Investors who upgraded their portfolios with cannabis-focused Real Estate Investment Trust - Innovative Industrial Properties IIPR five years ago are now loving their sky-high returns.
Launched in 2016, IIP is the first publicly-traded company on the New York Stock Exchange to provide real estate capital to the regulated cannabis industry. The company’s sale-leaseback program includes cultivation, processing and retail properties with carefully chosen tenants that are licensed operators under long-term, triple net leases.
Over the last five years, IIP’s stock has outperformed some of the most popular stocks in the world, such as Nvidia NVDA, Amazon AMZN, Square SQ and Pfizer PFE.
IIP concentrated on well-capitalized and state-licensed marijuana businesses across all product types, targeting deals in the amounts of $5 million to $30+ million. Its standard lease terms last from 10 to 20 years, with initial base rents of 10% to 16% on total investment.
Among the company’s lessees are some of the biggest multi-state operators like Curaleaf Holdings CURLF, Trulieve Cannabis TCNNF, PharmaCann, Cresco Labs CRLBF, Columbia Care CCHWF, Green Thumb Industries GTBIF, Vireo Health, Harvest Health HRVSF, 4Front Ventures FFNTF, Holistic Industries, Ayr Wellness AYRWF, Parallel, etc.
As of November 3, IPP owned 76 properties across 19 states, accounting for a total of around 7.5 million rentable square feet that are 100% leased.
In its latest earnings report for the third quarter, the company disclosed total revenue of around $53.9 million, up by 57% year-over-year from $34.3 million. Rental revenues reached $1.4 million, compared to $2.8 million in the same quarter of 2020. Net income attributable to common stockholders amounted to $29.8 million, or $1.20 per diluted share, compared to net income of $18.88 million, or $0.87 per diluted share in the same period a year ago.
Here's how returns break down from December 2016 to the present:
Pfizer is up from $29.85 share to $53.04 for a return of 77.69%;
Amazon is up from $743.65 a share to $3,437.36 for a return of 362.23%;
Nvidia is up from $21.91 a share to $321.26 for a return of 1369.01%;
Square is up from $12.71 a share to $192.15 for a return of 1411.80%;
And finally, Innovative Industrial Properties is up from $16.89 per share to $255.86 for a return of 1414.86%
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