There’s an oasis in the desert of desiccating pot stocks, and it was built by a company that doesn’t grow weed at all.
Cannabis real estate investment trust Innovative Industrial Properties, Inc. (NYSE: IIPR) posted strong fourth-quarter and annual 2019 financial results Thursday, further solidifying its position as a money-maker in an otherwise contracting corporate sector.
In addition to profiting off its model of buying property from cash-strapped weed businesses and leasing it back to them, IIP has continued to expand its real estate portfolio and offer dividends to its shareholders.
The company’s valuation at US$94.98 a share didn’t change much over the day, but has gone up 20 per cent over the past year.
Among its financial highlights, IIP reported revenues of US$17.7 million in the quarter, a 269 per cent increase from the same quarter 2018.
IIP recorded net income available to common stockholders of approximately US$9.6 million for the quarter, or US$0.78 per diluted share, and adjusted funds from operations (AFFO) of US$14.3 million, or US$1.18 per diluted share. AFFO and AFFO per diluted share represented increases of 293% and 211% from the prior year’s quarter, respectively.
The price per diluted share calculation represents a company’s earnings per share if all convertible securities were exercised by shareholders.
IIP paid a quarterly dividend of US$1 per common share on January 15, representing a 186 per cent increase from the prior year’s quarter and a 28 per cent increase from IIP’s third quarter 2019 dividend of US$0.78.
From last September through to today, IIP issued shares of common stock for net proceeds of US$184.8 million through an “at-the-market” public equity offering.
In January, IIP completed an underwritten public offering of 3,412,969 shares of common stock, resulting in gross proceeds of US$250 million.
Over the past five months, IIP has added 20 properties to its portfolio located in Colorado, Florida, Illinois, Michigan, North Dakota, Ohio, Pennsylvania and Virginia.
According to the company, these 20 properties and five amendments to existing leases represent an investment of US$308.4 million, excluding transaction costs.
From January 1, 2019 through today, IIP said it’s grown its property portfolio from 11 properties making up 1 million rentable square feet in nine states, to 51 properties totalling 3.2 million rentable square feet in 15 states.
Over the same period, IIP’s total investment in its property portfolio has increased by 307 per cent from US$167.4 million to US$680.7 million, which the company said consists of purchase prices, development and tenant reimbursement commitments, but excludes transaction costs and approximately US$51.5 million in the aggregate – which represents funds that tenants at certain properties may choose not to have IIP disburse to them and pay IIP the corresponding base rent on.
Top photo by Cannabis Tours via Wikimedia Commons