Innovative Industrial Properties, Inc., a Maryland corporation that buys and manages properties leased to experienced, state-licensed operators for their medical-use cannabis facilities, has generated increased interest from investors lately due to its profitable and diversified nature. In essence, it provides real estate capital to many cannabis operators, for a profit, so those operators can stretch their money on operations.
IIPR is one of only a few cannabis companies generating a profit already.
Currently, IIPR owns ten properties—in Arizona, Colorado, Maryland, Massachusetts, Michigan, Minnesota, New York and Pennsylvania—totaling 952,000 rentable sf, including 114,000 sf under development. These are 100% leased with an average remaining term of 14.7 years.
IIPR has invested $121.5 million in the portfolio and has committed an additional $15.9 million to reimburse tenants for construction and improvements, for a total of $137.4 million.
IIPR’s average yield on invested capital is 15.4% for these properties, calculated as the sum of its current rents and management fees (revenue), divided by its total investment.
IIPR is actively buying properties. In July, it acquired a 55,000 sf cannabis cultivation and processing facility in a sale-leaseback transaction with Holistic Industries in Massachusetts for $12.75 million.
In August 2018, it acquired a property in Michigan and entered into a long-term lease with Green Peak Industries for a 56,000 sf industrial facility when completed, with it’s total investment to be $13 million.
After the quarter, in October, IIPR bought a 58,000 sf cannabis cultivation facility in Colorado and entered into a long-term lease with The Green Solution, LLC for $11.25 million.
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IIPR press release
Yahoo Finance website