Reveal · frozen verdict dated November 2021 · teaching case

Halfmoon UPS audit, then what ILPT later disclosed about the bridge

The original audit used only M1 (published ) and M2 (published ). R1 (published ) and R2 (published ) came later and were not available at the November 2021 decision. They are shown beside the frozen verdict, never folded into it. Read from the local packet on 2026-10-14. Historical teaching case, not investment or legal advice. No buy or pass call.

1. Frozen verdict, November 2021

Unchanged copy from audit.html. Dated November 2021.

  1. 11 of 12 months are fixed by filed language. Their contractual scheduled base rent totals $272,333.33. That is a schedule, not cash: receipts are unknown for all twelve months.
  2. June 2021 stays open. The parking increment started 2021-06-04 and the filing does not say how June was invoiced. If June was billed wholly at one filed rate, it falls between $42,500.00 and $46,833.33, so the twelve-month schedule is $314,833.33 to $319,166.67. No proration is invented.
  3. Five free months, then $510,000 a year. Free rent ran 2020-11-01 to 2021-03-31; base rent commenced 2021-04-01, which matches the filed five-month count.
  4. Parking: about $52,000 of added annual rent on about $835,000 of capital, a gross ratio of 6.23%. Not NOI.
  5. Four different "annual rent" figures are not interchangeable: schedule annualized $595,000, stated straight-line $541,000, current base about $562,000, remaining-term annualized about $622,000.
  6. Financing: $4.0B of committed bridge capacity; funded balance and coupon are unknown. A hypothetical +100 bp move costs $10,000 a year per $1,000,000 of principal you choose to assume drawn.
  7. No property NOI, Halfmoon value or acquisition value can be proved from this packet.

2. Original analysis versus later observation

Left: what the November 2021 packet supported. Right: what dated later sources say.
TopicOriginal analysis, November 2021 (M1, M2)Later observation (R1, R2)
Bridge financing$4.0B of committed bridge loan capacity, a ceiling. Funded balance: unknown (null). M2 A $1,385,158,000 interest-only bridge loan facility entered in connection with the Merger closing, secured by 109 properties. This is a disclosed loan size, not proof the $4.0B ceiling was ever drawn. R2
Borrowing rateFinal coupon unknown (null); every rate change labeled hypothetical. M2 SOFR plus a weighted average premium of 2.92%. SOFR levels are not in the packet, so no all-in rate is stated here. R2
Maturity and exitNo bridge maturity in the packet.Scheduled to mature in ; repaid in full on with cash on hand and ILPT Floating Rate Loan proceeds, 5 calendar months before the maturity month. R2
Rate sensitivityHypothetical +100 bp: $10,000 a year per $1,000,000 of principal assumed drawn.Same hypothetical +100 bp on the disclosed $1,385,158,000 for a full year: $13,851,580. A rate shock, not the interest paid. R2
Exit costNot in the packet.$22,231,000 loss on early extinguishment of debt in the year ended , writing off unamortized costs of the Bridge Loan and related interest rate cap. Not interest paid. R2
DistributionsNot analyzed; the packet has no dividend figure.Regular quarterly distribution for the second quarter reduced to $0.01 per share. ILPT cites interest rates, market conditions and a slower financing plan. R1
Halfmoon UPS lease11 of 12 months fixed by filed language, $272,333.33 of scheduled base rent; June 2021 open at $42,500.00 to $46,833.33.Nothing new. Neither later source mentions Halfmoon or UPS, so the June 2021 question and cash receipts remain unknown.

3. Capacity ceiling versus disclosed loan, one scale

Committed bridge capacity, a ceiling M2

$4.0B source M2

Bridge loan principal at Merger closing R2

$1,385,158,000 source R2

Both bars start at zero on one linear scale in US dollars; gridlines every quarter of the ceiling. The left bar is a commitment ceiling announced ; the right bar is the loan size reported in the 10-K published . They measure different things, so the gap between them is not shown as undrawn capacity or any other amount.

4. Dated financing-event timeline

  1. ILPT acquisition presentation says lenders committed a $4.0B bridge loan facility. Capacity, not a draw. M2

  2. Monmouth FY2021 10-K filed. The audit verdict is frozen at this date (November 2021). M1

  3. date not in packet

    Merger closes and ILPT enters the $1,385,158,000 bridge loan at SOFR plus 2.92%. The excerpt gives no closing date; it must precede the repayment, and its position before R1 is inferred, not stated. R2

  4. Quarterly distribution cut to $0.01 per share; ILPT cites rates, markets and a slower financing plan. R1

  5. Bridge loan repaid in full with cash on hand and ILPT Floating Rate Loan proceeds. R2

  6. Fiscal year end. During 2022 ILPT recorded a $22,231,000 loss on early extinguishment of debt. R2

  7. Original scheduled bridge maturity (day not stated). Not reached; the loan was already repaid. R2

  8. FY2022 Form 10-K filed, the source of the bridge loan figures. R2

Everything after sits outside the frozen decision. The Merger closing date is not in the packet, so the closing event is placed by order, not by date.

5. The November 2021 rate sensitivity on the later principal

November 2021 method: hypothetical +100 bp costs $10,000 a year per $1,000,000 of principal assumed drawn.

R2 later discloses a bridge principal of $1,385,158,000, which is 1,385.158 of those units, or $138,515.80 a year per basis point.

Hypothetical +100 bp shock on the disclosed principal for one full year: $13,851,580. This is a hypothetical rate shock, not the interest paid. It ignores the interest rate cap, the real days outstanding and any SOFR path, none of which are in the packet. The 2.92% premium is not multiplied into an interest total. R2

Hypothetical annual change, full year, whole principal floating. Not interest paid.
Hypothetical movePer baseline unit (November 2021 method)On disclosed principal, full year, hypothetical
-100 bpdown $10,000 a yeardown $13,851,580 a year
-50 bpdown $5,000 a yeardown $6,925,790 a year
-25 bpdown $2,500 a yeardown $3,462,895 a year
+25 bpup $2,500 a yearup $3,462,895 a year
+50 bpup $5,000 a yearup $6,925,790 a year
+100 bpup $10,000 a yearup $13,851,580 a year
+200 bpup $20,000 a yearup $27,703,160 a year

6. Causes ILPT reported versus what the documents do not prove

Reported by ILPT (paraphrased; exact quotes in section 7)

  • R1 Unanticipated increases in interest rates and deterioration in real estate market conditions.
  • R1 As a result, the long term Monmouth financing plan (more equity sales in the consolidated joint venture, property sales, other refinancing) was taking longer than expected; the distribution was cut to $0.01 per share.
  • R2 The bridge loan was repaid early with cash on hand and ILPT Floating Rate Loan proceeds, and the $22,231,000 loss wrote off unamortized costs of the Bridge Loan and related interest rate cap.
  • M2 Those plan pieces, joint venture equity and property sales, were already named in November 2021 as conditional financing sources.

What these documents do not prove

  • No tenant default. The dividend cut does not prove a warehouse tenant default. R1 gives financing and market reasons and names no tenant.
  • No Halfmoon rent finding. Neither document says whether UPS paid or missed any Halfmoon rent; the June 2021 schedule stays open.
  • Capacity is not the amount drawn. The $4.0B commitment was a ceiling. R2 discloses a $1,385,158,000 bridge loan; no draw history is in the packet.
  • No interest total. No SOFR path, all-in rate, closing date or days outstanding is in the packet, so the interest actually paid is unknown here.
  • The loss is not interest. The $22,231,000 is a write-off of unamortized costs, not interest paid and not a Halfmoon figure.
  • No valuation. No Halfmoon NOI, property value or acquisition value follows from these documents.

7. Inspect a dated quote

Choose a quote to show it in the inspector. This only displays source text; it never edits the frozen verdict in section 1. Without scripts, every quote is printed in full in the register below.

Dated quotes
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  1. Bridge commitment, M2 ILPT acquisition investor presentation

    To ensure ILPT can finance the closing of the transaction, ILPT has secured commitments from lenders for a $4.0B bridge loan facility.

  2. Packet note: capacity ceiling, M2 ILPT acquisition investor presentation

    A committed bridge facility is a capacity ceiling, not funded principal.

  3. Distribution cut, R1 ILPT dividend reduction notice

    reduced ILPT's regular quarterly cash distribution on its common shares for the second quarter to $0.01 per share

  4. Stated reasons, R1 ILPT dividend reduction notice

    Since then, there have been unanticipated increases in interest rates and deterioration in real estate market conditions. As a result, it is taking longer than originally expected to complete ILPT's long term financing plan for the Monmouth acquisition, which includes the sale of additional equity interests in its consolidated joint venture, property sales and other refinancing activities.

  5. Packet note: no tenant finding, R1 ILPT dividend reduction notice

    This notice does not establish that the Halfmoon tenant missed any rent.

  6. Bridge principal, R2 ILPT FY2022 Form 10-K

    we entered into a [$1,385,158,000] interest only bridge loan facility secured by 109 of our properties

  7. Scheduled maturity, R2 ILPT FY2022 Form 10-K

    The Bridge Loan was scheduled to mature in February 2023

  8. Spread over SOFR, R2 ILPT FY2022 Form 10-K

    secured overnight financing rate, or SOFR, plus a weighted average premium of 2.92%

  9. Repayment, R2 ILPT FY2022 Form 10-K

    We repaid the Bridge Loan in full on September 22, 2022 with cash on hand and proceeds from the ILPT Floating Rate Loan.

  10. Early-extinguishment loss, R2 ILPT FY2022 Form 10-K

    During the year ended December 31, 2022, we recorded a [$22,231,000] loss on early extinguishment of debt to write off unamortized costs related to the Bridge Loan and related interest rate cap.

  11. Packet note: rounding, R2 ILPT FY2022 Form 10-K

    The filing prints dollar amounts rounded to the nearest $1,000; bracketed figures restate them in full US dollars

  12. Packet note: not interest paid, R2 ILPT FY2022 Form 10-K

    Do not mistake loan interest sensitivity for recorded interest paid: SOFR history, accrual dates and hedge settlements are not in this small packet.

8. Sources, by publication date