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Innovative Industrial (IIPR) Issues Q3 Update, Continues Buyouts

Innovative Industrial's (IIPR) expansion efforts will likely help the REIT bank on the solid opportunities in its markets and boost the top line.

This story originally appeared on Zacks

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 cannabis facilities, is likely to keep gaining from its acquisitions and expansion efforts.

In the operating update released in October, management noted that since the beginning of the third quarter through Oct 1, it has made four acquisitions — comprising three new properties and an additional land expansion at an existing property — for properties in Illinois, Maryland, Missouri and New York.

The REIT’s expansion efforts in the third quarter resulted in the company owning 75 properties as of Oct 1, 2021. The properties aggregate 7.3 million rentable square feet, including 2.7 million rentable square feet under development/redevelopment, which were fully leased, with a weighted-average remaining lease term of 16.7 years.

Moreover, it has executed three lease amendments to provide additional improvement allowances at properties located in Illinois, Maryland and Michigan. With these deals, the company has not only established a new tenant relationship with Calyx Peak, Inc., but also expanded its existing ties with 4Front Ventures Corp., Ascend Wellness Holdings, Inc., Goodness Growth Holdings, Inc., Green Peak Industries LLC (Skymint), Harvest Health & Recreation Inc. and Holistic Industries, Inc.

The company, as of Oct 1, 2021, has invested a total of $1.4 billion and committed another $417.5 million to reimburse some tenants and sellers for the accomplishment of construction and improvements at its properties.

However, the company did not carry out any capital raising activities during the above-mentioned period.

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 opened up opportunities for the cannabis industry. Therefore, with states signaling the green light for cannabis, 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.

Over the past six months, shares of this Zacks Rank #3 (Hold) company have outperformed the industry. The stock has gained 23.8% compared with the industry’s rally of 6.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Stocks to Consider

The Zacks Consensus Estimate for OUTFRONT Media Inc.’s OUT 2021 FFO per share has moved 8% north to 94 cents over the past two months. The company sports a Zacks Rank of 1, currently.

The Zacks Consensus Estimate for Extra Space Storage Inc.’s EXR current-year FFO per share has moved up 3.6% to $6.57 in the past two months. The company currently carries a Zacks Rank of 2 (Buy).

Terreno Realty Corporation TRNO carries a Zacks Rank of 2, at present. The Zacks Consensus Estimate for the ongoing year’s FFO per share has been revised marginally upward to $1.70 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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Most of the stocks in this report are flying under Wall Street radar, which provides a great opportunity to get in on the ground floor.

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Terreno Realty Corporation (TRNO): Free Stock Analysis Report


Extra Space Storage Inc (EXR): Free Stock Analysis Report


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Innovative Industrial Properties, Inc. (IIPR): Free Stock Analysis Report


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