ILPT Plugs Two Biggest Vacancies With 2.7 Million Square Foot Play In Indianapolis And Kapolei

Industrial Logistics Properties Trust is suddenly looking a lot less vacant. The REIT says it has locked in two enormous leases, a 532,364-square-foot warehouse in Indianapolis and a 2,237,547-square-foot ground lease in Kapolei, Hawaii, which together top 2.7 million square feet and push portfolio occupancy to roughly 98 percent. The Indianapolis lease kicked in on May 1, bringing back to life a building that had been empty since August 2024, while the Kapolei ground lease begins July 1 and runs for 53 years. Company leaders are pitching the one-two punch as a way to eliminate ILPT’s two largest vacancies and turn scarce Oʻahu land into a long-dated income stream.

In a press release via Business Wire, ILPT laid out the deals in detail. The Indianapolis asset at 9215–9347 E. Pendleton Pike is now under an approximately 10-year lease, and the Kapolei arrangement is a long-term ground lease on the 91-399 Kauhi Street parcel. The company said the two transactions "fully address the two largest vacancies" in its portfolio and that the ground-lease structure is expected to "generate durable income for decades to come."

Indianapolis Vacancy Finally Filled

ILPT had already circled the Indianapolis site as a must-solve problem for 2026 and even baked a leasing assumption into its second-quarter guidance, according to the company’s Q1 2026 presentation. That presentation assumed the 532,000-square-foot vacancy would be leased in June and that filling it would contribute roughly 2.8 percent to midpoint NOI, so the May 1 start date could pull some of those cash-flow benefits forward.

Local market research helps explain the urgency. Indianapolis has been racking up rapid absorption and shrinking big-box vacancy, which tightens the options for large distribution users and improves the backdrop for landlords trying to backfill massive spaces. In other words, ILPT chose a favorable moment to finally put a tenant in a building that had been sitting dark.

Kapolei Ground Lease Monetizes Scarce Oʻahu Land

The Kapolei transaction is structured as a 53-year ground lease that begins July 1 and covers more than 2.2 million square feet of land. ILPT keeps ownership and collects rent over the long haul, while the tenant controls what happens on the surface. The company framed the deal as a way to monetize hard-to-replicate Hawaii land without selling it outright, preserving future options such as rent resets or other value-capture moves.

ILPT has not disclosed the tenant or financial terms, so for now the Kapolei deal is a bit of a black box with very clear lines on duration and scale. Analysts and investors will be combing through future filings to see who signed on and what kind of rent check they are writing.

Why Oʻahu Parcels Matter

Broker listings and property records place the Kauhi Street site inside the James Campbell Industrial Park and peg it at roughly 2.24 million square feet, or about 51 acres, which puts it among the largest contiguous industrial parcels on Oʻahu. The parcel’s size and location are documented in commercial listings such as LoopNet, which highlights the industrial scale and harbor access that make the property stand out.

ILPT has argued in SEC filings that Oʻahu’s limited developable land and tightly constrained industrial inventory give its Hawaii holdings outsize strategic value. That scarcity backdrop helps explain why a very long ground lease can be attractive to the landlord, since it turns land pressure into predictable income while keeping the dirt in ILPT’s column.

What Investors Will Watch

The two leases effectively check off a key 2026 to-do item for ILPT and move the company closer to the portfolio profile it laid out earlier this year. As of March 31, 2026, ILPT reported 409 properties containing about 59.6 million rentable square feet, and management says these agreements resolve the two largest vacancies that were in the spotlight for the year.

ILPT is managed by The RMR Group, which reports roughly $37 billion in assets under management and supplies the REIT with an asset-management platform and capital relationships that support longer-dated leasing and financing strategies. From here, investors will be watching quarterly filings to see how the Indianapolis and Kapolei leases filter into normalized FFO, NOI and the actual timing of cash-flow recognition.

ILPT has not named the tenants behind either deal, and the company directed questions to its investor contacts in the original release. Market participants now have a new item on their own watchlists, waiting for lease filings and future reports that spell out rent levels, tenant credit and other commercial terms behind the headline square footage.