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6 Key Points From Innovative Industrial Properties' Q2'17 Earnings Release

August 9, 2017

(Image Credit - Nick Youngson)

After the close of trading on Wednesday, August 9th, 2017, Innovative Industrial Properties Inc. (NYSE:IIPR) reported the company's financial results for their second fiscal quarter ended June 30th, 2017. This is the company's second full quarter since completing their initial public offering in December 2016. 

 

Related: A Beginner's Guide to the Cannabis-Focused REITs

 

  1. IIPR generated total revenues of approximately $1.3 million in the second quarter of 2017. All of this revenue came from rents paid by PharmaCann LLC for the Company's medicinal cannabis cultivation facility in New York. Base rent for the company's Maryland property (see below) is subject to an initial rent abatement of three months, so no revenues were generated from this facility in the second quarter of 2017. 

  2. Net losses in the quarter were $(422,000), or $(0.13) per basic and diluted share. Funds from operations (FFO) (which exclude the impact of depreciation and select non-operating items in an attempt to better measure the performance of real estate investment trusts like IIPR) were ($247,000) or ($0.07) per basic and diluted share. Adjusted funds from operations (AFFO) in the quarter were $471,000, or $0.13.

  3. Innovative Industrial Properties paid its first dividend of $0.15 per share on July 14, 2017 to shareholders of record as of June 30, 2017. 

  4. In May, Innovative Industrial Properties purchased a facility in Maryland for approximately $8.2 million (including $185,000 in transaction costs) that is being developed for use as a cultivation facility for medicinal cannabis. Concurrently, the company entered into a long-term, triple net lease (a lease where in addition to rent, the tenant agrees to pay all real estate taxes, building insurance, and maintenance) with Holistic Industries LLC. 

  5. In addition to the roughly $8.2 million that IIPR purchased the Maryland property for, IIPR agreed to pay an additional $3 million payable to the seller upon completion of certain development milestones and an additional $4 million to the tenant as reimbursement for certain tenant improvements. Pursuant to the company's lease agreement with Holistic, the initial annualized base rent, after a three month rent abatement period, is subject to a rent reserve and is expected to be 15% of the sum of the initial purchase price (excluding transaction costs), the additional seller reimbursement and the reimbursed tenant improvements.  After the end of the second quarter, the seller completed the agreed-to development milestones at the property, and IIPR paid the additional reimbursement of $3 million to the seller. As a result, Holistic's initial annualized base rent increased by $450,000 (15% of the $3 million reimbursement) to $1.65 million.

  6. As of this release, IIPR was in various stages of reviewing approximately $100 million worth of additional properties to potentially acquire. 

 

Conference Call 

 

On Thursday, August 10th at 10:00 a.m. PDT (1:00 PM EDT), Innovative Industrial Properties will conduct a conference call to discuss their second quarter results and operational developments. The call will be webcast live at the Investor Relations section of the company's website at www.innovativeindustrialproperties.com and will also be available by calling 1-866-807-9684 (domestic) or 1-412-317-5415 (international) and asking for the Innovative Industrial Properties conference call. 

 

A recording of the conference call will be available for one week by calling 1-877-344-7529 (domestic), 1-855-669-9658 (Canada) or 1-412-317-0088 (international) and using access code 10111044. Additionally, the complete webcast will be archived for 90 days on the company's website. 

 

Conclusion 

 

Learn more about this currently one-of-a-kind, NYSE-listed, dividend-paying cannabis REIT by checking out the company's marijuana stock profile in our marijuana-related real estate company database

 

Stay up to date with developments from the world of cannabis real estate by subscribing to our free cannabis real estate email newsletter!

 

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Now Read: Marijuana Stocks with the Highest Trading Volume

 

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