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Innovative Industrial Properties, Inc. IIPR, focused on the acquisition, ownership and management of specialized industrial properties leased to experienced, state-licensed operators for their regulated state-licensed cannabis facilities, is poised to keep gaining from its acquisitions.
The company noted in its operating update that since the beginning of the second quarter through Jul 6, it made four acquisitions in Massachusetts, Michigan and Pennsylvania. Moreover, it executed three lease amendments to provide additional tenant improvements at properties located in Florida and Pennsylvania.
With these deals, the company not only established new tenant relationships with Sozo Companies, Inc. and Temescal Wellness of Massachusetts, LLC, but also expanded the existing ties with Green Peak Industries LLC (Skymint), Harvest Health & Recreation Inc., Jushi Holdings Inc. and Parallel.
Such continuation of expansion efforts in the June-end quarter resulted in the company owning 72 properties as of Jul 6, 2021. The properties aggregate 6.6 million rentable square feet of space that were fully leased, with a weighted-average remaining lease term of 16.7 years.
Apart from the investment activities, the company, through its operating partnership subsidiary, issued $300-million aggregate principal amount of unsecured senior notes in late May. With this, it reaped net proceeds of roughly $293 million, after deducting the initial purchasers’ discounts and commissions and offering expenses. Management plans to deploy this for investment in specialized industrial real estate assets, aiding the regulated cannabis industry as well as for general corporate needs.
Markedly, the legalization of marijuana for medical use across several states in the United States, as well as the permission of adult consumption in some, has created opportunities for the cannabis industry. Therefore, with more states in the nation giving cannabis the green light, Innovative Industrial Properties has incentives to partner with experienced medical-use cannabis operators, and serve as a vital source of capital by acquiring and leasing back their real-estate assets. Its strategy is to acquire the existing, redeveloped and under-development industrial buildings, including attached enclosed greenhouse facilities.
Currently, Innovative Industrial Properties carries a Zacks Rank #3 (Hold). Over the past year, shares of the company have outperformed the industry. The stock has gained 119.9% compared with the industry’s rally of 24%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Stocks to Consider
Mack-Cali Realty Corporation’s CLI Zacks Consensus Estimate for 2021 FFO per share moved up marginally over the past month. The company currently carries a Zacks Rank of 2 (Buy).
National Storage Affiliates Trust’s NSA consensus estimate for the current-year FFO per share moved 3.1% north to $1.99 in a month’s time. Currently, the company carries a Zacks Rank of 2.
Braemar Hotels & Resorts Inc. BHR holds a Zacks Rank of 2, at present. The consensus estimate for the ongoing year’s FFO per share has been revised 4.5% upward to 46 cents over the past month.
Note: Anything related to earnings presented in this write-up represent funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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