Those investors who added marijuana-focused Real Estate Investment Trust – Innovative Industrial Properties IIPR to their portfolios some five years ago, must be really pleased with their return on the investment.
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 Apple AAPL, Amazon AMZN, Alphabet GOOGL, Microsoft MSFT and Netflix NFLX. That’s not all, the company has been paying consecutive quarterly dividends to its common stockholders since the second quarter of 2017.
The San Diego, California-headquartered marijuana REIT is focused on well-capitalized and state-licensed cannabis 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, Goodness Growth Holdings GDNSF, 4Front Ventures FFNTF, Holistic Industries, Ayr Wellness AYRWF, Parallel, and Ascend Wellness Holdings AAWH.
As of September 1, 2022, IIP owns 111 properties comprising an aggregate of around 8.7 million rentable square feet (including approximately 2.1 million rentable square feet under development or redevelopment) in Arizona, California, Colorado, Florida, Illinois, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nevada, New Jersey, New York, North Dakota, Ohio, Pennsylvania, Texas, Virginia, and Washington.
In its latest earnings report, the company reported net income attributable to common stockholders of approximately $39.9 million for the second quarter of 2022, or $1.42 per diluted share, and AFFO of approximately $60.1 million, or $2.14 per diluted share. It also paid a quarterly dividend of $1.75 per common share on July 15, 2022, to stockholders of record as of June 30, 2022, representing a 25% increase over the prior year’s second quarter 2021 dividend, equal to an annualized dividend of $7.00 per share.
Here's how returns break down from October 2017 to the present:
Netflix is up from $200.01 a share to $295.72 for a return of 47.85%;
Google is up from $52.5 a share to $96.29 for a return of 83.41%;
Amazon is up from $55.05 a share to $103.41 for a return of 87.85%;
Microsoft is up from $84.14 a share to $235.87 for a return of 180.33%;
Apple is up from $40.76 share to $155.74 for a return of 282.09%;
And finally, Innovative Industrial Properties is up from $19.39 per share to $104.46 for a return of 438.73%
Photo: Courtesy of ataur0002bd and azure1 by Shutterstock and Wikipedia
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