capitalized	Close of Period(4)						Original
							Buildings and	Subsequent to		Buildings and		Accumulated		Date	Construction
	Property	Location	State	Property Type	Encumbrances(1)	Land	Equipment	Acquisition	Land	Equipment	Total(2)	Depreciation(3)		Acquired	Date
215	91-220 Kalaeloa	Kapolei	HI	Hawaii Building	—	242	1,457	172	242	1,629	1,871	(537	)	6/15/2005	1991
216	91-222 Olai	Kapolei	HI	Hawaii Land and Easement	—	2,035	—	—	2,035	—	2,035	—		6/15/2005	—
217	91-238 Kauhi	Kapolei	HI	Hawaii Building	—	1,390	—	9,209	1,390	9,209	10,599	(2,606	)	6/15/2005	1981
218	91-241 Kalaeloa	Kapolei	HI	Hawaii Building	—	426	3,983	838	426	4,821	5,247	(1,576	)	6/15/2005	1990
219	91-250 Komohana	Kapolei	HI	Hawaii Land and Easement	—	1,506	—	—	1,506	—	1,506	—		6/15/2005	—
220	91-252 Kauhi	Kapolei	HI	Hawaii Land and Easement	—	536	—	—	536	—	536	—		6/15/2005	—
221	91-255 Hanua	Kapolei	HI	Hawaii Land and Easement	—	1,230	—	16	1,230	16	1,246	(1	)	6/15/2005	—
222	91-259 Olai	Kapolei	HI	Hawaii Land and Easement	—	2,944	—	—	2,944	—	2,944	—		6/15/2005	—
223	91-265 Hanua	Kapolei	HI	Hawaii Land and Easement	—	1,569	—	—	1,569	—	1,569	—		6/15/2005	—
224	91-300 Hanua	Kapolei	HI	Hawaii Land and Easement	—	1,381	—	—	1,381	—	1,381	—		6/15/2005	—
225	91-329 Kauhi	Kapolei	HI	Hawaii Building	—	294	2,297	2,433	294	4,730	5,024	(1,342	)	6/15/2005	1980
226	91-349 Kauhi	Kapolei	HI	Hawaii Land and Easement	—	649	—	—	649	—	649	—		6/15/2005	—
227	91-399 Kauhi	Kapolei	HI	Hawaii Land and Easement	—	27,405	—	—	27,405	—	27,405	—		6/15/2005	—
228	91-400 Komohana	Kapolei	HI	Hawaii Land and Easement	—	1,494	—	—	1,494	—	1,494	—		6/15/2005	—
229	91-410 Komohana	Kapolei	HI	Hawaii Land and Easement	—	418	—	12	418	12	430	(1	)	6/15/2005	—
230	91-416 Komohana	Kapolei	HI	Hawaii Land and Easement	—	713	—	11	713	11	724	(1	)	6/15/2005	—
231	AES HI Easement	Kapolei	HI	Hawaii Land and Easement	—	1,250	—	—	1,250	—	1,250	—		6/15/2005	—
232	Other Easements & Lots	Kapolei	HI	Hawaii Land and Easement	—	358	—	1,395	358	1,395	1,753	(353	)	6/15/2005	—
233	Tesaro 967 Easement	Kapolei	HI	Hawaii Land and Easement	—	6,593	—	—	6,593	—	6,593	—		6/15/2005	—
234	Texaco Easement	Kapolei	HI	Hawaii Land and Easement	—	2,653	—	—	2,653	—	2,653	—		6/15/2005	—
235	94-240 Pupuole Street	Waipahu	HI	Hawaii Land and Easement	—	717	—	—	717	—	717	—		12/5/2003	—
236	5500 SE Delaware Avenue	Ankeny	IA	Mainland Industrial	—	2,200	16,994	1,007	2,707	17,494	20,201	(1,664	)	1/29/2015	2012
237	951 Trails Road	Eldridge	IA	Mainland Industrial	—	470	7,480	874	470	8,354	8,824	(2,340	)	4/2/2007	1994
238	2300 North 33rd Avenue East	Newton	IA	Mainland Industrial	—	500	13,236	395	500	13,631	14,131	(3,517	)	9/29/2008	2008
239	7121 South Fifth Avenue	Pocatello	ID	Mainland Industrial	—	400	4,201	145	400	4,346	4,746	(419	)	1/29/2015	2007
240	1230 West 171st Street	Harvey	IL	Mainland Industrial	—	800	1,673	—	800	1,673	2,473	(164	)	1/29/2015	2004
241	5156 American Road	Rockford	IL	Mainland Industrial	—	400	1,529	82	400	1,611	2,011	(151	)	1/29/2015	1996
242	17200 Manchac Park Lane	Baton Rouge	LA	Mainland Industrial	—	1,700	8,860	—	1,700	8,860	10,560	(868	)	1/29/2015	2014
243	209 South Bud Street	Lafayette	LA	Mainland Industrial	—	700	4,549	9	700	4,558	5,258	(446	)	1/29/2015	2010
244	4000 Principio Parkway	North East	MD	Mainland Industrial	—	4,200	71,518	650	4,200	72,168	76,368	(7,018	)	1/29/2015	2012
245	16101 Queens Court	Upper Marlboro	MD	Mainland Industrial	—	5,296	21,833	—	5,296	21,833	27,129	(137	)	9/28/2018	2016
246	3800 Midlink Drive	Kalamazoo	MI	Mainland Industrial	—	2,630	40,599	—	2,630	40,599	43,229	(3,975	)	1/29/2015	2014

S-9

							Initial Cost to				Costs		Gross Amount Carried at
							Company				Capitalized		Close of Period(4)										Original
									Buildings and		Subsequent to				Buildings and				Accumulated			Date	Construction
	Property	Location	State	Property Type	Encumbrances(1)		Land		Equipment		Acquisition		Land		Equipment		Total(2)		Depreciation(3)			Acquired	Date
247	2401 Cram Avenue SE	Bemidji	MN	Mainland Industrial	—		100		2,137		—		100		2,137		2,237		(209		)	1/29/2015	2013
248	10100 89th Avenue N	Maple Grove	MN	Mainland Industrial	—		3,469		21,287		—		3,469		21,287		24,756		(89		)	10/16/2018	2015
249	110 Stanbury Industrial Drive	Brookfield	MO	Mainland Industrial	—		200		1,859		—		200		1,859		2,059		(182		)	1/29/2015	2012
250	628 Patton Avenue	Asheville	NC	Mainland Industrial	—		500		1,514		—		500		1,514		2,014		(148		)	1/29/2015	1994
251	3900 NE 6th Street	Minot	ND	Mainland Industrial	—		700		3,223		—		700		3,223		3,923		(316		)	1/29/2015	2013
252	1415 West Commerce Way	Lincoln	NE	Mainland Industrial	—		2,200		8,518		—		2,200		8,518		10,718		(834		)	1/29/2015	1971
253	309 Dulty's Lane	Burlington	NJ	Mainland Industrial	—		1,600		51,400		—		1,600		51,400		53,000		(5,033		)	1/29/2015	2001
254	725 Darlington Avenue	Mahwah	NJ	Mainland Industrial	—		8,492		9,451		1,047		8,492		10,498		18,990		(1,179		)	4/9/2014	1999
255	2375 East Newlands Road	Fernley	NV	Mainland Industrial	—		1,100		17,314		286		1,100		17,600		18,700		(1,732		)	1/29/2015	2007
256	55 Commerce Avenue	Albany	NY	Mainland Industrial	—		1,000		10,105		179		1,000		10,284		11,284		(1,012		)	1/29/2015	2013
257	32150 Just Imagine Drive	Avon	OH	Mainland Industrial	—		2,200		23,280		—		2,200		23,280		25,480		(5,577		)	5/29/2009	1996
258	1415 Industrial Drive	Chillicothe	OH	Mainland Industrial	—		1,200		3,265		—		1,200		3,265		4,465		(320		)	1/29/2015	2012
259	5300 Centerpoint Parkway	Groveport	OH	Mainland Industrial	—		2,700		29,863		—		2,700		29,863		32,563		(2,924		)	1/29/2015	2014
260	200 Orange Point Drive	Lewis Center	OH	Mainland Industrial	—		1,300		8,613		162		1,300		8,775		10,075		(849		)	1/29/2015	2013
261	301 Commerce Drive	South Point	OH	Mainland Industrial	—		600		4,530		—		600		4,530		5,130		(444		)	1/29/2015	2013
262	2820 State Highway 31	McAlester	OK	Mainland Industrial	—		581		2,237		4,633		581		6,870		7,451		(365		)	1/29/2015	2012
263	5 Logistics Drive	Carlisle	PA	Mainland Industrial	—		3,299		15,515		—		3,299		15,515		18,814		(97		)	9/20/2018	2016
264	996 Paragon Way	Rock Hill	SC	Mainland Industrial	—		2,600		35,920		—		2,600		35,920		38,520		(3,517		)	1/29/2015	2014
265	510 John Dodd Road	Spartanburg	SC	Mainland Industrial	—		3,300		57,998		42		3,300		58,040		61,340		(5,680		)	1/29/2015	2012
266	4836 Hickory Hill Road	Memphis	TN	Mainland Industrial	—		1,402		10,769		750		1,402		11,519		12,921		(1,129		)	12/23/2014	1984
267	2020 Joe B. Jackson Parkway	Murfreesboro	TN	Mainland Industrial	—		7,500		55,259		—		7,500		55,259		62,759		(5,411		)	1/29/2015	2012
268	1095 South 4800 West	Salt Lake City	UT	Mainland Industrial	—		1,500		6,913		—		1,500		6,913		8,413		(677		)	1/29/2015	2012
269	1901 Meadowville Technology Parkway	Chester	VA	Mainland Industrial	49,195		4,000		67,511		—		4,000		67,511		71,511		(6,610		)	1/29/2015	2012
270	181 Battaile Drive	Winchester	VA	Mainland Industrial	—		1,487		12,854		11		1,487		12,865		14,352		(4,086		)	4/20/2006	1987
					$	49,195	$	669,341	$	751,735	$	41,320	$	670,501	$	791,895	$	1,462,396	$	(93,291	)

(1) Represents mortgage debt and includes the unamortized balance of the fair value adjustment totaling $445.

(2) Excludes value of real estate intangibles.

(3) Depreciation on buildings and improvements is provided for periods ranging up to 40 years and on equipment up to seven years.

(4) The total aggregate cost for U.S. federal income tax purposes is approximately $1,523,930.

S-10

INDUSTRIAL LOGISTICS PROPERTIES TRUST

SCHEDULE III

REAL ESTATE AND ACCUMULATED DEPRECIATION (CONTINUED)

December 31, 2018

(dollars in thousands)

Analysis of the carrying amount of real estate properties and accumulated depreciation:

	Real Estate			Accumulated
	Properties			Depreciation
Balance at December 31, 2015	$	1,335,363		$	(39,707	)
Additions	1,659			(17,563		)
Disposals	(294		)	294
Balance at December 31, 2016	1,336,728			(56,976		)
Additions	6,974			(17,738		)
Disposals	(100		)	100
Balance at December 31, 2017	1,343,602			(74,614		)
Additions	118,898			(18,781		)
Disposals	(104		)	104
Balance at December 31, 2018	$	1,462,396		$	(93,291	)

S-11

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

INDUSTRIAL LOGISTICS PROPERTIES TRUST
By:	/s/ John G. Murray
	John G. Murray President and Chief Executive Officer
	Dated: February 20, 2019

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

	Signature		Title		Date
/s/ John G. Murray		Managing Trustee, President and Chief Executive Officer		February 20, 2019
John G. Murray
/s/ Richard W. Siedel, Jr.		Chief Financial Officer and Treasurer (principal		February 20, 2019
Richard W. Siedel, Jr.		financial officer and principal accounting officer)
/s/ Adam D. Portnoy		Managing Trustee		February 20, 2019
Adam D. Portnoy
/s/ Bruce M. Gans, M.D.		Independent Trustee		February 20, 2019
Bruce M. Gans, M.D.
/s/ Lisa Harris Jones		Independent Trustee		February 20, 2019
Lisa Harris Jones
/s/ Joseph L. Morea		Independent Trustee		February 20, 2019
Joseph L. Morea

EX-8.1

Exhibit 8.1

February 20, 2019

Industrial Logistics Properties Trust

Two Newton Place

255 Washington Street, Suite 300

Newton, Massachusetts 02458

Ladies and Gentlemen:

The following opinion is furnished to Industrial Logistics Properties Trust, a Maryland real estate investment trust (the “Company”), to be filed with the Securities and Exchange Commission (the “SEC”) as Exhibit 8.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 (the “Form 10-K”) under the Securities Exchange Act of 1934, as amended.

We have acted as counsel for the Company in connection with the preparation of the Form 10-K. We have reviewed originals or copies of such corporate records, such certificates and statements of officers of the Company and of public officials, and such other documents as we have considered relevant and necessary in order to furnish the opinion hereinafter set forth. In doing so, we have assumed the genuineness of all signatures, the legal capacity of natural persons, the authenticity of all documents submitted to us as originals, the conformity to original documents of all documents submitted to us as copies, and the authenticity of the originals of such documents. Specifically, and without limiting the generality of the foregoing, we have reviewed: (i) the Company’s amended and restated declaration of trust and its amended and restated bylaws; and (ii) the Form 10-K. For purposes of the opinion set forth below, we have assumed that any documents (other than documents which have been executed, delivered, adopted or filed, as applicable, by the Company prior to the date hereof) that have been provided to us in draft form will be executed, delivered, adopted and filed, as applicable, without material modification.

The opinion set forth below is based upon the Internal Revenue Code of 1986, as amended, the Treasury regulations issued thereunder, published administrative interpretations thereof, and judicial decisions with respect thereto, all as of the date hereof (collectively, “Tax Laws”), and upon the Employee Retirement Income Security Act of 1974, as amended, the Department of Labor regulations issued thereunder, published administrative interpretations thereof, and judicial decisions with respect thereto, all as of the date hereof (collectively, “ERISA Laws”). No assurance can be given that Tax Laws or ERISA Laws will not change. In the discussions with respect to

Industrial Logistics Properties Trust

February 20, 2019

Page 2

Tax Laws matters and ERISA Laws matters in the sections of Item 1 of the Form 10-K captioned “Material United States Federal Income Tax Considerations” and “ERISA Plans, Keogh Plans and Individual Retirement Accounts”, certain assumptions have been made therein and certain conditions and qualifications have been expressed therein, all of which assumptions, conditions and qualifications are incorporated herein by reference. With respect to all questions of fact on which our opinion is based, we have assumed the initial and continuing truth, accuracy and completeness of: (i) the information set forth in the Form 10-K and in the exhibits thereto; and (ii) representations made to us by officers of the Company or contained in the Form 10-K and in the exhibits thereto, in each such instance without regard to qualifications such as “to the best knowledge of” or “in the belief of”. We have not independently verified such information.

We have relied upon, but not independently verified, the foregoing assumptions. If any of the foregoing assumptions are inaccurate or incomplete for any reason, or if the transactions described in the Form 10-K or in the exhibits thereto have been or are consummated in a manner that is inconsistent with the manner contemplated therein, our opinion as expressed below may be adversely affected and may not be relied upon.

Based upon and subject to the foregoing: (i) we are of the opinion that the discussions with respect to Tax Laws matters and ERISA Laws matters in the sections of Item 1 of the Form 10-K captioned “Material United States Federal Income Tax Considerations” and “ERISA Plans, Keogh Plans and Individual Retirement Accounts” in all material respects are, subject to the limitations set forth therein, the material Tax Laws considerations and the material ERISA Laws considerations relevant to holders of the securities of the Company discussed therein (the “Securities”); and (ii) we hereby confirm that the opinions of counsel referred to in said sections represent our opinions on the subject matters thereof.

Our opinion above is limited to the matters specifically covered hereby, and we have not been asked to address, nor have we addressed, any other matters or any other transactions. Further, we disclaim any undertaking to advise you of any subsequent changes of the matters stated, represented or assumed herein or any subsequent changes in Tax Laws or ERISA Laws.

This opinion is rendered to you in connection with the filing of the Form 10-K. Purchasers and holders of the Securities are urged to consult their own tax advisors or counsel, particularly with respect to their particular tax consequences of acquiring, holding and disposing of the Securities, which may vary for investors in different tax situations. We hereby consent to the filing of a copy of this opinion as an exhibit to the Form 10-K and to the references to our firm in the Form 10-K. In giving such consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, as amended, or under the rules and regulations of the SEC promulgated thereunder.

Very truly yours,

/s/ Sullivan & Worcester LLP

SULLIVAN & WORCESTER LLP

EX-10.8

Exhibit 10.8

INDUSTRIAL LOGISTICS PROPERTIES TRUST
FORM OF INDEMNIFICATION AGREEMENT

THIS INDEMNIFICATION AGREEMENT (this “Agreement”), effective as of [DATE] (the “Effective Date”), by and between Industrial Logistics Properties Trust, a Maryland real estate investment trust (the “Company”), and [TRUSTEE/OFFICER] (“Indemnitee”).

WHEREAS, Indemnitee currently serves as a trustee and/or executive officer of the Company and may, in connection therewith, be subjected to claims, suits or proceedings arising from such service; and

WHEREAS, as an inducement to Indemnitee to serve as [a/the] [title(s)] of the Company, the Company has agreed to indemnify and to advance expenses and costs incurred by Indemnitee in connection with any such claims, suits or proceedings, to the maximum extent permitted by law as hereinafter provided; and

WHEREAS, the parties by this Agreement desire to set forth their agreement regarding indemnification and advance of expenses;

NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

Section 1.Definitions.  For purposes of this Agreement:

(a) “Board” means the board of trustees of the Company.

(b)“Bylaws” means the bylaws of the Company, as they may be amended from time to time.

(c)“Change in Control” means a change in control of the Company occurring after the Effective Date of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or in response to any similar item on any similar schedule or form) promulgated under the Securities Exchange Act of 1934, as amended (the “Act”), whether or not the Company is then subject to such reporting requirement; provided, however, that, without limitation, such a Change in Control shall be deemed to have occurred if after the Effective Date:

(i)any “person” (as such term is used in Sections 13(d) and 14(d) of the Act) is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Act), directly or indirectly, of securities of the Company representing 10% or more of the combined voting power of all the Company’s then-outstanding securities entitled to vote generally in the election of trustees without the prior approval of at least two-thirds of the members of the Board in office immediately prior to such person attaining such percentage interest;

(ii)there occurs a proxy contest, or the Company is a party to a merger, consolidation, sale of assets, plan of liquidation or other reorganization not approved by at least two-thirds of the members of the Board then in office, as a consequence of which members of the Board in office immediately prior to such transaction or event constitute less than a majority of the Board thereafter; or

(iii)during any period of two consecutive years, other than as a result of an event described in clause (a)(ii) of this Section 1, individuals who at the beginning of such period constituted the Board (including for this purpose any new trustee whose election or nomination for election by the Company’s shareholders was approved by a vote of at least two-thirds of the trustees then still in office who were trustees at the beginning of such period) cease for any reason to constitute at least a majority of the Board.

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(d)“Company Status” means the status of a Person who is or was a trustee, director, officer, employee, agent or fiduciary of the Company or any of its majority owned subsidiaries and the status of a Person who, while a trustee, director, officer, employee, agent or fiduciary of the Company or any of its majority owned subsidiaries, is or was serving at the request of the Company as a director, trustee, officer, partner, manager or fiduciary of another corporation, real estate investment trust, partnership, limited liability company, joint venture, trust, employee benefit plan or any other Enterprise.

(e)“Control” of an entity, shall mean the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of such entity, whether through ownership of voting securities, by contract or otherwise.

(f)“Declaration of Trust” means the declaration of trust (as defined in the Maryland REIT Law) of the Company, as it may be in effect from time to time.

(g)“Disinterested Trustee” means a trustee of the Company who is not and was not a party to the Proceeding in respect of which indemnification or advance of Expenses is sought by Indemnitee.

(h)“Enterprise” shall mean the Company and any other corporation, real estate investment trust, partnership, limited liability company, joint venture, trust, employee benefit plan or other enterprise that Indemnitee is or was serving at the express written request of the Company as a director, trustee, officer, partner, manager or fiduciary.

(i)“Expenses”  means all expenses, including, but not limited to, all attorneys’ fees and costs, retainers, court or arbitration costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, participating, or being or preparing to be a witness in a Proceeding, or responding to, or objecting to, a request to provide discovery in any Proceeding.  Expenses also shall include Expenses incurred in connection with any appeal resulting from any Proceeding, including without limitation the premium, security for, and other costs relating to any cost bond or other appeal bond or its equivalent.

(j)“Independent Counsel” means a law firm, or a member of a law firm, selected by the Company and acceptable to the Indemnitee, that is experienced in matters of business law.  If, within twenty (20) days after submission by Indemnitee of a written demand for indemnification pursuant to Section 7(a) hereof, no Independent Counsel shall have been selected and agreed to by Indemnitee, either the Company or Indemnitee may petition a Chosen Court for the appointment as Independent Counsel of a person selected by the court or by such other person as the court shall designate, and the person so appointed shall act as Independent Counsel hereunder.

(k)“MGCL” means the Maryland General Corporation Law.

(l)“Maryland REIT Law” means Title 8 of the Corporations and Associations Article of the Annotated Code of Maryland.

(m)“Person” means an individual, a corporation, a general or limited partnership, an association, a limited liability company, a governmental entity, a trust, a joint venture, a joint stock company or another entity or organization.

(n)“Proceeding” means any threatened, pending or completed claim, demand, action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other proceeding, whether civil, criminal, administrative or investigative (including on appeal), whether or not by or in the right of the Company, except one initiated by an Indemnitee pursuant to Section 9.

Section 2.Indemnification - General.  The Company shall indemnify, and advance Expenses to, Indemnitee (a) as provided in this Agreement and (b) otherwise to the maximum extent permitted by Maryland law in effect on the Effective Date and as amended from time to time; provided, however, that no change in Maryland law shall

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have the effect of reducing the benefits available to Indemnitee hereunder based on Maryland law as in effect on the Effective Date.  The rights of Indemnitee provided in this Section 2 shall include, without limitation, the rights set forth in the other sections of this Agreement, including any additional indemnification permitted by Section 2-418(g) of the MGCL, as applicable to a Maryland real estate investment trust by virtue of Section 8-301(15) of the Maryland REIT Law.

Section 3.Proceedings Other Than Derivative Proceedings by or in the Right of the Company.  Indemnitee shall be entitled to the rights of indemnification provided in this Section 3 if, by reason of Indemnitee’s Company Status, Indemnitee is, or is threatened to be, made a party to any Proceeding, other than a derivative Proceeding by or in the right of the Company (or, if applicable, such other Enterprise at which Indemnitee is or was serving at the request of the Company).  Pursuant to this Section 3, Indemnitee shall be indemnified against all judgments, penalties, fines and amounts paid in settlement and all Expenses incurred by Indemnitee or on Indemnitee’s behalf in connection with a Proceeding by reason of Indemnitee’s Company Status unless it is finally determined that such indemnification is not permitted by the MGCL.

Section 4.Derivative Proceedings by or in the Right of the Company.  Indemnitee shall be entitled to the rights of indemnification provided in this Section 4 if, by reason of Indemnitee’s Company Status, Indemnitee is, or is threatened to be, made a party to any derivative Proceeding brought by or in the right of the Company (or, if applicable, such other Enterprise at which Indemnitee is or was serving at the request of the Company).  Pursuant to this Section 4, Indemnitee shall be indemnified against all judgments, penalties, fines and amounts paid in settlement and all Expenses incurred by Indemnitee or on Indemnitee’s behalf in connection with such Proceeding unless it is finally determined that such indemnification is not permitted by the MGCL.

Section 5.Indemnification for Expenses of a Party Who is Partly Successful.  Without limitation on Section 3 or Section 4, if Indemnitee is not wholly successful in any Proceeding covered by this Agreement, but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee under this Section 5 for all Expenses incurred by Indemnitee or on Indemnitee’s behalf in connection with each successfully resolved claim, issue or matter, allocated on a reasonable and proportionate basis.  For purposes of this Section 5 and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

Section 6.Advance of Expenses.  The Company, without requiring a preliminary determination of Indemnitee’s ultimate entitlement to indemnification hereunder, shall advance all Expenses incurred by or on behalf of Indemnitee in connection with any Proceeding in which Indemnitee may be involved, or is threatened to be involved, including as a party, a witness or otherwise, by reason of Indemnitee’s Company Status, within ten (10) days after the receipt by the Company of a statement or statements from Indemnitee requesting such advance or advances from time to time, whether prior to or after final disposition of such Proceeding.  Such statement or statements shall reasonably evidence the Expenses incurred by Indemnitee and shall be preceded or accompanied by a written affirmation by Indemnitee of Indemnitee’s good faith belief that the standard of conduct necessary for indemnification by the Company as authorized by the MGCL has been met and a written undertaking by or on behalf of Indemnitee, in substantially the form of Exhibit A hereto or in such other form as may be required under applicable law as in effect at the time of the execution thereof, to reimburse the portion of any Expenses advanced to Indemnitee relating to claims, issues or matters in the Proceeding as to which it shall be finally determined that the standard of conduct has not been met and which have not been successfully resolved as described in Section 5.  For the avoidance of doubt, the Company shall advance Expenses incurred by Indemnitee or on Indemnitee’s behalf in connection with such a Proceeding pursuant to this Section 6 until it is finally determined that the Indemnitee is not entitled to indemnification under law in respect of such Proceeding.  To the extent that Expenses advanced to Indemnitee do not relate to a specific claim, issue or matter in the Proceeding, such Expenses shall be allocated on a reasonable and proportionate basis.  The undertaking required by this Section 6 shall be an unlimited general obligation by or on behalf of Indemnitee and shall be accepted without reference to Indemnitee’s financial ability to repay such advanced Expenses and without any requirement to post security therefor.  At Indemnitee’s request, 

advancement of any such Expense shall be made by the Company’s direct payment of such Expense instead of reimbursement of Indemnitee’s payment of such Expense.

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Section 7.Procedure for Determination of Entitlement to Indemnification.

(a)To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written demand therefor.  The Secretary of the Company shall, promptly upon receipt of such a demand for indemnification, provide copies of the demand to the Board.

(b)Upon written request by Indemnitee for indemnification pursuant to the first sentence of Section 7(a), a determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto shall promptly be made in the specific case: (i) if a Change in Control shall have occurred, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee; or (ii) if a Change in Control shall not have occurred or if, after a Change in Control, Indemnitee shall so request, (A) by the Board (or a duly authorized committee thereof) by a majority vote of a quorum consisting of Disinterested Trustees, or (B) if a quorum of the Board consisting of Disinterested Trustees is not obtainable or, even if obtainable, such quorum of Disinterested Trustees so directs, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee, or (C) if so directed by a majority of the members of the Board, by the shareholders of the Company; and, if it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten (10) days after such determination.  Any Independent Counsel, member of the Board or shareholder of the Company shall act reasonably and in good faith in making a determination regarding the Indemnitee’s entitlement to indemnification under this Agreement.

(c)    The Company shall pay the fees and expenses of Independent Counsel, if one is appointed, and shall agree to fully indemnify such Independent Counsel against any and all expenses, claims, liabilities and damages arising out of or relating to this Agreement or the Independent Counsel’s engagement as such pursuant hereto.

Section 8.Presumptions and Effect of Certain Proceedings.

(a)In making a determination with respect to entitlement to indemnification hereunder, the Person or Persons making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement.  Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.

(b)It shall be presumed that Indemnitee has at all times acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company.  Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.  Without limitation of the foregoing, Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the records or books of account of the Enterprise, including financial statements, or on information supplied to Indemnitee by officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected with reasonable care by the Enterprise.  In addition, the knowledge or actions, or failure to act, of any trustee, director, officer, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.

(c)Neither the failure to make a determination pursuant to Section 7(b) as to whether indemnification is proper in the circumstances because Indemnitee has met any particular standard of conduct, nor an actual determination by the Company (including by its trustees or Independent Counsel) pursuant to Section 7(b) that Indemnitee has not met such standard of conduct, shall be a defense to Indemnitee’s claim that indemnification is proper in the circumstances or create a presumption that Indemnitee has not met any particular standard of conduct. 

(d)The termination of any Proceeding by judgment, order, settlement, conviction, a plea of nolo contendere or its equivalent, or an entry of an order of probation prior to judgment, shall not in and of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not meet the standard of conduct required for indemnification.  The Company acknowledges that a settlement or other disposition short of final judgment may be successful if it permits a party to avoid expense, delay, distraction, disruption and uncertainty.  In the event that any Proceeding to which Indemnitee is a party is resolved in any manner other than by adverse judgment against Indemnitee (including, without limitation, settlement of such action, claim or proceeding with

4

or without payment of money or other consideration), it shall be presumed that Indemnitee has been successful on the merits or otherwise in such Proceeding.  Anyone seeking to overcome this presumption shall have the burden of proof and the burden of persuasion by clear and convincing evidence.

Section 9.    Remedies of Indemnitee.

(a)If (i) a determination is made pursuant to Section 7(b) that Indemnitee is not entitled to indemnification under this Agreement, (ii) advance of Expenses is not timely made pursuant to Section 6, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 7(b) within thirty (30) days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 5 within ten (10) days after receipt by the Company of a written request therefor, or (v) payment of indemnification is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification, Indemnitee shall (A) unless the Company demands arbitration as provided by Section 17, be entitled to an adjudication in a Chosen Court or (B) be entitled to seek an award in arbitration as provided by Section 17, in each case of Indemnitee’s entitlement to such indemnification or advance of Expenses.

(b)In any judicial proceeding or arbitration commenced pursuant to this Section 9, the Company shall have the burden of proving that Indemnitee is not entitled to indemnification or advance of Expenses, as the case may be.  In the event that a determination shall have been made pursuant to Section 7(b) that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 9 shall be conducted in all respects as a de novo trial on the merits, and the Indemnitee shall not be prejudiced by reason of the adverse determination under Section 7(b).

(c)If a determination shall have been made pursuant to Section 7(b) that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 9, absent a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the demand for indemnification.

(d)In the event that Indemnitee, pursuant to this Section 9, seeks a judicial adjudication of or an award in arbitration as provided by Section 17 to enforce Indemnitee’s rights under, or to recover damages for breach of, this Agreement by the Company, or to recover under any directors’ and officers’ liability insurance policies maintained by the Company, the Company shall indemnify Indemnitee against any and all Expenses incurred by Indemnitee in such judicial adjudication or arbitration and, if requested by Indemnitee, the Company shall (within ten (10) days after receipt by the Company of a written demand therefore) advance, to the extent not prohibited by law, any and all such Expenses.

(e)The Company shall be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 9 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such judicial proceeding or arbitration that the Company is bound by all the provisions of this Agreement.

(f)To the extent requested by Indemnitee and approved by the Board, the Company may at any time and from time to time provide security to Indemnitee for the Company’s obligations hereunder through an irrevocable bank line of credit, funded trust or other collateral.  Any such security, once provided to Indemnitee, may not be revoked or released without the prior written consent of the Indemnitee.

(g)Interest shall be paid by the Company to Indemnitee at the maximum rate allowed to be charged for judgments under the Courts and Judicial Proceedings Article of the Annotated Code of Maryland

for amounts which the Company pays or is obligated to pay for the period (i) commencing with either the tenth (10th) day after the date on which the Company was requested to advance Expenses in accordance with Section 6 of this Agreement or the thirtieth (30th) day after the date on which the Company was requested to make the determination of entitlement to indemnification under Section 7(b) of this Agreement, as applicable, and (ii) ending on the date such payment is made to Indemnitee by the Company.

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Section 10.Defense of the Underlying Proceeding.

(a)Indemnitee shall notify the Company promptly upon being served with or receiving any summons, citation, subpoena, complaint, indictment, information, notice, request or other document relating to any Proceeding which may result in the right to indemnification or the advance of Expenses hereunder; provided, however, that the failure to give any such notice shall not disqualify Indemnitee from the right, or otherwise affect in any manner any right of Indemnitee, to indemnification or the advance of Expenses under this Agreement unless the Company’s ability to defend in such Proceeding or to obtain proceeds under any insurance policy is materially and adversely prejudiced thereby, and then only to the extent the Company is thereby actually so prejudiced.

(b)Subject to the provisions of the last sentence of this Section 10(b) and of Section 10(c) below, the Company shall have the right to defend Indemnitee in any Proceeding which may give rise to indemnification hereunder; provided, however, that the Company shall notify Indemnitee of any such decision to defend within fifteen (15) days following receipt of notice of any such Proceeding under Section 10(a) above, and the counsel selected by the Company shall be reasonably satisfactory to Indemnitee.  The Company shall not, without the prior written consent of Indemnitee, consent to the entry of any judgment against Indemnitee or enter into any settlement or compromise which (i) includes an admission of fault of Indemnitee, (ii) does not include, as an unconditional term thereof, the full release of Indemnitee from all liability in respect of such Proceeding, which release shall be in form and substance reasonably satisfactory to Indemnitee or (iii) has the actual or purported effect of extinguishing, limiting or impairing Indemnitee’s rights hereunder.  This Section 10(b) shall not apply to a Proceeding brought by Indemnitee under Section 9 above or Section 15.

(c)Notwithstanding the provisions of Section 10(b), if in a Proceeding to which Indemnitee is a party by reason of Indemnitee’s Company Status, (i) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld, that Indemnitee may have separate defenses or counterclaims to assert with respect to any issue which may not be consistent with other defendants in such Proceeding, (ii) Indemnitee reasonably concludes, based upon an opinion of counsel approved by the Company, which approval shall not be unreasonably withheld, that an actual or apparent conflict of interest or potential conflict of interest exists between Indemnitee and the Company, or (iii) the Company fails to assume the defense of such Proceeding in a timely manner, Indemnitee shall be entitled to be represented by separate legal counsel of Indemnitee’s choice, subject to the prior approval of the Company, which shall not be unreasonably withheld, at the expense of the Company.  In addition, if the Company fails to comply with any of its obligations under this Agreement or in the event that the Company or any other Person takes any action to declare this Agreement void or unenforceable, or institutes any Proceeding to deny or to recover from Indemnitee the benefits intended to be provided to Indemnitee hereunder, Indemnitee shall have the right to retain counsel of Indemnitee’s choice, at the expense of the Company (subject to Section 9(d)), to represent Indemnitee in connection with any such matter.

Section 11.Liability Insurance.

(a)To the extent the Company maintains an insurance policy or policies providing liability insurance for any of its trustees or officers, Indemnitee shall be covered by such policy or policies, in accordance with its or their terms, to the maximum extent of the coverage available for any Company trustee or officer during the Indemnitee’s tenure as a trustee or officer and, following a termination of Indemnitee’s service in connection with a Change in Control, for a period of six (6) years thereafter.

(b)If, at the time of the receipt of a notice of a claim pursuant to the terms hereof, the Company has directors’ and officers’ liability insurance in effect, the Company shall give prompt notice of the commencement of such proceeding to the insurers in accordance with the procedures set forth in the respective

policies.  The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such proceeding in accordance with the terms of such policies.

(c)In the event of any payment by the Company under this Agreement the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee with respect to any insurance policy.  Indemnitee shall take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights in accordance with the terms of

6

such insurance policy. The Company shall pay or reimburse all expenses actually and reasonably incurred by Indemnitee in connection with such subrogation.

Section 12.Non-Exclusivity; Survival of Rights.

(a)The rights of indemnification and advance of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Declaration of Trust or the Bylaws, any agreement or a resolution of the shareholders entitled to vote generally in the election of trustees or of the Board, or otherwise.  No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in Indemnitee’s Company Status prior to such amendment, alteration or repeal.  To the extent that a change in the Maryland REIT Law or the MGCL permits greater indemnification than would be afforded currently under the Declaration of Trust, Bylaws and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change.  No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise.  The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.

(b)The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable or payable or reimbursable as Expenses hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.

Section 13.Binding Effect.

(a)The indemnification and advance of Expenses provided by, or granted pursuant to, this Agreement shall be binding upon and be enforceable by the parties hereto and their respective successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the Company), shall continue as to an Indemnitee who has ceased to be a trustee or executive officer of the Company or a director, officer, partner, member, manager or trustee of another Enterprise which such Person is or was serving at the request of the Company, and shall inure to the benefit of Indemnitee and Indemnitee’s spouse, assigns, heirs, devisees, executors and administrators and other legal representatives.

(b)Any successor of the Company (whether direct or indirect by purchase, merger, consolidation or otherwise) to all, substantially all or a substantial part, of the business or assets of the Company shall be automatically deemed to have assumed and agreed to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession had taken place, provided that no such assumption shall relieve the Company of its obligations hereunder.  To the extent required by applicable law to give effect to the foregoing sentence and to the extent requested by Indemnitee, the Company shall require and cause any such successor to expressly assume and agree to perform this Agreement by written agreement in form and substance satisfactory to Indemnitee.

Section 14.Severability.  If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby; and (b) to the fullest extent possible, the 

provisions of this Agreement (including, without limitation, each portion of any section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.

Section 15.Limitation and Exception to Right of Indemnification or Advance of Expenses.  Notwithstanding any other provision of this Agreement, (a) any indemnification or advance of Expenses to which Indemnitee is otherwise entitled under the terms of this Agreement shall be made only to the extent such indemnification or advance of Expenses does not conflict with applicable Maryland law and (b) Indemnitee shall not be

7

entitled to indemnification or advance of Expenses under this Agreement with respect to any Proceeding brought by Indemnitee, unless (i) the Proceeding is brought to enforce rights under this Agreement, the Declaration of Trust, the Bylaws, liability insurance policy or policies, if any, or otherwise or (ii) the Declaration of Trust, the Bylaws, a resolution of the shareholders entitled to vote generally in the election of trustees or of the Board or an agreement approved by the Board to which the Company is a party expressly provides otherwise.  Notwithstanding any other provision of this Agreement, a court of appropriate jurisdiction, upon application of Indemnitee and such notice as the court shall require, may order indemnification of Indemnitee by the Company in the following circumstances:  (a) if such court determines that Indemnitee is entitled to reimbursement under Section 2-418(d)(1) of the MGCL, the court shall order indemnification, in which case Indemnitee shall be entitled to recover the Expenses of securing such reimbursement; or (b) if such court determines that Indemnitee is fairly and reasonably entitled to indemnification in view of all the relevant circumstances, whether or not Indemnitee (i) has met the standard of conduct set forth in Section 2-418(b) of the MGCL or (ii) has been adjudged liable for receipt of an improper personal benefit under Section 2-418(c) of the MGCL, the court may order such indemnification as the court shall deem proper without regard to any limitation on such court-ordered indemnification contemplated by Section 2-418(d)(2)(ii) of the MGCL.

Section 16.Specific Performance, Etc.  The parties hereto recognize that if any provision of this Agreement is violated by the Company, Indemnitee may be without an adequate remedy at law.  Accordingly, in the event of any such violation, Indemnitee shall be entitled, if Indemnitee so elects, to institute proceedings, either in law or at equity, to obtain damages, to enforce specific performance, to enjoin such violation, or to obtain any relief or any combination of the foregoing as Indemnitee may elect to pursue.

Section 17.Arbitration.

(a)Any disputes, claims or controversies regarding the Indemnitee’s entitlement to indemnification or advancement of Expenses hereunder or otherwise arising out of or relating to this Agreement, including any disputes, claims or controversies brought by or on behalf of a party hereto or any holder of equity interests (which, for purposes of this Section 17, shall mean any holder of record or any beneficial owner of equity interests or any former holder of record or beneficial owner of equity interests) of a party, either on his, her or its own behalf, on behalf of a party or on behalf of any series or class of equity interests of a party or holders of equity interests of a party against a party or any of their respective trustees, directors, members, officers, managers, agents or employees, including any disputes, claims or controversies relating to the meaning, interpretation, effect, validity, performance or enforcement of this Agreement, including this arbitration agreement or the governing documents of a party, (all of which are referred to as “Disputes”) or relating in any way to such a Dispute or Disputes shall, on the demand of any party to such Dispute or Disputes, be resolved through binding and final arbitration in accordance with the Commercial Arbitration Rules (the “Rules”) of the American Arbitration Association (“AAA”) then in effect, except as those Rules may be modified in this Section 17.  For the avoidance of doubt, and not as a limitation, Disputes are intended to include derivative actions against the trustees, directors, officers or managers of a party and class actions by a holder of equity interests against those individuals or entities and a party.  For the avoidance of doubt, a Dispute shall include a Dispute made derivatively on behalf of one party against another party.  For purposes of this Section 17, the term “equity interest” shall mean, in respect of (i) the Company, shares of beneficial interest of the Company, (ii) shares of “membership interests” in an entity that is a limited liability company, (iii) general partnership interests in an entity that is a partnership, (iv) shares of capital stock of an entity that is a corporation and (v) similar equity ownership interests in other entities.

(b)There shall be three (3) arbitrators.  If there are only two (2) parties to the Dispute, each party shall select one (1) arbitrator within fifteen (15) days after receipt by respondent of a copy of the demand for arbitration.  The arbitrators may be affiliated or interested persons of the parties.  If there are more than two (2)

parties to the Dispute, all claimants, on the one hand, and all respondents, on the other hand, shall each select, by the vote of a majority of the claimants or the respondents, as the case may be, one (1) arbitrator within fifteen (15) days after receipt of the demand for arbitration. The arbitrators may be affiliated or interested persons of the claimants or the respondents, as the case may be.  If either a claimant (or all claimants) or a respondent (or all respondents) fail(s) to timely select an arbitrator then the party (or parties) who has selected an arbitrator may request AAA to provide a list of three (3) proposed arbitrators in accordance with the Rules (each of whom shall be neutral, impartial and unaffiliated with any party) and the party (or parties) that failed to timely appoint an arbitrator shall have ten (10) days from the date AAA provides the list to select one (1) of the three (3) arbitrators proposed by AAA.  If the party (or parties) fail(s) to

8

select the second (2nd) arbitrator by that time, the party (or parties) who have appointed the first (1st) arbitrator shall then have ten (10) days to select one (1) of the three (3) arbitrators proposed by AAA to be the second (2nd) arbitrator; and, if he/they should fail to select the second (2nd) arbitrator by such time, AAA shall select, within fifteen (15) days thereafter, one (1) of the three (3) arbitrators it had proposed as the second (2nd) arbitrator.  The two (2) arbitrators so appointed shall jointly appoint the third (3rd) and presiding arbitrator (who shall be neutral, impartial and unaffiliated with any party) within fifteen (15) days of the appointment of the second (2nd) arbitrator.  If the third (3rd) arbitrator has not been appointed within the time limit specified herein, then AAA shall provide a list of proposed arbitrators in accordance with the Rules, and the arbitrator shall be appointed by AAA in accordance with a listing, striking and ranking procedure, with each party having a limited number of strikes, excluding strikes for cause.

(c)    The place of arbitration shall be Boston, Massachusetts unless otherwise agreed by the parties.

(d)There shall be only limited documentary discovery of documents directly related to the issues in dispute, as may be ordered by the arbitrators.  For the avoidance of doubt, it is intended that there shall be no depositions and no other discovery other than limited documentary discovery as described in the preceding sentence.

(e)In rendering an award or decision (an “Award”), the arbitrators shall be required to follow the laws of the State of Maryland without regard to principles of conflicts of law.  Any arbitration proceedings or award rendered hereunder and the validity, effect and interpretation of this arbitration agreement shall be governed by the Federal Arbitration Act, 9 U.S.C. §1 et seq.  An Award shall be in writing and shall state the findings of fact and conclusions of law on which it is based.  Any monetary Award shall be made and payable in U.S. dollars free of any tax, deduction or offset.  Subject to Section 17(g), each party against which an Award assesses a monetary obligation shall pay that obligation on or before the thirtieth (30th) day following the date of such Award or such other date as the Award may provide.

(f)Except to the extent expressly provided by this Agreement or as otherwise agreed by the parties thereto, each party and each Person acting or seeking to act in a representative capacity (such Person, a “Named Representative”) involved in a Dispute shall bear its own costs and expenses (including attorneys’ fees), and the arbitrators shall not render an Award that would include shifting of any such costs or expenses (including attorneys’ fees) or, in a derivative case or class action, award any portion of a party’s award to its attorneys, a Named Representative or any attorney of a Named Representative.  Each party (or, if there are more than two (2) parties to the Dispute, all claimants, on the one hand, and all respondents, on the other hand, respectively) shall bear the costs and expenses of its (or their) selected arbitrator and the parties (or, if there are more than two (2) parties to the Dispute, all claimants, on the one hand, and all respondents, on the other hand) shall equally bear the costs and expenses of the third (3rd) appointed arbitrator.

(g)Notwithstanding any language to the contrary in this Agreement, an Award, including but not limited to any interim Award, may be appealed pursuant to the AAA’s Optional Appellate Arbitration Rules (the “Appellate Rules”).  An Award shall not be considered final until after the time for filing the notice of appeal pursuant to the Appellate Rules has expired.  Appeals must be initiated within thirty (30) days of receipt of an Award by filing a notice of appeal with any AAA office. Following the appeal process, the decision rendered by the appeal tribunal may be entered in any court having jurisdiction thereof.  For the avoidance of doubt, and despite any contrary provision of the Appellate Rules, Section 17(f) shall apply to any appeal pursuant to this Section 17 and the appeal tribunal shall not render an Award that would include shifting of any costs or expenses (including attorneys’ fees) of any party or Named Representative or the payment of such costs and expenses, and all costs and expenses of a party or Named Representative shall be its sole responsibility.

(h)Following the expiration of the time for filing the notice of appeal, or the conclusion of the appeal process set forth in Section 17(g), an Award shall be final and binding upon the parties thereto and shall be the sole and exclusive remedy between those parties relating to the Dispute, including any claims, counterclaims, issues or accounting presented to the arbitrators.  Judgment upon an Award may be entered in any court having jurisdiction.  To the fullest extent permitted by law, no application or appeal to any court of competent jurisdiction may be made in connection with any question of law arising in the course of arbitration or with respect to any award made except for actions relating to enforcement of this agreement to arbitrate or any arbitral award issued hereunder and except for

9

actions seeking interim or other provisional relief in aid of arbitration proceedings in any court of competent jurisdiction.

(i)This Section 17 is intended to benefit and be enforceable by the parties hereto and their respective holders of equity interests, trustees, directors, officers, managers, agents or employees, and their respective successors and assigns, and shall be binding upon all such parties and their respective holders of equity interests, and be in addition to, and not in substitution for, any other rights to indemnification or contribution that such individuals or entities may have by contract or otherwise.

Section 18.Venue.  Each party hereto agrees that it shall bring any Proceeding in respect of any claim arising out of or related to this Agreement exclusively in the courts of the State of Maryland and the Federal courts of the United States, in each case, located in the City of Baltimore (the “Chosen Courts”).  Solely in connection with claims arising under this Agreement, each party irrevocably and unconditionally (i) submits to the exclusive jurisdiction of the Chosen Courts, (ii) agrees not to commence any such Proceeding except in such courts, (iii) waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any such Proceeding in the Chosen Courts, (iv) waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such Proceeding, (v) agrees that service of process upon such party in any such Proceeding shall be effective if notice is given in accordance with Section 24and (vi) agrees to request and/or consent to the assignment of any dispute arising out of this Agreement or the transactions contemplated by this Agreement to the Chosen Courts’ Business and Technology Case Management Program, or similar program.  Nothing in this Agreement will affect the right of any party hereto to serve process in any other manner permitted by law.  A final judgment in any such Proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law.  EACH PARTY HERETO IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS.  Notwithstanding anything herein to the contrary, if a demand for arbitration of a Dispute is made pursuant to Section 17, this Section 18 shall not preempt resolution of the Dispute pursuant to Section 17.

Section 19.Adverse Settlement.  The Company shall not seek, nor shall it agree to or support, or agree not to contest any settlement or other resolution of any matter that has the actual or purported effect of extinguishing, limiting or impairing Indemnitee’s rights hereunder, including without limitation the entry of any bar order or other order, decree or stipulation, pursuant to 15 U.S.C. § 78u-4 (the Private Securities Litigation Reform Act), or any similar foreign, federal or state statute, regulation, rule or law.

Section 20.Period of Limitations.  To the fullest extent permitted by law, no legal action shall be brought, and no cause of action shall be asserted, by or on behalf of the Company or any controlled affiliate of the Company against Indemnitee, Indemnitee’s spouse, heirs, executors or personal or legal representatives after the expiration of two years from the date of accrual of such cause of action, and any claim or cause of action of the Company or its controlled affiliate shall be extinguished and deemed released unless asserted by the timely filing of a legal action within such two-year period; provided, however, if any shorter period of limitations is otherwise applicable to any such cause of action, such shorter period shall govern.

Section 21.Counterparts.  This Agreement may be executed in any number of counterparts, all of which shall be considered one and the same agreement and shall become effective when counterparts have been signed by each of the parties hereto and delivered to the other party (including via facsimile or other electronic transmission), it being understood that each party hereto need not sign the same counterpart.

Section 22.Delivery by Electronic Transmission.  This Agreement and any signed agreement or instrument entered into in connection with this Agreement or contemplated hereby, and any amendments hereto or thereto, to the extent signed and delivered by means of an electronic transmission, including by a facsimile machine or via email, shall be treated in all manner and respects as an original agreement or instrument and shall be considered to have the same binding legal effect as if it were the original signed version thereof delivered in person.  At the request of any party hereto or to any such agreement or instrument, each other party hereto or thereto shall re-execute original forms thereof and deliver them to the other parties.  No party hereto or to any such agreement or instrument shall raise the use of electronic transmission by a facsimile machine or via email to deliver a signature or the fact that any

10

signature or agreement or instrument was transmitted or communicated through electronic transmission as a defense to the formation of a contract and each such party forever waives any such defense.

Section 23.Modification and Waiver.  No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by both of the parties hereto.  No waiver of any of the provisions of this Agreement shall be deemed to, or shall, constitute a waiver of any other provisions hereof (whether or not similar) nor shall such waiver constitute a continuing waiver.

Section 24.Notices.  Any notice, report or other communication required or permitted to be given hereunder shall be in writing unless some other method of giving such notice, report or other communication is accepted by the party to whom it is given, and shall be given by being delivered at the following addresses to the parties hereto:

(a) If to Indemnitee, to:  The address set forth on the signature page hereto.

(b) If to the Company to:

Industrial Logistics Properties Trust

Two Newton Place

255 Washington Street, Suite 300

Newton, Massachusetts 02458-1634

Attn: Secretary

or to such other address as may have been furnished to the Indemnitee by the Company or to the Company by Indemnitee, as the case may be.

Section 25.Governing Law.  The provisions of this Agreement and any Dispute, whether in contract, tort or otherwise, shall be governed by and construed in accordance with the laws of the State of Maryland without regard to principles of conflicts of law.

Section 26.Interpretation.

(a)Generally.  Unless the context otherwise requires, as used in this Agreement: (a) words defined in the singular have the parallel meaning in the plural and vice versa; (b)”Articles,” “Sections,” and “Exhibits” refer to Articles, Sections and Exhibits of this Agreement unless otherwise specified; and (c) “hereto” and “hereunder” and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement.

(b)Additional Interpretive Provisions.  The headings in this Agreement are for reference purposes only and shall not in any way affect the meaning or interpretation of this Agreement.  Any capitalized term used in any Exhibit to this Agreement, but not otherwise defined therein, shall have the meaning as defined in this Agreement.  References to any statute shall be deemed to refer to such statute as amended from time to time and to any rules or regulations promulgated thereunder and any successor statute or statutory provision.  References to any agreement are to that agreement as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof.  References to any Person include the successors and permitted assigns of that Person.  Reference to any agreement, document or instrument means the agreement, document or

instrument as amended or otherwise modified from time to time in accordance with the terms thereof, and if applicable hereof.

[Signature Page Follows]

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IN WITNESS WHEREOF, the undersigned have executed or caused to be executed on their behalf this Agreement as of the date first written above.

Inf	INDUSTRIAL LOGISTICS PROPERTIES TRUST
	By:
	Name:
	Title:
	[INDEMNITEE]
	Indemnitee’s Address:
	[ ]

[Signature Page to Indemnification Agreement]

12

EXHIBIT A

FORM OF AFFIRMATION AND

UNDERTAKING TO REPAY EXPENSES ADVANCED

To the Board of Trustees of Industrial Logistics Properties Trust:

This affirmation and undertaking is being provided pursuant to that certain Indemnification Agreement dated                                 , 20   (the “Indemnification Agreement”), by and between Industrial Logistics Properties Trust, a Maryland real estate investment trust (the “Company”), and the undersigned Indemnitee, pursuant to which I am entitled to advancement of expenses in connection with [Description of Claims/Proceeding] (together, the “Claims”).  Terms used, and not otherwise defined, herein shall have the meanings specified in the Indemnification Agreement.

I am subject to the Claims by reason of my Company Status or by reason of alleged actions or omissions by me in such capacity.

I hereby affirm my good faith belief that the standard of conduct necessary for my indemnification has been met.

In consideration of the advancement of Expenses by the Company for attorneys’ fees and related expenses incurred by me in connection with the Claims (the “Advanced Expenses”), I hereby agree that if, in connection with a proceeding regarding the Claim, it is ultimately determined that I am not entitled to indemnification under law with respect to an act or omission by me, then I shall promptly reimburse the portion of the Advanced Expenses relating to the Claim(s) as to which the foregoing findings have been established and which have not been successfully resolved as described in Section 5 of the Indemnification Agreement.  To the extent that Advanced Expenses do not relate to specific Claims, I agree that such Advanced Expenses may be allocated on a reasonable and proportionate basis.

IN WITNESS WHEREOF, I have executed this affirmation and undertaking on                      ,      .

WITNESS:
Print name of witness	Print name of Indemnitee

Schedule to Exhibit 10.8

The following trustees and executive officers of Industrial Logistics Properties Trust, or ILPT, are parties to Indemnification Agreements with ILPT which are substantially identical in all material respects to the representative Indemnification Agreement filed herewith and are dated as of the respective dates listed below. The other Indemnification Agreements are omitted pursuant to Instruction 2 to Item 601 of Regulation S-K.

Name of Signatory	Date
Bruce M. Gans	January 11, 2018
Lisa Harris Jones	January 11, 2018
Joseph L. Morea	January 11, 2018
John G. Murray	December 1, 2018
John C. Popeo	January 11, 2018
Adam D. Portnoy	January 11, 2018
Richard W. Siedel, Jr.	January 11, 2018

EX-10.10

Exhibit 10.10

**Confidential portions have been omitted pursuant to a request for confidential treatment and have been filed separately with the Securities and Exchange Commission (the “Commission”)**

MSBNA Loan No.  18-55416

Citi Loan No.  12144

LOAN AGREEMENT

Between

HIGGINS PROPERTIES LLC, MASTERS PROPERTIES LLC, ROBIN 1 PROPERTIES LLC, TANAKA PROPERTIES LLC, ILPT TSM PROPERTIES LLC, Z&A PROPERTIES LLC, LTMAC PROPERTIES LLC, ILPT ORVILLE PROPERTIES LLC, RFRI PROPERTIES LLC, and TEDCAL PROPERTIES LLC,collectively, as Borrower,

and

MORGAN STANLEY BANK, N.A.

CITI REAL ESTATE FUNDING INC.,

UBS AG, BY AND THROUGH ITS BRANCH OFFICE AT 1285 AVENUE OF THE AMERICAS, NEW YORK, NEW YORK and

JPMORGAN CHASE BANK, NATIONAL ASSOCIATIONcollectively, as Lender

Dated as of January 29, 2019

TABLE OF CONTENTS

			Page
ARTICLE I.	DEFINITIONS; PRINCIPLES OF CONSTRUCTION		1
Section 1.1		Definitions	1
Section 1.2		Principles of Construction	29
ARTICLE II.	THE LOAN		29
Section 2.1		The Loan	29
Section 2.2		Interest Rate	31
Section 2.3		Loan Payments	32
Section 2.4		Prepayments	33
Section 2.5		Defeasance	35
ARTICLE III.	REPRESENTATIONS AND WARRANTIES		37
Section 3.1		Borrower Representations	37
Section 3.2		Survival of Representations	58
ARTICLE IV.	BORROWER COVENANTS		58
Section 4.1		Borrower Affirmative Covenants	58
Section 4.2		Borrower Negative Covenants	68
ARTICLE V.	INSURANCE, CASUALTY AND CONDEMNATION		71
Section 5.1		Insurance	71
Section 5.2		Casualty and Condemnation	77
Section 5.3		Delivery of Net Proceeds	79
ARTICLE VI.	RESERVE FUNDS		83
Section 6.1		Reserved	83
Section 6.2		Tax Funds	83
Section 6.3		Insurance Funds	83
Section 6.4		Reserved	84
Section 6.5		Reserved	84
Section 6.6		Lease Termination Funds	84
Section 6.7		Cash Trap Funds	86
Section 6.8		Application of Reserve Funds	88
Section 6.9		Security Interest in Reserve Funds and Interest on Reserve Funds	88

i

Section 6.10		Letters of Credit	89
Section 6.11		Provisions Regarding Letters of Credit	90
ARTICLE VII.	PROPERTY MANAGEMENT		91
Section 7.1		The Property Management Agreement	91
Section 7.2		Prohibition Against Termination or Modification of the Property Management Agreement	91
Section 7.3		Replacement of Manager	92
ARTICLE VIII.	PERMITTED TRANSFERS		92
Section 8.1		Permitted Transfer of the Collective Properties	92
Section 8.2		Permitted Transfers of Equity Interests	93
ARTICLE IX.	SALE AND SECURITIZATION OF LOAN		96
Section 9.1		Sale of Loan and Securitization	96
Section 9.2		Securitization Indemnification	98
Section 9.3		Servicing and Trust Expenses	101
Section 9.4		Loan Bifurcation	101
ARTICLE X.	DEFAULTS		102
Section 10.1		Event of Default	102
Section 10.2		Remedies	104
Section 10.3		Right to Cure Defaults	106
Section 10.4		Remedies Cumulative	106
ARTICLE XI.	MISCELLANEOUS		106
Section 11.1		Successors and Assigns	106
Section 11.2		Lender’s Discretion	106
Section 11.3		Governing Law	107
Section 11.4		Modification, Waiver in Writing	108
Section 11.5		Delay Not a Waiver	108
Section 11.6		Notices	109
Section 11.7		Trial by Jury	110
Section 11.8		Headings	110
Section 11.9		Severability	110
Section 11.10		Preferences	110
Section 11.11		Waiver of Notice	111
Section 11.12		Remedies of Borrower	111
Section 11.13		Expenses; General Indemnity; Mortgage Tax Indemnity; ERISA Indemnity; CFIUS Indemnity	111
Section 11.14		Schedules Incorporated	114

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Section 11.15		Offsets, Counterclaims and Defenses		114
Section 11.16		No Joint Venture or Partnership; No Third Party Beneficiaries		114
Section 11.17		Publicity		115
Section 11.18		Waiver of Marshalling of Assets		115
Section 11.19		Waiver of Offsets/Defenses/Counterclaims		115
Section 11.20		Conflict; Construction of Documents; Reliance		115
Section 11.21		Brokers and Financial Advisors		116
Section 11.22		Exculpation		116
Section 11.23		Prior Agreements		118
Section 11.24		Contributions and Waivers		119
Section 11.25		Joint and Several Liability		122
Section 11.26		Creation of Security Interest		122
Section 11.27		Assignments and Participations		123
Section 11.28		Co-Lenders		124
Section 11.29		Set-Off		125
SCHEDULES
Schedule I	—		Rent Roll
Schedule II	—		Organizational Chart
Schedule III	—		Leased Fee Leases
Schedule 3.1.1	—		Organizational ID Numbers and Tax Identification Numbers
Schedule 3.1.4	—		Litigation
Schedule 3.1.9	—		Legal Requirements
Schedule 3.1.14	—		Assessments
Schedule 3.1.46	—		Owned Improvements

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LOAN AGREEMENT

THIS LOAN AGREEMENT, dated as of January 29, 2019 (as amended, restated, replaced, supplemented or otherwise modified from time to time, this “Agreement”), is between MORGAN STANLEY BANK, N.A., a national banking association, having an office at 1585 Broadway, New York, New York 10036 (together with its successors and assigns, “MSBNA”), CITI REAL ESTATE FUNDING INC., a New York corporation, having an office at 390 Greenwich Street, 7th Floor, New York, New York 10013 (together with its successors and assigns, “Citi”), UBS AG, BY AND THROUGH ITS BRANCH OFFICE AT 1285 AVENUE OF THE AMERICAS, NEW YORK, NEW YORK (together with its successors and assigns, “UBS”) and JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, a banking association chartered under the laws of the United States of America, having an address at 383 Madison Avenue, New York, New York 10179 (together with its successors and/or assigns, “JPM” and, together with MSBNA, Citi and UBS, “Lender”), and HIGGINS PROPERTIES LLC, MASTERS PROPERTIES LLC, ROBIN 1 PROPERTIES LLC, TANAKA PROPERTIES LLC, ILPT TSM PROPERTIES LLC, Z&A PROPERTIES LLC, LTMAC PROPERTIES LLC, ILPT ORVILLE PROPERTIES LLC, RFRI PROPERTIES LLC, and TEDCAL PROPERTIES LLC, each a Delaware limited liability company, having an address at Two Newton Place, 255 Washington Street Suite 300, Newton, MA 02458 (individually or collectively as the context may require, and together with their respective permitted successors and permitted assigns, “Borrower”).

All capitalized terms used herein shall have the respective meanings set forth in Article I hereof.

W I T N E S S E T H:

WHEREAS, Borrower desires to obtain the Loan from Lender; and

WHEREAS, Lender is willing to make the Loan to Borrower, subject to and in accordance with the conditions and terms of this Agreement and the other Loan Documents.

NOW, THEREFORE, in consideration of the covenants set forth in this Agreement, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree, represent and warrant as follows:

ARTICLE I.

DEFINITIONS; PRINCIPLES OF CONSTRUCTION

Section 1.1Definitions. For all purposes of this Agreement, except as otherwise expressly provided:

“Acceptable Person” shall mean a Person that (a) has never been convicted of a felony, (b) has never been convicted for a violation of Prescribed Laws and are not Embargoed

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Persons, (c) has not, within the past seven (7) years, been the subject of a proceeding under the Bankruptcy Code except any involuntary proceedings that have been discharged and (d) has no outstanding judgments which would have a material adverse effect on such Person’s ability to perform its obligations, if any, under the Loan Documents.

“Act” shall have the meaning set forth in Section 3.1.24(cc).

“Affiliate” shall mean, (i) as to any Person, any other Person that, directly or indirectly, owns more than ten percent (10%) of such Person or is in Control of, is Controlled by or is under common Control with such Person or is a director or officer of such Person or of an Affiliate of such Person, (ii) with respect to clause (f) of the definition of “Qualified Buyer,” a Person who is under common Control with Sponsor, and (iii) with respect to Section 8.2(a), a Person who is under common Control with Sponsor or managed by The RMR Group LLC or any successor by merger, consolidation or otherwise.

“Affiliated Manager” shall mean The RMR Group LLC and any other managing agent of any Property that is an Affiliate of Borrower, Guarantor or any SPE Party (if any).

“ALTA” shall mean American Land Title Association, or any successor thereto.

“Alteration Threshold” shall mean $20,000,000.00.

“Annual Budget” shall mean the operating and capital budget for the Collective Properties setting forth Borrower’s good faith estimate of Operating Income, Operating Expenses, and Capital Expenditures for the Collective Properties for the applicable Fiscal Year.

“Applicable Contribution” shall have the meaning set forth in Section 11.24 hereof.

“Approved Annual Budget” shall have the meaning set forth in Section 4.1.6(e).

“Approved Independent Manager/Director Provider” shall mean each of CT Corporation, Corporation Service Company, National Registered Agents, Inc., Wilmington Trust Company, Stewart Management Company and Lord Securities Corporation, any of their respective Affiliates or, if none of those companies is then providing professional independent directors and managers on commercially reasonable terms, another nationally- recognized company reasonably approved by Lender, in each case that is not an Affiliate of the Borrower Parties and that provides professional independent directors and other corporate services in the ordinary course of its business.

“Assignment and Subordination of Management Agreement” shall mean that certain Assignment and Subordination of Management Agreement, dated the date hereof, among Borrower, Manager and Lender, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“Award” shall mean any compensation paid by any Governmental Authority in connection with a Condemnation in respect of all or any part of any Property to which Borrower

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is entitled, or has any right, title or interest in, under the applicable provisions of the applicable Leases.

“Bankruptcy Code” shall mean Title 11 of the United States Code entitled “Bankruptcy”, as amended from time to time, and any successor statute or statutes and all rules and regulations from time to time promulgated thereunder, and any comparable foreign laws relating to bankruptcy, insolvency or creditors’ rights.

“Bankruptcy Event” shall mean with respect to any Person (a) such Person filing a voluntary petition under the Bankruptcy Code, or any other Federal, state, local or foreign bankruptcy or insolvency law; (b) the filing of an involuntary petition against such Person under the Bankruptcy Code, or any other Federal, state, local or foreign bankruptcy or insolvency law, or soliciting or causing to be solicited petitioning creditors for any involuntary petition against such Person; (c) such Person filing an answer consenting to or otherwise acquiescing in or joining in any involuntary petition filed against it, by any other Person under the Bankruptcy Code, or any other Federal, state, local or foreign bankruptcy or insolvency law; (d) such Person consenting to or acquiescing in or joining in an application for the appointment of a custodian, receiver, trustee, or examiner for such Person or any portion of its property; (e) such Person making an assignment for the benefit of creditors, or admitting, in writing or in any legal proceeding, its insolvency or inability to pay its debts as they become due; or (f) there is substantive consolidation of such Person with any other Person in connection with any federal or state bankruptcy proceeding.

“Basic Carrying Costs” shall mean the sum of the following costs associated with the Collective Properties for the relevant Fiscal Year or payment period: (a) Taxes and (b) Insurance Premiums.

“Benefit Amount” shall have the meaning set forth in Section 11.24 hereof.

“BI/Rent Loss Proceeds” shall have the meaning set forth in Section 5.2.3.

“Borrower” shall have the meaning set forth in the introductory paragraph of this Agreement.

“Borrower Party” shall mean Borrower, Sponsor, or any director, officer, employee, beneficiary, shareholder (other than in a publicly-traded entity), partner, member, trustee or agent of Borrower (acting at the direction of Borrower, Sponsor or any Affiliate of Borrower) or any Affiliate of Borrower or Sponsor.

“Business Day” shall mean any day other than a Saturday, a Sunday or a legal holiday on which national banks are not open for general business in (a) the State of New York, (b) the state where the corporate trust office of the Trustee is located, or (c) the state where the servicing offices of the Servicer are located.

“Business Income/Rent Loss Insurance” shall have the meaning set forth in Section 5.1.1.

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“Capital Expenditures” for any period shall mean amounts expended for replacements and alterations to any Property by Borrower which are required to be capitalized according to GAAP.

“Capital Expenditures Work” shall mean any labor performed or materials installed in connection with any Capital Expenditure or as may be required under the Property Management Agreement.

“Cash Management Account” shall mean the “Deposit Account” as defined in the Cash Management Agreement.

“Cash Management Agreement” shall mean that certain Cash Management Agreement of even date herewith among Lender, Borrower, Manager and Cash Management Bank.

“Cash Management Bank” shall mean Wells Fargo Bank, N.A. or any successor permitted pursuant to the terms and provisions of the Cash Management Agreement.

“Cash Management Sweep Period” shall mean a period commencing:

(a)from and after the occurrence of any Event of Default, and continuing until such time as such Event of Default has been cured in accordance with the terms and provisions of this Agreement or otherwise to Lender’s satisfaction (provided that no Cash Management Sweep Period remains in effect pursuant to clauses (b) or (c) below);

(b)upon the occurrence of a Debt Yield Event and continuing until such time as (i) the Debt Yield is at least six and three-quarters percent (6.75%) for two (2) consecutive calendar quarters (provided that no Cash Management Sweep Period remains in effect pursuant to clause (a) above or clause (c) below) or (ii) Borrower has delivered to Lender a Letter of Credit in accordance with the terms of this Agreement in a face amount such that, if applied to reduce the principal balance of the Debt, would result in a Debt Yield of at least six and three-quarters percent (6.75%); or

(c)upon the occurrence of a Partial Debt Yield Event and continuing until such time as (i) the Debt Yield is at least seven and one-quarter percent (7.25%) for two (2) consecutive calendar quarters (provided that no Cash Management Sweep Period remains in effect pursuant to clauses (a) or (b) above) or (ii) Borrower has delivered to Lender a Letter of Credit in accordance with the terms of this Agreement in a face amount such that, if applied to reduce the principal balance of the Debt, would result in a Debt Yield of at least seven and one-quarter percent (7.25%).

“Cash Trap Funds” shall have the meaning set forth in Section 6.7.1.

“Casualty” shall mean the occurrence of any casualty, damage or injury, by fire or otherwise, to any Property or any part thereof.

“Casualty Consultant” shall have the meaning set forth in Section 5.3.2(c).

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“Casualty Retainage” shall have the meaning set forth in Section 5.3.2(d).

“Central Bank Pledge” shall have the meaning set forth in Section 11.26.

“CFIUS” shall mean (a) the Committee on Foreign Investment in the United States first established pursuant to Executive Order 11858 of May 7, 1975, and (b) any replacement or successor thereto, including, without limitation, pursuant to FIRRMA.

“CFIUS Approval” shall mean (a) written confirmation provided by CFIUS that each of the transactions described in Section 3.1.43 (collectively, the “Subject Transaction”) is not a Covered Transaction under the DPA, (b) written confirmation provided by CFIUS that it has completed its review or, if applicable, investigation of the matter in question under the DPA, and determined that there are no unresolved national security concerns with respect to the Subject Transaction or (c) CFIUS shall have sent a report to the President of the United States requesting the President’s decision under the DPA, and the President shall have announced a decision not to take any action to suspend, prohibit or place any limitations on the Subject Transaction.

“CFIUS Review” shall have the meaning set forth in Section 4.1.1(d) hereof.

“Citi” shall have the meaning set forth in the preamble to this Agreement.

“Closing Date” shall mean the date of this Agreement.

“Code” shall mean the Internal Revenue Code of 1986, as amended, and as it may be further amended from time to time, any successor statutes thereto, and applicable U.S. Department of Treasury regulations issued pursuant thereto in temporary or final form.

“Collective Properties” shall mean, collectively, all of the Properties of all of the Borrowers.

“Co-Lender” shall mean each of MSBNA, Citi, UBS and JPM.

“Componentization Notice” shall have the meaning set forth in Section 2.1.5 hereof.

“Component A Notes” shall mean, collectively, each of Note A-1, Note A-2, Note A-3, Note A-4 and Note A-9.

“Component B Notes” shall mean, collectively, each of Note A-5, Note A-6, Note A-7, Note A-8, Note A-10 and Note A-11.

“Condemnation” shall mean a temporary or permanent taking by any Governmental Authority as the result or in lieu or in anticipation of the exercise of the right of condemnation or eminent domain, of all or any part of any Property, or any interest therein or right accruing thereto, including any right of access thereto or any change of grade affecting such Property or any part thereof.

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“Condemnation Payment” shall have the meaning set forth in Section 2.4.2(b).

“Contribution” shall have the meaning set forth in Section 11.24 hereof.

“Control” shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the day-to-day management and policies or activities of a Person, with respect to which the determination is to be made, whether through ownership of voting securities, by contract or otherwise (subject to certain major approval rights).

“Constituent Members” shall have the meaning set forth in Section 3.1.24(ee).

“Conveyance Fee” shall mean, as applicable, the Initial Conveyance Fee and the Subsequent Conveyance Fee.

“Covered Disclosure Information” shall have the meaning set forth in Section 9.2(b).

“Covered Rating Agency Information” shall have the meaning set forth in Section 9.2(f).

“Covered Transaction” shall have the meaning set forth in the DPA.

“DACA” shall mean that certain Deposit Account Control Agreement, dated as of the date hereof, by and among Borrower, Lender and DACA Bank.

“DACA Bank” shall mean First Hawaiian Bank or any successor pursuant to the terms and provisions of the DACA.

“Debt” shall mean the outstanding principal amount of the Loan together with all interest accrued and unpaid thereon and all other sums (including the Yield Maintenance Premium, if any) due to Lender in respect of the Loan under the Note, this Agreement, the Mortgage, the Environmental Indemnity and any other Loan Document, including, without limitation, reasonable costs, fees and expenses (including reasonable attorneys’ fees) payable to Lender to the extent specifically provided under the terms of the Loan Documents.

“Debt Service” shall mean, with respect to any particular period of time, scheduled interest payments under the Note.

“Debt Yield” shall mean, as of the last day of the most recently completed calendar quarter, the quotient (expressed as a percentage) obtained by dividing (a) Net Operating Income as of such date by (b) the outstanding principal amount of the Loan.

“Debt Yield Event” shall mean that, as of the last day of any calendar quarter, the Debt Yield is less than six and three-quarters percent (6.75%) for two (2) consecutive calendar quarters.

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“Default” shall mean the occurrence of any event hereunder or under any other Loan Document which, but for the giving of notice or passage of time, or both, would be an Event of Default.

“Default Rate” shall mean, with respect to each Note Component of the Loan, a rate per annum equal to the lesser of (a) the Maximum Legal Rate or (b) three percent (3%) above the Interest Rate applicable to such Note Component.

“Defeasance Collateral” shall mean U.S. Obligations, which provide payments (a) on or prior to, but as close as possible to, the Monthly Payment Dates and other scheduled payment dates, if any, under the Note after the Defeasance Date and up to and including the Open Prepayment Date, and (b) in amounts equal to or greater than the Scheduled Defeasance Payments relating to such Monthly Payment Dates and other scheduled payment dates.

“Defeasance Collateral Account” shall have the meaning set forth in Section 2.5.2.

“Defeasance Date” shall have the meaning set forth in Section 2.5.1(a)(i).

“Defeasance Event” shall have the meaning set forth in Section 2.5.1(a).

“Deposit Account” shall mean the account established pursuant to the DACA.

“Disclosure Document” shall mean, collectively, any written materials used or provided to any prospective investors and/or the Rating Agencies in connection with any public offering or private placement in connection with a Securitization (including, without limitation, a prospectus, prospectus supplement, private placement memorandum, offering memorandum, offering circular, term sheet, road show presentation materials or other offering documents, marketing materials or information provided to prospective investors), in each case in preliminary or final form and including any amendments, supplements, exhibits, annexes and other attachments thereto.

“Dominion” shall mean DBRS, Inc.

“DPA” shall mean the Defense Production Act of 1950, 50 U.S.C. § 4565, as amended by the Foreign Investment Risk Review Modernization Act of 2018 (“FIRRMA”), H.R. 5515-538 (as the same may have been or may hereafter be amended, restated, supplemented or otherwise modified), all laws and regulations related thereto and all mandates, requirements, powers and similar requirements imposed or exercised thereunder (including, without limitation, any of the foregoing implemented by and/or otherwise relating to CFIUS), as the foregoing may be amended from time to time, any successor statute or statutes and all rules and regulations from time to time promulgated in connection with the foregoing.

“Eligible Account” shall mean a separate and identifiable account from all other funds held by the holding institution that is either (a) an account or accounts (or subaccounts thereof) maintained with the corporate trust department of a federal or state-chartered depository institution or trust company which complies with the definition of Eligible Institution or (b) a segregated trust account or accounts (or subaccounts thereof) maintained with the corporate trust

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department of a federal or state-chartered depository institution or trust company acting in its fiduciary capacity that has a Moody’s rating of at least “A1” and which, in the case of a state- chartered depository institution or trust company, is subject to regulations substantially similar to 12 C.F.R. §9.10(b), having in either case a combined capital and surplus of at least $50,000,000 and subject to supervision or examination by federal and state authority. An Eligible Account shall not be evidenced by a certificate of deposit, passbook or other instrument.

“Eligible Institution” shall mean either (a) a depository institution or trust company the deposits of which are insured by the Federal Deposit Insurance Corporation, the short-term unsecured debt obligations or commercial paper of which are rated at least “A-1+” by S&P, “P-1” by Moody’s and “F-1+” by Fitch in the case of accounts in which funds are held for thirty (30) days or less (or, in the case of Letters of Credit and accounts in which funds are held for more than thirty (30) days, the long-term unsecured debt obligations of which are rated at least “AA-” by Fitch and S&P and “Aa3” by Moody’s), or (b) Wells Fargo Bank, N.A. (“Wells”), provided that the rating by S&P and the other Rating Agencies for Wells’ short term unsecured debt obligations or commercial paper and long term unsecured debt obligations does not decrease below such ratings in effect as of the Closing Date.

“Embargoed Person” shall have the meaning set forth in Section 3.1.40.

“Employee Benefit Plan” shall mean any employee benefit plan as defined in Section 3(3) of ERISA, including, without limitation, any employee welfare benefit plan (as defined in Section 3(1) of ERISA), any employee pension benefit plan (as defined in Section 3(2) of ERISA), and any plan which is both an employee welfare benefit plan and an employee pension benefit plan, and in respect of which the Borrower, Guarantor or any of their respective ERISA Affiliates is (or, if such Employee Benefit Plan were terminated, would under Section 4062 or Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 305 of ERISA.

“Environmental Indemnity” shall mean that certain Environmental Indemnity Agreement dated as of the date hereof executed by Borrower and Guarantor in connection with the Loan for the benefit of Lender.

“Environmental Policy” shall have the meaning set forth in Section 5.1.1(a).

“Equipment” shall have the meaning set forth in the granting clause of each Mortgage.

“ERISA” shall have the meaning set forth in Section 4.2.11.

“ERISA Affiliate” shall mean any Person that for purposes of Title IV of ERISA is a member of the Borrower’s or Guarantor’s “controlled group”, or under common control with the Borrower or Guarantor, within the meaning of Section 414 of the Code.

“Event of Default” shall have the meaning set forth in Section 10.1.

“Excess Cash Flow” shall have the meaning ascribed to such term in the Cash Management Agreement.

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“Exchange Act” shall have the meaning set forth in Section 9.2(a).

“Exchange Act Filing” shall have the meaning set forth in Section 9.1(c).

“Exculpated Parties” shall have the meaning set forth in Section 11.22.

“Extraordinary Expense” shall have the meaning set forth in Section 4.1.6(e).

“FIRRMA” shall have the meaning set forth in the definition of “DPA”.

“Fiscal Year” shall mean each twelve (12) month period commencing on January 1 and ending on December 31 during the term of the Loan.

“Fitch” shall mean Fitch, Inc.

“Fixtures” shall have the meaning set forth in the granting clause of each Mortgage.

“Flood Insurance Acts” shall have the meaning set forth in Section 5.1(a).

“Funding Borrower” shall have the meaning set forth in Section 11.24 hereof.

“GAAP” shall mean generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions of comparable stature and authority within the accounting profession), or in such other statements by such entity as may be in general use by significant segments of the U.S. accounting profession.

“Governmental Authority” shall mean any court, board, agency, commission, office or authority of any nature whatsoever or any governmental unit (federal, state, county, district, municipal, city, foreign or otherwise) whether now or hereafter in existence.

“Ground Tenant” shall mean any Tenant under a Leased Fee Lease.

“Guarantor” shall mean (a) Sponsor or (b) to the extent a substitute or replacement guarantor is provided pursuant to Section 8.1 or Section 8.2 hereof, such substitute or replacement guarantor.

“Guaranty” shall mean that certain Guaranty of Recourse Obligations dated as of the date hereof from Guarantor for the benefit of Lender.

“Improvements” shall have the meaning set forth in the granting clause of each Mortgage, provided that for the purposes of the representations, warranties and covenants of Borrower set forth in the Loan Documents, “Improvements” shall be deemed to only include the Owned Improvements unless otherwise expressly specified herein.

“Indebtedness” shall mean, for any Person, without duplication: (a) all indebtedness of such Person for borrowed money, for amounts drawn under a letter of credit, or

9

for the deferred purchase price of property for which such Person or its assets is liable, (b) all unfunded amounts under a loan agreement, letter of credit, or other credit facility for which such Person would be liable if such amounts were advanced thereunder, (c) all amounts required to be paid by such Person as a guaranteed payment to partners or a preferred or special dividend, including any mandatory redemption of shares or interests, (d) all indebtedness guaranteed by such Person, directly or indirectly, (e) all obligations under leases that constitute capital leases for which such Person is liable, (f) all obligations of such Person under interest rate swaps, caps, floors, collars and other interest hedge agreements, in each case whether such Person is liable contingently or otherwise, as obligor, guarantor or otherwise, or in respect of which obligations such Person otherwise assures a creditor against loss, (g) obligations secured by any Liens, whether or not the obligations have been assumed (other than the Permitted Encumbrances) and (h) any property-assessed clean energy loans or similar indebtedness (without regard to the name given to such indebtedness), including, without limitation, if such loans or indebtedness are made or otherwise provided by any Governmental Authority and/or secured or repaid (directly or indirectly) by any taxes or similar assessments (a “PACE Transaction”).

“Indemnifying Person” shall mean each of Borrower and Guarantor.

“Independent Manager/Director” shall have the meaning set forth in Section 3.1.24(dd).

“Initial Conveyance Fee” shall mean, in respect of the earlier to occur of (x) the initial assumption of the Loan pursuant to Section 8.1, and (y) the initial transfer pursuant to Section 8.2(b), a fee equal to $400,000.00.

“Insurance Funds” shall have the meaning set forth in Section 6.3.1.

“Insurance Premiums” shall mean the premiums due under the Policies.

“Interest Bearing Account” shall mean an account held by Lender or the Servicer on its behalf where the funds on deposit therein are invested in Permitted Investments and all interest or income earned thereon shall be added to the principal balance of such account.

“Interest Period” shall mean (a) for the first interest period hereunder, the period commencing on the Closing Date and ending on (and including) the sixth (6th) day of the following calendar month and (b) for each interest period thereafter commencing February 7, 2019, the period commencing on the seventh (7th) day of each calendar month and ending on (and including) the sixth (6th) day of the following calendar month. Each Interest Period as set forth in clause (b) shall be a full month and shall not be shortened by reason of any payment of the Loan prior to the expiration of such Interest Period.

“Interest Rate” shall mean (a) with respect to Note Component A-1, 4.31%, (ii) with respect to Note Component A-2, 4.31%, (iii) with respect to Note Component A-3, 4.31%, (iv) with respect to Note Component A-4, 4.31%, and (v) with respect to Note Component B, 4.31%.

“Investment Grade Rating” shall mean a long-term unsecured debt rating of at least “BBB-” by Fitch and S&P and “Baa3” by Moody’s; provided that for purposes of

10

determining Net Operating Income if one or more of the foregoing Rating Agencies assigns such a rating to a Tenant but the other(s) have not rated the applicable Tenant, then the relevant Tenant shall be deemed to have an Investment Grade Rating.

“JPM” shall have the meaning set forth in the preamble to this Agreement.

“KBRA” shall mean Kroll Bond Rating Agency, Inc.

“Knowledge” shall mean, and shall be limited to, the actual knowledge of the President & Chief Executive Officer and the Chief Financial Officer & Treasurer of each Borrower as of the Closing Date of a fact or matter at such time of determination after conducting such due diligence as each of them, as senior executives of experienced investors in commercial properties and/or operators of commercial properties similar to the Collective Properties, as applicable, have reasonably deemed appropriate in connection with the acquisition and ownership of the Collective Properties and the borrowing of the Loan. To the extent any such phrases are used in any representation or certification being made after the Closing Date, any individuals that shall have succeeded to the current positions of the President & Chief Executive Officer and the Chief Financial Officer & Treasurer of each Borrower with respect to the Collective Properties at such time shall be deemed to be the appropriate “knowledge parties” hereunder. “Know” and “Known” shall have correlative meanings.

“Lease” shall mean any lease, sublease or subsublease, letting, license, concession or other agreement (whether written or oral and whether now or hereafter in effect) pursuant to which any Person is granted a possessory interest in, or right to use or occupy all or any portion of any space in any Property, and every modification, amendment or other agreement relating to such lease, sublease, subsublease, or other agreement entered into in connection with such lease, sublease, subsublease, or other agreement and every guarantee of the performance and observance of the covenants, conditions and agreements to be performed and observed by the other party thereto.

“Lease Termination Fee” shall have the meaning set forth in Section 6.6.1.

“Lease Termination Funds” shall have the meaning set forth in Section 6.6.1.

“Lease Termination Reserve Account” shall have the meaning set forth in Section 6.6.1.

“Leased Fee Leases” shall mean each of those leases set forth on Schedule III attached hereto.

“Leasing Commissions” shall mean the leasing commissions required to be paid by Borrower to (i) any third-party leasing agent pursuant to a leasing agreement entered into in accordance with the terms and provisions hereof or approved by Lender as of the Closing Date) for procuring Leases with respect to any Property, or (ii) if applicable, Manager pursuant to the terms and provisions of the Property Management Agreement.

“Legal Requirements” shall mean all federal, state, county, municipal and other governmental statutes, laws, rules, orders, regulations, ordinances, judgments, decrees and

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injunctions of Governmental Authorities affecting Borrower or any Property or any part thereof or the construction, use, alteration or operation thereof, or any part thereof, whether now or hereafter enacted and in force, including, without limitation, the Americans with Disabilities Act of 1990, and all permits, licenses and authorizations and regulations of any Governmental Authority relating thereto, and all covenants, agreements, restrictions and encumbrances contained in any instruments, either of record or Known to Borrower, at any time in force affecting such Property or any part thereof, including, without limitation, any which may (a) require repairs, modifications or alterations in or to such Property or any part thereof, or (b) in any way limit the use and enjoyment thereof.

“Lender” shall have the meaning set forth in the introductory paragraph of this Agreement.

“Lender Indemnitee” shall have the meaning set forth in Section 11.13(b).

“Letter of Credit” shall mean an irrevocable, unconditional, transferable, clean sight draft letter of credit acceptable to Lender and satisfying Rating Agency Criteria (either an evergreen letter of credit or one which does not expire until at least thirty (30) Business Days after the Maturity Date) in favor of Lender and entitling Lender to draw thereon in New York, New York, issued by a domestic Eligible Institution or the U.S. agency or branch of a foreign Eligible Institution. If at any time the bank issuing any such Letter of Credit shall cease to be an Eligible Institution, then to the extent Borrower fails to deliver to Lender a replacement Letter of Credit within ten (10) Business Days thereafter, Lender shall have the right to immediately draw down the same in full and hold the proceeds of such draw in accordance with the applicable provisions hereof.

“Liabilities” shall have the meaning set forth in Section 9.2(b).

“Licenses” shall have the meaning set forth in Section 3.1.18.

“Lien” shall mean any mortgage, deed of trust, lien, pledge, hypothecation, assignment, security interest, PACE Transaction or any other encumbrance, charge or transfer of, or any agreement to enter into or create any of the foregoing, on or affecting any Property or any portion thereof or any interest in Borrower, including, without limitation, any conditional sale or other title retention agreement, any financing lease having substantially the same economic effect as any of the foregoing, the filing of any financing statement, and mechanic’s, materialmen’s and other similar liens and encumbrances.

“Liquidity” shall have the meaning set forth in the Guaranty.

“LLC Agreement” shall have the meaning set forth in Section 3.1.24(cc).

“Loan” shall mean the loan in the original principal amount of Six Hundred Fifty Million and No/100 Dollars ($650,000,000.00) made by Lender to Borrower pursuant to this Agreement.

“Loan Bifurcation” shall have the meaning set forth in Section 9.4.

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“Loan Documents” shall mean, collectively, this Agreement, the Note, the Mortgage, the Cash Management Agreement, the DACA, the Environmental Indemnity, the Guaranty, the Assignment and Subordination of Management Agreement (if entered into in accordance with this Agreement), the Post-Closing Agreement and any other document pertaining to any Property as well as all other documents now or hereafter executed and/or delivered in connection with the Loan, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“Lockout Expiration Date” shall mean the earlier to occur of (a) the date that is thirty-six (36) months after the Closing Date and (b) the date that is twenty-four (24) months from the “startup day” (within the meaning of Section 860G(a)(9) of the Code) of the REMIC Trust established in connection with the last Securitization of the last portion of the Loan.

“Losses” shall mean liabilities, obligations, losses, damages, penalties, actions, judgments, suits, claims, costs, expenses and disbursements of any kind or nature whatsoever (including, without limitation, the reasonable fees and disbursements of counsel related thereto).

“Major Lease” shall mean (a) any Lease which, individually or when aggregated with any other Lease with the same Tenant or any Affiliate of such Tenant, assuming the exercise of all fixed expansion rights and other preferential rights to lease additional space at any Property (as distinguished from right of first offer rights) accounts for or is reasonably expected to account for ten percent (10%) or more of the total Net Operating Income of the Collective Properties, (b) any Lease which contains any purchase option, offer, right of first refusal or other similar entitlement to acquire all or any portion of any Property (which such rights shall be deemed to be exclusive of any rights under any Lease to extend the term thereof or to lease additional space at such Property), (c) any Lease entered, or to be entered, into during the continuance of an Event of Default, (d) any Lease with an Affiliate of Borrower which, when aggregated with any other Leases with Affiliates of the Borrower at the Property on the whole, exceeds 5,000 square feet, or (e) any instrument guaranteeing or providing credit support for any Lease meeting the requirements of clauses (a) - (d) above.

“Manager” shall mean The RMR Group LLC, a Maryland limited liability company or, if the context requires, a Qualified Manager managing the Property in accordance with the terms and provisions of this Agreement.

“Material Adverse Effect” shall mean a material adverse effect on (a) the Collective Properties as a whole, (b) the business, profits, management, operations or condition (financial or otherwise) of the Borrowers, taken as a whole, Guarantor or the Collective Properties as a whole, (c) the enforceability, validity, perfection or priority of the lien of the Mortgage or the other Loan Documents, or (d) the ability of the Borrowers, taken as a whole, to perform its obligations under this Agreement, the Note or the other Loan Documents, as each may be amended, restated, supplemented or otherwise modified from time to time in accordance with the terms and provisions hereof.

“Material Agreements” shall mean any contract and agreement relating to the ownership, management, development, use, leasing, maintenance, repair or improvement of the Collective Properties, other than the Property Management Agreement, and the Leases, as to

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which (a) there is an obligation of Borrower to pay more than $1,000,000 per annum and such contract or agreement is not cancelable on thirty (30) days or less notice without cause and without requiring the payment of termination fees or payments of any kind, (b)(i) there is an obligation of Borrower to pay more than $250,000 per annum and such contract or agreement is not cancelable on thirty (30) days or less notice without cause and without requiring the payment of termination fees or payments of any kind and (ii) there is an obligation of Borrower to pay more than $2,500,000 per annum, in the aggregate, under all contracts and agreements that are not cancelable on thirty (30) days or less notice without cause and without requiring the payment of termination fees or payments of any kind, or (c) a Borrower Party (other than Borrower) is a counterparty thereto.

“Material Credit Action” shall mean to file any insolvency, or reorganization case or proceeding, to institute proceedings to have Borrower or an SPE Party be adjudicated bankrupt or insolvent, to institute proceedings under any applicable insolvency law, to seek any relief under any law relating to relief from debts or the protection of debtors, to consent to the filing or institution of bankruptcy or insolvency proceedings against Borrower or an SPE Party to file a petition seeking, or consent to, reorganization or relief with respect to Borrower or an SPE Party under any applicable federal or state law relating to bankruptcy or insolvency, to seek or consent to the appointment of a receiver, liquidator, assignee, trustee, sequestrator, custodian, or any similar official of or for Borrower or an SPE Party or a substantial part of its property, to make any assignment for the benefit of creditors of Borrower or an SPE Party.

“Maturity Date” shall mean February 7, 2029, or such other date on which the final payment of principal of the Note becomes due and payable as therein or herein provided, whether at such stated maturity date, by declaration of acceleration, or otherwise.

“Maximum Legal Rate” shall mean the maximum non-usurious interest rate, if any, that at any time or from time to time may be contracted for, taken, reserved, charged or received on the indebtedness evidenced by the Note and as provided for herein or the other Loan Documents, under the laws of such state or states whose laws are held by any court of competent jurisdiction to govern the interest rate provisions of the Loan.

“Member” shall have the meaning set forth in Section 3.1.24(cc).

“Minimum Disbursement Amount” shall mean $100,000.

“Minimum Experience” shall mean that such Person (a) has at least ten (10) years’ experience in the ownership or management of properties with similar size, scope, class, use and value as the Collective Properties and (b) has, for at least ten (10) years prior to its acquisition of an interest in the Collective Properties, owned, operated or managed at least ten (10) properties similar in size, scope, class, use and value as the Collective Properties which comprise in the aggregate at least 2,000,000 leasable square feet.

“Monthly Payment Amount” shall mean, on each Payment Date, the amount of interest which accrues on the Loan for the Interest Period immediately preceding the applicable Monthly Payment Date.

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“Monthly Payment Date” shall mean the seventh (7th) day of every calendar month occurring during the term of the Loan or if such date is not a Business Day, the immediately preceding Business Day.

“Moody’s” shall mean Moody’s Investors Service, Inc.

“Morgan Stanley” shall mean MSBNA and its Affiliates.

“Morgan Stanley Group” shall have the meaning set forth in Section 9.2(b).

“Morningstar” shall mean Morningstar Credit Ratings, LLC.

“Mortgage” shall mean, individually or collectively, as the context may require, each of those certain first priority Mortgages, Assignment of Leases and Rents, Security Agreement and Fixture Filing, dated the date hereof, executed and delivered by Borrower to or for the benefit of Lender as security for the Loan and encumbering each Property, as the same may be amended, restated, replaced, supplemented or otherwise modified from time to time.

“MSBNA” shall have the meaning set forth in the preamble to this Agreement.

“Multiemployer Plan” shall mean a multiemployer plan, as defined in Section 3(37) or Section 4001(a)(3) of ERISA, as applicable, in respect of which the Borrower, Guarantor or any ERISA Affiliate could have any obligation or liability, contingent or otherwise.

“Multiple Employer Plan” shall mean a single employer plan, as defined in Section 4001(a)(15) of ERISA, that (a) is maintained for employees of the Borrower, Guarantor or any ERISA Affiliate and at least one Person other than the Borrower, Guarantor and the ERISA Affiliates or (b) was so maintained and in respect of which the Borrower, Guarantor or any ERISA Affiliate could have liability under Section 4064 or 4069 of ERISA in the event such plan has been or were to be terminated.

“Net Operating Income” shall mean (a) (i) annualized Operating Income of the Collective Properties based on in-place base Rents in connection with executed Leases with Tenants based on the most recent rent roll (provided, in each case, there is no termination rights on the part of Tenant under such Lease prior to rent commencement other than in connection with a Casualty, Condemnation or landlord default), but excluding Rents relating to (A) any Tenant that is in bankruptcy and has not assumed its Lease, (B) any Tenant that has less than one hundred eighty (180) days remaining under its Lease and has not extended or renewed their Lease by written notice to Borrower, (C) any Tenant that has failed to extend or renew in accordance with an option in its Lease for which the notice period has expired, (D) any Tenants that are sixty (60) or more days delinquent in the payment of base rent or (E) any Tenant that has an Investment Grade Rating that has more than nine (9) months of free rent remaining under its Lease or any Tenant that does not have an Investment Grade Rating that has more than six (6) months of free rent remaining under its Lease, plus (ii) projected expense reimbursements under executed Leases for the succeeding twelve (12) month period based on the terms of such Leases (to the extent such amounts are recurring in nature and properly included as Operating Income), plus (iii) actual amounts received by Borrower from the ownership and operation of the Collective Properties to the extent such amounts are recurring in nature and properly included as

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Operating Income during such period, less (b) budgeted Operating Expenses of the Collective Properties for the succeeding twelve (12) month period. Lender shall reasonably confirm Borrower’s calculation of Net Operating Income based upon information provided to Lender by Borrower pursuant to Section 4.1.6.

“Net Proceeds” shall mean: (a) the net amount of all insurance proceeds payable as a result of a Casualty to any Property, after deduction of reasonable costs and expenses (including, but not limited to, reasonable attorneys’ fees), if any, in collecting such insurance proceeds or (b) the net amount of the Award, after deduction of reasonable costs and expenses (including, but not limited to, reasonable attorneys’ fees), if any, in collecting such Award.

“Net Proceeds Deficiency” shall have the meaning set forth in Section 5.3.2(f).

“Net Worth” shall have the meaning set forth in the Guaranty.

“New Non-Consolidation Opinion” shall mean a bankruptcy substantive non-consolidation opinion, provided by outside counsel, meeting Rating Agency Criteria and otherwise reasonably acceptable to Lender (with it being acknowledged that Sullivan & Worcester LLP is an acceptable issuer of such opinion).

“Non-Consolidation Opinion” shall mean that certain bankruptcy non-consolidation opinion letter dated the Closing Date delivered by Sullivan & Worcester LLP in connection with the Loan.

“Note” shall mean, collectively, Note A-1, Note A-2, Note A-3, Note A-4, Note A-5, Note A-6, Note A-7, Note A-8, Note A-9, Note A-10, and Note A-11.

“Note A-1” shall mean that certain Promissory Note A-1, dated the date hereof, in the stated principal amount of One Hundred Sixty-Two Million Five Hundred Thousand and No/100 Dollars ($162,500,000.00), executed by Borrower and payable to the order of MSBNA in evidence of the Loan, as the same may hereafter be amended, supplemented, restated, severed, increased, extended or consolidated from time to time.

“Note A-2” shall mean that certain Promissory Note A-2, dated the date hereof, in the stated principal amount of Sixty-Five Million and No/100 Dollars ($65,000,000.00), executed by Borrower and payable to the order of Citi in evidence of the Loan, as the same may hereafter be amended, supplemented, restated, severed, increased, extended or consolidated from time to time.

“Note A-3” shall mean that certain Promissory Note A-3, dated the date hereof, in the stated principal amount of Thirty-Five Million and No/100 Dollars ($35,000,000.00), executed by Borrower and payable to the order of UBS in evidence of the Loan, as the same may hereafter be amended, supplemented, restated, severed, increased, extended or consolidated from time to time.

“Note A-4” shall mean that certain Promissory Note A-4, dated the date hereof, in the stated principal amount of Thirty-Two Million Five Hundred Thousand and No/100 Dollars ($32,500,000.00), executed by Borrower and payable to the order of JPM in evidence of the

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Loan, as the same may hereafter be amended, supplemented, restated, severed, increased, extended or consolidated from time to time.

“Note A-5” shall mean that certain Promissory Note A-5, dated the date hereof, in the stated principal amount of One Hundred Sixty-Two Million Five Hundred Thousand and No/100 Dollars ($162,500,000.00), executed by Borrower and payable to the order of MSBNA in evidence of the Loan, as the same may hereafter be amended, supplemented, restated, severed, increased, extended or consolidated from time to time.

“Note A-6” shall mean that certain Promissory Note A-6, dated the date hereof, in the stated principal amount of Sixty-Five Million and No/100 Dollars ($65,000,000.00), executed by Borrower and payable to the order of Citi in evidence of the Loan, as the same may hereafter be amended, supplemented, restated, severed, increased, extended or consolidated from time to time.

“Note A-7” shall mean that certain Promissory Note A-7, dated the date hereof, in the stated principal amount of Thirty-Five Million and No/100 Dollars ($35,000,000.00), executed by Borrower and payable to the order of UBS in evidence of the Loan, as the same may hereafter be amended, supplemented, restated, severed, increased, extended or consolidated from time to time.

“Note A-8” shall mean that certain Promissory Note A-8, dated the date hereof, in the stated principal amount of Thirty-Two Million Five Hundred Thousand and No/100 Dollars ($32,500,000.00), executed by Borrower and payable to the order of JPM in evidence of the Loan, as the same may hereafter be amended, supplemented, restated, severed, increased, extended or consolidated from time to time.

“Note A-9” shall mean that certain Promissory Note A-9, dated the date hereof, in the stated principal amount of Thirty Million and No/100 Dollars ($30,000,000.00), executed by Borrower and payable to the order of UBS in evidence of the Loan, as the same may hereafter be amended, supplemented, restated, severed, increased, extended or consolidated from time to time.

“Note A-10” shall mean that certain Promissory Note A-10, dated the date hereof, in the stated principal amount of Twenty Million and No/100 Dollars ($20,000,000.00), executed by Borrower and payable to the order of UBS in evidence of the Loan, as the same may hereafter be amended, supplemented, restated, severed, increased, extended or consolidated from time to time.

“Note A-11” shall mean that certain Promissory Note A-11, dated the date hereof, in the stated principal amount of Ten Million and No/100 Dollars ($10,000,000.00), executed by Borrower and payable to the order of UBS in evidence of the Loan, as the same may hereafter be amended, supplemented, restated, severed, increased, extended or consolidated from time to time.

“Note Component” shall mean, individually, any one of Note Component A-1, Note Component A-2, Note Component A-3, Note Component A-4 and Note Component B and

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“Note Components” shall mean, collectively, Note Component A-1, Note Component A-2, Note Component A-3, Note Component A-4 and Note Component B.

“Note Component A” shall mean, individually or collectively as the context may require, Note Component A-1, Note Component A-2, Note Component A-3, and Note Component A-4.

“Note Component A-1” shall mean the component of the Loan designated as “Note Component A-1” in Section 2.1.5 hereof.

“Note Component A-2” shall mean the component of the Loan designated as “Note Component A-2” in Section 2.1.5 hereof.

“Note Component A-3” shall mean the component of the Loan designated as “Note Component A-3” in Section 2.1.5 hereof.

“Note Component A-4” shall mean the component of the Loan designated as “Note Component A-4” in Section 2.1.5 hereof.

“Note Component B” shall mean the component of the Loan designated as “Note Component B” in Section 2.1.5 hereof.

“Notice” shall have the meaning set forth in Section 11.6.

“Obligations” shall mean Borrower’s obligation to pay the Debt and perform its obligations under the Note, this Agreement and the other Loan Documents.

“OFAC” shall have the meaning set forth in Section 3.1.40.

“Officer’s Certificate” shall mean a certificate delivered to Lender by Borrower which is signed by an authorized officer of Borrower (or an authorized officer of Borrower’s general partner or managing member, if applicable).

“Open Prepayment Date” shall mean August 7, 2028.

“Operating Expenses” shall mean all expenses, computed in accordance with GAAP, or other sound and prudent accounting principles reasonably approved by Lender, of whatever kind and from whatever source, relating to the ownership, operation, repair, maintenance and management of the Collective Properties that are incurred on a regular monthly or other periodic basis, including, without limitation (and without duplication), Taxes, Insurance Premiums, management fees (whether or not actually paid) equal to the greater of actual management fees and three percent (3.0%) of Operating Income of the Collective Properties, costs attributable to the ordinary operation, repair and maintenance of the systems for heating, ventilation and air conditioning, advertising expenses, license fees, utilities, payroll and related taxes, computer processing charges, operating equipment or other lease payments, ground lease payments, bond assessments and other similar costs, in each instance, actually paid for by or for Borrower. Operating Expenses shall not include Debt Service, required amortization, Capital Expenditures, Tenant Improvement costs, Tenant Improvement Allowances, Leasing

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Commissions, or other expenses which are paid from Reserve Funds or other escrows required by the Loan Documents, any payment or expense for which Borrower was or is to be reimbursed from proceeds of the Loan or insurance or by any third party, federal, state or local income taxes, any non-cash charges such as depreciation and amortization, and any item of expense otherwise includable in Operating Expenses which is paid directly by any Tenant except real estate taxes paid directly to any taxing authority by any Tenant. Lender shall reasonably confirm Borrower’s calculation of Operating Expenses based upon information provided to Lender by Borrower pursuant to Section 4.1.6.

“Operating Income” shall mean all revenue derived from the ownership and operation of the Collective Properties from whatever source, including, without limitation, rental income reflected in a current rent roll for all Tenants paying rent pursuant to Leases which are in full force and effect (whether denominated as basic rent, additional rent, escalation payments, electrical payments or otherwise), common area maintenance, real estate tax recoveries, utility recoveries, other miscellaneous expense recoveries, other required pass-throughs, business interruption, rent loss or other similar insurance proceeds and other miscellaneous income. Operating Income shall not include: (a) insurance proceeds (other than proceeds of rent loss, business interruption or other similar insurance allocable to the applicable period), (b) condemnation proceeds (other than condemnation proceeds arising from a temporary taking or the use and occupancy of all or part of any Property allocable to the applicable period), (c) proceeds of any financing, sale, exchange or transfer of any Property or any part thereof or interest therein, (d) capital contributions or loans to Borrower or an Affiliate of Borrower, (e) any item of income otherwise includable in Operating Income but paid directly by any Tenant to a Person other than Borrower, (f) any other extraordinary, non-recurring revenues, (g) payments paid by or on behalf of any Tenant under a Lease which is the subject of any proceeding or action relating to its bankruptcy, reorganization or other arrangement pursuant to the Bankruptcy Code or any similar federal or state law or which has been adjudicated a bankrupt or insolvent unless such Lease has been affirmed by the trustee in such proceeding or action pursuant to a final, non-appealable order of a court of competent jurisdiction, (h) payments paid by or on behalf of any Tenant under a Lease if the demised premises thereunder has been vacated, (i) payments paid by or on behalf of any Tenant under a Lease in whole or partial consideration for the termination of any Lease, (j) sales tax rebates from any Governmental Authority, (k) sales, use and occupancy taxes on receipts required to be accounted for by Borrower to any Governmental Authority, (l) refunds and uncollectible accounts, (m) interest income from any source other than the Reserve Funds required pursuant to this Agreement or the other Loan Documents, (n) unforfeited security deposits, utility and other similar deposits, or (o) any disbursements to Borrower from the Reserve Funds. Lender shall reasonably confirm Borrower’s calculation of Operating Income based upon information provided to Lender by Borrower pursuant to Section 4.1.6.

“Organizational Documents” shall mean each of those certain Amended and Restated Limited Liability Company Agreements of each Borrower, dated as of the date hereof, and entered into by Sponsor.

“Other Charges” shall mean all ground rents, maintenance charges, impositions other than Taxes, and any other charges, including, without limitation, vault charges and license

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fees for the use of vaults, chutes and similar areas adjoining any Property, now or hereafter levied or assessed or imposed against any Property or any part thereof.

“Owned Improvements” shall have the meaning set forth in Section 3.1.46 hereof.

“PACE Transaction” shall have the meaning ascribed to such term in the definition of “Indebtedness”.

“Partial Debt Yield Event” shall mean that, as of the last day of any calendar quarter, the Debt Yield is less than seven and one-quarter percent (7.25%) for two (2) consecutive calendar quarters and a Debt Yield Event does not otherwise exist.

“Participant” shall mean any Person that has purchased a participation in the Loan pursuant to Section 11.27.

“Patriot Act” shall have the meaning set forth in Section 3.1.41(a).

“Pension Plan” shall mean any Employee Benefit Plan, other than a Multiemployer Plan, which is subject to Title IV of ERISA or Sections 412 and 430 of the Code or Section 302 of ERISA.

“Permitted Encumbrances” shall mean, collectively, (a) the Liens and security interests created by the Loan Documents, (b) all Liens, encumbrances and other matters disclosed in the Title Insurance Policy, (c) Liens, if any, for Taxes imposed by any Governmental Authority not yet due or delinquent (but excluding any Lien securing any PACE Transaction or similar indebtedness with respect to Borrower and/or the Property, including, without limitation, if such loans or indebtedness made or otherwise provided by any Governmental Authority and/or secured or repaid (directly or indirectly) by any taxes or similar assessments), (d) all Leases, and (e) such other title and survey exceptions as Lender has approved or may approve in writing in Lender’s sole discretion.

“Permitted Equipment Leases” shall mean equipment leases or other similar instruments entered into with respect to the Equipment and/or the Personal Property provided, that, in each case, such equipment leases or similar instruments (a) are entered into on commercially reasonable terms and conditions in the ordinary course of Borrower’s business and (b) relate to Equipment and/or Personal Property which is (i) used in connection with the operation and maintenance of any Property in the ordinary course of Borrower’s business and (ii) readily replaceable without material interference or interruption to the operation of such Property.

“Permitted Investments” shall mean one of the following elected in writing by Lender: (i) direct obligations of the United States of America, or any agency thereof, or obligations fully guaranteed as to payment of principal and interest by the United States of America, or any agency thereof, provided such obligations are backed by the full faith and credit of the United States of America, and provided, however, that any such investment must have a predetermined fixed dollar amount of principal due at maturity that cannot vary or change; (ii) deposit accounts with an FDIC-insured bank or trust company organized under the laws of the United States of America or any state thereof; (iii) short term certificates of deposits which are

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time deposits and rated (1) A-1 or better by Standard & Poor’s Ratings Group or P-1 or better by Moody’s Investors Services, Inc. and (2) A and F1 or better by Fitch for securities maturing not more than 30 days from the date of acquisition thereof and AA- and F1+ by Fitch for securities maturing more than 30 days from the date of acquisition thereof, (3) in each case under (1) and (2) maturing not more than ninety (90) days from the date of acquisition thereof, and (4) are negotiable and have a ready secondary market in which such investment can be disposed of; and (iv) shares of a money market fund that is subject to regulation under the Investment Company Act of 1940 and complies with the requirements of Rule 2a-7 thereunder.

“Permitted Transfer” shall mean a transfer of any Property or the Collective Properties permitted in accordance with Section 8.1 and/or any equity interest transfer permitted in accordance with Section 8.2.

“Person” shall mean any individual, corporation, partnership, limited liability company, joint venture, estate, trust, unincorporated association, any other entity, any federal, state, county or municipal government or any bureau, department or agency thereof and any fiduciary acting in such capacity on behalf of any of the foregoing.

“Personal Property” shall have the meaning set forth in the granting clause of each Mortgage.

“Pfandbrief Pledge” shall have the meaning set forth in Section 11.26.

“Policy” or “Policies” shall have the meaning specified in Section 5.1.1(b).

“Prepayment Date” shall mean the date on which the Loan is prepaid in accordance with the terms hereof.

“Prescribed Laws” shall mean, collectively, (a) the Patriot Act, (b) Executive Order No. 13224 on Terrorist Financing, effective September 24, 2001, and relating to Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism, (c) the International Emergency Economic Power Act, 50 U.S.C. §1701 et seq., (d) OFAC and (e) all other Legal Requirements and Executive Orders relating to economic sanctions, money laundering, bank secrecy and terrorism.

“Primary Account Borrower” shall mean Higgins Properties LLC.

“Prohibited Entity” shall mean (i) a tenancy in common or any tenant in common (ii) a Delaware Statutory Trusts or (iii) a crowdfunded or crowdsourced entity or platform, any entity funded, in whole or in part, pursuant to Title III of the JOBS Act or any other entity which has direct or indirect investors with required minimum investments of less than $100,000.

“Property” shall mean any parcel of real property (or “Unit” under Hawaii Revised Statutes Chapter 514B), the Improvements thereon (or common interest in the Improvements in the case of “Units” under Hawaii Revised Statutes Chapter 514B) and all personal property owned by applicable Borrower and encumbered by the applicable Mortgage, together with all rights pertaining to such property and such Improvements, all as more particularly described in the Granting Clauses of the Mortgage.

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“Property Management Agreement” shall mean that certain Property Management Agreement, dated as of the date hereof, entered into by and between Borrower and Manager, pursuant to which Manager is to provide management and other services with respect to the Collective Properties or any replacement management agreement entered into in accordance with the Loan Documents.

“Provided Information” shall mean any and all financial and other information, including, without limitation, operating statements and rent rolls, furnished to Lender at any time which is prepared by, or on behalf of, Borrower, Guarantor and/or Manager other than any information prepared by any member of the Underwriter Group which was not based on information provided by, or on behalf of, Borrower, Guarantor and/or Manager and any third- party reports commissioned by Lender.

“Qualified Buyer” shall mean any of the following entities:

(a)a pension fund, pension trust or pension account, a government entity or plan, a sovereign fund, an investment fund or an institution or fund substantially similar to any of the of the foregoing that immediately prior to such transfer owns, directly or indirectly, total real estate assets of at least $1,000,000,000;

(b)a pension fund advisor or similar fiduciary who (i) immediately prior to such transfer, controls, directly or indirectly, at least $1,000,000,000 of real estate assets and (ii) is acting on behalf of one or more pension funds that, in the aggregate, satisfy the requirements of clause (a) of this definition;

(c)an insurance company which is subject to supervision by the insurance commissioner, or a similar official or agency, of a state or territory of the United States (including the District of Columbia) (i) with a net worth, determined as of a date no more than six (6) months prior to the date of the transfer of at least $500,000,000 and (ii) who, immediately prior to such transfer, controls, directly or indirectly, real estate assets of at least $1,000,000,000;

(d)a corporation organized under the banking laws of the United States or any state or territory of the United States (including the District of Columbia) (i) with a combined capital and surplus of at least $500,000,000 and (ii) who, immediately prior to such transfer, controls, directly or indirectly, real estate assets of at least $1,000,000,000;

(e)any Person (i) who owns or operates commercial real estate properties of similar or higher quality as the Property totaling not less than 1,500,000 square feet (exclusive of the Collective Properties), (ii) who has a net worth, determined as of a date no more than six (6) months prior to the date of such transfer, of at least $500,000,000 and (iii) who, immediately prior to such transfer, controls, directly or indirectly, real estate assets of at least $1,000,000,000 (exclusive of the Collective Properties);

(f)any real estate investment trust or other investment vehicle which (i) is a publicly traded entity listed on the NASDAQ or another nationally recognized stock exchange, (ii) is managed and/or Controlled by The RMR Group LLC or its Affiliate, and (iii) who, immediately prior to such transfer, has a market capitalization equal to or in

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excess $400,000,000 and shall include any operating partnership through which such Person conducts all or substantially all of its business;

(g)any Person in which more than fifty percent (50%) of the ownership interests are owned directly or indirectly by any of the entities listed in subsections (a) through (f) of this definition of “Qualified Buyer”, or any combination of more than one such entity, and which is controlled directly or indirectly by such entity or entities;

(h)any Person in which more than twenty percent (20%) of the ownership interests are owned directly or indirectly by any of the entities listed in subsections (a) or (b) of this definition of “Qualified Buyer”, or any combination of both such entities, and which is controlled directly or indirectly by such entity or entities; or

(i)any other entity reasonably acceptable to Lender (which, after a Securitization of any portion of the Loan, may be conditioned upon Lender’s receipt of a Rating Agency Confirmation in connection with such transferee).

Notwithstanding the foregoing, no Person shall be deemed to be a Qualified Buyer unless such Person has the Minimum Experience.

“Qualified Manager” shall mean, to the extent not subject to a Bankruptcy Event and to the extent not previously removed by Borrower or Lender pursuant to the Loan Documents, (a) The RMR Group LLC, a Maryland limited liability company; or (b) a reputable and experienced management organization (which may be an Affiliate of Borrower), approved by Lender in its reasonable discretion, which management organization shall possess experience in managing properties similar in size, scope, use and value as the Collective Properties and shall not be subject to a Bankruptcy Event, (c) a reputable and experienced real estate management organization that (i) has, for at least the last five (5) years’ prior to its engagement as property manager, experience managing at least ten (10) similar commercial properties which comprise in the aggregate at least two million (2,000,000) leasable square feet (exclusive of the Collective Properties), and (ii) is not subject to a Bankruptcy Event, (d) CBRE, (e) Colliers, (f) Cushman & Wakefield, (g) DTZ, (h) Jones Lang LaSalle, (i) Kidder Mathews, (j) Lincoln Properties, or (k) Transwestern, provided, that, in the case of the foregoing subclause (b) and subclause (c), if such Person is an Affiliate of Borrower, a New Non-Consolidation Opinion shall be required to be delivered to Lender as a condition to such Person qualifying as a Qualified Manager.

“Radius” shall have the meaning set forth in Section 5.1.1(c).

“Ratable Share” or “ratably” shall mean, with respect to any Lender, its share of the Loan based on the proportion of the outstanding principal of the Loan advanced by such Lender to the total outstanding principal amount of the Loan.

“Rating Agency” shall mean, prior to a Securitization, each of Dominion, Fitch, S&P, Moody’s, KBRA, Morningstar and any other nationally-recognized statistical rating agency designated by Lender (and any successor to any of the foregoing), and following a Securitization, the rating agencies that actually rate the bonds in the Securitization transaction.

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“Rating Agency Confirmation” shall mean a written affirmation from each of the Rating Agencies that the credit rating of the Securities by such Rating Agency immediately prior to the occurrence of the event with respect to which such Rating Agency Confirmation is sought will not be qualified, downgraded or withdrawn as a result of the occurrence of such event, which affirmation may be granted or withheld in such Rating Agency’s sole and absolute discretion. In the event that any Rating Agency, in writing, waives, declines or refuses to review or otherwise engage any request for Rating Agency Confirmation hereunder or requires an indemnification from Lender, Servicer or any other Person as a condition to considering the request for a Rating Agency Confirmation, then (a) in the case of a request for a Rating Agency Confirmation in connection with a Defeasance Event, such Rating Agency Confirmation requirement shall be deemed to have been satisfied or (b) other than with respect to a Defeasance Event, such action that would otherwise require a Rating Agency Confirmation shall instead require the consent of Lender in lieu of a Rating Agency Confirmation from such Rating Agency. In the event that no portion of the Loan is subject to a Securitization, any action that would otherwise require a Rating Agency Confirmation shall require the consent of the Lender, which consent shall not be unreasonably withheld or delayed.

“Rating Agency Criteria” shall mean the then-current criteria utilized by one or more of the Rating Agencies in connection with the Securitization of loans that are similar to the Loan, including, without limitation, in size, relative cash flow, relative leverage (of the mortgage loan and total debt), asset type and geographic location.

“Recognized Exchange” shall have the meaning set forth in Section 8.2(e).

“Registration Statement” shall have the meaning set forth in Section 9.2(b).

“Regulation AB” shall mean Subpart 229-1100 Asset Backed Securities (Regulation AB), 17 C.F.R. Sections 229.1100-229.1125, as such may be amended from time to time, and subject to such clarification and interpretation as have been provided by the United States Securities and Exchange Commission (the “Commission”) or by the staff of the Commission from time to time.

“Reimbursement Contribution” shall have the meaning set forth in Section 11.24 hereof.

“Related Loan(s)” shall mean a loan made to an Affiliate of Borrower or secured by a Related Property that is included in a Securitization with the Loan.

“Related Property(ies)” shall mean, with respect to any Property, each Property that is “related”, within the meaning of the definition of Significant Obligor, to such Property.

“REMIC Trust” shall mean a “real estate mortgage investment conduit” within the meaning of Section 860D of the Code that holds the Note.

“Rents” shall mean all rents, moneys payable as damages or in lieu of rent (including any disbursements from Reserve Funds representing amounts payable during a Tenant’s free rent period), rent equivalents, royalties (including, without limitation, all oil and gas or other mineral royalties and bonuses), income, receivables, receipts, revenues, deposits

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(including, without limitation, security, utility and other deposits), accounts, cash, issues, profits, charges for services rendered, and other consideration of whatever form or nature received by or paid to or for the account of or benefit of Borrower or its agents or employees from any and all sources arising from or attributable to any Property.

“Required Repairs” shall have the meaning set forth in Section 4.1.19.

“Required Repair Deadline” shall have the meaning set forth in Section 4.1.19.

“Reserve Funds” shall mean, collectively, the Insurance Funds, the Tax Funds, the Lease Termination Funds and the Cash Trap Funds.

“Restoration” shall have the meaning set forth in Section 5.2.1.

“Restoration Threshold” shall mean $20,000,000.00.

“Restricted Party” shall mean Borrower, each SPE Party (if any) or any direct or indirect legal or beneficial owner of any of the foregoing (other than Sponsor or any successor by merger, consolidation or otherwise of Sponsor, and shareholders in Sponsor so long as Sponsor or any successor by merger, consolidation or otherwise of Sponsor is a publicly traded entity).

“S&P” shall mean Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc.

“Sale or Pledge” shall mean a voluntary or involuntary sale, conveyance, mortgage, grant, bargain, encumbrance, pledge, assignment, grant of any options with respect to, or any other transfer or disposition (directly or indirectly, voluntarily or involuntarily, by operation of law or otherwise, and whether or not for consideration or of record) of a legal or beneficial interest.

“Scheduled Defeasance Payments” shall mean scheduled payments of interest and principal under the Note for all Monthly Payment Dates occurring after the Defeasance Date and up to and including the Open Prepayment Date (including the outstanding principal balance on the Note as of the Open Prepayment Date and assuming that the same is repaid in full on the Open Prepayment Date).

“Secondary Market Transaction” shall have the meaning set forth in Section 9.1(a).

“Securities” shall have the meaning set forth in Section 9.1(a).

“Securities Act” shall have the meaning set forth in Section 9.2(a).

“Securitization” shall have the meaning set forth in Section 9.1(a).

“Security Agreement” shall mean a security agreement in form and substance that would be satisfactory to a prudent lender originating commercial loans for securitization similar

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to the Loan pursuant to which Borrower grants Lender a perfected, first priority security interest in the Defeasance Collateral Account and the Defeasance Collateral.

“Servicer” shall have the meaning set forth in Section 9.3.

“Servicing Agreement” shall have the meaning set forth in Section 9.3.

“Severed Loan Documents” shall have the meaning set forth in Section 10.2(c).

“Significant Obligor” shall have the meaning set forth in Item 1101(k) of Regulation AB.

“Single Member Delaware LLC” shall mean a single member limited liability company formed under Delaware law which (a) has and shall have either two natural persons or one entity that is not a member of the company, that has signed its limited liability company agreement and that, under the terms of such limited liability company agreement becomes a member of the company immediately prior to the withdrawal or dissolution of the last remaining member of the company, (b) complies with the terms and provisions of Section 3.1.24(cc) hereof, and (c) otherwise meets the Rating Agency Criteria.

“SPE Party” shall mean, if Borrower is a limited partnership or a limited liability company (other than a Single Member Delaware LLC), each general partner or managing member of Borrower (as of the date hereof, Borrower is a Single Member Delaware LLC and there are no SPE Parties).

“Sponsor” shall mean Industrial Logistics Properties Trust, a Maryland real estate investment trust.

“Sponsor’s Credit Agreement” shall mean that certain Credit Agreement dated as of December 29, 2017, among Sponsor, as borrower, certain financial institutions, as lenders, and Citibank, N.A., as Administrative Agent and Collateral Agent, as amended, modified and supplemented from time to time.

“Special Member” shall have the meaning set forth in Section 3.1.24(cc)(i).

“State” shall mean the State or Commonwealth in which the Property or any part thereof is located.

“Subsequent Conveyance Fee” shall mean, in respect of any assumption of the Loan pursuant to Section 8.1 or transfer pursuant to Section 8.2(b), in each case following the earlier to occur of (x) the initial assumption of the Loan pursuant to Section 8.1, and (y) the initial transfer pursuant to Section 8.2(b), a fee equal to $750,000.00.

“Successor Borrower” shall have the meaning set forth in Section 2.5.3.

“Survey” shall mean, with respect to any Property, a survey of such Property prepared by a surveyor licensed in the State and reasonably satisfactory to Lender and the

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company or companies issuing the Title Insurance Policy, and containing a certification of such surveyor reasonably satisfactory to Lender.

“Tax Funds” shall have the meaning set forth in Section 6.2.1.

“Taxes” shall mean all real estate and personal property taxes, payments in lieu of taxes, assessments, water rates or sewer rents, now or hereafter levied or assessed or imposed against any Property or part thereof, together with all interest and penalties thereon. In no event shall any PACE Transaction be considered Taxes for purposes of this Agreement.

“Tenant” shall mean any Person obligated by contract or otherwise to pay monies (including a percentage of gross income, revenue or profits) under any Lease now or hereafter affecting all or any part of any Property.

“Tenant Improvement Allowance” shall mean the amount required to be paid by Borrower to a Tenant under a Lease on account of or in lieu of work performed by such Tenant in the applicable space demised under such Lease.

“Tenant Improvements” shall mean the improvements and/or other work affecting any space at any Property required to be constructed and paid for by Borrower pursuant to applicable Leases for such space.

“Tenant Owned Improvements” shall have the meaning set forth in Section 3.1.46 hereof.

“Termination Space” shall have the meaning set forth in Section 6.6.1.

“Terrorism Insurance” shall have the meaning set forth in Section 5.1.1(xi).

“Title Insurance Policy” shall mean, individually or collectively, as the context may require, the ALTA mortgagee title insurance policies in the form reasonably acceptable to Lender issued with respect to each Property and insuring the lien of each Mortgage.

“Traded Security” shall have the meaning set forth in Section 8.2(e).

“Transferee” shall have the meaning set forth in Section 8.1(a).

“TRIPRA” shall have the meaning set forth in Section 5.1.1(xi).

“Trustee” shall mean any trustee holding the Loan in a Securitization.

“Trust Fund Expenses” shall mean all actual fees and out-of-pocket costs and expenses of (a) Lender, (b) any Servicer (other than monthly master servicing fees), (c) any special servicer in connection with a Securitization of the Loan (a “Special Servicer”), (d) any trustee in connection with a Securitization (a “Trustee”), (e) any other party to the pooling and servicing agreement, including, without limitation, the trust and operating advisors, and (f) any certificate administrator in connection with a Securitization but in each case only to the extent resulting from a reasonably foreseeable Event of Default, any Event of Default or Lender’s

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receipt of a written notice from Borrower or its Affiliate that an Event of Default is imminently likely to occur (including, without limitation, interest on advances made by the Servicer or the trustee during the continuance of an Event of Default, any enforcement, modification or restructuring expenses and any liquidation fees (not to exceed one-half percent (0.5%) of any liquidation proceeds), workout fees (not to exceed one-half percent (0.5%) of each collection of interest and principal collections of the Loan so long as the Loan is a “corrected” mortgage loan), special servicing fees or any other similar fees in an amount not to exceed one-quarter percent (0.25%) of the amount of the Loan during any period when the Loan becomes a specially serviced loan as a result of an Event of Default, a reasonably foreseeable default or Borrower’s requesting that the Loan be placed into special servicing, any Special Servicer, any Trustee or any other party to the pooling and servicing agreement with respect to delinquent debt service payments or expenses of curing any Default and any expenses paid by any Servicer, any Special Servicer, any Trustee or any other party to the pooling and servicing agreement in respect of the protection and preservation of any Property (including, without limitation, the payment of Taxes and Insurance Premiums)) and the actual and reasonable costs of all property inspections, appraisals, property condition reports and environmental assessments in connection with such Property that any Servicer, any Special Servicer, any Trustee or any other party to the pooling and servicing agreement shall obtain in connection with a request by Borrower, after an Event of Default or upon written notice from Borrower or its Affiliate that an Event of Default is imminently likely to occur.

“UBS” shall have the meaning set forth in the preamble to this Agreement.

“UCC” or “Uniform Commercial Code” shall mean the Uniform Commercial Code as in effect in the State.

“Underwriter Group” shall have the meaning set forth in Section 9.2(b).

“Updated Information” shall have the meaning set forth in Section 9.1(b)(i).

“U.S. Obligations” shall mean non-redeemable securities evidencing an obligation to timely pay principal and/or interest in a full and timely manner that are (a) obligations or securities not subject to prepayment, call or early redemption which are direct obligations of, or obligations fully guaranteed as to timely payment by, the United States of America or of any agency or instrumentality of the United States of America, the obligations of which are backed by the full faith and credit of the United States of America, which qualify under § 1.860G-2(a)(8) of the Treasury Regulations, (b) other non-callable “government securities” as defined in Treasury Regulations Section 1.860G-2(a)(8)(ii), as amended, for which a Rating Agency Confirmation shall have been received or (c) other non-callable instruments, which if a Securitization has occurred, the REMIC Trust formed pursuant to such Securitization will not fail to maintain its status as a “real estate mortgage investment conduit” within the meaning of Section 860D of the Code and for which a Rating Agency Confirmation shall have been received. Any obligations or instruments pursuant to clause (b) above and, provided same shall not constitute a “significant modification” for REMIC purposes, clause (c) above, shall be subject to Lender’s reasonable approval.

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“Yield Maintenance Premium” shall mean an amount equal to the greater of: (a) one percent (1.0%) of the outstanding principal amount of the Loan or (b) the present value as of the Prepayment Date of the Calculated Payments from the Prepayment Date through the Open Prepayment Date determined by discounting such payments at the Discount Rate. As used in this definition, the term “Prepayment Date” shall mean the date on which prepayment is made. As used in this definition, the term “Calculated Payments” shall mean the monthly payments of interest only which would be due based on the principal amount of the Loan being prepaid on the Prepayment Date and assuming an interest rate per annum equal to the difference (if such difference is greater than zero) between (i) the Interest Rate and (ii) the Yield Maintenance Treasury Rate. As used in this definition, the term “Discount Rate” shall mean the rate which, when compounded monthly, is equivalent to the Yield Maintenance Treasury Rate, when compounded semi-annually. As used in this definition, the term “Yield Maintenance Treasury Rate” shall mean the yield calculated by Lender by the linear interpolation of the yields, as reported in the Federal Reserve Statistical Release H.15-Selected Interest Rates under the heading U.S. Government Securities/Treasury Constant Maturities for the week ending prior to the Prepayment Date, of U.S. Treasury Constant Maturities with maturity dates (one longer or one shorter) most nearly approximating the Maturity Date. In the event Release H.15 is no longer published, Lender shall select a comparable publication to determine the Yield Maintenance Treasury Rate. In no event, however, shall Lender be required to reinvest any prepayment proceeds in U.S. Treasury obligations or otherwise.

Section 1.2Principles of Construction. All references to sections and schedules are to sections and schedules in or to this Agreement unless otherwise specified. Any reference in this Agreement or in any other Loan Document to any Loan Document shall be deemed to include references to such documents as the same may hereafter be amended, modified, supplemented, extended, replaced and/or restated from time to time (and, in the case of any note or other instrument, to any instrument issued in substitution therefor). Unless otherwise specified, the words “hereof”, “herein”, and “hereunder” and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. Unless otherwise specified, all meanings attributed to defined terms herein shall be equally applicable to both the singular and plural forms of the terms so defined.

ARTICLE II.

THE LOAN

Section 2.1The Loan.

2.1.1Agreement to Lend and Borrow. Subject to and upon the terms and conditions set forth herein, Lender shall make the Loan to Borrower and Borrower shall accept the Loan from Lender on the Closing Date. The Primary Account Borrower will open an account with Lender solely for purposes of funding the proceeds of the Loan through a single account, and Primary Account Borrower shall receive the proceeds of the Loan from Lender for the benefit of, and on behalf of, all Borrowers.

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2.1.2Single Disbursement to Borrower. Borrower shall receive only one borrowing hereunder in respect of the Loan and any amount borrowed and repaid hereunder in respect of the Loan may not be re-borrowed.

2.1.3The Note. The Loan shall be evidenced by Note A-1, Note A-2, Note A-3, and Note A-4, each executed by Borrower and payable to the order of the applicable Lender in evidence of the Loan, and shall be repaid in accordance with the terms of this Agreement and the Note.

2.1.4Use of Proceeds. Borrower shall use proceeds of the Loan to (a) pay all past due Basic Carrying Costs, if any, in respect of the Collective Properties, (b) fund the Reserve Funds, (c) pay costs and expenses incurred in connection with the closing of the Loan, as approved by Lender, (d) fund any working capital requirements of the Collective Properties and (e) retain the balance, if any, for such purposes as Borrower shall determine, including, but not limited to, distributions to direct or indirect owners of Borrower.

2.1.5Loan Components. For the purpose of computing interest payable from time to time on the principal amount of the Loan and certain other computations set forth herein, the principal balance of the Loan shall be divided into Note Component A-1, Note Component A-2, Note Component A-3, Note Component A-4 and Note Component B with the following principal balances:

Note Component	Principal Balance
Note Component A-1	$	322,000,000
Note Component A-2	$	1,000,000
Note Component A-3	$	1,000,000
Note Component A-4	$	1,000,000
Note Component B	$	325,000,000

Each Component A Note will represent a pro rata portion of each Note Component A in accordance with the outstanding principal balance of each Component A Note. Each Component B Note will represent a pro rata portion of Note Component B in accordance with the outstanding principal balance of each Component B Note. Borrower shall be treated as the obligor with respect to each of the Note Components and acknowledges that each Note Component may be individually beneficially owned by a separate Person. The Note Components need not be represented by separate physical Notes, but if requested by Lender, each Note Component shall be represented by a separate physical Note, in which case Borrower shall execute and return to Lender each such Note, in the same form as the Note executed and delivered on the Closing Date, promptly following Borrower’s receipt of an execution copy thereof. Provided no Event of Default is then continuing, voluntary and involuntary

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prepayments and defeasances of principal on the Loan shall be applied (a) among Note Component A and Note Component B on a pro rata and pari passu basis and (b) to Note Component A as follows: (i) first, to the reduction of the outstanding principal balance of Note Component A-1, until reduced to zero, (ii) second, to the reduction of the outstanding principal balance of Note Component A-2, until reduced to zero, (iii) third, to the reduction of the outstanding principal balance of Note Component A-3, until reduced to zero, and (iv) fourth, to the reduction of the outstanding principal balance of Note Component A-4, until reduced to zero.

Upon written notice from Lender to Borrower (a “Componentization Notice”), the Note Components may be reallocated and the Interest Rates applicable to each Note Component may be adjusted, or the principal balance may be re-allocated between the Note Component A Note and Note Component B, provided that the sum of the principal balances of all Note Components shall equal the then-current outstanding principal balance of the Loan, the principal balances of the Note Components shall equal the then-current outstanding principal balance of the Loan, and the weighted average of the component interest rates, weighted on the basis of their respective principal balances, shall equal the Interest Rate (as calculated based on the weighted average of the Interest Rates applicable to the Note Components as weighted on the basis of the respective principal balances of the Note Components).

Section 2.2Interest Rate.

2.2.1Interest Rate. Interest on the outstanding principal balance of each Note Component shall accrue from (and including) the Closing Date up to but excluding the Maturity Date at the Interest Rate applicable to the Note Component.

2.2.2Default Rate. In the event that, and for so long as, any Event of Default shall have occurred and be continuing, the outstanding principal balance of the Note Components and, to the extent permitted by law, overdue interest in respect of the Loan, shall accrue interest on each Note Component at the Default Rate applicable to such Note Component, calculated from the date the related Default occurred (without regard to any grace or cure periods contained herein). In no event shall the foregoing be construed to nullify any grace and/or cure periods applicable to a determination of the existence of an Event of Default.

2.2.3Interest Calculation. Interest on the outstanding principal balance of the Note Components shall be calculated by multiplying (a) the actual number of days elapsed in the Interest Period for which the calculation is being made by (b) a daily rate based on a three hundred sixty (360) day year (that is, the Interest Rate or the Default Rate, as then applicable to the Note Component, expressed as an annual rate divided by 360) by (c) the outstanding principal balance. The accrual period for calculating interest due on each Monthly Payment Date shall be the Interest Period ending immediately prior to such Monthly Payment Date.

2.2.4Usury Savings. This Agreement and the other Loan Documents are subject to the express condition that at no time shall Borrower be required to pay interest on the principal balance of the Loan at a rate which could subject Lender to either civil or criminal liability as a result of being in excess of the Maximum Legal Rate. If by the terms of this Agreement or the other Loan Documents, Borrower is at any time required or obligated to pay interest on the principal balance due hereunder at a rate in excess of the Maximum Legal Rate,

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the Interest Rate or the Default Rate applicable to the Note Component, as the case may be, shall be deemed to be immediately reduced to the Maximum Legal Rate and all previous payments in excess of the Maximum Legal Rate shall be deemed to have been payments in reduction of principal and not on account of the interest due hereunder. All sums paid or agreed to be paid to Lender for the use, forbearance, or detention of the sums due under the Loan, shall, to the extent permitted by applicable law, be amortized, prorated, allocated, and spread throughout the full stated term of the Loan until payment in full so that the rate or amount of interest on account of the Loan does not exceed the Maximum Legal Rate from time to time in effect and applicable to the Loan for so long as the Loan is outstanding.

Section 2.3Loan Payments.

2.3.1Payment Before Maturity Date. Borrower shall make a payment to Lender of interest only on the Closing Date for the initial Interest Period. On the Monthly Payment Date occurring in March, 2019 and on each Monthly Payment Date thereafter to and including the Maturity Date (unless the Loan is repaid in full prior thereto), Borrower shall make a payment to Lender equal to the Monthly Payment Amount. With respect to each payment of the Monthly Payment Amount pursuant to this Section 2.3.1, such payments shall be applied pro rata and pari passu amongst Note Component A and Note Component B. With respect to payments received on the Note Component A pursuant to this Section 2.3.1, such payments will be applied: (a) first, to the payment of interest due and payable on Note Component A-1; (ii) second, to the payment of interest due and payable on Note Component A-2, (iii) third, to the payment of interest due and payable on Note Component A-3, and (iv) fourth, to the payment of interest due and payable on Note Component A-4.

2.3.2Payment on Maturity Date. Borrower shall pay to Lender on the Maturity Date the outstanding principal balance of the Loan, all accrued and unpaid interest and all other amounts due hereunder and under the Note, the Mortgage and the other Loan Documents.

2.3.3Late Payment Charge. If any principal, interest or any other sum due under the Loan Documents, other than the payment of principal due on the Maturity Date, is not paid by Borrower on or before the date on which it is due, Borrower shall pay to Lender upon demand an amount equal to the lesser of five percent (5%) of such unpaid sum or the maximum amount permitted by applicable law in order to defray the expense incurred by Lender in handling and processing such delinquent payment and to compensate Lender for the loss of the use of such delinquent payment. Any such amount shall be secured by the Mortgage and the other Loan Documents.

2.3.4Method and Place of Payment. (a) Except as otherwise specifically provided herein, all payments and prepayments under this Agreement and the Note shall be made to Lender not later than 2:00 P.M., New York City time, on the date when due and shall be made in lawful money of the United States of America in immediately available funds at Lender’s office (or such other place designated in writing by Lender to Borrower), and any funds received by Lender after such time shall, for all purposes hereof, be deemed to have been paid on the next succeeding Business Day.

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(b)Whenever any payment to be made hereunder or under any other Loan Document shall be stated to be due on a day which is not a Business Day, the due date thereof shall be the preceding Business Day.

(c)All payments required to be made by Borrower hereunder or under the Note or the other Loan Documents shall be made irrespective of, and without deduction for, any setoff, claim or counterclaim and shall be made irrespective of any defense thereto.

(d)All payments of interest and principal under the Loan shall be applied to the Notes on a pro rata basis, but which payments shall be applied among the Note Components of the Component A Notes on a sequential basis as set forth herein.

Section 2.4Prepayments.

2.4.1Voluntary Prepayments. Except as otherwise provided herein, Borrower shall not have the right to prepay the Loan in whole or in part. After the Lockout Expiration Date, Borrower may, upon not less than fifteen (15) Business Days’ prior written notice to Lender (or such shorter period of time as may be permitted by Lender in its sole discretion), prepay the Debt in whole (but not in part) on any Business Day together with payment of the Yield Maintenance Premium; provided, however, no Yield Maintenance Premium or other prepayment fee shall be due in connection with any such prepayment made on or after the Open Prepayment Date. Any prepayment received by Lender on a date other than a Monthly Payment Date shall include interest which would have accrued thereon to the next Monthly Payment Date and such amounts (i.e., principal and interest prepaid by Borrower) shall be applied to the Loan on the next Monthly Payment Date.

2.4.2Mandatory Prepayments. (a)  On each date on which Lender actually receives a distribution of Net Proceeds, if Lender is not required to make such Net Proceeds available to Borrower for a Restoration, Lender may apply such Net Proceeds to prepay the outstanding principal balance of the Note, and, after the indefeasible satisfaction of the Debt in full, to Borrower. Any prepayment received by Lender pursuant to this Section 2.4.2 on a date other than a Monthly Payment Date shall be held by Lender in an interest-bearing account for the benefit of Borrower as collateral security for the Loan and shall be applied by Lender on the next Monthly Payment Date. Notwithstanding anything contained in Section 2.4.2 hereof to the contrary, in the event Lender uses Net Proceeds to prepay a portion of the principal balance of the Loan and any accrued and unpaid interest thereon, Borrower shall be permitted to prepay the entire amount of the Loan outstanding after the application of such Net Proceeds on the next Monthly Payment Date. Other than during the continuance of an Event of Default, no Yield Maintenance Premium or other prepayment fee shall be due in connection with any prepayment made pursuant to this Section 2.4.2(a).

(b)Notwithstanding the provisions of Sections 5.2 and 5.3, if the Loan is included in a REMIC Trust and, immediately following a release of any portion of the Lien of the Mortgage following a Condemnation (but taking into account any proposed Restoration on the remaining Property), the ratio of the unpaid principal balance of the Loan to the value of the remaining Collective Properties (for purposes of the REMIC provisions, counting only real property and excluding any personal property or going concern value) is greater than one

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hundred twenty-five percent (125%) (such value to be determined by Lender based upon a new or updated appraisal of the Collective Properties ordered by Lender, in form and substance reasonably acceptable to Lender, and prepared by an appraiser reasonably acceptable to Lender, the cost of which shall be paid by Borrower), the principal balance of the Loan must be paid down (the “Condemnation Payment”) by Borrower by an amount equal to the least of the following amounts: (i) the Net Proceeds paid in connection with such Condemnation, provided that for purposes of this clause (i), the Net Proceeds shall be calculated based upon any compensation paid by any Governmental Authority in connection with a Condemnation in respect of all or any part of any Property regardless of whether or not Borrower has any right, title or interest in that condemnation award, (ii) the fair market value of the released portion of the Collective Properties at the time of the release, or (iii) an amount such that the loan-to-value ratio of the Loan (as so determined by Lender) does not increase after the release, unless Borrower delivers to Lender an opinion of counsel that if such amount is not paid, the Securitization will not fail to maintain its status as a REMIC Trust as a result of the related release. No Yield Maintenance Premium shall be due in connection with any prepayment made pursuant to this Section 2.4.2(b).

2.4.3Prepayments After Default. Other than with respect to any application of Net Proceeds or a Condemnation Payment, if concurrently with or during the occurrence of an Event of Default, payment of all or any part of the principal of the Loan is tendered by Borrower, a purchaser at foreclosure or any other Person, such tender shall be deemed an attempt to circumvent the restrictions against prepayment set forth in Section 2.4.1 and Lender shall be owed and Borrower, such purchaser at foreclosure or other Person shall pay the Yield Maintenance Premium to the extent such Yield Maintenance Premium would otherwise be due and payable, in addition to the outstanding principal balance, all accrued and unpaid interest through the end of the Interest Period during which such payment is made and other amounts payable under the Loan Documents.

2.4.4Application of Prepayments to Components. Any mandatory prepayment of the principal of the Loan made pursuant to Section 2.4.2 hereof and any other voluntary prepayments of principal of the Loan made pursuant to Section 2.4.1 shall be applied between Note Component A and Note Component B on a pro rata and pari passu basis. Any mandatory prepayment of the principal of the Loan made pursuant to Section 2.4.2 hereof and any other voluntary prepayments of principal of the Loan made pursuant to Section 2.4.1 or otherwise when no Event of Default exists which is applied to Note Component A shall be applied by Lender to the Note Components as follows: (a) first, to the reduction of the outstanding principal balance of Note Component A-1, until reduced to zero; (b) second, to the reduction of the outstanding principal balance of Note Component A-2, until reduced to zero; (c) third, to the reduction of the outstanding principal balance of Note Component A-3, until reduced to zero; and (d) fourth, to the reduction of the outstanding principal balance of Note Component A-4, until reduced to zero. During the continuance of any Event of Default, any payment of principal of the Component A Notes from whatever source may be applied by Lender to the Note A Components in Lender’s sole discretion.

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Section 2.5Defeasance.

2.5.1Conditions to Defeasance. (a)  Provided no Event of Default shall then be continuing, Borrower shall have the right at any time after the Lockout Expiration Date and prior to the Open Prepayment Date to voluntarily defease the entire Loan and obtain an assignment or release of the lien of the Mortgage by providing Lender with the Defeasance Collateral (hereinafter, a “Defeasance Event”), subject to the satisfaction of the following conditions precedent:

(i)Borrower shall provide Lender not less than thirty (30) days’ notice (or such shorter period of time if permitted by Lender in its sole discretion), specifying a Business Day on which the Defeasance Event is to occur (the “Defeasance Date”);

(ii)Borrower shall pay to Lender (A) all accrued and unpaid payments of principal and interest due on the Loan to and including the Defeasance Date and (B) all other sums, then due under the Note, this Agreement, the Mortgage and the other Loan Documents;

(iii)Borrower shall deposit the Defeasance Collateral into the Defeasance Collateral Account and otherwise comply with the provisions of Section 2.5.2 hereof;

(iv)Borrower shall execute and deliver to Lender a Security Agreement in respect of the Defeasance Collateral Account and the Defeasance Collateral;

(v)Borrower shall deliver to Lender an opinion of counsel for Borrower that is standard in commercial lending transactions and subject only to customary qualifications, assumptions and exceptions opining, among other things, that (A) Lender has a legal and valid perfected first priority security interest in the Defeasance Collateral Account and the Defeasance Collateral, (B) if a Securitization has occurred, the REMIC Trust formed pursuant to such Securitization will not fail to maintain its status as a “real estate mortgage investment conduit” within the meaning of Section 860D of the Code as a result of a Defeasance Event pursuant to this Section 2.5, (C) the Defeasance Event will not result in a deemed exchange for purposes of the Code and will not adversely affect the status of the Note as indebtedness for federal income tax purposes, (D) delivery of the Defeasance Collateral and the grant of a security interest therein to Lender shall not constitute an avoidable preference under Section 547 of the Bankruptcy Code or applicable state law and (E) if required by the Rating Agencies, a New Non-Consolidation Opinion acceptable to the Rating Agencies with respect to the Successor Borrower;

(vi)Borrower shall deliver an Officer’s Certificate certifying that the requirements set forth in this Section 2.5 have been satisfied;

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(vii)Borrower shall deliver a certificate of a public accounting firm acceptable to Lender certifying that the Defeasance Collateral will generate monthly amounts equal to or greater than the Scheduled Defeasance Payments;

(viii)each Rating Agency rating the Securities shall have delivered a Rating Agency Confirmation as to the proposed Defeasance Event;

(ix)Borrower shall deliver such other customary certificates, opinions, documents and instruments as Lender may reasonably request; and

(x)Borrower shall pay all (A) reasonable, third-party out-of-pocket costs and expenses of Lender actually incurred in connection with the Defeasance Event, including Lender’s reasonable third-party out-of-pocket attorneys’ fees and expenses and (B) any Rating Agency fees and expenses.

(b)If Borrower has elected to defease the Note and the requirements of this Section 2.5 have been satisfied, the Collective Properties shall be released from the lien of the Mortgage and the other Loan Documents. Defeasance Collateral pledged pursuant to the Security Agreement shall be the sole source of collateral securing the Note. In connection with the release of the Lien, Borrower shall submit to Lender, not less than fifteen (15) days prior to the Defeasance Date (or such shorter time as is acceptable to Lender in its sole discretion), a release of Lien (and related Loan Documents) for execution by Lender. Such release shall be in a form appropriate in the jurisdiction in which the Collective Properties are located and that contains standard provisions protecting the rights of the releasing lender. In addition, Borrower shall provide all other documentation that a prudent lender originating mortgage loans for securitization similar to the Loan would reasonably require to be delivered by Borrower in connection with such release, together with an Officer’s Certificate certifying that such documentation (i) is in compliance with all Legal Requirements, and (ii) will effect such release in accordance with the terms of this Agreement. Borrower shall pay all costs, taxes and expenses associated with the release of the lien of the Mortgage, including Lender’s reasonable, third party, out-of-pocket attorneys’ fees. Except as set forth in Section 2.4, this Section 2.5 or any other specific provisions in any of the Loan Documents to the contrary, no repayment, prepayment or defeasance of all or any portion of the Note shall cause, give rise to a right to require, or otherwise result in, the release of the lien of the Mortgage on the Collective Properties.

2.5.2Defeasance Collateral Account. On or before the date on which Borrower delivers the Defeasance Collateral, Borrower shall open at any Eligible Institution, selected by Borrower, the defeasance collateral account (the “Defeasance Collateral Account”) which shall at all times be an Eligible Account. The Defeasance Collateral Account shall contain only (a) Defeasance Collateral, and (b) cash from interest and principal paid on the Defeasance Collateral. All cash from interest and principal payments paid on the Defeasance Collateral shall be paid over to Lender on each Monthly Payment Date in an amount equal to the interest which shall have accrued on the outstanding principal balance of the Loan and applied first to accrued and unpaid interest and then to principal. Any cash from interest and principal paid on the Defeasance Collateral not needed to pay the Scheduled Defeasance Payments shall be retained in the Defeasance Collateral Account as additional collateral for the Loan. Borrower shall cause

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the Eligible Institution at which the Defeasance Collateral is deposited to enter into an agreement with Borrower and Lender, reasonably satisfactory to Lender, pursuant to which such Eligible Institution shall agree to hold and distribute the Defeasance Collateral in accordance with this Agreement. Borrower or Successor Borrower, as applicable, shall be the owner of the Defeasance Collateral Account. Borrower shall prepay all cost and expenses associated with opening and maintaining the Defeasance Collateral Account. Lender shall not in any way be liable by reason of any insufficiency in the Defeasance Collateral Account.

2.5.3Successor Borrower. In connection with a Defeasance Event under this Section 2.5, Borrower shall transfer and assign all obligations, rights and duties under and to the Note and the Security Agreement, together with the Defeasance Collateral, to a newly-created successor entity, which entity shall be a single purpose, bankruptcy remote entity with two (2) Independent Managers/Directors and which entity shall be designated or established by Borrower (the “Successor Borrower”). Borrower shall have the right to purchase, or cause to be purchased on behalf of Borrower, the Defeasance Collateral. Such Successor Borrower shall assume the obligations under the Note and the Security Agreement and Borrower shall be relieved of its obligations under the Loan Documents (other than those obligations which by their express terms survive a repayment, defeasance or other satisfaction of the Loan and/or a transfer of the Collective Properties in connection with Lender’s exercise of its remedies under the Loan Documents). Borrower shall pay a minimum of $1,000 to any such Successor Borrower as consideration for assuming the obligations under the Note and the Security Agreement. Borrower shall pay all reasonable third-party out-of-pocket costs and expenses actually incurred by Lender in connection with establishing the Successor Borrower, including Lender’s reasonable third-party out-of-pocket attorney’s fees and expenses actually incurred in connection therewith.

ARTICLE III.

REPRESENTATIONS AND WARRANTIES

Section 3.1Borrower Representations. Each Borrower represents and warrants that, as of the date hereof:

3.1.1Organization. (a)  Each Borrower and each SPE Party (if any) is duly formed, organized, validly existing and in good standing with full power and authority to own its assets and conduct its business, and is duly qualified and in good standing in all jurisdictions in which the ownership or lease of its property or the conduct of its business requires such qualification. Each Borrower has taken all necessary action to authorize the execution, delivery and performance of this Agreement and the other Loan Documents by it, and has the power and authority to execute, deliver and perform under this Agreement, the other Loan Documents and all the transactions contemplated hereby.

(b)Each Borrower’s exact legal name is correctly set forth in the first paragraph of this Agreement. Each Borrower is an organization of the type specified in the first paragraph of this Agreement. Each Borrower is incorporated or organized under the laws of the state specified in the first paragraph of this Agreement. Each Borrower’s principal place of business and chief executive office, and the place where such Borrower keeps its books and

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records, including recorded data of any kind or nature, regardless of the medium of recording, including software, writings, plans, specifications and schematics, has been for the preceding four (4) months (or, if less than four (4) months, the entire period of the existence of the applicable Borrower) and will continue to be the address of such Borrower set forth in the first paragraph of this Agreement (unless such Borrower notifies Lender in writing at least thirty (30) days prior to the date of such change). Each Borrower’s organizational identification number assigned by the state of its incorporation or organization is set forth on Schedule 3.1.1 attached hereto. Each Borrower’s federal tax identification number is set forth on Schedule 3.1.1 attached hereto. No Borrower is subject to back-up withholding taxes.

3.1.2Proceedings. This Agreement and the other Loan Documents have been duly authorized, executed and delivered by each Borrower and constitute a legal, valid and binding obligation of such Borrower, enforceable against such Borrower in accordance with their respective terms, except as such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the enforcement of creditors’ rights generally, and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law).

3.1.3No Conflicts. The execution and delivery of this Agreement and the other Loan Documents by each Borrower and the performance of its obligations hereunder and thereunder will not conflict with any provision of any law or regulation to which such Borrower is subject, or conflict with, result in a breach of, or constitute a default under, any of the terms, conditions or provisions of any of such Borrower’s organizational documents or any agreement or instrument to which such Borrower is a party or by which it is bound, or any order or decree applicable to such Borrower, or result in the creation or imposition of any lien on any of Borrower’s assets or property (other than pursuant to the Loan Documents).

3.1.4Litigation. Except as disclosed on Schedule 3.1.4 attached hereto, there is no action, suit, proceeding or investigation pending or, to Borrower’s Knowledge, threatened in writing against any Borrower or any Property in any court or by or before any other Governmental Authority which would have, or is reasonably likely to have, a Material Adverse Effect. There is no action, suit, proceeding or investigation pending or, to Borrower’s Knowledge, threatened in writing against Guarantor, any Property or any Restricted Party, in any court or by or before any other Governmental Authority, which would have or is reasonably likely to have, a Material Adverse Effect.

3.1.5Agreements. Except as disclosed in the Title Insurance Policy, no Borrower is a party to any agreement or instrument or subject to any restriction which would have, or is reasonably likely to have, a Material Adverse Effect. No Borrower is in default with respect to any order or decree of any court or any order, regulation or demand of any Governmental Authority, which default would have, or is reasonably likely to have, a Material Adverse Effect. No Borrower is in default in any material respect in the performance, observance or fulfillment of any of the obligations, covenants or conditions contained in any Permitted Encumbrance or any other agreement or instrument to which it is a party or by which it or such Borrower’s Property is bound that would have, or is reasonably likely to have, a Material Adverse Effect. No Borrower has any material financial obligation (contingent or otherwise) under any indenture, mortgage, deed of trust, loan agreement or other agreement or

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instrument to which such Borrower is a party or by which such Borrower or its Property is otherwise bound, other than (a) obligations incurred in the ordinary course of the operation of the Collective Properties (including, without limitation, obligations under Leases and with respect to title matters) and (b) obligations under the Loan Documents.

3.1.6Consents. No consent, approval, authorization or order of any court or Governmental Authority is required for the execution, delivery and performance by any Borrower of, or compliance by any Borrower with, this Agreement or the other Loan Documents or the consummation of the transactions contemplated hereby, other than those which have been obtained by such Borrower.

3.1.7Title. Each Borrower has good, marketable and insurable fee simple title to the real property comprising part of the Collective Properties owned by such Borrower and good title to the balance of the Collective Properties owned by it, in each case, free and clear of all Liens whatsoever except the Permitted Encumbrances. Each Mortgage, when properly recorded in the appropriate records, together with any Uniform Commercial Code financing statements required to be filed in connection therewith, the DACA and the Cash Management Agreement, will create (a) a valid, first priority, perfected lien on real property comprising part of the Collective Properties owned by such Borrower, subject only to Permitted Encumbrances and (b) perfected security interests in and to, and perfected collateral assignments of, all personalty (including the Leases) owned by such Borrower, all in accordance with the terms thereof, in each case subject only to any Permitted Encumbrances. To Borrower’s Knowledge, there are no mechanics’, materialman’s or other similar liens or claims which have been filed for work, labor or materials affecting any of the Collective Properties which are or may be liens prior to, or equal or coordinate with, the lien of the related Mortgage. None of the Permitted Encumbrances, individually or in the aggregate, materially interfere with the benefits of the security intended to be provided by the Mortgage and this Agreement, or impair such Borrower’s ability to pay its obligations in a timely manner.

3.1.8ERISA Matters; No Plan Assets. (a)  As of the date hereof and throughout the term of the Loan (i) No Borrower is, nor will any Borrower be an “employee benefit plan”, as defined in Section 3(3) of ERISA, subject to Title I of ERISA, (ii) none of the assets of any Borrower constitutes or will constitute “plan assets” of one or more such plans within the meaning of 29 C.F.R. Section 2510.3-101, as modified by Section 3(42) of ERISA, (iii) No Borrower is, nor will any Borrower be a “governmental plan” within the meaning of Section 3(32) of ERISA, and (iv) no transactions by or with a Borrower are and will be subject to any state statute regulating investments of, or fiduciary obligations with respect to, governmental plans.

(b)Each Borrower, the Guarantor and each of their respective ERISA Affiliates has not in the past six (6) years maintained or contributed or had any obligation to contribute, to any Employee Benefit Plan and, as of the date hereof and throughout the term of the Loan, does not and will not maintain, contribute or be obligated to contribute to any Employee Benefit Plan.

3.1.9Compliance. To Borrower’s Knowledge, except as disclosed on Schedule 3.1.9 attached hereto, each Borrower and each Property and the use thereof comply

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with all applicable Legal Requirements, including, without limitation, parking, building, zoning and land use laws, ordinances, regulations, and codes except as neither would not have, nor could not reasonably be expected to have, a Material Adverse Effect. No Borrower has received any written notice that it is in default or violation of any order, writ, injunction, decree or demand of any Governmental Authority that remains uncorrected, the violation of which neither would have, nor could reasonably be expected to have, a Material Adverse Effect. No Borrower has committed any act which may give any Governmental Authority the right to cause such Borrower to forfeit any Property owned by such Borrower or any part thereof or any monies paid in performance of Borrower’s obligations under any of the Loan Documents. To Borrower’s Knowledge, in the event that all or any part of the Improvements are destroyed or damaged, said Improvements can be legally reconstructed to their condition prior to such damage or destruction, and thereafter exist for the same use without violating any zoning or other ordinances applicable thereto and without the necessity of obtaining any variances or special permits.

3.1.10Financial Information. All financial data (including, without limitation, the statements of cash flow and income and operating expense that have been delivered to Lender in respect of the Collective Properties and the Borrowers (a) are true, complete and correct in all material respects, (b) accurately represent the financial condition of the Collective Properties and the Borrowers as of the date of such reports and (c) have been prepared in accordance with GAAP throughout the periods covered, except as disclosed therein. No Borrower has any contingent liabilities, liabilities for taxes, unusual forward or long term commitments or unrealized or anticipated losses from any unfavorable commitments that are Known to such Borrower that is required to be set forth in such financial statements, except as referred to or reflected in said financial statements. Since the date of the financial statements described above and through the date hereof, there has been no material adverse change in the financial condition, operations or business of the Borrowers or the Collective Properties from that set forth in said financial statements.

3.1.11Condemnation. Except as disclosed in the Title Insurance Policy, no Condemnation or other proceeding has been commenced or, to Borrower’s Knowledge, has been threatened in writing with respect to all or any portion of any Property or for the relocation of roadways providing access to any Property.

3.1.12Utilities and Public Access. To Borrower’s Knowledge, each individual Property (a) has rights of access to public ways and is served by water, sewer, sanitary sewer and storm drain facilities adequate to service such Property for its intended uses, and (b) has, or is served by, parking to the extent required to comply with all Leases and all Legal Requirements.

3.1.13Separate Lots. Except as set forth in the Survey, each Property is comprised of one (1) or more parcels (or “Units” under Hawaii Revised Statutes Chapter 514B) which constitute separate tax lots (or separate tax parcel IDs in the case of “Units” under Hawaii Revised Statues Chapter 514B) and do not constitute a portion of any other tax lot not a part of such Property.

3.1.14Assessments. To Borrower’s Knowledge, except as set forth on Schedule 3.1.14 attached hereto, there are no pending or proposed special or other assessments

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for public improvements or otherwise affecting any Property, nor are there any contemplated improvements to any Property that may result in such special or other assessments.

3.1.15Enforceability. The Loan Documents are not subject to any right of rescission, set off, counterclaim or defense by any Borrower, including the defense of usury, nor would the operation of any of the terms of the Loan Documents, or the exercise of any right thereunder, render the Loan Documents unenforceable (except as such enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium, or other similar laws affecting the enforcement of creditors’ rights generally, and by general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law)), and no Borrower has asserted any right of rescission, set off, counterclaim or defense with respect thereto.

3.1.16Mortgage. Each Mortgage creates a valid assignment of, or a valid security interest in, certain rights under the Leases, subject only to a license granted to related Borrower to exercise certain rights and to perform certain obligations of the lessor under the Leases, including the right to operate such Property. No Person other than Lender has any interest in or assignment of the Leases or any portion of the Rents due and payable or to become due and payable thereunder.

3.1.17Insurance. Borrower has obtained and has delivered to Lender original or certified copies of all of the Policies or ACORD certificates, with all premiums prepaid thereunder, reflecting the insurance coverages, amounts and other requirements set forth in this Agreement. There are no claims currently outstanding that have been made under any of the Policies and that would have a Material Adverse Effect, and to Borrower’s Knowledge, no Person, including any Borrower, has done, by act or omission, anything which would impair the coverage of any of the Policies.

3.1.18Licenses. All certifications, permits, licenses and approvals, including without limitation, certificates of completion and occupancy permits required of the applicable Borrower by any Governmental Authority for the legal use, occupancy and operation of the Property in the manner in which the Property owned by such Borrower is currently being used, occupied and operated by Borrower (“Licenses”) have been obtained and are in full force and effect, except where the failure to obtain such License neither would have nor would be reasonably expected to have a Material Adverse Effect.

3.1.19Flood Zone. Except as set forth on any Survey, none of the Improvements on the Collective Properties are located in an area identified by the Federal Emergency Management Agency as a special flood hazard area, or, if so located the flood insurance required pursuant to Section 5.1.1(a) hereof is in full force and effect with respect to such Property.

3.1.20Physical Condition. Except as may be disclosed in the property condition report obtained by Lender in connection with the Loan or otherwise disclosed to Lender in writing (including, without limitation, any matter disclosed in any estoppel received by Lender), (a) (i) to Borrower’s Knowledge, each Property, including, without limitation, all buildings, improvements, parking facilities, sidewalks, storm drainage systems, roofs, plumbing systems, HVAC systems, fire protection systems, electrical systems, equipment, elevators, exterior sidings and doors, landscaping, irrigation systems and all structural components, are in good condition,

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order and repair in all material respects and (ii) to Borrower’s Knowledge, but without any duty of inquiry, each of the Tenant Owned Improvements at any applicable Property, including, without limitation, all buildings, improvements, parking facilities, sidewalks, storm drainage systems, roofs, plumbing systems, HVAC systems, fire protection systems, electrical systems, equipment, elevators, exterior sidings and doors, landscaping, irrigation systems and all structural components, are in good condition, order and repair in all material respects; (b) to Borrower’s Knowledge, there exists no structural or other material defects or damages in such Property, whether latent or otherwise, and Borrower has not received written notice from any insurance company or bonding company of any defects or inadequacies in the related Property, or any part thereof, which would cause the imposition of extraordinary premiums or charges thereon or of any termination or threatened termination of any policy of insurance or bond.

3.1.21Boundaries. Except as set forth on the Survey, all of the Improvements which were included in determining the appraised value of each Property lie wholly within the boundaries and building restriction lines of such Property, and no improvements on adjoining properties encroach upon the related Property, and no easements or other encumbrances affecting such Property encroach upon any of the Improvements. Except as set forth on the Survey, to Borrower’s Knowledge, but without any duty of inquiry, all of the Tenant Owned Improvements which were included in determining the appraised value of each Property lie wholly within the boundaries and building restriction lines of such Property, and no easements or other encumbrances affecting such Property encroach upon any of the Tenant Owned Improvements.

3.1.22Leases. Borrower represents and warrants to Lender with respect to the Leases that, except as disclosed in any Tenant estoppel certificate addressed and delivered to Lender prior to the Closing Date or otherwise disclosed to Lender in writing: (a) the rent roll attached hereto as Schedule I is true, complete and correct, no Property is subject to any Leases other than the Leases described in Schedule I, and no Person has any possessory interest in any Property or right to occupy the same except under and pursuant to the provisions of the Leases; (b)(i) the Leases identified on Schedule I are in full force and effect, (ii) there are no monetary defaults or, to Borrower’s Knowledge, material non-monetaery defaults thereunder by any applicable Tenant, (iii) there are no defaults thereunder by Borrower, as landlord, and, Borrower’s Knowledge, there are no conditions that, with the passage of time or the giving of notice, or both, would constitute a default by Borrower, as landlord, thereunder, and (iv) to Borrower’s Knowledge, no Tenant is subject to an action under any state or federal bankruptcy, insolvency, or similar laws or regulations, (c) the copies of the Leases delivered to Lender are true and complete, and there are no oral agreements with respect thereto, (d) no Rent (other than security deposits) has been paid more than one (1) month in advance of its due date, (e) all work to be performed by Borrower under each Lease to which such Borrower is a party has been performed as required and has been accepted by the applicable Tenant, (f) any payments, free rent, partial rent, rebate of rent or other payments, credits, allowances or abatements required to be given by the applicable Borrower to any Tenant has already been received by such Tenant, (g) all security deposits are being held in accordance with Legal Requirements, (h) all Tenants at the Property are paying full rent under their Leases; (i) no Tenant under any Lease (or any sublease) is an Affiliate of Borrower, (j) no Tenant under any Lease has a right or option pursuant to such Lease or otherwise to purchase all or any part of the leased premises or the Improvements of which the leased premises are a part, (k) intentionally omitted, and (l) no Person other than the

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applicable Borrower and the applicable Tenant have any right, title or interest in and to the Leases and Rents except the rights and Liens granted to Lender pursuant to the Loan Documents.

3.1.23Filing and Recording Taxes. All mortgage, mortgage recording, stamp, intangible or other similar tax required to be paid under applicable Legal Requirements in connection with the execution, delivery, recordation, filing, registration, perfection or enforcement of any of the Loan Documents, including, without limitation, each Mortgage, have been paid or are being paid simultaneously herewith. All taxes and governmental assessments due and owing in respect of each Property as of the date hereof have been paid, or an escrow of funds in an amount sufficient to cover such payments has been established hereunder or are insured against by the related Title Insurance Policy.

3.1.24Single Purpose. Each Borrower hereby represents and warrants that from the date of the formation of Borrower and each SPE Party (if any) through and including the Closing Date that none of the Borrower and any SPE Party has taken any of the actions prohibited (or failed to take any actions required to be taken) pursuant to the terms and provisions of this Section 3.1.24. Borrower hereby represents and warrants to, and covenants with, Lender that since its formation, at all times thereafter and until such time as the Debt shall be paid in full:

(a)No Borrower has owned, owns or will own any asset or property other than (i) the Property owned by such Borrower, and (ii) incidental personal property necessary for the ownership or operation of the Property owned by such Borrower.

(b)No Borrower has or will engage in any business other than the acquisition, ownership, holding, leasing, financing, management, operation, development and improvement of the Property owned by such Borrower and each Borrower has and will conduct and operate its business as presently conducted and operated.

(c)Except for capital contributions or capital distributions permitted under the terms and conditions of its organizational documents and properly reflected on its books and records, and except as contemplated by the Loan Documents with respect to co-borrowers under the Loan Documents, no Borrower has or will enter into any contract or agreement with any Affiliate of Borrower, any constituent party of Borrower or any Affiliate of any constituent party, except in the ordinary course of business and upon terms and conditions that are commercially reasonable and substantially similar to those that would be available on an arms-length basis with unaffiliated third parties; provided, however, that the Lender has reviewed and approved the Property Management Agreement.

(d)No Borrower has incurred any Indebtedness that is still outstanding or will incur any Indebtedness, secured or unsecured, direct or contingent (including guaranteeing any obligation), other than (i) the Debt, (ii) trade and/or operational indebtedness incurred in the ordinary course of business with trade and/or operational creditors, provided such indebtedness is (A) unsecured, (B) not evidenced by a note, (C) on commercially reasonable terms and conditions, and (D) due not more than sixty (60) days past the date incurred and paid on or prior to such date, (iii) reimbursements to Affiliates for shared overhead expenses as contemplated by Section 3.1.24(t), and (iv) Permitted Equipment Leases; provided however, the aggregate amount

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of the indebtedness described in clauses (ii), (iii) and (iv) shall not exceed at any time three percent (3.0%) of the amount of the Debt;

(e)No Borrower has made or will make any loans or advances to any third party (including any Affiliate or constituent party), and has not and shall not acquire obligations or securities of its Affiliates.

(f)Each Borrower has been, is and will intend to remain solvent and each Borrower has paid and, except as contemplated by the Loan Documents with respect to co-borrowers under the Loan, will pay its debts and liabilities (including, as applicable, shared personnel and overhead expenses) from its assets as the same shall become due; provided, that, in each such case, there exists and, if applicable, is made available to Borrower by Lender pursuant to the Cash Management Agreement, sufficient cash flow from the Collective Properties to do so and that the foregoing shall not require any partners, members or other owners of Borrower to make any capital contributions or to lend funds to Borrower or arrange for any such capital contribution or loan by any other Person.

(g)Each Borrower has done or caused to be done and will do or cause to be done all things necessary to observe organizational formalities and preserve its separate existence, and no Borrower has, will, nor will any Borrower permit any SPE Party to amend, modify or otherwise change the partnership certificate, partnership agreement, articles of incorporation and bylaws, operating agreement, trust or other organizational documents of Borrower or such SPE Party without the prior consent of Lender in any manner that (i) violates the single purpose covenants set forth in this Section 3.1.24, or (ii) amends, modifies or otherwise changes any provision thereof that (A) by its terms cannot be modified at any time when the Loan is outstanding, (B) by its terms cannot be modified without Lender’s consent, or (C) is otherwise prohibited from being amended or modified pursuant to this Agreement or the other Loan Documents.

(h)Each Borrower has maintained and will maintain all of its books, records, financial statements and bank accounts separate from those of its Affiliates and any constituent party (except as provided in the following two (2) sentences). No Borrower’s assets have or will be listed as assets on the financial statement of any other Person; provided, however, that Borrower’s assets may be included in a consolidated financial statement of its Affiliates provided that (i) appropriate notation shall be made on such consolidated financial statements to indicate the separateness of Borrower and such Affiliates and to indicate that Borrower’s assets and credit are not available to satisfy the debts and other obligations of such Affiliates or any other Person and (ii) such assets shall be listed on Borrower’s own separate balance sheet. Each Borrower has filed and will file its own tax returns separate from those of any other Person except to the extent the Borrower is treated as a “disregarded entity” for tax purposes and is not required to file tax returns under applicable law.

(i)Each Borrower has been and will be, and at all times has and will hold itself out to the public as, a legal entity separate and distinct from any other entity (including any Affiliate of Borrower or any constituent party of Borrower), has and shall correct any Known misunderstanding regarding its status as a separate entity, has and shall conduct business solely in its own name, has not and shall not identify itself or any of its Affiliates as a division or part of

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any Person and has and shall maintain and utilize separate invoices and checks bearing its own name, except in each case for business conducted on behalf of Borrower by Manager pursuant to the terms and provisions of the Property Management Agreement, which Borrower represents is on commercially-reasonable and arms’ length terms, so long as Manager holds itself out as an agent or representative of Borrower.

(j)Each Borrower has maintained and will maintain adequate capital for the normal obligations reasonably foreseeable in a business of its size and character and in light of its contemplated business operations (provided that there exists sufficient cash flow from the Collective Properties to do so and provided, further, that the foregoing shall not require any partners, members or other owners of Borrower to make any capital contributions or to lend funds or loans to Borrower or arrange for any such capital contribution or loan by any other Person) and shall not intentionally make any distribution which shall cause it to have less than adequate capital.

(k)Neither any Borrower nor any constituent party has or will seek or effect the liquidation, dissolution, winding up, division into two (2) or more limited liability companies or other legal entities, liquidation, consolidation or merger, in whole or in part, of a Borrower or a sale or transfer of all or substantially all of such Borrower’s assets.

(l)Except as contemplated by the Loan Documents with respect to co-borrowers under the Loan, no Borrower has and nor will any Borrower commingle the funds and other assets of such Borrower with those of any Affiliate or constituent party or any other Person, and has and will hold all of its assets solely in its own name.

(m)Each Borrower has and will maintain its assets in such a manner that it will not be costly or difficult to segregate, ascertain or identify its individual assets from those of any Affiliate or constituent party or any other Person.

(n)No Borrower has and no Borrower will guarantee or become obligated for the debts of any other Person and has not and will not hold itself out to be responsible for or have its credit available to satisfy the debts or obligations of any other Person, except for (i) any co-borrowers pursuant to this Agreement and (ii) guarantees of borrowings and other extensions of credit to Sponsor under Sponsor’s Credit Agreement, which guarantees were released prior to the date hereof.

(o)Each Borrower shall conduct its business so that the assumptions made with respect to such Borrower in the Non-Consolidation Opinion and any New Non-Consolidation Opinion shall be true and correct in all material respects. In connection with the foregoing, each Borrower hereby covenants and agrees that it will comply in all material respects with or cause the compliance in all material respects with, (i) all of the facts and assumptions (whether regarding such Borrower or any other Person) set forth in the Non-Consolidation Opinion, and any New Non-Consolidation Opinion, (ii) all the representations, warranties and covenants in this Section 3.1.24, and (iii) all the organizational documents of Borrower and any SPE Party.

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(p)No Borrower has permitted, and no Borrower will permit any Affiliate or constituent party independent access to its bank accounts, except for customary access by the Manager acting as agent of Borrower in accordance with the Property Management Agreement.

(q)Each Borrower has paid and, except as contemplated by the Loan Documents with respect to co-borrowers under the Loan, shall pay from its own funds its own liabilities and expenses, including all Property-related expenses and the salaries of its own employees (if any) from its own funds (provided there exists and, if applicable, is made available to Borrower by Lender pursuant to the Cash Management Agreement, sufficient cash flow from the Collective Properties to do so and that the foregoing shall not require any partners, members or other owners of Borrower to make any capital contributions or to lend funds to Borrower or arrange for any such capital contribution or loan by any other Person), with it being understood that nothing in this Section 3.1.24(q) shall limit the right of Borrower to share overhead expenses with Affiliates in compliance with Section 3.1.24(t) and provided further that the foregoing shall not require Borrower’s direct or indirect legal or beneficial owners to make any capital contributions or to lend funds to Borrower or arrange for any such capital contribution or loan by any other party.

(r)Each Borrower has compensated and, except as contemplated by the Loan Documents with respect to co-borrowers under the Loan, shall compensate each of its consultants and agents from its funds for services provided to it and has paid and shall pay from and to the extent of its own assets all obligations of any kind incurred.

(s)No Borrower will, without the unanimous consent of all of its directors or members (including all Independent Managers/Directors), take any Material Credit Action.

(t)Each Borrower has allocated and will allocate fairly and reasonably any overhead expenses that are shared with any Affiliate, including shared office space and for services performed by any employee of an Affiliate.

(u)No Borrower has pledged and no Borrower will pledge its assets to secure the obligations of any other Person (except as contemplated by the Loan Documents with respect to co-borrowers under the Loan).

(v)No Borrower will have any obligation to indemnify its officers, directors, members or partners, as the case may be, unless such obligation is fully subordinated to the Debt and will not constitute a claim against it if cash flow in excess of the amount required to pay the Debt is insufficient to pay such obligation.

(w)No Borrower (i) has, does, or will have any of its obligations guaranteed by any Affiliate, other than with respect to the Guaranty and the Environmental Indemnity, and (ii) does or will permit any Affiliate (other than (x) the Guarantor under the Guaranty and Environmental Indemnity and (y) except as contemplated by the Loan Documents with respect to co-borrowers under the Loan) to hold such Affiliate’s credit out as available to pay the debts of Borrower.

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(x)No Borrower has bought or held and no Borrower shall buy or hold evidence of indebtedness issued by any other Person other than Permitted Investments made in accordance with the terms and provisions of this Agreement and the other Loan Documents.

(y)No Borrower shall form, acquire or hold any subsidiary (whether corporate, partnership, limited liability company or other) or own any equity interest in any other entity, other than Permitted Investments made in accordance with the terms and provisions of this Agreement and the other Loan Documents.

(z)Each Borrower and each SPE Party shall be organized under Delaware law.

(aa)(i) If a Borrower shall have its own board of directors/managers, such Borrower shall cause its board of directors /managers to meet at least annually or act pursuant to written consent and keep minutes of such meetings and actions and observe all other Delaware limited liability company formalities, and (ii) each Borrower shall cause the directors, officers, agents and other representatives of such Borrower to act at all times with respect to such Borrower consistently and in furtherance of the foregoing and in the best interests of such Borrower.

(bb)If a Borrower is a limited partnership or a limited liability company other than a Single Member Delaware LLC, each SPE Party shall comply with the terms and provisions of this Section 3.1.24. Each SPE Party shall either be (i) a Single Member Delaware LLC in accordance with the terms and provisions of clause (cc) below or (ii) a corporation (A) whose sole asset is its interest in such Borrower, (B) which has not been and shall not be permitted to engage in any business or activity other than owning an interest in such Borrower, (C) which has not been and shall not be permitted to incur any debt, secured or unsecured, direct or contingent (including guaranteeing any obligation) except being liable for the obligations of Borrower as general partner thereof, and (D) which has and will at all times own at least a one-half of one percent (0.5%) (or if Borrower is a Delaware entity, a one-tenth of one percent (0.1%)) direct equity ownership interest in Borrower. Each SPE Party will at all times comply, and will cause such Borrower to comply, with each of the representations, warranties, and covenants contained in this Section 3.1.24 (to the extent applicable) as if such representation, warranty or covenant was made directly by such SPE Party. Upon the withdrawal or the disassociation of an SPE Party from a Borrower, to the extent permitted pursuant to the terms and provisions of this Agreement, the affected Borrower shall immediately appoint a new SPE Party whose articles of incorporation or organization are substantially similar to those of such SPE Party and deliver a New Non- Consolidation Opinion to Lender with respect to the new SPE Party and its equity owners.

(cc)In the event a Borrower or an SPE Party is a Single Member Delaware LLC, its limited liability company agreement (the “LLC Agreement”) shall provide that:

(i)upon the occurrence of any event that causes the last remaining member (“Member”) of such Borrower or the SPE Party, as applicable, to cease to be the member of such Borrower or the SPE Party, as applicable, (other than (A) upon an assignment by Member of all of its limited liability company interest in such Borrower or

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the SPE Party, as applicable, and the admission of the transferee in accordance with the Loan Documents and the LLC Agreement, or (B) the resignation of Member and the admission of an additional member of such Borrower or the SPE Party, as applicable, in accordance with the terms of the Loan Documents and the LLC Agreement), any person acting as Independent Manager/Director of such Borrower or the SPE Party, as applicable, shall, without any action of any other Person and simultaneously with the Member ceasing to be the member of such Borrower or the SPE Party, as applicable, automatically be admitted to such Borrower or the SPE Party, as applicable, as a member with a zero percent (0%) economic interest (“Special Member”) and shall continue the existence of such Borrower or the SPE Party, as applicable, without dissolution;

(ii)Special Member may not resign from a Borrower or the SPE Party, as applicable, or transfer its rights as Special Member unless (A) a successor Special Member has been admitted to such Borrower or the SPE Party, as applicable, as a Special Member in accordance with requirements of Delaware, as applicable, and (B) after giving effect to such resignation or transfer, there remains at least two (2) Independent Managers/Directors of such Borrower or the SPE Party, as applicable, in accordance with Section 3.1.24(dd) below;

(iii)Special Member shall automatically cease to be a member of a Borrower or the SPE Party, as applicable, upon the admission to such Borrower or the SPE Party, as applicable, of the first substitute member;

(iv)Special Member shall be a member of a Borrower or the SPE Party, as applicable, that has no interest in the profits, losses and capital of such Borrower or the SPE Party, as applicable, and has no right to receive any distributions of the assets of such Borrower or the SPE Party, as applicable;

(v)pursuant to the applicable provisions of the limited liability company act of the State of Delaware (the “Act”), Special Member shall not be required to make any capital contributions to the related Borrower or the SPE Party, as applicable, and shall not receive a limited liability company interest in such Borrower or the SPE Party, as applicable;

(vi)Special Member, in its capacity as Special Member, may not bind the related Borrower or the SPE Party, as applicable;

(vii)except as required by any mandatory provision of the Act, Special Member, in its capacity as Special Member, shall have no right to vote on, approve or otherwise consent to any action by, or matter relating to, the related Borrower or the SPE Party, as applicable, including, without limitation, the merger, consolidation, division into two (2) or more limited liability companies or other legal entities or conversion of such Borrower or the SPE Party, as applicable; provided, however, such prohibition shall not limit the obligations of Special Member, in its capacity as Independent Manager/Director, to vote on such matters required by the Loan Documents or the LLC Agreement;

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(viii)upon the occurrence of any event that causes the Member to cease to be a member of the related Borrower or the SPE Party, as applicable, to the fullest extent permitted by law, the personal representative of Member shall, within ninety (90) days after the occurrence of the event that terminated the continued membership of Member in such Borrower or the SPE Party (as applicable) agree in writing (A) to continue such Borrower or the SPE Party (as applicable) and (B) to the admission of the personal representative or its nominee or designee, as the case may be, as a substitute member of such Borrower or the SPE Party (as applicable) effective as of the occurrence of the event that terminated the continued membership of Member in such Borrower or the SPE Party, as applicable;

(ix)any action initiated by or brought against Member or Special Member in connection with any Bankruptcy Event shall not cause Member or Special Member to cease to be a member of the related Borrower or the SPE Party, as applicable, and upon the occurrence of such an event, the business of such Borrower or the SPE Party (as applicable) shall continue without dissolution; and

(x)each of Member and Special Member waives any right it might have to agree in writing to dissolve the related Borrower or the SPE Party, as applicable, upon the occurrence of any action initiated by or brought against Member or Special Member in connection with any Bankruptcy Event, or the occurrence of an event that causes Member or Special Member to cease to be a member of such Borrower or the SPE Party, as applicable.

In order to implement the admission to Borrower or an SPE Party, as applicable, of Special Member, Special Member shall execute a counterpart to the LLC Agreement. Prior to its admission to the related Borrower or the SPE Party, as applicable, as Special Member, Special Member shall not be a member of such Borrower or the SPE Party, as applicable, but Special Member may serve as an Independent Manager/Director of the related Borrower or the SPE Party, as applicable.

(dd)The organizational documents of Borrower (to the extent Borrower is a corporation or a Single Member Delaware LLC) or each SPE Party (if Borrower is a limited partnership or a limited liability company other than a Single Member Delaware LLC) shall provide that at all times there shall be at least two (2) duly appointed independent managers or directors of such entity (each, an “Independent Manager/Director”) who shall (i) not have been at the time of each such individual’s initial appointment, and has never been, and shall not be at any time while serving as Independent Manager/Director, any of the following: (A) a member, partner, equityholder, manager, director, officer or employee of such Borrower or any of its or the SPE Party’s, as applicable, equityholders or Affiliates (other than serving as an Independent Manager/Director of (x) Borrower or (y) an Affiliate of Borrower that does not own a direct or indirect ownership interest in Borrower or the SPE Party (if any) and that is required by a creditor to be a single purpose bankruptcy remote entity, provided that such Independent Manager/Director is employed by a company that routinely provides professional Independent Managers/Directors or managers in the ordinary course of its business), (B) a customer, creditor, supplier or service provider (including provider of professional services) to, or any other Person who derives any of its purchases or revenues from its activities with, Borrower or any of its

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equityholders or Affiliates (other than a nationally-recognized company that routinely provides professional Independent Managers/Directors and other corporate services to Borrower or any of its Affiliates in the ordinary course of its business), (C) a family member of any such member, partner, equityholder, manager, director, officer, employee, creditor, supplier, customer or service provider, or (D) a Person that controls (whether directly, indirectly or otherwise) any of (A), (B) or (C) above, (ii) be employed by, in good standing with and engaged by Borrower in connection with, in each case, an Approved Independent Manager/Director Provider, and (iii) have had at least three (3) years prior experience as an Independent Manager/Director employed and in good standing with an Approved Independent Manager/Director Provider. A natural person who otherwise satisfies the foregoing definition and satisfies clause (A) by reason of being the Independent Manager/Director of a “special purpose entity” affiliated with Borrower that does not own a direct or indirect ownership interest in Borrower or SPE Party (if any) shall be qualified to serve as an Independent Manager/Director of the Borrower, provided that the fees that such individual earns from serving as an Independent Manager/Director of affiliates of Borrower in any given year constitute in the aggregate less than five percent (5%) of such individual’s annual income for that year. For purposes of this paragraph, a “special purpose entity” is an entity whose organizational documents contain restrictions on its activities and impose requirements intended to preserve such entity’s separateness that are substantially similar to those contained in the definition of Special Purpose Entity of this Agreement.

(ee)The organizational documents of Borrower (to the extent Borrower is a corporation or a Single Member Delaware LLC) or each SPE Party (if Borrower is a limited partnership or a limited liability company other than a Single Member Delaware LLC) shall further provide that:

(i)the board of directors or managers of Borrower or the SPE Party, as applicable, and the constituent members of such entities (the “Constituent Members”) shall not take any Material Credit Action without the unanimous vote of the entire board of directors or managers, as applicable, and the Constituent Members including the two (2) Independent Managers/Directors appointed in accordance with the terms and provisions of Section 3.1.24(dd);

(ii)any resignation, removal or replacement of an Independent Manager/Director shall not be effective without five (5) Business Days prior written notice to Lender accompanied by evidence that a replacement Independent Manager/Director satisfying the applicable terms and conditions hereof and of the applicable organizational documents shall have replaced such outgoing Independent Manager/Director;

(iii)to the fullest extent permitted by applicable law, including Section 18-1101(c) of the Act, and notwithstanding any duty otherwise existing at law or in equity, each Independent Manager/Director shall consider only the interests of Borrower and the SPE Party, if applicable (including Borrower’s and any such SPE Party’s creditors), in acting or otherwise voting on a Material Credit Action or any other matters provided for herein, and the organizational documents of Borrower and any SPE Party (which such fiduciary duties to the Constituent Members and Borrower’s and any such SPE Party’s respective creditors, in each case, shall be deemed to apply solely to the

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extent of their respective economic interests in Borrower or any SPE Party, as applicable) exclusive of (x) all other interests (including, without limitation, all other interests of the Constituent Members), (y) the interests of other affiliates of the Constituent Members, Borrower and any SPE Party and (z) the interests of any group of affiliates of which the Constituent Members, Borrower or any SPE Party is a part));

(iv)other than as provided in subsection (iii) above, the Independent Managers/Directors shall not have any fiduciary duties to any Constituent Members, any directors of Borrower, any SPE Party or any other Person;

(v)the foregoing shall not eliminate the implied contractual covenant of good faith and fair dealing under applicable law; and

(vi)to the fullest extent permitted by applicable law, including Section 18-1101(e) of the Act, an Independent Manager/Director shall not be liable to Borrower, any SPE Party, any Constituent Member or any other Person for breach of contract or breach of duties (including fiduciary duties), unless such Independent Manager/Director acted in bad faith or engaged in willful misconduct.

(ff)Any assignment of limited liability company or limited partnership interests in Borrower, and the admission of the assignee as a member or partner of Borrower, were accomplished in accordance with, and were permitted by, the limited liability company agreement or limited partnership agreement of Borrower as in effect at such time.

(gg)prior to the filing of each Certificate of Conversion with the Secretary of State of the State of Delaware with respect to a Borrower, each conversion thereunder was approved in the manner provided for (i) by the document, instrument, agreement or other writing, as the case may be, governing the internal affairs of the applicable Company and the conduct of its business or (ii) by applicable non-Delaware law, as appropriate, and each prior limited liability agreement of a Borrower was approved by the same authorization required to approve such conversion.

(hh)The organizational documents of Borrower and each SPE Party (if any) shall provide an express acknowledgment that Lender is an intended third-party beneficiary of the “special purpose” provisions of such organizational documents.

(ii)Each amendment and restatement (if any) of each organizational document of Borrower has been accomplished in accordance with, and was permitted by, the relevant provisions of said documents prior to its amendment or restatement from time to time.

(jj)The Organizational Documents for each Borrower shall provide that except for duties to such Borrower as set forth in the Organizational Documents (including duties to the member and Borrower’s creditors solely to the extent of their respective economic interests in Borrower, but excluding (i) all other interests of the member, (ii) the interests of other Affiliates of Borrower, and (iii) the interests of any group of Affiliates of which Borrower is a part), the Independent Managers/Directors shall not have any fiduciary duties to the member, any officer or any other Person bound by the Borrower’s Organizational Documents; provided, however, the foregoing shall not eliminate the implied contractual covenant of good faith and

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fair dealing. The Organizational Documents for Borrower shall provide that to the fullest extent permitted by law, including Section 18-1101(e) of the Delaware Limited Liability Company Act, an Independent Manager/Director shall not be liable to Borrower, the member or any other Person bound by the Borrower’s Organizational Documents for breach of contract or breach of duties (including fiduciary duties), unless the Independent Manager/Director acted in bad faith or engaged in willful misconduct. The Organizational Documents for Borrower shall at all times provide that all right, power and authority of the Independent Managers/Directors shall be limited to the extent necessary to exercise those rights and perform those duties specifically set forth in the Borrower’s Organizational Documents. The Organizational Documents for Borrower shall provide that notwithstanding any other provision of the Borrower’s Organizational Documents to the contrary, each Independent Manager/Director, in its capacity as an Independent Manager/Director, may only act, vote or otherwise participate in those matters referred to in Section 9(j)(iii) of the Borrower’s Organizational Documents or as otherwise specifically required by the applicable Organizational Documents, and such Independent Manager/Director’s act, vote or other participation shall not be required for the validity of any action taken by the board of directors of Borrower unless, pursuant to the provisions of Section 9(j)(iii) of the operating agreement or as otherwise specifically provided in the applicable Organizational Documents, such action would be invalid in the absence of the affirmative vote or consent of such Independent Manager/Director.

(kk)Each Borrower’s conversion to a Delaware limited liability company was in accordance with the Delaware Limited Liability Company Act and other applicable law.

3.1.25Tax Filings. To the extent required, each Borrower has timely filed (or has obtained effective extensions for filing) all federal, state and local tax returns required to be filed and have paid or made adequate provision for the payment of all federal, state and local taxes, charges and assessments payable by such Borrower. Borrower believes that its tax returns (if any) properly reflect the income and taxes of Borrower for the periods covered thereby, subject only to reasonable adjustments required by the Internal Revenue Service or other applicable tax authority upon audit.

3.1.26Solvency. No Borrower has entered into the transaction or any Loan Document with the actual intent to hinder, delay, or defraud any creditor. Each Borrower received reasonably equivalent value in exchange for its obligations under the Loan Documents. Giving effect to the Loan, the fair saleable value of Borrower’s assets exceeds and will, immediately following the making of the Loan, exceed Borrower’s total liabilities, including, without limitation, subordinated, unliquidated, disputed and contingent liabilities. The fair saleable value of Borrower’s assets is and will, immediately following the making of the Loan, be greater than Borrower’s probable liabilities, including the maximum amount of its contingent liabilities on its debts as such debts become absolute and matured. Borrower’s assets do not and, immediately following the making of the Loan will not, constitute unreasonably small capital to carry out its business as conducted or as proposed to be conducted. Borrower does not intend to, and does not believe that it will, incur Indebtedness and liabilities (including contingent liabilities and other commitments) beyond its ability to pay such Indebtedness and liabilities as they mature (taking into account the timing and amounts of cash to be received by Borrower and the amounts to be payable on or in respect of obligations of Borrower). No petition in bankruptcy has been filed against any Borrower or any Constituent Member of any Borrower,

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and no Borrower nor any Constituent Member of Borrower has ever made an assignment for the benefit of creditors or taken advantage of any insolvency act for the benefit of debtors.

3.1.27Federal Reserve Regulations. No part of the proceeds of the Loan will be used for the purpose of purchasing or acquiring any “margin stock” within the meaning of Regulation U of the Board of Governors of the Federal Reserve System or for any other purpose which would be inconsistent with such Regulation U or any other Regulations of such Board of Governors, or for any purposes prohibited by Legal Requirements or by the terms and conditions of this Agreement or the other Loan Documents.

3.1.28Organizational Chart. The organizational chart attached as Schedule II hereto, relating to each Borrower and certain Affiliates and other parties, is true, complete and correct on and as of the date hereof.

3.1.29Bank Holding Company. No Borrower is a “bank holding company” or a direct or indirect subsidiary of a “bank holding company” as defined in the Bank Holding Company Act of 1956, as amended, and Regulation Y thereunder of the Board of Governors of the Federal Reserve System.

3.1.30Investment Company Act. Borrower is not (1) an “investment company” or a company “controlled” by an “investment company”, within the meaning of the Investment Company Act of 1940, as amended; or (2) subject to any other federal or state law or regulation which purports to restrict or regulate its ability to borrow money.

3.1.31No Bankruptcy Filing. Borrower is not contemplating either the filing of a petition by it under any state or federal bankruptcy or insolvency laws or the liquidation of its assets or property, and Borrower does not have any Knowledge of any Person contemplating the filing of any such petition against Borrower.

3.1.32Full and Accurate Disclosure. No information contained in this Agreement, the other Loan Documents, or any written statement furnished by or on behalf of any Borrower pursuant to the terms of this Agreement contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements contained herein or therein not misleading in light of the circumstances under which they were made. There is no fact or circumstance presently Known to Borrower (other than information of a general economic nature) which has not been disclosed to Lender which is reasonably likely to have a Material Adverse Effect.

3.1.33Foreign Person. Borrower is not a “foreign person” within the meaning of Section 1445(f)(3) of the Code.

3.1.34No Change in Facts or Circumstances; Disclosure. There has been no material adverse change in any condition, fact, circumstance or event that would make the financial statements, rent rolls, reports, certificates or other documents submitted in connection with the Loan inaccurate, incomplete or otherwise misleading in any material respect or that otherwise has, or is reasonably likely to have, a Material Adverse Effect.

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3.1.35Property Management Agreement. The Property Management Agreement is in full force and effect and (a) to Borrower’s Knowledge, there is no default by Manager thereunder and no event has occurred that, with the passage of time and/or the giving of notices would constitute a default by Manager thereunder and (b) there is no default by Borrower thereunder and no event has occurred that, with the passage of time and/or the giving of notice would constitute a default by Borrower thereunder.

3.1.36Intentionally Omitted.

3.1.37Perfection of Accounts.

(a)This Agreement, together with the other Loan Documents, create a valid and continuing security interest (as defined in the Uniform Commercial Code of the State of New York) in the Deposit Account and the other Accounts (as defined in the Cash Management Agreement) in favor of Lender, which security interest is prior to all other Liens (except as provided in the DACA), and is enforceable as such against creditors of and purchasers from Borrower. Other than in connection with the Loan Documents, Borrower has not sold or otherwise conveyed the Accounts.

(b)The Deposit Account and the other Accounts (as defined in the Cash Management Agreement) constitute “deposit accounts” or “securities accounts” within the meaning of the Uniform Commercial Code of the State of New York.

3.1.38Material Agreements. With respect to each Material Agreement, Borrower hereby represents that (except, in each case, as disclosed to Lender in writing) (a) each Material Agreement is, to Borrower’s Knowledge, in full force and effect and has not been amended, restated, replaced or otherwise modified by Borrower, and to Borrower’s Knowledge, has not been amended, restated, replaced or otherwise modified by any other party (b) no Borrower has received any written notice of any uncured defaults under any Material Agreement by any party thereto and, to Borrower’s Knowledge, no event has occurred which, but for the passage of time, the giving of notice, or both, would constitute a material default under any Material Agreement, (c) to Borrower’s Knowledge, all payments and other sums due and payable by the related Borrower under the Material Agreements have been paid in full, and (d) no party to any Material Agreement has commenced any action to which Borrower is a party, and no Borrower has either given or received any notice, for the purpose of terminating any Material Agreement.

3.1.39Illegal Activity/Forfeiture. (a)  No portion of any individual Property has been or will be purchased, improved, equipped or furnished with proceeds of any illegal activity and to the Borrower’s Knowledge, there are no illegal activities at any Property.

(b)There has not been committed by any Borrower or to Borrower’s Knowledge, any other person in occupancy of or involved with the operation or use of the applicable Property, nor has Borrower permitted any other person in occupancy of or involved with the operation or use of the applicable Property to commit, any act or omission affording the federal government or any state or local government the right of forfeiture as against such Property or any part thereof or any monies paid in performance of Borrower’s obligations under

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this Agreement, the Note, the Mortgage, or the other Loan Documents. No Borrower shall commit, nor shall Borrower permit any other person in occupancy of or involved with the operation or use of the applicable Property to commit, any act or omission affording such right of forfeiture.

3.1.40Embargoed Person. As of the date hereof and at all times throughout the term of the Loan, including after giving effect to any transfers of interests permitted pursuant to the Loan Documents, (a) none of the funds or other assets of any Borrower, Sponsor or Guarantor constitute property of, or are beneficially owned, directly or indirectly, by any person, entity or country which is a sanctioned person, entity or country or is otherwise subject to any trade restrictions under U.S. law (including, without limitation, Cuba, Iran, North Korea, Syria and Crimea), including but not limited to, the International Emergency Economic Powers Act, 50 U.S.C. §§ 1701 et seq., The Trading with the Enemy Act, 50 U.S.C. App. 1 et seq., and any Executive Orders or regulations promulgated thereunder (including regulations administered by the Office of Foreign Assets Control (“OFAC”) of the U.S. Department of the Treasury and the Specially Designated Nationals List maintained by OFAC) with the result that the investment in such Borrower, Sponsor and/or Guarantor, as applicable (whether directly or indirectly), is prohibited by Legal Requirements or the Loan made by Lender is in violation of Legal Requirements (“Embargoed Person”); (b) unless expressly waived in writing by Lender, no Embargoed Person has any interest of any nature whatsoever in any Borrower, Sponsor or Guarantor, as applicable, with the result that the investment in any Borrower, Sponsor and/or Guarantor, as applicable (whether directly or indirectly), is prohibited by Legal Requirements or the Loan is in violation of Legal Requirements; and (c) none of the funds of Borrower, Sponsor or Guarantor, as applicable, have been derived from any unlawful activity with the result that the investment in Borrower, Sponsor and/or Guarantor, as applicable (whether directly or indirectly), is prohibited by Legal Requirements or the Loan is in violation of Legal Requirements. Borrower covenants and agrees that in the event Borrower receives any notice that any Borrower, Sponsor or Guarantor (or any of their respective beneficial owners, affiliates or participants) or any Person that has an interest in any Property is designated as an Embargoed Person, Borrower shall promptly notify Lender in writing. The representations and warranties set forth in this Section 3.1.40 shall not apply to any shareholders or owners of stock or equity interest (directly or indirectly) in any Person which is publicly traded on a Recognized Exchange. At Lender’s option, it shall be an Event of Default hereunder if any Borrower, Guarantor or Sponsor is designated as an Embargoed Person.

3.1.41Patriot Act. (a)  All capitalized words and phrases and all defined terms used in the USA Patriot Act of 2001, 107 Public Law 56 (October 26, 2001) and in other statutes and all orders, rules and regulations of the United States government and its various executive departments, agencies and offices related to the subject matter of the Patriot Act (collectively referred to in this Section only as the “Patriot Act”) are incorporated into this Section. Borrower hereby represents and warrants that each Borrower, Sponsor and Guarantor and each and every Person affiliated with each Borrower, Sponsor and/or Guarantor or that to Borrower’s Knowledge has an economic interest in a Borrower, or, to Borrower’s Knowledge, that has or will have an interest in the transaction contemplated by this Agreement or in any Property or will participate, in any manner whatsoever, in the Loan (excluding any Lender Indemnitee or any other assignee or participant of Lender not affiliated with Borrower or Guarantor), is: (i) in full compliance with all applicable requirements of the Patriot Act and any regulations issued

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thereunder; (ii) operated under policies, procedures and practices, if applicable, that are in compliance with the Patriot Act and available to Lender for their review and inspection during normal business hours and upon reasonable prior notice; (iii) not in receipt of any notice from the Secretary of State or the Attorney General of the United States or any other department, agency or office of the United States claiming a violation or possible violation of the Patriot Act; (iv) not a person who has been determined by competent authority to have violated any of the prohibitions contained in the Patriot Act; and (v) not owned or controlled by or now acting and or will in the future act for or on behalf of any person who has been determined to have violated the prohibitions contained in the Patriot Act. Borrower covenants and agrees that in the event Borrower receives any notice that any Borrower, Sponsor or Guarantor (or any of their respective beneficial owners, affiliates or participants) or any Person that has an interest in the Property is indicted, arraigned, or custodially detained on charges involving money laundering or predicate crimes to money laundering, Borrower shall promptly notify Lender. At Lenders’ option, it shall be an Event of Default hereunder if any Borrower, Guarantor, Sponsor or any other party to the Loan (excluding any Lender Indemnitee or any other assignee or participant of Lender not affiliated with Borrower or Guarantor) is indicted, arraigned or custodially detained on charges involving money laundering or predicate crimes to money laundering. The representations and warranties set forth in this Section 3.1.41 shall not apply to any shareholders or owners of stock or equity interest (directly or indirectly) in any Person which is publicly traded on a Recognized Exchange.

(b)The Patriot Act requires all financial institutions to obtain, verify and record certain information that identifies individuals or business entities which open an “account” with such financial institution. Consequently, Lender may from time-to-time request, and Borrower shall provide to Lender, Borrower’s name, address, tax identification number and/or such other identification information as shall be necessary for Lender to comply with federal law. An “account” for this purpose may include, without limitation, a deposit account, cash management service, a transaction or asset account, a credit account, a loan or other extension of credit and/or other financial services product.

3.1.42Prohibited Entities. No Borrower nor any holder of a direct or indirect beneficial interest in Borrower (exclusive of any direct or indirect owner of Sponsor, or any successor by merger, consolidation or otherwise of Sponsor, so long as Sponsor or any such successor by merger, consolidation or otherwise of Sponsor is a publicly traded entity) is a Prohibited Entity.

3.1.43CFIUS. Either (a) each of the Leased Fee Leases and Borrower’s acquisition of each Property owned by it was not a Covered Transaction when entered into or acquired, or (b) Borrower has previously obtained CFIUS Approval with respect to each of the Leased Fee Leases and Borrower’s acquisition of such Property.

3.1.44Recycled Entity Representations. Each Borrower hereby represents that such Borrower:

(a)from the date of its formation to the date hereof (i) is and always has been duly formed, validly existing, and in good standing in the state of its formation and in all other jurisdictions where it is qualified to do business and (ii) has never owned any real

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property other than the Property of such Borrower and personal property necessary or incidental to its ownership or leasing of such Property and has never engaged in any business other than the ownership and leasing of such Property;

(b)has no outstanding judgments or liens of any nature against it except for tax liens not yet due;

(c)is in compliance with all laws, regulations, and orders applicable to it and, except as otherwise disclosed in this Agreement, has received all permits necessary for it to own and lease such Property;

(d)is not currently involved in any dispute with any taxing authority;

(e)has paid all taxes which it owes;

(f)except as otherwise disclosed in this Agreement, is not now, nor has ever been, party to any lawsuit, arbitration, summons, or legal proceeding that is still pending; and is not now, nor has ever been, party to any lawsuit, arbitration, summons, or legal proceeding that resulted in a judgment against it that has not been paid in full;

(g)has provided Lender with complete financial statements that reflect a fair and accurate view of the Collective Properties on a combined basis;

(h)has no material contingent or actual obligations not related to such Property; and

(i)each amendment and restatement of Borrower’s organizational documents has been accomplished in accordance with, and was permitted by, the relevant provisions of said documents prior to its amendment or restatement from time to time.

3.1.45Knowledge Parties. The President & Chief Executive Officer and the Chief Financial Officer & Treasurer of each Borrower are the officers of Borrower who are appropriately positioned to provide knowledge of the representations and warranties set forth herein.

3.1.46Tenant Owned Improvements. Borrower hereby represents and warrants to Lender that the improvements on the parcels of real property identified on Schedule 3.1.46 hereof are the only improvements in which Borrower has any right, title and interest as of the date hereof (excluding in any event the Tenant Owned Improvements) (the “Owned Improvements”; any improvements located at where the applicable Lease permits the applicable Tenant to remove or demolish such improvements, regardless of whether title to such improvement vests in Borrower at the end of the Lease term shall be referred to as a “Tenant Owned Improvement”). Borrower acknowledges that, in the event that Borrower acquires any right, title or interest (or any reversionary interest has reverted back to Borrower) in a Tenant Owned Improvement after the Closing Date, such Tenant Owned Improvement shall thereafter be considered an “Owned Improvement” for the purposes of any covenants set forth in the Loan Documents and any forward-looking representation or representation made by Borrower with

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respect to Improvements after the date that the Borrower acquires a right, title or interest in such Tenant Owned Improvement.

Section 3.2Survival of Representations. The representations and warranties set forth in Section 3.1 are made as of the Closing Date (or as of another date specifically set forth herein) and shall survive for so long as any amount remains payable to Lender under this Agreement or any of the other Loan Documents.

ARTICLE IV.

BORROWER COVENANTS

Section 4.1Borrower Affirmative Covenants. From and after the Closing Date until the indefeasible repayment or defeasance in full of the Debt, each Borrower hereby covenants and agrees with Lender that:

4.1.1Existence; Compliance with Legal Requirements.

(a)Each Borrower shall do or cause to be done all things necessary to preserve, renew and keep in full force and effect its existence, rights, licenses, permits, trade names, and franchises, and comply in all material respects with all Legal Requirements applicable to it and each Property which it owns, including, without limitation, Prescribed Laws. Each Borrower shall continue to comply with the Patriot Act and OFAC, including without limitation, the provisions of Sections 3.1.40 and 3.1.41, throughout the term of the Loan.

(b)Anti-Corruption. Neither any Borrower, any SPE Party, Sponsor, or Guarantor, nor any director, officer, or employee of the aforementioned, has taken or will take any action in furtherance of an offer, payment, promise to pay, or authorization or approval of the payment or giving of money, property, gifts or anything else of value, directly or indirectly, to any person to secure any improper business advantage for any Borrower; and neither Borrower, SPE Party, nor Guarantor have conducted their business in a manner which is not in compliance with all applicable anti-bribery and anti-corruption laws.

(c)CFIUS. During the term of the Loan, each Borrower shall (and shall cause the holders of direct and/or indirect, legal and/or beneficial interests in such Borrower to) (a) within five (5) days of receipt of the same, notify Lender and provide Lender with a copy of, any inquiry received from CFIUS or any other Governmental Authority related to each of the Leased Fee Leases and/or Borrower’s acquisition of any Property, (b) make any filing requested by CFIUS related to the Leased Fee Leases and/or Borrower’s acquisition of any Property, (c) cooperate with, and fully respond to any inquiries received from CFIUS or any Governmental Authority related to CFIUS’s review and/or investigation (the “CFIUS Review”) related to the Leased Fee Leases and/or Borrower’s acquisition of any Property, in each case within the time permitted by CFIUS or such Governmental Authority, as applicable, and (d) subject to the terms and conditions hereof (including without limitation, Section 4.2.1 hereof), take any mitigation

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measures requested by CFIUS and/or any Governmental Authority in connection with the CFIUS Review.

4.1.2Taxes and Other Charges. Each Borrower shall pay all Taxes and Other Charges now or hereafter levied or assessed or imposed against its Property or any part thereof as the same become due and payable; provided, however, with respect to Taxes and Other Charges that are due more than sixty (60) days after the Closing Date, Borrower’s obligation to directly pay Taxes shall be suspended during a Cash Management Sweep Period for so long as Borrower complies with the terms and provisions of Section 6.2 hereof. Upon Lender’s request, Borrower shall furnish to Lender receipts for the payment of the Taxes and the Other Charges prior to the date the same shall become delinquent; provided, however, that Borrower is not required to furnish such receipts for payment of Taxes in the event that such Taxes have been paid by Lender pursuant to Section 6.2 hereof. No Borrower shall permit or suffer, and each Borrower shall promptly discharge, any lien or charge against any of the Collective Properties. After prior notice to Lender, a Borrower, at its own expense, may contest by appropriate legal proceeding, conducted in good faith and with due diligence, the amount or validity of any Taxes or Other Charges, provided that (a) no Event of Default has occurred and remains uncured; (b) such proceeding shall be permitted under and be conducted in accordance with all applicable statutes, laws and ordinances; (c) neither the applicable Property nor any part thereof or interest therein will be in danger of being sold, forfeited, terminated, canceled or lost; (d) the applicable Borrower shall promptly upon final determination thereof pay the amount of any such Taxes or Other Charges, together with all costs, interest and penalties which may be payable in connection therewith; (e) such proceeding shall suspend the collection of Taxes or Other Charges from the affected Property; and (f) Borrower shall either (i) furnish such security as may be required in the proceeding, or (ii) deposit with Lender cash, or other security as may be reasonably required by Lender, in an amount equal to one hundred ten percent (110%) of the contested amount, to insure the payment of any such Taxes or Other Charges, together with all interest and penalties thereon. Lender may pay over any such cash or other security held by Lender to the claimant entitled thereto at any time when, in the judgment of Lender, the entitlement of such claimant is established. To the extent a Tenant is contesting Taxes or Other Charges in accordance with the terms of its Lease and the Tenant otherwise satisfies any of the foregoing requirements set forth in clauses (a) through (f) above, Lender shall not separately require that the Borrower satisfy such requirements provided that Lender is in receipt of reasonable evidence to verify the Tenant’s compliance with this Section 4.1.2. The foregoing shall also not be deemed to limit or otherwise prohibit a Tenant from otherwise exercising any separate rights of contest which may be granted to it pursuant to the terms of its Lease.

4.1.3Litigation. Borrower shall give prompt notice to Lender of any material litigation (other than ordinary course “slip and fall” litigation that is covered by insurance) or material governmental proceedings pending or threatened in writing against any Property, any Borrower or any SPE Party. Borrower shall give prompt notice to Lender of any litigation or governmental proceedings pending or threatened in writing against Guarantor that has or could reasonably be expected to have a Material Adverse Effect.

4.1.4Access to Property. Subject to the rights of Tenants under applicable Leases, Borrower shall permit agents, representatives and employees of Lender to inspect each Property or any part thereof at reasonable hours upon reasonable advance notice. Lender shall

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use commercially reasonable efforts to avoid interference with the ongoing business operations of Tenants during any inspection of the related Property.

4.1.5Further Assurances; Supplemental Mortgage Affidavits. Borrower shall, at Borrower’s sole cost and expense:

(a)execute and deliver to Lender such documents, instruments, certificates, assignments and other writings, and do such other acts necessary or desirable, to evidence, preserve and/or protect the collateral at any time securing or intended to secure the obligations of Borrower under the Loan Documents, as Lender may reasonably require; and

(b)do and execute all and such further lawful and reasonable acts, conveyances and assurances for the better and more effective carrying out of the intents and purposes of this Agreement and the other Loan Documents, as Lender shall reasonably require from time to time.

4.1.6Financial Reporting. (a)  Each Borrower shall keep and maintain or will cause to be kept and maintained proper and accurate accounting books and records, in accordance with GAAP (or such other accounting basis selected by Borrower and reasonably acceptable to Lender), reflecting the financial affairs of each Borrower. Following the occurrence and during the continuation of an Event of Default, Lender shall have the right from time to time during normal business hours upon reasonable notice to Borrower to examine such books and records at the office of such Borrower or other Person maintaining such books and records and to make such copies or extracts thereof as Lender shall desire. After the occurrence and during the continuance of an Event of Default, Borrower shall pay any reasonable out-of-pocket costs and expenses incurred by Lender to examine Borrower’s such books and records.

(b)Borrower shall furnish Lender annually, prior to the date that is one hundred and twenty (120) days after the end of the calendar year, a complete copy of Borrower’s annual financial statements audited by Baker Newman Noyes, Ernst & Young, Deloitte, RSM McGladrey, PwC, or another firm of certificated public accountants reasonably acceptable to Lender prepared in accordance with GAAP (or such other accounting basis selected by Borrower and reasonably acceptable to Lender) covering the Collective Properties on a combined basis, including statements of income and expense and cash flow and a balance sheet. Such annual financial statements shall be accompanied by a certificate executed by a duly authorized officer of Borrower (or its general partner or managing member, as applicable) certifying that such annual financial statement presents fairly the combined financial condition and the results of operations of the Borrowers and the Collective Properties. Together with Borrower’s annual financial statements, Borrower shall furnish to Lender an annual summary of any and all Capital Expenditures made at the Collective Properties during the prior twelve (12) month period and the Net Operating Income as of the end of such calendar year.

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(c)Borrower will furnish Lender, prior to the date that is forty-five (45) days after the end of each of the first three calendar quarters of each year, the following items:

(i)on a combined basis for the Collective Properties, a current balance sheet and quarterly and year to date statements of income and expense and cash flow prepared for such quarter;

(ii)an Officer’s Certificate from a duly authorized officer of Borrower (or its general partner or managing member, as applicable) certifying: (A) that such statements referred to in clause (i) above are true, correct, accurate and complete and fairly present the combined financial condition and the results of the operations of Borrowers and the Collective Properties in accordance with GAAP as applicable, and (B) a calculation reflecting the Debt Yield; and

(iii)a current rent roll for the Collective Properties.

(d)Prior to the earlier of (x) Securitization of the Loan in its entirety, (y) the sale, transfer or assignment of the Loan in its entirety (other than transfers of the Loan to Affiliates of Lender for purposes of the Securitization), or (z) the date which is two (2) years from the Closing Date, and upon written request of Lender, Borrower will furnish Lender on or before the forty-fifth (45th) day after the end of each calendar month, the following items:

(i)on a combined basis for the Collective Properties, a current balance sheet and monthly and year-to-date statements of income and expense and cash flow prepared for such month with respect to the Collective Properties, and for the corresponding month of the previous year, and a statement of revenues and expenses for the year-to-date;

(ii)an Officer’s Certificate certifying: (A) that such statements referred to in clause (i) above are true, correct, accurate and complete and fairly present the combined financial condition and results of the operations of Borrowers and the Collective Properties in accordance with GAAP as applicable; and (B) that as of the date of such Officer’s Certificate, no Default or Event of Default exists under this Agreement or any other Loan Document or, if so, specifying the nature and status of each such Default and the action then being taken by Borrower or proposed to be taken to remedy such Default;

(iii)the current Net Operating Income as of the end of such calendar month; and

(iv)a current rent roll for the Collective Properties.

(e)On or before the date which is thirty (30) days prior to the commencement of each Fiscal Year, Borrower shall submit to Lender an Annual Budget in form similar to that delivered to Lender prior to the Closing Date or such other form reasonably approved by Lender. Each Annual Budget submitted to Lender during any period which is not a Cash Management Sweep Period shall be for informational purposes only and Lender shall not have the right to approve same. During the continuance of a Cash Management Sweep Period, each such Annual

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Budget submitted for such Fiscal Year and any Annual Budget then in effect shall be subject to Lender’s approval, which approval shall not be unreasonably withheld or delayed (each such Annual Budget, an “Approved Annual Budget”). In the event that Lender has the right to approve the same and Lender objects to a proposed Annual Budget submitted by Borrower, Lender shall use good faith efforts to advise Borrower of such objections within ten (10) Business Days after receipt thereof (and deliver to Borrower a reasonably detailed description of such objections), and Borrower shall promptly revise such Annual Budget and resubmit the same to Lender. Provided an Event of Default shall not have occurred and be continuing, so long as Borrower sends a written request containing a legend in bold letters stating that Lender’s failure to respond within the initial ten (10) Business Day period and then again within the additional seven (7) Business Day period following Lender’s receipt of a second notice in accordance with Section 4.1.6(e) of this Agreement shall result in Lender’s deemed approval, Lender fails to respond to such initial notice within such ten (10) Business Day period following receipt thereof and then Borrower sends a second written request containing a legend in bold letters stating that Lender’s failure to respond within an additional seven (7) Business Days shall be deemed approval, Lender shall be deemed to have approved such Annual Budget if Lender fails to respond to such second written request before the expiration of such seven (7) Business Day period. In the event Lender shall advise Borrower of any objections to such revised Annual Budget within the time period required hereunder, Borrower shall promptly revise the same in accordance with the process described in this subsection until the Lender approves the Annual Budget. Until such time that Lender approves or is deemed to have approved a proposed Annual Budget, the most recently Approved Annual Budget shall apply; provided that, such Approved Annual Budget shall be adjusted to reflect actual increases in Taxes, Insurance Premiums, the cost of utilities and such other Property-related costs which by their nature Borrower cannot control, as well as increases for capital costs for Leases approved by Lender. In the event that during the continuance of a Cash Management Sweep Period resulting from the occurrence of a Partial Debt Yield Event or Debt Yield Event (but excluding in all cases if a Cash Management Sweep Period exists as a result of an Event of Default), Borrower requests disbursement of funds in the Cash Trap Account (as defined in the Cash Management Agreement) to pay an extraordinary operating expense or capital expense incurred by Borrower which is not set forth in the Approved Annual Budget (including any Tenant Improvements or Leasing Commissions for Leases entered into in accordance with this Agreement, each an “Extraordinary Expense”), then Borrower shall promptly deliver to Lender a reasonably detailed explanation of such proposed Extraordinary Expense for Lender’s approval (such approval not to be unreasonably withheld or delayed).

(f)Borrower shall furnish to Lender, within five (5) Business Days after written request (or as soon thereafter as may be reasonably possible), such further detailed information with respect to the operation of the Collective Properties and the financial affairs of Borrower as may be reasonably requested by Lender, including, without limitation, a comparison of the budgeted income and expenses and the actual income and expenses for a quarter and year to date for the Collective Properties, together with a reasonably detailed explanation of any variances of more than five percent (5%) between budgeted and actual amounts for such period and year to date.

(g)For purposes of this Section 4.1.6, Borrower shall be permitted to furnish any of the required deliverables or reports to Lender (or its servicer) by uploading such

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documents to a website or datasite controlled by Lender (or its servicer) to the extent such service is available.

4.1.7Title to the Collective Properties. Borrower will warrant and defend the validity and priority of the Lien of each Mortgage on the related Property against the claims of all Persons whomsoever, subject only to Permitted Encumbrances.

4.1.8Estoppel Statement. (a)  After written request by Lender (which request, provided an Event of Default shall not have occurred and be continuing, shall not be made more than twice during any given calendar year), Borrower shall within ten (10) Business Days furnish Lender with a statement, duly acknowledged and certified, stating (i) the unpaid principal amount of the Note, (ii) the Interest Rate of the Note, (iii) the date installments of interest and/or principal were last paid, (iv) any offsets or defenses to the payment of the Debt, if any, and (v) that this Agreement and the other Loan Documents have not been modified or if modified, giving particulars of such modification.

(b)After written request by Borrower, provided no Event of Default exists, Lender shall within ten (10) Business Days furnish Borrower with a statement, duly acknowledged and certified, stating (i) the unpaid principal amount of the Note, (ii) the Interest Rate of the Note, (iii) the date installments of interest and/or principal were last paid, (iv) whether or not Lender has sent any notice of default under the Loan Documents which remains uncured in the opinion of Lender, and (v) that this Agreement and the other Loan Documents have not been modified or if modified, giving particulars of such modification.

(c)Borrower shall use commercially reasonable efforts (not involving, for the avoidance of doubt, the expenditure of monies or any concession or agreement) to such Tenant to obtain and deliver to Lender (but excluding out-of-pocket expenses that may be incurred in the ordinary course of business in obtaining such estoppel), upon request, an estoppel certificate from each Tenant under any Lease; provided that such certificate may be in the form required under such Lease; provided, further, that Borrower shall not be required to request or deliver such certificates more frequently than one (1) time in any twelve (12) month period (other than in connection with an Event of Default or a Securitization) or less frequently to the extent provided in the applicable Lease. Failure to deliver an estoppel certificate pursuant to this Section 4.1.8(c) shall not constitute a Default or Event of Default under this Agreement so long as Borrower has used commercially reasonable efforts in order obtain such estoppel certificate.

4.1.9Leases. (a)  All Leases, amendments and modifications to Leases and all renewals of Leases executed after the date hereof (except, as to any amendment, modification or renewal of any existing Lease executed after the date hereof, to the extent otherwise provided in such Lease as a unilateral right of the related Tenant without the consent of the Borrower, as landlord) shall (i) provide for market rental rates in the local market, (ii) be on commercially reasonable terms, (iii) provide that such Lease is subordinate to the applicable Mortgage and that the lessee will attorn to the mortgagee and any purchaser at a foreclosure sale, (iv) be written substantially in accordance with the standard form of Lease which shall have been approved by Lender (subject to any commercially reasonable changes made in the course of negotiations with the applicable Tenant) and (v) not contain any option to purchase, any right of first refusal to purchase, any right to terminate (except in the event of the destruction or condemnation of a

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substantial portion of the related Property). All Major Leases and all renewals, amendments, modifications, extensions, assignments and subleases thereof executed after the date hereof shall be subject to Lender’s prior approval, which approval shall not be unreasonably withheld or delayed, provided, however, Lender’s consent shall not be required for (A) any extensions, assignments or subleases to the extent the Tenant may unilaterally exercise such right under its Lease without the consent of Borrower or (B) any extension, renewal or amendment to a Major Lease to the extent that the net effective rent payable under such Major Lease is not reduced and the length of the term of such Major Lease is not decreased.

(b)Borrower (i) shall observe and perform the obligations imposed upon the lessor under the Leases in a commercially reasonable manner; (ii) shall enforce the terms, covenants and conditions contained in the Leases upon the part of the lessee thereunder to be observed or performed in a commercially reasonable manner; provided, however, that, except in connection with a default by the Tenant thereunder, Borrower shall not terminate or accept a surrender of a Major Lease without Lender’s prior approval, which approval shall not be unreasonably withheld; provided, further, that, Borrower shall not waive (whether pursuant to a termination, settlement or surrender agreement or otherwise) any material right or claims of Borrower arising due to such default by the Tenant without Lender’s prior approval, which approval shall not be unreasonably withheld; (iii) shall not collect any of the Rents more than one (1) month in advance (other than security deposits); (iv) shall not execute any assignment of lessor’s interest in the Leases or the Rents (except as contemplated by the Loan Documents); (v) shall not alter, modify or change any Major Lease so as to decrease the amount of or payment date for rent, change the expiration date, grant any option for additional space, grant any option for an additional term, materially reduce the obligations of the lessee or increase the obligations of lessor, in each case, in a manner materially adverse to Borrower and/or Lender, except to the extent a Lease permits such an alteration or amendment by the Tenant without the consent of the Borrower as landlord; (vi) shall hold all security deposits under all Leases in accordance with Legal Requirements; and (vii) shall not permit or consent to any assignment of any Major Lease without Lender’s prior written reasonable approval (other than assignments expressly permitted under any Major Lease pursuant to a unilateral right of the Tenant thereunder not requiring the consent of Borrower). Borrower shall furnish Lender with executed copies of all Leases and amendments thereto promptly following execution thereof.

(c)Notwithstanding anything to the contrary in Section 4.1.9(a), provided an Event of Default shall not have occurred and be continuing, whenever Lender’s approval or consent is required pursuant to the provisions of Sections 4.1.9(a) or (b) (including, without limitation, any assignment of a Lease or a sublease of space demised pursuant to a Lease), Lender shall use good faith efforts to respond within ten (10) Business Days after Lender’s receipt of Borrower’s written request for such approval or consent together with all information reasonably required by Lender to make its determination. Lender’s request for additional information shall be deemed a response hereunder. If Lender fails to respond to such request within ten (10) Business Days, and Borrower sends a second written request containing a legend in bold letters stating that Lender’s failure to respond within an additional five (5) Business Days shall be deemed consent or approval, Lender shall be deemed to have approved or consented to the matter for which Lender’s consent or approval was sought if Lender fails to respond to such second written request before the expiration of such five (5) Business Day period.

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(d)Within ten (10) Business Days after written request by Borrower, Lender shall deliver a subordination, non-disturbance and attornment agreement on Lender’s form (with such modifications thereto requested by the Tenant and as may be reasonably acceptable to Lender) to any Tenants under any Lease, provided Borrower shall reimburse Lender any actual, reasonable out-of-pocket third-party expenses incurred by Lender in connection with the same.

(e)Borrower shall give Lender prompt written notice (containing a reasonably detailed description) in the event of: (i) the cancellation or termination of a Major Lease in violation of the terms and provisions of such Major Lease (or Borrower’s receipt of written notice from a Tenant under a Major Lease of its intent to cancel or terminate such Major Lease prior to the scheduled expiration date in violation of the terms and provisions of such Major Lease) and/or (ii) a default under a Major Lease beyond all applicable notice and cure periods.

(f)During a Cash Management Sweep Period, Borrower shall notify Lender in writing, within five (5) Business Days following receipt thereof, of Borrower’s receipt of any Lease Termination Fee paid by any Tenant under any Lease, and Borrower further covenants and agrees that Borrower shall deposit such Lease Termination Fee with Lender subject to and in accordance with Section 6.6 hereof. If a Cash Management Sweep Period is not in effect, then Borrower shall deposit such any Lease Termination Fees into the Deposit Account to be applied in the same manner as proceeds of Business Income/Rent Loss Insurance.

4.1.10Alterations. Lender’s prior approval shall be required in connection with any alterations to any Improvements (except Tenant Improvements under any Lease in effect as of the Closing Date or any Lease approved or deemed approved by Lender and except for any alterations Tenant has the right to make under its Lease without Borrower’s consent or where such consent may not be withheld unreasonably or under any lesser standard (in which case the lesser standard applicable to the Borrower’s consent under such Tenant’s Lease shall be deemed to be applicable to the Lender) notwithstanding any provision in this Section 4.1.10 to the contrary), (a) that would reasonably be expected to have a Material Adverse Effect, in which case, Lender’s approval, may be granted or withheld in Lender’s sole discretion, (b) the cost of which (including any related alteration, improvement or replacement), together with all other ongoing alterations, is reasonably anticipated to exceed the Alteration Threshold, in which case, Lender’s approval, may be granted or withheld in Lender’s reasonable discretion, or (c) that are structural in nature, in which case, Lender’s approval, may be granted or withheld in Lender’s reasonable discretion. If the total unpaid amounts incurred and reasonably anticipated to be incurred with respect to such alterations to the Improvements shall at any time exceed the Alteration Threshold, Borrower shall promptly deliver to Lender as security for the payment of such amounts, and as additional security for Borrower’s obligations under the Loan Documents, any of the following: (i) cash, (ii) Letters of Credit, or (iii) a guaranty (in form reasonably acceptable to Lender) from Sponsor (so long as Sponsor has an Investment Grade Rating at such time) or from another Person acceptable to Lender in its sole discretion; provided, however, the right to provide Lender with a guaranty hereunder is conditioned upon Borrower delivering to Lender a New Non- Consolidation Opinion in connection therewith, as well as such other legal opinions as may be reasonably requested by Lender in connection with the guaranty. Such security shall be in an amount equal to the excess of the total unpaid amounts incurred and to be incurred with respect to such alterations to the Improvements (other than such amounts to be

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paid or reimbursed by Tenants under the Leases) over the Alteration Threshold. Upon completion of any alteration permitted hereunder, the Property shall continue to comply with all Legal Requirements and Permitted Encumbrances.

4.1.11Intentionally Omitted.

4.1.12Material Agreements. Except as otherwise expressly provided in this Agreement, each Borrower shall (a) promptly perform and/or observe all of the material covenants and agreements required to be performed and observed by it under each Material Agreement to which it is a party, and do all things necessary to preserve and to keep unimpaired its material rights thereunder, (b) promptly notify Lender in writing of the giving of any written notice of any default by any party under any Material Agreement of which it is aware, (c) promptly enforce the performance and observance of all of the material covenants and agreements required to be performed and/or observed by the other party under each Material Agreement to which it is a party in a commercially reasonable manner, and (d) not amend, modify, or terminate a Material Agreement in any material respect nor enter into a new Material Agreement without the consent of Lender, which shall not be unreasonably withheld, conditioned, or delayed.

4.1.13Performance by Borrower. Each Borrower shall in a timely manner observe, perform and fulfill each and every covenant, term and provision of each Loan Document executed and delivered by such Borrower, and shall not enter into or otherwise suffer or permit any amendment, waiver, supplement, termination or other modification of any Loan Document executed and delivered by such Borrower without the prior consent of Lender.

4.1.14Costs of Enforcement/Remedying Defaults. In the event (a) that the Mortgage is foreclosed in whole or in part or the Note or any other Loan Document is put into the hands of an attorney for collection, suit, action or foreclosure, (b) of the foreclosure of any Lien or mortgage prior to or subsequent to the Mortgage, (c) of the bankruptcy, insolvency, rehabilitation or other similar proceeding in respect of Borrower or Guarantor or an assignment by Borrower or Guarantor for the benefit of its creditors, or (d) Lender shall remedy or attempt to remedy any Event of Default hereunder, Borrower shall be chargeable with and agrees to pay all reasonable costs incurred by Lender as a result thereof, including costs of collection and defense (including reasonable attorneys’, experts’, consultants’ and witnesses’ fees and disbursements) in connection therewith and in connection with any appellate proceeding or post-judgment action involved therein, which shall be due and payable on demand, together with interest thereon from the date incurred by Lender at the Default Rate, and together with all required service or use taxes.

4.1.15Business and Operations. Each Borrower will continue to engage in the business currently conducted by it as and to the extent reasonably required for the ownership and leasing of the Collective Properties owned by such Borrower. Each Borrower will qualify to do business and will remain in good standing under the laws of each jurisdiction as and to the extent the same are required for the ownership and leasing of the Collective Properties owned by such Borrower. Each Borrower shall at all times cause the related Property to be used for industrial and/or warehouse purposes and ancillary uses.

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4.1.16Intentionally Omitted.

4.1.17Maintenance of Property. Each Borrower shall cause any Property owned by such Borrower to be maintained in good and safe working order and repair, reasonable wear and tear excepted, and in keeping with the condition and repair of properties of a similar use, value, age, nature and construction. No Borrower shall use, maintain or operate any Property in any manner that constitutes a public or private nuisance or that makes void, voidable, or cancelable, or increases the premium of, any insurance then in force with respect thereto. Each Borrower shall from time to time make, or cause to be made, all reasonably necessary and desirable repairs, renewals, replacements, betterments and improvements to any Property owned by such Borrower. No Borrower shall make any change in the use of any Property owned by such Borrower that would materially increase the risk of fire or other hazard arising out of the operation of such Property, or do or permit to be done thereon anything that may in any way impair the value of such Property in any material respect or the impair the Lien of the related Mortgage. No Borrower shall, without the prior written consent of Lender, permit any drilling or exploration for or extraction, removal, or production of any minerals from the surface or the subsurface of any Property, regardless of the depth thereof or the method of mining or extraction thereof. Notwithstanding anything to the contrary contained herein, Borrower’s obligation to otherwise comply with this Section 4.1.17 shall be limited to exercising commercially reasonable efforts to enforce its rights under the related Leased Fee Lease (including, without limitation, any rights to cure the Tenant’s failure to maintain the related Property) to the extent that the Leased Fee Lease for such Property is in full force in effect and the applicable Ground Tenant is responsible for maintaining such Property under the terms of the related Leased Fee Lease.

4.1.18Environmental Policy. Borrower shall maintain in full force and effect at all times during the term of the Loan the Environmental Policy.

4.1.19Required Repairs. Borrower shall perform all of the repairs described in that certain letter by Borrower to Lender dated of even date herewith (such repairs hereinafter referred to as “Required Repairs”) (a) in compliance in all material respects with all applicable Legal Requirements, (b) in a lien-free, good and workmanlike manner and (c) prior to the twelve-month anniversary of the Closing Date (the “Required Repair Deadline”). It shall constitute an Event of Default if Borrower does not complete each Required Repair by the Required Repair Deadline, provided that, if Borrower shall have been unable to complete a Required Repair by the applicable Required Repair Deadline, after using commercially reasonable efforts to do so, including, without limitation, if caused by delays due to weather or force majeure, such Required Repair Deadline shall be automatically extended solely as to such Required Repair to permit Borrower to complete such Required Repair so long as Borrower is at all times thereafter diligently and expeditiously proceeding to complete the same.

4.1.20Zoning Reports. Borrower shall use commercially reasonable efforts to deliver final zoning reports for each of the Properties to the extent not furnished to Lender prior to the date hereof. To the extent that any such zoning report delivered on or after the date hereof identifies any open violations or non-conformities at the related Property with respect to any Owned Improvements which are not the responsibility of any Tenant pursuant to its Lease, Borrower shall use commercially reasonable efforts to remedy such violation or non-conformity to the extent Borrower, in the exercise of its reasonable business judgment determines necessary

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or appropriate. If such violation or non-conformity is the responsibility of the Tenant under the related Lease, Borrower’s obligations shall be limited to notifying such Tenant of such violation or non-conformity and Borrower shall take such additional actions with respect thereto as Borrower determines appropriate in the exercise of its business judgment.

Section 4.2Borrower Negative Covenants. From and after the Closing Date until the indefeasible repayment or defeasance of the Debt in full, each Borrower hereby covenants and agrees with Lender that:

4.2.1Due on Sale and Encumbrance; Transfers of Interests. (a)  Except as provided in Article VIII hereof, without the prior written consent of Lender, neither Borrower nor any other Person having a direct or indirect ownership or beneficial interest in Borrower shall sell, convey, mortgage, grant, bargain, encumber, pledge, divide into two (2) or more limited liability companies or other legal entities, assign or transfer any interest, direct or indirect, in a Restricted Party, any Property or any part thereof, whether voluntarily or involuntarily (collectively, “Prohibited Transfer”).

(b)A Prohibited Transfer shall include, but not be limited to, (i) an installment sales agreement wherein any Borrower agrees to sell any Property or any part thereof for a price to be paid in installments; (ii) an agreement by any Borrower leasing all or a substantial part of any Property for other than actual occupancy by a Tenant thereunder or a sale, assignment or other transfer of, or the grant of a security interest in, such Borrower’s right, title and interest in and to any Leases or any Rents; (iii) if a Restricted Party is a corporation, any merger, consolidation, division into two (2) or more legal entities or Sale or Pledge of such corporation’s stock or the creation or issuance of new stock in one or a series of transactions; (iv) if a Restricted Party is a limited or general partnership or joint venture, any merger or consolidation, any division into two (2) or more legal entities or the change, removal, resignation or addition of a general partner or the Sale or Pledge of the partnership interest of any general or limited partner or any profits or proceeds relating to such partnership interests (provided, that, for the avoidance of doubt, pledges of Borrower distributions by indirect owners of Borrower shall not be prohibited hereby, provided such distributions are not made by Borrower during the continuance of a Cash Management Sweep Period) or the creation or issuance of new limited partnership interests; (v) if a Restricted Party is a limited liability company, any merger or consolidation, any division into two (2) or more legal entities or the change, removal, resignation or addition of a managing member or non-member manager (or if no managing member, any member) or the Sale or Pledge of the membership interest of any member or any profits or proceeds relating to such membership interest (provided, that, for the avoidance of doubt, pledges of Borrower distributions by indirect owners of Borrower shall not be prohibited hereby, provided such distributions are not made by Borrower during the continuance of a Cash Management Sweep Period); (vi) if a Restricted Party is a trust or nominee trust, any merger, consolidation, any division into two (2) or more legal entities or the Sale or Pledge of the legal or beneficial interest in a Restricted Party or the creation or issuance of new legal or beneficial interests; (vii) the removal or the resignation of Manager (including, without limitation, an Affiliated Manager) other than in accordance with Section 7.3; and (viii) any action for partition of any Property (or any portion thereof or interest therein) or any similar action instituted or prosecuted by Borrower or by any other person or entity, pursuant to any contractual agreement or other instrument or under applicable law (including, without limitation, common law).

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4.2.2Liens. No Borrower shall create, incur, assume or suffer to exist any Lien on any portion of any Property except for Permitted Encumbrances; provided, however, after prior written notice to Lender, a Borrower, at its own expense, may contest by appropriate legal proceedings, promptly initiated and conducted in good faith and with due diligence, the amount or validity, in whole or in part, of any mechanic’s or materialman’s liens, provided that (a) no Event of Default has occurred and is continuing, (b) such proceeding shall suspend the collection of the mechanic’s or materialman’s liens from the related Borrower and from its Property or such Borrower shall have paid all of the mechanic’s or materialman’s liens under protest, (c) such proceeding shall be permitted under and be conducted in accordance with the provisions of any other instrument to which such Borrower is subject and shall not constitute a default thereunder, (d) neither the related Property nor any part thereof or interest therein will be in reasonable danger of being sold, forfeited, terminated, cancelled or lost, and (e) either (i) such lien shall be fully bonded, provided that Lender shall have approved such bond as to the form and issuer of same, in its reasonable discretion, or (ii) Borrower shall have deposited with Lender cash or other security as may be approved by Lender (it being understood that a guaranty (in form reasonably acceptable to Lender) from Sponsor (so long as Sponsor has an Investment Grade Rating at such time) or from another Person acceptable to Lender in its sole discretion shall be approved by Lender; provided, however, the right to provide Lender with a guaranty hereunder is conditioned upon Borrower delivering to Lender a New Non-Consolidation Opinion in connection therewith, as well as such other legal opinions as may be reasonably requested by Lender in connection with the guaranty) in an amount equal to one hundred ten percent (110%) of the amount of the Lien amount being contested in accordance with this Section 4.2.2 to insure the payment of the amounts relating to any such Lien, together with all interest and penalties thereon as determined by Lender in its reasonable discretion. Lender may pay over any such cash or other security held by Lender to the claimant entitled thereto at any time when, in the reasonable judgment of Lender, the entitlement of such claimant is established. To the extent a Tenant is contesting a Lien in accordance with the terms of its Lease and the Tenant otherwise satisfies any of the foregoing requirements set forth in clauses (a) through (e) above, Lender shall not separately require that the Borrower satisfy such requirements provided that Lender is in receipt of reasonable evidence to verify the Tenant’s compliance with this Section 4.2.2. The foregoing shall also not be deemed to limit or otherwise prohibit a Tenant from otherwise exercising any separate rights of contest which may be granted to it pursuant to the terms of its Lease.

4.2.3Dissolution. No Borrower shall (a) engage in any dissolution, liquidation or consolidation or merger with or into any other business entity or division into two (2) or more limited liability companies or other legal entities, (b) engage in any business activity not related to the ownership and operation of the Property owned by it, (c) transfer, lease or sell, in one transaction or any combination of transactions, all or substantially all of the property or assets of such Borrower except to the extent expressly permitted by the Loan Documents, or (d) cause, permit or suffer any SPE Party to (i) dissolve, wind up or liquidate or take any action, or omit to take an action, as a result of which such SPE Party would be dissolved, wound up or liquidated in whole or in part, or (ii) amend, modify, waive or terminate the organizational documents of such SPE Party, in each case without obtaining the prior consent of Lender.

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4.2.4Change in Business. No Borrower shall enter into any line of business other than the ownership and operation of the Property owned by it and personal property related thereto.

4.2.5Debt Cancellation. No Borrower shall cancel or otherwise forgive or release any material claim or debt (other than termination or amendment of Leases in accordance herewith or in accordance with the terms of the Leases) owed to Borrower by any Person, except for adequate consideration and in the ordinary course of Borrower’s business.

4.2.6Distributions. Each Borrower agrees that there shall be no distributions to any of its direct owners until each Borrower satisfies all of its then current due and payable obligations hereunder and under the other Loan Documents, in each case, to the extent then due and payable, including without limitation, Borrower’s obligation to pay Debt Service, to deposit into Reserve Funds, and to pay maintenance costs, Tenant Improvement costs, Leasing Commissions, Capital Expenditures costs and Operating Expenses.

4.2.7Zoning. No Borrower shall initiate or consent to any zoning reclassification of any portion of any Property or seek any variance under any existing zoning ordinance or use or permit the use of any portion of a Property in any manner that could result in such use becoming a non-conforming use under any zoning ordinance or any other applicable land use law, rule or regulation, without the prior consent of Lender.

4.2.8No Indebtedness. No Borrower shall have any Indebtedness other than that which is permitted pursuant to Section 3.1.24(d) of this Agreement.

4.2.9No Joint Assessment. No Borrower shall suffer, permit or initiate the joint assessment of any Property (a) with any other real property constituting a tax lot separate from the related Property, and (b) with any portion of the applicable Property which may be deemed to constitute personal property, or any other procedure whereby the lien of any taxes which may be levied against such personal property shall be assessed or levied or charged to such Property.

4.2.10Principal Place of Business. No Borrower shall (a) change its principal place of business or name from the address and name set forth in the introductory paragraph hereof without, in each instance, (i) without first giving Lender thirty (30) days’ prior notice and (ii) taking all action required by Lender for the purpose of perfecting or protecting the Lien and security interest of Lender created pursuant to this Agreement and the other Loan Documents or (b) except as may be permitted in connection with a Permitted Transfer, change its organizational structure (including, without limitation, dividing into two (2) or more limited liability companies or other legal entities), type of entity, or jurisdiction of organization or incorporation without (i) obtaining the prior written consent of Lender, not to be unreasonably withheld, conditioned or delayed, and (ii) taking all action reasonably required by Lender for the purpose of perfecting or protecting the Lien and security interest of Lender created pursuant to this Agreement and the other Loan Documents. At the request of Lender, each Borrower shall execute a certificate in form reasonably satisfactory to Lender listing the trade names under which such Borrower intends to operate the related Property, and representing and warranting that Borrower does business under no other trade name with respect to such Property.

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4.2.11ERISA. (a)  No Borrower shall not engage in any transaction which would cause any obligation, or action taken or to be taken, hereunder (or the exercise by Lender of any of its rights under the Note, this Agreement or the other Loan Documents) to be a non-exempt (under a statutory or administrative class exemption) prohibited transaction under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).

(b)Borrower shall deliver to Lender such certifications or other evidence from time to time throughout the term of the Loan, as requested by Lender in its sole discretion, that (i) no Borrower is or maintains an Employee Benefit Plan which is subject to Title I of ERISA, or a “governmental plan” within the meaning of Section 3(32) of ERISA; (ii) no Borrower is subject to any state statute regulating investments of, or fiduciary obligations with respect to, governmental plans; and (iii) one or more of the following circumstances is true:

(A)Equity interests in each Borrower are publicly offered securities, within the meaning of 29 C.F.R. §2510.3-101(b)(2);

(B)Less than twenty-five percent (25%) of each outstanding class of equity interests in each Borrower is held by “benefit plan investors” within the meaning of 29 C.F.R. §2510.3-101(f)(2) as modified by Section 3(42) of ERISA;

(C)Each Borrower qualifies as an “operating company” or a “real estate operating company” within the meaning of 29 C.F.R. §2510.3-101(c) or (e); or

(D)The assets of each Borrower are not otherwise “plan assets” of one or more “employee benefit plans” (as defined in Section 3(3) of ERISA) subject to Title I of ERISA, within the meaning of 29 C.F.R. §2510.3-101.

4.2.12Environmental Policy. Prior to the payment in full of the Debt, Borrower shall not terminate the Environmental Policy or enter into or otherwise permit any modification or amendment (including any endorsement), supplement or replacement thereof or thereto without the prior written consent of Lender.

ARTICLE V.

INSURANCE, CASUALTY AND CONDEMNATION

Section 5.1Insurance.

5.1.1Insurance Policies. (a)  Each Borrower shall obtain and maintain, or cause to be maintained, insurance for related Borrower and the Collective Properties providing at least the following coverages:

(i)comprehensive “all risk” or “special form” insurance including, but not limited to, loss caused by any type of windstorm, tsunami, or hail on the Improvements and the Personal Property at the Property, in each case (A) in an amount equal to one hundred percent (100%) of the “Full Replacement Cost”, which for purposes

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of this Agreement shall mean actual replacement value (exclusive of costs of excavations, foundations, underground utilities and footings) with a waiver of depreciation; (B) written on a no-coinsurance form containing an agreed amount endorsement with respect to the Improvements and Personal Property at the Property; (C) providing for no deductible in excess of $100,000 for all such insurance coverage except as otherwise provided herein and except for the perils of earthquake and windstorm, which shall not exceed five percent (5%) of total insurable value of the Property per loss; and (D) containing an “Ordinance or Law Coverage” or “Enforcement” endorsement if any of the Improvements or the use of the Property shall at any time constitute legal non-conforming structures or uses, including loss to the undamaged portion of the building, demolition costs and increased costs of construction in such amount as may be acceptable to Lender. In addition, Borrower shall obtain: (y) if any portion of the Improvements or Personal Property is currently or at any time in the future located in a federally designated special flood hazard area (“SFHA”), flood hazard insurance, for all such Improvements and/or Personal Property located in the SFHA in an amount equal to (1) the maximum amount of building and/or contents insurance available under the National Flood Insurance Act of 1968, the Flood Disaster Protection Act of 1973, the National Flood Insurance Reform Act of 1994, the Flood Insurance Reform Act of 2004, or the Biggert-Waters Flood Insurance Reform Act of 2012, as each may be amended (the “Flood Insurance Acts”), plus, (2) such greater amount as Lender shall require, in each case with deductibles acceptable to Lender; and (z) earthquake insurance in amounts and in form and substance satisfactory to Lender in the event the Property is located in an area with a high degree of seismic activity, provided that the insurance pursuant to clauses (y) and (z) hereof shall be on terms consistent with the comprehensive all-risk insurance policy required under this subsection (i).

(ii)commercial general liability insurance against claims for personal injury, bodily injury, death or property damage occurring upon, in or about the Property, such insurance (A) to be on the so-called “occurrence” form with a combined limit, excluding umbrella coverage, of not less than $2,000,000.00 per location in aggregate and $1,000,000.00 per occurrence with a deductible or self-insured retention not to exceed $250,000; (B) to continue at not less than the aforesaid limit until required to be changed by Lender by reason of changed economic conditions making such protection inadequate; and (C) to cover at least the following hazards: (1) premises and operations; (2) products and completed operations on an “if any” basis; (3) independent contractors, (4) contractual liability for all insured contracts; and (5) contractual liability covering the indemnities contained in Article 8 of the Mortgage to the extent the same is available;

(iii)business income/rent loss insurance covering the Properties and, for the avoidance of doubt, including the Properties subject to Leased Fee Leases with Owned Improvements or Tenant-Owned Improvements, (A) with loss payable to Lender; (B) covering all risks required to be covered by the insurance provided for in subsection (i) above and subsections (vi) and (xi) below for a period commencing at the time of loss for such length of time as it takes to repair or replace with the exercise of due diligence and dispatch and for at least twenty-four (24) months; (C) containing an extended period of indemnity endorsement which provides that after the physical loss to the Tenant Owned Improvements or Owned Improvements has been repaired, the continued loss of

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income will be insured until such income either returns to the same level it was at prior to the loss, or the expiration of twelve (12) months from the date that the Property is repaired or replaced and operations are resumed, whichever first occurs, and notwithstanding that the policy may expire prior to the end of such period; and (D) in an amount equal to one hundred percent (100%) of the projected gross income (less non-continuing expenses) from the Property for a period of twenty-four (24) months. The amount of such business income/rent loss insurance shall be determined prior to the date hereof and at least once each year thereafter based on Borrower’s reasonable estimate of the gross income (less non-continuing expenses) from the Property for the succeeding twenty-four (24) month period. All proceeds payable to Lender pursuant to this subsection shall be held by Lender and shall be applied to the obligations secured by the Loan Documents from time to time due and payable hereunder and under the Note; provided, however, that nothing herein contained shall be deemed to relieve Borrower of its obligations to pay the obligations secured by the Loan Documents on the respective dates of payment provided for in the Note and the other Loan Documents except to the extent such amounts are actually paid out of the proceeds of such business income insurance (“Business Income/Rent Loss Insurance”);

(iv)at all times during which structural construction, repairs or alterations are being made with respect to the Property, and only if the current property and liability coverage forms do not otherwise apply, (A) commercial general liability and umbrella liability insurance covering claims related to the construction, repairs or alterations being made which are not covered by or under the terms or provisions of the commercial general liability insurance and umbrella insurance policies required herein in this Section 5.1.1; and (B) the insurance provided for in subsection (i) above written in a so-called builder’s risk completed value form in amounts acceptable to Lender (1) on a non-reporting basis, (2) against all risks insured against pursuant to subsection (i) above, (3) including permission to occupy the Property, and (4) with an agreed amount endorsement waiving co-insurance provisions;

(v)workers’ compensation, with respect to any employees of Borrower, subject to the statutory limits of the State, and employer’s liability insurance with a limit of at least $1,000,000.00 per accident and per disease per employee, and $1,000,000.00 for disease aggregate in respect of any work or operations on or about the Property, or in connection with the Property, its operation (if applicable) or any Capital Expenditures Work;

(vi)comprehensive boiler and machinery insurance, if applicable, in amounts as shall be reasonably required by Lender on terms consistent with the commercial property insurance policy required under subsection (i) above;

(vii)umbrella liability insurance in addition to primary coverage in an amount not less than $100,000,000.00 per occurrence on terms consistent with the commercial general liability insurance policy required under subsection (ii) above and (viii) below;

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(viii)motor vehicle liability coverage for all owned and non-owned vehicles, including rented and leased vehicles containing minimum limits per occurrence, including umbrella coverage, of $1,000,000.00, if applicable;

(ix)so-called “dramshop” insurance or other liability insurance required in connection with the sale of alcoholic beverages, if applicable;

(x)insurance against employee dishonesty, with respect to any employees of Borrower, in an amount acceptable to Lender, if applicable;

(xi)the insurance required under Section 5.1.1(a)(i)-(iii) and (vii) above shall cover perils of terrorism and acts of terrorism and Borrower shall maintain insurance for loss resulting from perils and acts of terrorism on terms (including amounts) consistent with those required under Section 5.1.1(a)(i)-(iii) and (vii) above at all times during the term of the Loan. If “acts of terrorism” or other similar acts or events or “fire following” such acts or events are hereafter excluded from Borrower’s comprehensive all risk insurance policy or policies required under Sections 5.1.1(a)(i) and 5.1.1(a)(iii) above, Borrower shall obtain an endorsement to such policy or policies, or a separate policy from an insurance provider which satisfies the requirements of Section 5.1.2, insuring against all such excluded acts or events and “fire following” such acts or events (“Terrorism Insurance”) in an amount not less than the sum of one hundred percent (100%) of the “Full Replacement Cost” and the business income/rent loss insurance required in Section 5.1.1(a)(iii) above; provided that such endorsement or policy shall be in form and substance reasonably satisfactory to Lender. Notwithstanding the foregoing, for so long as the Terrorism Risk Insurance Act of 2002, as extended and modified by the Terrorism Risk Insurance Program Reauthorization Act of 2015 (“TRIPRA”) is in effect (including any extensions thereof or if another federal governmental program is in effect relating to “acts of terrorism” which provides substantially similar protections as TRIPRA), Lender shall accept terrorism insurance which insures against “covered acts” as defined by TRIPRA (or such other program) as full compliance with this Section 5.1.1(a)(xi) as it relates to the risks that are required to be covered hereunder but only in the event that TRIPRA (or such other program) continues to cover both domestic and foreign acts of terrorism;

(xii)such insurance as may be required of Borrower pursuant to the terms of the applicable Leased Fee Lease;

(xiii)that certain Enviro Covered Location Insurance Policy from the Beazley Group and approved by Lender as of the Closing Date (the “Environmental Policy”), which Environmental Policy shall be renewed at, or prior to, its expiration (unless such renewal is otherwise waived by Lender) for a term of no less than three (3) years beyond the Maturity Date of the Loan;

(xiv)upon sixty (60) days’ written notice, such other reasonable insurance and in such reasonable amounts as Lender from time to time may reasonably request against such other insurable hazards which at the time are commonly insured

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against for property similar to the Collective Properties located in or around the region in which the Property is located.

(b)All insurance provided for in Section 5.1.1(a) shall be obtained under valid and enforceable policies (collectively, the “Policies” or, in the singular, the “Policy”) and, to the extent not specified above, shall be subject to the reasonable approval of Lender as to deductibles, insurance companies, amounts, loss payees and insureds. Prior to the expiration dates of the Policies theretofore furnished to Lender, certificates of insurance evidencing the Policies, shall be delivered by Borrower to Lender. Borrower shall pay all Insurance Premiums in full as they become due and payable. Complete copies of the Policies shall be provided to Lender upon request.

(c)Any insurance coverage required pursuant to this Section 5.1.1 may be met utilizing blanket insurance Policies, provided any blanket insurance Policies shall be subject to Lender approval and shall otherwise provide the same protection as would a separate Policy insuring only the Property in compliance with the provisions of this Section 5.1.1 and provided further that, if such blanket policy covers locations within a one thousand foot radius of the Property (the “Radius”), the limits of any such policy shall be adequate to maintain the coverage required in Section 5.1.1 for the Property plus each other location within the Radius that is covered by such blanket policy calculated on a total insured value basis. Notwithstanding anything to the contrary contained herein, Borrower shall notify Lender of any material changes to the blanket policy, including changes to the limits under the policy as of Closing Date or an aggregation of the insured values covered under the blanket policy, including the reduction of earthquake, flood, tsunami or wind/named storm limits or the addition of locations that are subject to the perils of earthquake, flood, tsunami or wind/named storm, and such changes shall be subject Lender’s approval.

(d)All Policies of insurance provided for or contemplated by Section 5.1.1(a) shall name Borrower as a named insured and with respect to liability policies, except for the Policies referenced in Sections 5.1.1(a)(v) and (viii) of this Agreement, shall name Lender and its successors and/or assigns as the additional insured, as its interests may appear, and in the case of property policies, including but not limited to all risk/special form, boiler and machinery, flood, earthquake and terrorism insurance, shall contain a standard non-contributing mortgagee clause in favor of Lender providing that the loss thereunder shall be payable to Lender. Borrower shall not procure or permit any of its constituent entities to procure any other insurance coverage which would be on the same level of payment as the Policies or would adversely impact in any way the ability of Lender or Borrower to collect any proceeds under any of the Policies.

(e)All Policies of insurance provided for in Section 5.1.1(a) shall:

(i)with respect to the Policies of property insurance, contain clauses or endorsements to the effect that (1) no act or negligence of Borrower, or anyone acting for Borrower, or of any Tenant or other occupant, or failure to comply with the provisions of any Policy, which would otherwise result in a forfeiture of the insurance or any part thereof, or foreclosure or similar action, shall in any way affect the validity or enforceability of the insurance insofar as Lender is concerned and (2) the Policies shall

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not be cancelled without at least thirty (30) days’ written notice to Lender, except ten (10) days’ notice for non-payment of premium;

(ii)with respect to the Policies of liability insurance, if obtainable by Borrower using commercially reasonable efforts, contain clauses or endorsements to the effect that (1) the Policy shall not be canceled or materially changed (other than to increase the coverage provided thereby) without at least thirty (30) days’ written notice to Lender. If issuer will not or cannot provide the notices required herein in this clause (ii), Borrower shall be obligated to provide such notice;

(iii)contain a waiver of subrogation; and

(iv)not contain any clauses that would make Lender liable for any Insurance Premiums thereon or subject to any assessments thereunder.

(f)If at any time Lender is not in receipt of written evidence that all insurance required hereunder is in full force and effect, Lender shall have the right, with notice to Borrower, to take such action as Lender deems necessary to protect its interest in the Property, including, without limitation, the obtaining of such insurance coverage as Lender in its reasonable discretion deems appropriate and all premiums incurred by Lender in connection with such action or in obtaining such insurance and keeping it in effect shall be paid by Borrower to Lender upon demand and until paid shall be secured by the Mortgage and shall bear interest at the Default Rate.

(g)In the event of foreclosure of the Mortgage or other transfer of title to the Property in extinguishment in whole or in part of the Debt, all right, title and interest of Borrower in and to the Policies then in force concerning the Property and all proceeds payable thereunder shall thereupon vest in the purchaser at such foreclosure, Lender or other transferee in the event of such other transfer of title.

(h)Ground Tenant Obligations. Borrower shall be obligated to maintain property insurance as required in Sections 5.1(a)(i), (iv)(B), (vi), (xi) and (xiii) consistent with the requirements of this Section 5.1 (the “Applicable Property Sections”) and solely for the benefit of Borrower and Lender on the Tenant Owned Improvements located on any Property subject to a Leased Fee Lease; provided however, that, to the extent no material default shall exist under the applicable Leased Fee Lease beyond any applicable notice and cure period, such property insurance maintained by the Borrower on the Tenant Owned Improvements required pursuant to the Applicable Property Sections may be provided with a loss limit of $150,000,000 per occurrence (and subject to other sublimits for flood and earthquake as noted in this Section 5.1 as may be approved by Lender) and, provided, further, that Borrower shall not be obligated to provide the flood hazard coverage available under the Flood Insurance Acts as required in Section 5.1(a)(y)(1) for Tenant Owned Improvements.

5.1.2Insurance Company. The Policies shall be issued by financially sound and responsible insurance companies authorized to do business in the State and each having a financial strength rating of (1) “A” or better by S&P and “A2” or better by Moody’s, to the extent Moody’s rates the Securities and rates the insurance companies, and “A” or better by

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Fitch, to the extent Fitch rates the Securities and rates the insurance companies, (provided, however for multi-layered policies, (A) if four (4) or fewer insurance companies issue the Policies for the Collective Properties, then at least seventy-five percent (75%) of the required coverage shall be provided by insurance companies with a rating of “A” or better by S&P and “A2” or better by Moody’s, to the extent Moody’s rates the Securities and rates the insurance companies, and “A” or better by Fitch, to the extent Fitch rates the Securities and rates the insurance companies, with no remaining carrier below “BBB” by S&P and “Baa2” or better by Moody’s, to the extent Moody’s rates the Securities and rates the insurance companies, and “BBB” or better by Fitch, to the extent Fitch rates the Securities and rates the insurance companies, or (B) if five (5) or more insurance companies issue the Policies for the Collective Properties, then at least sixty percent (60%) of the required coverage shall be provided by insurance companies with a rating of “A” or better by S&P and “A2” or better by Moody’s, to the extent Moody’s rates the Securities and rates the insurance companies, and “A” or better by Fitch, to the extent Fitch rates the Securities and rates the insurance companies, with no remaining carrier below “BBB” by S&P and “Baa2” or better by Moody’s, to the extent Moody’s rates the Securities and rates the insurance companies, and “BBB” or better by Fitch, to the extent Fitch rates the Securities and rates the insurance companies, and (2) a rating of A:VIII or better in the current Best’s Insurance Reports. Notwithstanding the foregoing, Borrower may continue to use Hamilton Re, Ltd. (Bermuda), rated “A- XIV” with AM Best, in its current position and participation amounts within the syndicate of the property program, provided that (x) the rating of Hamilton Re, Ltd. (Bermuda) is not withdrawn or downgraded below the date hereof and (y) at renewal of the current policy term on June 30, 2019, Borrower shall replace Hamilton Re, Ltd. (Bermuda) with insurance companies meeting the rating requirements set forth hereinabove.

Section 5.2Casualty and Condemnation.

5.2.1Casualty. If any Property shall sustain a Casualty, Borrower shall give prompt notice of such Casualty to Lender and Borrower shall promptly commence and diligently prosecute to completion the repair and restoration of the affected Property as nearly as possible to the condition the affected Property was in immediately prior to such Casualty (a “Restoration”) and otherwise in accordance with Section 5.3, it being understood, however, that Borrower shall not be obligated to restore the affected Property to the precise condition of the affected Property prior to such Casualty provided the affected Property is restored, to the extent practicable, to be of at least equal value and of substantially the same character as prior to the Casualty. Borrower shall pay all costs of such Restoration whether or not such costs are covered by insurance. Lender may, but shall not be obligated to, make proof of loss if not made promptly by Borrower. In the event of a Casualty where the loss does not exceed the Restoration Threshold as reasonably determined by Lender, Borrower may settle and adjust such claim; provided that (a) no Event of Default has occurred and is continuing and (b) such adjustment is carried out in a commercially reasonable and timely manner. In the event of a Casualty where the loss exceeds the Restoration Threshold as reasonably determined by Lender or if an Event of Default then exists, Borrower may settle and adjust such claim only with the consent of Lender (which consent shall not be unreasonably withheld or delayed) and Lender shall have the opportunity to participate, at Borrower’s cost, in any such adjustments. To the extent that any of the provisions of this Section 5.2.1 conflict with the terms of any Leased Fee Lease, such provisions shall not apply with respect to any Casualty. Notwithstanding any Casualty,

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Borrower shall continue to pay the Debt at the time and in the manner provided for its payment in the Note and in this Agreement.

5.2.2Condemnation. Borrower shall give Lender prompt notice of any actual or threatened Condemnation by any Governmental Authority of all or any part of any Property and shall deliver to Lender a copy of any and all papers served in connection with such proceedings. Provided no Event of Default has occurred and is continuing and in the event of a Condemnation where the value of the taking does not exceed the Restoration Threshold as reasonably determined by Lender, Borrower may settle and compromise such Condemnation; provided that the same is effected in a commercially reasonable and timely manner. In the event a Condemnation where the value of the taking exceeds the Restoration Threshold, in Lender’s reasonable determination, or if an Event of Default then exists, Borrower may settle and compromise the Condemnation only with the consent of Lender (which consent shall not be unreasonably withheld or delayed) and Lender shall have the opportunity to participate, at Borrower’s cost, in any litigation and settlement discussions in respect thereof and Borrower shall from time to time deliver to Lender all instruments requested by Lender to permit such participation. Borrower shall, at its expense, diligently prosecute any such proceedings, and shall consult with Lender, its attorneys and experts, and cooperate with them in the carrying on or defense of any such proceedings. Notwithstanding any Condemnation, Borrower shall continue to pay the Debt at the time and in the manner provided for its payment in the Note and in this Agreement. Lender shall not be limited to the interest paid on the Award by any Governmental Authority but shall be entitled to receive out of the Award interest at the rate or rates provided herein or in the Note. If any Property or any portion thereof is taken by any Governmental Authority, Borrower shall promptly commence and diligently prosecute the Restoration of the affected Property and otherwise comply with the provisions of Section 5.3. To the extent that any of the provisions of this Section 5.2.2 conflict with the terms of any Leased Fee Lease, such provisions shall not apply with respect to any Condemnation. If any Property is sold, through foreclosure or otherwise, prior to the receipt by Lender of the Award, Lender shall have the right, whether or not a deficiency judgment on the Note shall have been sought, recovered or denied, to receive the Award, or a portion thereof sufficient to pay the Debt.

5.2.3Application of Business Interruption Insurance Proceeds. Notwithstanding the last sentence of Section 5.1.1(a)(iii) and provided no Event of Default exists hereunder, proceeds received by Lender on account of the Business Income/Rent Loss Insurance (“BI/Rent Loss Proceeds”) with respect to any Casualty shall be deposited by Lender directly into the Deposit Account but (a) only to the extent the BI/Rent Loss Proceeds reflects a replacement for (i) lost Rents that would have been due under Leases existing on the date of such Casualty, and/or (ii) lost Rents under Leases that had not yet been executed and delivered at the time of such Casualty which Borrower has proven to the insurance company would have been due under such Leases (and then only to the extent such BI/Rent Loss Proceeds disbursed by the insurance company reflect a replacement for such past due Rents) and (b) only to the extent necessary to fully pay debt service under the Loan, make the required monthly Reserve Fund deposits and pay Operating Expenses approved by Lender for the applicable Monthly Payment Date. In no event shall Lender make a lump sum disbursement of BI/Rent Loss Proceeds for a period in excess of one (1) month. All Net Proceeds other than BI/Rent Loss Proceeds shall be held by Lender and disbursed in accordance with Section 5.3 hereof.

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Section 5.3    Delivery of Net Proceeds.

5.3.1    Minor Casualty or Condemnation. Notwithstanding anything to the contrary contained herein, if a Casualty or Condemnation has occurred to any Property, then the Net Proceeds will be disbursed by Lender to Borrower if the Net Proceeds shall be less than the Restoration Threshold and the costs of completing the Restoration of the affected Property shall be less than the Restoration Threshold, and provided the conditions set forth in Sections 5.3.2(a)(i) through (ix) below have been met. If any Net Proceeds are received by Borrower and may be held by Borrower pursuant to the terms hereof, such Net Proceeds shall, until completion of the Restoration, be held in trust for Lender and shall be segregated from other funds of Borrower to be used to pay for the cost of Restoration in accordance with the terms hereof. To the extent that any of the provisions of this Section 5.3.1 conflict with the terms of any Leased Fee Lease, such provisions shall not apply with respect to any Casualty or Condemnation.

5.3.2    Major Casualty or Condemnation. (a)  If a Casualty or Condemnation has occurred to any Property and the Net Proceeds are equal to or greater than the Restoration Threshold or the costs of completing the Restoration of the affected Property is equal to or greater than the Restoration Threshold then the Lender shall make the Net Proceeds available for the Restoration of the applicable Property, provided that each of the following conditions are met:

(i)no Event of Default shall have occurred and be continuing;

(ii)(A) in the event the Net Proceeds are insurance proceeds, less than thirty percent (30%) of each of the (i) fair market value of the affected Property as reasonably determined by Lender and (ii) rentable area of the affected Property has been damaged, destroyed or rendered unusable as a result of such Casualty or (B) in the event the Net Proceeds are an Award, less than ten percent (10%) of each of the (i) fair market value of the affected Property as reasonably determined by Lender and (ii) rentable area of the affected Property has been taken, and such land is located along the perimeter or periphery of the affected Property, and no portion of the Improvements is the subject of the Condemnation;

(iii)All Major Leases at the affected Property shall remain in full force and effect during and after the completion of the Restoration without abatement of rent beyond the time required for Restoration, notwithstanding the occurrence of such Casualty or Condemnation;

(iv)Borrower shall commence the Restoration as soon as reasonably practicable (but in no event later than ninety (90) days after the date upon which Net Proceeds are made available to Borrower) and shall diligently pursue the same to satisfactory completion;

(v)Lender shall be reasonably satisfied that any operating deficits and all payments of principal and interest under the Note will be paid during the period required for Restoration from (A) the Net Proceeds, (B) the proceeds of the insurance

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coverage required to be maintained by Borrower under the Loan Documents or otherwise maintained by Borrower, and/or (C) other funds of Borrower;

(vi)Lender shall be reasonably satisfied that the Restoration will be completed on or before the earliest to occur of (A) the date six (6) months prior to the Maturity Date, (B) the earliest date required for such completion under the terms of any Major Lease at the affected Property, (C) such time as may be required under applicable Legal Requirements in order to repair and restore the affected Property to the condition it was in immediately prior to such Casualty or to as nearly as possible the condition it was in immediately prior to such Condemnation, as applicable or (D) the expiration of the Business Income/Rent Loss Insurance;

(vii)the affected Property and the use thereof after the Restoration will be in compliance with and permitted under all applicable Legal Requirements and any Major Lease at the affected Property;

(viii)the Restoration shall be done and substantially completed by Borrower in an expeditious and diligent fashion and in compliance in all material respects with all applicable Legal Requirements and the requirements of any Major Lease; and

(ix)such Casualty or Condemnation, as applicable, does not result in the loss of access to the affected Property or the related Improvements.

(b)With respect to a Casualty or Condemnation where the Net Proceeds in connection therewith are equal to or greater than the Restoration Threshold applicable to the affected Property or the cost of completing the Restoration is equal to or greater than the Restoration Threshold applicable to the affected Property, such Net Proceeds shall be paid directly to Lender and held by Lender in an interest-bearing account and, until disbursed in accordance with the provisions of this Section 5.3.2, shall constitute additional security for the Debt. The Net Proceeds shall be disbursed by Lender to, or as directed by, Borrower from time to time during the course of the Restoration, upon receipt of evidence reasonably satisfactory to Lender that (A) all requirements set forth in Section 5.3.2(a) have been satisfied, (B) all materials installed and work and labor performed (except to the extent that they are to be paid for out of the requested disbursement) in connection with the Restoration have been paid for in full, and (C) there exist no notices of pendency, stop orders, mechanic’s or materialman’s liens or notices of intention to file same, or any other liens or encumbrances of any nature whatsoever on such Property arising out of the Restoration which have not either been fully bonded to the reasonable satisfaction of Lender and discharged of record or in the alternative fully insured to the reasonable satisfaction of Lender by the title company issuing the applicable Title Insurance Policy.

(c)All plans and specifications required in connection with the Restoration shall be subject to prior approval of Lender and an independent architect selected by Lender (the “Casualty Consultant”), which approval shall not be unreasonably withheld, conditioned or delayed by Lender and the Casualty Consultant. The plans and specifications shall require that the Restoration be completed in a first-class workmanlike manner at least equivalent to the quality and character of the original work in the Improvements (provided, however, that in the

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case of a partial Condemnation, the Restoration shall be done to the extent reasonably practicable after taking into account the consequences of such partial Condemnation), so that upon completion thereof, the affected Property shall be at least equal in value and general utility to such Property prior to the damage or destruction; it being understood, however, that Borrower shall not be obligated to restore the affected Property to the precise condition of such Property prior to such Casualty provided such Property is restored, to the extent practicable, to be of at least equal value and of substantially the same character as prior to the Casualty. Borrower shall restore all Improvements such that when they are fully restored and/or repaired, such Improvements and their contemplated use fully comply with all applicable material Legal Requirements, the Permitted Encumbrances and the requirements of any Major Lease at the applicable Property. The identity of the contractors, subcontractors and materialmen engaged in the Restoration, as well as the contracts under which they have been engaged, shall be subject to approval of Lender and the Casualty Consultant, which approval shall not be unreasonably withheld, conditioned or delayed by Lender and the Casualty Consultant. All costs and expenses incurred by Lender in connection with recovering, holding and advancing the Net Proceeds for the Restoration including, without limitation, reasonable attorneys’ fees and disbursements and the Casualty Consultant’s fees and disbursements, shall be paid by Borrower.

(d)In no event shall Lender be obligated to make disbursements of the Net Proceeds in excess of an amount equal to the costs actually incurred from time to time for work in place as part of the Restoration, as certified by the Casualty Consultant, less the Casualty Retainage. The term “Casualty Retainage” shall mean, as to each contractor, subcontractor or materialman engaged in the Restoration, an amount equal to ten percent (10%) of the costs actually incurred for work in place as part of the Restoration, as certified by the Casualty Consultant, until the Restoration has been fifty percent (50%) completed, such fifty percent (50%) completion to be certified by the Casualty Consultant, it being understood that upon such fifty percent (50%) completion of such Restoration, such Casualty Retainage will be reduced to an amount equal to five percent (5%) of the costs actually incurred for work in place as part of such Restoration. The Casualty Retainage shall in no event, and notwithstanding anything to the contrary set forth above in this Section 5.3.2(d), be less than the amount actually held back by Borrower from contractors, subcontractors and materialmen engaged in the Restoration. The Casualty Retainage shall not be released until the Casualty Consultant certifies to Lender that the Restoration has been completed in accordance with the provisions of this Section 5.3.2(d) and that all approvals necessary for the re-occupancy and use of the affected Property have been obtained from all appropriate Governmental Authorities, and Lender receives evidence satisfactory to Lender that the costs of the Restoration have been paid in full or will be paid in full out of the Casualty Retainage; provided, however, that Lender will release the portion of the Casualty Retainage being held with respect to any contractor, subcontractor or materialman engaged in the Restoration as of the date upon which the Casualty Consultant certifies to Lender that the contractor, subcontractor or materialman has satisfactorily completed all work and has supplied all materials in accordance with the provisions of the contractor’s, subcontractor’s or materialman’s contract, the contractor, subcontractor or materialman delivers the lien waivers and evidence of payment in full of all sums due to the contractor, subcontractor or materialman as may be reasonably requested by Lender or by the title company issuing the related Title Insurance Policy, and Lender receives an endorsement to the related Title Insurance Policy insuring the continued priority of the lien of the applicable Mortgage and evidence of payment of any premium payable for such endorsement. If required by Lender, the release of any such

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portion of the Casualty Retainage shall be approved by the surety company, if any, which has issued a payment or performance bond with respect to the contractor, subcontractor or materialman.

(e)Lender shall not be obligated to make disbursements of the Net Proceeds more frequently than once every calendar month.

(f)If at any time the Net Proceeds or the undisbursed balance thereof shall not, in the reasonable opinion of Lender in consultation with the Casualty Consultant, be sufficient to pay in full the balance of the costs which are estimated by the Casualty Consultant to be incurred in connection with the completion of the Restoration, Borrower shall either (i) deposit the deficiency (the “Net Proceeds Deficiency”) with Lender before any further disbursement of the Net Proceeds shall be made or (ii) provide Lender with (A) cash or (B) Letters of Credit. The Net Proceeds Deficiency deposited with Lender shall be held by Lender and shall be disbursed for costs actually incurred in connection with the Restoration on the same conditions applicable to the disbursement of the Net Proceeds, and until so disbursed pursuant to this Section 5.3.2 shall constitute additional security for the Debt.

(g)The excess, if any, of the Net Proceeds and the remaining balance, if any, of the Net Proceeds Deficiency deposited with Lender after the Casualty Consultant certifies to Lender that the Restoration has been completed in accordance with the provisions of this Section 5.3.2, and the receipt by Lender of evidence satisfactory to Lender that all costs incurred in connection with the Restoration have been paid in full, shall be remitted by Lender to Borrower provided no Cash Management Sweep Period shall be continuing under any of the Loan Documents; provided, however, the amount of such excess returned to Borrower in the case of a Condemnation shall not exceed the amount of Net Proceeds Deficiency deposited by Borrower with the balance being applied to the Debt in the manner provided for in Subsection 5.3.2(h). In the event a Cash Management Sweep Period exists at the time Restoration is completed and the Net Proceeds Deficiency is held by Lender as Cash Trap Funds, such amounts shall be disbursed to Borrower at such time a Cash Management Sweep Period no longer exists.

(h)Subject to Section 2.4.2, all Net Proceeds not required (i) to be made available for the Restoration or (ii) to be returned to Borrower as excess Net Proceeds pursuant to Section 5.3.2(g) may be applied by Lender toward the payment of the Debt, whether or not then due and payable, in such order, priority and proportions as Lender in its sole discretion shall deem proper or, at the discretion of the Lender, may be paid, in whole or in part, to Borrower for such purposes as Lender shall designate. Upon payment in full of the Debt, any remaining Net Proceeds shall be paid to Borrower.

(i)To the extent that any of the provisions of this Section 5.3.2 conflict with the terms of any Leased Fee Lease, such provisions shall not apply with respect to any Restoration.

5.3.3REMIC Required Pay Down. Notwithstanding anything contained herein to the contrary, Borrower shall make the Condemnation Payment as and when required pursuant to this Agreement.

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ARTICLE VI.

RESERVE FUNDS

Section 6.1Reserved.

Section 6.2Tax Funds.

6.2.1Deposits of Tax Funds. Borrower shall deposit with Lender or Servicer on behalf of Lender (or cause to be deposited with Lender or Servicer pursuant to the Cash Management Agreement), on each Monthly Payment Date during the continuance of a Cash Management Sweep Period, an amount equal to one-twelfth of the Taxes that Lender estimates will be payable during the next ensuing twelve (12) months in order to accumulate sufficient funds to pay all such Taxes at least ten (10) days prior to their respective due dates. Amounts deposited pursuant to this Section 6.2.1 are referred to herein as the “Tax Funds”. If at any time Lender reasonably determines that the Tax Funds will not be sufficient to pay the Taxes, Lender shall notify Borrower of such determination and the monthly deposits for Taxes shall be increased by the amount that Lender estimates is sufficient to make up the deficiency at least ten (10) days prior to the respective due dates for the Taxes; provided that if Borrower receives notice of any deficiency after the date that is ten (10) days prior to the date that Taxes are due, Borrower will deposit such amount within one (1) Business Day after its receipt of such notice. The Tax Funds shall be held in the Tax Reserve Account (as defined in the Cash Management Agreement), which shall be an Interest Bearing Account.

6.2.2Release of Tax Funds. Provided no Event of Default is continuing, Lender shall apply the Tax Funds to payments of Taxes. In making any payment relating to Taxes, Lender may do so according to any bill, statement or estimate procured from the appropriate public office (with respect to Taxes) without inquiry into the accuracy of such bill, statement or estimate or into the validity of any tax, assessment, sale, forfeiture, tax lien or title or claim thereof. If the amount of the Tax Funds shall exceed the amounts due for Taxes, Lender shall, in its sole discretion, return any excess to Borrower or credit such excess against future payments to be made to the Tax Funds. Any Tax Funds remaining after the Debt has been paid in full shall be returned to Borrower.

Section 6.3Insurance Funds.

6.3.1    Deposits of Insurance Funds. Borrower shall deposit with Lender or Servicer on behalf of Lender (or cause to be deposited with Lender or Servicer pursuant to the Cash Management Agreement), on each Monthly Payment Date during the continuance of a Cash Management Sweep Period, an amount equal to one-twelfth of the Insurance Premiums (excluding premiums under policies described in Section 5.1.1(h)) that Lender estimates will be payable for the renewal of the coverage afforded by the Policies upon the expiration thereof in order to accumulate sufficient funds to pay all such Insurance Premiums at least thirty (30) days prior to the expiration of the Policies. Amounts deposited pursuant to this Section 6.3.1 are referred to herein as the “Insurance Funds”. The Insurance Funds shall be held in the Insurance Reserve Account (as defined in the Cash Management Agreement), which shall be an Interest Bearing Account. If at any time Lender reasonably determines that the Insurance Funds will not

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be sufficient to pay the Insurance Premiums, Lender shall notify Borrower of such determination and the monthly deposits for Insurance Premiums shall be increased by the amount that Lender estimates is sufficient to make up the deficiency at least thirty (30) days prior to expiration of the Policies. Notwithstanding the foregoing, provided no Event of Default is continuing, Lender agrees that upon delivery to Lender by Borrower of evidence satisfactory to Lender that the Policies of insurance required to be maintained by Borrower pursuant to Section 5.1.1 are maintained pursuant to blanket insurance Policies covering the Collective Properties and other properties and which blanket insurance Policies otherwise comply with the requirements of Section 5.1.1 and the Insurance Premiums payable in connection therewith have been prepaid for not less than one year in advance (or, for the period of coverage under the Policies as to which certificates are delivered at closing, such period, if less than one year), then Borrower’s obligation to make monthly deposits of the Insurance Funds pursuant to this Section 6.3.1 shall be suspended. Upon request of Lender, Borrower shall provide evidence satisfactory to Lender that the Insurance Premiums payable in connection with such blanket insurance Policies are paid as soon as appropriate evidence is reasonably available.

6.3.2Release of Insurance Funds. Provided no Event of Default is continuing, Lender shall apply the Insurance Funds, if any, to payment of Insurance Premiums. In making any payment relating to Insurance Premiums, Lender may do so according to any bill, statement or estimate procured from the insurer or its agent, without inquiry into the accuracy of such bill, statement or estimate. If the amount of the Insurance Funds shall exceed the amounts due for Insurance Premiums, Lender shall return any excess to Borrower or credit such excess against future deposits to be made to Insurance Funds. Any Insurance Funds remaining after the Debt has been indefeasibly repaid or defeased in full shall be returned to Borrower.

Section 6.4Reserved.

Section 6.5Reserved.

Section 6.6Lease Termination Funds.

6.6.1Deposits of Lease Termination Funds. Subject to Section 4.1.9(e), in the event that Borrower receives a fee, payment or other compensation from any Tenant relating to or in exchange for the termination of such Tenant’s Lease with respect to any Improvements and which fee is in excess of $500,000 (a “Lease Termination Fee”), Borrower shall immediately deposit such Lease Termination Fee with Lender or Servicer on behalf of Lender to be utilized for Tenant Improvements costs, Tenant Improvement Allowances and Leasing Commissions that may be incurred with respect to the space at the applicable Property relating to such Lease Termination Fee (a “Termination Space”). Amounts deposited pursuant to this Section 6.6.1 are referred to herein as the “Lease Termination Funds”. The Lease Termination Funds shall be held in an Interest Bearing Account (the “Lease Termination Reserve Account”).

6.6.2Release of Lease Termination Funds. Within ten (10) days after Lender’s receipt of a written request from Borrower, and provided that on the date such request is received by Lender and on the date such disbursement is to be made no Event of Default shall be continuing, Lender shall disburse to Borrower the Lease Termination Funds upon satisfaction by Borrower of each of the following conditions, as applicable:

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(a)Releases for Tenant Improvements. For each disbursement request relating to Tenant Improvements, as applicable: (i) Borrower’s request shall specify the Tenant Improvement costs for which such disbursement is requested; (ii) Lender shall have received and, to the extent required hereby, approved (or have been deemed to have approved) the Lease in respect of which Borrower is obligated to complete the Tenant Improvements for which such disbursement is requested; (iii) Lender shall have received a certificate from Borrower (A) certifying that all Tenant Improvements at the applicable Property to be funded by the requested disbursement have been completed or are in the process of being performed in good and workmanlike manner and in accordance with all applicable federal, state and local laws, rules and regulations (provided if any Reserve Funds are disbursed in connection with an invoice for work that shall not have been completed prior to the disbursement, then Borrower shall not be entitled to any additional disbursements of Reserve Funds until such time as the work described in such invoice shall have been completed), (B) identifying each Person that supplied materials or labor in connection with the Tenant Improvements to be funded by the requested disbursement, and (C) certifying that each such Person has been paid in full, or upon such disbursement will be paid in full, with respect to the Tenant Improvements to be funded by the requested disbursement for all amounts then invoiced by and due and owing to such Person, and, at Lender’s option if the cost of any individual Tenant Improvement exceeds $250,000.00, such certificate to be accompanied by lien waivers or other evidence of payment satisfactory to Lender; (iv) at Lender’s option, if such disbursement of Lease Termination Funds is in excess of $250,000.00, Lender shall have received a title search for the applicable Property indicating that such Property is free from all Liens, claims and other encumbrances not previously approved by Lender; and (v) Lender shall have received such other evidence as Lender shall reasonably request that the Tenant Improvements at such Property to be funded by the requested disbursement have been completed and are paid for or will be paid for upon such disbursement to Borrower.

(b)Release for Tenant Improvement Allowances and Leasing Commissions. For each disbursement request relating to Tenant Improvement Allowances or Leasing Commissions, as applicable: (i) Borrower’s request shall specify the Tenant Improvement Allowances or Leasing Commissions for which such disbursement is requested; (ii) Lender shall have received and, to the extent required hereby, approved (or have been deemed to have approved) the Lease in respect of which Borrower is obligated to pay the Tenant Improvement Allowances or Leasing Commissions for which such disbursement is requested; (iii) in the case of Tenant Improvement Allowances, Borrower shall certify to Lender that all conditions under the applicable Lease(s) for the release of the Tenant Improvement Allowances to be funded by the requested disbursement have been satisfied and shall provide to Lender copies of the documentation (if any) provided by the applicable Tenant pursuant to its Lease in support of its request for payment of such Tenant Improvement Allowances; and (iv) in the case of Leasing Commissions, Borrower shall certify to Lender that all conditions to the payment of the Leasing Commissions to be funded by the requested disbursement have been satisfied and shall provide to Lender copies of invoices and bills for such Leasing Commissions.

(c)Lender shall not be required to disburse Lease Termination Funds more frequently than once each calendar month, nor in an amount less than the Minimum Disbursement Amount except for the final disbursement of such Lease Termination Funds.

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(d)Notwithstanding the foregoing, upon receipt by Lender of a tenant estoppel certificate and/or other evidence reasonably acceptable to Lender that, with respect to any new replacement Lease entered into in accordance with this Agreement for the entire premises of any Termination Space with an initial term of at least five (5) years, all Tenant Improvements required to be completed by Borrower pursuant to such replacement Lease, if any, have been completed and all Tenant Improvement Allowances and Leasing Commissions required to be paid by Borrower with respect to such replacement Lease, if any, have been paid, and no Event of Default or Cash Management Sweep Period then exists, Lender shall disburse to Borrower all Lease Termination Funds on deposit with respect to such Termination Space.

Section 6.7Cash Trap Funds.

6.7.1Deposits into the Cash Trap. Upon the occurrence and during the continuance of a Cash Management Sweep Period, Borrower shall deposit, or cause to be deposited with Lender pursuant to the Cash Management Agreement, in each case to be held as additional collateral for the Loan, (a) with respect to a Cash Management Sweep Period caused by a Partial Debt Yield Event only, fifty percent (50%) of the Excess Cash Flow and (b) with respect to any other Cash Management Sweep Period (including one that exists for multiple reasons, including the occurrence of a Partial Debt Yield Event), one hundred percent (100%) of the Excess Cash Flow. Amounts deposited pursuant to this Section 6.7.1 are referred to herein as the “Cash Trap Funds”. The Cash Trap Funds shall be held in the Cash Trap Account (as defined in the Cash Management Agreement), which shall be an Interest Bearing Account.

6.7.2Release of Cash Trap Funds.

(a)During a Cash Management Sweep Period, provided no Event of Default is then continuing, Lender shall apply any available Cash Trap Funds to (i) pay any shortfalls in Debt Service, (ii) to make any required monthly deposit into the Tax Funds to the extent required by Section 6.2 hereof and to the extent amounts on deposit in the Cash Management Account are insufficient to do so, and (iii) to make any required monthly deposit into the Insurance Funds to the extent required by Section 6.3 hereof and to the extent amounts on deposit in the Cash Management Account are insufficient to do so. Provided no Event of Default has occurred and is continuing, Lender shall disburse the Cash Trap Funds to Borrower upon its written request for (w) Tenant Improvements costs, Tenant Improvement Allowances and Leasing Commissions in accordance with Section 6.6.2, (x) for Capital Expenditures for such month set forth on the Approved Annual Budget in accordance with Section 6.7.2(d) below, (y) for management fees in an amount not to exceed 3.0% of Operating Income for the Collective Properties, and (z) to the extent required by applicable law for any direct or indirect owner of Borrower, REIT distributions in the minimum amount necessary to preserve such direct or indirect owner of Borrower’s REIT status but in no event in excess of $100,000.00 per annum.

(b)Provided a Cash Management Sweep Period shall no longer be in effect, all funds on deposit as Cash Trap Funds shall be promptly disbursed to Borrower.

(c)Any Cash Trap Funds remaining after the Debt has been paid in full shall be promptly returned to Borrower.

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(d)Disbursements of Cash Trap Funds for Capital Expenditures.

(i)Lender shall disburse to Borrower the Cash Trap Funds for Capital Expenditures for the Collective Properties upon satisfaction by Borrower of each of the following conditions: (A) Borrower shall submit a request for payment to Lender at least ten (10) days prior to the date on which Borrower requests such payment be made and specifies the Capital Expenditures to be paid, (B) on the date such request is received by Lender and on the date such payment is to be made, no Event of Default shall be continuing, (C) Lender shall have received a certificate from Borrower (1) stating that the items to be funded by the requested disbursement are Capital Expenditures, (2) stating that all Capital Expenditures to be funded by the requested disbursement have been completed in a good and workmanlike manner and in accordance with all applicable Legal Requirements, such certificate to be accompanied by a copy of any license, permit or other approval required by any Governmental Authority in connection with the Capital Expenditures, (3) identifying each Person that supplied materials or labor in connection with the Capital Expenditures to be funded by the requested disbursement, and (4) stating that each such Person has been paid in full or will be paid in full upon such disbursement, such certificate to be accompanied by lien waivers or other evidence of payment satisfactory to Lender, (D) at Lender’s option, if the disbursement of Cash Trap Funds is in excess of $250,000, (1) a title search for the applicable Property indicating that such Property is free from all Liens not previously approved by Lender, and/or (2) a report satisfactory to Lender in its reasonable discretion from an architect or engineer approved by Lender in respect of such architect or engineer’s inspection of the applicable Capital Expenditures, and (E) Lender shall have received such other evidence as Lender shall reasonably request that the Capital Expenditures at such Property to be funded by the requested disbursement have been completed and are paid for or will be paid upon such disbursement to Borrower. Lender shall not be required to disburse Cash Trap Funds more frequently than once each calendar month, nor in an amount less than the Minimum Disbursement Amount.

(ii)Nothing in this Section 6.7.2 shall (A) make Lender responsible for making or completing the Capital Expenditures; (B) require Lender to expend funds in addition to the Cash Trap Funds to complete any Capital Expenditures; (C) obligate Lender to proceed with the Capital Expenditures; or (D) obligate Lender to demand from Borrower additional sums to complete any Capital Expenditures.

(iii)Borrower shall permit Lender and Lender’s agents and representatives (including, without limitation, Lender’s engineer, architect, or inspector) or third parties to enter onto the applicable Property during normal business hours (subject to the rights of Tenants under their Leases and upon reasonable advance written notice) to inspect the progress of any Capital Expenditures and all materials being used in connection therewith and to examine all plans and shop drawings relating to such Capital Expenditures. Borrower shall cause all contractors and subcontractors to cooperate with Lender or Lender’s representatives or such other Persons described above in connection with inspections described in this Section 6.7.2(d)(iii).

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(iv)If a disbursement of Cash Trap Funds with respect to any single Property will exceed $1,000,000, Lender may require an inspection of the applicable Property at Borrower’s expense prior to making such a disbursement of Cash Trap Funds in order to verify completion of the Capital Expenditures for which reimbursement is sought. Lender may require that such inspection be conducted by an appropriate independent qualified professional selected by Lender and may require a certificate of completion by an independent qualified professional architect acceptable to Lender prior to the disbursement of Cash Trap Funds. Borrower shall pay the expense of the inspection as required hereunder, whether such inspection is conducted by Lender or by an independent qualified professional architect.

(v)In addition to any insurance required under the Loan Documents, Borrower shall provide or cause to be provided workmen’s compensation insurance, builder’s risk, and public liability insurance and other insurance to the extent required under applicable law in connection with Capital Expenditures. All such policies shall be in form and amount reasonably satisfactory to Lender.

Section 6.8Application of Reserve Funds. Notwithstanding anything to the contrary contained in this Agreement, provided an Event of Default shall not have occurred and be continuing, any payment required to be made under this Agreement or under any other Loan Document by Lender out of the Reserve Funds shall be deemed to have been timely made so long as sufficient funds were then available therefor and Borrower shall have satisfied each of the conditions contained herein for the release of the same. During the continuance of an Event of Default, Lender, at its option, may withdraw the Reserve Funds and apply the Reserve Funds to the items for which the Reserve Funds were established or to payment of the Debt in such order, proportion and priority as Lender may determine in its sole discretion. Lender’s right to withdraw and apply the Reserve Funds shall be in addition to all other rights and remedies provided to Lender under the Loan Documents.

Section 6.9Security Interest in Reserve Funds and Interest on Reserve Funds.

6.9.1Grant of Security Interest. Borrower shall be the owner of the Reserve Funds. Borrower hereby pledges, assigns and grants a security interest to Lender, as security for payment of the Debt and the performance of all other terms, conditions and covenants of the Loan Documents on Borrower’s part to be paid and performed, in all of Borrower’s right, title and interest in and to the Reserve Funds. The Reserve Funds shall be under the sole dominion and control of Lender.

6.9.2Interest on Reserve Funds. Interest accrued, if any, on the Reserve Funds shall become part of the applicable Reserve Fund and shall be disbursed in accordance with the disbursement procedures contained herein applicable to such Reserve Fund. Cash Trap Funds shall be invested in Permitted Investments.

6.9.3Income Taxes. Borrower shall report on its federal, state and local income tax returns all interest or income accrued on the Reserve Funds.

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6.9.4Prohibition Against Further Encumbrance. Borrower shall not, without the prior consent of Lender, further pledge, assign or grant any security interest in the Reserve Funds or permit any lien or encumbrance to attach thereto, or any levy to be made thereon, or any UCC-1 Financing Statements, except those naming Lender as the secured party, to be filed with respect thereto.

6.9.5Reserve Fund Indemnification. Borrower shall indemnify Lender and hold Lender harmless from and against any and all Losses arising from or in any way connected with the Reserve Funds, the sums deposited therein or the performance of the obligations for which the Reserve Funds were established, except to the extent arising from the fraud, gross negligence or willful misconduct of Lender, its agents or employees. Borrower shall assign to Lender all rights and claims Borrower may have against all Persons supplying labor, materials or other services which are to be paid from or secured by the Reserve Funds; provided, however, that Lender may not pursue any such right or claim unless an Event of Default has occurred and remains uncured.

6.9.6Reserve Fund Fees and Expenses. Borrower acknowledges and agrees that it solely shall be, and shall at all times remain, liable to Lender or Servicer for all actual, out- of-pocket fees, charges, costs and expenses in connection with the Reserve Funds, this Agreement and the enforcement hereof, including, without limitation, any monthly or annual fees or charges as may be assessed by Cash Management Bank in connection with maintaining the Reserve Funds and the reasonable fees and expenses of legal counsel to Lender and Servicer as needed to enforce, protect or preserve the rights and remedies of Lender and/or Servicer under this Agreement.

Section 6.10Letters of Credit.

6.10.1Delivery of Letters of Credit. (a)  During the Cash Management Sweep Period resulting solely from the occurrence of a Debt Yield Event or a Partial Debt Yield Event, Borrower may avoid, or terminate, such Cash Management Sweep Period and obtain a release of the Cash Trap Funds, as applicable, upon Borrower’s delivery to Lender of a Letter of Credit in accordance with the provisions of this Section 6.10 in an amount necessary to end or avoid a Debt Yield Event or Partial Debt Yield Event, as applicable.

(b)Borrower shall give Lender no less than thirty (30) days’ notice of Borrower’s election to deliver a Letter of Credit and Borrower shall pay to Lender all of Lender’s reasonable out-of-pocket costs and expenses in connection therewith. Borrower shall not be entitled to draw from any such Letter of Credit. No party other than Lender shall be entitled to draw on any such Letter of Credit. Upon thirty (30) days’ notice to Lender, Borrower may replace a Letter of Credit with a cash deposit to the Cash Trap Account (as defined in the Cash Management Agreement) if a Letter of Credit has been outstanding for more than six (6) months.

(c)The applicant under each Letter of Credit shall be required, until such time as the Debt has been paid in full, to waive, release and abrogate any and all rights it may have under any agreement, at law, in equity or otherwise (including, without limitation, any law subrogating the applicant to the rights of Lender), to assert any claim against or seek

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contribution, indemnification or any other form of reimbursement from Borrower or any other Person liable for payment of the amounts which the Letter of Credit is intended to cover for any draw made on any such Letter of Credit or otherwise.

(d)In the event Borrower delivers to Lender a Letter of Credit after the Closing Date (i) which is, together with all other Letters of Credit then outstanding, equal to or greater than ten percent (10%) of the outstanding principal balance of the Loan, Borrower shall deliver to Agent a New Non-Consolidation Opinion or a “no effect letter” with respect to the Non-Consolidation Opinion, (ii) Borrower shall have no reimbursement obligations with respect to such Letter of Credit, and (iii) such Letter of Credit shall be a contribution to the Borrower and shall be accompanied by the execution and delivery of a contribution agreement approved by Lender, such approval not to be unreasonably withheld, conditioned or delayed.

Section 6.11Provisions Regarding Letters of Credit.

6.11.1Security for Debt. Each Letter of Credit delivered under this Agreement shall be additional security for the payment of the Debt. Upon the occurrence and during the continuance of an Event of Default, Lender shall have the right, at its option, to draw on any Letter of Credit and to apply all or any part thereof to the payment of the items for which such Letter of Credit was established or to apply each such Letter of Credit to payment of the Debt in such order, proportion or priority as Lender may determine. Any such application to the Debt shall be subject to the Yield Maintenance Premium to the extent such application occurs prior to the occurrence of the Open Prepayment Date. On the Maturity Date, any such Letter of Credit may be applied to reduce the Debt.

6.11.2Additional Rights of Lender. In addition to any other right Lender may have to draw upon a Letter of Credit pursuant to the terms and conditions of this Agreement, Lender shall have the additional rights to draw in full any Letter of Credit: (a) with respect to any evergreen Letter of Credit, if Lender has received a notice from the issuing bank that the Letter of Credit will not be renewed and a substitute Letter of Credit is not provided at least thirty (30) days prior to the date on which the outstanding Letter of Credit is scheduled to expire; (b) with respect to any Letter of Credit with a stated expiration date, if Lender has not received a notice from the issuing bank that it has renewed the Letter of Credit at least thirty (30) days prior to the date on which such Letter of Credit is scheduled to expire and a substitute Letter of Credit is not provided at least thirty (30) days prior to the date on which the outstanding Letter of Credit is scheduled to expire; (c) upon receipt of notice from the issuing bank that the Letter of Credit will be terminated (except if the termination of such Letter of Credit is permitted pursuant to the terms and conditions of this Agreement or a substitute Letter of Credit is provided); or (d) if Lender has received notice that the bank issuing the Letter of Credit shall cease to be an Eligible Institution. Notwithstanding anything to the contrary contained in the above, Lender is not obligated to draw any Letter of Credit upon the happening of an event specified in clauses (a), (b), (c) or (d) above and shall not be liable for any losses sustained by Borrower due to the insolvency of the bank issuing the Letter of Credit if Lender has not drawn the Letter of Credit.

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ARTICLE VII.

PROPERTY MANAGEMENT

Section 7.1The Property Management Agreement. Borrower shall (i) cause Manager to manage the Collective Properties in accordance with the Property Management Agreement, (ii) diligently perform and observe all of the material terms, covenants and conditions of the Property Management Agreement on the part of Borrower to be performed and observed, (iii) promptly notify Lender of any notice to Borrower of any default by Borrower in the performance or observance of any of the terms, covenants or conditions of the Property Management Agreement on the part of Borrower to be performed and observed, and (iv) promptly enforce the performance and observance of all of the material covenants required to be performed and observed by Manager under the Property Management Agreement. If Borrower shall default in the performance or observance of any material term, covenant or condition of the Property Management Agreement on the part of Borrower to be performed or observed, then, without limiting Lender’s other rights or remedies under this Agreement or the other Loan Documents, and without waiving or releasing Borrower from any of its obligations hereunder or under the Property Management Agreement, Lender shall have the right, but shall be under no obligation, to pay any sums and to perform any act as may be appropriate to cause all the material terms, covenants and conditions of the Property Management Agreement on the part of Borrower to be performed or observed. Following the occurrence and during the continuance of an Event of Default, Borrower shall not exercise any rights, make any decisions, grant any approvals or otherwise take any action under the Property Management Agreement without the prior written consent of Lender, which consent may be granted, conditioned or withheld in Lender’s sole discretion.

Section 7.2Prohibition Against Termination or Modification of the Property Management Agreement. Borrower shall not surrender, terminate, cancel, modify, renew or extend the Property Management Agreement, or enter into any other agreement relating to the management or operation of the Collective Properties with Manager or any other Person, or consent to the assignment by the Manager of its interest under the Property Management Agreement, or waive or release any of its rights and remedies under the Property Management Agreement, in each case without the express consent of Lender, which consent shall not be unreasonably withheld or delayed; provided, however, that, as long as no Event of Default has occurred and is continuing, Borrower shall have the right, without Lender’s prior written consent, to replace the Manager with a Qualified Manager provided that (a) Borrower enters into a replacement Property Management Agreement with such Qualified Manager for the Collective Properties that is on an arms’-length basis and under which the fees payable thereunder shall not exceed three percent (3.0%) of Operating Income for the Collective Properties, (b) if such Qualified Manager is an Affiliate of Borrower, Borrower delivers a New Non-Consolidation Opinion in accordance with Rating Agency Criteria and reasonably acceptable to Lender, with respect to such Affiliated Manager, and (c) such Qualified Manager and Borrower shall execute a subordination of Property Management Agreement in substantially the same form as the Assignment and Subordination of Management Agreement or otherwise reasonably acceptable to Lender.

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Section 7.3Replacement of Manager. Lender shall have the right to (x) require Borrower to replace the Manager with a Person which is not an Affiliate of, but is chosen by, Borrower and approved by Lender (such approval not to be unreasonably withheld, conditioned or delayed) upon the occurrence of any one or more of the following events: (a) if Manager shall be insolvent or a debtor in a bankruptcy proceeding, (b) if Manager shall be in material default under the Property Management Agreement beyond any applicable notice and cure period or (c) if at any time the Manager has engaged in gross negligence, fraud or willful misconduct, and (y) replace the Manager with a Person reasonably satisfactory to Lender upon the occurrence and during the continuance of an Event of Default.

ARTICLE VIII.

PERMITTED TRANSFERS

Section 8.1Permitted Transfer of the Collective Properties. Notwithstanding the restrictions contained in Section 4.2.1 hereof, Article 6 of the Mortgage or any other provision of the Loan Documents, not more than two (2) sales or conveyances (but not a deed of trust, mortgage, lien or other encumbrance) by Borrower of the Collective Properties (a “Property Sale”) and the two (2) related assumptions of the Loan are permitted following the earlier of (1) the date which is two (2) years from the Closing Date and (2) ninety (90) days following the final Securitization of the Loan, provided that each of the following conditions have been satisfied:

(a)the Person to whom the Collective Properties are sold or conveyed (the “Transferee”) satisfies the requirements of Section 3.1.24 hereof and the organizational documents of the Transferee shall satisfy Rating Agency Criteria as determined by Lender;

(b)the Transferee is an Acceptable Person Controlled by, and at least twenty percent (20%) owned by, a Qualified Buyer;

(c)immediately prior to such sale or conveyance, no Event of Default shall have occurred and be continuing and no Default or Event of Default shall exist as a result of such sale or conveyance;

(d)following the sale or conveyance, the Collective Properties shall be managed by a Qualified Manager in accordance with this Agreement;

(e)Lender has received a New Non-Consolidation Opinion which may be relied upon by Lender and the Rating Agencies with respect to the sale or conveyance, which New Non-Consolidation Opinion shall be reasonably acceptable to a prudent lender acting reasonably and, after a Securitization, the Rating Agencies;

(f)the Transferee shall execute an assumption of all of the obligations of Borrower under the Loan Agreement, the Mortgage and the other Loan Documents arising from and after such assumption and shall deliver or cause to be delivered such documents, organizational documents, satisfactory search results, legal opinions and title insurance endorsements as may be reasonably requested by Lender;

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(g)the proposed transfer will not result in a violation of any of the covenants contained herein relating to compliance with ERISA, the Patriot Act and the Executive Order, and Borrower shall deliver or cause the proposed Transferee to deliver to Lender such documentation and/or evidence of compliance as Lender shall reasonably request which may include search results;

(h)Borrower shall pay Lender the applicable Conveyance Fee;

(i)Borrower shall give written notice to Lender of the proposed sale or conveyance not later than thirty (30) days prior thereto, which notice shall set forth the name of the proposed Transferee, identify the owners of such direct and indirect interests in the proposed Transferee sufficient to establish satisfaction of the conditions set forth in clause (b) above, and set forth the date the sale or conveyance is expected to be effective;

(j)a substitute guarantor acceptable to Lender shall have assumed the Guaranty and Environmental Indemnity executed by Guarantor or executed a replacement guaranty satisfactory to Lender after which the existing Guarantor shall be released from the Guaranty with respect to any liability first accruing from and after the date thereof and such replacement guarantor shall be required to maintain a Net Worth of not less than $250,000,000 and Liquidity of not less than $15,000,000 during the term of the Loan (and Lender shall have received any legal opinions of counsel reasonably required to Lender in connection therewith);

(k)such transfer shall not trigger any right of first refusal, option to purchase or default under any Lease that has not expired or been waived prior to the consummation of transfer and assumption of the Loan, or any default under the Property Management Agreement which has not been waived in writing by Manager; and

(l)The proposed transfer shall not constitute a Covered Transaction or, if the proposed Property Sale is a Covered Transaction, then CFIUS Approval shall be obtained with respect to the proposed transfer;

(m)Borrower shall pay any and all reasonable out-of-pocket costs incurred in connection with such transfer and assumption of the Loan (including, without limitation, Lender’s counsel fees and disbursements and all recording fees, title insurance premiums and mortgage and intangible taxes and the fees and expenses of the Rating Agencies incurred in connection with clause (e) above).

Notwithstanding anything to the contrary contained herein, in no event shall any Transferee (or any holder of a direct or indirect beneficial interest in any Transferee other than shareholders in a publicly traded entity which owns a direct or indirect beneficial interest in such Transferee) be a Prohibited Entity and any transfer or purported transfer of any interest in the Property which would result in Borrower (or any holder of a direct or indirect beneficial interest in Borrower other than shareholders in a publicly traded entity which owns a direct or indirect beneficial interest in Borrower) being a Prohibited Entity is hereby prohibited and shall be void ab initio.

Section 8.2Permitted Transfers of Equity Interests. Notwithstanding the restrictions contained in Section 4.2.1 hereof, in Article 6 of the Mortgage or in any other

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provision of the Loan Documents, the following transfers (but in no event pledges) shall be permitted without Lender’s consent:

(a)transfers of a direct or indirect beneficial interest in Borrower or any Restricted Party, provided after giving effect to each and every such transfer, (i) Sponsor, any Affiliate of Sponsor (or any successor by merger, consolidation or otherwise of Sponsor or any Affiliate of Sponsor) shall own, in the aggregate, at least twenty percent (20%) of the direct or indirect equity ownership interest in Borrower and each SPE Party; and (ii) Borrower is Controlled by Sponsor or an Affiliate of Sponsor (or any successor by merger, consolidation or otherwise of Sponsor or an Affiliate of Sponsor);

(b)transfers of a direct or indirect beneficial interest in Borrower or any Restricted Party, provided after giving effect to such transfers, (i) a Qualified Buyer shall own, in the aggregate, at least twenty percent (20%) of the direct or indirect equity ownership interest in Borrower and each SPE Party; and (ii) Borrower is Controlled by such Qualified Buyer;

(c)transfers by devise or descent or by operation of law upon the death of a natural person;

(d)transfers of direct or indirect interests in Borrower for estate planning purposes to the spouse, any lineal descendant, sibling or parent of such transferor, (including any of the foregoing by adoption), or to a trust for the benefit of any one or more of such Persons; or

(e)the sale, transfer or issuance of shares of common stock or other beneficial ownership interests in Sponsor or in any Person holding a direct or indirect interest in Borrower that is a publicly traded entity, (a “Traded Security”), provided such Traded Security is listed on the New York Stock Exchange or another nationally recognized stock exchange (a “Recognized Exchange”) prior to the time of such sale, transfer or issuance, or any merger or consolidation of Sponsor or any such other Person that is a publicly traded entity.

provided: (i) with respect to the transfer listed in clause (a), no Event of Default shall have occurred and be continuing, (ii) with respect to the transfer listed in clause (b), (A) no Event of Default shall have occurred and be continuing, (B) Borrower shall pay Lender the applicable Conveyance Fee; provided, however, in no event shall a Conveyance Fee ever be due or payable in connection with a sale of Sponsor or a sale of all or substantially all of Sponsor’s assets or a transfer to or merger into a Qualified Buyer described under paragraph (f) of the definition of “Qualified Buyer,” and (C) to the extent the Sponsor no longer Controls, or owns a beneficial interest in, the Borrower, a substitute guarantor acceptable to Lender shall have assumed the Guaranty and Environmental Indemnity executed by Guarantor or executed a replacement guaranty satisfactory to Lender after which the existing Guarantor shall be released from the Guaranty with respect to any liability first accruing from and after the date thereof and such replacement guarantor shall be required to maintain a Net Worth of not less than $250,000,000 and Liquidity of not less than $15,000,000 during the term of the Loan (and Lender shall have received any legal opinions of counsel reasonably required to Lender in connection therewith), (iii) with respect to the transfers listed in clauses (a) and (b), Lender shall receive not less than thirty (30) days’ prior written notice of such transfer, (iv) in the case of the transfer of any direct equity ownership interests in Borrower or in any SPE Party, such transfers shall be conditioned

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upon continued compliance by Borrower and any SPE Party with the provisions of Section 3.1.24 hereof, (v) such transfers shall be conditioned upon Borrower’s ability to, after giving effect to the equity transfer in question, (A) remake the representations contained herein relating to the DPA and CFIUS, ERISA matters and the Patriot Act, OFAC and matters concerning Embargoed Persons (and, upon Lender’s request, Borrower shall deliver to Lender (x) an Officer’s Certificate containing such updated representations effective as of the date of the consummation of the applicable equity transfer, and (y) lien, bankruptcy, Patriot Act and litigation searches acceptable to Lender for any entity or individual owning, directly or indirectly, ten percent (10%) or more of the interests in Borrower as a result of such transfer), (B) certify to Lender that each Person owning directly or indirectly ten percent (10%) of the interests in the Borrower as a result of such transfer is an Acceptable Person, and (C) comply with the covenants contained herein relating to the DPA and CFIUS, ERISA matters and Prescribed Laws, it being agreed that if such transfer will trigger Lender’s right to request searches and certifications, Borrower shall deliver prior notice of such transfer to Lender and such transfer shall not be deemed permitted hereunder until such search results and certifications are received and approved by Lender, (vi) prior to any transfer which, after giving effect to such transfer, results in more than forty-nine (49%) of the direct or indirect interests in Borrower being transferred to a Person not owning at least forty-nine (49%) of the direct or indirect interests in Borrower prior to such transfer, Borrower shall deliver to Lender a New Non-Consolidation Opinion with respect to the proposed transfer, which New Non-Consolidation Opinion shall be reasonably acceptable to Lender and, if required by Lender, the Rating Agencies, and (vii) such transfer shall not trigger any right of first refusal, option to purchase or default under any Lease that has not expired or been waived prior to the consummation of transfer, or any default under the Property Management Agreement which has not been waived in writing by Manager prior to the consummation of such transfer. Borrower shall pay all reasonable third-party out-of-pocket costs and expenses of Lender incurred in connection with Lender’s review of any transfer or proposed transfer, including, without limitation, attorneys’ fees and expenses whether or not such transfer is actually consummated. In connection with any transfer consummated in accordance with the terms of this Section 8.2, the organizational documents of any Person that owns a direct or indirect interest in Borrower may be amended to reflect such transfer so long as any such amendment does not violate the terms and provisions of Section 3.1.24 hereof. Notwithstanding anything to the contrary contained herein, in no event shall any transferee of any interest in Borrower (or any holder of a direct or indirect beneficial interest in any such transferee other than shareholders in a publicly traded entity which owns a direct or indirect beneficial interest in such transferee) be a Prohibited Entity and any transfer or purported transfer of any interest in Borrower which would result in Borrower (or any holder of a direct or indirect beneficial interest in Borrower other than shareholders in a publicly traded entity which owns a direct or indirect beneficial interest in Borrower) being a Prohibited Entity is hereby prohibited and shall be void ab initio.

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ARTICLE IX.

SALE AND SECURITIZATION OF LOAN

Section 9.1Sale of Loan and Securitization.

(a)Lender shall have the right (i) to sell or otherwise transfer the Loan or any portion thereof as a whole loan, (ii) to sell participation interests in the Loan or (iii) to securitize the Loan or any portion thereof in a single asset securitization or a pooled loan securitization. (The transaction referred to in clauses (i), (ii) and (iii) shall hereinafter be referred to collectively as “Secondary Market Transactions” and the transactions referred to in clause (iii) shall hereinafter be referred to as a “Securitization.” Any certificates, notes or other securities issued in connection with a Securitization are hereinafter referred to as “Securities.”)

(b)If requested by Lender, Borrower shall assist Lender, at Lender’s expense, in satisfying the market standards to which Lender customarily adheres or which may be reasonably required in the marketplace or by the Rating Agencies in connection with any Secondary Market Transactions, including, without limitation, to:

(i)(A) provide updated financial and other information with respect to any Property, the business operated at such Property by Borrower, Borrower, Guarantor, Sponsor, and the Manager, (B) provide updated budgets relating to Collective Properties and (C) provide updated appraisals, market studies, environmental reviews (Phase I’s and, if appropriate, Phase II’s), property condition reports and other due diligence investigations of such Property (the “Updated Information”), together, if customary, with appropriate and reasonable verification of the Updated Information through letters of auditors or opinions of counsel reasonably acceptable to Lender and acceptable to the Rating Agencies;

(ii)provide opinions of counsel, which may be relied upon by Lender, the Rating Agencies and their respective counsel, agents and representatives, as to non-consolidation, matters of Delaware and federal bankruptcy law relating to single-member limited liability companies and true sale or any other opinion customary in Secondary Market Transactions or required by the Rating Agencies with respect to any Property and Borrower and Affiliates, which counsel and opinions shall be reasonably satisfactory in form and substance to Lender and the Rating Agencies;

(iii)provide updated, as of the closing date of the Secondary Market Transaction, representations and warranties made in the Loan Documents; and

(iv)execute such amendments to the Loan Documents and Borrower or any SPE Party’s organizational documents as may be reasonably requested by Lender or requested by the Rating Agencies or otherwise to effect the Securitization provided the same do not increase the obligations or decrease the rights of Borrower, Guarantor or any SPE Party, other than to a de minimis extent.

(c)If, at the time one or more Disclosure Documents are being prepared for a Securitization, Lender expects that Borrower alone or Borrower and one or more Affiliates of

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Borrower collectively, or the Collective Properties alone or the Collective Properties and Related Properties collectively, will be a Significant Obligor, Borrower shall furnish to Lender upon request (i) the selected financial data or, if applicable, net operating income, required under Item 1112(b)(1) of Regulation AB, if Lender expects that the principal amount of the Loan together with any Related Loans as of the cut-off date for such Securitization may, or if the principal amount of the Loan together with any Related Loans as of the cut-off date for such Securitization and at any time during which the Loan and any Related Loans are included in a Securitization does, equal or exceed ten percent (10%) (but less than twenty percent (20%)) of the aggregate principal amount of all mortgage loans included or expected to be included, as applicable, in the Securitization or (ii) the financial statements required under Item 1112(b)(2) of Regulation AB, if Lender expects that the principal amount of the Loan together with any Related Loans as of the cut-off date for such Securitization may, or if the principal amount of the Loan together with any Related Loans as of the cut-off date for such Securitization and at any time during which the Loan and any Related Loans are included in a Securitization does, equal or exceed twenty percent (20%) of the aggregate principal amount of all mortgage loans included or expected to be included, as applicable, in the Securitization. Notwithstanding anything in Section 4.1.6 above to the contrary, such financial data or financial statements shall be furnished to Lender (A) within ten (10) Business Days after notice from Lender in connection with the preparation of Disclosure Documents for the Securitization, (B) not later than thirty (30) days after the end of each fiscal quarter of Borrower and (C) not later than sixty (60) days after the end of each fiscal year of Borrower; provided, however, that Borrower shall not be obligated to furnish financial data or financial statements pursuant to clauses (B) or (C) of this sentence with respect to any period for which a filing pursuant to the Exchange Act in connection with or relating to the Securitization (an “Exchange Act Filing”) is not required. If requested by Lender, Borrower shall furnish to Lender financial data and/or financial statements for any tenant of any Property if available to Borrower and, in connection with a Securitization, Lender expects there to be, with respect to such tenant or group of affiliated tenants, a concentration within all of the mortgage loans included or expected to be included, as applicable, in the Securitization such that such tenant or group of affiliated tenants would constitute a Significant Obligor.

(d)All financial data and financial statements provided by Borrower hereunder pursuant to Section 9.1(c) and (d) hereof shall be prepared in accordance with GAAP, and shall meet the requirements of Regulation AB and other applicable legal requirements. All financial statements referred to in Section 9.1(c) above shall be audited by independent accountants of Borrower acceptable to Lender in accordance with Regulation AB and all other applicable legal requirements, shall be accompanied by the manually executed report of the independent accountants thereon, which report shall meet the requirements of Regulation AB and all other applicable legal requirements, and shall be further accompanied by a manually executed written consent of the independent accountants, in form and substance acceptable to Lender, to the inclusion of such financial statements in any Disclosure Document and any Exchange Act Filing and to the use of the name of such independent accountants and the reference to such independent accountants as “experts” in any Disclosure Document and Exchange Act Filing, all of which shall be provided at the same time as the related financial statements are required to be provided. All financial data and financial statements (audited or unaudited) provided by Borrower under Section 9.1(c) hereof shall be accompanied by an Officer’s Certificate which shall state that such financial statements meet the requirements set forth in the first sentence of this Section 9.1(d).

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(e)If requested by Lender, Borrower shall provide Lender, promptly upon request, with any other or additional financial statements, or financial, statistical or operating information, as Lender shall reasonably determine to be required pursuant to Regulation AB or any amendment, modification or replacement thereto or other legal requirements in connection with any Disclosure Document or any Exchange Act Filing or as shall otherwise be reasonably requested by Lender.

(f)In the event Lender reasonably determines, in connection with a Securitization, that the financial data and financial statements required in order to comply with Regulation AB or any amendment, modification or replacement thereto or other legal requirements are other than as provided herein, then notwithstanding the provisions of Section 9.1(c) and (d) hereof, Lender may request, and Borrower shall promptly provide, such other financial statements as Lender determines to be necessary or appropriate for such compliance. Notwithstanding anything to the contrary contained herein, to the extent that the timeframes for compliance with such on-going financial reporting and similar provisions in this Section 9.1 are shorter than the timeframes allowed for comparable reporting obligations under Section 4.1.6 hereof, the timeframes under this Section 9.1 shall control.

(g)Lender shall pay Borrower’s reasonable out-of-pocket third-party costs incurred in connection with the transactions and obligations contemplated by this Section 9.1.

Section 9.2Securitization Indemnification.

(a)Borrower understands that certain of the Provided Information may be included in Disclosure Documents in connection with the Securitization and may also be included in filings with the Securities and Exchange Commission pursuant to the Securities Act of 1933, as amended (the “Securities Act”), or the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and provided or made available to investors or prospective investors in the Securities, the Rating Agencies, and service providers relating to the Securitization. In the event any portion of the Disclosure Document relating to Borrower, Guarantor, Affiliated Manager or any Property is required to be revised prior to the sale of all Securities, Borrower will cooperate with the holder of the Note in updating the Disclosure Document by providing all current information relating to Borrower, Guarantor, Affiliated Manager and any Property necessary to keep the Disclosure Document accurate and complete in all material respects.

(b)The Indemnifying Persons agree to provide, in connection with the Securitization, an indemnification agreement (A) certifying that (i) the Borrower has examined the Disclosure Documents the sections entitled “Risk Factors,” “Special Considerations,” “Description of the Mortgage Loans and Mortgaged Properties,” “The Manager,” “The Borrower” and “Certain Legal Aspects of the Mortgage Loan,” and such other sections as reasonably requested by Lender (in each case, to the extent such information relates to or includes any Provided Information or any information regarding any Property, Borrower, Manager and/or Guarantor) and (ii) such sections and such other information in the Disclosure Documents (to the extent such information relates to or includes any Provided Information or any information regarding any Property, Borrower, Manager, and/or Guarantor ) (collectively with the Provided Information, the “Covered Disclosure Information”) does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the

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statements made, in the light of the circumstances under which they were made, not misleading, (B) indemnifying Lender (and for purposes of this Section 9.2, Lender hereunder shall include its officers and directors), the Affiliate of Morgan Stanley that has filed the registration statement relating to the Securitization (the “Registration Statement”), each of its directors, each of its officers who have signed the Registration Statement and each Person that controls the Affiliate within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act (collectively, the “Morgan Stanley Group”), and Morgan Stanley, and any other placement agent or underwriter with respect to the Securitization, each of their respective directors and each Person who controls Morgan Stanley or any other placement agent or underwriter within the meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act (collectively, the “Underwriter Group”) for any losses, claims, damages or liabilities (including without limitation legal fees and expenses for enforcement of these obligations) (collectively, the “Liabilities”) to which Lender, the Morgan Stanley Group or the Underwriter Group may become subject insofar as the Liabilities arise out of or are based upon any untrue statement of any material fact contained in the Covered Disclosure Information or arise out of or are based upon the omission to state therein a material fact required to be stated in the Covered Disclosure Information or necessary in order to make the statements in the Covered Disclosure Information, in light of the circumstances under which they were made, not misleading and (C) agreeing to reimburse Lender, the Morgan Stanley Group and/or the Underwriter Group for any legal or other expenses reasonably incurred by Lender, the Morgan Stanley Group and the Underwriter Group in connection with investigating or defending the Liabilities; provided, however, that Borrower will be liable in any such case under clauses (B) or (C) above only to the extent that any such loss claim, damage or liability arises out of or is based upon any such untrue statement or omission made therein in reliance upon and in conformity with information furnished to Lender by or on behalf of Borrower in connection with Provided Information. The indemnification provided in clauses (B) and (C) above shall be effective whether or not the indemnification agreement described above is provided to Borrower or Guarantor; provided, however, such indemnity shall be limited to the Provided Information and shall only be effective to the extent that Lender accurately states the Provided Information in the applicable Disclosure Document. Notwithstanding the foregoing, Borrower shall have no liability under this Section 9.2(b) unless Lender provides Borrower with all Disclosure Documents and provides Borrower with a reasonable opportunity to review the same, and Borrower shall have no liability for any misstatement or omission to the extent Lender fails to revise the Disclosure Documents in accordance with comments from Borrower. The aforesaid indemnity agreement will be in addition to any liability which Borrower may otherwise have.

(c)In connection with Exchange Act Filings, Borrower shall (i) indemnify Lender, the Morgan Stanley Group and the Underwriter Group for Liabilities to which Lender, the Morgan Stanley Group or the Underwriter Group may become subject insofar as the Liabilities arise out of or are based upon any untrue statement of any material fact in the Covered Disclosure Information or upon the omission or alleged omission to state in the Disclosure Document a material fact required to be stated in the Disclosure Document in order to make the statements in the Disclosure Document related to Covered Disclosure Information, in light of the circumstances under which they were made, not misleading and (ii) reimburse Lender, the Morgan Stanley Group or the Underwriter Group for any legal or other expenses reasonably incurred by Lender, the Morgan Stanley Group or the Underwriter Group in connection with defending or investigating the Liabilities.

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(d)Promptly after receipt by an indemnified party under this Section 9.2 of notice of the commencement of any action, such indemnified party will, if a claim in respect thereof is to be made against the indemnifying party under this Section 9.2, notify the indemnifying party in writing of the commencement thereof, but the omission to so notify the indemnifying party will not relieve the indemnifying party from any liability which the indemnifying party may have to any indemnified party hereunder except to the extent that failure to notify causes prejudice to the indemnifying party. In the event that any action is brought against any indemnified party, and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled, jointly with any other indemnifying party, to participate therein and, to the extent that it (or they) may elect by written notice delivered to the indemnified party promptly after receiving the aforesaid notice from such indemnified party, to assume the defense thereof with counsel reasonably satisfactory to such indemnified party. After notice from the indemnifying party to such indemnified party under this Section 9.2, such indemnified party shall pay for any legal or other expenses subsequently incurred by such indemnified party in connection with the defense thereof other than reasonable costs of investigation; provided, however, if the defendants in any such action include both the indemnified party and the indemnifying party and the indemnified party shall have reasonably concluded that there are any legal defenses available to it and/or other indemnified parties that are different from or additional to those available to the indemnifying party, the indemnified party or parties shall have the right to select separate counsel to assert such legal defenses and to otherwise participate in the defense of such action on behalf of such indemnified party at the cost of the indemnifying party. The indemnifying party shall not be liable for the expenses of more than one separate counsel unless an indemnified party shall have reasonably concluded that there may be legal defenses available to it that are different from or additional to those available to another indemnified party.

(e)In order to provide for just and equitable contribution in circumstances in which the indemnity agreement provided for in Section 9.2(b) or (c) hereof is for any reason held to be unenforceable as to an indemnified party in respect of any losses, claims, damages or liabilities (or action in respect thereof) referred to therein which would otherwise be indemnifiable under Section 9.2(b) or (c) hereof, the indemnifying party shall contribute to the amount paid or payable by the indemnified party as a result of such losses, claims, damages or liabilities (or action in respect thereof); provided, however, that no Person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. In determining the amount of contribution to which the respective parties are entitled, the following factors shall be considered: (i) Morgan Stanley’s and Borrower’s relative knowledge and access to information concerning the matter with respect to which the claim was asserted; (ii) the opportunity to correct and prevent any statement or omission; and (iii) any other equitable considerations appropriate in the circumstances. Lender and Borrower hereby agree that it would not be equitable if the amount of such contribution were determined by pro rata or per capita allocation.

(f)Borrower shall indemnify Lender and its officers, directors, partners, employees, representatives, agents and Affiliates against any Losses to which Lender or its officers, directors, partners, employees, representatives, agents and Affiliates, may become subject in connection with any indemnification to the Rating Agencies in connection with

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issuing, monitoring or maintaining the Securities insofar as the Losses arise out of or are based upon any untrue statement of any material fact in any information provided by or on behalf of Borrower to the Rating Agencies (the “Covered Rating Agency Information”) or arise out of or are based upon the omission to state a material fact in the Covered Rating Agency Information required to be stated therein or necessary in order to make the statements in Covered Rating Agency Information, in light of the circumstances under which they were made, not misleading. Information provided to the Rating Agencies by any member of the Underwriter Group and not provided to Borrower for review shall not be considered Covered Rating Agency Information.

(g)The liabilities and obligations of both Borrower and Lender under this Section 9.2 shall survive the termination of this Agreement and the satisfaction and discharge of the Debt.

(h)The Indemnifying Persons agree that the indemnification, contribution and reimbursement obligations set forth in this Section 9.2 shall apply whether or not any Indemnified Person is a formal party to any lawsuits, claims or other proceedings. The Indemnifying Persons further agree that the Indemnified Persons are intended third party beneficiaries under this Section 9.2.

(i)Notwithstanding anything to the contrary contained herein, Borrower shall have no obligation to act as depositor with respect to the Loan or an issuer or registrant with respect to the Securities issued in any Securitization.

Section 9.3Servicing and Trust Expenses. At the option of Lender, the Loan may be serviced by a servicer/trustee (the “Servicer”) selected by Lender and Lender may delegate all or any portion of its responsibilities under this Agreement and the other Loan Documents to the Servicer pursuant to a servicing agreement (the “Servicing Agreement”) between Lender and Servicer. Borrower shall not be responsible for any set-up fees or any other costs relating to or arising under the Servicing Agreement, including the monthly servicing fee due to the Servicer under the Servicing Agreement; provided, however, following a Securitization, Borrower shall be responsible for the payment of all Trust Fund Expenses and shall reimburse Lender, Servicer, Special Servicer, Trustee or other applicable party upon written demand for the same.

Section 9.4Loan Bifurcation. Upon Lender’s request, Borrower shall execute such amendments to the Loan Documents and Borrower’s organizational documents as may be reasonably requested by Lender in connection with a bifurcation of the Loan into two or more components and/or separate notes and/or creating a senior/subordinate note structure and/or a mortgage/mezzanine loan structure (any of the foregoing, a “Loan Bifurcation”); provided, however, that Borrower shall not be required to modify or amend any Loan Document if such modification or amendment would (a) change the weighted average of the Interest Rate among such components or notes except in connection with (i) a prepayment pursuant to the terms and provisions of Section 2.4.2 or (ii) an Event of Default), (b) change the aggregate principal balance of the Loan, the stated maturity or the amortization of principal as set forth herein or in the Note, (c) modify or amend the exculpation provisions contained in Section 11.22 hereof, (d) increase, except to a de minimis extent, Borrower’s obligations under the Loan Documents, or (e) decrease, except to a de minimis extent, Borrower’s rights under the Loan Documents.

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ARTICLE X.

DEFAULTS

Section 10.1Event of Default.

(a)Each of the following events shall constitute an event of default hereunder (an “Event of Default”):

(i)if (A) the payment due on the Maturity Date is not paid when due, (B) any monthly installment of principal and/or interest due under the Note or any amount required to be deposited into the Reserve Funds is not paid when due, or (C) any other portion of the Debt is not paid when due within five (5) Business Days following notice to Borrower that the same is due and payable;

(ii)if any of the Taxes or Other Charges are not paid when due (unless, with respect to Taxes, sufficient Tax Funds are on deposit with Lender pursuant to Section 6.2.1 hereof and Lender’s access to such funds has not been restricted);

(iii)if the Policies are not kept in full force and effect;

(iv)if Borrower breaches or permits or suffers a breach of Section 4.2.1 hereof, or Article 6 of the Mortgage;

(v)if any representation or warranty made by any Borrower herein or in any other Loan Document, or in any report, certificate, financial statement or other instrument, agreement or document furnished to Lender shall have been false or misleading in any material respect as of the date the representation or warranty was made and such misrepresentation is not cured within thirty (30) days after the earlier of Borrower’s actual Knowledge of the same or notice from Lender;

(vi)if any Borrower, any SPE Party or Guarantor shall make an assignment for the benefit of creditors;

(vii)if a receiver, liquidator or trustee shall be appointed for any Borrower, any SPE Party or Guarantor or if any Borrower, any SPE Party or Guarantor shall be adjudicated a bankrupt or insolvent, or if any petition for bankruptcy, reorganization or arrangement pursuant to federal bankruptcy law, or any similar federal or state law, shall be filed by or against, consented to, or acquiesced in by, any Borrower, any SPE Party or Guarantor, or if any proceeding for the dissolution or liquidation of any Borrower, any SPE Party or Guarantor shall be instituted; provided, however, if such appointment, adjudication, petition or proceeding was involuntary and not consented to by any Borrower, any SPE Party or Guarantor, upon the same not being discharged, stayed or dismissed within ninety (90) days;

(viii)subject to Borrower’s or the applicable Tenant’s rights to contest such Lien expressly set forth in this Agreement, if any Property becomes subject to any mechanic’s, materialman’s or other Lien other than a Lien for local real estate taxes and

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assessments not then due and payable and the Lien shall remain undischarged of record (by payment, bonding or otherwise) for a period of thirty (30) days;

(ix)if Borrower assigns its rights under this Agreement or any of the other Loan Documents or any interest herein or therein in contravention of the Loan Documents;

(x)if any of the factual assumptions contained in the Non-Consolidation Opinion (other than those relating to Lender), or in any New Non-Consolidation Opinion delivered to Lender in connection with the Loan, or in any other non-consolidation opinion delivered subsequent to the closing of the Loan, were not true and correct in any material respect as of the date of such Non-Consolidation Opinion or New Non-Consolidation Opinion, as applicable; provided, that no Event of Default shall be deemed to have occurred (A) if such untruth was inadvertent or immaterial, (B) if such untruth is curable, Borrower shall promptly commence to cures same within ten (10) days of notice from Lender and (C) if reasonably requested by Lender, within fifteen (15) days of request by Lender, Borrower delivers to Lender a New Non-Consolidation Opinion to the effect that such breach shall not in any material respect impair, negate or amend the opinions rendered in the Non-Consolidation Opinion or the New Non-Consolidation Opinion most recently delivered to Lender, which opinion shall be acceptable to Lender in its reasonable discretion;

(xi)any Borrower or any SPE Party (if any) breaches any representation, warranty or covenant contained in Section 3.1.24 hereof; provided, that such breach shall not constitute an Event of Default if (A) such breach was inadvertent or immaterial, (B) if such breach is curable, Borrower shall promptly commence to cure such breach within ten (10) days of notice from Lender, (C) such breach is cured within ten (10) days, as the same may be extended for such time as is reasonably necessary for Borrower in the exercise of due diligence to cure such default, and (D) if requested by Lender, within fifteen (15) days of request by Lender, Borrower delivers to Lender a New Non-Consolidation Opinion to the effect that such breach shall not in any material respect impair, negate or amend the opinions rendered in the Non-Consolidation Opinion or the New Non-Consolidation Opinion most recently delivered to Lender, which opinion shall be acceptable to Lender in its reasonable discretion;

(xii)if any Borrower, Guarantor or Sponsor fails to comply with the covenants contained in Sections 3.1.40, 3.1.41, 3.1.43 and 4.1.1;

(xiii)if any Borrower breaches any of the negative covenants contained in Section 4.2.11;

(xiv)if Guarantor breaches in any material respect any covenant, warranty or representation contained in the Guaranty;

(xv)if any Borrower shall continue to be in Default under any of the other terms, covenants or conditions of this Agreement not specified in clauses (i) to (xiv) above, for ten (10) days after notice to Borrower from Lender, in the case of any Default

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which can be cured by the payment of a sum of money, or for thirty (30) days after notice from Lender in the case of any other Default; provided, however, that if such non-monetary Default is susceptible of cure but cannot reasonably be cured within such thirty (30) day period and provided further that Borrower shall have commenced to cure such Default within such thirty (30) day period and thereafter diligently and expeditiously proceeds to cure the same, such thirty (30) day period shall be extended for such time as is reasonably necessary for Borrower in the exercise of due diligence to cure such Default, such additional period not to exceed ninety (90) days or in the case of a Default attributable to any act or omission of a Tenant in violation of the applicable Lease, such longer period as may be reasonably necessary for Borrower to enforce such Tenant’s obligations under such Lease with reasonable diligence so long as the Borrower continues to diligently pursue the same; or

(xvi)if there shall be default or breach under any of the other Loan Documents beyond any applicable notice and/or cure periods contained in such Loan Documents, whether as to any Borrower, Guarantor or any Property, or if any other such event shall occur or condition shall exist, if the effect of such event or condition is to accelerate the maturity of any portion of the Debt or to permit Lender to accelerate the maturity of all or any portion of the Debt.

(b)Upon the occurrence of an Event of Default (other than an Event of Default described in clauses (vi) or (vii) above with respect to the Borrower and/or SPE Party only) and at any time thereafter Lender may, in addition to any other rights or remedies available to it pursuant to this Agreement and the other Loan Documents or at law or in equity, take such action, without notice or demand, that Lender deems advisable to protect and enforce its rights against Borrower and in and to any Property, including, without limitation, declaring the Debt to be immediately due and payable, and Lender may enforce or avail itself of any or all rights or remedies provided in the Loan Documents against Borrower and any Property, including, without limitation, all rights or remedies available at law or in equity; and upon any Event of Default described in clauses (vi) or (vii) above with respect to Borrower and/or SPE Party only, the Debt and all other obligations of Borrower hereunder and under the other Loan Documents shall immediately and automatically become due and payable, without notice or demand, and Borrower hereby expressly waives any such notice or demand, anything contained herein or in any other Loan Document to the contrary notwithstanding.

Section 10.2Remedies.

(a)Upon the occurrence of an Event of Default, all or any one or more of the rights, powers, privileges and other remedies available to Lender against Borrower under this Agreement or any of the other Loan Documents executed and delivered by, or applicable to, Borrower or at law or in equity may be exercised by Lender at any time and from time to time, whether or not all or any of the Debt shall be declared due and payable, and whether or not Lender shall have commenced any foreclosure proceeding or other action for the enforcement of its rights and remedies under any of the Loan Documents with respect to any Property. Any such actions taken by Lender shall be cumulative and concurrent and may be pursued independently, singly, successively, together or otherwise, at such time and in such order as Lender may determine in its sole discretion, to the fullest extent permitted by law, without impairing or

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otherwise affecting the other rights and remedies of Lender permitted by law, equity or contract or as set forth herein or in the other Loan Documents. Without limiting the generality of the foregoing, if an Event of Default is continuing (i) Lender is not subject to any “one action” or “election of remedies” law or rule, and (ii) all liens and other rights, remedies or privileges provided to Lender shall remain in full force and effect until Lender has exhausted all of its remedies against any Property and each Mortgage has been foreclosed, sold and/or otherwise realized upon in satisfaction of the Debt or the Debt has been paid in full.

(b)With respect to Borrower and the Properties, nothing contained herein or in any other Loan Document shall be construed as requiring Lender to resort to any Property or collateral for the satisfaction of any of the Debt in preference or priority to any other Property or collateral, and Lender may seek satisfaction out of all of the Properties or any other collateral or any part thereof, in its absolute discretion in respect of the Debt. Lender shall have the right from time to time to partially foreclose each of the Mortgages in any manner and for any amounts secured by the Mortgages then due and payable as determined by Lender in its sole discretion including, without limitation, the following circumstances: (i) in the event Borrower defaults beyond any applicable grace period in the payment of one or more scheduled payments of principal and interest, Lender may foreclose the Mortgage to recover such delinquent payments, or (ii) in the event Lender elects to accelerate less than the entire outstanding principal balance of the Loan, Lender may foreclose one or more of the Mortgages to recover so much of the principal balance of the Loan as Lender may accelerate and such other sums secured by the Mortgage as Lender may elect. Notwithstanding one or more partial foreclosures, the Properties shall remain subject to the Mortgages to secure payment of sums secured by the Mortgages and not previously recovered.

(c)Lender shall have the right from time to time to sever the Note and the other Loan Documents into one or more separate notes, mortgages and other security documents (the “Severed Loan Documents”) in such denominations as Lender shall determine in its sole discretion for purposes of evidencing and enforcing its rights and remedies provided hereunder. Borrower shall execute and deliver to Lender from time to time, promptly after the request of Lender, a severance agreement and such other documents as Lender shall request in order to effect the severance described in the preceding sentence, all in form and substance reasonably satisfactory to Lender. Borrower hereby absolutely and irrevocably appoints Lender as its true and lawful attorney, coupled with an interest, in its name and stead to make and execute all documents necessary or desirable to effect the aforesaid severance, Borrower ratifying all that its said attorney shall do by virtue thereof; provided, however, Lender shall not make or execute any such documents under such power until three (3) days after notice has been given to Borrower by Lender of Lender’s intent to exercise its rights under such power. Except during the continuance of an Event of Default or as may be required pursuant to Article IX hereof, Borrower shall not be obligated to pay any costs or expenses incurred in connection with the preparation, execution, recording or filing of the Severed Loan Documents and the Severed Loan Documents shall not contain any representations, warranties or covenants not contained in the Loan Documents and any such representations and warranties contained in the Severed Loan Documents will be given by Borrower only as of the Closing Date.

(d)Any amounts recovered from any Property or any other collateral for the Loan after an Event of Default may be applied by Lender toward the payment of any interest

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and/or principal of the Loan and/or any other amounts due under the Loan Documents in such order, priority and proportions as Lender in its sole discretion shall determine.

Section 10.3Right to Cure Defaults. Lender may, but without any obligation to do so and without notice to or demand on Borrower (except as otherwise expressly provided in the Loan Documents and/or required by applicable Legal Requirements) and without releasing Borrower from any obligation hereunder or being deemed to have cured any Event of Default hereunder, make, do or perform any obligation of Borrower hereunder in such manner and to such extent as Lender may deem necessary. Lender is authorized to enter upon any Property for such purposes, or appear in, defend, or bring any action or proceeding to protect its interest in any Property for such purposes, and the cost and expense thereof (including reasonable attorneys’ fees to the extent permitted by law), with interest as provided in this Section 10.3, shall constitute a portion of the Debt and shall be due and payable to Lender upon demand. All such costs and expenses incurred by Lender in remedying such Event of Default or such failed payment or act or in appearing in, defending, or bringing any action or proceeding shall bear interest at the Default Rate, for the period after such cost or expense was incurred until the date of payment to Lender. All such costs and expenses incurred by Lender together with interest thereon calculated at the Default Rate shall be deemed to constitute a portion of the Debt and be secured by the liens, claims and security interests provided to Lender under the Loan Documents and shall be immediately due and payable upon demand by Lender therefor.

Section 10.4Remedies Cumulative. The rights, powers and remedies of Lender under this Agreement shall be cumulative and not exclusive of any other right, power or remedy which Lender may have against Borrower pursuant to this Agreement or the other Loan Documents, or existing at law or in equity or otherwise. Lender’s rights, powers and remedies may be pursued singly, concurrently or otherwise, at such time and in such order as Lender may determine in Lender’s sole discretion. No delay or omission to exercise any remedy, right or power accruing upon an Event of Default shall impair any such remedy, right or power or shall be construed as a waiver thereof, but any such remedy, right or power may be exercised from time to time and as often as may be deemed expedient. A waiver of one Default or Event of Default with respect to Borrower shall not be construed to be a waiver of any subsequent Default or Event of Default by Borrower or to impair any remedy, right or power consequent thereon.

ARTICLE XI.

MISCELLANEOUS

Section 11.1Successors and Assigns. All covenants, promises and agreements in this Agreement, by or on behalf of Borrower and Lender, as applicable, shall inure to the benefit of the respective legal representatives, successors and assigns of Lender and Borrower, as applicable.

Section 11.2Lender’s Discretion. Whenever pursuant to this Agreement Lender exercises any right given to it to approve or disapprove, or any arrangement or term is to be satisfactory to Lender, the decision of Lender to approve or disapprove or to decide whether arrangements or terms are satisfactory or not satisfactory shall (except as is otherwise specifically herein provided in the absence of an Event of Default) be in the sole discretion of

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Lender and shall be final and conclusive. Whenever pursuant to this Agreement Lender’s right to approve or disapprove is to be reasonably exercised, or any arrangement or term is to be reasonably satisfactory to Lender, absent a continuing Event of Default, Lender’s approval shall not be unreasonably withheld, condition or delayed.

Section 11.3Governing Law.

(a)THIS AGREEMENT WAS NEGOTIATED IN THE STATE OF NEW YORK, THE LOAN WAS MADE BY LENDER AND ACCEPTED BY BORROWER IN THE STATE OF NEW YORK, AND THE PROCEEDS OF THE LOAN DELIVERED PURSUANT HERETO WERE DISBURSED FROM THE STATE OF NEW YORK, WHICH STATE THE PARTIES AGREE HAS A SUBSTANTIAL RELATIONSHIP TO THE PARTIES AND TO THE UNDERLYING TRANSACTION EMBODIED HEREBY, AND IN ALL RESPECTS, INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS AGREEMENT, THE NOTE AND THE OTHER LOAN DOCUMENTS AND THE OBLIGATIONS ARISING HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN SUCH STATE (WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS) AND ANY APPLICABLE LAW OF THE UNITED STATES OF AMERICA, EXCEPT THAT AT ALL TIMES THE PROVISIONS FOR THE CREATION, PERFECTION, PRIORITY AND ENFORCEMENT OF THE LIEN AND SECURITY INTEREST CREATED PURSUANT HERETO AND PURSUANT TO THE OTHER LOAN DOCUMENTS (OTHER THAN WITH RESPECT TO LIENS AND SECURITY INTERESTS IN PROPERTY WHOSE PERFECTION AND PRIORITY IS COVERED BY ARTICLE 9 OF THE UCC (INCLUDING, WITHOUT LIMITATION, THE ACCOUNTS) WHICH SHALL BE GOVERNED BY THE LAW OF THE JURISDICTION APPLICABLE THERETO IN ACCORDANCE WITH SECTIONS 9-301 THROUGH 9-307 OF THE UCC AS IN EFFECT IN THE STATE OF NEW YORK) SHALL BE GOVERNED BY AND CONSTRUED ACCORDING TO THE LAW OF THE STATE IN WHICH THE PROPERTY IS LOCATED, IT BEING UNDERSTOOD THAT, TO THE FULLEST EXTENT PERMITTED BY THE LAW OF SUCH STATE, THE LAW OF THE STATE OF NEW YORK SHALL GOVERN THE CONSTRUCTION, VALIDITY AND ENFORCEABILITY OF ALL LOAN DOCUMENTS AND ALL OF THE OBLIGATIONS ARISING HEREUNDER OR THEREUNDER. TO THE FULLEST EXTENT PERMITTED BY LAW, BORROWER HEREBY UNCONDITIONALLY AND IRREVOCABLY WAIVES ANY CLAIM TO ASSERT THAT THE LAW OF ANY OTHER JURISDICTION GOVERNS THIS AGREEMENT, THE NOTE AND THE OTHER LOAN DOCUMENTS, AND THIS AGREEMENT, THE NOTE AND THE OTHER LOAN DOCUMENTS SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK PURSUANT TO SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW EXCEPT AS SPECIFICALLY SET FORTH ABOVE.

(b)ANY LEGAL SUIT, ACTION OR PROCEEDING AGAINST LENDER OR BORROWER ARISING OUT OF OR RELATING TO THIS

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AGREEMENT MAY AT LENDER’S OPTION BE INSTITUTED IN ANY FEDERAL OR STATE COURT IN THE CITY OF NEW YORK, COUNTY OF NEW YORK, PURSUANT TO SECTION 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND BORROWER WAIVES ANY OBJECTIONS WHICH IT MAY NOW OR HEREAFTER HAVE BASED ON VENUE AND/OR FORUM NON CONVENIENS OF ANY SUCH SUIT, ACTION OR PROCEEDING, AND BORROWER HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY SUCH COURT IN ANY SUIT, ACTION OR PROCEEDING. BORROWER DOES HEREBY DESIGNATE AND APPOINT:

CORPORATION SERVICE COMPANY
1180 AVENUE OF THE AMERICAS, SUITE 210
NEW YORK, NY 10036-8401

AS ITS AUTHORIZED AGENT TO ACCEPT AND ACKNOWLEDGE ON ITS BEHALF SERVICE OF ANY AND ALL PROCESS WHICH MAY BE SERVED IN ANY SUCH SUIT, ACTION OR PROCEEDING IN ANY FEDERAL OR STATE COURT IN NEW YORK, NEW YORK, AND AGREES THAT SERVICE OF PROCESS UPON SAID AGENT AT SAID ADDRESS AND WRITTEN NOTICE OF SAID SERVICE MAILED OR DELIVERED TO BORROWER IN THE MANNER PROVIDED HEREIN SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF PROCESS UPON BORROWER, IN ANY SUCH SUIT, ACTION OR PROCEEDING IN THE STATE OF NEW YORK. BORROWER (I) SHALL GIVE PROMPT NOTICE TO LENDER OF ANY CHANGED ADDRESS OF ITS AUTHORIZED AGENT HEREUNDER, (II) MAY AT ANY TIME AND FROM TIME TO TIME DESIGNATE A SUBSTITUTE AUTHORIZED AGENT WITH AN OFFICE IN NEW YORK, NEW YORK (WHICH SUBSTITUTE AGENT AND OFFICE SHALL BE DESIGNATED AS THE PERSON AND ADDRESS FOR SERVICE OF PROCESS), AND (III) SHALL PROMPTLY DESIGNATE SUCH A SUBSTITUTE IF ITS AUTHORIZED AGENT CEASES TO HAVE AN OFFICE IN NEW YORK, NEW YORK OR IS DISSOLVED WITHOUT LEAVING A SUCCESSOR.

Section 11.4Modification, Waiver in Writing. No modification, amendment, extension, discharge, termination or waiver of any provision of this Agreement or of any other Loan Document, nor consent to any departure by Borrower therefrom, shall in any event be effective unless the same shall be in a writing signed by the party against whom enforcement is sought, and then such waiver or consent shall be effective only in the specific instance, and for the purpose, for which given. Except as otherwise expressly provided herein, no notice to, or demand on Borrower, shall entitle Borrower to any other or future notice or demand in the same, similar or other circumstances.

Section 11.5Delay Not a Waiver. Neither any failure nor any delay on the part of Lender in insisting upon strict performance of any term, condition, covenant or agreement, or exercising any right, power, remedy or privilege hereunder, or under any other Loan Document, shall operate as or constitute a waiver thereof, nor shall a single or partial exercise thereof preclude any other future exercise, or the exercise of any other right, power, remedy or privilege. In particular, and not by way of limitation, by accepting payment after the due date of any

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amount payable under this Agreement or any other Loan Document, Lender shall not be deemed to have waived any right either to require prompt payment when due of all other amounts due under this Agreement or the other Loan Documents, or to declare a default for failure to effect prompt payment of any such other amount. Lender shall have the right to waive or reduce any time periods that Lender is entitled to under the Loan Documents in its sole and absolute discretion.

Section 11.6Notices. All notices, demands, requests, consents, approvals or other communications (any of the foregoing, a “Notice”) required, permitted, or desired to be given hereunder shall be in writing sent by registered or certified mail, postage prepaid, return receipt requested, or delivered by hand or reputable overnight courier addressed to the party to be so notified at its address hereinafter set forth, or to such other address as such party may hereafter specify in accordance with the provisions of this Section 11.6. Any Notice shall be deemed to have been received: (a) three (3) days after the date such Notice is so mailed, (b) on the date of delivery by hand if delivered during business hours on a Business Day (otherwise on the next Business Day), and (c) on the next Business Day if sent by an overnight commercial courier, in each case addressed to the parties as follows:

If to Lender: Morgan Stanley Bank, N.A.
1585 Broadway, 25th Floor
New York, New York 10036
Attention: George Kok

and: Citi Real Estate Funding Inc.
390 Greenwich Street, 7th Floor
New York, New York 10013
Attention: Ana Rosu Marmann

and: JPMorgan Chase Bank, National Association
383 Madison Ave.
New York, New York 10179
Attention: Thomas Nicholas Cassino

and: UBS AG
1285 Avenue of the Americas, 11th Floor
New York, New York 10019
Attention: Transaction Management - Henry Chung

with a copy to: Cadwalader, Wickersham & Taft LLP
227 West Trade Street, Suite 2400
Charlotte, North Carolina 28202
Attention: Holly M. Chamberlain, Esq.

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If to Borrower: c/o Industrial Logistics Properties Trust
Two Newton Place
255 Washington Street, Suite 300
Newton, Massachusetts 02458
Attention: Richard W. Siedel, Jr.

with a copy to: Industrial Logistics Properties Trust
Two Newton Place
255 Washington Street, Suite 300
Newton, Massachusetts 02458
Attention: Jennifer B. Clark, Esq.

Any party may change the address to which any such Notice is to be delivered by furnishing ten (10) days written notice of such change to the other parties in accordance with the provisions of this Section 11.6. Notices shall be deemed to have been given on the date as set forth above, even if there is an inability to actually deliver any such Notice because of a changed address of which no Notice was given, or there is a rejection or refusal to accept any Notice offered for delivery. Notice for any party may be given by its respective counsel. Additionally, Notice from Lender may also be given by Servicer and Lender hereby acknowledges and agrees that Borrower shall be entitled to rely on any Notice given by Servicer as if it had been sent by Lender.

Section 11.7Trial by Jury. BORROWER AND LENDER EACH HEREBY AGREES NOT TO ELECT A TRIAL BY JURY OF ANY ISSUE TRIABLE OF RIGHT BY JURY, AND WAIVES ANY RIGHT TO TRIAL BY JURY FULLY TO THE EXTENT THAT ANY SUCH RIGHT SHALL NOW OR HEREAFTER EXIST WITH REGARD TO THE LOAN DOCUMENTS, OR ANY CLAIM, COUNTERCLAIM OR OTHER ACTION ARISING IN CONNECTION THEREWITH. THIS WAIVER OF RIGHT TO TRIAL BY JURY IS GIVEN KNOWINGLY AND VOLUNTARILY BY BORROWER AND LENDER, AND IS INTENDED TO ENCOMPASS INDIVIDUALLY EACH INSTANCE AND EACH ISSUE AS TO WHICH THE RIGHT TO A TRIAL BY JURY WOULD OTHERWISE ACCRUE. EACH PARTY IS HEREBY AUTHORIZED TO FILE A COPY OF THIS PARAGRAPH IN ANY PROCEEDING AS CONCLUSIVE EVIDENCE OF THIS WAIVER.

Section 11.8Headings. The Article and/or Section headings and the Table of Contents in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose.

Section 11.9Severability. Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

Section 11.10Preferences. Lender shall have the continuing and exclusive right to apply or reverse and reapply any and all payments by Borrower to any portion of the obligations of Borrower hereunder. To the extent Borrower makes a payment or payments to

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Lender, which payment or proceeds or any part thereof are subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to a trustee, receiver or any other party under any bankruptcy law, state or federal law, common law or equitable cause, then, to the extent of such payment or proceeds received, the obligations hereunder or part thereof intended to be satisfied shall be revived and continue in full force and effect, as if such payment or proceeds had not been received by Lender.

Section 11.11Waiver of Notice. Borrower shall not be entitled to any notices of any nature whatsoever from Lender except with respect to matters for which this Agreement or the other Loan Documents specifically and expressly provide for the giving of notice by Lender to Borrower and except with respect to matters for which Borrower is not, pursuant to applicable Legal Requirements, permitted to waive the giving of notice. Borrower hereby expressly waives the right to receive any notice from Lender with respect to any matter for which this Agreement or the other Loan Documents do not specifically and expressly provide for the giving of notice by Lender to Borrower.

Section 11.12Remedies of Borrower. In the event that a claim or adjudication is made that Lender or its agents have acted unreasonably or unreasonably delayed acting in any case where by law or under this Agreement or the other Loan Documents, Lender or such agent, as the case may be, has an obligation to act reasonably or promptly, Borrower agrees that neither Lender nor its agents shall be liable for any monetary damages, and Borrower’s sole remedies shall be limited to commencing an action seeking injunctive relief or declaratory judgment. The parties hereto agree that any action or proceeding to determine whether Lender has acted reasonably shall be determined by an action seeking declaratory judgment.

Section 11.13Expenses; General Indemnity; Mortgage Tax Indemnity; ERISA Indemnity; CFIUS Indemnity.

(a)Borrower shall pay or, if Borrower fails to pay, reimburse Lender upon receipt of notice from Lender, for all reasonable out-of-pocket costs and expenses (including reasonable attorneys’ fees and disbursements) incurred by Lender in connection with (i) the ongoing performance of and compliance with agreements and covenants of Borrower and Guarantor contained in this Agreement and the other Loan Documents, including, without limitation, confirming compliance with environmental and insurance requirements (but excluding monthly servicing fees due to the Servicer under the Servicing Agreement); (ii) Lender’s ongoing performance of and compliance with all agreements and covenants contained in this Agreement and the other Loan Documents on its part to be performed or complied with after the Closing Date (but excluding monthly servicing fees due to the Servicer under the Servicing Agreement); (iii) the negotiation, preparation, execution, delivery and administration of any consents, amendments, waivers or other modifications to this Agreement and the other Loan Documents and any other documents or matters requested by Borrower; (iv) the filing and recording fees and expenses, title insurance and reasonable fees and expenses of counsel for providing to Lender all required legal opinions, and other similar expenses incurred, in creating and perfecting the Liens in favor of Lender pursuant to this Agreement and the other Loan Documents; (v) enforcing or preserving any rights, in response to third party claims or the prosecuting or defending of any action or proceeding or other litigation or otherwise, in each case against, under or affecting Borrower, this Agreement, the other Loan Documents, any

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Property, or any other security given for the Loan; and (vi) enforcing any obligations of or collecting any payments due from Borrower and Guarantor under this Agreement, the other Loan Documents or with respect to any Property; provided, however, that Borrower shall not be liable for the payment of any such costs and expenses to the extent the same arise by reason of the gross negligence, illegal acts, fraud or willful misconduct of Lender. Any costs due and payable to Lender may be paid to Lender pursuant to the Cash Management Agreement.

(b)Borrower shall, at its sole cost and expense, protect, defend, indemnify, release and hold harmless Lender Indemnitees (defined below) from and against any and all Losses (including, without limitation, the reasonable fees and disbursements of counsel for the Lender Indemnitees in connection with any investigative, administrative or judicial proceeding commenced or threatened, whether or not the Lender Indemnitees shall be designated a party thereto), that may be imposed upon, incurred by, or asserted against any Lender Indemnitees and directly or indirectly arising out of or in any way relating to or arising out of any one or more of the following: (i) any breach by Borrower of its obligations under, or any material misrepresentation by Borrower contained in, this Agreement or the other Loan Documents, (ii) the use or intended use of the proceeds of the Loan; (iii) ownership of the Loan, the Mortgage, any Property or any interest therein or receipt of any Rents; (iv) any amendment to, or restructuring of, the Debt, the Note, this Agreement, the Mortgage, or any other Loan Documents; (v) any and all lawful action that may be taken by Lender in connection with the enforcement of the provisions of this Agreement, the Mortgage, the Note or any of the other Loan Documents, whether or not suit is filed in connection with same, or in connection with Borrower, any guarantor or any indemnitor and/or any partner, joint venturer or shareholder thereof becoming a party to a voluntary or involuntary federal or state bankruptcy, insolvency or similar proceeding; (vi) any accident, injury to or death of persons or loss of or damage to property occurring in, on or about any Property or any part thereof or on the adjoining sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways; (vii) any use, nonuse or condition in, on or about any Property or any part thereof or on the adjoining sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways; (viii) any failure on the part of Borrower to perform or be in compliance with any of the terms of the Mortgage, the Note, this Agreement or the other Loan Documents; (ix) performance of any labor or services or the furnishing of any materials or other property in respect of any Property or any part thereof; (x) the failure of any person to file timely with the Internal Revenue Service an accurate Form 1099- B, Statement for Recipients of Proceeds from Real Estate, Broker and Barter Exchange Transactions, which may be required in connection with the Mortgage, or to supply a copy thereof in a timely fashion to the recipient of the proceeds of the Loan; (xi) any failure of any Property to be in compliance with any Legal Requirements; (xii) the enforcement by any Lender Indemnitee of the provisions of this Section 11.13; (xiii) any and all claims and demands whatsoever which may be asserted against Lender by reason of any alleged obligations or undertakings on its part to perform or discharge any of the terms, covenants, or agreements contained in any Lease; (xiv) the payment of any commission, charge or brokerage fee to anyone claiming through Borrower which may be payable in connection with the funding of the Loan; or (xv) any misrepresentation made by Borrower in this Agreement, the Mortgage or any other Loan Document; provided, however, that Borrower shall not have any obligation to the Lender Indemnitees hereunder to the extent that such Losses arise from the gross negligence, illegal acts, fraud or willful misconduct of the Lender Indemnitees. To the extent that the undertaking to indemnify, defend and hold harmless set forth in the preceding sentence may be unenforceable

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because it violates any law or public policy, Borrower shall pay the maximum portion that it is permitted to pay and satisfy under applicable law to the payment and satisfaction of all Losses incurred by the Lender Indemnitees. Any amounts payable to Lender by reason of the application of this Section 11.13 shall become immediately due and payable and shall bear interest at the Default Rate from the date loss or damage is sustained by Lender until paid.

For purposes of this Section 11.13, the term “Lender Indemnitees” shall mean Lender and any Person who is or will have been involved in the origination of the Loan, any Person who is or will have been involved in the servicing of the Loan, any Person in whose name the encumbrance created by the Mortgage is or will have been recorded, persons and entities who may hold or acquire or will have held a full or partial interest in the Loan (including, but not limited to, investors or prospective investors in the Securities, as well as custodians, trustees and other fiduciaries who hold or have held a full or partial interest in the Loan for the benefit of third parties) as well as the respective directors, officers, shareholders, partners, employees, agents, servants, representatives, contractors, subcontractors, affiliates, subsidiaries, participants, successors and assigns of any and all of the foregoing (including but not limited to any other Person who holds or acquires or will have held a participation or other full or partial interest in the Loan, whether during the term of the Loan or as a part of or following a foreclosure of the Loan and including, but not limited to, any successors by merger, consolidation or acquisition of all or a substantial portion of Lender’s assets and business).

(c)Borrower shall, at its sole cost and expense, protect, defend, indemnify, release and hold harmless each Lender Indemnitee from and against any and all Losses imposed upon or incurred by or asserted against any Lender Indemnitee and directly or indirectly arising out of or in any way relating to (i) any tax on the making and/or recording of the Mortgage, the Note or any of the other Loan Documents, or (ii) any transfer taxes incurred in connection with the exercise of remedies hereunder or under the Mortgage by Lender or its designee and any subsequent transfer of any Property by Lender or its designee.

(d)Borrower shall, at its sole cost and expense, protect, defend, indemnify, release and hold harmless each Lender Indemnitee from and against any and all Losses (including, without limitation, reasonable attorneys’ fees and costs incurred in the investigation, defense, and settlement of Losses incurred in correcting any prohibited transaction or in the sale of a prohibited loan, and in obtaining any individual prohibited transaction exemption under ERISA that may be required, in Lender’s sole discretion) that Lender may incur, directly or indirectly, as a result of a default under Sections 3.1.8 and/or 4.2.11 of this Agreement.

(e)Upon written request by any Lender Indemnitee, Borrower shall defend such Lender Indemnitee (if requested by any Lender Indemnitee, in the name of the Lender Indemnitee) by attorneys and other professionals reasonably approved by the Lender Indemnitee. Notwithstanding the foregoing, if the defendants in any such claim or proceeding include both Borrower and any Lender Indemnitee and Borrower and such Lender Indemnitee shall have reasonably concluded that there are any legal defenses available to it and/or other Lender Indemnitees that are different from or additional to those available to Borrower, such Lender Indemnitee shall have the right to select separate counsel to assert such legal defenses and to otherwise participate in the defense of such action on behalf of such Lender Indemnitee, provided that no compromise or settlement shall be entered without Borrower’s consent, which

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consent shall not be unreasonably withheld. Upon demand, Borrower shall pay or, in the sole and absolute discretion of the Lender Indemnitee, reimburse, the Lender Indemnitees for the payment of reasonable fees and disbursements of attorneys, engineers, environmental consultants, laboratories and other professionals in connection therewith.

(f)Borrower shall, at its sole cost and expense, protect, defend, indemnify, release and hold harmless each Lender Indemnitee from and against any and all Losses (including, without limitation, reasonable attorneys’ fees and costs incurred in the investigation, defense, and settlement of Losses) that any Lender Indemnitee may incur, directly or indirectly, as a result of (i) any of the Leased Fee Leases and/or Borrower’s acquisition of any Property being a Covered Transaction or otherwise arising under the DPA and/or (ii) a default under Sections 3.1.43 and/or4.1.1(c) hereof.

(g)The indemnification obligations of Borrower under this Section 11.13 shall survive the repayment of the Debt for two (2) years.

Section 11.14Schedules Incorporated. The Schedules annexed hereto are hereby incorporated herein as a part of this Agreement with the same effect as if set forth in the body hereof.

Section 11.15Offsets, Counterclaims and Defenses. Any assignee of Lender’s interest in and to this Agreement and the other Loan Documents shall take the same free and clear of all offsets, counterclaims or defenses which are unrelated to such documents which Borrower may otherwise have against any assignor of such documents, and no such unrelated counterclaim or defense shall be interposed or asserted by Borrower in any action or proceeding brought by any such assignee upon such documents and any such right to interpose or assert any such unrelated offset, counterclaim or defense in any such action or proceeding is hereby expressly waived by Borrower.

Section 11.16No Joint Venture or Partnership; No Third Party Beneficiaries.

(a)Borrower and Lender intend that the relationships created hereunder and under the other Loan Documents be solely that of borrower and lender. Nothing herein or therein is intended to create a joint venture, partnership, tenancy in common, or joint tenancy relationship between Borrower and Lender nor to grant Lender any interest in any Property other than that of mortgagee, beneficiary or lender.

(b)This Agreement and the other Loan Documents are solely for the benefit of Lender and Borrower and nothing contained in this Agreement or the other Loan Documents shall be deemed to confer upon anyone other than Lender and Borrower any right to insist upon or to enforce the performance or observance of any of the obligations contained herein or therein. All conditions to the obligations of Lender to make the Loan hereunder are imposed solely and exclusively for the benefit of Lender and no other Person shall have standing to require satisfaction of such conditions in accordance with their terms or be entitled to assume that Lender will refuse to make the Loan in the absence of strict compliance with any or all thereof and no other Person shall under any circumstances be deemed to be a beneficiary of such

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conditions, any or all of which may be freely waived in whole or in part by Lender if, in Lender’s sole discretion, Lender deems it advisable or desirable to do so.

Section 11.17Publicity. All news releases, publicity or advertising by Borrower or its Affiliates through any media intended to reach the general public which refers to the Loan Documents or the financing evidenced by the Loan Documents, MSBNA, Citi, JPM, UBS or any of their Affiliates shall be subject to the prior reasonable approval of Lender; provided, however, Lender’s consent shall not be required in connection with any filings required to be made by Borrower or its Affiliates to the SEC. All news releases, publicity or advertising by Lender or its Affiliates through any media intended to reach the general public which refers to the Loan Documents or the financing evidenced by the Loan Documents, Borrower, Sponsor or any of their Affiliates shall be subject to the prior reasonable approval of Borrower; provided, however, Borrower’s consent shall not be required in connection with (i) customary “tombstone” advertisements or (ii) in connection with any exercise of remedies by Lender during the continuance of an Event of Default, provided, further, that in no event shall the foregoing restrict any disclosures which are necessary or desirable, as reasonably determined by Lender, in connection with a Securitization.

Section 11.18Waiver of Marshalling of Assets. To the fullest extent permitted by law, Borrower, for itself and its successors and assigns, waives all rights to a marshalling of the assets of Borrower, Borrower’s members or partners and others with interests in Borrower, and of any Property, and shall not assert any right under any laws pertaining to the marshalling of assets, the sale in inverse order of alienation, homestead exemption, the administration of estates of decedents, or any other matters whatsoever to defeat, reduce or affect the right of Lender under the Loan Documents to a sale of any Property for the collection of the Debt without any prior or different resort for collection or of the right of Lender to the payment of the Debt out of the net proceeds of any Property in preference to every other claimant whatsoever.

Section 11.19Waiver of Offsets/Defenses/Counterclaims. Borrower hereby waives the right to assert a counterclaim, other than a compulsory counterclaim, in any action or proceeding brought against it by Lender or its agents or otherwise to offset any obligations to make the payments required by the Loan Documents. No failure by Lender to perform any of its obligations hereunder shall be a valid defense to, or result in any offset against, any payments which Borrower is obligated to make under any of the Loan Documents.

Section 11.20Conflict; Construction of Documents; Reliance. In the event of any conflict between the provisions of this Agreement and any of the other Loan Documents, the provisions of this Agreement shall control. The parties hereto acknowledge that they were represented by competent counsel in connection with the negotiation, drafting and execution of the Loan Documents and that such Loan Documents shall not be subject to the principle of construing their meaning against the party which drafted same. Borrower acknowledges that, with respect to the Loan, Borrower shall rely solely on its own judgment and advisors in entering into the Loan without relying in any manner on any statements, representations or recommendations of Lender or any parent, subsidiary or Affiliate of Lender. Lender shall not be subject to any limitation whatsoever in the exercise of any rights or remedies available to it under any of the Loan Documents or any other agreements or instruments which govern the Loan by virtue of the ownership by it or any parent, subsidiary or Affiliate of Lender of any equity

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interest any of them may acquire in Borrower, and Borrower hereby irrevocably waives the right to raise any defense or take any action on the basis of the foregoing with respect to Lender’s exercise of any such rights or remedies. Borrower acknowledges that Lender engages in the business of real estate financings and other real estate transactions and investments which may be viewed as adverse to or competitive with the business of Borrower or its Affiliates.

Section 11.21Brokers and Financial Advisors. Borrower hereby represents that it has dealt with no financial advisors, brokers, underwriters, placement agents, agents or finders in connection with the transactions contemplated by this Agreement other than Eastdil Secured (“Broker”). Borrower shall pay Broker in full in connection with the closing of the Loan. Borrower shall indemnify, defend and hold Lender Indemnitees harmless from and against any and all claims, liabilities, costs and expenses of any kind (including Lender Indemnitee’s attorneys’ fees and expenses) in any way relating to or arising from a claim by any Person that such Person acted on behalf of Borrower or Lender in connection with the transactions contemplated herein. The provisions of this Section 11.21 shall survive the expiration and termination of this Agreement and the payment of the Debt.

Section 11.22Exculpation. Subject to the qualifications below, Lender shall not enforce the liability and obligation of Borrower to perform and observe the obligations contained in the Note, this Agreement, the Mortgage or the other Loan Documents by any action or proceeding wherein a money judgment or any deficiency judgment or other judgment establishing personal liability shall be sought against Borrower or any principal, director, officer, employee, beneficiary, shareholder, partner, member, trustee, agent, or affiliate of Borrower (but specifically excluding Guarantor) or any legal representatives, successors or assigns of any of the foregoing (collectively, the “Exculpated Parties”), except that Lender may bring a foreclosure action, an action for specific performance or any other appropriate action or proceeding to enable Lender to enforce and realize upon its interest under the Note, this Agreement, the Mortgage and the other Loan Documents, or in any Property, the Rents, or any other collateral given to Lender pursuant to the Loan Documents; provided, however, that, except as specifically provided herein, any judgment in any such action or proceeding shall be enforceable against Borrower only to the extent of Borrower’s interest in the Collective Properties, in the Rents and in any other collateral given to Lender, and Lender, by accepting the Note, this Agreement, the Mortgage and the other Loan Documents, shall not sue for, seek or demand any deficiency judgment against Borrower or any of the Exculpated Parties, in any such action or proceeding under or by reason of or under or in connection with the Note, this Agreement, the Mortgage or the other Loan Documents. The provisions of this Section shall not, however, (a) constitute a waiver, release or impairment of any obligation evidenced or secured by any of the Loan Documents; (b) impair the right of Lender to name Borrower as a party defendant in any action or suit for foreclosure and sale under the Mortgage; (c) affect the validity or enforceability of any indemnity, guaranty, or similar instrument made in connection with the Loan or any of the rights and remedies of Lender thereunder; (d) impair the right of Lender to obtain the appointment of a receiver; (e) impair the enforcement of the Mortgage; (f) impair the right of Lender to enforce the provisions of the Guaranty or the Environmental Indemnity; (g) constitute a prohibition against Lender to seek a deficiency judgment against Borrower in order to fully realize on any security given by Borrower in connection with the Loan or to commence any other appropriate action or proceeding in order for Lender to exercise its remedies against such security; or (h) constitute a waiver of the right of Lender to enforce the liability and obligation of Borrower, by money judgment or otherwise, to

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the extent of any actual Losses incurred by Lender (including out-of-pocket attorneys’ fees and costs reasonably incurred) arising out of or in connection with the following:

(i)fraud or intentional material misrepresentation by Borrower, Guarantor or any Borrower Party in connection with the Loan;

(ii)the willful misconduct of Borrower, Guarantor or any Borrower Party in connection with the Loan;

(iii)the breach of any representation, warranty, covenant or indemnification provision in the Environmental Indemnity or in any other Loan Document concerning environmental laws, hazardous substances and asbestos and any indemnification of Lender with respect thereto in any such document;

(iv)material physical waste to any Property caused by intentional acts or intentional omissions of Borrower, Guarantor or any Borrower Party, other than waste (or alleged waste) to such Property resulting from (A) the insufficiency of cash flow from the Collective Properties as a whole to prevent such waste and such insufficiency is not a result of misappropriation of Rents by any Borrower Party or (B) Lender’s failure to make cash flow received by Lender available to Borrower in order to prevent such waste;

(v)the removal of any portion of any Property by Borrower, Guarantor or any other Borrower Party in violation of this Agreement and the other Loan Documents other than in the ordinary course of business;

(vi)Borrower fails to obtain Lender’s prior written consent to any subordinate financing or voluntary Lien encumbering any Property or to the incurrence of unsecured indebtedness or indemnification obligations by Borrower and, in each case, not otherwise expressly permitted by the Loan Documents;

(vii)the misappropriation or conversion by Borrower, or any Borrower Parties of (A) any insurance proceeds paid by reason of any loss, damage or destruction to any Property, (B) any Awards or other amounts received in connection with the Condemnation of all or a portion of any Property or (C) any Rents;

(viii)any security deposits, advance deposits or any other deposits collected with respect to any Property which are not delivered to Lender upon a foreclosure of such Property or action in lieu thereof, except to the extent any such security deposits, advance deposits or other deposits were applied in accordance with the terms and conditions of any of the Leases;

(ix)the breach of any representation, warranty or covenant of Borrower with respect to itself, or any SPE Party, and such breach is cited as a material factor in the substantive consolidation of Borrower with any other Person (other than a co-borrower under the Loan) in connection with any federal or state bankruptcy proceeding;

(x)any litigation or other legal proceeding related to the Debt filed by Borrower, Guarantor, any Borrower Party or any Affiliate thereof in bad faith with the

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sole intention (as finally determined by a court of competent jurisdiction pursuant to a non-appealable judgment) of delaying, opposing, impeding, obstructing, hindering, enjoining or otherwise interfering with the efforts of Lender to exercise any rights and remedies available to Lender as provided herein and in the other Loan Documents upon an Event of Default;

(xi)Borrower effects a Transfer in violation of the provisions of Section 4.2.1 or Article VIII hereof; and/or

(xii)the non-compliance or non-conformity of any Property with applicable zoning law (which includes, for the avoidance of doubt, the lack of a valid certificate of occupancy for the occupancy or use of such Property as currently operated and any building, use, zoning, or fire code violations) disclosed in any zoning report delivered to Lender on or prior to the date hereof, or disclosed in any zoning report delivered to Lender subsequent to the date hereof in accordance with Section 4.1.20, which Losses shall also include (A) any cost or expense incurred by Lender in remedying such non-compliance or non-conformity and (B) any lost rents during (1) the period of remediation (including re-tenanting, if applicable) by Lender or (2) any period in which the applicable regulatory authority prevents the operation of such Property until the remediation or cure (including re-tenanting, if applicable) of the related non-compliance or non-conformity.

Notwithstanding anything to the contrary in this Agreement, the Note or any of the Loan Documents, (A) Lender shall not be deemed to have waived any right which Lender may have under Section 506(a), 506(b), 1111(b) or any other provisions of the Bankruptcy Code to file a claim for the full amount of the Debt or to require that all collateral shall continue to secure all of the Debt owing to Lender in accordance with the Loan Documents, and (B) the Debt shall be fully recourse to Borrower in the event that: (1) intentionally omitted; (2) Borrower or any SPE Party or any Affiliate of any of them files, or joins in the filing of, a voluntary petition against Borrower or any SPE Party under the Bankruptcy code or any other Federal or state bankruptcy or insolvency law; (3) any Borrower Party or any Affiliate, officer, director, or representative thereof files, or joins in the filing of, an involuntary petition against Borrower or any SPE Party under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law, or solicits or causes to be solicited, or otherwise colludes with, petitioning creditors for any involuntary petition against Borrower or any SPE Party from any Person; (4) Borrower or any SPE Party fails to oppose any involuntary petition filed against it, by any other Person under the Bankruptcy Code or any other Federal or state bankruptcy or insolvency law unless there is no good faith defense to such involuntary petition; (5) any Borrower Party or any Affiliate, officer, director, or representative thereof consents to or acquiesces in writing or joins in an application for the appointment of a custodian, receiver, trustee, or examiner for Borrower or any SPE Party or any portion of the Collective Properties (other than at the request of Lender); and/or (6) Borrower or any SPE Party makes an assignment for the benefit of creditors (other than in favor of Lender).

Section 11.23Prior Agreements. This Agreement and the other Loan Documents contain the entire agreement of the parties hereto and thereto in respect of the transactions contemplated hereby and thereby, and all prior agreements among or between such parties,

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whether oral or written, are superseded by the terms of this Agreement and the other Loan Documents.

Section 11.24Contributions and Waivers.

(a)As a result of the transactions contemplated by this Agreement, each Borrower will benefit, directly and indirectly, from each Borrower’s obligation to pay the Debt and perform its Obligations and in consideration therefore each Borrower desires to enter into an allocation and contribution agreement among themselves as set forth in this Section 11.24 to allocate such benefits among themselves and to provide a fair and equitable agreement to make contributions among each of the Borrowers in the event any payment is made by any individual Borrower hereunder to Lender (such payment being referred to herein as a “Contribution,” and for purposes of this Section 11.24, includes any exercise of recourse by Lender against any collateral of a Borrower and application of proceeds of such collateral in satisfaction of such Borrower’s obligations, to Lender under the Loan Documents).

(b)Each Borrower shall be liable hereunder with respect to the Obligations only for such total maximum amount (if any) that would not render its Obligations hereunder or under any of the Loan Documents subject to avoidance under Section 548 of the Bankruptcy Code or any comparable provisions of any State law.

(c)In order to provide for a fair and equitable contribution among Borrowers in the event that any Contribution is made by an individual Borrower (a “Funding Borrower”), such Funding Borrower shall be entitled to a reimbursement Contribution (“Reimbursement Contribution”) from all other Borrowers for all payments, damages and expenses incurred by that Funding Borrower in discharging any of the Obligations, in the manner and to the extent set forth in this Section 11.24.

(d)For purposes hereof, the “Benefit Amount” of any individual Borrower as of any date of determination shall be the net value of the benefits to such Borrower and its Affiliates from extensions of credit made by Lenders to (i) such Borrower and (ii) to the other Borrowers hereunder and the Loan Documents to the extent such other Borrowers have guaranteed or mortgaged their Property to secure the Obligations of such Borrower to Lender.

(e)Each Borrower shall be liable to a Funding Borrower in an amount equal to the greater of (i) the (A) ratio of the Benefit Amount of such Borrower to the total amount of the Obligations, multiplied by (B) the amount of Obligations paid by such Funding Borrower, or (ii) ninety-five percent (95%) of the excess of the fair saleable value of the property of such Borrower over the total liabilities of such Borrower (including the maximum amount reasonably expected to become due in respect of contingent liabilities) determined as of the date on which the payment made by a Funding Borrower is deemed made for purposes hereof (giving effect to all payments made by other Funding Borrowers as of such date in a manner to maximize the amount of such Contributions).

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(f)In the event that at any time there exists more than one Funding Borrower with respect to any Contribution (in any such case, the “Applicable Contribution”), then Reimbursement Contributions from other Borrowers pursuant hereto shall be allocated among such Funding Borrowers in proportion to the total amount of the Contribution made for or on account of the other Borrowers by each such Funding Borrower pursuant to the Applicable Contribution. In the event that at any time any Borrower pays an amount hereunder in excess of the amount calculated pursuant to this Section 11.24 above, that Borrower shall be deemed to be a Funding Borrower to the extent of such excess and shall be entitled to a Reimbursement Contribution from the other Borrowers in accordance with the provisions of this Section 11.24.

(g)Each Borrower acknowledges that the right to Reimbursement Contribution hereunder shall constitute an asset in favor of Borrower to which such Reimbursement Contribution is owing.

(h)No Reimbursement Contribution payments payable by a Borrower pursuant to the terms of this Section 11.24 shall be paid until all amounts then due and payable by all of Borrowers to Lender, pursuant to the terms of the Loan Documents, are paid in full. Nothing contained in this Section 11.24 shall limit or affect in any way the Obligations of any Borrower to Lender under the Note or any other Loan Documents.

(i)To the extent permitted by applicable law, each Borrower waives:

(A)any right to require Lender to proceed against any other Borrower or any other person or to proceed against or exhaust any security held by Lender at any time or to pursue any other remedy in Lender’s power before proceeding against Borrower;

(B)the defense of the statute of limitations in any action against any other Borrower or for the collection of any indebtedness or the performance of any obligation under the Loan;

(C)any defense based upon any legal disability or other defense of any other Borrower, any guarantor of any other person or by reason of the cessation or limitation of the liability of any other Borrower or any guarantor from any cause other than full payment of all sums payable under the Note, this Agreement and any of the other Loan Documents;

(D)any defense based upon any lack of authority of the officers, directors, partners or agents acting or purporting to act on behalf of any other Borrower or any principal of any other Borrower or any defect in the formation of any other Borrower or any principal of any other Borrower;

(E)any defense based upon any statute or rule of law which provides that the obligation of a surety must be neither larger in amount nor in any other respects more burdensome than that of a principal;

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(F)any defense based upon any failure by Lender to obtain collateral for the indebtedness or failure by Lender to perfect a lien on any collateral;

(G)presentment, demand, protest and notice of any kind;

(H)any defense based upon any failure of Lender to give notice of sale or other disposition of any collateral to any other Borrower or to any other person or entity or any defect in any notice that may be given in connection with any sale or disposition of any collateral;

(I)any defense based upon any failure of Lender to comply with applicable Legal Requirements in connection with the sale or other disposition of any collateral, including, without limitation, any failure of Lender to conduct a commercially reasonable sale or other disposition of any collateral;

(J)any defense based upon any election by Lender, in any bankruptcy proceeding, of the application or non-application of Section 1111(b)(2) of the Bankruptcy Code or any successor statute;

(K)any defense based upon any use of cash collateral under Section 363 of the Bankruptcy Code;

(L)any defense based upon any agreement or stipulation entered into by Lender with respect to the provision of adequate protection in any bankruptcy proceeding;

(M)any defense based upon any borrowing or any grant of a security interest under Section 364 of the Bankruptcy Code;

(N)any defense based upon the avoidance of any security interest in favor of Lender for any reason;

(O)any defense based upon any bankruptcy, insolvency, reorganization, arrangement, readjustment of debt, liquidation or dissolution proceeding, including any discharge of, or bar or stay against collecting, all or any of the obligations evidenced by the Note or owing under any of the Loan Documents; and

(P)any defense or benefit based upon Borrower’s, or any other party’s, resignation of the portion of any obligation secured by the applicable Mortgage to be satisfied by any payment from any other Borrower or any such party.

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(j)To the extent permitted by applicable law, each Borrower waives:

(A)all rights and defenses arising out of an election of remedies by Lender even though the election of remedies, such as non-judicial foreclosure with respect to security for the Loan or any other amounts owing under the Loan Documents, has destroyed Borrower’s rights of subrogation and reimbursement against any other Borrower;

(B)all rights and defenses that Borrower may have because any of Debt is secured by real property. This means, among other things: (I) Lender may collect from Borrower without first foreclosing on any real or personal property collateral pledged by any other Borrower, (II) if Lender forecloses on any real property collateral pledged by any other Borrower, (y) the amount of the Debt may be reduced only by the price for which that collateral is sold at the foreclosure sale, even if the collateral is worth more than the sale price, (z) Lender may collect from Borrower even if any other Borrower, by foreclosing on the real property collateral, has destroyed any right Borrower may have to collect from any other Borrower. This is an unconditional and irrevocable waiver of any rights and defenses Borrower may have because any of the Debt is secured by real property; and

(C)any claim or other right which Borrower now has or hereafter acquires against any other Borrower or any other person that arises from the existence or performance of any obligations under the Note, this Agreement, the Mortgages or the other Loan Documents, including, without limitation, any of the following: (I) any right of subrogation, reimbursement, exoneration, contribution, or indemnification; or (II) any right to participate in any claim or remedy of Lender against any other Borrower or any collateral security therefor, whether or not such claim, remedy or right arises in equity or under contract, statute or common law.

Section 11.25Joint and Several Liability. If more than one Person has executed this Agreement as “Borrower”, the representations, covenants, warranties and obligations of all such Persons hereunder shall be joint and several.

Section 11.26Creation of Security Interest. Notwithstanding any other provision set forth in this Agreement, the Note, the Mortgage or any of the other Loan Documents, Lender may at any time create a security interest in all or any portion of its rights under this Agreement, the Note, the Mortgage and any other Loan Document (including, without limitation, the advances owing to it) in favor of (i) any Federal Reserve Bank, any Federal Home Loan Bank or the central reserve bank or similar authority of any other country to secure any obligation of Lender to such bank or similar authority (a “Central Bank Pledge”) or (ii) the trustee, administrator or receiver (or their respective nominees, collateral agents or collateral trustees) of a mortgage pool securing covered mortgage bonds issued by a German mortgage bank, or any other Person permitted to issue covered mortgage bonds, under German Pfandbrief legislation, as

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such legislation may be amended and in effect from time to time, on any substitute or successor legislation (a “Pfandbrief Pledge”). In the event that the interest of Lender that is assigned in connection with a Central Bank Pledge is foreclosed upon and transferred to the pledge thereof, Lender shall have no further liability hereunder with respect to the interest that was the subject of such transfer and the assignee shall be Lender with respect to such interest. Lender shall not be required to notify Borrower of any Central Bank Pledge or Pfandbrief Pledge. Borrower agrees to execute, within fifteen (15) Business Days after request therefor is made by Lender, any documents or any amendments, amendments and restatements, and/or modifications to any Loan Documents and/or additional documents (including, without limitation, amended, amended and restated, modified and/or additional promissory notes) and/or estoppel certificates reasonably requested by Lender in order to make the Loan Documents eligible under German Pfandbrief legislation; provided, however, that Borrower shall not be required to enter into any such documents and amendments which would increase Borrower’s affirmative obligations or decrease Borrower’s rights under the Loan Documents or adversely affect the economic or other material terms of the Loan other than to a de minimis extent.

Section 11.27Assignments and Participations. (a)  Without limiting Lender’s rights pursuant to Section 9.1, the Lender may assign to one or more Persons all or a portion of its rights and obligations under this Agreement.

(b)Lender may sell participations to one or more Persons in or to all or a portion of its rights and obligations under this Agreement; provided, however, that (i) Lender’s obligations under this Agreement shall remain unchanged, (ii) Lender shall remain solely responsible to the other parties hereto for the performance of such obligations, (iii) Lender shall remain the holder of any Note for all purposes of this Agreement and (iv) Borrower shall continue to deal solely and directly with Lender in connection with Lender’s rights and obligations under and in respect of this Agreement and the other Loan Documents and (v) in no event may any Lender sell a participation in the Loan to Borrower, Guarantor or an Affiliate of Borrower or Guarantor. Any such purported sale by Lender of a participation in the Loan to Borrower, Guarantor or an Affiliate of Borrower or Guarantor in violation of subclause (v) of the immediately preceding sentence shall be void ab initio.

(c)Lender may, in connection with any assignment or participation or proposed assignment or participation pursuant to this Section 11.27, disclose to the assignee or Participant or proposed assignee or participant, as the case may be, any information relating to Borrower or any of its Affiliates or to any aspect of the Loan that has been furnished to the Lender by or on behalf of Borrower or any of its Affiliates.

(d)Subject to acceptance and recording thereof pursuant to paragraph (e) of this Section 11.27, upon such assignment the assignee thereunder shall be a party hereto and, to the extent of the interest assigned by such assignment, have the rights and obligations of Lender under this Agreement. Any assignment or transfer by Lender of rights or obligations under this Agreement that does not comply with this Section 11.27 shall be treated for purposes of this Agreement as a sale by such Lender of a participation in such rights and obligations in accordance with clause (b) of this Section 11.27.

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(e)In connection with any Secondary Market Transaction, including, without limitation, any assignment or participation pursuant to this Section 11.27, at the request of Lender, Borrower shall (i) appoint, as its agent, a registrar and transfer agent (the “Register”) reasonably acceptable to Lender which shall maintain, subject to such reasonable regulations as it shall provide, such books and records as are necessary for the registration and transfer of the Note in a manner that shall cause the Note to be considered to be in registered form for purposes of Section 163(f) of the Code, and (ii) otherwise cooperate with Lender in order to cause the Note to be in registered form pursuant to Section 163(f) of the Code. The option to convert the Note into registered form once exercised may not be revoked. Any agreement setting out the rights and obligation of the Register shall be subject to the reasonable approval of Lender. Borrower may revoke the appointment of any particular person as Register, effective upon the effectiveness of the appointment of a replacement Register, reasonably acceptable to Lender. The Register shall not be entitled to any fee from Borrower or Lender or any other lender in respect of transfers of the Note and other Loan Documents.

(f)Borrower authorizes each Lender to disclose to any Assignee or Participant of such Lender, any prospective assignee or participant of a Lender’s interest in the Loan, any Affiliate of such Lender, any derivative counterparty or any Rating Agency any and all financial or other information in such Lender’s possession concerning Borrower and its Affiliates which has been delivered to such Lender by or on behalf of Borrower pursuant to this Agreement or which has been delivered to such Lender by or on behalf of Borrower in connection with such Lender’s credit evaluation of Borrower and its Affiliates prior to becoming a party to this Agreement.

(g)Borrower agrees upon Lender’s written request and at the sole cost and expense of Lender, that (i) Borrower shall execute and deliver to Lender any amendment and/or other document that may be reasonably necessary to effectuate such an assignment but in no event shall Borrower be required to sign any documents which would either (y) increase, except to a de minimis extent, its obligations or (z) decrease, except to a de minimis extent, its rights, under the Loan Documents and (ii) after the effective date under such Assignment and Acceptance, upon the request by Lender, Borrower shall execute and deliver to such Lender one or more substitute notes of Borrower evidencing such Lender’s Ratable Share of the Loan, with appropriate insertions as to payee and principal amount; each such substitute note shall be dated as of the date hereof.

Section 11.28Co-Lenders.

(a)Borrower hereby acknowledges and agrees that notwithstanding the fact that the Loan may be serviced by Servicer, prior to a Securitization of the Loan, all requests for approval and consents hereunder and in every instance in which Lender’s consent or approval is required, Borrower shall be required to obtain the consent and approval of each Co- Lender and all copies of documents, reports, requests and other delivery obligations of Borrower required hereunder shall be delivered by Borrower to each Co-Lender.

(b)Following the Closing Date (i) the liabilities of Lender shall be several and not joint, (ii) no Co-Lender shall be responsible for the obligations of any other Co- Lender, and (iii) each Co-Lender shall be liable to Borrower only for their respective Ratable Share of the

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Loan. Notwithstanding anything to the contrary herein, all indemnities by Borrower and obligations for costs, expenses, damages or advances set forth herein shall run to and benefit each Co-Lender in accordance with its Ratable Share.

(c)Each Co-Lender agrees that it has, independently and without reliance on any other Co-Lender, and based on such documents and information as it has deemed appropriate, made its own credit analysis of Borrower, Guarantor and their respective Affiliates and decision to enter into this Agreement and that it will, independently and without reliance upon any other Co-Lender, and based on such documents and information as it shall deem appropriate at the time, continue to make its own analysis and decisions in taking or not taking action under this Agreement or under any other Loan Document.

(d)Notwithstanding anything to the contrary in this Agreement or any other Loan Documents, at all times prior to a Securitization of any portion of the Loan, Borrower shall only be required to engage with a single servicer, which servicer shall be the only entity with whom Borrower shall be required to request approvals in connection with the Loan and who will provide a single response from Lender upon which Borrower shall be entitled to rely. On or before the Closing Date, Lender agrees to identify and provide to Borrower contact information for the initial servicer of the Loan.

(e)Each of the Co-Lenders hereby appoint the Note A-1 holder as the approved agent for the benefit of Lenders solely in respect of the right to receive grants by Borrower or any other Borrower Party of an interest in any property of such Person as collateral security for the Loan and exercise such rights granted to the Note A-1 holder in connection therewith.

Section 11.29Set-Off. In addition to any rights and remedies of Lender provided by this Agreement and by law, the Lender shall have the right, without prior notice to Borrower, any such notice being expressly waived by Borrower to the extent permitted by applicable law, upon any amount becoming due and payable by Borrower hereunder (whether at the stated maturity, by acceleration or otherwise) to set-off and appropriate and apply against such amount any and all deposits (general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute or contingent, matured or unmatured, at any time held or owing by Lender or any Affiliate thereof to or for the credit or the account of Borrower. Lender agrees promptly to notify Borrower after any such set-off and application made by Lender; provided that the failure to give such notice shall not affect the validity of such set-off and application.

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their duly authorized representatives, all as of the day and year first above written.

BORROWER:
HIGGINS PROPERTIES LLC
MASTERS PROPERTIES LLC
ROBIN 1 PROPERTIES LLC
TANAKA PROPERTIES LLC
ILPT TSM PROPERTIES LLC
Z&A PROPERTIES LLC
LTMAC PROPERTIES LLC
ILPT ORVILLE PROPERTIES LLC
RFRI PROPERTIES LLC
TEDCAL PROPERTIES LLC
each a Delaware limited liability company
By:	/s/ Richard W. Siedel, Jr.
Name:	Richard W. Siedel, Jr.
Title:	Chief Financial Officer and Treasurer

[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]

LENDER:
MORGAN STANLEY BANK, N.A., a national banking association
By:	/s/ Kristin Sansone
	Name:	Kristin Sansone
	Title:	Authorized Signatory

[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]

CITI REAL ESTATE FUNDING INC., a New York corporation
By:	/s/ Harry Kramer
	Name:	Harry Kramer
	Title:	Vice President

[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]

UBS AG
By:	/s/ Michael Mills
	Name:	Michael Mills
	Title:	Associate Director
By:	/s/ Racquel A.C. Small
	Name:	Racquel A.C. Small
	Title:	Executive Director

[SIGNATURES CONTINUE ON THE FOLLOWING PAGE]

JPMORGAN CHASE BANK, NATIONAL ASSOCIATION, a banking association chartered under the laws of the United States of America
By:	/s/ Simon B. Burce
	Name: Simon B. Burce
	Title: Vice President

Schedule I

Rent Roll

(see attached)

Tenant Name	Tenant Address	RSF	Lease Commencement Date	Lease Expiration Date	Rent Commencement Date	Start Date	End Date		Annual Amount	PSF	Pymt Freq	SqFt
[See * for this column]	238 Sand Island Access Road	60,000	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	60,000
												60,000
												60,000
												60,000
	2815 Kaihikapu Street	35,000										35,000
	2250 Pahounui Drive and 180 Sand Island Access Road	142,455										75,627
												75,627
												75,627
												75,627
												75,627
												75,627
												75,627
												75,627
												75,627
												75,627
												75,627
												66,828
												66,828
												66,828
												66,828
												66,828
												66,828
												66,828
												66,828
												66,828
												66,828
												66,828
	158 Sand Island Access Road	100,500										100,500
												100,500
* [THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION]

[See * for this column]			[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	100,500
											100,500
											100,500
											100,500
											100,500
											100,500
											100,500
											100,500
											100,500
	2135 Auiki Street	33,328									33,328
											33,328
											33,328
											33,328
											33,328
											33,328
											33,328
											33,328
											33,328
											33,328
											33,328
	2849 Kaihikapu Street	35,000									35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
	2906 Kaihikapu Street	35,000									35,000
											35,000
											35,000
											35,000
	2020 Auiki Street	46,705									46,705
* [THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION]

[See * for this column]			[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	46,705
											46,705
											46,705
	2635 Waiwai Loop	44,959									44,959
											44,959
											44,959
											44,959
											44,959
											44,959
											44,959
											44,959
											44,959
											44,959
											44,959
											44,959
											44,959
											44,959
											44,959
											44,959
	803 Ahua Street	73,013									73,013
											73,013
											73,013
											73,013
											73,013
											73,013
											73,013
											73,013
											73,013
											73,013
	733 Mapunapuna Street	64,894									64,894
											64,894
											64,894
											64,894
											64,894
											64,894
	2344 Pahounui Drive	146,430									146,430
											146,430
											146,430
											146,430
* [THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION]

[See * for this column]			[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	146,430
											146,430
											146,430
											146,430
											146,430
											146,430
	2838 Kilihau Street	83,189									83,189
											83,189
	889 Ahua Street	49,452									49,452
											49,452
											49,452
											49,452
											49,452
											49,452
											49,452
	918 Ahua Street	72,072									72,072
											72,072
											72,072
											72,072
	1150 Kikowaena Street	45,753									45,753
											45,753
	2969 Mapunapuna Industrial	79,999									79,999
	2810 Paa Street	52,185									52,185
											52,185
	1050 Kikowaena Place	42,790									42,790
	846 and 848 Ala Lilikoi Street	333,887									333,887
											333,887
* [THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION]

[See * for this column]			[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	333,887
	2855 Kaihikapu Street	35,000									35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
	645 Ahua Street	35,000									35,000
											35,000
											35,000
	855 Ahua Street	35,200									35,200
											35,200
											35,200
											35,200
											35,200
	2915 Kaihikapu Street	105,000									105,000
											105,000
	2122 Kaliawa Street	33,468									33,468
											33,468
											33,468
	852 Mapunapuna Street	35,000									35,000
											35,000
	949 Mapunapuna Street	236,914									236,914
* [THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION]

[See * for this column]	2855/2865 Pukuloa Street	79,200	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	79,200
	2879 Mokumoa Street	34,755									34,755
	675 Mapunapuna Street	30,063									30,063
											30,063
	120 Mokauea Street	38,322									38,322
											38,322
											38,322
											38,322
	113 Puuhale Road, 2140 Kaliawa Street, 165 Sand Island Access Road	112,117									112,117
											112,117
											112,117
											112,117
											112,117
											112,117
											112,117
											112,117
											112,117
											112,117
											112,117
	1000 Mapunapuna Street	41,833									41,833
											41,833
											41,833
											41,833
	94-240 Pupuole Street	43,529									43,529
											43,529
											43,529
											43,529
											43,529
* [THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION]

[See * for this column]			[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	43,529
											43,529
											43,529
											43,529
											43,529
											43,529
											43,529
											43,529
											43,529
											43,529
											43,529
											43,529
											43,529
											43,529
											43,529
											43,529
	659 Puuloa Road	35,000									35,000
	667 Puuloa Road	35,000									35,000
	679 Puuloa Road	35,000									35,000
	689 Puuloa Road	35,000									35,000
	2103 Kaliawa Street	78,730									78,730
											78,730
											78,730
											78,730
											78,730
											78,730
											78,730
											78,730
											78,730
											78,730
											78,730
	2847 Awaawaloa Street	35,000									35,000
* [THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION]

[See * for this column]			[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
	2850 Mokumoa Street	39,544									39,544
	2819 Mokumoa Street -A	35,384									35,384
											35,384
											35,384
	2819 Mokumoa Street - B	35,279									35,279
											35,279
											35,279
	704 Mapunapuna Street	59,315									59,315
											59,315
											59,315
											59,315
											59,315
											59,315
											59,315
											59,315
											59,315
											59,315
											59,315
* [THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION]

[See * for this column]			[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	59,315
											59,315
											59,315
											59,315
											59,315
											59,315
											59,315
											59,315
											59,315
											59,315
											59,315
											59,315
	2827 Kaihikapu Street	35,000									35,000
											35,000
	2868 Kaihikapu Street	35,000									35,000
											35,000
											35,000
	2308 Pahounui Drive	64,896									64,896
											64,896
	2861 Mokumoa Street	70,035									70,035
											70,035
											70,035
											70,035
											70,035
	2839 Mokumoa Street	35,174									35,174
											35,174
											35,174
											35,174
											35,174
	1931 Kahai Street	96,287									96,287
											96,287
											96,287
											96,287
											96,287
											96,287
											96,287
* [THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION]

[See * for this column]			[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	96,287
											96,287
											96,287
											96,287
											96,287
											96,287
											96,287
											96,287
											96,287
											96,287
											96,287
											96,287
	850 Ahua Street	47,879									47,879
	2850 Paa Street	298,384									298,384
											298,384
											298,384
											298,384
	207/215 Puuhale Road,	81,631									81,631
											81,631
											81,631
											81,631
											81,631
											81,631
											81,631
											81,631
											81,631
											81,631
											81,631
											81,631
											81,631
											81,631
											81,631
* [THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION]

[See * for this column]			[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	81,631
											81,631
											81,631
											81,631
											81,631
											81,631
	692 Mapunapuna Street	35,000									35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
	2965 Mokumoa street	41,586									41,586
	125B Puuhale Road	48,933									48,933
											48,933
	2814 Kilihau Street	37,413									37,413
											37,413
											37,413
	759 Puuloa Road	34,313									34,313
											34,313
											34,313
	2806 Kaihikapu Street	35,000									35,000
											35,000
* [THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION]

[See * for this column]	2804 Kilihau Street	34,494	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	34,494
											34,494
											34,494
	2828 Paa Street	187,264									187,264
											187,264
											187,264
											187,264
											187,264
											187,264
											187,264
	2264 Pahounui Drive	33,103									33,103
											33,103
											33,103
											33,103
											33,103
											33,103
											33,103
											33,103
											33,103
											33,103
											33,103
	2276 Pahounui Drive	32,841									32,841
											32,841
											32,841
											32,841
											32,841
											32,841
											32,841
											32,841
											32,841
											32,841
											32,841
	761 Ahua Street	73,013									73,013
* [THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION]

[See * for this column]			[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	73,013
											73,013
	120 Sand Island Access Road	52,819									52,819
	1001 Ahua Street	337,734									337,734
											337,734
											337,734
	1024 Kikowaena Place	39,831									39,831
	702 Ahua Street	34,657									34,657
											34,657
											34,657
	179 Sand Island Access Road	62,464									62,464
											62,464
											62,464
											62,464
											62,464
											62,464
											62,464
											62,464
											62,464
											62,464
	2858 Kaihikapu Street	35,000									35,000
											35,000
	659 Ahua Street	35,000									35,000
											35,000
											35,000
	148 Mokauea Street	85,790									85,790
											85,790
											85,790
* [THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION]

[See * for this column]			[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	85,790
											85,790
											85,790
											85,790
											85,790
											85,790
	2864 Mokumoa Street	39,600									39,600
											39,600
											39,600
											39,600
											39,600
	2869 Mokumoa Street	34,860									34,860
											34,860
											34,860
	2857 Awaawaloa Street	40,011									40,011
											40,011
	770 Mapunapuna Street	35,000									35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
* [THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION]

[See * for this column]			[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	35,000
											35,000
	697 Ahua Street	35,000									35,000
	2812 Awaawaloa Street	35,000									35,000
	2127 Auiki Street	56,900									56,900
											56,900
											56,900
											56,900
											56,900
											56,900
											56,900
											56,900
											56,900
											56,900
											56,900
											56,900
											56,900
											56,900
											56,900
											56,900
											56,900
	151 Puuhale Road	38,294									38,294
											38,294
											38,294
											38,294
											38,294
											38,294
											38,294
											38,294
											38,294
											38,294
											38,294
											38,294
											38,294
											38,294
* [THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION]

[See * for this column]			[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	38,294
	2829 Awaawaloa Street	70,000									70,000
											70,000
											70,000
											70,000
											70,000
	204 Sand Island Access Road	33,078									33,078
											33,078
											33,079
	2879 Paa Street	31,316									31,316
											31,316
											31,316
											31,316
											31,316
											31,316
											31,316
											31,316
	1122 Mapunapuna	105,506									105,506
											105,506
											105,506
	2846-A and 2850 Awaawaloa Street	69,753									69,753
	2970 Mokumoa Street	35,021									35,021
											35,021
											35,021
	2809 Kaihikapu Street	35,698									35,698
	80 Sand Island Access Road	190,836									190,836
	819 Ahua Street	105,013									105,013
											105,013
											105,013
* [THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION]

[See * for this column]			[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	105,013
											105,013
											105,013
											105,013
											105,013
											105,013
											105,013
											105,013
											105,013
											105,013
											105,013
											105,013
											105,013
	660 Ahua Street	34,657									34,657
	1038 Kikowaena Place	47,417									47,417
	228 Mohonua Place	36,522									36,522
											36,522
											36,522
											36,522
	1062 Kikowaena Place	30,959									30,959
	830 Mapunanpuna Street	35,000									35,000
											35,000
											35,000
	812 Mapunapuna Street	35,000									35,000
											35,000
											35,000
											35,000
											35,000
											35,000
	709 Ahua Street	35,000									35,000
											35,000
											35,000
											35,000
											35,000
* [THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION]

[See * for this column]			[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
	1027 Kikowaena Street	102,443									102,443
	2831 Awaawaloa Street	35,000									35,000
											35,000
											35,000
	212 Mohonua Place	46,221									46,221
											46,221
											46,221
											46,221
	2816 / 2836 Awaawaloa Street	70,000									70,000
											70,000
											70,000
	673 Ahua Street	35,000									35,000
											35,000
											35,000
	669 Ahua Street	35,000									35,000
											35,000
											35,000
* [THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION]

[See * for this column]			[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
	2864 Awaawaloa Street	35,247									35,247
											35,247
	865 Ahua Street	35,933									35,933
	1330 and 1360 Pali Highway	146,446									146,446
											146,446
											146,446
											146,446
											146,446
											146,446
											146,446
											146,446
											146,446
* [THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION]

[See * for this column]			[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	146,446
											146,446
											146,446
											146,446
											146,446
											146,446
											146,446
											146,446
											146,446
											146,446
											146,446
											146,446
											146,446
											146,446
											146,446
											146,446
	2886 Paa Street	60,023									60,023
											60,023
											60,023
											60,023
											60,023
											60,023
											60,023
											60,023
											60,023
											60,023
											60,023
											60,023
											60,023
											60,023
											60,023
											60,023
											60,023
											60,023
* [THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION]

[See * for this column]			[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	60,023
											60,023
											60,023
											60,023
											60,023
											60,023
											60,023
	2810 Pukoloa Street	418,502									418,502
											418,502
	2829/2841 Pukoloa Street	79,200									79,200
	2819 Pukoloa Street	39,600									39,600
	719 Ahua Street	35,000									35,000
											35,000
	808 Ahua Street	56,690									56,690
	960 Mapunapuna	36,501									36,501
	950 Mapunapuna Street	32,551									32,551
	930 Mapunapuna Street	68,992									68,992
	2831 Kaihikapu Street	35,000									35,000
											35,000
	218 Mohonua Place	34,096									34,096
											34,096
											34,096
											34,096
											34,096
											34,096
											34,096
											34,096
											34,096
											34,096
											34,096
* [THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION]

[See * for this column]	2960 Mokumoa Street	38,377	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	38,377
	2826 Kaihikapu Street	70,000									70,000
	685 Ahua Street	35,000									35,000
	2844 Kaihikapu Street	35,000									35,000
	2928 B Kaihikapu Street	37,852									37,852
	2928 A Kaihikapu Street	35,000									35,000
	2889 Mokumoa Street	34,651									34,651
											34,651
											34,651
	2908 Kaihikapu Street	35,000									35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
* [THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION]

[See * for this column]			[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	35,000
											35,000
											35,000
											35,000
	789 Mapunapuna Street	46,559									46,559
	2833 Pa’a Street	60,000									60,000
											60,000
											60,000
											60,000
											60,000
											60,000
											60,000
	2927 Mokumoa Street	34,546									34,546
											34,546
											34,546
	855 Mapunapuna Street	63,436									63,436
											63,436
											63,436
	231B Sand Island Access Road	38,752									38,752
											38,752
											38,752
											38,752
											38,752
											38,752
											38,752
											38,752
											38,752
											38,752
											38,752
											38,752
	220 Puuhale Road	65,942									65,942
											65,942
											65,942
											65,942
* [THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION]

[See * for this column]			[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	65,942
											65,942
											65,942
											65,942
											65,942
											65,942
											65,942
											65,942
	150 Puuhale Road	123,037									123,037
											123,037
											123,037
											123,037
											123,037
											123,037
											123,037
											123,037
											123,037
											123,037
											123,037
											123,037
	766 Mapunapuna Street	35,000									35,000
											35,000
	2830/2840 Mokumoa Street	79,256									79,256
	1030 Mapunapuna Street	122,281									122,281
											122,281
											122,281
	729 Ahua Street	35,000									35,000
	739 Ahua Street	35,000									35,000
	2019 Kahai Street	26,954									26,954
											26,954
* [THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION]

[See * for this column]			[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	26,954
											26,954
											26,954
											26,954
											26,954
											26,954
											26,954
											26,954
											26,954
	197 Sand Island Access Road	31,178									31,178
											31,178
											31,178
											31,178
											31,178
											31,178
											31,178
											31,178
											31,178
											31,178
											31,178
											31,178
	125 A Puuhale Road	31,006									31,006
											31,006
	2106 Kaliawa Street and 140 Puuhale Road	52,250									52,250
											52,250
											52,250
											52,250
											52,250
											52,250
											52,250
											52,250
											52,250
											52,250
											52,250
											52,250
											52,250
											52,250
* [THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION]

[See * for this column]	1052 Ahua Street	30,000	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	30,000
											30,000
	2001 Kahai Street	26,741									26,741
											26,741
											26,741
											26,741
											26,741
	822 Mapunapuna Street	35,000									35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
	2839 Kilihau Street	11,680									11,680
											11,680
											11,680
											11,680
	944 Ahua Street	26,596									26,596
	842 Mapunapuna Street	35,000									35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
											35,000
* [THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION]

[See * for this column]			[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	35,000
											35,000
											35,000
	142 Mokauea Street	26,000									26,000
											26,000
											26,000
											26,000
											26,000
											26,000
											26,000
											26,000
	2760 Kam Highway	28,615									28,615
											28,615
	1926 Auiki Street	19,028									19,028
											19,028
	1055 Ahua Street	26,531									26,531
											26,531
	970 Ahua Street	15,037									15,037
	1024 Mapunapuna Street	25,895									25,895
											25,895
											25,895
	1926 Auiki Street	23,225									23,225
											23,225
	1045 Mapunapuna Street	14,902									14,902
											14,902
											14,902
	609 Ahua Street	14,840									14,840
											14,840
											14,840
* [THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION]

[See * for this column]	960 Ahua Street	14,476	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	14,476
	2833 Kilihau Street	11,680									11,680
											11,680
											11,680
	2829 Kilihau Street	11,680									11,680
											11,680
											11,680
	2808 Kilihau Street	12,620									12,620
											12,620
											12,620
	2875 Paa Street	23,154									23,154
											23,154
	2139 Kaliawa Street	21,657									21,657
											21,657
											21,657
	905 Ahua Street	21,195									21,195
	525 North King Street	20,934									20,934
											20,934
											20,934
											20,934
											20,934
											20,934
											20,934
											20,934
											20,934
											20,934
	2815 & 2821 Kilihau Street	23,360									23,360
											23,360
											23,360
* [THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION]

[See * for this column]	2144 Auiki Street and 111 Sand Island Access Road	11,600	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	11,600
											11,600
											11,600
											11,600
											11,600
											11,600
											11,600
	106 Puuhale Road	5,184									5,184
											5,184
											5,184
											5,184
											5,184
	2110 Auiki Street	20,436									20,436
											20,436
											20,436
											20,436
											20,436
											20,436
											20,436
											20,436
											20,436
											20,436
											20,436
	214 Sand Island Access Road	4,500									4,500
											4,500
											4,500
	120 Sand Island Access Road	2,489									2,489
											2,489
	120 Sand Island Access Road	3,612									3,612
											3,612
											3,612
											3,612
	231 Sand Island Access Road	18,921									18,921
											18,921
											18,921
											18,921
* [THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION]

[See * for this column]			[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	18,921
											18,921
											18,921
											18,921
											18,921
											18,921
											18,921
											18,921
	111 Sand Island Access Road	1,400									1,400
											1,400
											1,400
											1,400
											1,400
											1,400
											1,400
	111 Sand Island Access Road	1,200									1,200
											1,200
											1,200
	111 Sand Island Access Road	1,200									1,200
											1,200
	111 Sand Island Access Road	1,200									1,200
											1,200
											1,200
											1,200
	111 Sand Island Access Road	1,020									1,020
											1,020
	111 Sand Island Access Road	1,000									1,000
											1,000
											1,000
* [THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION]

[See * for this column]			[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	1,000
											1,000
											1,000
	111 Sand Island Access Road	900									900
											900
											900
											900
	111 Sand Island Access Road	2,990									2,990
											2,990
											2,990
	111 Sand Island Access Road	4,400									4,400
											4,400
											4,400
	111 Sand Island Access Road	1,920									1,920
											1,920
	111 Sand Island Access Road	4,300									1,300
											1,300
											3,000
											3,000
	33 S. Vineyard Boulevard	11,570									11,570
											11,570
											11,570
											11,570
											11,570
											11,570
											11,570
											11,570
											11,570
											11,570
	120B Mokauea St	11,537									11,537
											11,537
											11,537
											11,537
	609-B Ahua Street	9,600									9,600
											9,600
* [THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION]

[See * for this column]	120 Mokauea Street	9,497	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	9,497
	2144 Auiki Street	1,800									1,800
											1,800
											1,800
											1,800
	2144 Auiki Street	1,800									1,800
											1,800
											1,800
											1,800
											1,800
	111 Sand Island Access Road	2,480									2,480
											2,480
											2,480
	2144 Auiki Street	1,800									1,800
											1,800
											1,800
	111 Sand Island Access Road	3,300									3,300
											3,300
											3,300
											3,300
	111 Sand Island Access Road	2,000									2,000
											2,000
											2,000
											2,000
	120 Sand Island Access Road	1,742									1,742
											1,742
* [THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION]

[See * for this column]			[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	1,742
	111 Sand Island Access Road	1,000									1,000
	106 Puuhale Road	1,733									1,733
											1,733
											1,733
	120 Sand Island Access Road	8,328									8,328
											8,328
											8,328
											8,328
											8,328
											8,328
	106 Puuhale Road	1,728									1,728
											1,728
											1,728
	120 Mokauea Street	7,086									7,086
											7,086
											7,086
											7,086
	111 Sand Island Access Road	900									900
											900
											900
											900
	2144 Auiki Street	1,650									1,650
											1,650
											1,650
											1,650
											1,650
* [THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION]

[See * for this column]	111 Sand Island Access Road	900	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	900
											900
											900
											900
											900
											900
											900
											900
											900
	106 Puuhale	5,578									5,578
	120 Sand Island Access Road	1,500									1,500
											1,500
											1,500
	120 Sand Island Access Road	470
	619 Mapunapuna Street	55,377									55,377
											55,377
											55,377
											55,377
											55,377
											55,377
											55,377
											55,377
											55,377
											55,377
											55,377
											55,377
											55,377
											55,377
											55,377
											55,377
											55,377
											55,377
* [THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION]

[See * for this column]			[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	[See * for this column]	55,377
											55,377
											55,377
											55,377
											55,377
	214 Sand Island Access Road	15,300									15,300
											15,300
											15,300
											15,300
	214 Sand Island Access Road	1,800									1,800
											1,800
											1,800
	2144 Auiki St	—
	2144 Auiki Street	1,650									1,650
											1,650
											1,650
	2144 Auiki St	600
	2144 Auiki St	900
	Total SF	9,591,512
* [THE CONFIDENTIAL PORTION HAS BEEN SO OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT AND HAS BEEN FILED SEPARATELY WITH THE COMMISSION]

Schedule II

Organizational Chart

Schedule III

Leased Fee Leases

All of the leases noted on the Rent Roll attached as Schedule I, except for leases at the following properties:

1926 Auiki Street, Honolulu, HI 96819

142 Mokauea Street, Honolulu, HI 96819

2144 Auiki Street, Honolulu, HI 96819

106 Puuhale Road, Honolulu, HI 96819

120 Mokauea Street, Honolulu, HI 96819

120B Mokauea Street, Honolulu, HI 96819

214 Sand Island Access Road, Honolulu, HI 96819

120 Sand Island Access Road, Honolulu, HI 96819

Schedule 3.1.1

Borrower	Organizational ID Number	Tax ID Number
Higgins Properties LLC	7190304	20-0434626
ILPT Orville Properties LLC	7190328	20-0434591
ILPT TSM Properties LLC	7190321	20-0434472
LTMAC Properties LLC	7190332	20-0434504
Masters Properties LLC	7190302	20-0434656
RFRI Properties LLC	7190311	20-0434707
Robin 1 Properties LLC	7190330	20-0434730
Tanaka Properties LLC	7190382	20-0434568
TedCal Properties LLC	7190367	20-0434683
Z&A Properties LLC	7190374	20-0434539

Schedule 3.1.4

Litigation

None.

Schedule  3.1.9

Legal Requirements

None, except as disclosed in the (i) Phase I Environmental Site Assessments prepared by EBI Consulting and Zoning Compliance Reports for the Properties and Improvements prepared by Commercial Due Diligence Services provided to Lender on the Eastdil Secured website and (ii) the property condition reports prepared by Lender.

Schedule 3.1.14

Assessments

None.

Schedule 3.1.46

Owned Improvements

1926 Auiki Street, Honolulu, HI 96819

142 Mokauea Street, Honolulu, HI 96819

2144 Auiki Street, Honolulu, HI 96819

106 Puuhale Road, Honolulu, HI 96819

120 Mokauea Street, Honolulu, HI 96819

120B Mokauea Street, Honolulu, HI 96819

214 Sand Island Access Road, Honolulu, HI 96819

120 Sand Island Access Road, Honolulu, HI 96819

1052 Ahua Street, Honolulu, HI 96819

EX-21.1

Exhibit 21.1

INDUSTRIAL LOGISTICS PROPERTIES TRUSTSUBSIDIARIES OF THE REGISTRANT

Name	State of Formation,Organization or Incorporation
Alpha BT LLC	Maryland
Hawaii MMGD LLC	Maryland
Hawaii Phoenix Properties LLC	Maryland
Higgins Properties LLC	Delaware
ILPT Albany LLC	Delaware
ILPT Ankeny LLC	Delaware
ILPT Asheville LLC	Delaware
ILPT Avon LLC	Maryland
ILPT Baton Rouge LLC	Delaware
ILPT Bemidji LLC	Delaware
ILPT Brookfield LLC	Delaware
ILPT Burlington LLC	Delaware
ILPT Chesterfield LLC	Delaware
ILPT Chillicothe LLC	Delaware
ILPT Denver LLC	Delaware
ILPT Fernley LLC	Delaware
ILPT Florida LLC	Maryland
ILPT Fort Smith LLC	Delaware
ILPT Harvey LLC	Delaware
ILPT ID Colorado Springs LLC	Delaware
ILPT Kalamazoo LLC	Delaware
ILPT KYIN LLC	Maryland
ILPT Lafayette LLC	Delaware
ILPT Lincoln LLC	Delaware
ILPT Mahwah LLC	Maryland
ILPT McAlester LLC	Delaware
ILPT Minot LLC	Delaware
ILPT Murfreesboro LLC	Delaware
ILPT Newton Iowa LLC	Maryland
ILPT North East LLC	Delaware
ILPT Obetz LLC	Delaware
ILPT Orange Township LLC	Delaware
ILPT Orville Properties LLC	Delaware
ILPT Pocatello LLC	Delaware
ILPT Pueblo LLC	Delaware
ILPT Rock Hill LLC	Delaware
ILPT Rockford (American) LLC	Delaware
ILPT Salt Lake City LLC	Delaware
ILPT South Point LLC	Delaware
ILPT Spartanburg LLC	Delaware
ILPT TN LLC	Maryland
ILPT Tower LLC	Maryland
ILPT Trails Road LLC	Maryland
ILPT TSM Properties LLC	Delaware
ILPT Windsor LLC	Maryland
ILPT Virginia LLC	Maryland
LTMAC Properties LLC	Delaware
Masters Properties LLC	Delaware
RFRI Properties LLC	Delaware
Robin 1 Properties LLC	Delaware
Tanaka Properties LLC	Delaware
TedCal Properties LLC	Delaware
Z&A Properties LLC	Delaware

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 333-223906) of Industrial Logistics Properties Trust pertaining to the 2018 Equity Compensation Plan, of our report dated February 20, 2019, with respect to the consolidated financial statements and schedules of Industrial Logistics Properties Trust included in this Annual Report (Form 10-K) for the year ended December 31, 2018.

/s/ Ernst & Young LLP

Boston, Massachusetts

February 20, 2019

EX-31.1

Exhibit31.1

CERTIFICATION PURSUANT TO EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a)

I, John G. Murray, certify that:

1. I have reviewed this Annual Report on Form 10-K of Industrial Logistics Properties Trust;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

5
Date: February 20, 2019	/s/ John G. Murray
	John G. Murray
	President and Chief Executive Officer

EX-31.2

Exhibit31.2

CERTIFICATION PURSUANT TO EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a)

I, Richard W. Siedel, Jr., certify that:

1. I have reviewed this Annual Report on Form 10-K of Industrial Logistics Properties Trust;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a. Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b. Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a. All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

5
Date: February 20, 2019	/s/ Richard W. Siedel, Jr.
	Richard W. Siedel, Jr.
	Chief Financial Officer and Treasurer

EX-32.1

Exhibit 32.1

Certification Pursuant to 18 U.S.C. Sec. 1350

_______________________________________________

In connection with the filing by Industrial Logistics Properties Trust (the “Company”) of the Annual Report on Form 10-K for the period ended December 31, 2018 (the “Report”), each of the undersigned hereby certifies, to the best of his knowledge:

1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

9
/s/ John G. Murray	/s/ Richard W. Siedel, Jr.
John G. Murray	Richard W. Siedel, Jr.
President and Chief Executive Officer	Chief Financial Officer and Treasurer
Date: February 20, 2019

EX-99..1

Exhibit 99.1

EXECUTION VERSION

STOCK PURCHASE AGREEMENT

This STOCK PURCHASE AGREEMENT (this “Agreement”), dated as of December 28, 2018, is entered into by and between Select Income REIT, a Maryland real estate investment trust (“Seller”), and Industrial Logistics Properties Trust, a Maryland real estate investment trust (“Purchaser”).

RECITALS

WHEREAS, Seller owns 22,857 shares of common stock, par value of $10.00 per share (the “SIR AIC Shares”), of Affiliates Insurance Company, an Indiana insurance company (“AIC”), constituting approximately 14.3% of AIC's issued and outstanding common stock; and

WHEREAS, Seller is party to that certain Amended and Restated Shareholders Agreement (the “Shareholders Agreement”), dated May 21, 2012, by and among AIC, Hospitality Properties Trust, Five Star Quality Care, Inc. (now known as Five Star Senior Living Inc.), CommonWealth REIT (now known as Equity Commonwealth, whose obligations were transferred to and assumed by the other AIC shareholders on a pro rata basis), Senior Housing Properties Trust, TravelCenters of America LLC, Reit Management & Research LLC (now known as The RMR Group LLC, whose obligations were transferred to and assumed by ABP Trust), Government Properties Income Trust (“GOV”) and Seller; and

WHEREAS, Purchaser was a majority owned subsidiary of Seller; and

WHEREAS, in connection with the distribution to Seller's shareholders of all of its common shares of beneficial interest of Purchaser and the merger of Seller with and into a wholly-owned subsidiary of GOV, Seller has agreed to sell to Purchaser, and Purchaser has agreed to buy from Seller, the SIR AIC Shares (the “Purchased Shares”) in exchange for the payment by Purchaser of the net book value of the Purchased Shares as of December 31, 2018, in cash; and

WHEREAS, subject to the terms and conditions hereof, Seller desires to sell, assign, transfer, convey and deliver, and Purchaser desires to accept the sale, assignment, transfer, conveyance and delivery, of the Purchased Shares;

1

AGREEMENT

NOW, THEREFORE, in consideration of the premises and the agreements herein contained and other good and valuable consideration the receipt and sufficiency of which are hereby acknowledged and intending to be legally bound, Seller and Purchaser hereby agree as follows:

Section 1.Sale, Transfer and Assignment. Effective as of the Closing (as defined below), Seller shall sell, assign, transfer, convey and deliver to Purchaser all of Seller’s right, title and interest in and to the Purchased Shares free and clear of all liens, other than any restrictions arising under applicable law and the Shareholders Agreement, and all of Seller’s rights under the Shareholders Agreement with respect to the Purchased Shares in exchange for the payment by Purchaser of the net book value of the Purchased Shares as of December 31, 2018, in cash.

Section 2.Acceptance and Payment. (a) Effective as of the Closing (as defined below), Purchaser shall accept the foregoing sale, assignment, transfer, conveyance and delivery of the Purchased Shares from Seller and agree to be bound by the terms and conditions of the Shareholders Agreement with respect to the Purchased Shares and (b) in consideration of the sale and transfer made pursuant to Section 1 hereof, Purchaser shall pay an aggregate amount to Seller equal to the net book value of the Purchased Shares as of December 31, 2018, in cash (the “Purchase Price”). At the Closing, Purchaser shall pay Seller a cash amount equal to an estimate of the Purchase Price based on Seller’s net book value of the Purchased Shares as of September 30, 2018, which estimate shall be adjusted and additional payment made to (or refunded by) Seller (or its successor), as applicable, based on the final amount of the Purchase Price determined following receipt of and based on AIC’s December 31, 2018 U.S. GAAP basis audited financial statements.

Section 3.Closing. The closing (the “Closing”) of the transactions contemplated by Section 1 and Section 2 hereof shall be effective as of the Effective Time of the Merger (each as defined in that certain Agreement and Plan of Merger by and among GOV, GOV MS REIT and Seller, dated as of September 14, 2018, as it may be amended from time to time).

Section 4.Representations and Warranties of Seller. Seller hereby represents and warrants to Purchaser that (i) Seller owns the Purchased Shares and hereby delivers the Purchased Shares to Purchaser, free and clear of any and all liens, claims, options, security interests and encumbrances of any kind other than any restrictions arising under applicable law and the Shareholders Agreement, and Seller will convey to Purchaser good, valid and marketable title to the Purchased Shares, (ii) Seller has all requisite power and authority to execute, deliver and perform its obligations under this Agreement and to consummate the transactions contemplated hereby and thereby, (iii) this Agreement and the transactions contemplated hereby have been duly authorized by all necessary company action by Seller and (iv) this Agreement has been duly and validly executed and delivered by Seller and, assuming due authorization, execution and delivery by Purchaser, constitutes the valid and binding obligation of Seller, enforceable in accordance with its terms.

Section 5.Representations and Warranties of Purchaser. Purchaser hereby represents and warrants to Seller that (i) Purchaser has all requisite power and authority to execute, deliver and perform its obligations under this Agreement and to consummate the transactions contemplated hereby and thereby, (ii) this Agreement and the transactions contemplated hereby have been duly authorized by all necessary company action by Purchaser, (iii) this Agreement has been duly and validly executed and

2

delivered by Purchaser and, assuming due authorization, execution and delivery by Seller, constitutes the valid and binding obligation of Purchaser, enforceable in accordance with its terms, (iv) Purchaser is a sophisticated investor and has the capacity to evaluate the risks and merits of the transactions contemplated by this Agreement and (v) Purchaser has made an informed decision with respect to the transactions contemplated by this Agreement without reliance on any advice from Seller. Purchaser hereby understands and acknowledges that neither Seller nor any of its affiliates or agents has provided Purchaser with any investment advice or rendered any opinion to Purchaser as to AIC or whether the purchase of the Purchased Shares is prudent or suitable, and Purchaser is not relying on any representation or warranty of Purchaser other than those set forth in Section 4 hereof.

Section 6.Miscellaneous.

(a) Governing Law. This Agreement, and any claim, controversy or dispute arising under or related to this Agreement, the relationship of the parties hereto, and/or the interpretation and enforcement of the rights and duties of the parties hereto, shall be governed by, and shall be construed and interpreted in accordance with the laws of the State of Maryland, without regard to the conflict of laws rules thereof or of any other jurisdiction, and the parties hereto agree to submit any dispute arising out of this Agreement to the exclusive jurisdiction of any court of competent civil jurisdiction sitting in the State of Maryland.

(b) Jury Trial Waiver. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT TO TRIAL BY JURY WITH RESPECT TO ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT.

(c) Dispute Resolution. Any action, suit or proceeding seeking to enforce any provision of, or based on any matter arising out of or in connection with, this Agreement or the transactions contemplated hereby shall be resolved in accordance with Section 8.7 of the Shareholders Agreement.

(d) Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

(e) Counterparts. This Agreement may be signed in separate counterparts (including by facsimile or other electronic transmission), each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument.

(f) Binding Effect. This Agreement shall be binding upon the parties hereto and their respective successors and permitted assigns, and shall inure to the benefit of the parties hereto, their respective successors and permitted assigns.

(g) Further Assurances. Each party hereby agrees to do, execute, acknowledge and deliver, or to cause to be done, executed, acknowledged and delivered, all such further acts, deeds, assignment, transfers, conveyances, powers of attorney and other documents or instruments that may be reasonably requested by the other party in order to effect or confirm the assignment, acceptance and assumption provided for above.

(h) Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, such provision shall be excluded from this Agreement and the

3

balance of the Agreement shall be interpreted as if such provision were so excluded, but as consistent with its objectives as possible, and shall be enforceable in accordance with its terms.

(i) Entire Agreement. This Agreement constitutes the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes all prior negotiations and agreements with respect to the subject matter hereof.

(j) Amendments. This Agreement may not be modified, amended or supplemented except in a writing signed by each of the parties hereto.

(k) Survival. The representations and warranties contained herein and the obligations of the parties hereunder shall survive the Closing and the consummation of the transactions contemplated hereby.

(l) Specific Performance; Remedies. Each party hereto acknowledges and agrees that the other party would be damaged irreparably if any provision of this Agreement were not performed in accordance with its specific terms or were otherwise breached. Accordingly, the parties hereto will be entitled to an injunction or injunctions to prevent breaches of the provisions of this Agreement and to enforce specifically this Agreement and its provisions in addition to any other remedy to which they may be entitled, at law or in equity. Except as expressly provided herein, the rights, obligations and remedies created by this Agreement are cumulative and in addition to any other rights, obligations or remedies otherwise available at law or in equity. Except as expressly provided herein, nothing herein will be considered an election of remedies.

(m) Titles and Subtitles. The titles and subtitles used in this Agreement are used for convenience only and are not to be considered in construing or interpreting this Agreement.

[Remainder of Page Intentionally Left Blank]

4

IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of the day and year first written above.

SELLER:

SELECT INCOME REIT

By:    /s/ David M. Blackman                David M. Blackman    President and Chief Executive Officer

PURCHASER:

INDUSTRIAL LOGISTICS PROPERTIES TRUST

By:    /s/ Richard W. Siedel, Jr.             Richard W. Siedel, Jr.    Chief Financial Officer and Treasurer

[Signature Page to SIR - ILPT AIC Stock Purchase Agreement]

[Signature Page to SIR-ILPT AIC Stock Purchase Agreement]

EX-99..3

Exhibit 99.3

INDUSTRIAL LOGISTICS PROPERTIES TRUST

January 29, 2019

The RMR Group LLC

Two Newton Place

255 Washington Street

Newton, MA 02458

Re:    Property Management Agreement, dated as of January 17, 2018

Ladies and Gentlemen:

Industrial Logistics Properties Trust, a Maryland real estate investment trust (“ILPT”), on its own behalf and on behalf of certain of its subsidiaries, and The RMR Group LLC, a Maryland limited liability company (“RMR”), are parties to the above captioned agreement (as the same may be amended, restated or supplemented from time to time, the “Master Property Management Agreement”). RMR and ILPT acknowledge that from time to time, to accommodate secured financings (including, without limitation, a pending financing of certain of ILPT’s properties in Hawaii), RMR and one or more subsidiaries of ILPT may enter into separate property management agreements for specific properties (each, a “Property Specific Management Agreement”).

ILPT and RMR acknowledge and agree that, notwithstanding anything in a Property Specific Management Agreement to the contrary, it is ILPT’s and RMR’s intent that the terms and conditions of the Master Property Management Agreement will control the rights and obligations of ILPT and RMR, including, without limitation, the fees payable, the term of the property management arrangement, the conditions for (and amounts payable upon) termination, and the resolution of disputes.

In furtherance of the foregoing, ILPT and RMR agree that, if there is any discrepancy between amounts owing or paid under a Property Specific Management Agreement and amounts owing or paid under the Master Property Management Agreement, ILPT or RMR, as the case may be, shall promptly pay or refund any amounts that would be paid or payable if the applicable property were subject to the Master Property Management Agreement rather than a Property Specific Management Agreement.

If the foregoing accurately reflects our understandings and agreements, please confirm your agreement by signing below where indicated and returning a copy of this letter so signed to me.

Very truly yours,

/s/ Richard W. Siedel, Jr.         

Richard W. Siedel, Jr.

Chief Financial Officer & Treasurer

Acknowledged and agreed:

The RMR Group LLC

/s/ Matthew P. Jordan            

Matthew P. Jordan

Executive VP, Chief Financial Officer & Treasurer

XML

Document and Entity Information - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Feb. 19, 2019	Jun. 29, 2018
Document And Entity Information [Abstract]
Document Period End Date	Dec. 31, 2018
Entity Registrant Name	Industrial Logistics Properties Trust
Entity Central Index Key	0001717307
Current Fiscal Year End Date	--12-31
Entity Filer Category	Non-accelerated Filer
Document Type	10-K
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	FY
Amendment Flag	false
Entity Common Stock, Shares Outstanding		65,074,791
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Public Float			$ 447.0

XML

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Real estate properties:
Land	$ 670,501	$ 642,706
Buildings and improvements	791,895	700,896
Real estate properties, gross	1,462,396	1,343,602
Accumulated depreciation	(93,291)	(74,614)
Real estate properties, net	1,369,105	1,268,988
Acquired real estate leases, net	75,803	79,103
Cash and cash equivalents	9,608	0
Rents receivable, including straight line rents of $54,916 and $50,177, respectively, net of allowance for doubtful accounts of $1,457 and $1,241, respectively	56,940	51,672
Deferred leasing costs, net	6,157	5,254
Debt issuance costs, net	4,430	1,724
Due from related parties	1,390	0
Other assets, net	11,178	4,942
Total assets	1,534,611	1,411,683
LIABILITIES AND SHAREHOLDERS' EQUITY
Revolving credit facility	413,000	750,000
Mortgage note payable, net	49,195	49,427
Assumed real estate lease obligations, net	18,316	20,384
Accounts payable and other liabilities	12,040	11,082
Rents collected in advance	6,004	5,794
Security deposits	6,130	5,674
Due to related persons	1,653	7,114
Total liabilities	506,338	849,475
Commitments and contingencies
Shareholders' equity:
Common shares of beneficial interest, $.01 par value: 100,000,000 shares authorized; 65,074,791 and 45,000,000 shares issued and outstanding, respectively	651	450
Additional paid in capital	998,447	546,489
Cumulative net income	89,657	15,269
Cumulative common distributions	(60,482)	0
Ownership interest	1,028,273	562,208
Total liabilities and shareholders' equity	$ 1,534,611	$ 1,411,683

XML

CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Straight line rents (in dollars)	$ 54,916	$ 50,177
Allowance for doubtful accounts (in dollars)	$ 1,457	$ 1,241
Common shares, par value (in dollars per share)	$ 0.01	$ 0.01
Common shares, shares authorized (in shares)	100,000,000	100,000,000
Common shares, shares issued (in shares)	65,074,791	45,000,000
Common shares, shares outstanding (in shares)	65,074,791	45,000,000

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) shares in Thousands, $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
REVENUES:
Rental income	$ 139,311	$ 134,826	$ 132,518
Tenant reimbursements and other income	23,219	21,680	20,792
Total revenues	162,530	156,506	153,310
EXPENSES:
Real estate taxes	19,342	17,868	17,204
Other operating expenses	13,005	10,913	10,593
Depreciation and amortization	28,575	27,315	27,074
Acquisition and transaction related costs	0	1,025	35
General and administrative	11,307	16,799	9,200
Total expenses	72,229	73,920	64,106
Interest income	200	0	0
Interest expense (including net amortization of debt issuance costs and premiums of $1,244, ($494) and ($292), respectively)	(16,081)	(2,439)	(2,262)
Income before income tax expense	74,420	80,147	86,942
Income tax expense	(32)	(44)	(44)
Net income	$ 74,388	$ 80,103	$ 86,898
Weighted average common shares outstanding - basic (in shares)	64,139	45,000	45,000
Weighted average common shares outstanding - diluted (in shares)	64,140	45,000	45,000
Net income per common share - basic and diluted (in dollars per share)	$ 1.16	$ 1.78	$ 1.93

XML

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Income Statement [Abstract]
Net amortization of debt issuance costs and premiums	$ 1,244	$ (494)	$ (292)

XML

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY - USD ($) $ in Thousands	Total	Common shares	Additional Paid In Capital	Cumulative Net Income	Cumulative Common Distributions	Ownership Interest
Balance (in shares) at Dec. 31, 2015		0
Balance at beginning of period at Dec. 31, 2015	$ 1,334,170	$ 0	$ 0	$ 0	$ 0	$ 1,334,170
Increase (Decrease) in Stockholders' Equity
Net income	86,898					86,898
Contributions	46,210					46,210
Distributions	(154,093)					(154,093)
Noncash Distribution To Parent	0
Balance (in shares) at Dec. 31, 2016		0
Balance at end of period at Dec. 31, 2016	1,313,185	$ 0	0	0	0	1,313,185
Increase (Decrease) in Stockholders' Equity
Net income	80,103			15,269		64,834
Contributions	72,807		30,244			42,563
Distributions	(153,887)		(37,348)			(116,539)
Issuance of common shares and reclassification of ownership interest (in shares)		45,000,000
Issuance of common shares and reclassification of ownership interest	(750,000)	$ 450	553,593
Noncash Distribution To Parent	(1,304,043)					(1,304,043)
Distributions to common shareholders	(60,482)
Balance (in shares) at Dec. 31, 2017		45,000,000
Balance at end of period at Dec. 31, 2017	562,208	$ 450	546,489	15,269	0	0
Increase (Decrease) in Stockholders' Equity
Net income	74,388			74,388
Contributions	16,162		16,162
Distributions	(9,187)		(9,187)
Issuance of common shares and reclassification of ownership interest (in shares)		20,000,000
Issuance of common shares and reclassification of ownership interest	444,309	$ 200	444,109
Noncash Distribution To Parent	0
Share grants (in shares)		77,400
Share grants	$ 927	$ 1	926
Share grant forfeitures (in shares)	(240)
Share grant forfeitures	$ 0
Share repurchases (in shares)	(2,369)
Share repurchases	$ (52)		(52)
Distributions to common shareholders	(60,482)				(60,482)
Balance (in shares) at Dec. 31, 2018		65,074,791
Balance at end of period at Dec. 31, 2018	$ 1,028,273	$ 651	$ 998,447	$ 89,657	$ (60,482)	$ 0

XML

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$ 74,388	$ 80,103	$ 86,898
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation	18,781	17,738	17,563
Net amortization of debt issuance costs and premiums	1,244	(494)	(292)
Amortization of acquired real estate leases and assumed real estate lease obligations	8,592	8,434	8,419
Amortization of deferred leasing costs	820	771	706
Provision for losses on rents receivable	1,198	704	257
Straight line rental income	(4,739)	(5,762)	(6,202)
Other non-cash expenses	927	0	0
Change in assets and liabilities:
Rents receivable	(1,727)	436	301
Deferred leasing costs	(1,745)	(693)	(910)
Other assets	3,591	(4,431)	56
Due from related persons	(1,390)	0	0
Accounts payable and other liabilities	1,618	245	295
Rents collected in advance	210	(743)	2,122
Security deposits	456	33	42
Due to related persons	(5,461)	7,114	0
Net cash provided by operating activities	96,763	103,455	109,255
CASH FLOWS FROM INVESTING ACTIVITIES:
Real estate acquisitions	(121,891)	(281)	0
Real estate improvements	(5,004)	(6,026)	(1,356)
Investment in Affiliates Insurance Company	(8,632)	0	0
Net cash used in investing activities	(135,527)	(6,307)	(1,356)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common shares, net	444,309	0	0
Borrowings under revolving credit facility	193,000	750,000	0
Repayments of revolving credit facility	(530,000)	0	0
Repayment of mortgage notes payable	0	(14,344)	(16)
Repayment of SIR note	0	(750,000)	0
Payment of debt issuance costs	(5,378)	(1,724)	0
Distributions to common shareholders	(60,482)	0	0
Repurchase of common shares	(52)	0	0
Contributions	16,162	72,807	46,210
Distributions	(9,187)	(153,887)	(154,093)
Net cash provided by (used in) financing activities	48,372	(97,148)	(107,899)
Increase in cash and cash equivalents	9,608	0	0
Cash and cash equivalents at beginning of period	0	0	0
Cash and cash equivalents at end of period	9,608	0	0
SUPPLEMENTAL DISCLOSURES:
Interest paid	14,749	2,752	2,554
NON-CASH FINANCING ACTIVITIES:
Distribution to SIR of ownership interest	0	(1,304,043)	0
Issuance of SIR note	0	750,000	0
Issuance of common shares	$ 0	$ 554,043	$ 0

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Organization

12 Months Ended

Dec. 31, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization

Organization

Industrial Logistics Properties Trust, or, collectively with its consolidated subsidiaries, we, us or our, is a real estate investment trust, or REIT, formed under Maryland law on September 15, 2017, as a wholly owned subsidiary of Select Income REIT, or SIR, a former publicly traded REIT that merged with a wholly owned subsidiary of Office Properties Income Trust (formerly Government Properties Income Trust), or OPI, on December 31, 2018.

Until January 17, 2018, we were a wholly owned subsidiary of SIR and SIR managed and controlled our cash management function through a series of commingled centralized accounts. As a result, the cash receipts collected by SIR on our behalf have been accounted for as distributions and the cash disbursements paid by SIR on our behalf have been accounted for as contributions within ownership interest through September 29, 2017. Subsequent to September 29, 2017, contributions and distributions have been accounted for as an increase or decrease, respectively, in additional paid in capital.

On January 17, 2018, we completed an initial public offering and listing on The Nasdaq Stock Market LLC, or Nasdaq, of 20,000,000 of our common shares, or our IPO. At that time, we owned 266 properties with a total of approximately 28,540,000 rentable square feet, or our Initial Properties (all square footage amounts included within these notes are unaudited). Our Initial Properties were contributed to us on September 29, 2017, by SIR. Two hundred twenty six (226) of these properties with a total of approximately 16,834,000 rentable square feet are located on the island of Oahu, Hawaii. The remaining 40 properties have a total of approximately 11,706,000 rentable square feet and are located in 24 other states. In connection with our formation and this contribution of properties, we (1) issued to SIR 45,000,000 of our common shares of beneficial interest, $.01 par value per share, or our common shares, (2) issued to SIR a $750,000 non-interest bearing demand note, or the SIR Note, and (3) assumed three mortgage notes totaling $63,069, excluding premiums, that were secured by three of our Initial Properties.

On December 27, 2018, SIR distributed all 45,000,000 of our common shares that SIR owned to SIR's shareholders of record as of the close of business on December 20, 2018.

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Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Basis of Presentation. These consolidated financial statements include the accounts of us and our subsidiaries, all of which are 100% owned directly or indirectly by us. All intercompany transactions and balances with or among our consolidated subsidiaries have been eliminated.

The accounts of our Initial Properties are presented at SIR’s historical basis and are consolidated for prior periods presented as the transaction described in Note 1 has been accounted for as a reorganization of entities under common control in accordance with Financial Accounting Standards Board, or FASB, Accounting Standards Codification 805-50-30, Business Combinations. Substantially all of the rental income received from our tenants and SIR’s other tenants was deposited in and commingled with SIR’s general funds during the periods prior to January 17, 2018. Prior to January 17, 2018, general and administrative costs of SIR were primarily allocated to us based on the historical cost of our real estate investments as a percentage of SIR’s historical cost of all of its real estate investments. In accordance with applicable accounting guidance, we believe this method for allocating general and administrative expenses is reasonable. However, actual expenses may have been different from allocated expenses if we operated as a standalone company and those differences may be material.

Real Estate Properties. We record properties at our cost and have presented our Initial Properties at their historical cost basis. Our real estate investments in lands are not depreciated. We calculate depreciation on other real estate investments on a straight line basis over estimated useful lives generally ranging from seven to 40 years.

We allocate the purchase prices of our properties to land, building and improvements based on determinations of the fair values of these assets assuming the properties are vacant. We determine the fair value of each property using methods similar to those used by independent appraisers. In some circumstances, we engage independent real estate appraisal firms to provide market information and evaluations which are relevant to our purchase price allocations and determinations of depreciable useful lives; however, we are ultimately responsible for the purchase price allocations and determinations of useful lives. We allocate a portion of the purchase price to above market and below market leases based on the present value (using an interest rate which reflects the risks associated with acquired in place leases at the time each property was acquired by us) of the difference, if any, between (i) the contractual amounts to be paid pursuant to the acquired in place leases and (ii) our estimates of fair market lease rates for the corresponding leases, measured over a period equal to the terms of the respective leases. The terms of below market leases that include bargain renewal options, if any, are further adjusted if we determine that renewal to be probable. We allocate a portion of the purchase price to acquired in place leases and tenant relationships based upon market estimates to lease up the property based on the leases in place at the time of purchase. In making these allocations, we consider factors such as estimated carrying costs during the expected lease up periods, including real estate taxes, insurance and other operating income and expenses and costs, such as leasing commissions, legal and other related expenses, to execute similar leases in current market conditions at the time a property was acquired by us. We allocate this aggregate value between acquired in place lease values and tenant relationships based on our evaluation of the specific characteristics of each tenant’s lease. However, we have not separated the value of tenant relationships from the value of acquired in place leases because such value and related amortization expense is immaterial to the accompanying consolidated financial statements. If the value of tenant relationships becomes material in the future, we may separately allocate those amounts and amortize the allocated amount over the estimated life of the relationships.

We amortize capitalized above market lease values (included in acquired real estate leases in our consolidated balance sheets) and below market lease values (presented as assumed real estate lease obligations in our consolidated balance sheets) as a reduction or increase, respectively, to rental income over the terms of the associated leases. Such amortization resulted in increases in rental income of $401, $390 and $403 during the years ended December 31, 2018, 2017 and 2016, respectively. We amortize the value of acquired in place leases (included in acquired real estate leases in our consolidated balance sheets), exclusive of the value of above market and below market acquired in place leases, or lease origination value, over the terms of the associated leases. Such amortization, which is included in depreciation and amortization expense, totaled $8,993, $8,824 and $8,823 during the years ended December 31, 2018, 2017 and 2016, respectively. If a lease is terminated prior to its stated expiration, we write off the unamortized amounts relating to that lease.

As of December 31, 2018 and 2017, our acquired real estate leases and assumed real estate lease obligations were as follows:

	December 31,
	2018			2017
Acquired real estate leases:
Capitalized above market lease values	$	28,723		$	30,104
Less: accumulated amortization	(16,726		)	(16,440		)
Capitalized above market lease values, net	11,997			13,664
Lease origination value	99,727			93,646
Less: accumulated amortization	(35,921		)	(28,207		)
Lease origination value, net	63,806			65,439
Acquired real estate leases, net	$	75,803		$	79,103
Assumed real estate lease obligations:
Capitalized below market lease values	$	34,313		$	34,786
Less: accumulated amortization	(15,997		)	(14,402		)
Assumed real estate lease obligations, net	$	18,316		$	20,384

As of December 31, 2018, the weighted average amortization periods for capitalized above market lease values, lease origination value and capitalized below market lease values were 11.7 years, 8.8 years, and 14.1 years, respectively.  Future amortization of net intangible acquired real estate lease assets and liabilities to be recognized over the current terms of the associated leases as of December 31, 2018 are estimated to be $7,805 in 2019, $7,797 in 2020, $7,725 in 2021, $7,538 in 2022, $7,279 in 2023 and $19,343 thereafter.

We recognize impairment losses on real estate investments when indicators of impairment are present and the estimated undiscounted cash flow from our real estate investments is less than the carrying amount of such real estate investments. Impairment indicators may include declining tenant occupancy, lack of progress releasing vacant space, tenant bankruptcies, low long term prospects for improvement in property performance, weak or declining tenant profitability, cash flow or liquidity, our decision to dispose of an asset before the end of its estimated useful life and legislative, market or industry changes that could permanently reduce the value of a property. We review our properties for impairment quarterly, or whenever events or changes in circumstances indicate that carrying amounts may not be recoverable. If indicators of impairment are present, we evaluate the carrying value of the related property by comparing it to the expected future undiscounted cash flows expected to be generated from that property. If the sum of these expected future undiscounted cash flows is less than the carrying value, we reduce the net carrying value of the property to its estimated fair value. The determination of undiscounted cash flow includes consideration of many factors including income to be earned from the investment, holding costs (exclusive of interest), estimated selling prices, and prevailing economic and market conditions. No impairments exist on any of our properties as of December 31, 2018 and 2017.

We believe some of our properties may contain asbestos. We believe any asbestos on our properties is contained in accordance with applicable laws and regulations and we have no current plans to remove it. If we removed the asbestos or renovated or demolished the affected properties, certain environmental regulations govern the manner in which the asbestos must be handled and removed, and we could incur substantial costs complying with such regulations. Due to the uncertainty of the timing and amount of costs we may incur, we cannot reasonably estimate such costs and we have not recognized a liability in our consolidated financial statements for these costs.

Certain of our industrial lands in Hawaii may require environmental remediation, especially if the use of those lands is changed; however, we do not have any present plans to change the use of those lands or to undertake this environmental cleanup. As of December 31, 2018 and 2017, accrued environmental remediation costs of $6,940 and $7,002, respectively, were included in accounts payable and other liabilities in our consolidated balance sheets. These accrued environmental remediation costs relate to maintenance of our properties for current uses, and, because of the indeterminable timing of the remediation, these amounts have not been discounted to present value. In general, we do not have any insurance designated to limit any losses that we may incur as a result of known or unknown environmental conditions which are not caused by an insured event, such as, for example, fire or flood, although some of our tenants may maintain such insurance that may benefit us. Although we do not believe that there are environmental conditions at any of our properties that will have a material adverse effect on us, we cannot be sure that such conditions are not present at our properties or that costs we incur to remediate contamination will not have a material adverse effect on our business or financial condition. Charges for environmental remediation costs, if any, are included in other operating expenses in our consolidated statements of comprehensive income.

Capitalization Policy. Costs directly related to the development of properties are capitalized. We capitalize development costs, including interest, real estate taxes, insurance, and other project costs, incurred during the period of development. Determinations of when a development project commences and capitalization begins, and when a development project is substantially complete and held available for occupancy and capitalization must cease, involve judgments. We begin the capitalization of costs during the pre-construction period, which we consider to begin when activities that are necessary to the development of the property commence. We consider a development project as substantially completed and held available for occupancy upon the completion of tenant improvements, but no later than one year from cessation of major construction activity.

Cash and Cash Equivalents. We consider highly liquid investments with original maturities of three months or less at the date of purchase to be cash equivalents.

Deferred Leasing Costs. Deferred leasing costs include capitalized brokerage, legal and other fees associated with the successful negotiation of leases, which are amortized to depreciation and amortization expense on a straight line basis over the terms of the respective leases. Deferred leasing costs totaled $9,845 and $8,379 at December 31, 2018 and 2017, respectively, and accumulated amortization of deferred leasing costs totaled $3,688 and $3,125 at December 31, 2018 and 2017, respectively. Included in deferred leasing costs at December 31, 2018, was $24 of estimated costs associated with leases under negotiation. Future amortization of deferred leasing costs to be recognized during the current terms of our existing leases as of December 31, 2018, are estimated to be $836 in 2019, $757 in 2020, $673 in 2021, $552 in 2022, $386 in 2023 and $2,953 thereafter.

Debt Issuance Costs. Debt issuance costs include capitalized issuance costs related to borrowings, which are amortized to interest expense over the terms of the respective loans. As of December 31, 2018 and 2017, we had debt issuance costs for our revolving credit facility totaling $5,907 and $1,724, respectively, and accumulated amortization of debt issuance costs totaling $1,477 at December 31, 2018. There were no accumulated amortization of debt issuance costs at December 31, 2017. As of December 31, 2018, we had debt issuance costs of $1,413 for our $650,000 mortgage loan obtained in January 2019. Future amortization of debt issuance costs to be recognized with respect to our revolving credit facility and our $650,000 mortgage loan as of December 31, 2018 is estimated to be $1,618 in 2019, $1,618 in 2020, $1,618 in 2021, $142 in 2022, $142 in 2023 and $705 thereafter.

Other Assets. Other assets consist of our investment in Affiliates Insurance Company, or AIC, prepaid insurance and prepaid real estate taxes. As of December 31, 2017, other assets also included costs related to our formation and preparation for our IPO. We acquired shares of common stock of AIC from SIR on December 31, 2018 for $8,632. We own a 14.3% ownership interest in AIC. We account for our investment in AIC using the equity method of accounting. Significant influence is present through common representation on the boards of trustees or directors of us and AIC. One of our Managing Trustees, Adam D. Portnoy, as the sole trustee of ABP Trust, is the controlling shareholder of The RMR Group Inc., or RMR Inc. RMR Inc. is the managing member of our manager, The RMR Group LLC, or RMR LLC. Mr. Portnoy is also a managing director and president and chief executive officer of RMR Inc. and an officer and employee of RMR LLC. John G. Murray, our other Managing Trustee and our President and Chief Executive Officer, is also an officer and employee of RMR LLC. RMR LLC also provides management and administrative services to AIC, and most of our Trustees are directors of AIC. See Note 7 for further information regarding our investments in RMR Inc. and AIC.

Revenue Recognition. Rental income from operating leases is recognized on a straight line basis over the lives of lease agreements. We defer the recognition of contingent rental income, such as percentage rents, until the specific targets that trigger the contingent rental income are achieved. Contingent rental income recognized for the years ended December 31, 2018, 2017 and 2016 totaled $941, $650 and $846, respectively. Tenant reimbursements and other income include property level operating expenses and capital expenditures reimbursed by our tenants as well as other incidental revenues. Certain tenants are obligated to pay directly their obligations under their leases for insurance, real estate taxes and certain other expenses. These costs, which have been assumed by the tenants under the terms of their respective leases, are not reflected in our consolidated financial statements. To the extent any tenant responsible for these costs under their respective lease defaults on its lease or if it is deemed probable that the tenant will fail to pay for such costs, we would record a liability for such obligation.

Allowance for Doubtful Accounts. We maintain an allowance for doubtful accounts for estimated losses resulting from the inability or unwillingness of certain tenants to make payments required under their leases. The computation of the allowance is based on the tenants’ payment histories and current credit profiles, as well as other considerations.

Income Taxes. Until January 17, 2018, we were a wholly owned subsidiary of SIR, which was taxed as a REIT under the Internal Revenue Code of 1986, as amended, or the IRC. Accordingly, until January 17, 2018, we were a qualified REIT subsidiary and a disregarded entity for tax purposes. We intend to qualify for taxation as a REIT under the IRC for U.S. federal income tax purposes commencing with our taxable year ended December 31, 2018 and to maintain such qualification thereafter. Accordingly, we generally are not, and will not be, subject to U.S. federal income taxes provided we distribute our taxable income and meet certain other requirements to qualify for taxation as a REIT. We may, however, be subject to certain state and local taxes.

Use of Estimates. Preparation of these financial statements in conformity with U.S. generally accepted accounting principles, or GAAP, requires us to make estimates and assumptions that may affect the amounts reported in these consolidated financial statements and related notes. The actual results could differ from these estimates. Significant estimates in the consolidated financial statements include the allowance for doubtful accounts, purchase price allocations, useful lives of fixed assets and the assessments of the carrying values and impairments of long lived assets.

Ownership Interest. For the periods prior to January 17, 2018, our investment activities were financed by SIR. Amounts invested in or advanced to us did not carry interest and had no specific repayment terms.

Net Income Per Common Share. We calculate basic earnings per common share by dividing net income by the weighted average number of common shares outstanding during the period. We calculate diluted net income per share using the more dilutive of the two class method or the treasury stock method.

Segment Reporting. We operate in one business segment: ownership and leasing of properties that include industrial and logistics buildings and leased industrial lands.

Reclassifications. Reclassifications have been made to the prior years' consolidated financial statements to conform to the current year's presentation. For the year ended December 31, 2017, we reclassified $1,724 from other assets to deferred issuance costs, net, in our consolidated balance sheets.

New Accounting Pronouncements. On January 1, 2018, we adopted FASB Accounting Standards Update, or ASU, No. 2014-09 (and related clarifying guidance issued by the FASB), Revenue From Contracts With Customers, which outlines a comprehensive model for entities to use in accounting for revenue arising from contracts with customers. ASU No. 2014-09 states that “an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” A substantial portion of our revenue consists of rental income from leasing arrangements, which is specifically excluded from ASU No. 2014-09. We have adopted ASU No. 2014-09 using the modified retrospective approach. The adoption of ASU No. 2014-09 did not have a material impact on the amount or timing of our revenue recognition in our consolidated financial statements.

On October 1, 2018, we adopted FASB ASU No. 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which aligns the measurement and classification guidance for share based payments to nonemployees with the guidance for share based payments to employees, with certain exceptions. The adoption of this standard did not have a material impact in our consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases. In July 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases and ASU No. 2018-11, Leases (Topic 842): Targeted Improvements. In December 2018, the FASB issued ASU No. 2018-20 Leases (Topic 842), Narrow-Scope Improvements for Lessors. Collectively, these standards set out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). ASU No. 2016-02 requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase of the leased asset by the lessee. This classification will determine whether the lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales type leases, direct financing leases and operating leases. These standards are effective as of January 1, 2019. Upon adoption, we applied the package of practical expedients that allows an entity to not reassess (i) whether any expired or existing contracts are or contain leases, (ii) lease classification for any expired or existing leases and (iii) initial direct costs for any expired or existing leases. Furthermore, we applied the optional transition method in ASU No. 2018-11, which allows entities to initially apply the new leases standard at the adoption date and recognize a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption, if any. Additionally, our leases met the criteria in ASU No. 2018-11 to not separate non-lease components from the related lease component; therefore, the accounting for these leases remained largely unchanged from the previous standard. The adoption of ASU No. 2016-02 and the related improvements did not have a material impact in our consolidated financial statements.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires that entities use a new forward looking “expected loss” model that generally will result in the earlier recognition of allowance for credit losses. The measurement of expected credit losses is based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. ASU No. 2016-13 will be effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. We are currently assessing the potential impact the adoption of ASU No. 2016-13 will have in our consolidated financial statements. We currently expect to adopt the standard using the modified retrospective approach.

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Real Estate Properties

12 Months Ended

Dec. 31, 2018

Real Estate [Abstract]

Real Estate Properties

Real Estate Properties

As of December 31, 2018, we owned 270 properties with a total of approximately 29,535,000 rentable square feet, including 226 buildings, leasable land parcels and easements with a total of approximately 16,834,000 rentable square feet of primarily industrial lands located on the island of Oahu, HI, or our Hawaii Properties, and 44 buildings with a total of approximately 12,701,000 rentable square feet of industrial properties in 25 other states, or our Mainland Properties.

We operate in one business segment: ownership and leasing of properties that include industrial and logistics buildings and leased industrial lands. For the years ended December 31, 2018, 2017 and 2016, approximately 59.7%, 60.2% and 59.5%, respectively, of our total revenues were from our Hawaii Properties. In addition, two subsidiaries of Amazon.com, Inc., which are tenants at certain of our Mainland Properties, accounted for $16,047, $15,938 and $16,063 of our total revenues for the years ended December 31, 2018, 2017 and 2016, respectively.

2018 Acquisitions:

During the year ended December 31, 2018, we acquired 985,235 rentable square feet for an aggregate purchase price of $121,385, including acquisition related costs of $1,360. These acquisitions were accounted for as acquisitions of assets. We allocated the purchase prices of these acquisitions based on the estimated fair values of the acquired assets as follows:

		Number	Rentable							Acquired
		of	Square	Purchase				Buildings and		Real Estate
Date	Location	Properties	Feet	Price		Land		Improvements		Leases
June 2018	Doral, FL (1)	1	240,283	$	43,326	$	15,225	$	28,101	$	—
September 2018	Carlisle, PA	1	205,090	20,451		3,299		15,515		1,637
September 2018	Upper Marlboro, MD	1	220,800	29,801		5,296		21,833		2,672
October 2018	Maple Grove, MN	1	319,062	27,807		3,469		21,287		3,051
		4	985,235	$	121,385	$	27,289	$	86,736	$	7,360

(1) This property was acquired and simultaneously leased back to the seller.

In October 2018, we acquired a land parcel adjacent to a property we own located in Ankeny, IA for a purchase price of $450, excluding acquisition related costs. This land parcel will be used for a 194,000 square foot expansion for the existing tenant at such property.

In February 2019, we entered an agreement to acquire a portfolio of eight industrial properties located in the Indianapolis and Cincinnati market areas, that are leased to 10 tenants with an aggregate of approximately 4,202,000 rentable square feet for a purchase price of $280,000, excluding acquisition related costs. We completed the acquisition of seven of the eight properties on February 14, 2019. The acquisition of the remaining property is expected to occur by April 15, 2019.

Also in February 2019, we entered an agreement to acquire a portfolio of 18 industrial properties located in 12 states that are leased to 13 tenants with an aggregate of approximately 8,694,000 rentable square feet for a purchase price of $625,300, excluding acquisition related costs and including the assumption of $57,000 of mortgage debt. The acquisition of these properties is expected to occur by April 15, 2019.

During the year ended December 31, 2018, we committed $2,613 for expenditures related to tenant improvements and leasing costs for approximately 2,630,000 square feet of leases executed during the period. Committed but unspent tenant related obligations based on existing leases as of December 31, 2018 were $472.

2017 Acquisitions:

On January 13, 2017, we acquired a land parcel adjacent to one of our properties located in McAlester, OK for $281, including $55 of acquisition related costs. As of December 31, 2018, we completed the development of a 35,000 square foot expansion for the tenant which is located on this adjacent parcel.

Future Minimum Lease Payments:

The future minimum lease payments scheduled to be received by us during the current terms of our leases as of December 31, 2018 are as follows:

	Minimum
	Lease
Year	Payment
2019	$	140,363
2020	139,440
2021	137,814
2022	132,124
2023	113,443
Thereafter	994,544
	$	1,657,728

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Indebtedness

12 Months Ended

Dec. 31, 2018

Debt Disclosure [Abstract]

Indebtedness

Indebtedness

As of December 31, 2018 and 2017, our outstanding indebtedness consisted of the following:

	December 31,
	2018		2017
Revolving credit facility, due in 2021(1)	$	413,000	$	750,000
Mortgage note payable, 3.99%, due in 2020 (2)	48,750		48,750
Unamortized debt premiums	445		677
Carrying value	$	462,195	$	799,427

(1) We repaid certain amounts outstanding under our revolving credit facility on January 17, 2018 with part of the $444,309 of net proceeds from our IPO. Upon completion of our IPO, the maturity date of our revolving credit facility was extended to December 29, 2021 and we have the option to extend the maturity date for two, six month periods through December 29, 2022.

(2) We assumed this mortgage note in connection with our acquisition of a property. The stated interest rate for this mortgage debt is the contractually stated rate; we recorded the assumed mortgage note at estimated fair value on the date of acquisition. We amortize the fair value premium to interest expense over the respective term of the mortgage note to reduce interest expense to the estimated market interest rate as of the date of acquisition.

On December 29, 2017, we obtained a $750,000 secured revolving credit facility which initially had a maturity date of March 29, 2018. Upon the completion of our IPO, our secured revolving credit facility became a $750,000 unsecured revolving credit facility and the maturity date was extended to December 29, 2021. Following our IPO, borrowings under our revolving credit facility are available for our general business purposes, including acquisitions. We may borrow, repay and reborrow funds under our revolving credit facility until maturity, and no principal repayment is due until maturity. Interest on borrowings under our revolving credit facility is calculated at floating rates based on LIBOR plus a premium that varies based on our leverage ratio. We have the option to extend the maturity date of our revolving credit facility for two, six month periods, subject to payment of extension fees and satisfaction of other conditions. We are also required to pay a commitment fee on the unused portion of our revolving credit facility until and if such time as we make a ratings election, and thereafter we will be required to pay a facility fee in lieu of such commitment fee based on the maximum amount of our revolving credit facility. The agreement governing our revolving credit facility, or our credit agreement, also includes a feature under which the maximum borrowing availability under our revolving credit facility may be increased to up to $1,500,000 in certain circumstances. As of December 31, 2018, interest payable on the amount outstanding under our revolving credit facility was LIBOR plus 130 basis points. As of December 31, 2018 and 2017, the interest rate payable on borrowings under our revolving credit facility was 3.81% and 2.89%, respectively. The weighted average interest rate for borrowings under our revolving credit facility was 3.33% for the year ended December 31, 2018. As of December 31, 2018 and February 19, 2019, we had $413,000 and $60,000, respectively, outstanding under our revolving credit facility and $337,000 and $690,000, respectively, available to borrow under our revolving credit facility.

Our credit agreement provides for acceleration of payment of all amounts due thereunder upon the occurrence and continuation of certain events of default, such as, a change of control of us, which includes RMR LLC ceasing to act as our business manager and property manager. Our credit agreement also contains a number of covenants, including covenants that restrict our ability to incur debts or to make distributions in certain circumstances, and generally requires us to maintain certain financial ratios. We believe we were in compliance with the terms and conditions of the covenants under our credit agreement at December 31, 2018.

As of December 31, 2018, the principal amount outstanding under our mortgage note was $48,750. This mortgage note was secured by one of our properties with a net book value of $64,901. This mortgage note is non-recourse, subject to certain limited exceptions, and does not contain any material financial covenants.

On January 29, 2019, we obtained a $650,000 mortgage loan secured by 186 of our properties (178 land parcels and eight buildings) containing approximately 9.6 million square feet with a net book value of $492,620, located on the island of Oahu, Hawaii. The non-amortizing loan matures on February 7, 2029 and requires monthly interest payments at a fixed rate of 4.31% per annum. We used the proceeds from this loan to repay outstanding borrowings under our $750,000 unsecured revolving credit facility and to fund acquisitions.

The required principal payments due during the next five years and thereafter under all our outstanding debt as of December 31, 2018 are as follows:

	Principal
Year	Payment
2019	$	—
2020	48,750
2021	413,000
2022	—
2023	—
Thereafter	—
	$	461,750	(1)

(1) Total debt outstanding as of December 31, 2018, including unamortized debt premiums, was $462,195.

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Fair Value of Assets and Liabilities

12 Months Ended

Dec. 31, 2018

Fair Value Disclosures [Abstract]

Fair Value of Assets and Liabilities

Fair Value of Assets and Liabilities

Our financial instruments include cash and cash equivalents, rents receivable, our revolving credit facility, mortgage note payable, accounts payable, rents collected in advance and amounts due from or to related persons. At December 31, 2018 and 2017, the fair value of our financial instruments approximated their carrying values in our consolidated financial statements, due to the short term nature of floating interest rates, except as follows:

	At December 31, 2018				At December 31, 2017
	Carrying		Estimated		Carrying		Estimated
	Value (1)		Fair Value		Value (1)		Fair Value
Mortgage note payable	$	49,195	$	48,642	$	49,427	$	48,919

(1) Includes unamortized premiums of $445 and $677 as of December 31, 2018 and 2017, respectively.

We estimate the fair value of our mortgage note payable using a discounted cash flow analysis and currently prevailing market rates as of the measurement date (Level 3 inputs). Because Level 3 inputs are unobservable, our estimated fair value may differ materially from the actual fair value.

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Shareholders' Equity

12 Months Ended

Dec. 31, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Shareholders' Equity

Shareholders’ Equity

Common Share Awards:

We have common shares available for issuance under the terms of our 2018 Equity Compensation Plan, or the 2018 Plan. During the year ended December 31, 2018, we awarded to our officers and other employees of RMR LLC annual share awards of 54,400 of our common shares, valued at $1,269, in aggregate. We also granted each of our then Trustees 1,000 of our common shares with an aggregate value of $104 ($21 per Trustee) as compensation for the period from our IPO to May 2018 and granted each of our then Trustees 3,000 common shares with an aggregate value of $314 ($63 per Trustee) as part of their annual compensation. We granted an additional 3,000 common shares in December 2018, with an aggregate value of $61 to one of our Managing Trustees, who was elected as a Managing Trustee in December 2018. The values of the share grants were based upon the closing price of our common shares trading on Nasdaq on the dates of grants. The common shares granted to our Trustees vested immediately. The common shares granted to our officers and certain other employees of RMR LLC vest in five equal annual installments beginning on the date of grant. We include the value of granted shares in general and administrative expenses ratably over the vesting period.

A summary of shares granted, vested and forfeited under the terms of the 2018 Plan for the year ended December 31, 2018 is as follows:

			Weighted
			Average
	Number		Grant Date
	of Shares		Fair Value
2018 Activity:
Granted	77,400		$	22.60
Vested	(33,880	)	$	21.64
Forfeited	(240	)	$	23.33
Unvested shares at December 31, 2018	43,280		$	23.33

The 43,280 unvested shares as of December 31, 2018 are scheduled to vest as follows: 15,320 shares in 2019, 9,320 shares in 2020, 9,320 shares in 2021 and 9,320 in 2022. As of December 31, 2018, the estimated future compensation expense for the unvested shares was approximately $1,010. The weighted average period over which the compensation expense will be recorded is approximately 28 months. During the year ended December 31, 2018, we recorded $927 of compensation expense related to the 2018 Plan.

At December 31, 2018, 3,925,209 common shares remain available for issuance under the 2018 Plan.

2018 Common Share Purchases:

On September 24, 2018, we purchased an aggregate of 2,369 of our common shares, valued at $22.08 per share, the closing price of our common shares on Nasdaq on that day, from certain of our officers and certain other employees of RMR LLC in satisfaction of tax withholding and payment obligations in connection with awards of our common shares.

Distributions:

During the year ended December 31, 2018, we paid distributions on our common shares as follows:

Declaration	Record	Paid	Distributions		Total
Date	Date	Date	Per Share		Distributions
4/19/2018	4/30/2018	5/14/2018	$	0.27	$	17,551
7/19/2018	7/30/2018	8/13/2018	0.33		21,457
10/18/2018	10/29/2018	11/12/2018	0.33		21,474
			$	0.93	$	60,482

Distributions per share paid or payable by us to our common shareholders for the year ended December 31, 2018, was $0.93. The characterization of our distributions for 2018 was 100% ordinary income.

On January 18, 2019, we declared a regular quarterly distribution of $0.33 per common share, or approximately $21,500, to shareholders of record on January 28, 2019. We expect to pay this distribution on or about February 21, 2019.

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Related Person Transactions

12 Months Ended

Dec. 31, 2018

Related Party Transactions [Abstract]

Related Person Transactions

Related Person Transactions

We have relationships and historical and continuing transactions with RMR LLC, RMR Inc., AIC and others related to them, including other companies to which RMR LLC or its subsidiaries provide management services and some of which have trustees, directors or officers who are also our Trustees or officers. RMR LLC is a majority owned subsidiary of RMR Inc. One of our Managing Trustees, Adam Portnoy, as the sole trustee of ABP Trust, is the controlling shareholder of RMR Inc. and is a managing director and the president and chief executive officer of RMR Inc. and an officer and employee of RMR LLC. Barry M. Portnoy was our other Managing Trustee and a managing director and an officer of RMR Inc. and an officer and employee of RMR LLC until his death on February 25, 2018. John Murray, who succeeded John C. Popeo as our other Managing Trustee and President and Chief Executive Officer effective December 1, 2018, and each of our other officers is also an officer and employee of RMR LLC. Our Independent Trustees also serve as independent trustees or independent directors of other public companies to which RMR LLC or its subsidiaries provide management services. Adam Portnoy serves, and, until his death, Barry M. Portnoy served, as a managing director or managing trustee of these public companies, including SIR (prior to its merger into OPI’s subsidiary in December 2018). Other officers of RMR LLC serve as managing trustees or managing directors of certain of these companies. In addition, officers of RMR LLC and RMR Inc. serve as our officers and officers of other companies to which RMR LLC or its subsidiaries provide management services, including SIR prior to its merger into OPI’s subsidiary.

Our Manager, RMR LLC. We have two agreements with RMR LLC to provide management services to us: (i) a business management agreement, which relates to our business generally, and (ii) a property management agreement, which relates to our property level operations. See Note 9 for further information regarding our management agreements with RMR LLC.

Share Awards to RMR LLC Employees. As described in Note 6, we award shares to our officers and other employees of RMR LLC annually. Generally, one fifth of these awards vest on the grant date and one fifth vests on each of the next four anniversaries of the grant dates. In certain instances, we may accelerate the vesting of an award, such as in connection with the award holder’s retirement as an officer of us or an officer or employee of RMR LLC. These awards to RMR LLC employees are in addition to the share awards granted to our current and former Managing Trustees, as Trustee compensation, and the fees we paid to RMR LLC. See Note 6 for information regarding our share awards and activity as well as certain share purchases we made in connection with share award recipients satisfying tax withholding obligation on the vesting of share awards.

SIR. Until January 17, 2018, when we completed our IPO, we were a wholly owned subsidiary of SIR. SIR was our largest shareholder until December 27, 2018, when SIR distributed to its shareholders of record as of the close of business on December 20, 2018, all 45,000,000 of our common shares that SIR then owned. Effective December 31, 2018, SIR merged with and into a wholly owned subsidiary of OPI. Adam Portnoy, one of our Managing Trustees, was also a managing trustee of SIR prior to its merger with OPI’s subsidiary. John C. Popeo, before he resigned on November 30, 2018, was our other Managing Trustee and President and Chief Executive Officer, and he also served as the chief financial officer and treasurer of SIR prior to its merger with OPI’s subsidiary. RMR LLC provided management services to SIR until its merger into OPI’s subsidiary, and continues to provide management services to OPI and it provides management services to us. As a result of the merger, OPI succeeded to all of SIR’s rights and obligations, including with respect to SIR’s agreements with us.

IPO. In connection with our IPO, we and SIR entered a transaction agreement, or the Transaction Agreement, to govern our relationship with SIR. OPI is the successor to SIR under the Transaction Agreement. Pursuant to the Transaction Agreement:

• our current assets and current liabilities were settled between SIR (for the periods ending on and before the closing of our IPO) and us (for periods ending after the closing of our IPO);

• SIR agreed to indemnify us with respect to any of its liabilities, and we agreed to indemnify SIR with respect to any of our liabilities, after giving effect to the settlement between us and SIR of our current assets and current liabilities; and

• we and SIR agreed to cooperate to enforce the ownership limitations in our and SIR’s respective declaration of trust as may be appropriate to qualify for and maintain qualification for taxation as a REIT under the IRC and otherwise to ensure each receives the economics of its assets and liabilities and to file future tax returns, including appropriate allocations of taxable income, expenses and other tax attributes.

On January 17, 2018, we and SIR also entered a registration rights agreement, which granted SIR demand and piggyback registration rights, subject to certain limitations, with respect to our common shares then owned by SIR. This registration rights agreement expired on December 27, 2018 due to SIR no longer beneficially owning any of our common shares following SIR’s pro rata distribution of our common shares that it then held to its shareholders on such date.

AIC.  On December 28, 2018, we and SIR entered a stock purchase agreement, or the AIC Stock Purchase Agreement, pursuant to which we purchased all of SIR’s shares of common stock of AIC, an Indiana insurance company, effective December 31, 2018 for a purchase price of $8,632. As a result of this purchase, we, ABP Trust and five other companies to which RMR LLC provides management services currently own AIC in equal amounts and are parties to a shareholders agreement regarding AIC. All our Trustees (other than John Murray) and all the independent trustees and independent directors of the other AIC shareholders currently serve on the board of directors of AIC. RMR LLC provides management and administrative services to AIC pursuant to a management and administrative services agreement with AIC. Pursuant to this agreement, AIC pays to RMR LLC a service fee equal to 3.0% of the total annual net earned premiums payable under then active policies issued or underwritten by AIC or by a vendor or an agent of AIC on its behalf or in furtherance of AIC’s business.

We and the other AIC shareholders participate in a combined property insurance program arranged and insured or reinsured in part by AIC. Historically, we participated in this program through SIR, as SIR’s subsidiary, and SIR allocated to us the portion of the premiums for this insurance program, including taxes and fees, covering our Initial Properties, which allocations were $266, $320 and $351 for the policy years ending June 30, 2019, 2018 and 2017, respectively, which amount for the policy year ending June 30, 2019 may be adjusted from time to time as we acquire or dispose of properties included in this insurance program. We paid or reimbursed SIR approximately $266 in respect of this insurance program for the policy year ending June 30, 2019.

As of December 31, 2018, our investment in AIC had a carrying value of $8,632. This amount is included in other assets in our consolidated balance sheets. There was no income recognized related to our investment in AIC for the year ended December 31, 2018.

Directors’ and Officers’ Liability Insurance. We, RMR Inc., RMR LLC and certain other companies to which RMR LLC or its subsidiaries provide management services participate in a combined directors’ and officers’ liability insurance policy. The current combined policy expires in September 2020. Prior to SIR’s distribution of our common shares to its shareholders, as a majority owned subsidiary of SIR, we were provided coverage under this policy and SIR allocated a portion of its cost of the policy to us. The cost of this insurance SIR allocated to us was $90, $116 and $93 for the years ended December 31, 2018, 2017 and 2016, respectively, and is included in general and administrative expenses in our consolidated statements of comprehensive income.

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Certain Arrangements, Allocations and Operations Prior to our IPO

12 Months Ended

Dec. 31, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Certain Arrangements, Allocations and Operations Prior to our IPO

Certain Arrangements, Allocations and Operations Prior to our IPO

In connection with our IPO, on September 29, 2017, SIR contributed to us 266 properties with a total of approximately 28,540,000 rentable square feet, including 16,834,000 rentable square feet of primarily industrial lands in Hawaii and approximately 11,706,000 rentable square feet of industrial and logistics properties in 24 other states. In connection with our formation and this contribution from SIR, we issued to SIR 45,000,000 of our common shares and the SIR Note, and we assumed three mortgage notes totaling $63,069, as of September 30, 2017, that were secured by three of our Initial Properties. In December 2017, we obtained a $750,000 secured revolving credit facility, and we used the proceeds of an initial borrowing under this credit facility to pay the SIR Note in full. Also in December 2017, SIR prepaid on our behalf two of the mortgage notes totaling approximately $14,319 that had encumbered two of our Initial Properties. In connection with our IPO, we reimbursed SIR for approximately $7,271 of costs that SIR incurred in connection with our formation and preparation for our IPO. In addition, SIR collected rents from certain of our tenants for the period subsequent to our IPO, of which SIR owed to us$865as of December 31, 2018, which amount is included in due from related persons in our consolidated balance sheet as of December 31, 2018. OPI (as successor by merger to SIR) paid this amount due to us in January 2019.

We do not have any employees. As a wholly owned subsidiary of SIR, until the completion of our IPO, we received services from RMR LLC under SIR’s management agreements with RMR LLC. In connection with our IPO, we entered two agreements with RMR LLC to provide management services to us that were substantially similar to the terms of the then management agreements between SIR and RMR LLC. See Note 9 for further information regarding our management agreements with RMR LLC.

For periods prior to the completion of our IPO on January 17, 2018, base management fees payable by SIR under SIR’s business management agreement with RMR LLC were calculated based on the historical costs of our Initial Properties and incentive management fees payable by SIR and allocated to us were based on the percentage of the base management fees allocated to us compared to the total base management fees paid by SIR. Base management fees paid by SIR allocated to us by SIR for the period from January 1, 2018 to January 16, 2018 and the years ended December 31, 2017 and 2016 were $308, $6,823 and $6,789, respectively. The incentive management fee allocated to us by SIR for the year ended December 31, 2017 and paid to RMR LLC in January 2018 was $7,660, and no incentive management fees were allocated to us by SIR for the year ended December 31, 2016. General and administrative expenses incurred by SIR, which include costs of the internal audit function provided by RMR LLC to the companies it or its subsidiaries manage, were allocated to us by SIR for periods prior to our IPO based on the percentage of the base management fees allocated to us compared to the total base management fees paid by SIR. The amounts allocated to us by SIR for internal audit costs for the period from January 1 to January 16, 2018 and the years ended December 31, 2017 and 2016 were $4, $84 and $74, respectively.

RMR LLC was paid, by SIR, property management fees equal to 3.0% of gross collected rents and construction supervision fees equal to 5.0% of construction costs. The aggregate property management and construction supervision fees allocated to us by SIR for the period from January 1 to January 16, 2018 and the years ended December 31, 2017 and 2016 were $230, $4,244 and $4,182, respectively. These amounts were calculated based upon gross collected rents and construction supervision services provided at or for our Initial Properties. These amounts are included in other operating expenses or have been capitalized, as appropriate, in our consolidated financial statements.

Under SIR’s management agreements with RMR LLC, SIR was generally responsible for all of our operating expenses, including certain expenses incurred by RMR LLC on our behalf. Our property level operating costs are generally incorporated into rents charged to our tenants, including certain payroll and related costs incurred by RMR LLC. The total of these property management related reimbursements paid to RMR LLC for costs incurred by RMR LLC related to our Initial Properties for the period from January 1 to January 16, 2018 and the years ended December 31, 2017 and 2016 were $120, $2,512 and $2,448, respectively. These amounts are included in other operating expenses in our consolidated financial statements for these periods.

We also paid or reimbursed SIR for our allocated portion of certain insurance policies. The total of these insurance related reimbursements paid to SIR for costs for the period from January 1 to January 16, 2018 was $4. See Note 7 for further information.

See Notes 7 and 9 for further information regarding our relationships, agreements and transactions with RMR LLC and SIR.

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Business and Property Management Agreements

12 Months Ended

Dec. 31, 2018

Related Party Transactions [Abstract]

Business and Property Management Agreements with RMR LLC

Business and Property Management Agreements with RMR LLC

We have no employees. The personnel and various services we require to operate our business are provided to us by RMR LLC. Upon completion of our IPO on January 17, 2018, we entered two agreements with RMR LLC to provide management services to us: (i) a business management agreement, which relates to our business generally, and (ii) a property management agreement, which relates to our property level operations. See Notes 7 and 8 for further information regarding our relationship, agreements and transactions with RMR LLC prior to our IPO.

Management Agreements with RMR LLC. Our management agreements with RMR LLC provide for an annual base management fee, an annual incentive management fee and property management and construction supervision fees, payable in cash, among other terms:

• Base Management Fee. The annual base management fee payable to RMR LLC by us for each applicable period is equal to the lesser of:

◦ the sum of (i) 0.5% of the average aggregate historical cost of the real estate assets acquired from a REIT to which RMR LLC provided business management or property management services, or the Transferred Assets, which includes our Initial Properties we acquired from SIR, plus (ii) 0.7% of the average aggregate historical cost of our real estate investments excluding the Transferred Assets up to $250,000, plus (iii) 0.5% of the average aggregate historical cost of our real estate investments excluding the Transferred Assets exceeding $250,000; and

◦ the sum of (i) 0.7% of the average closing price per share of our common shares on the stock exchange on which such shares are principally traded during such period, multiplied by the average number of our common shares outstanding during such period, plus the daily weighted average of the aggregate liquidation preference of each class of our preferred shares outstanding during such period, plus the daily weighted average of the aggregate principal amount of our consolidated indebtedness during such period, or, together, our Average Market Capitalization, up to $250,000, plus (ii) 0.5% of our Average Market Capitalization exceeding $250,000.

The average aggregate historical cost of our real estate investments includes our consolidated assets invested, directly or indirectly, in equity interests in or loans secured by real estate and personal property owned in connection with such real estate (including acquisition related costs and costs which may be allocated to intangibles or are unallocated), all before reserves for depreciation, amortization, impairment charges or bad debts or other similar non-cash reserves.

• Incentive Management Fee. The incentive management fee which may be earned by RMR LLC for an annual period is calculated as follows:

◦ An amount, subject to a cap, based on the value of our common shares outstanding, equal to 12.0% of the product of:

– if the relevant measurement period ends on or before December 31, 2020, $1,560,000 (our unadjusted equity market capitalization as calculated at our IPO) or, if the relevant measurement period ends thereafter, our equity market capitalization on the last trading day of the calendar year immediately prior to the relevant measurement period, and

– the amount (expressed as a percentage) by which the total return per share, as defined in the business management agreement and further described below, of our common shareholders (i.e., share price appreciation plus dividends) exceeds the total shareholder return of the applicable market index, or the benchmark return per share, for the relevant measurement period. Effective as of January 1, 2019 we amended our business management agreement with RMR LLC so that the SNL U.S. Industrial REIT Index will be used for periods beginning on and after January 1, 2019, with the SNL U.S. REIT Equity Index used for periods ending on or prior to December 31, 2018.

For purposes of the total return per share of our common shareholders, share price appreciation for a measurement period is determined by subtracting (i) if the measurement period ends on or before December 31, 2020, $24.00 per common share (our unadjusted initial share price, as defined under the business management agreement, based on our IPO price of our common shares) or, if the measurement period ends after December 31, 2020, the closing price of our common shares on Nasdaq on the last trading day of the year immediately before the first year of the applicable measurement period from (ii) the average closing price of our common shares on the 10 consecutive trading days having the highest average closing prices during the final 30 trading days in the last year of the measurement period.

◦ The calculation of the incentive management fee (including the determinations of our equity market capitalization, initial share price and the total return per share of our common shareholders) is subject to adjustments if additional common shares are issued during the measurement period.

◦ No incentive management fee is payable by us unless our total return per share during the measurement period is positive.

◦ The measurement periods are generally three year periods ending with the year for which the incentive management fee is being calculated, with shorter periods applicable in the case of the calculation of the incentive fee for 2020 (the period beginning on January 12, 2018, the first day our common shares began trading, and ending on December 31, 2020), 2019 (the period beginning on January 12, 2018 and ending on December 31, 2019) and 2018 (the period beginning on January 12, 2018 and ending on December 31, 2018).

◦ If our total return per share exceeds 12.0% per year in any measurement period, the benchmark return per share is adjusted to be the lesser of the total shareholder return of the applicable market index for such measurement period and 12.0% per year, or the adjusted benchmark return per share. In instances where the adjusted benchmark return per share applies, the incentive management fee will be reduced if our total return per share is between 200 basis points and 500 basis points below the applicable market index, by a low return factor, as defined in the business management agreement, and there will be no incentive management fee paid if, in these instances, our total return per share is more than 500 basis points below the applicable market index.

◦ The incentive management fee is subject to a cap. The cap is equal to the value of the number of our common shares which would, after issuance, represent 1.5% of the number of our common shares then outstanding multiplied by the average closing price of our common shares during the 10 consecutive trading days having the highest average closing prices during the final 30 trading days of the relevant measurement period.

◦ Incentive management fees we paid to RMR LLC for any period may be subject to “clawback” if our financial statements for that period are restated due to material non-compliance with any financial reporting requirements under the securities laws as a result of the bad faith, fraud, willful misconduct or gross negligence of RMR LLC and the amount of the incentive management fee we paid was greater than the amount we would have paid based on the restated financial statements.

Pursuant to our business management agreement with RMR LLC, we recognized net business management fees of $7,269 for the period from January 17, 2018 through December 31, 2018. The net business management fees we recognized are included in general and administrative expenses in our consolidated statements of comprehensive income for the year ended December 31, 2018. We did not incur an incentive management fee pursuant to our business management agreement for the period ended December 31, 2018.

• Property Management and Construction Supervision Fees. The property management fees payable to RMR LLC by us for each applicable period are equal to 3.0% of gross collected rents and the construction supervision fees payable to RMR LLC by us for each applicable period are equal to 5.0% of construction costs.

Pursuant to our property management agreement with RMR LLC, we recognized aggregate property management and construction supervision fees of $4,680 for the period from January 17, 2018 through December 31, 2018. These amounts are included in operating expenses or capitalized, as appropriate, in our consolidated statements of comprehensive income.

• Expense Reimbursement. We are generally responsible for all of our operating expenses, including certain expenses incurred or arranged by RMR LLC on our behalf. We are generally not responsible for payment of RMR LLC’s employment, office or administrative expenses incurred to provide management services to us, except for the employment and related expenses of RMR LLC’s employees assigned to work exclusively or partly at our properties, our share of the wages, benefits and other related costs of RMR LLC’s centralized accounting personnel, our share of RMR LLC’s costs for providing our internal audit function and as otherwise agreed. Our property level operating expenses are generally incorporated into rents charged to our tenants, including certain payroll and related costs incurred by RMR LLC. These amounts are included in operating expenses in our consolidated statements of comprehensive income for these periods. The amount we recognized as expense for payroll and related costs we reimbursed to RMR LLC was $2,672 for the period from January 17, 2018 through December 31, 2018. Our Audit Committee appoints our Director of Internal Audit and our Compensation Committee approves the costs of our internal audit function. The amount recognized as expense for internal audit costs was $236 for the year ended December 31, 2018. This amount is included in general and administrative expenses in our consolidated statements of comprehensive income for this period.

• Term. Our management agreements with RMR LLC have terms that end on December 31, 2038, and automatically extend on December 31st of each year for an additional year, so that the terms of our management agreements thereafter end on the 20th anniversary of the date of the extension.

• Termination Rights. We have the right to terminate one or both of our management agreements with RMR LLC: (i) at any time on 60 days’ written notice for convenience, (ii) immediately on written notice for cause, as defined therein, (iii) on written notice given within 60 days after the end of an applicable calendar year for a performance reason, as defined therein, and (iv) by written notice during the 12 months following a change of control of RMR LLC, as defined therein. RMR LLC has the right to terminate the management agreements for good reason, as defined therein.

• Termination Fee. If we terminate one or both of our management agreements with RMR LLC for convenience, or if RMR LLC terminates one or both of our management agreements for good reason, we have agreed to pay RMR LLC a termination fee in an amount equal to the sum of the present values of the monthly future fees, as defined therein, for the terminated management agreement(s) for the term that was remaining prior to such termination, which, depending on the time of termination would be between 19 and 20 years. If we terminate one or both of our management agreements with RMR LLC for a performance reason, we have agreed to pay RMR LLC the termination fee calculated as described above, but assuming a 10 year term was remaining prior to the termination. We are not required to pay any termination fee if we terminate our management agreements with RMR LLC for cause or as a result of a change of control of RMR LLC.

• Transition Services. RMR LLC has agreed to provide certain transition services to us for 120 days following an applicable termination by us or notice of termination by RMR LLC, including cooperating with us and using commercially reasonable efforts to facilitate the orderly transfer of the management and real estate investment services provided under our business management agreement and to facilitate the orderly transfer of the management of the managed properties under our property management agreement, as applicable.

• Vendors. Pursuant to our management agreements with RMR LLC, RMR LLC may from time to time negotiate on our behalf with certain third party vendors and suppliers for the procurement of goods and services to us. As part of this arrangement, we may enter agreements with RMR LLC and other companies to which RMR LLC or its subsidiaries provide management services for the purpose of obtaining more favorable terms from such vendors and suppliers.

• Investment Opportunities. Under our business management agreement with RMR LLC, we acknowledge that RMR LLC may engage in other activities or businesses and act as the manager to any other person or entity (including other REITs) even though such person or entity has investment policies and objectives similar to ours and we are not entitled to preferential treatment in receiving information, recommendations and other services from RMR LLC.

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Selected Quarterly Financial Data (Unaudited)

12 Months Ended

Dec. 31, 2018

Selected Quarterly Financial Information [Abstract]

Selected Quarterly Financial Data (Unaudited)

Selected Quarterly Financial Data (Unaudited)

The following is a summary of our unaudited quarterly results of operations for 2018 and 2017:

	2018
	First		Second		Third		Fourth
	Quarter		Quarter		Quarter		Quarter
Total revenues	$	40,605	$	39,420	$	40,431	$	42,074
Net income	$	19,232	$	18,726	$	18,142	$	18,288
Net income per common share—basic and diluted	$	0.31	$	0.29	$	0.28	$	0.28

	2017
	First		Second		Third		Fourth
	Quarter		Quarter		Quarter		Quarter
Total revenues	$	39,440	$	38,605	$	39,066	$	39,395
Net income	$	20,356	$	21,575	$	22,903	$	15,269
Net income per common share—basic and diluted	$	0.45	$	0.48	$	0.51	$	0.34

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SCHEDULE II - Valuation and Qualifying Accounts

12 Months Ended

Dec. 31, 2018

Valuation and Qualifying Accounts [Abstract]

SCHEDULE II - Valuation and Qualifying Accounts

SCHEDULE II

VALUATION AND QUALIFYING ACCOUNTS

December 31, 2018

(dollars in thousands)

	Balance at		Charged to					Balance
	Beginning		Costs and					at End
Description	of Period		Expenses		Deductions			of Period
Year ended December 31, 2016:
Allowance for doubtful accounts	$	413	$	257	$	(87	)	$	583
Year ended December 31, 2017:
Allowance for doubtful accounts	$	583	$	704	$	(46	)	$	1,241
Year ended December 31, 2018:
Allowance for doubtful accounts	$	1,241	$	1,198	$	(982	)	$	1,457

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SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

12 Months Ended

Dec. 31, 2018

SEC Schedule III, Real Estate and Accumulated Depreciation Disclosure [Abstract]

SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION

SCHEDULE III

REAL ESTATE AND ACCUMULATED DEPRECIATION

December 31, 2018

(dollars in thousands)

							Initial Cost to				Costs		Gross Amount Carried at
							Company				Capitalized		Close of Period(4)										Original
									Buildings and		Subsequent to				Buildings and				Accumulated			Date	Construction
	Property	Location	State	Property Type	Encumbrances(1)		Land		Equipment		Acquisition		Land		Equipment		Total(2)		Depreciation(3)			Acquired	Date
1	4501 Industrial Drive	Fort Smith	AR	Mainland Industrial	$	—	$	900	$	3,485	$	—	$	900	$	3,485	$	4,385	$	(341	)	1/29/2015	2013
2	955 Aeroplaza Drive	Colorado Springs	CO	Mainland Industrial	—		800		7,412		—		800		7,412		8,212		(726		)	1/29/2015	2012
3/4	13400 East 39th Avenue and 3800 Wheeling Street	Denver	CO	Mainland Industrial	—		3,100		12,955		46		3,100		13,001		16,101		(1,298		)	1/29/2015	1973
5	150 Greenhorn Drive	Pueblo	CO	Mainland Industrial	—		200		4,177		—		200		4,177		4,377		(409		)	1/29/2015	2013
6	2 Tower Drive	Wallingford	CT	Mainland Industrial	—		1,471		2,165		7		1,471		2,172		3,643		(668		)	10/24/2006	1978
7	235 Great Pond Drive	Windsor	CT	Mainland Industrial	—		2,400		9,469		—		2,400		9,469		11,869		(1,519		)	7/20/2012	2004
8	10450 Doral Boulevard	Doral	FL	Mainland Industrial	—		15,225		28,101		—		15,225		28,101		43,326		(468		)	6/27/2018	1996
9	2100 NW 82nd Avenue	Miami	FL	Mainland Industrial	—		144		1,297		454		144		1,751		1,895		(749		)	3/19/1998	1987
10	1000 Mapunapuna Street	Honolulu	HI	Hawaii Land and Easement	—		2,252		—		—		2,252		—		2,252		—			12/5/2003	—
11	1001 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—		15,155		3,312		92		15,155		3,404		18,559		(1,269		)	12/5/2003	—
12	1024 Kikowaena Place	Honolulu	HI	Hawaii Land and Easement	—		1,818		—		—		1,818		—		1,818		—			12/5/2003	—
13	1024 Mapunapuna Street	Honolulu	HI	Hawaii Land and Easement	—		1,385		—		—		1,385		—		1,385		—			12/5/2003	—
14	1027 Kikowaena Place	Honolulu	HI	Hawaii Land and Easement	—		5,444		—		—		5,444		—		5,444		—			12/5/2003	—
15	1030 Mapunapuna Street	Honolulu	HI	Hawaii Land and Easement	—		5,655		—		—		5,655		—		5,655		—			12/5/2003	—
16	1038 Kikowaena Place	Honolulu	HI	Hawaii Land and Easement	—		2,576		—		—		2,576		—		2,576		—			12/5/2003	—
17	1045 Mapunapuna Street	Honolulu	HI	Hawaii Land and Easement	—		819		—		—		819		—		819		—			12/5/2003	—
18	1050 Kikowaena Place	Honolulu	HI	Hawaii Land and Easement	—		1,404		873		—		1,404		873		2,277		(328		)	12/5/2003	—
19	1052 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—		1,703		—		240		1,703		240		1,943		(79		)	12/5/2003	—
20	1055 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—		1,216		—		—		1,216		—		1,216		—			12/5/2003	—
21	106 Puuhale Road	Honolulu	HI	Hawaii Building	—		1,113		—		229		1,113		229		1,342		(54		)	12/5/2003	1966
22	1062 Kikowaena Place	Honolulu	HI	Hawaii Land and Easement	—		1,049		598		—		1,049		598		1,647		(225		)	12/5/2003	—
23	1122 Mapunapuna Street	Honolulu	HI	Hawaii Land and Easement	—		5,781		—		—		5,781		—		5,781		—			12/5/2003	—
24	113 Puuhale Road	Honolulu	HI	Hawaii Land and Easement	—		3,729		—		—		3,729		—		3,729		—			12/5/2003	—
25	1150 Kikowaena Place	Honolulu	HI	Hawaii Land and Easement	—		2,445		—		—		2,445		—		2,445		—			12/5/2003	—
26	120 Mokauea Street	Honolulu	HI	Hawaii Building	—		1,953		—		655		1,953		655		2,608		(105		)	12/5/2003	1970
27	120 Sand Island Access Road	Honolulu	HI	Hawaii Building	—		1,130		11,307		1,298		1,130		12,605		13,735		(4,321		)	11/23/2004	2004
28	120B Mokauea Street	Honolulu	HI	Hawaii Building	—		1,953		—		—		1,953		—		1,953		—			12/5/2003	1970
29	125 Puuhale Road	Honolulu	HI	Hawaii Land and Easement	—		1,630		—		—		1,630		—		1,630		—			12/5/2003	—
30	125B Puuhale Road	Honolulu	HI	Hawaii Land and Easement	—		2,815		—		—		2,815		—		2,815		—			12/5/2003	—

						Initial Cost to		Costs	Gross Amount Carried at
						Company		Capitalized	Close of Period(4)						Original
							Buildings and	Subsequent to		Buildings and		Accumulated		Date	Construction
	Property	Location	State	Property Type	Encumbrances(1)	Land	Equipment	Acquisition	Land	Equipment	Total(2)	Depreciation(3)		Acquired	Date
31	1330 Pali Highway	Honolulu	HI	Hawaii Land and Easement	—	1,423	—	—	1,423	—	1,423	—		12/5/2003	—
32	1360 Pali Highway	Honolulu	HI	Hawaii Land and Easement	—	9,170	—	161	9,170	161	9,331	(103	)	12/5/2003	—
33	140 Puuhale Road	Honolulu	HI	Hawaii Land and Easement	—	1,100	—	—	1,100	—	1,100	—		12/5/2003	—
34	142 Mokauea Street	Honolulu	HI	Hawaii Building	—	2,182	—	1,455	2,182	1,455	3,637	(359	)	12/5/2003	1972
35	148 Mokauea Street	Honolulu	HI	Hawaii Land and Easement	—	3,476	—	—	3,476	—	3,476	—		12/5/2003	—
36	150 Puuhale Road	Honolulu	HI	Hawaii Land and Easement	—	4,887	—	—	4,887	—	4,887	—		12/5/2003	—
37	151 Puuhale Road	Honolulu	HI	Hawaii Land and Easement	—	1,956	—	—	1,956	—	1,956	—		12/5/2003	—
38	158 Sand Island Access Road	Honolulu	HI	Hawaii Land and Easement	—	2,488	—	—	2,488	—	2,488	—		12/5/2003	—
39	165 Sand Island Access Road	Honolulu	HI	Hawaii Land and Easement	—	758	—	—	758	—	758	—		12/5/2003	—
40	179 Sand Island Access Road	Honolulu	HI	Hawaii Land and Easement	—	2,480	—	—	2,480	—	2,480	—		12/5/2003	—
41	180 Sand Island Access Road	Honolulu	HI	Hawaii Land and Easement	—	1,655	—	—	1,655	—	1,655	—		12/5/2003	—
42	1926 Auiki Street	Honolulu	HI	Hawaii Building	—	2,874	—	1,562	2,874	1,562	4,436	(466	)	12/5/2003	1959
43	1931 Kahai Street	Honolulu	HI	Hawaii Land and Easement	—	3,779	—	—	3,779	—	3,779	—		12/5/2003	—
44	197 Sand Island Access Road	Honolulu	HI	Hawaii Land and Easement	—	1,238	—	—	1,238	—	1,238	—		12/5/2003	—
45	2001 Kahai Street	Honolulu	HI	Hawaii Land and Easement	—	1,091	—	—	1,091	—	1,091	—		12/5/2003	—
46	2019 Kahai Street	Honolulu	HI	Hawaii Land and Easement	—	1,377	—	—	1,377	—	1,377	—		12/5/2003	—
47	2020 Auiki Street	Honolulu	HI	Hawaii Land and Easement	—	2,385	—	—	2,385	—	2,385	—		12/5/2003	—
48	204 Sand Island Access Road	Honolulu	HI	Hawaii Land and Easement	—	1,689	—	—	1,689	—	1,689	—		12/5/2003	—
49	207 Puuhale Road	Honolulu	HI	Hawaii Land and Easement	—	2,024	—	—	2,024	—	2,024	—		12/5/2003	—
50	2103 Kaliawa Street	Honolulu	HI	Hawaii Land and Easement	—	3,212	—	—	3,212	—	3,212	—		12/5/2003	—
51	2106 Kaliawa Street	Honolulu	HI	Hawaii Land and Easement	—	1,568	—	169	1,568	169	1,737	(66	)	12/5/2003	—
52	2110 Auiki Street	Honolulu	HI	Hawaii Land and Easement	—	837	—	—	837	—	837	—		12/5/2003	—
53	212 Mohonua Place	Honolulu	HI	Hawaii Land and Easement	—	1,067	—	—	1,067	—	1,067	—		12/5/2003	—
54	2122 Kaliawa Street	Honolulu	HI	Hawaii Land and Easement	—	1,365	—	—	1,365	—	1,365	—		12/5/2003	—
55	2127 Auiki Street	Honolulu	HI	Hawaii Land and Easement	—	2,906	—	97	2,906	97	3,003	(25	)	12/5/2003	—
56	2135 Auiki Street	Honolulu	HI	Hawaii Land and Easement	—	825	—	—	825	—	825	—		12/5/2003	—
57	2139 Kaliawa Street	Honolulu	HI	Hawaii Land and Easement	—	885	—	—	885	—	885	—		12/5/2003	—
58	214 Sand Island Access Road	Honolulu	HI	Hawaii Building	—	1,864	—	485	1,864	485	2,349	(43	)	12/5/2003	1981
59	2140 Kaliawa Street	Honolulu	HI	Hawaii Land and Easement	—	931	—	—	931	—	931	—		12/5/2003	—

						Initial Cost to		Costs	Gross Amount Carried at
						Company		Capitalized	Close of Period(4)						Original
							Buildings and	Subsequent to		Buildings and		Accumulated		Date	Construction
	Property	Location	State	Property Type	Encumbrances(1)	Land	Equipment	Acquisition	Land	Equipment	Total(2)	Depreciation(3)		Acquired	Date
60	2144 Auiki Street	Honolulu	HI	Hawaii Building	—	2,640	—	7,088	2,640	7,088	9,728	(2,068	)	12/5/2003	1953
61	215 Puuhale Road	Honolulu	HI	Hawaii Land and Easement	—	2,117	—	—	2,117	—	2,117	—		12/5/2003	—
62	218 Mohonua Place	Honolulu	HI	Hawaii Land and Easement	—	1,741	—	—	1,741	—	1,741	—		12/5/2003	—
63	220 Puuhale Road	Honolulu	HI	Hawaii Land and Easement	—	2,619	—	—	2,619	—	2,619	—		12/5/2003	—
64	2250 Pahounui Drive	Honolulu	HI	Hawaii Land and Easement	—	3,862	—	—	3,862	—	3,862	—		12/5/2003	—
65	2264 Pahounui Drive	Honolulu	HI	Hawaii Land and Easement	—	1,632	—	—	1,632	—	1,632	—		12/5/2003	—
66	2276 Pahounui Drive	Honolulu	HI	Hawaii Land and Easement	—	1,619	—	—	1,619	—	1,619	—		12/5/2003	—
67	228 Mohonua Place	Honolulu	HI	Hawaii Land and Easement	—	1,865	—	—	1,865	—	1,865	—		12/5/2003	—
68	2308 Pahounui Drive	Honolulu	HI	Hawaii Land and Easement	—	3,314	—	—	3,314	—	3,314	—		12/5/2003	—
69	231 Sand Island Access Road	Honolulu	HI	Hawaii Land and Easement	—	752	—	—	752	—	752	—		12/5/2003	—
70	231B Sand Island Access Road	Honolulu	HI	Hawaii Land and Easement	—	1,539	—	—	1,539	—	1,539	—		12/5/2003	—
71	2344 Pahounui Drive	Honolulu	HI	Hawaii Land and Easement	—	6,709	—	—	6,709	—	6,709	—		12/5/2003	—
72	238 Sand Island Access Road	Honolulu	HI	Hawaii Land and Easement	—	2,273	—	—	2,273	—	2,273	—		12/5/2003	—
73	2635 Waiwai Loop A	Honolulu	HI	Hawaii Land and Easement	—	934	350	683	934	1,033	1,967	(132	)	12/5/2003	—
74	2635 Waiwai Loop B	Honolulu	HI	Hawaii Land and Easement	—	1,177	105	683	1,177	788	1,965	(40	)	12/5/2003	—
75	2760 Kam Highway	Honolulu	HI	Hawaii Land and Easement	—	703	—	143	703	143	846	—		12/5/2003	—
76	2804 Kilihau Street	Honolulu	HI	Hawaii Land and Easement	—	1,775	2	—	1,775	2	1,777	(1	)	12/5/2003	—
77	2806 Kaihikapu Street	Honolulu	HI	Hawaii Land and Easement	—	1,801	—	—	1,801	—	1,801	—		12/5/2003	—
78	2808 Kam Highway	Honolulu	HI	Hawaii Land and Easement	—	310	—	—	310	—	310	—		12/5/2003	—
79	2809 Kaihikapu Street	Honolulu	HI	Hawaii Land and Easement	—	1,837	—	—	1,837	—	1,837	—		12/5/2003	—
80	2810 Paa Street	Honolulu	HI	Hawaii Land and Easement	—	3,340	—	—	3,340	—	3,340	—		12/5/2003	—
81	2810 Pukoloa Street	Honolulu	HI	Hawaii Land and Easement	—	27,699	—	4	27,699	4	27,703	(4	)	12/5/2003	—
82	2812 Awaawaloa Street	Honolulu	HI	Hawaii Land and Easement	—	1,801	2	1	1,801	3	1,804	(2	)	12/5/2003	—
83	2814 Kilihau Street	Honolulu	HI	Hawaii Land and Easement	—	1,925	—	—	1,925	—	1,925	—		12/5/2003	—
84	2815 Kaihikapu Street	Honolulu	HI	Hawaii Land and Easement	—	1,818	—	5	1,818	5	1,823	(1	)	12/5/2003	—
85	2815 Kilihau Street	Honolulu	HI	Hawaii Land and Easement	—	287	—	—	287	—	287	—		12/5/2003	—
86	2816 Awaawaloa Street	Honolulu	HI	Hawaii Land and Easement	—	1,009	27	—	1,009	27	1,036	(10	)	12/5/2003	—
87	2819 Mokumoa Street - A	Honolulu	HI	Hawaii Land and Easement	—	1,821	—	—	1,821	—	1,821	—		12/5/2003	—
88	2819 Mokumoa Street - B	Honolulu	HI	Hawaii Land and Easement	—	1,816	—	—	1,816	—	1,816	—		12/5/2003	—
89	2819 Pukoloa Street	Honolulu	HI	Hawaii Land and Easement	—	2,090	—	33	2,090	33	2,123	(8	)	12/5/2003	—
90	2821 Kilihau Street	Honolulu	HI	Hawaii Land and Easement	—	287	—	—	287	—	287	—		12/5/2003	—

						Initial Cost to		Costs	Gross Amount Carried at
						Company		Capitalized	Close of Period(4)						Original
							Buildings and	Subsequent to		Buildings and		Accumulated		Date	Construction
	Property	Location	State	Property Type	Encumbrances(1)	Land	Equipment	Acquisition	Land	Equipment	Total(2)	Depreciation(3)		Acquired	Date
91	2826 Kaihikapu Street	Honolulu	HI	Hawaii Land and Easement	—	3,921	—	—	3,921	—	3,921	—		12/5/2003	—
92	2827 Kaihikapu Street	Honolulu	HI	Hawaii Land and Easement	—	1,801	—	—	1,801	—	1,801	—		12/5/2003	—
93	2828 Paa Street	Honolulu	HI	Hawaii Land and Easement	—	12,448	—	—	12,448	—	12,448	—		12/5/2003	—
94	2829 Awaawaloa Street	Honolulu	HI	Hawaii Land and Easement	—	1,720	2	—	1,720	2	1,722	(2	)	12/5/2003	—
95	2829 Kilihau Street	Honolulu	HI	Hawaii Land and Easement	—	287	—	—	287	—	287	—		12/5/2003	—
96	2829 Pukoloa Street	Honolulu	HI	Hawaii Land and Easement	—	2,088	—	—	2,088	—	2,088	—		12/5/2003	—
97	2830 Mokumoa Street	Honolulu	HI	Hawaii Land and Easement	—	2,146	—	—	2,146	—	2,146	—		12/5/2003	—
98	2831 Awaawaloa Street	Honolulu	HI	Hawaii Land and Easement	—	860	—	—	860	—	860	—		12/5/2003	—
99	2831 Kaihikapu Street	Honolulu	HI	Hawaii Land and Easement	—	1,272	529	56	1,272	585	1,857	(219	)	12/5/2003	—
100	2833 Kilihau Street	Honolulu	HI	Hawaii Land and Easement	—	601	—	—	601	—	601	—		12/5/2003	—
101	2833 Paa Street	Honolulu	HI	Hawaii Land and Easement	—	1,701	—	—	1,701	—	1,701	—		12/5/2003	—
102	2833 Paa Street #2	Honolulu	HI	Hawaii Land and Easement	—	1,675	—	—	1,675	—	1,675	—		12/5/2003	—
103	2836 Awaawaloa Street	Honolulu	HI	Hawaii Land and Easement	—	1,353	—	—	1,353	—	1,353	—		12/5/2003	—
104	2838 Kilihau Street	Honolulu	HI	Hawaii Land and Easement	—	4,262	—	—	4,262	—	4,262	—		12/5/2003	—
105	2839 Kilihau Street	Honolulu	HI	Hawaii Land and Easement	—	627	—	—	627	—	627	—		12/5/2003	—
106	2839 Mokumoa Street	Honolulu	HI	Hawaii Land and Easement	—	1,942	—	—	1,942	—	1,942	—		12/5/2003	—
107	2840 Mokumoa Street	Honolulu	HI	Hawaii Land and Easement	—	2,149	—	—	2,149	—	2,149	—		12/5/2003	—
108	2841 Pukoloa Street	Honolulu	HI	Hawaii Land and Easement	—	2,088	—	—	2,088	—	2,088	—		12/5/2003	—
109	2844 Kaihikapu Street	Honolulu	HI	Hawaii Land and Easement	—	1,960	14	—	1,960	14	1,974	(11	)	12/5/2003	—
110	2846-A Awaawaloa Street	Honolulu	HI	Hawaii Land and Easement	—	2,181	954	—	2,181	954	3,135	(359	)	12/5/2003	—
111	2847 Awaawaloa Street	Honolulu	HI	Hawaii Land and Easement	—	582	303	—	582	303	885	(114	)	12/5/2003	—
112	2849 Kaihikapu Street	Honolulu	HI	Hawaii Land and Easement	—	860	—	—	860	—	860	—		12/5/2003	—
113	2850 Awaawaloa Street	Honolulu	HI	Hawaii Land and Easement	—	286	173	—	286	173	459	(65	)	12/5/2003	—
114	2850 Mokumoa Street	Honolulu	HI	Hawaii Land and Easement	—	2,143	—	—	2,143	—	2,143	—		12/5/2003	—
115	2850 Paa Street	Honolulu	HI	Hawaii Land and Easement	—	22,827	—	—	22,827	—	22,827	—		12/5/2003	—
116	2855 Kaihikapu Street	Honolulu	HI	Hawaii Land and Easement	—	1,807	—	—	1,807	—	1,807	—		12/5/2003	—
117	2855 Pukoloa Street	Honolulu	HI	Hawaii Land and Easement	—	1,934	—	—	1,934	—	1,934	—		12/5/2003	—
118	2857 Awaawaloa Street	Honolulu	HI	Hawaii Land and Easement	—	983	—	—	983	—	983	—		12/5/2003	—
119	2858 Kaihikapu Street	Honolulu	HI	Hawaii Land and Easement	—	1,801	—	—	1,801	—	1,801	—		12/5/2003	—
120	2861 Mokumoa Street	Honolulu	HI	Hawaii Land and Easement	—	3,867	—	—	3,867	—	3,867	—		12/5/2003	—
121	2864 Awaawaloa Street	Honolulu	HI	Hawaii Land and Easement	—	1,836	—	6	1,836	6	1,842	(4	)	12/5/2003	—

						Initial Cost to		Costs	Gross Amount Carried at
						Company		Capitalized	Close of Period(4)						Original
							Buildings and	Subsequent to		Buildings and		Accumulated		Date	Construction
	Property	Location	State	Property Type	Encumbrances(1)	Land	Equipment	Acquisition	Land	Equipment	Total(2)	Depreciation(3)		Acquired	Date
122	2864 Mokumoa Street	Honolulu	HI	Hawaii Land and Easement	—	2,092	—	—	2,092	—	2,092	—		12/5/2003	—
123	2865 Pukoloa Street	Honolulu	HI	Hawaii Land and Easement	—	1,934	—	—	1,934	—	1,934	—		12/5/2003	—
124	2868 Kaihikapu Street	Honolulu	HI	Hawaii Land and Easement	—	1,801	—	—	1,801	—	1,801	—		12/5/2003	—
125	2869 Mokumoa Street	Honolulu	HI	Hawaii Land and Easement	—	1,794	—	—	1,794	—	1,794	—		12/5/2003	—
126	2875 Paa Street	Honolulu	HI	Hawaii Land and Easement	—	1,330	—	—	1,330	—	1,330	—		12/5/2003	—
127	2879 Mokumoa Street	Honolulu	HI	Hawaii Land and Easement	—	1,789	—	—	1,789	—	1,789	—		12/5/2003	—
128	2879 Paa Street	Honolulu	HI	Hawaii Land and Easement	—	1,691	—	44	1,691	44	1,735	(11	)	12/5/2003	—
129	2886 Paa Street	Honolulu	HI	Hawaii Land and Easement	—	2,205	—	—	2,205	—	2,205	—		12/5/2003	—
130	2889 Mokumoa Street	Honolulu	HI	Hawaii Land and Easement	—	1,783	—	—	1,783	—	1,783	—		12/5/2003	—
131	2906 Kaihikapu Street	Honolulu	HI	Hawaii Land and Easement	—	1,814	2	—	1,814	2	1,816	(1	)	12/5/2003	—
132	2908 Kaihikapu Street	Honolulu	HI	Hawaii Land and Easement	—	1,798	12	—	1,798	12	1,810	(1	)	12/5/2003	—
133	2915 Kaihikapu Street	Honolulu	HI	Hawaii Land and Easement	—	2,579	—	—	2,579	—	2,579	—		12/5/2003	—
134	2927 Mokumoa Street	Honolulu	HI	Hawaii Land and Easement	—	1,778	—	—	1,778	—	1,778	—		12/5/2003	—
135	2928 Kaihikapu Street - A	Honolulu	HI	Hawaii Land and Easement	—	1,801	—	—	1,801	—	1,801	—		12/5/2003	—
136	2928 Kaihikapu Street - B	Honolulu	HI	Hawaii Land and Easement	—	1,948	—	—	1,948	—	1,948	—		12/5/2003	—
137	2960 Mokumoa Street	Honolulu	HI	Hawaii Land and Easement	—	1,977	—	—	1,977	—	1,977	—		12/5/2003	—
138	2965 Mokumoa Street	Honolulu	HI	Hawaii Land and Easement	—	2,140	—	—	2,140	—	2,140	—		12/5/2003	—
139	2969 Mapunapuna Street	Honolulu	HI	Hawaii Land and Easement	—	4,038	15	—	4,038	15	4,053	(8	)	12/5/2003	—
140	2970 Mokumoa Street	Honolulu	HI	Hawaii Land and Easement	—	1,722	—	—	1,722	—	1,722	—		12/5/2003	—
141	33 S. Vineyard Boulevard	Honolulu	HI	Hawaii Land and Easement	—	844	—	—	844	—	844	—		12/5/2003	—
142	525 N. King Street	Honolulu	HI	Hawaii Land and Easement	—	1,342	—	—	1,342	—	1,342	—		12/5/2003	—
143	609 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—	616	—	8	616	8	624	(6	)	12/5/2003	—
144	619 Mapunapuna Street	Honolulu	HI	Hawaii Land and Easement	—	1,401	2	12	1,401	14	1,415	(1	)	12/5/2003	—
145	645 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—	882	—	—	882	—	882	—		12/5/2003	—
146	659 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—	860	20	—	860	20	880	(16	)	12/5/2003	—
147	659 Puuloa Road	Honolulu	HI	Hawaii Land and Easement	—	1,807	—	—	1,807	—	1,807	—		12/5/2003	—
148	660 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—	1,783	3	1	1,783	4	1,787	(3	)	12/5/2003	—
149	667 Puuloa Road	Honolulu	HI	Hawaii Land and Easement	—	860	2	—	860	2	862	(2	)	12/5/2003	—
150	669 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—	1,801	14	62	1,801	76	1,877	(18	)	12/5/2003	—
151	673 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—	1,801	—	—	1,801	—	1,801	—		12/5/2003	—
152	675 Mapunapuna Street	Honolulu	HI	Hawaii Land and Easement	—	1,081	—	—	1,081	—	1,081	—		12/5/2003	—

						Initial Cost to		Costs	Gross Amount Carried at
						Company		Capitalized	Close of Period(4)						Original
							Buildings and	Subsequent to		Buildings and		Accumulated		Date	Construction
	Property	Location	State	Property Type	Encumbrances(1)	Land	Equipment	Acquisition	Land	Equipment	Total(2)	Depreciation(3)		Acquired	Date
153	679 Puuloa Road	Honolulu	HI	Hawaii Land and Easement	—	1,807	3	—	1,807	3	1,810	(2	)	12/5/2003	—
154	685 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—	1,801	—	—	1,801	—	1,801	—		12/5/2003	—
155	673 Mapunapuna Street	Honolulu	HI	Hawaii Land and Easement	—	1,801	20	—	1,801	20	1,821	(16	)	12/5/2003	—
156	692 Mapunapuna Street	Honolulu	HI	Hawaii Land and Easement	—	1,798	—	—	1,798	—	1,798	—		12/5/2003	—
157	697 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—	994	811	—	994	811	1,805	(307	)	12/5/2003	—
158	702 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—	1,783	4	—	1,783	4	1,787	(3	)	12/5/2003	—
159	704 Mapunapuna Street	Honolulu	HI	Hawaii Land and Easement	—	2,390	685	—	2,390	685	3,075	(258	)	12/5/2003	—
160	709 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—	1,801	—	—	1,801	—	1,801	—		12/5/2003	—
161	719 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—	1,960	—	—	1,960	—	1,960	—		12/5/2003	—
162	729 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—	1,801	—	—	1,801	—	1,801	—		12/5/2003	—
163	733 Mapunapuna Street	Honolulu	HI	Hawaii Land and Easement	—	3,403	—	—	3,403	—	3,403	—		12/5/2003	—
164	739 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—	1,801	—	—	1,801	—	1,801	—		12/5/2003	—
165	759 Puuloa Road	Honolulu	HI	Hawaii Land and Easement	—	1,766	3	—	1,766	3	1,769	(3	)	12/5/2003	—
166	761 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—	3,757	1	1	3,757	2	3,759	(1	)	12/5/2003	—
167	766 Mapunapuna Street	Honolulu	HI	Hawaii Land and Easement	—	1,801	—	—	1,801	—	1,801	—		12/5/2003	—
168	770 Mapunapuna Street	Honolulu	HI	Hawaii Land and Easement	—	1,801	—	—	1,801	—	1,801	—		12/5/2003	—
169	789 Mapunapuna Street	Honolulu	HI	Hawaii Land and Easement	—	2,608	3	—	2,608	3	2,611	(2	)	12/5/2003	—
170	80 Sand Island Access Road	Honolulu	HI	Hawaii Land and Easement	—	7,972	—	—	7,972	—	7,972	—		12/5/2003	—
171	803 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—	3,804	—	—	3,804	—	3,804	—		12/5/2003	—
172	808 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—	3,279	—	—	3,279	—	3,279	—		12/5/2003	—
173	812 Mapunapuna Street	Honolulu	HI	Hawaii Land and Easement	—	1,960	25	628	2,613	—	2,613	—		12/5/2003	—
174	819 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—	4,821	583	30	4,821	613	5,434	(230	)	12/5/2003	—
175	822 Mapunapuna Street	Honolulu	HI	Hawaii Land and Easement	—	1,795	15	—	1,795	15	1,810	(12	)	12/5/2003	—
176	830 Mapunapuna Street	Honolulu	HI	Hawaii Land and Easement	—	1,801	25	—	1,801	25	1,826	(20	)	12/5/2003	—
177	841 Mapunapuna Street	Honolulu	HI	Hawaii Land and Easement	—	3,265	—	—	3,265	—	3,265	—		12/5/2003	—
178	842 Mapunapuna Street	Honolulu	HI	Hawaii Land and Easement	—	1,795	14	—	1,795	14	1,809	(11	)	12/5/2003	—
179	846 Ala Lilikoi Boulevard B	Honolulu	HI	Hawaii Land and Easement	—	234	—	—	234	—	234	—		12/5/2003	—
180	848 Ala Lilikoi Boulevard A	Honolulu	HI	Hawaii Land and Easement	—	9,426	—	—	9,426	—	9,426	—		12/5/2003	—
181	850 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—	2,682	2	—	2,682	2	2,684	(2	)	12/5/2003	—
182	852 Mapunapuna Street	Honolulu	HI	Hawaii Land and Easement	—	1,801	—	—	1,801	—	1,801	—		12/5/2003	—
183	855 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—	1,834	—	—	1,834	—	1,834	—		12/5/2003	—

						Initial Cost to		Costs	Gross Amount Carried at
						Company		Capitalized	Close of Period(4)						Original
							Buildings and	Subsequent to		Buildings and		Accumulated		Date	Construction
	Property	Location	State	Property Type	Encumbrances(1)	Land	Equipment	Acquisition	Land	Equipment	Total(2)	Depreciation(3)		Acquired	Date
184	865 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—	1,846	—	—	1,846	—	1,846	—		12/5/2003	—
185	889 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—	5,888	315	—	5,888	315	6,203	(48	)	11/21/2012	—
186	905 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—	1,148	—	—	1,148	—	1,148	—		12/5/2003	—
187	918 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—	3,820	—	—	3,820	—	3,820	—		12/5/2003	—
188	930 Mapunapuna Street	Honolulu	HI	Hawaii Land and Easement	—	3,654	—	—	3,654	—	3,654	—		12/5/2003	—
189	944 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—	1,219	—	—	1,219	—	1,219	—		12/5/2003	—
190	949 Mapunapuna Street	Honolulu	HI	Hawaii Land and Easement	—	11,568	—	—	11,568	—	11,568	—		12/5/2003	—
191	950 Mapunapuna Street	Honolulu	HI	Hawaii Land and Easement	—	1,724	—	—	1,724	—	1,724	—		12/5/2003	—
192	960 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—	614	—	—	614	—	614	—		12/5/2003	—
193	960 Mapunapuna Street	Honolulu	HI	Hawaii Land and Easement	—	1,933	—	—	1,933	—	1,933	—		12/5/2003	—
194	970 Ahua Street	Honolulu	HI	Hawaii Land and Easement	—	817	—	—	817	—	817	—		12/5/2003	—
195	91-027 Kaomi Loop	Kapolei	HI	Hawaii Land and Easement	—	2,667	—	—	2,667	—	2,667	—		6/15/2005	—
196	91-064 Kaomi Loop	Kapolei	HI	Hawaii Land and Easement	—	1,826	—	—	1,826	—	1,826	—		6/15/2005	—
197	91-080 Hanua	Kapolei	HI	Hawaii Land and Easement	—	2,187	—	—	2,187	—	2,187	—		6/15/2005	—
198	91-083 Hanua	Kapolei	HI	Hawaii Land and Easement	—	716	—	—	716	—	716	—		6/15/2005	—
199	91-086 Kaomi Loop	Kapolei	HI	Hawaii Land and Easement	—	13,884	—	—	13,884	—	13,884	—		6/15/2005	—
200	91-087 Hanua	Kapolei	HI	Hawaii Land and Easement	—	381	—	—	381	—	381	—		6/15/2005	—
201	91-091 Hanua	Kapolei	HI	Hawaii Land and Easement	—	552	—	—	552	—	552	—		6/15/2005	—
202	91-102 Kaomi Loop	Kapolei	HI	Hawaii Land and Easement	—	1,599	—	—	1,599	—	1,599	—		6/15/2005	—
203	91-110 Kaomi Loop	Kapolei	HI	Hawaii Land and Easement	—	1,293	—	—	1,293	—	1,293	—		6/15/2005	—
204	91-119 Olai	Kapolei	HI	Hawaii Land and Easement	—	1,981	—	—	1,981	—	1,981	—		6/15/2005	—
205	91-141 Kalaeloa	Kapolei	HI	Hawaii Land and Easement	—	11,624	—	—	11,624	—	11,624	—		6/15/2005	—
206	91-150 Kaomi Loop	Kapolei	HI	Hawaii Land and Easement	—	3,159	—	—	3,159	—	3,159	—		6/15/2005	—
207	91-171 Olai	Kapolei	HI	Hawaii Land and Easement	—	218	—	47	218	47	265	(17	)	6/15/2005	—
208	91-174 Olai	Kapolei	HI	Hawaii Land and Easement	—	962	—	47	962	47	1,009	(16	)	6/15/2005	—
209	91-175 Olai	Kapolei	HI	Hawaii Land and Easement	—	1,243	—	43	1,243	43	1,286	(17	)	6/15/2005	—
210	91-185 Kalaeloa	Kapolei	HI	Hawaii Land and Easement	—	1,761	—	—	1,761	—	1,761	—		6/15/2005	—
211	91-202 Kalaeloa	Kapolei	HI	Hawaii Building	—	1,722	—	326	1,722	326	2,048	(45	)	6/15/2005	1964
212	91-210 Kauhi	Kapolei	HI	Hawaii Land and Easement	—	567	—	—	567	—	567	—		6/15/2005	—
213	91-210 Olai	Kapolei	HI	Hawaii Land and Easement	—	706	—	—	706	—	706	—		6/15/2005	—
214	91-218 Olai	Kapolei	HI	Hawaii Land and Easement	—	1,622	—	61	1,622	61	1,683	(17	)	6/15/2005	—

						Initial Cost to		Costs	Gross Amount Carried at
						Company		Capitalized	Close of Period(4)						Original
							Buildings and	Subsequent to		Buildings and		Accumulated		Date	Construction
	Property	Location	State	Property Type	Encumbrances(1)	Land	Equipment	Acquisition	Land	Equipment	Total(2)	Depreciation(3)		Acquired	Date
215	91-220 Kalaeloa	Kapolei	HI	Hawaii Building	—	242	1,457	172	242	1,629	1,871	(537	)	6/15/2005	1991
216	91-222 Olai	Kapolei	HI	Hawaii Land and Easement	—	2,035	—	—	2,035	—	2,035	—		6/15/2005	—
217	91-238 Kauhi	Kapolei	HI	Hawaii Building	—	1,390	—	9,209	1,390	9,209	10,599	(2,606	)	6/15/2005	1981
218	91-241 Kalaeloa	Kapolei	HI	Hawaii Building	—	426	3,983	838	426	4,821	5,247	(1,576	)	6/15/2005	1990
219	91-250 Komohana	Kapolei	HI	Hawaii Land and Easement	—	1,506	—	—	1,506	—	1,506	—		6/15/2005	—
220	91-252 Kauhi	Kapolei	HI	Hawaii Land and Easement	—	536	—	—	536	—	536	—		6/15/2005	—
221	91-255 Hanua	Kapolei	HI	Hawaii Land and Easement	—	1,230	—	16	1,230	16	1,246	(1	)	6/15/2005	—
222	91-259 Olai	Kapolei	HI	Hawaii Land and Easement	—	2,944	—	—	2,944	—	2,944	—		6/15/2005	—
223	91-265 Hanua	Kapolei	HI	Hawaii Land and Easement	—	1,569	—	—	1,569	—	1,569	—		6/15/2005	—
224	91-300 Hanua	Kapolei	HI	Hawaii Land and Easement	—	1,381	—	—	1,381	—	1,381	—		6/15/2005	—
225	91-329 Kauhi	Kapolei	HI	Hawaii Building	—	294	2,297	2,433	294	4,730	5,024	(1,342	)	6/15/2005	1980
226	91-349 Kauhi	Kapolei	HI	Hawaii Land and Easement	—	649	—	—	649	—	649	—		6/15/2005	—
227	91-399 Kauhi	Kapolei	HI	Hawaii Land and Easement	—	27,405	—	—	27,405	—	27,405	—		6/15/2005	—
228	91-400 Komohana	Kapolei	HI	Hawaii Land and Easement	—	1,494	—	—	1,494	—	1,494	—		6/15/2005	—
229	91-410 Komohana	Kapolei	HI	Hawaii Land and Easement	—	418	—	12	418	12	430	(1	)	6/15/2005	—
230	91-416 Komohana	Kapolei	HI	Hawaii Land and Easement	—	713	—	11	713	11	724	(1	)	6/15/2005	—
231	AES HI Easement	Kapolei	HI	Hawaii Land and Easement	—	1,250	—	—	1,250	—	1,250	—		6/15/2005	—
232	Other Easements & Lots	Kapolei	HI	Hawaii Land and Easement	—	358	—	1,395	358	1,395	1,753	(353	)	6/15/2005	—
233	Tesaro 967 Easement	Kapolei	HI	Hawaii Land and Easement	—	6,593	—	—	6,593	—	6,593	—		6/15/2005	—
234	Texaco Easement	Kapolei	HI	Hawaii Land and Easement	—	2,653	—	—	2,653	—	2,653	—		6/15/2005	—
235	94-240 Pupuole Street	Waipahu	HI	Hawaii Land and Easement	—	717	—	—	717	—	717	—		12/5/2003	—
236	5500 SE Delaware Avenue	Ankeny	IA	Mainland Industrial	—	2,200	16,994	1,007	2,707	17,494	20,201	(1,664	)	1/29/2015	2012
237	951 Trails Road	Eldridge	IA	Mainland Industrial	—	470	7,480	874	470	8,354	8,824	(2,340	)	4/2/2007	1994
238	2300 North 33rd Avenue East	Newton	IA	Mainland Industrial	—	500	13,236	395	500	13,631	14,131	(3,517	)	9/29/2008	2008
239	7121 South Fifth Avenue	Pocatello	ID	Mainland Industrial	—	400	4,201	145	400	4,346	4,746	(419	)	1/29/2015	2007
240	1230 West 171st Street	Harvey	IL	Mainland Industrial	—	800	1,673	—	800	1,673	2,473	(164	)	1/29/2015	2004
241	5156 American Road	Rockford	IL	Mainland Industrial	—	400	1,529	82	400	1,611	2,011	(151	)	1/29/2015	1996
242	17200 Manchac Park Lane	Baton Rouge	LA	Mainland Industrial	—	1,700	8,860	—	1,700	8,860	10,560	(868	)	1/29/2015	2014
243	209 South Bud Street	Lafayette	LA	Mainland Industrial	—	700	4,549	9	700	4,558	5,258	(446	)	1/29/2015	2010
244	4000 Principio Parkway	North East	MD	Mainland Industrial	—	4,200	71,518	650	4,200	72,168	76,368	(7,018	)	1/29/2015	2012
245	16101 Queens Court	Upper Marlboro	MD	Mainland Industrial	—	5,296	21,833	—	5,296	21,833	27,129	(137	)	9/28/2018	2016
246	3800 Midlink Drive	Kalamazoo	MI	Mainland Industrial	—	2,630	40,599	—	2,630	40,599	43,229	(3,975	)	1/29/2015	2014

							Initial Cost to				Costs		Gross Amount Carried at
							Company				Capitalized		Close of Period(4)										Original
									Buildings and		Subsequent to				Buildings and				Accumulated			Date	Construction
	Property	Location	State	Property Type	Encumbrances(1)		Land		Equipment		Acquisition		Land		Equipment		Total(2)		Depreciation(3)			Acquired	Date
247	2401 Cram Avenue SE	Bemidji	MN	Mainland Industrial	—		100		2,137		—		100		2,137		2,237		(209		)	1/29/2015	2013
248	10100 89th Avenue N	Maple Grove	MN	Mainland Industrial	—		3,469		21,287		—		3,469		21,287		24,756		(89		)	10/16/2018	2015
249	110 Stanbury Industrial Drive	Brookfield	MO	Mainland Industrial	—		200		1,859		—		200		1,859		2,059		(182		)	1/29/2015	2012
250	628 Patton Avenue	Asheville	NC	Mainland Industrial	—		500		1,514		—		500		1,514		2,014		(148		)	1/29/2015	1994
251	3900 NE 6th Street	Minot	ND	Mainland Industrial	—		700		3,223		—		700		3,223		3,923		(316		)	1/29/2015	2013
252	1415 West Commerce Way	Lincoln	NE	Mainland Industrial	—		2,200		8,518		—		2,200		8,518		10,718		(834		)	1/29/2015	1971
253	309 Dulty's Lane	Burlington	NJ	Mainland Industrial	—		1,600		51,400		—		1,600		51,400		53,000		(5,033		)	1/29/2015	2001
254	725 Darlington Avenue	Mahwah	NJ	Mainland Industrial	—		8,492		9,451		1,047		8,492		10,498		18,990		(1,179		)	4/9/2014	1999
255	2375 East Newlands Road	Fernley	NV	Mainland Industrial	—		1,100		17,314		286		1,100		17,600		18,700		(1,732		)	1/29/2015	2007
256	55 Commerce Avenue	Albany	NY	Mainland Industrial	—		1,000		10,105		179		1,000		10,284		11,284		(1,012		)	1/29/2015	2013
257	32150 Just Imagine Drive	Avon	OH	Mainland Industrial	—		2,200		23,280		—		2,200		23,280		25,480		(5,577		)	5/29/2009	1996
258	1415 Industrial Drive	Chillicothe	OH	Mainland Industrial	—		1,200		3,265		—		1,200		3,265		4,465		(320		)	1/29/2015	2012
259	5300 Centerpoint Parkway	Groveport	OH	Mainland Industrial	—		2,700		29,863		—		2,700		29,863		32,563		(2,924		)	1/29/2015	2014
260	200 Orange Point Drive	Lewis Center	OH	Mainland Industrial	—		1,300		8,613		162		1,300		8,775		10,075		(849		)	1/29/2015	2013
261	301 Commerce Drive	South Point	OH	Mainland Industrial	—		600		4,530		—		600		4,530		5,130		(444		)	1/29/2015	2013
262	2820 State Highway 31	McAlester	OK	Mainland Industrial	—		581		2,237		4,633		581		6,870		7,451		(365		)	1/29/2015	2012
263	5 Logistics Drive	Carlisle	PA	Mainland Industrial	—		3,299		15,515		—		3,299		15,515		18,814		(97		)	9/20/2018	2016
264	996 Paragon Way	Rock Hill	SC	Mainland Industrial	—		2,600		35,920		—		2,600		35,920		38,520		(3,517		)	1/29/2015	2014
265	510 John Dodd Road	Spartanburg	SC	Mainland Industrial	—		3,300		57,998		42		3,300		58,040		61,340		(5,680		)	1/29/2015	2012
266	4836 Hickory Hill Road	Memphis	TN	Mainland Industrial	—		1,402		10,769		750		1,402		11,519		12,921		(1,129		)	12/23/2014	1984
267	2020 Joe B. Jackson Parkway	Murfreesboro	TN	Mainland Industrial	—		7,500		55,259		—		7,500		55,259		62,759		(5,411		)	1/29/2015	2012
268	1095 South 4800 West	Salt Lake City	UT	Mainland Industrial	—		1,500		6,913		—		1,500		6,913		8,413		(677		)	1/29/2015	2012
269	1901 Meadowville Technology Parkway	Chester	VA	Mainland Industrial	49,195		4,000		67,511		—		4,000		67,511		71,511		(6,610		)	1/29/2015	2012
270	181 Battaile Drive	Winchester	VA	Mainland Industrial	—		1,487		12,854		11		1,487		12,865		14,352		(4,086		)	4/20/2006	1987
					$	49,195	$	669,341	$	751,735	$	41,320	$	670,501	$	791,895	$	1,462,396	$	(93,291	)

(1) Represents mortgage debt and includes the unamortized balance of the fair value adjustment totaling $445.

(2) Excludes value of real estate intangibles.

(3) Depreciation on buildings and improvements is provided for periods ranging up to 40 years and on equipment up to seven years.

(4) The total aggregate cost for U.S. federal income tax purposes is approximately $1,523,930.

INDUSTRIAL LOGISTICS PROPERTIES TRUST

SCHEDULE III

REAL ESTATE AND ACCUMULATED DEPRECIATION (CONTINUED)

December 31, 2018

(dollars in thousands)

Analysis of the carrying amount of real estate properties and accumulated depreciation:

	Real Estate			Accumulated
	Properties			Depreciation
Balance at December 31, 2015	$	1,335,363		$	(39,707	)
Additions	1,659			(17,563		)
Disposals	(294		)	294
Balance at December 31, 2016	1,336,728			(56,976		)
Additions	6,974			(17,738		)
Disposals	(100		)	100
Balance at December 31, 2017	1,343,602			(74,614		)
Additions	118,898			(18,781		)
Disposals	(104		)	104
Balance at December 31, 2018	$	1,462,396		$	(93,291	)

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation. These consolidated financial statements include the accounts of us and our subsidiaries, all of which are 100% owned directly or indirectly by us. All intercompany transactions and balances with or among our consolidated subsidiaries have been eliminated.

The accounts of our Initial Properties are presented at SIR’s historical basis and are consolidated for prior periods presented as the transaction described in Note 1 has been accounted for as a reorganization of entities under common control in accordance with Financial Accounting Standards Board, or FASB, Accounting Standards Codification 805-50-30, Business Combinations. Substantially all of the rental income received from our tenants and SIR’s other tenants was deposited in and commingled with SIR’s general funds during the periods prior to January 17, 2018. Prior to January 17, 2018, general and administrative costs of SIR were primarily allocated to us based on the historical cost of our real estate investments as a percentage of SIR’s historical cost of all of its real estate investments. In accordance with applicable accounting guidance, we believe this method for allocating general and administrative expenses is reasonable. However, actual expenses may have been different from allocated expenses if we operated as a standalone company and those differences may be material.

Real Estate Properties

Real Estate Properties. We record properties at our cost and have presented our Initial Properties at their historical cost basis. Our real estate investments in lands are not depreciated. We calculate depreciation on other real estate investments on a straight line basis over estimated useful lives generally ranging from seven to 40 years.

We allocate the purchase prices of our properties to land, building and improvements based on determinations of the fair values of these assets assuming the properties are vacant. We determine the fair value of each property using methods similar to those used by independent appraisers. In some circumstances, we engage independent real estate appraisal firms to provide market information and evaluations which are relevant to our purchase price allocations and determinations of depreciable useful lives; however, we are ultimately responsible for the purchase price allocations and determinations of useful lives. We allocate a portion of the purchase price to above market and below market leases based on the present value (using an interest rate which reflects the risks associated with acquired in place leases at the time each property was acquired by us) of the difference, if any, between (i) the contractual amounts to be paid pursuant to the acquired in place leases and (ii) our estimates of fair market lease rates for the corresponding leases, measured over a period equal to the terms of the respective leases. The terms of below market leases that include bargain renewal options, if any, are further adjusted if we determine that renewal to be probable. We allocate a portion of the purchase price to acquired in place leases and tenant relationships based upon market estimates to lease up the property based on the leases in place at the time of purchase. In making these allocations, we consider factors such as estimated carrying costs during the expected lease up periods, including real estate taxes, insurance and other operating income and expenses and costs, such as leasing commissions, legal and other related expenses, to execute similar leases in current market conditions at the time a property was acquired by us. We allocate this aggregate value between acquired in place lease values and tenant relationships based on our evaluation of the specific characteristics of each tenant’s lease. However, we have not separated the value of tenant relationships from the value of acquired in place leases because such value and related amortization expense is immaterial to the accompanying consolidated financial statements. If the value of tenant relationships becomes material in the future, we may separately allocate those amounts and amortize the allocated amount over the estimated life of the relationships.

We amortize capitalized above market lease values (included in acquired real estate leases in our consolidated balance sheets) and below market lease values (presented as assumed real estate lease obligations in our consolidated balance sheets) as a reduction or increase, respectively, to rental income over the terms of the associated leases. Such amortization resulted in increases in rental income of $401, $390 and $403 during the years ended December 31, 2018, 2017 and 2016, respectively. We amortize the value of acquired in place leases (included in acquired real estate leases in our consolidated balance sheets), exclusive of the value of above market and below market acquired in place leases, or lease origination value, over the terms of the associated leases. Such amortization, which is included in depreciation and amortization expense, totaled $8,993, $8,824 and $8,823 during the years ended December 31, 2018, 2017 and 2016, respectively. If a lease is terminated prior to its stated expiration, we write off the unamortized amounts relating to that lease.

As of December 31, 2018 and 2017, our acquired real estate leases and assumed real estate lease obligations were as follows:

	December 31,
	2018			2017
Acquired real estate leases:
Capitalized above market lease values	$	28,723		$	30,104
Less: accumulated amortization	(16,726		)	(16,440		)
Capitalized above market lease values, net	11,997			13,664
Lease origination value	99,727			93,646
Less: accumulated amortization	(35,921		)	(28,207		)
Lease origination value, net	63,806			65,439
Acquired real estate leases, net	$	75,803		$	79,103
Assumed real estate lease obligations:
Capitalized below market lease values	$	34,313		$	34,786
Less: accumulated amortization	(15,997		)	(14,402		)
Assumed real estate lease obligations, net	$	18,316		$	20,384

As of December 31, 2018, the weighted average amortization periods for capitalized above market lease values, lease origination value and capitalized below market lease values were 11.7 years, 8.8 years, and 14.1 years, respectively.  Future amortization of net intangible acquired real estate lease assets and liabilities to be recognized over the current terms of the associated leases as of December 31, 2018 are estimated to be $7,805 in 2019, $7,797 in 2020, $7,725 in 2021, $7,538 in 2022, $7,279 in 2023 and $19,343 thereafter.

We recognize impairment losses on real estate investments when indicators of impairment are present and the estimated undiscounted cash flow from our real estate investments is less than the carrying amount of such real estate investments. Impairment indicators may include declining tenant occupancy, lack of progress releasing vacant space, tenant bankruptcies, low long term prospects for improvement in property performance, weak or declining tenant profitability, cash flow or liquidity, our decision to dispose of an asset before the end of its estimated useful life and legislative, market or industry changes that could permanently reduce the value of a property. We review our properties for impairment quarterly, or whenever events or changes in circumstances indicate that carrying amounts may not be recoverable. If indicators of impairment are present, we evaluate the carrying value of the related property by comparing it to the expected future undiscounted cash flows expected to be generated from that property. If the sum of these expected future undiscounted cash flows is less than the carrying value, we reduce the net carrying value of the property to its estimated fair value. The determination of undiscounted cash flow includes consideration of many factors including income to be earned from the investment, holding costs (exclusive of interest), estimated selling prices, and prevailing economic and market conditions. No impairments exist on any of our properties as of December 31, 2018 and 2017.

We believe some of our properties may contain asbestos. We believe any asbestos on our properties is contained in accordance with applicable laws and regulations and we have no current plans to remove it. If we removed the asbestos or renovated or demolished the affected properties, certain environmental regulations govern the manner in which the asbestos must be handled and removed, and we could incur substantial costs complying with such regulations. Due to the uncertainty of the timing and amount of costs we may incur, we cannot reasonably estimate such costs and we have not recognized a liability in our consolidated financial statements for these costs.

Certain of our industrial lands in Hawaii may require environmental remediation, especially if the use of those lands is changed; however, we do not have any present plans to change the use of those lands or to undertake this environmental cleanup. As of December 31, 2018 and 2017, accrued environmental remediation costs of $6,940 and $7,002, respectively, were included in accounts payable and other liabilities in our consolidated balance sheets. These accrued environmental remediation costs relate to maintenance of our properties for current uses, and, because of the indeterminable timing of the remediation, these amounts have not been discounted to present value. In general, we do not have any insurance designated to limit any losses that we may incur as a result of known or unknown environmental conditions which are not caused by an insured event, such as, for example, fire or flood, although some of our tenants may maintain such insurance that may benefit us. Although we do not believe that there are environmental conditions at any of our properties that will have a material adverse effect on us, we cannot be sure that such conditions are not present at our properties or that costs we incur to remediate contamination will not have a material adverse effect on our business or financial condition. Charges for environmental remediation costs, if any, are included in other operating expenses in our consolidated statements of comprehensive income.

Capitalization Policy. Costs directly related to the development of properties are capitalized. We capitalize development costs, including interest, real estate taxes, insurance, and other project costs, incurred during the period of development. Determinations of when a development project commences and capitalization begins, and when a development project is substantially complete and held available for occupancy and capitalization must cease, involve judgments. We begin the capitalization of costs during the pre-construction period, which we consider to begin when activities that are necessary to the development of the property commence. We consider a development project as substantially completed and held available for occupancy upon the completion of tenant improvements, but no later than one year from cessation of major construction activity.

Deferred Leasing Costs

Deferred Leasing Costs. Deferred leasing costs include capitalized brokerage, legal and other fees associated with the successful negotiation of leases, which are amortized to depreciation and amortization expense on a straight line basis over the terms of the respective leases.

Debt Issuance Costs

Debt Issuance Costs. Debt issuance costs include capitalized issuance costs related to borrowings, which are amortized to interest expense over the terms of the respective loans.

Other Assets

Other Assets. Other assets consist of our investment in Affiliates Insurance Company, or AIC, prepaid insurance and prepaid real estate taxes. As of December 31, 2017, other assets also included costs related to our formation and preparation for our IPO. We acquired shares of common stock of AIC from SIR on December 31, 2018 for $8,632. We own a 14.3% ownership interest in AIC. We account for our investment in AIC using the equity method of accounting. Significant influence is present through common representation on the boards of trustees or directors of us and AIC. One of our Managing Trustees, Adam D. Portnoy, as the sole trustee of ABP Trust, is the controlling shareholder of The RMR Group Inc., or RMR Inc. RMR Inc. is the managing member of our manager, The RMR Group LLC, or RMR LLC. Mr. Portnoy is also a managing director and president and chief executive officer of RMR Inc. and an officer and employee of RMR LLC. John G. Murray, our other Managing Trustee and our President and Chief Executive Officer, is also an officer and employee of RMR LLC. RMR LLC also provides management and administrative services to AIC, and most of our Trustees are directors of AIC. See Note 7 for further information regarding our investments in RMR Inc. and AIC.

Revenue Recognition

Revenue Recognition. Rental income from operating leases is recognized on a straight line basis over the lives of lease agreements. We defer the recognition of contingent rental income, such as percentage rents, until the specific targets that trigger the contingent rental income are achieved. Contingent rental income recognized for the years ended December 31, 2018, 2017 and 2016 totaled $941, $650 and $846, respectively. Tenant reimbursements and other income include property level operating expenses and capital expenditures reimbursed by our tenants as well as other incidental revenues. Certain tenants are obligated to pay directly their obligations under their leases for insurance, real estate taxes and certain other expenses. These costs, which have been assumed by the tenants under the terms of their respective leases, are not reflected in our consolidated financial statements. To the extent any tenant responsible for these costs under their respective lease defaults on its lease or if it is deemed probable that the tenant will fail to pay for such costs, we would record a liability for such obligation.

Allowance for Doubtful Accounts

Allowance for Doubtful Accounts. We maintain an allowance for doubtful accounts for estimated losses resulting from the inability or unwillingness of certain tenants to make payments required under their leases. The computation of the allowance is based on the tenants’ payment histories and current credit profiles, as well as other considerations.

Income Taxes

Income Taxes. Until January 17, 2018, we were a wholly owned subsidiary of SIR, which was taxed as a REIT under the Internal Revenue Code of 1986, as amended, or the IRC. Accordingly, until January 17, 2018, we were a qualified REIT subsidiary and a disregarded entity for tax purposes. We intend to qualify for taxation as a REIT under the IRC for U.S. federal income tax purposes commencing with our taxable year ended December 31, 2018 and to maintain such qualification thereafter. Accordingly, we generally are not, and will not be, subject to U.S. federal income taxes provided we distribute our taxable income and meet certain other requirements to qualify for taxation as a REIT. We may, however, be subject to certain state and local taxes.

Use of Estimates

Use of Estimates. Preparation of these financial statements in conformity with U.S. generally accepted accounting principles, or GAAP, requires us to make estimates and assumptions that may affect the amounts reported in these consolidated financial statements and related notes. The actual results could differ from these estimates. Significant estimates in the consolidated financial statements include the allowance for doubtful accounts, purchase price allocations, useful lives of fixed assets and the assessments of the carrying values and impairments of long lived assets.

Ownership Interest

Interest. For the periods prior to January 17, 2018, our investment activities were financed by SIR. Amounts invested in or advanced to us did not carry interest and had no specific repayment terms.

Net Income Per Common Share

Net Income Per Common Share. We calculate basic earnings per common share by dividing net income by the weighted average number of common shares outstanding during the period. We calculate diluted net income per share using the more dilutive of the two class method or the treasury stock method.

Segment Reporting

Segment Reporting. We operate in one business segment: ownership and leasing of properties that include industrial and logistics buildings and leased industrial lands.

Reclassifications

Reclassifications. Reclassifications have been made to the prior years' consolidated financial statements to conform to the current year's presentation. For the year ended December 31, 2017, we reclassified $1,724 from other assets to deferred issuance costs, net, in our consolidated balance sheets.

New Accounting Pronouncements

New Accounting Pronouncements. On January 1, 2018, we adopted FASB Accounting Standards Update, or ASU, No. 2014-09 (and related clarifying guidance issued by the FASB), Revenue From Contracts With Customers, which outlines a comprehensive model for entities to use in accounting for revenue arising from contracts with customers. ASU No. 2014-09 states that “an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services.” A substantial portion of our revenue consists of rental income from leasing arrangements, which is specifically excluded from ASU No. 2014-09. We have adopted ASU No. 2014-09 using the modified retrospective approach. The adoption of ASU No. 2014-09 did not have a material impact on the amount or timing of our revenue recognition in our consolidated financial statements.

On October 1, 2018, we adopted FASB ASU No. 2018-07, Compensation - Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting, which aligns the measurement and classification guidance for share based payments to nonemployees with the guidance for share based payments to employees, with certain exceptions. The adoption of this standard did not have a material impact in our consolidated financial statements.

In February 2016, the FASB issued ASU No. 2016-02, Leases. In July 2018, the FASB issued ASU No. 2018-10, Codification Improvements to Topic 842, Leases and ASU No. 2018-11, Leases (Topic 842): Targeted Improvements. In December 2018, the FASB issued ASU No. 2018-20 Leases (Topic 842), Narrow-Scope Improvements for Lessors. Collectively, these standards set out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). ASU No. 2016-02 requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase of the leased asset by the lessee. This classification will determine whether the lease expense is recognized based on an effective interest method or on a straight line basis over the term of the lease. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales type leases, direct financing leases and operating leases. These standards are effective as of January 1, 2019. Upon adoption, we applied the package of practical expedients that allows an entity to not reassess (i) whether any expired or existing contracts are or contain leases, (ii) lease classification for any expired or existing leases and (iii) initial direct costs for any expired or existing leases. Furthermore, we applied the optional transition method in ASU No. 2018-11, which allows entities to initially apply the new leases standard at the adoption date and recognize a cumulative effect adjustment to the opening balance of retained earnings in the period of adoption, if any. Additionally, our leases met the criteria in ASU No. 2018-11 to not separate non-lease components from the related lease component; therefore, the accounting for these leases remained largely unchanged from the previous standard. The adoption of ASU No. 2016-02 and the related improvements did not have a material impact in our consolidated financial statements.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires that entities use a new forward looking “expected loss” model that generally will result in the earlier recognition of allowance for credit losses. The measurement of expected credit losses is based upon historical experience, current conditions, and reasonable and supportable forecasts that affect the collectability of the reported amount. ASU No. 2016-13 will be effective for fiscal years beginning after December 15, 2019, including interim periods within those fiscal years. We are currently assessing the potential impact the adoption of ASU No. 2016-13 will have in our consolidated financial statements. We currently expect to adopt the standard using the modified retrospective approach.

Fair Value Measurement

We estimate the fair value of our mortgage note payable using a discounted cash flow analysis and currently prevailing market rates as of the measurement date (Level 3 inputs). Because Level 3 inputs are unobservable, our estimated fair value may differ materially from the actual fair value.

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Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

Schedule of acquired real estate leases and assumed real estate lease obligations

As of December 31, 2018 and 2017, our acquired real estate leases and assumed real estate lease obligations were as follows:

	December 31,
	2018			2017
Acquired real estate leases:
Capitalized above market lease values	$	28,723		$	30,104
Less: accumulated amortization	(16,726		)	(16,440		)
Capitalized above market lease values, net	11,997			13,664
Lease origination value	99,727			93,646
Less: accumulated amortization	(35,921		)	(28,207		)
Lease origination value, net	63,806			65,439
Acquired real estate leases, net	$	75,803		$	79,103
Assumed real estate lease obligations:
Capitalized below market lease values	$	34,313		$	34,786
Less: accumulated amortization	(15,997		)	(14,402		)
Assumed real estate lease obligations, net	$	18,316		$	20,384

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Real Estate Properties (Tables)

12 Months Ended

Dec. 31, 2018

Real Estate [Abstract]

Schedule of real estate properties

We allocated the purchase prices of these acquisitions based on the estimated fair values of the acquired assets as follows:

		Number	Rentable							Acquired
		of	Square	Purchase				Buildings and		Real Estate
Date	Location	Properties	Feet	Price		Land		Improvements		Leases
June 2018	Doral, FL (1)	1	240,283	$	43,326	$	15,225	$	28,101	$	—
September 2018	Carlisle, PA	1	205,090	20,451		3,299		15,515		1,637
September 2018	Upper Marlboro, MD	1	220,800	29,801		5,296		21,833		2,672
October 2018	Maple Grove, MN	1	319,062	27,807		3,469		21,287		3,051
		4	985,235	$	121,385	$	27,289	$	86,736	$	7,360

(1) This property was acquired and simultaneously leased back to the seller.

Schedule of future minimum lease payments scheduled to be received during the current terms of the existing leases

The future minimum lease payments scheduled to be received by us during the current terms of our leases as of December 31, 2018 are as follows:

	Minimum
	Lease
Year	Payment
2019	$	140,363
2020	139,440
2021	137,814
2022	132,124
2023	113,443
Thereafter	994,544
	$	1,657,728

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Indebtedness (Tables)

12 Months Ended

Dec. 31, 2018

Debt Disclosure [Abstract]

Schedule of outstanding indebtedness

As of December 31, 2018 and 2017, our outstanding indebtedness consisted of the following:

	December 31,
	2018		2017
Revolving credit facility, due in 2021(1)	$	413,000	$	750,000
Mortgage note payable, 3.99%, due in 2020 (2)	48,750		48,750
Unamortized debt premiums	445		677
Carrying value	$	462,195	$	799,427

(1) We repaid certain amounts outstanding under our revolving credit facility on January 17, 2018 with part of the $444,309 of net proceeds from our IPO. Upon completion of our IPO, the maturity date of our revolving credit facility was extended to December 29, 2021 and we have the option to extend the maturity date for two, six month periods through December 29, 2022.

(2) We assumed this mortgage note in connection with our acquisition of a property. The stated interest rate for this mortgage debt is the contractually stated rate; we recorded the assumed mortgage note at estimated fair value on the date of acquisition. We amortize the fair value premium to interest expense over the respective term of the mortgage note to reduce interest expense to the estimated market interest rate as of the date of acquisition.

Schedule of the principal payments due under the outstanding debt

The required principal payments due during the next five years and thereafter under all our outstanding debt as of December 31, 2018 are as follows:

	Principal
Year	Payment
2019	$	—
2020	48,750
2021	413,000
2022	—
2023	—
Thereafter	—
	$	461,750	(1)

(1) Total debt outstanding as of December 31, 2018, including unamortized debt premiums, was $462,195.

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Fair Value of Assets and Liabilities (Tables)

12 Months Ended

Dec. 31, 2018

Fair Value Disclosures [Abstract]

Schedule of carrying value and the estimated fair market value of mortgage notes payable

At December 31, 2018 and 2017, the fair value of our financial instruments approximated their carrying values in our consolidated financial statements, due to the short term nature of floating interest rates, except as follows:

	At December 31, 2018				At December 31, 2017
	Carrying		Estimated		Carrying		Estimated
	Value (1)		Fair Value		Value (1)		Fair Value
Mortgage note payable	$	49,195	$	48,642	$	49,427	$	48,919

(1) Includes unamortized premiums of $445 and $677 as of December 31, 2018 and 2017, respectively.

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Shareholders' Equity (Tables)

12 Months Ended

Dec. 31, 2018

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Summary of shares granted and vested under the terms of the 2018 Plan

A summary of shares granted, vested and forfeited under the terms of the 2018 Plan for the year ended December 31, 2018 is as follows:

			Weighted
			Average
	Number		Grant Date
	of Shares		Fair Value
2018 Activity:
Granted	77,400		$	22.60
Vested	(33,880	)	$	21.64
Forfeited	(240	)	$	23.33
Unvested shares at December 31, 2018	43,280		$	23.33

Summary of distributions paid on common shares

During the year ended December 31, 2018, we paid distributions on our common shares as follows:

Declaration	Record	Paid	Distributions		Total
Date	Date	Date	Per Share		Distributions
4/19/2018	4/30/2018	5/14/2018	$	0.27	$	17,551
7/19/2018	7/30/2018	8/13/2018	0.33		21,457
10/18/2018	10/29/2018	11/12/2018	0.33		21,474
			$	0.93	$	60,482

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Selected Quarterly Financial Data (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2018

Selected Quarterly Financial Information [Abstract]

Summary of unaudited quarterly results of operations

The following is a summary of our unaudited quarterly results of operations for 2018 and 2017:

	2018
	First		Second		Third		Fourth
	Quarter		Quarter		Quarter		Quarter
Total revenues	$	40,605	$	39,420	$	40,431	$	42,074
Net income	$	19,232	$	18,726	$	18,142	$	18,288
Net income per common share—basic and diluted	$	0.31	$	0.29	$	0.28	$	0.28

	2017
	First		Second		Third		Fourth
	Quarter		Quarter		Quarter		Quarter
Total revenues	$	39,440	$	38,605	$	39,066	$	39,395
Net income	$	20,356	$	21,575	$	22,903	$	15,269
Net income per common share—basic and diluted	$	0.45	$	0.48	$	0.51	$	0.34

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Organization - Narative (Details)				1 Months Ended
	Jan. 17, 2018 USD ($) ft² property shares	Sep. 30, 2017 USD ($) property note	Sep. 29, 2017 USD ($) ft² state property note $ / shares shares	Dec. 31, 2017 USD ($) property $ / shares shares	Dec. 31, 2018 USD ($) ft² state property $ / shares shares	Dec. 27, 2018 shares	Dec. 29, 2017 USD ($)
Subsidiary, Sale of Stock [Line Items]
Number of properties owned | property	266		266		270
Net rentable area | ft²	28,540,000		28,540,000		29,535,000
Common shares, shares issued (in shares) | shares				45,000,000	65,074,791
Common shares, par value (in dollars per share) | $ / shares			$ 0.01	$ 0.01	$ 0.01
Debt assumed on acquisition					$ 461,750,000
HAWAII
Subsidiary, Sale of Stock [Line Items]
Number of properties owned | property			226		226
Net rentable area | ft²			16,834,000		16,834,000
Other States
Subsidiary, Sale of Stock [Line Items]
Number of properties owned | property			40		44
Net rentable area | ft²			11,706,000		12,701,000
Number of states where real estate is located | state			24		25
Affiliated Entity
Subsidiary, Sale of Stock [Line Items]
Common shares, shares issued (in shares) | shares			45,000,000
Revolving Credit Facility
Subsidiary, Sale of Stock [Line Items]
Maximum borrowing capacity of revolving credit facility	$ 750,000,000			$ 750,000,000			$ 750,000,000
Debt assumed on acquisition				$ 750,000,000	$ 413,000,000
Revolving Credit Facility | Affiliated Entity
Subsidiary, Sale of Stock [Line Items]
Maximum borrowing capacity of revolving credit facility			$ 750,000,000
Mortgages
Subsidiary, Sale of Stock [Line Items]
Number of instruments assumed | note		3	3
Debt assumed on acquisition		$ 63,069,000	$ 63,069,000
Number of properties used as collateral | property		3	3	2
IPO
Subsidiary, Sale of Stock [Line Items]
Common shares issued (in shares) | shares	20,000,000
Industrial Logistics Properties Trust | Select Income REIT
Subsidiary, Sale of Stock [Line Items]
Common shares, shares issued (in shares) | shares			45,000,000		45,000,000	45,000,000

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Summary of Significant Accounting Policies - Real Estate Properties (Details) - USD ($)	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Property, Plant and Equipment [Line Items]
2019		$ 7,805,000
2020	$ 7,797,000
2021	7,725,000
2022	7,538,000
2023	7,279,000
Thereafter	19,343,000
Real estate impairment	0	0
Accrued environmental remediation cost	$ 6,940,000	7,002,000
Minimum
Property, Plant and Equipment [Line Items]
Estimated useful lives	7 years
Maximum
Property, Plant and Equipment [Line Items]
Estimated useful lives	40 years
Increases in rental income	$ 401,000	390,000	$ 403,000
Amortization of the value of acquired in place leases	$ 8,993,000	$ 8,824,000	$ 8,823,000
Weighted Average
Property, Plant and Equipment [Line Items]
Amortization period of capitalized below market lease values	14 years 1 month 6 days
Above market lease | Weighted Average
Property, Plant and Equipment [Line Items]
Amortization periods for capitalized above market lease and lease origination values	11 years 8 months 12 days
Acquired Real Estate Leases | Weighted Average
Property, Plant and Equipment [Line Items]
Amortization periods for capitalized above market lease and lease origination values	8 years 9 months 18 days

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Summary of Significant Accounting Policies - Summary of Acquired Real Estate Leases and Assumed Real Estate Lease Obligations (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Acquired real estate leases:
Acquired real estate leases, net	$ 75,803	$ 79,103
Assumed real estate lease obligations:
Capitalized below market lease values	34,313	34,786
Less: accumulated amortization	(15,997)	(14,402)
Assumed real estate lease obligations, net	18,316	20,384
Above market lease
Acquired real estate leases:
Acquired real estate leases, gross	28,723	30,104
Less: accumulated amortization	(16,726)	(16,440)
Acquired real estate leases, net	11,997	13,664
Acquired Real Estate Leases
Acquired real estate leases:
Acquired real estate leases, gross	99,727	93,646
Less: accumulated amortization	(35,921)	(28,207)
Acquired real estate leases, net	$ 63,806	$ 65,439

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Summary of Significant Accounting Policies - Deferred Leasing Costs (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017
Accounting Policies [Abstract]
Deferred leasing costs	$ 9,845	$ 8,379
Accumulated amortization of deferred leasing costs	3,688	$ 3,125
Estimated cost of lease under negotiation	24
Future amortization of deferred leasing costs to be recognized during the current terms of the existing leases
2019	836
2020	757
2021	673
2022	552
2023	386
Thereafter	$ 2,953

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Summary of Significant Accounting Policies - Debt Issuance Costs (Details) - USD ($)	Jan. 31, 2019	Jan. 29, 2019	Dec. 31, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Debt issuance costs, line of credit			$ 5,907,000	$ 1,724,000
Debt issuance costs, accumulated amortization			1,477,000	$ 0
Future amortization expense of debt issuance costs, 2019			1,618,000
Future amortization expense of debt issuance costs, 2020			1,618,000
Future amortization expense of debt issuance costs, 2021			1,618,000
Future amortization expense of debt issuance costs, 2022			142,000
Future amortization expense of debt issuance costs, 2023			142,000
Future amortization expense of debt issuance costs, Thereafter			705,000
Loans Payable | Mortgage Loan 2019
Debt Instrument [Line Items]
Debt issuance cost, mortgage loan			$ 1,413,000
Subsequent Event | Loans Payable | Mortgage Loan 2019
Debt Instrument [Line Items]
Debt instrument, face amount	$ 650,000,000	$ 650,000,000

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Summary of Significant Accounting Policies - Other Assets (Details) - AIC $ in Thousands	Dec. 31, 2018 USD ($)
Schedule of Equity Method Investments [Line Items]
Cost to acquire shares	$ 8,632
Ownership interest	14.30%

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Summary of Significant Accounting Policies - Revenue Recognition (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Accounting Policies [Abstract]
Contingent rental income recognized	$ 941	$ 650	$ 846

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Summary of Significant Accounting Policies - Segment (Details)	12 Months Ended
	Dec. 31, 2018 segment
Accounting Policies [Abstract]
Number of business segments	1

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Summary of Significant Accounting Policies - Reclassifications (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Adjustment to Debt issuance costs, net	$ 4,430	$ 1,724
Adjustments to other assets, net	$ (11,178)	(4,942)
Scenario, Adjustment
Error Corrections and Prior Period Adjustments Restatement [Line Items]
Adjustment to Debt issuance costs, net		1,724
Adjustments to other assets, net		$ 1,724

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Real Estate Properties - Narrative (Details) $ in Thousands			1 Months Ended		3 Months Ended								12 Months Ended
	Feb. 14, 2019 property	Jan. 13, 2017 USD ($) ft² property	Feb. 20, 2019 USD ($) ft² state property tenant	Oct. 31, 2018 USD ($)	Dec. 31, 2018 USD ($) ft² state property	Sep. 30, 2018 USD ($)	Jun. 30, 2018 USD ($)	Mar. 31, 2018 USD ($)	Dec. 31, 2017 USD ($)	Sep. 30, 2017 USD ($)	Jun. 30, 2017 USD ($)	Mar. 31, 2017 USD ($)	Dec. 31, 2018 USD ($) ft² state property segment	Dec. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Oct. 26, 2018 ft²	Jan. 17, 2018 ft² property	Sep. 29, 2017 ft² state property
Real Estate Properties
Number of properties owned | property					270								270				266	266
Net rentable area | ft²					29,535,000								29,535,000				28,540,000	28,540,000
Number of business segments | segment													1
Total revenues					$ 42,074	$ 40,431	$ 39,420	$ 40,605	$ 39,395	$ 39,066	$ 38,605	$ 39,440	$ 162,530	$ 156,506	$ 153,310
Commitments related to tenant improvements and leasing costs													$ 2,613
Square feet of committed expenditures related to tenant improvements and leasing costs | ft²													2,630,000
Committed but unspent tenant related obligations					$ 472								$ 472
HAWAII
Real Estate Properties
Number of properties owned | property					226								226					226
Net rentable area | ft²					16,834,000								16,834,000					16,834,000
Other States
Real Estate Properties
Number of properties owned | property					44								44					40
Net rentable area | ft²					12,701,000								12,701,000					11,706,000
Number of states where real estate is located | state					25								25					24
Ankeny, IA
Real Estate Properties
Net rentable area | ft²																194,000
Purchase price				$ 450
McAlester, OK
Real Estate Properties
Purchase price		$ 281
Real estate, acquisition costs		$ 55
Number of properties | property		1
Real estate property expansion, square feet | ft²		35,000
Geographic Concentration Risk | Sales Revenue, Net | HAWAII
Real Estate Properties
Percentage of revenues													59.70%	60.20%	59.50%
Two Subsidiaries Of Amazon, Inc.
Real Estate Properties
Total revenues													$ 16,047	$ 15,938	$ 16,063
Subsequent Event | Indianapolis and Cincinnati
Real Estate Properties
Net rentable area | ft²			4,202,000
Purchase price			$ 280,000
Number of properties | property	7		8
Number of tenants | tenant			10
Subsequent Event | Twelve States [Member]
Real Estate Properties
Net rentable area | ft²			8,694,000
Number of states where real estate is located | state			12
Purchase price			$ 625,300
Mortgage debt			$ 57,000
Number of properties | property			18
Number of tenants | tenant			13
Office and Industrial Properties
Real Estate Properties
Net rentable area | ft²					985,235								985,235
Purchase price													$ 121,385
Real estate, acquisition costs													$ 1,360
Number of properties | property													4

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Real Estate Properties - Property Acquisitions (Details) $ in Thousands	1 Months Ended			12 Months Ended
	Oct. 31, 2018 USD ($) ft² property	Sep. 30, 2018 USD ($) ft² property	Jun. 30, 2018 USD ($) ft² property	Dec. 31, 2018 USD ($) ft² property	Jan. 17, 2018 ft²	Dec. 31, 2017 USD ($)	Sep. 29, 2017 ft²
Real Estate [Line Items]
Net rentable area | ft²				29,535,000	28,540,000		28,540,000
Land				$ 670,501		$ 642,706
Buildings and improvements				791,895		700,896
Acquired real estate leases				$ 75,803		79,103
Office and Industrial Properties
Real Estate [Line Items]
Number of properties | property				4
Net rentable area | ft²				985,235
Purchase price				$ 121,385
Land				27,289
Buildings and improvements				86,736
Acquired real estate leases				7,360
Doral, FL | Office and Industrial Properties
Real Estate [Line Items]
Number of properties | property			1
Net rentable area | ft²			240,283
Purchase price			$ 43,326
Land			15,225
Buildings and improvements			28,101
Carlisle PA | Office and Industrial Properties
Real Estate [Line Items]
Number of properties | property		1
Net rentable area | ft²		205,090
Purchase price		$ 20,451
Land		3,299
Buildings and improvements		$ 15,515
Upper Marlboro, MD | Office and Industrial Properties
Real Estate [Line Items]
Number of properties | property		1
Net rentable area | ft²		220,800
Purchase price		$ 29,801
Land		5,296
Buildings and improvements		21,833
Maple Grove, MN | Office and Industrial Properties
Real Estate [Line Items]
Number of properties | property	1
Net rentable area | ft²	319,062
Purchase price	$ 27,807
Land	3,469
Buildings and improvements	21,287
Acquired Real Estate Leases
Real Estate [Line Items]
Acquired real estate leases				$ 63,806		$ 65,439
Acquired Real Estate Leases | Doral, FL | Office and Industrial Properties
Real Estate [Line Items]
Acquired real estate leases			$ 0
Acquired Real Estate Leases | Carlisle PA | Office and Industrial Properties
Real Estate [Line Items]
Acquired real estate leases		1,637
Acquired Real Estate Leases | Upper Marlboro, MD | Office and Industrial Properties
Real Estate [Line Items]
Acquired real estate leases		$ 2,672
Acquired Real Estate Leases | Maple Grove, MN | Office and Industrial Properties
Real Estate [Line Items]
Acquired real estate leases	$ 3,051

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Real Estate Properties - Future Minimum Lease Payments (Details) $ in Thousands	Dec. 31, 2018 USD ($)
Real Estate [Abstract]
2019	$ 140,363
2020	139,440
2021	137,814
2022	132,124
2023	113,443
Thereafter	994,544
Total	$ 1,657,728

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Indebtedness - Summary of Outstanding Indebtedness (Details) - USD ($) $ in Thousands	Jan. 17, 2018	Dec. 31, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Long-term debt, gross		$ 461,750
Unamortized debt premiums		445	$ 677
Carrying value		462,195	799,427
Mortgage note payable, 3.99%, due in 2020
Debt Instrument [Line Items]
Long-term debt, gross		$ 48,750	48,750
Interest rate (as a percent)		3.99%
Revolving Credit Facility
Debt Instrument [Line Items]
Long-term debt, gross		$ 413,000	$ 750,000
Repayments of outstanding revolving credit facility	$ 444,309

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Indebtedness - Narrative (Details) ft² in Millions		12 Months Ended
	Jan. 29, 2019 USD ($) ft² property building	Dec. 31, 2017 USD ($)	Feb. 19, 2019 USD ($)	Jan. 31, 2019 USD ($)	Dec. 31, 2018 USD ($) property	Jan. 17, 2018 USD ($)	Dec. 29, 2017 USD ($)
Debt Instrument [Line Items]
Amount outstanding on revolving credit facility		$ 750,000,000			$ 413,000,000
Mortgage note payable		49,427,000			$ 49,195,000
Number of properties that are securing mortgage note | property					1
Net book value of property, securing mortgage note					$ 64,901,000
Subsequent Event
Debt Instrument [Line Items]
Maximum borrowing capacity of revolving credit facility	$ 750,000,000
Number of properties that are securing mortgage note | property	186
Amount of square feet of property, securing mortgage note | ft²	9.6
Net book value of property, securing mortgage note	$ 492,620,000
Mortgage Note Payable 3.99 Percent Due 2020
Debt Instrument [Line Items]
Mortgage note payable					$ 48,750,000
Interest rate (as a percent)					3.99%
Revolving Credit Facility
Debt Instrument [Line Items]
Maximum borrowing capacity of revolving credit facility		$ 750,000,000				$ 750,000,000	$ 750,000,000
Line of credit maximum increase capacity					$ 1,500,000,000
Interest rate at period end		2.89%			3.81%
Interest rate during period		3.33%
Amount outstanding on revolving credit facility					$ 413,000,000
Remaining borrowing capacity on revolving credit facility					$ 337,000,000
Revolving Credit Facility | Subsequent Event
Debt Instrument [Line Items]
Amount outstanding on revolving credit facility			$ 60,000,000
Remaining borrowing capacity on revolving credit facility			$ 690,000,000
Loans Payable | Mortgage Loan 2019 | Subsequent Event
Debt Instrument [Line Items]
Debt instrument, face amount	$ 650,000,000			$ 650,000,000
Interest rate (as a percent)	4.31%
London Interbank Offered Rate (LIBOR) | Revolving Credit Facility
Debt Instrument [Line Items]
Basis spread on variable rate		1.30%
Land | Subsequent Event
Debt Instrument [Line Items]
Number of properties that are securing mortgage note | property	178
Building | Subsequent Event
Debt Instrument [Line Items]
Number of properties that are securing mortgage note | building	8

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Indebtedness - Summary of Future Indebtedness Maturity (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Debt Disclosure [Abstract]
2019	$ 0
2020	48,750
2021	413,000
2022	0
2023	0
Thereafter	0
Long-term debt, gross	461,750
Unamortized debt premiums	$ 462,195	$ 799,427

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Fair Value of Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2018	Dec. 31, 2017
Fair Value of Financial Instruments
Mortgage note payable	$ 49,195	$ 49,427
Carrying Amount
Fair Value of Financial Instruments
Mortgage note payable	49,195	49,427
Estimated Fair Value
Fair Value of Financial Instruments
Mortgage note payable	48,642	48,919
Mortgages
Fair Value of Financial Instruments
Unamortized premiums	$ 445	$ 677

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Shareholders' Equity - Share Awards (Details) $ / shares in Units, $ in Thousands				1 Months Ended		12 Months Ended
	Jan. 18, 2019 USD ($) $ / shares	Sep. 24, 2018 $ / shares shares	May 23, 2018 USD ($) shares	Dec. 31, 2018 USD ($) shares	May 31, 2018 USD ($) shares	Dec. 31, 2018 USD ($) item $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unvested shares (in shares)				43,280		43,280
2019 (in shares)				15,320		15,320
2020 (in shares)				9,320		9,320
2021 (in shares)				9,320		9,320
2022 (in shares)				9,320		9,320
Estimated future compensation expense for the unvested shares | $				$ 1,010		$ 1,010
Weighted Average Period of Which Compensation Expense Will be Recognized						28 months
Compensation expense | $						$ 927
Shares available for issuance under the award plan				3,925,209		3,925,209
Stock Repurchased During Period, Shares						2,369
Distribution characterization percentage, ordinary income						100.00%
Distributions per share paid (in dollars per share) | $ / shares						$ 0.93
Trustees
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common shares granted (in shares)			3,000
Aggregate value of common shares granted | $			$ 314			$ 61
Share Based Compensation Arrangement By Share Based Payment Award, Market Value Of Shares Issued In Period To Each Individual1 | $			$ 63
Trustees | Common shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common shares granted (in shares)				3,000	1,000
Aggregate value of common shares granted | $					$ 104
Share Based Compensation Arrangement By Share Based Payment Award, Market Value Of Shares Issued In Period To Each Individual1 | $					$ 21
Officers And Employees | Common shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Stock Repurchased During Period, Shares		2,369
Share price (in dollars per share) | $ / shares		$ 22.08
RMR LLC
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Common shares granted (in shares)						54,400,000
Common shares granted | $						$ 1,269
RMR LLC | Officers And Employees
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Related Party Transaction Number of Equal Annual Installments for Vesting of Common Shares | item						5
Subsequent Event
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Distributions per share paid (in dollars per share) | $ / shares	$ 0.33
Dividends declared | $	$ 21,500

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Shareholders' Equity - Summary of Unvested Shares Activity (Details)	12 Months Ended
	Dec. 31, 2018 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Granted (in shares) | shares	77,400
Vested (in shares) | shares	(33,880)
Forfeited (in shares) | shares	(240)
Unvested shares at the end of the period (in shares) | shares	43,280
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract]
Granted (in dollars per share) | $ / shares	$ 22.60
Vested (in dollars per share) | $ / shares	21.64
Forfeited (in dollars per share) | $ / shares	23.33
Unvested shares at the end of the period (in dollars per share) | $ / shares	$ 23.33

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Shareholders' Equity - 2018 Share Purchases (Details) - $ / shares		12 Months Ended
	Sep. 24, 2018	Dec. 31, 2018
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share repurchases to pay for tax withholding (in shares)		2,369
Common shares | Officers And Employees
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share repurchases to pay for tax withholding (in shares)	2,369
Share price (in dollars per share)	$ 22.08

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Shareholders' Equity - Distributions (Details) - USD ($) $ / shares in Units, $ in Thousands					12 Months Ended
	Jan. 18, 2019	Nov. 17, 2016	Aug. 18, 2016	May 19, 2016	Dec. 31, 2018	Dec. 31, 2017
Dividends Payable [Line Items]
Distribution per share (in dollars per share)		$ 0.33	$ 0.33	$ 0.27		$ 0.93
Total Distributions		$ 21,474	$ 21,457	$ 17,551	$ 60,482	$ 60,482
Distributions per share paid (in dollars per share)					$ 0.93
Distribution characterization percentage, ordinary income					100.00%
Subsequent Event
Dividends Payable [Line Items]
Distributions per share paid (in dollars per share)	$ 0.33

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Related Person Transactions Narrative (Details) $ in Thousands		12 Months Ended
	Dec. 31, 2018 USD ($) agreement shares	Dec. 31, 2018 USD ($) agreement shares	Dec. 31, 2017 USD ($) shares	Dec. 31, 2016 USD ($)	Dec. 27, 2018 shares	Sep. 29, 2017 shares
Related Party Transaction [Line Items]
Common shares, shares issued (in shares) | shares	65,074,791	65,074,791	45,000,000
Stock repurchased during the period		$ 8,632	$ 0	$ 0
Insurance premium allocation cost		90	116	93
Insurance premium allocation		$ 266	$ 320	$ 351
RMR LLC
Related Party Transaction [Line Items]
Number of management service agreements | agreement	2	2
Common shares granted (in shares) | shares		54,400,000
Common shares granted		$ 1,269
Affiliated Entity
Related Party Transaction [Line Items]
Common shares, shares issued (in shares) | shares						45,000,000
Payments for insurance premiums incurred		$ 266
Industrial Logistics Properties Trust | Select Income REIT
Related Party Transaction [Line Items]
Common shares, shares issued (in shares) | shares	45,000,000	45,000,000			45,000,000	45,000,000
AIC
Related Party Transaction [Line Items]
Cost to acquire shares	$ 8,632	$ 8,632
AIC Stock Purchase Agreement
Related Party Transaction [Line Items]
Stock repurchased during the period	$ 8,632
Service fee, percent		3.00%

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Certain Arrangements, Allocations and Operations Prior to our IPO (Details)				1 Months Ended		11 Months Ended	12 Months Ended
	Jan. 17, 2018 USD ($) ft² property	Sep. 30, 2017 USD ($) property note	Sep. 29, 2017 USD ($) ft² state property note shares	Jan. 16, 2018 USD ($)	Dec. 31, 2017 USD ($) property note shares	Dec. 31, 2018 USD ($) ft² state property shares	Dec. 31, 2018 USD ($) ft² state property shares	Dec. 31, 2017 USD ($) shares	Dec. 31, 2016 USD ($)	Dec. 27, 2018 shares	Dec. 29, 2017 USD ($)
Line of Credit Facility [Line Items]
Number of properties owned | property	266		266			270	270
Net rentable area | ft²	28,540,000		28,540,000			29,535,000	29,535,000
Common shares, shares issued (in shares) | shares					45,000,000	65,074,791	65,074,791	45,000,000
Debt assumed on acquisition						$ 461,750,000	$ 461,750,000
Due from related parties					$ 0	1,390,000	1,390,000	$ 0
Repayment of mortgage notes payable							0	14,344,000	$ 16,000
Business management fees						7,269,000
Incentive fee expense							0
Mortgage note payable
Line of Credit Facility [Line Items]
Number of instruments assumed | note		3	3
Debt assumed on acquisition		$ 63,069,000	$ 63,069,000
Number of properties used as collateral | property		3	3		2
Number of debt instruments prepaid | note					2
Repayment of mortgage notes payable					$ 14,319,000
Revolving Credit Facility
Line of Credit Facility [Line Items]
Debt assumed on acquisition					750,000,000	$ 413,000,000	413,000,000	750,000,000
Maximum borrowing capacity of revolving credit facility and term loan	$ 750,000,000				$ 750,000,000			750,000,000			$ 750,000,000
RMR LLC
Line of Credit Facility [Line Items]
Business management fees				$ 308,000				6,823,000	6,789,000
Incentive fee expense								7,660,000
Internal audit expense				4,000				84,000	74,000
Construction supervision fees				230,000				4,244,000	4,182,000
Related party reimbursement expense				$ 120,000				$ 2,512,000	$ 2,448,000
AIC
Line of Credit Facility [Line Items]
Payments for insurance premiums incurred							$ 4,000
HAWAII
Line of Credit Facility [Line Items]
Number of properties owned | property			226			226	226
Net rentable area | ft²			16,834,000			16,834,000	16,834,000
Other States
Line of Credit Facility [Line Items]
Number of properties owned | property			40			44	44
Net rentable area | ft²			11,706,000			12,701,000	12,701,000
Number of states where real estate is located | state			24			25	25
RMR LLC
Line of Credit Facility [Line Items]
Property management fees as percentage of gross collected rents							3.00%
Construction supervision fees as percentage of construction costs							5.00%
Construction supervision fees						$ 4,680,000
Select Income REIT
Line of Credit Facility [Line Items]
Payments of stock issuance costs	$ 7,271,000
Due from related parties						$ 865,000	$ 865,000
Select Income REIT | Industrial Logistics Properties Trust
Line of Credit Facility [Line Items]
Common shares, shares issued (in shares) | shares			45,000,000			45,000,000	45,000,000			45,000,000

XML

Business and Property Management Agreements (Details)	11 Months Ended	12 Months Ended
	Dec. 31, 2018 USD ($) employee	Dec. 31, 2018 USD ($) employee	Jan. 18, 2018 $ / shares	Jan. 17, 2018 agreement
Related Party Transaction [Line Items]
Number of employees | employee	0	0
Equity market capitalization		$ 1,560,000,000
Unadjusted initial share price (usd per share) | $ / shares			$ 24.00
Adjusted benchmark return qualification for management fee reduction minimum		2.00%
Adjusted benchmark return qualification for management fee reduction maximum		5.00%
Business management fees	$ 7,269,000
Incentive management fee		$ 0
Term remaining prior to termination used in calculation of termination fee		10 days
RMR LLC
Related Party Transaction [Line Items]
Number of management service agreements | agreement				2
Percentage applied on average historical cost of real estate investment properties acquired to calculate base management fee	0.50%	0.50%
Base management fee payable as percentage of average historical cost of real estate investments excluding transferred assets for investments up to specified amount	0.70%	0.70%
Base management fee payable threshold amount of other real estate investments	$ 250,000,000	$ 250,000,000
Annual business management fee as percentage of aggregate cost of properties acquired in excess of specified amount		0.50%
Base management fee payable as percentage of average closing stock price on stock exchange	0.70%	0.70%
Base management fee payable as percentage of average market capitalization exceeding specified amount	0.50%	0.50%
Percentage for limitation and adjustments of incentive management fee payable	12.00%	12.00%
Period of Consecutive Trading Days Used in Calculation		10 days
Period of trading days of measurement period used in calculation		30 days
Required return per share to adjust the return per share benchmark		12.00%
Incentive management fee, percentage of common shares outstanding used in calculation		1.50%
Property management fees as percentage of gross collected rents		3.00%
Construction supervision fees as percentage of construction costs		5.00%
Construction supervision fees	$ 4,680,000
Payroll and related costs	2,672,000
Internal audit costs	$ 236,000
Number of business days prior written notice for termination of property management agreement		60 days
Window following a change of control		12 months
Period of transition services after termination agreement		120 days
Minimum | RMR LLC
Related Party Transaction [Line Items]
Termination fee term		19 years
Maximum | RMR LLC
Related Party Transaction [Line Items]
Termination fee term		20 years

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Selected Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Selected Quarterly Financial Information [Abstract]
Total revenues	$ 42,074	$ 40,431	$ 39,420	$ 40,605	$ 39,395	$ 39,066	$ 38,605	$ 39,440	$ 162,530	$ 156,506	$ 153,310
Net income	$ 18,288	$ 18,142	$ 18,726	$ 19,232	$ 15,269	$ 22,903	$ 21,575	$ 20,356	$ 74,388	$ 80,103	$ 86,898
Net income per common share - basic and diluted (in dollars per share)	$ 0.28	$ 0.28	$ 0.29	$ 0.31	$ 0.34	$ 0.51	$ 0.48	$ 0.45	$ 1.16	$ 1.78	$ 1.93

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SCHEDULE II - Valuation And Qualifying Accounts (Details) - Allowance for doubtful accounts - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Movement in valuation and qualifying accounts
Balance at Beginning of Period	$ 1,241	$ 583	$ 413
Charged to Costs and Expenses	1,198	704	257
Deductions	(982)	(46)	(87)
Balance at End of Period	$ 1,457	$ 1,241	$ 583

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SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION - Real Estate Properties (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	$ 49,195
Initial Cost to Company
Land	669,341
Buildings and Equipment	751,735
Costs Capitalized Subsequent to Acquisition	41,320
Gross Amount Carried at Close of Period
Land	670,501
Buildings and Equipment	791,895
Total	1,462,396	$ 1,343,602	$ 1,336,728	$ 1,335,363
Accumulated Depreciation	(93,291)	$ (74,614)	$ (56,976)	$ (39,707)
Liabilities, fair value adjustment	445
U.S. federal income tax basis	$ 1,523,930
Building and Building Improvements
Gross Amount Carried at Close of Period
Life used for depreciation	40 years
Equipment
Gross Amount Carried at Close of Period
Life used for depreciation	7 years
Fort Smith, AR | 4501 Industrial Drive
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	$ 0
Initial Cost to Company
Land	900
Buildings and Equipment	3,485
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	900
Buildings and Equipment	3,485
Total	4,385
Accumulated Depreciation	(341)
Colorado Springs, CO | 955 Aeroplaza Drive
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	800
Buildings and Equipment	7,412
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	800
Buildings and Equipment	7,412
Total	8,212
Accumulated Depreciation	(726)
Denver, CO | 13400 East 39th Avenue and 3800 Wheeling Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	3,100
Buildings and Equipment	12,955
Costs Capitalized Subsequent to Acquisition	46
Gross Amount Carried at Close of Period
Land	3,100
Buildings and Equipment	13,001
Total	16,101
Accumulated Depreciation	(1,298)
Pueblo, CO | 150 Greenhorn Drive
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	200
Buildings and Equipment	4,177
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	200
Buildings and Equipment	4,177
Total	4,377
Accumulated Depreciation	(409)
Wallingford, CT | 2 Tower Drive
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,471
Buildings and Equipment	2,165
Costs Capitalized Subsequent to Acquisition	7
Gross Amount Carried at Close of Period
Land	1,471
Buildings and Equipment	2,172
Total	3,643
Accumulated Depreciation	(668)
Windsor, CT | 235 Great Pond Drive
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	2,400
Buildings and Equipment	9,469
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	2,400
Buildings and Equipment	9,469
Total	11,869
Accumulated Depreciation	(1,519)
Doral, FL | 10450 Doral Boulevard
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	15,225
Buildings and Equipment	28,101
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	15,225
Buildings and Equipment	28,101
Total	43,326
Accumulated Depreciation	(468)
Miami, FL | 2100 NW 82nd Avenue
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	144
Buildings and Equipment	1,297
Costs Capitalized Subsequent to Acquisition	454
Gross Amount Carried at Close of Period
Land	144
Buildings and Equipment	1,751
Total	1,895
Accumulated Depreciation	(749)
Honolulu, HI | 1000 Mapunapuna Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	2,252
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	2,252
Buildings and Equipment	0
Total	2,252
Accumulated Depreciation	0
Honolulu, HI | 1001 Ahua Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	15,155
Buildings and Equipment	3,312
Costs Capitalized Subsequent to Acquisition	92
Gross Amount Carried at Close of Period
Land	15,155
Buildings and Equipment	3,404
Total	18,559
Accumulated Depreciation	(1,269)
Honolulu, HI | 1024 Kikowaena Place
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,818
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,818
Buildings and Equipment	0
Total	1,818
Accumulated Depreciation	0
Honolulu, HI | 1024 Mapunapuna Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,385
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,385
Buildings and Equipment	0
Total	1,385
Accumulated Depreciation	0
Honolulu, HI | 1027 Kikowaena Place
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	5,444
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	5,444
Buildings and Equipment	0
Total	5,444
Accumulated Depreciation	0
Honolulu, HI | 1030 Mapunapuna Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	5,655
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	5,655
Buildings and Equipment	0
Total	5,655
Accumulated Depreciation	0
Honolulu, HI | 1038 Kikowaena Place
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	2,576
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	2,576
Buildings and Equipment	0
Total	2,576
Accumulated Depreciation	0
Honolulu, HI | 1045 Mapunapuna Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	819
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	819
Buildings and Equipment	0
Total	819
Accumulated Depreciation	0
Honolulu, HI | 1050 Kikowaena Place
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,404
Buildings and Equipment	873
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,404
Buildings and Equipment	873
Total	2,277
Accumulated Depreciation	(328)
Honolulu, HI | 1052 Ahua Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,703
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	240
Gross Amount Carried at Close of Period
Land	1,703
Buildings and Equipment	240
Total	1,943
Accumulated Depreciation	(79)
Honolulu, HI | 1055 Ahua Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,216
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,216
Buildings and Equipment	0
Total	1,216
Accumulated Depreciation	0
Honolulu, HI | 106 Puuhale Road
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,113
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	229
Gross Amount Carried at Close of Period
Land	1,113
Buildings and Equipment	229
Total	1,342
Accumulated Depreciation	(54)
Honolulu, HI | 1062 Kikowaena Place
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,049
Buildings and Equipment	598
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,049
Buildings and Equipment	598
Total	1,647
Accumulated Depreciation	(225)
Honolulu, HI | 1122 Mapunapuna Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	5,781
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	5,781
Buildings and Equipment	0
Total	5,781
Accumulated Depreciation	0
Honolulu, HI | 113 Puuhale Road
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	3,729
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	3,729
Buildings and Equipment	0
Total	3,729
Accumulated Depreciation	0
Honolulu, HI | 1150 Kikowaena Place
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	2,445
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	2,445
Buildings and Equipment	0
Total	2,445
Accumulated Depreciation	0
Honolulu, HI | 120 Mokauea Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,953
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	655
Gross Amount Carried at Close of Period
Land	1,953
Buildings and Equipment	655
Total	2,608
Accumulated Depreciation	(105)
Honolulu, HI | 120 Sand Island Access Road
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,130
Buildings and Equipment	11,307
Costs Capitalized Subsequent to Acquisition	1,298
Gross Amount Carried at Close of Period
Land	1,130
Buildings and Equipment	12,605
Total	13,735
Accumulated Depreciation	(4,321)
Honolulu, HI | 120B Mokauea Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,953
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,953
Buildings and Equipment	0
Total	1,953
Accumulated Depreciation	0
Honolulu, HI | 125 Puuhale Road
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,630
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,630
Buildings and Equipment	0
Total	1,630
Accumulated Depreciation	0
Honolulu, HI | 125B Puuhale Road
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	2,815
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	2,815
Buildings and Equipment	0
Total	2,815
Accumulated Depreciation	0
Honolulu, HI | 1330 Pali Highway
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,423
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,423
Buildings and Equipment	0
Total	1,423
Accumulated Depreciation	0
Honolulu, HI | 1360 Pali Highway
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	9,170
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	161
Gross Amount Carried at Close of Period
Land	9,170
Buildings and Equipment	161
Total	9,331
Accumulated Depreciation	(103)
Honolulu, HI | 140 Puuhale Road
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,100
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,100
Buildings and Equipment	0
Total	1,100
Accumulated Depreciation	0
Honolulu, HI | 142 Mokauea Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	2,182
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	1,455
Gross Amount Carried at Close of Period
Land	2,182
Buildings and Equipment	1,455
Total	3,637
Accumulated Depreciation	(359)
Honolulu, HI | 148 Mokauea Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	3,476
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	3,476
Buildings and Equipment	0
Total	3,476
Accumulated Depreciation	0
Honolulu, HI | 150 Puuhale Road
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	4,887
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	4,887
Buildings and Equipment	0
Total	4,887
Accumulated Depreciation	0
Honolulu, HI | 151 Puuhale Road
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,956
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,956
Buildings and Equipment	0
Total	1,956
Accumulated Depreciation	0
Honolulu, HI | 158 Sand Island Access Road
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	2,488
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	2,488
Buildings and Equipment	0
Total	2,488
Accumulated Depreciation	0
Honolulu, HI | 165 Sand Island Access Road
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	758
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	758
Buildings and Equipment	0
Total	758
Accumulated Depreciation	0
Honolulu, HI | 179 Sand Island Access Road
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	2,480
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	2,480
Buildings and Equipment	0
Total	2,480
Accumulated Depreciation	0
Honolulu, HI | 180 Sand Island Access Road
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,655
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,655
Buildings and Equipment	0
Total	1,655
Accumulated Depreciation	0
Honolulu, HI | 1926 Auiki Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	2,874
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	1,562
Gross Amount Carried at Close of Period
Land	2,874
Buildings and Equipment	1,562
Total	4,436
Accumulated Depreciation	(466)
Honolulu, HI | 1931 Kahai Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	3,779
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	3,779
Buildings and Equipment	0
Total	3,779
Accumulated Depreciation	0
Honolulu, HI | 197 Sand Island Access Road
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,238
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,238
Buildings and Equipment	0
Total	1,238
Accumulated Depreciation	0
Honolulu, HI | 2001 Kahai Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,091
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,091
Buildings and Equipment	0
Total	1,091
Accumulated Depreciation	0
Honolulu, HI | 2019 Kahai Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,377
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,377
Buildings and Equipment	0
Total	1,377
Accumulated Depreciation	0
Honolulu, HI | 2020 Auiki Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	2,385
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	2,385
Buildings and Equipment	0
Total	2,385
Accumulated Depreciation	0
Honolulu, HI | 204 Sand Island Access Road
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,689
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,689
Buildings and Equipment	0
Total	1,689
Accumulated Depreciation	0
Honolulu, HI | 207 Puuhale Road
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	2,024
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	2,024
Buildings and Equipment	0
Total	2,024
Accumulated Depreciation	0
Honolulu, HI | 2103 Kaliawa Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	3,212
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	3,212
Buildings and Equipment	0
Total	3,212
Accumulated Depreciation	0
Honolulu, HI | 2106 Kaliawa Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,568
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	169
Gross Amount Carried at Close of Period
Land	1,568
Buildings and Equipment	169
Total	1,737
Accumulated Depreciation	(66)
Honolulu, HI | 2110 Auiki Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	837
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	837
Buildings and Equipment	0
Total	837
Accumulated Depreciation	0
Honolulu, HI | 212 Mohonua Place
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,067
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,067
Buildings and Equipment	0
Total	1,067
Accumulated Depreciation	0
Honolulu, HI | 2122 Kaliawa Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,365
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,365
Buildings and Equipment	0
Total	1,365
Accumulated Depreciation	0
Honolulu, HI | 2127 Auiki Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	2,906
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	97
Gross Amount Carried at Close of Period
Land	2,906
Buildings and Equipment	97
Total	3,003
Accumulated Depreciation	(25)
Honolulu, HI | 2135 Auiki Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	825
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	825
Buildings and Equipment	0
Total	825
Accumulated Depreciation	0
Honolulu, HI | 2139 Kaliawa Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	885
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	885
Buildings and Equipment	0
Total	885
Accumulated Depreciation	0
Honolulu, HI | 214 Sand Island Access Road
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,864
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	485
Gross Amount Carried at Close of Period
Land	1,864
Buildings and Equipment	485
Total	2,349
Accumulated Depreciation	(43)
Honolulu, HI | 2140 Kaliawa Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	931
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	931
Buildings and Equipment	0
Total	931
Accumulated Depreciation	0
Honolulu, HI | 2144 Auiki Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	2,640
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	7,088
Gross Amount Carried at Close of Period
Land	2,640
Buildings and Equipment	7,088
Total	9,728
Accumulated Depreciation	(2,068)
Honolulu, HI | 215 Puuhale Road
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	2,117
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	2,117
Buildings and Equipment	0
Total	2,117
Accumulated Depreciation	0
Honolulu, HI | 218 Mohonua Place
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,741
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,741
Buildings and Equipment	0
Total	1,741
Accumulated Depreciation	0
Honolulu, HI | 220 Puuhale Road
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	2,619
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	2,619
Buildings and Equipment	0
Total	2,619
Accumulated Depreciation	0
Honolulu, HI | 2250 Pahounui Drive
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	3,862
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	3,862
Buildings and Equipment	0
Total	3,862
Accumulated Depreciation	0
Honolulu, HI | 2264 Pahounui Drive
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,632
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,632
Buildings and Equipment	0
Total	1,632
Accumulated Depreciation	0
Honolulu, HI | 2276 Pahounui Drive
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,619
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,619
Buildings and Equipment	0
Total	1,619
Accumulated Depreciation	0
Honolulu, HI | 228 Mohonua Place
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,865
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,865
Buildings and Equipment	0
Total	1,865
Accumulated Depreciation	0
Honolulu, HI | 2308 Pahounui Drive
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	3,314
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	3,314
Buildings and Equipment	0
Total	3,314
Accumulated Depreciation	0
Honolulu, HI | 231 Sand Island Access Road
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	752
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	752
Buildings and Equipment	0
Total	752
Accumulated Depreciation	0
Honolulu, HI | 231B Sand Island Access Road
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,539
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,539
Buildings and Equipment	0
Total	1,539
Accumulated Depreciation	0
Honolulu, HI | 2344 Pahounui Drive
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	6,709
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	6,709
Buildings and Equipment	0
Total	6,709
Accumulated Depreciation	0
Honolulu, HI | 238 Sand Island Access Road
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	2,273
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	2,273
Buildings and Equipment	0
Total	2,273
Accumulated Depreciation	0
Honolulu, HI | 2635 Waiwai Loop A
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	934
Buildings and Equipment	350
Costs Capitalized Subsequent to Acquisition	683
Gross Amount Carried at Close of Period
Land	934
Buildings and Equipment	1,033
Total	1,967
Accumulated Depreciation	(132)
Honolulu, HI | 2635 Waiwai Loop B
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,177
Buildings and Equipment	105
Costs Capitalized Subsequent to Acquisition	683
Gross Amount Carried at Close of Period
Land	1,177
Buildings and Equipment	788
Total	1,965
Accumulated Depreciation	(40)
Honolulu, HI | 2760 Kam Highway
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	703
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	143
Gross Amount Carried at Close of Period
Land	703
Buildings and Equipment	143
Total	846
Accumulated Depreciation	0
Honolulu, HI | 2804 Kilihau Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,775
Buildings and Equipment	2
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,775
Buildings and Equipment	2
Total	1,777
Accumulated Depreciation	(1)
Honolulu, HI | 2806 Kaihikapu Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,801
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,801
Buildings and Equipment	0
Total	1,801
Accumulated Depreciation	0
Honolulu, HI | 2808 Kam Highway
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	310
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	310
Buildings and Equipment	0
Total	310
Accumulated Depreciation	0
Honolulu, HI | 2809 Kaihikapu Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,837
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,837
Buildings and Equipment	0
Total	1,837
Accumulated Depreciation	0
Honolulu, HI | 2810 Paa Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	3,340
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	3,340
Buildings and Equipment	0
Total	3,340
Accumulated Depreciation	0
Honolulu, HI | 2810 Pukoloa Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	27,699
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	4
Gross Amount Carried at Close of Period
Land	27,699
Buildings and Equipment	4
Total	27,703
Accumulated Depreciation	(4)
Honolulu, HI | 2812 Awaawaloa Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,801
Buildings and Equipment	2
Costs Capitalized Subsequent to Acquisition	1
Gross Amount Carried at Close of Period
Land	1,801
Buildings and Equipment	3
Total	1,804
Accumulated Depreciation	(2)
Honolulu, HI | 2814 Kilihau Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,925
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,925
Buildings and Equipment	0
Total	1,925
Accumulated Depreciation	0
Honolulu, HI | 2815 Kaihikapu Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,818
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	5
Gross Amount Carried at Close of Period
Land	1,818
Buildings and Equipment	5
Total	1,823
Accumulated Depreciation	(1)
Honolulu, HI | 2815 Kilihau Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	287
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	287
Buildings and Equipment	0
Total	287
Accumulated Depreciation	0
Honolulu, HI | 2816 Awaawaloa Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,009
Buildings and Equipment	27
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,009
Buildings and Equipment	27
Total	1,036
Accumulated Depreciation	(10)
Honolulu, HI | 2819 Mokumoa Street - A
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,821
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,821
Buildings and Equipment	0
Total	1,821
Accumulated Depreciation	0
Honolulu, HI | 2819 Mokumoa Street - B
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,816
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,816
Buildings and Equipment	0
Total	1,816
Accumulated Depreciation	0
Honolulu, HI | 2819 Pukoloa Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	2,090
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	33
Gross Amount Carried at Close of Period
Land	2,090
Buildings and Equipment	33
Total	2,123
Accumulated Depreciation	(8)
Honolulu, HI | 2821 Kilihau Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	287
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	287
Buildings and Equipment	0
Total	287
Accumulated Depreciation	0
Honolulu, HI | 2826 Kaihikapu Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	3,921
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	3,921
Buildings and Equipment	0
Total	3,921
Accumulated Depreciation	0
Honolulu, HI | 2827 Kaihikapu Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,801
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,801
Buildings and Equipment	0
Total	1,801
Accumulated Depreciation	0
Honolulu, HI | 2828 Paa Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	12,448
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	12,448
Buildings and Equipment	0
Total	12,448
Accumulated Depreciation	0
Honolulu, HI | 2829 Awaawaloa Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,720
Buildings and Equipment	2
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,720
Buildings and Equipment	2
Total	1,722
Accumulated Depreciation	(2)
Honolulu, HI | 2829 Kilihau Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	287
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	287
Buildings and Equipment	0
Total	287
Accumulated Depreciation	0
Honolulu, HI | 2829 Pukoloa Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	2,088
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	2,088
Buildings and Equipment	0
Total	2,088
Accumulated Depreciation	0
Honolulu, HI | 2830 Mokumoa Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	2,146
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	2,146
Buildings and Equipment	0
Total	2,146
Accumulated Depreciation	0
Honolulu, HI | 2831 Awaawaloa Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	860
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	860
Buildings and Equipment	0
Total	860
Accumulated Depreciation	0
Honolulu, HI | 2831 Kaihikapu Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,272
Buildings and Equipment	529
Costs Capitalized Subsequent to Acquisition	56
Gross Amount Carried at Close of Period
Land	1,272
Buildings and Equipment	585
Total	1,857
Accumulated Depreciation	(219)
Honolulu, HI | 2833 Kilihau Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	601
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	601
Buildings and Equipment	0
Total	601
Accumulated Depreciation	0
Honolulu, HI | 2833 Paa Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,701
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,701
Buildings and Equipment	0
Total	1,701
Accumulated Depreciation	0
Honolulu, HI | 2833 Paa Street 2
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,675
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,675
Buildings and Equipment	0
Total	1,675
Accumulated Depreciation	0
Honolulu, HI | 2836 Awaawaloa Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,353
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,353
Buildings and Equipment	0
Total	1,353
Accumulated Depreciation	0
Honolulu, HI | 2838 Kilihau Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	4,262
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	4,262
Buildings and Equipment	0
Total	4,262
Accumulated Depreciation	0
Honolulu, HI | 2839 Kilihau Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	627
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	627
Buildings and Equipment	0
Total	627
Accumulated Depreciation	0
Honolulu, HI | 2839 Mokumoa Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,942
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,942
Buildings and Equipment	0
Total	1,942
Accumulated Depreciation	0
Honolulu, HI | 2840 Mokumoa Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	2,149
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	2,149
Buildings and Equipment	0
Total	2,149
Accumulated Depreciation	0
Honolulu, HI | 2841 Pukoloa Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	2,088
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	2,088
Buildings and Equipment	0
Total	2,088
Accumulated Depreciation	0
Honolulu, HI | 2844 Kaihikapu Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,960
Buildings and Equipment	14
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,960
Buildings and Equipment	14
Total	1,974
Accumulated Depreciation	(11)
Honolulu, HI | 2846-A Awaawaloa Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	2,181
Buildings and Equipment	954
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	2,181
Buildings and Equipment	954
Total	3,135
Accumulated Depreciation	(359)
Honolulu, HI | 2847 Awaawaloa Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	582
Buildings and Equipment	303
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	582
Buildings and Equipment	303
Total	885
Accumulated Depreciation	(114)
Honolulu, HI | 2849 Kaihikapu Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	860
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	860
Buildings and Equipment	0
Total	860
Accumulated Depreciation	0
Honolulu, HI | 2850 Awaawaloa Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	286
Buildings and Equipment	173
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	286
Buildings and Equipment	173
Total	459
Accumulated Depreciation	(65)
Honolulu, HI | 2850 Mokumoa Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	2,143
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	2,143
Buildings and Equipment	0
Total	2,143
Accumulated Depreciation	0
Honolulu, HI | 2850 Paa Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	22,827
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	22,827
Buildings and Equipment	0
Total	22,827
Accumulated Depreciation	0
Honolulu, HI | 2855 Kaihikapu Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,807
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,807
Buildings and Equipment	0
Total	1,807
Accumulated Depreciation	0
Honolulu, HI | 2855 Pukoloa Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,934
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,934
Buildings and Equipment	0
Total	1,934
Accumulated Depreciation	0
Honolulu, HI | 2857 Awaawaloa Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	983
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	983
Buildings and Equipment	0
Total	983
Accumulated Depreciation	0
Honolulu, HI | 2858 Kaihikapu Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,801
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,801
Buildings and Equipment	0
Total	1,801
Accumulated Depreciation	0
Honolulu, HI | 2861 Mokumoa Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	3,867
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	3,867
Buildings and Equipment	0
Total	3,867
Accumulated Depreciation	0
Honolulu, HI | 2864 Awaawaloa Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,836
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	6
Gross Amount Carried at Close of Period
Land	1,836
Buildings and Equipment	6
Total	1,842
Accumulated Depreciation	(4)
Honolulu, HI | 2864 Mokumoa Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	2,092
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	2,092
Buildings and Equipment	0
Total	2,092
Accumulated Depreciation	0
Honolulu, HI | 2865 Pukoloa Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,934
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,934
Buildings and Equipment	0
Total	1,934
Accumulated Depreciation	0
Honolulu, HI | 2868 Kaihikapu Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,801
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,801
Buildings and Equipment	0
Total	1,801
Accumulated Depreciation	0
Honolulu, HI | 2869 Mokumoa Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,794
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,794
Buildings and Equipment	0
Total	1,794
Accumulated Depreciation	0
Honolulu, HI | 2875 Paa Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,330
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,330
Buildings and Equipment	0
Total	1,330
Accumulated Depreciation	0
Honolulu, HI | 2879 Mokumoa Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,789
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,789
Buildings and Equipment	0
Total	1,789
Accumulated Depreciation	0
Honolulu, HI | 2879 Paa Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,691
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	44
Gross Amount Carried at Close of Period
Land	1,691
Buildings and Equipment	44
Total	1,735
Accumulated Depreciation	(11)
Honolulu, HI | 2886 Paa Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	2,205
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	2,205
Buildings and Equipment	0
Total	2,205
Accumulated Depreciation	0
Honolulu, HI | 2889 Mokumoa Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,783
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,783
Buildings and Equipment	0
Total	1,783
Accumulated Depreciation	0
Honolulu, HI | 2906 Kaihikapu Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,814
Buildings and Equipment	2
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,814
Buildings and Equipment	2
Total	1,816
Accumulated Depreciation	(1)
Honolulu, HI | 2908 Kaihikapu Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,798
Buildings and Equipment	12
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,798
Buildings and Equipment	12
Total	1,810
Accumulated Depreciation	(1)
Honolulu, HI | 2915 Kaihikapu Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	2,579
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	2,579
Buildings and Equipment	0
Total	2,579
Accumulated Depreciation	0
Honolulu, HI | 2927 Mokumoa Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,778
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,778
Buildings and Equipment	0
Total	1,778
Accumulated Depreciation	0
Honolulu, HI | 2928 Kaihikapu Street - A
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,801
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,801
Buildings and Equipment	0
Total	1,801
Accumulated Depreciation	0
Honolulu, HI | 2928 Kaihikapu Street - B
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,948
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,948
Buildings and Equipment	0
Total	1,948
Accumulated Depreciation	0
Honolulu, HI | 2960 Mokumoa Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,977
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,977
Buildings and Equipment	0
Total	1,977
Accumulated Depreciation	0
Honolulu, HI | 2965 Mokumoa Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	2,140
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	2,140
Buildings and Equipment	0
Total	2,140
Accumulated Depreciation	0
Honolulu, HI | 2969 Mapunapuna Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	4,038
Buildings and Equipment	15
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	4,038
Buildings and Equipment	15
Total	4,053
Accumulated Depreciation	(8)
Honolulu, HI | 2970 Mokumoa Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,722
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,722
Buildings and Equipment	0
Total	1,722
Accumulated Depreciation	0
Honolulu, HI | 33 S. Vineyard Boulevard
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	844
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	844
Buildings and Equipment	0
Total	844
Accumulated Depreciation	0
Honolulu, HI | 525 N. King Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,342
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,342
Buildings and Equipment	0
Total	1,342
Accumulated Depreciation	0
Honolulu, HI | 609 Ahua Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	616
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	8
Gross Amount Carried at Close of Period
Land	616
Buildings and Equipment	8
Total	624
Accumulated Depreciation	(6)
Honolulu, HI | 619 Mapunapuna Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,401
Buildings and Equipment	2
Costs Capitalized Subsequent to Acquisition	12
Gross Amount Carried at Close of Period
Land	1,401
Buildings and Equipment	14
Total	1,415
Accumulated Depreciation	(1)
Honolulu, HI | 645 Ahua Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	882
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	882
Buildings and Equipment	0
Total	882
Accumulated Depreciation	0
Honolulu, HI | 659 Ahua Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	860
Buildings and Equipment	20
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	860
Buildings and Equipment	20
Total	880
Accumulated Depreciation	(16)
Honolulu, HI | 659 Puuloa Road
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,807
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,807
Buildings and Equipment	0
Total	1,807
Accumulated Depreciation	0
Honolulu, HI | 660 Ahua Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,783
Buildings and Equipment	3
Costs Capitalized Subsequent to Acquisition	1
Gross Amount Carried at Close of Period
Land	1,783
Buildings and Equipment	4
Total	1,787
Accumulated Depreciation	(3)
Honolulu, HI | 667 Puuloa Road
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	860
Buildings and Equipment	2
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	860
Buildings and Equipment	2
Total	862
Accumulated Depreciation	(2)
Honolulu, HI | 669 Ahua Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,801
Buildings and Equipment	14
Costs Capitalized Subsequent to Acquisition	62
Gross Amount Carried at Close of Period
Land	1,801
Buildings and Equipment	76
Total	1,877
Accumulated Depreciation	(18)
Honolulu, HI | 673 Ahua Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,801
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,801
Buildings and Equipment	0
Total	1,801
Accumulated Depreciation	0
Honolulu, HI | 675 Mapunapuna Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,081
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,081
Buildings and Equipment	0
Total	1,081
Accumulated Depreciation	0
Honolulu, HI | 679 Puuloa Road
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,807
Buildings and Equipment	3
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,807
Buildings and Equipment	3
Total	1,810
Accumulated Depreciation	(2)
Honolulu, HI | 685 Ahua Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,801
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,801
Buildings and Equipment	0
Total	1,801
Accumulated Depreciation	0
Honolulu, HI | 673 Mapunapuna Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,801
Buildings and Equipment	20
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,801
Buildings and Equipment	20
Total	1,821
Accumulated Depreciation	(16)
Honolulu, HI | 692 Mapunapuna Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,798
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,798
Buildings and Equipment	0
Total	1,798
Accumulated Depreciation	0
Honolulu, HI | 697 Ahua Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	994
Buildings and Equipment	811
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	994
Buildings and Equipment	811
Total	1,805
Accumulated Depreciation	(307)
Honolulu, HI | 702 Ahua Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,783
Buildings and Equipment	4
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,783
Buildings and Equipment	4
Total	1,787
Accumulated Depreciation	(3)
Honolulu, HI | 704 Mapunapuna Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	2,390
Buildings and Equipment	685
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	2,390
Buildings and Equipment	685
Total	3,075
Accumulated Depreciation	(258)
Honolulu, HI | 709 Ahua Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,801
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,801
Buildings and Equipment	0
Total	1,801
Accumulated Depreciation	0
Honolulu, HI | 719 Ahua Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,960
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,960
Buildings and Equipment	0
Total	1,960
Accumulated Depreciation	0
Honolulu, HI | 729 Ahua Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,801
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,801
Buildings and Equipment	0
Total	1,801
Accumulated Depreciation	0
Honolulu, HI | 733 Mapunapuna Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	3,403
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	3,403
Buildings and Equipment	0
Total	3,403
Accumulated Depreciation	0
Honolulu, HI | 739 Ahua Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,801
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,801
Buildings and Equipment	0
Total	1,801
Accumulated Depreciation	0
Honolulu, HI | 759 Puuloa Road
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,766
Buildings and Equipment	3
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,766
Buildings and Equipment	3
Total	1,769
Accumulated Depreciation	(3)
Honolulu, HI | 761 Ahua Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	3,757
Buildings and Equipment	1
Costs Capitalized Subsequent to Acquisition	1
Gross Amount Carried at Close of Period
Land	3,757
Buildings and Equipment	2
Total	3,759
Accumulated Depreciation	(1)
Honolulu, HI | 766 Mapunapuna Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,801
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,801
Buildings and Equipment	0
Total	1,801
Accumulated Depreciation	0
Honolulu, HI | 770 Mapunapuna Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,801
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,801
Buildings and Equipment	0
Total	1,801
Accumulated Depreciation	0
Honolulu, HI | 789 Mapunapuna Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	2,608
Buildings and Equipment	3
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	2,608
Buildings and Equipment	3
Total	2,611
Accumulated Depreciation	(2)
Honolulu, HI | 80 Sand Island Access Road
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	7,972
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	7,972
Buildings and Equipment	0
Total	7,972
Accumulated Depreciation	0
Honolulu, HI | 803 Ahua Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	3,804
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	3,804
Buildings and Equipment	0
Total	3,804
Accumulated Depreciation	0
Honolulu, HI | 808 Ahua Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	3,279
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	3,279
Buildings and Equipment	0
Total	3,279
Accumulated Depreciation	0
Honolulu, HI | 812 Mapunapuna Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,960
Buildings and Equipment	25
Costs Capitalized Subsequent to Acquisition	628
Gross Amount Carried at Close of Period
Land	2,613
Buildings and Equipment	0
Total	2,613
Accumulated Depreciation	0
Honolulu, HI | 819 Ahua Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	4,821
Buildings and Equipment	583
Costs Capitalized Subsequent to Acquisition	30
Gross Amount Carried at Close of Period
Land	4,821
Buildings and Equipment	613
Total	5,434
Accumulated Depreciation	(230)
Honolulu, HI | 822 Mapunapuna Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,795
Buildings and Equipment	15
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,795
Buildings and Equipment	15
Total	1,810
Accumulated Depreciation	(12)
Honolulu, HI | 830 Mapunapuna Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,801
Buildings and Equipment	25
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,801
Buildings and Equipment	25
Total	1,826
Accumulated Depreciation	(20)
Honolulu, HI | 841 Mapunapuna Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	3,265
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	3,265
Buildings and Equipment	0
Total	3,265
Accumulated Depreciation	0
Honolulu, HI | 842 Mapunapuna Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,795
Buildings and Equipment	14
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,795
Buildings and Equipment	14
Total	1,809
Accumulated Depreciation	(11)
Honolulu, HI | 846 Ala Lilikoi Boulevard B
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	234
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	234
Buildings and Equipment	0
Total	234
Accumulated Depreciation	0
Honolulu, HI | 848 Ala Lilikoi Boulevard A
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	9,426
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	9,426
Buildings and Equipment	0
Total	9,426
Accumulated Depreciation	0
Honolulu, HI | 850 Ahua Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	2,682
Buildings and Equipment	2
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	2,682
Buildings and Equipment	2
Total	2,684
Accumulated Depreciation	(2)
Honolulu, HI | 852 Mapunapuna Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,801
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,801
Buildings and Equipment	0
Total	1,801
Accumulated Depreciation	0
Honolulu, HI | 855 Ahua Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,834
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,834
Buildings and Equipment	0
Total	1,834
Accumulated Depreciation	0
Honolulu, HI | 865 Ahua Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,846
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,846
Buildings and Equipment	0
Total	1,846
Accumulated Depreciation	0
Honolulu, HI | 889 Ahua Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	5,888
Buildings and Equipment	315
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	5,888
Buildings and Equipment	315
Total	6,203
Accumulated Depreciation	(48)
Honolulu, HI | 905 Ahua Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,148
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,148
Buildings and Equipment	0
Total	1,148
Accumulated Depreciation	0
Honolulu, HI | 918 Ahua Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	3,820
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	3,820
Buildings and Equipment	0
Total	3,820
Accumulated Depreciation	0
Honolulu, HI | 930 Mapunapuna Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	3,654
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	3,654
Buildings and Equipment	0
Total	3,654
Accumulated Depreciation	0
Honolulu, HI | 944 Ahua Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,219
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,219
Buildings and Equipment	0
Total	1,219
Accumulated Depreciation	0
Honolulu, HI | 949 Mapunapuna Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	11,568
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	11,568
Buildings and Equipment	0
Total	11,568
Accumulated Depreciation	0
Honolulu, HI | 950 Mapunapuna Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,724
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,724
Buildings and Equipment	0
Total	1,724
Accumulated Depreciation	0
Honolulu, HI | 960 Ahua Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	614
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	614
Buildings and Equipment	0
Total	614
Accumulated Depreciation	0
Honolulu, HI | 960 Mapunapuna Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,933
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,933
Buildings and Equipment	0
Total	1,933
Accumulated Depreciation	0
Honolulu, HI | 970 Ahua Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	817
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	817
Buildings and Equipment	0
Total	817
Accumulated Depreciation	0
Kapolei, HI | 91-027 Kaomi Loop
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	2,667
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	2,667
Buildings and Equipment	0
Total	2,667
Accumulated Depreciation	0
Kapolei, HI | 91-064 Kaomi Loop
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,826
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,826
Buildings and Equipment	0
Total	1,826
Accumulated Depreciation	0
Kapolei, HI | 91-080 Hanua
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	2,187
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	2,187
Buildings and Equipment	0
Total	2,187
Accumulated Depreciation	0
Kapolei, HI | 91-083 Hanua
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	716
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	716
Buildings and Equipment	0
Total	716
Accumulated Depreciation	0
Kapolei, HI | 91-086 Kaomi Loop
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	13,884
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	13,884
Buildings and Equipment	0
Total	13,884
Accumulated Depreciation	0
Kapolei, HI | 91-087 Hanua
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	381
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	381
Buildings and Equipment	0
Total	381
Accumulated Depreciation	0
Kapolei, HI | 91-091 Hanua
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	552
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	552
Buildings and Equipment	0
Total	552
Accumulated Depreciation	0
Kapolei, HI | 91-102 Kaomi Loop
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,599
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,599
Buildings and Equipment	0
Total	1,599
Accumulated Depreciation	0
Kapolei, HI | 91-110 Kaomi Loop
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,293
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,293
Buildings and Equipment	0
Total	1,293
Accumulated Depreciation	0
Kapolei, HI | 91-119 Olai
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,981
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,981
Buildings and Equipment	0
Total	1,981
Accumulated Depreciation	0
Kapolei, HI | 91-141 Kalaeloa
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	11,624
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	11,624
Buildings and Equipment	0
Total	11,624
Accumulated Depreciation	0
Kapolei, HI | 91-150 Kaomi Loop
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	3,159
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	3,159
Buildings and Equipment	0
Total	3,159
Accumulated Depreciation	0
Kapolei, HI | 91-171 Olai
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	218
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	47
Gross Amount Carried at Close of Period
Land	218
Buildings and Equipment	47
Total	265
Accumulated Depreciation	(17)
Kapolei, HI | 91-174 Olai
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	962
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	47
Gross Amount Carried at Close of Period
Land	962
Buildings and Equipment	47
Total	1,009
Accumulated Depreciation	(16)
Kapolei, HI | 91-175 Olai
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,243
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	43
Gross Amount Carried at Close of Period
Land	1,243
Buildings and Equipment	43
Total	1,286
Accumulated Depreciation	(17)
Kapolei, HI | 91-185 Kalaeloa
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,761
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,761
Buildings and Equipment	0
Total	1,761
Accumulated Depreciation	0
Kapolei, HI | 91-202 Kalaeloa
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,722
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	326
Gross Amount Carried at Close of Period
Land	1,722
Buildings and Equipment	326
Total	2,048
Accumulated Depreciation	(45)
Kapolei, HI | 91-210 Kauhi
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	567
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	567
Buildings and Equipment	0
Total	567
Accumulated Depreciation	0
Kapolei, HI | 91-210 Olai
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	706
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	706
Buildings and Equipment	0
Total	706
Accumulated Depreciation	0
Kapolei, HI | 91-218 Olai
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,622
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	61
Gross Amount Carried at Close of Period
Land	1,622
Buildings and Equipment	61
Total	1,683
Accumulated Depreciation	(17)
Kapolei, HI | 91-220 Kalaeloa
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	242
Buildings and Equipment	1,457
Costs Capitalized Subsequent to Acquisition	172
Gross Amount Carried at Close of Period
Land	242
Buildings and Equipment	1,629
Total	1,871
Accumulated Depreciation	(537)
Kapolei, HI | 91-222 Olai
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	2,035
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	2,035
Buildings and Equipment	0
Total	2,035
Accumulated Depreciation	0
Kapolei, HI | 91-238 Kauhi
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,390
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	9,209
Gross Amount Carried at Close of Period
Land	1,390
Buildings and Equipment	9,209
Total	10,599
Accumulated Depreciation	(2,606)
Kapolei, HI | 91-241 Kalaeloa
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	426
Buildings and Equipment	3,983
Costs Capitalized Subsequent to Acquisition	838
Gross Amount Carried at Close of Period
Land	426
Buildings and Equipment	4,821
Total	5,247
Accumulated Depreciation	(1,576)
Kapolei, HI | 91-250 Komohana
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,506
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,506
Buildings and Equipment	0
Total	1,506
Accumulated Depreciation	0
Kapolei, HI | 91-252 Kauhi
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	536
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	536
Buildings and Equipment	0
Total	536
Accumulated Depreciation	0
Kapolei, HI | 91-255 Hanua
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,230
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	16
Gross Amount Carried at Close of Period
Land	1,230
Buildings and Equipment	16
Total	1,246
Accumulated Depreciation	(1)
Kapolei, HI | 91-259 Olai
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	2,944
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	2,944
Buildings and Equipment	0
Total	2,944
Accumulated Depreciation	0
Kapolei, HI | 91-265 Hanua
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,569
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,569
Buildings and Equipment	0
Total	1,569
Accumulated Depreciation	0
Kapolei, HI | 91-300 Hanua
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,381
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,381
Buildings and Equipment	0
Total	1,381
Accumulated Depreciation	0
Kapolei, HI | 91-329 Kauhi
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	294
Buildings and Equipment	2,297
Costs Capitalized Subsequent to Acquisition	2,433
Gross Amount Carried at Close of Period
Land	294
Buildings and Equipment	4,730
Total	5,024
Accumulated Depreciation	(1,342)
Kapolei, HI | 91-349 Kauhi
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	649
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	649
Buildings and Equipment	0
Total	649
Accumulated Depreciation	0
Kapolei, HI | 91-399 Kauhi
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	27,405
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	27,405
Buildings and Equipment	0
Total	27,405
Accumulated Depreciation	0
Kapolei, HI | 91-400 Komohana
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,494
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,494
Buildings and Equipment	0
Total	1,494
Accumulated Depreciation	0
Kapolei, HI | 91-410 Komohana
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	418
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	12
Gross Amount Carried at Close of Period
Land	418
Buildings and Equipment	12
Total	430
Accumulated Depreciation	(1)
Kapolei, HI | 91-416 Komohana
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	713
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	11
Gross Amount Carried at Close of Period
Land	713
Buildings and Equipment	11
Total	724
Accumulated Depreciation	(1)
Kapolei, HI | AES HI Easement
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,250
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,250
Buildings and Equipment	0
Total	1,250
Accumulated Depreciation	0
Kapolei, HI | Other Easements & Lots
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	358
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	1,395
Gross Amount Carried at Close of Period
Land	358
Buildings and Equipment	1,395
Total	1,753
Accumulated Depreciation	(353)
Kapolei, HI | Tesaro 967 Easement
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	6,593
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	6,593
Buildings and Equipment	0
Total	6,593
Accumulated Depreciation	0
Kapolei, HI | Texaco Easement
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	2,653
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	2,653
Buildings and Equipment	0
Total	2,653
Accumulated Depreciation	0
Waipahu, HI | 94-240 Pupuole Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	717
Buildings and Equipment	0
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	717
Buildings and Equipment	0
Total	717
Accumulated Depreciation	0
Ankeny, IA | 5500 SE Delaware Avenue
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	2,200
Buildings and Equipment	16,994
Costs Capitalized Subsequent to Acquisition	1,007
Gross Amount Carried at Close of Period
Land	2,707
Buildings and Equipment	17,494
Total	20,201
Accumulated Depreciation	(1,664)
Eldridge, IA | 951 Trails Road
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	470
Buildings and Equipment	7,480
Costs Capitalized Subsequent to Acquisition	874
Gross Amount Carried at Close of Period
Land	470
Buildings and Equipment	8,354
Total	8,824
Accumulated Depreciation	(2,340)
Newton, IA | 2300 North 33rd Avenue East
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	500
Buildings and Equipment	13,236
Costs Capitalized Subsequent to Acquisition	395
Gross Amount Carried at Close of Period
Land	500
Buildings and Equipment	13,631
Total	14,131
Accumulated Depreciation	(3,517)
Pocatello, ID | 7121 South Fifth Avenue
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	400
Buildings and Equipment	4,201
Costs Capitalized Subsequent to Acquisition	145
Gross Amount Carried at Close of Period
Land	400
Buildings and Equipment	4,346
Total	4,746
Accumulated Depreciation	(419)
Harvey, IL | 1230 West 171st Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	800
Buildings and Equipment	1,673
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	800
Buildings and Equipment	1,673
Total	2,473
Accumulated Depreciation	(164)
Rockford, IL | 5156 American Road
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	400
Buildings and Equipment	1,529
Costs Capitalized Subsequent to Acquisition	82
Gross Amount Carried at Close of Period
Land	400
Buildings and Equipment	1,611
Total	2,011
Accumulated Depreciation	(151)
Baton Rouge, LA | 17200 Manchac Park Lane
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,700
Buildings and Equipment	8,860
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,700
Buildings and Equipment	8,860
Total	10,560
Accumulated Depreciation	(868)
Lafayette, LA | 209 South Bud Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	700
Buildings and Equipment	4,549
Costs Capitalized Subsequent to Acquisition	9
Gross Amount Carried at Close of Period
Land	700
Buildings and Equipment	4,558
Total	5,258
Accumulated Depreciation	(446)
North East, MD | 4000 Principio Parkway
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	4,200
Buildings and Equipment	71,518
Costs Capitalized Subsequent to Acquisition	650
Gross Amount Carried at Close of Period
Land	4,200
Buildings and Equipment	72,168
Total	76,368
Accumulated Depreciation	(7,018)
Upper Marlboro, MD | 16101 Queens Court
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	5,296
Buildings and Equipment	21,833
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	5,296
Buildings and Equipment	21,833
Total	27,129
Accumulated Depreciation	(137)
Kalamazoo, MI | 3800 Midlink Drive
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	2,630
Buildings and Equipment	40,599
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	2,630
Buildings and Equipment	40,599
Total	43,229
Accumulated Depreciation	(3,975)
Bemidji, MN | 2401 Cram Avenue SE
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	100
Buildings and Equipment	2,137
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	100
Buildings and Equipment	2,137
Total	2,237
Accumulated Depreciation	(209)
Maple Grove, MN | 10100 89th Avenue N
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	3,469
Buildings and Equipment	21,287
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	3,469
Buildings and Equipment	21,287
Total	24,756
Accumulated Depreciation	(89)
Brookfield, MO | 110 Stanbury Industrial Drive
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	200
Buildings and Equipment	1,859
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	200
Buildings and Equipment	1,859
Total	2,059
Accumulated Depreciation	(182)
Asheville, NC | 628 Patton Avenue
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	500
Buildings and Equipment	1,514
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	500
Buildings and Equipment	1,514
Total	2,014
Accumulated Depreciation	(148)
Minot, ND | 3900 NE 6th Street
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	700
Buildings and Equipment	3,223
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	700
Buildings and Equipment	3,223
Total	3,923
Accumulated Depreciation	(316)
Lincoln, NE | 1415 West Commerce Way
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	2,200
Buildings and Equipment	8,518
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	2,200
Buildings and Equipment	8,518
Total	10,718
Accumulated Depreciation	(834)
Burlington, NJ | 309 Dulty's Lane
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,600
Buildings and Equipment	51,400
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,600
Buildings and Equipment	51,400
Total	53,000
Accumulated Depreciation	(5,033)
Mahwah, NJ | 725 Darlington Avenue
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	8,492
Buildings and Equipment	9,451
Costs Capitalized Subsequent to Acquisition	1,047
Gross Amount Carried at Close of Period
Land	8,492
Buildings and Equipment	10,498
Total	18,990
Accumulated Depreciation	(1,179)
Fernley, NV | 2375 East Newlands Road
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,100
Buildings and Equipment	17,314
Costs Capitalized Subsequent to Acquisition	286
Gross Amount Carried at Close of Period
Land	1,100
Buildings and Equipment	17,600
Total	18,700
Accumulated Depreciation	(1,732)
Albany, NY | 55 Commerce Avenue
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,000
Buildings and Equipment	10,105
Costs Capitalized Subsequent to Acquisition	179
Gross Amount Carried at Close of Period
Land	1,000
Buildings and Equipment	10,284
Total	11,284
Accumulated Depreciation	(1,012)
Avon, OH | 32150 Just Imagine Drive
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	2,200
Buildings and Equipment	23,280
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	2,200
Buildings and Equipment	23,280
Total	25,480
Accumulated Depreciation	(5,577)
Chillicothe, OH | 1415 Industrial Drive
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,200
Buildings and Equipment	3,265
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,200
Buildings and Equipment	3,265
Total	4,465
Accumulated Depreciation	(320)
Groveport, OH | 5300 Centerpoint Parkway
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	2,700
Buildings and Equipment	29,863
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	2,700
Buildings and Equipment	29,863
Total	32,563
Accumulated Depreciation	(2,924)
Lewis Center, OH | 200 Orange Point Drive
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,300
Buildings and Equipment	8,613
Costs Capitalized Subsequent to Acquisition	162
Gross Amount Carried at Close of Period
Land	1,300
Buildings and Equipment	8,775
Total	10,075
Accumulated Depreciation	(849)
South Point, OH | 301 Commerce Drive
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	600
Buildings and Equipment	4,530
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	600
Buildings and Equipment	4,530
Total	5,130
Accumulated Depreciation	(444)
McAlester, OK | 2820 State Highway 31
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	581
Buildings and Equipment	2,237
Costs Capitalized Subsequent to Acquisition	4,633
Gross Amount Carried at Close of Period
Land	581
Buildings and Equipment	6,870
Total	7,451
Accumulated Depreciation	(365)
Carlisle PA | 5 Logistics Drive
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	3,299
Buildings and Equipment	15,515
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	3,299
Buildings and Equipment	15,515
Total	18,814
Accumulated Depreciation	(97)
Rock Hill, SC | 996 Paragon Way
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	2,600
Buildings and Equipment	35,920
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	2,600
Buildings and Equipment	35,920
Total	38,520
Accumulated Depreciation	(3,517)
Spartanburg, SC | 510 John Dodd Road
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	3,300
Buildings and Equipment	57,998
Costs Capitalized Subsequent to Acquisition	42
Gross Amount Carried at Close of Period
Land	3,300
Buildings and Equipment	58,040
Total	61,340
Accumulated Depreciation	(5,680)
Memphis, TN | 4836 Hickory Hill Road
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,402
Buildings and Equipment	10,769
Costs Capitalized Subsequent to Acquisition	750
Gross Amount Carried at Close of Period
Land	1,402
Buildings and Equipment	11,519
Total	12,921
Accumulated Depreciation	(1,129)
Murfreesboro, TN | 2020 Joe B. Jackson Parkway
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	7,500
Buildings and Equipment	55,259
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	7,500
Buildings and Equipment	55,259
Total	62,759
Accumulated Depreciation	(5,411)
Salt Lake City, UT | 1095 South 4800 West
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,500
Buildings and Equipment	6,913
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	1,500
Buildings and Equipment	6,913
Total	8,413
Accumulated Depreciation	(677)
Chester, VA | 1901 Meadowville Technology Parkway
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	49,195
Initial Cost to Company
Land	4,000
Buildings and Equipment	67,511
Costs Capitalized Subsequent to Acquisition	0
Gross Amount Carried at Close of Period
Land	4,000
Buildings and Equipment	67,511
Total	71,511
Accumulated Depreciation	(6,610)
Winchester, VA | 181 Battaile Drive
REAL ESTATE AND ACCUMULATED DEPRECIATION
Encumbrances	0
Initial Cost to Company
Land	1,487
Buildings and Equipment	12,854
Costs Capitalized Subsequent to Acquisition	11
Gross Amount Carried at Close of Period
Land	1,487
Buildings and Equipment	12,865
Total	14,352
Accumulated Depreciation	$ (4,086)

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SCHEDULE III - REAL ESTATE AND ACCUMULATED DEPRECIATION - Analysis of Carrying Amount And Accumulated Depreciation (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Real Estate Properties
Balance at the beginning of the period	$ 1,343,602	$ 1,336,728	$ 1,335,363
Additions	118,898	6,974	1,659
Disposals	(104)	(100)	(294)
Balance at the end of the period	1,462,396	1,343,602	1,336,728
Accumulated Depreciation
Balance at the beginning of the period	(74,614)	(56,976)	(39,707)
Additions	(18,781)	(17,738)	(17,563)
Disposals	104	100	294
Balance at the end of the period	$ (93,291)	$ (74,614)	$ (56,976)