Marijuana REIT is in overdrive

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Innovative Industrial Properties is unrelenting in its expansion

Innovative Industrial Properties (IIP) concentrates almost exclusively on the legal cannabis industry, buying and leasing real estate to cannabis companies. The real estate investment trust (REIT) company has found a niche market that was lacking a major company and it has already seen substantial growth this year. The company’s revenue continues to increase – even if it does sometimes miss expectations – and has risen 136% since this past January. This is only the beginning.

In the second quarter of 2018, IIP had net rental revenue of $3.25 million. This increased by 155% by the second quarter of this year, reaching $8.28 million. Operating income shot up as well, jumping from $1.24 million to $4.07 million over the same period – an increase of 228%.

Across the board, all of its financial stats are rising. Net income increased 155% from $1.20 million to $3.07 million and earnings per share increased from $0.17 to $0.30 for a 76% climb. Adjusted fund from operations per share have exploded a massive 90%, going from $0.31 to $0.59.

According to analyst Beth McKenna, “Innovative Industrial’s revenue growth continues to be primarily driven by the acquisition of new properties, though contractual rental increases at certain properties also contributed to growth.  Moreover, year-over-year revenue growth continued to accelerate in the quarter, up from 146% in the first quarter and 111% in the fourth quarter of 2018.  For full-year 2018, revenue grew 128% year over year.”

In its most recent finance report, IIP stated, “As of August 7, 2019, IIP owned 26 properties located in Arizona, California, Colorado, Illinois, Maryland, Massachusetts, Michigan, Minnesota, New York, Nevada, Ohio and Pennsylvania, totaling approximately 2.0 million rentable square feet (including approximately 631,000 rentable square feet under development/redevelopment), which were 100% leased with a weighted-average remaining lease term of approximately 15.5 years. … IIP’s average current yield on invested capital is approximately 14.6% for these 26 properties.”

This is just the start of what is going to continue to be an upward climb for the company. It continues to seek out new properties and will be even stronger by the end of the year.