Shares of Innovative Industrial Properties, Inc. (NYSE:IIPR) are trading lower after the company announced PharmaCann, one of its tenants, defaulted on rent obligations for six of eleven leases in December.
What To Know: Thes leases accounted for 17% of the company’s total rental revenues for the three and nine months ended Sept. 30 2024. PharmaCann failed to pay $4.2 million in December rent, including base rent, property management fees, and estimated tax and insurance payments, for properties in Illinois, Massachusetts, Michigan, New York, Ohio and Pennsylvania.
Innovative Industrial Properties applied security deposits to cover the unpaid rent, late penalties, and interest. While PharmaCann paid $90,000 in rent for the other five leases, cross-default provisions rendered all eleven leases in default.
The company is in discussions with PharmaCann and indicated it may pursue eviction proceedings or other enforcement measures. Following the announcement, Compass Point downgraded Innovative Industrial Properties from Buy to Neutral and reduced the price target from $125 to $78, potentially reflecting concerns over the financial impact of the default.
IIPR Price Action: Innovative Industrial Properties shares were down 22.7% at $73.54 at the time of writing, according to Benzinga Pro.
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