IIP, the First and Only NYSE Listed Cannabis REIT Posted Impressive Q4 and Full-Year 2019 Earnings
Innovative Industrial Properties Reported a 293% Increase in Fourth Quarter 2019 Net Income
Innovative Industrial Properties (NYSE: IIPR) reported earnings Thursday for the fourth quarter and year ended December 31, 2019. IIP is first and only cannabis-focused real estate investment trust (REIT) trading on the New York Stock Exchange (NYSE). Innovative Industrial Properties commenced real estate operations three years ago following the company’s initial public offering on the NYSE in December of 2016.
IIP generated total Q4 2019 revenues of roughly $17.7 million, up 269% compared to the $4.8 million reported in Q4 2018. For the full-year 2019, the company reported total revenues of approximately $44.7 million, an increase of 202% compared to IIP’s full-year 2018 revenues of $14.8 million.
Adjusted funds from operations (AFFO) for the fourth quarter was approximately $14.3 million, or $1.18 per diluted share. Compared to last year’s Q4, AFFO and AFFO per diluted share increased by 293% and 211%, respectively. Full-year 2019 AFFO worked out to around $34.9 million or $3.27 per diluted share. Compared to the previous year, AFFO and AFFO per diluted share increased by 259% and 144%, respectively.
Net income for the fourth quarter 2o19 grew by 293% to $9.6 million or $0.78 per diluted share. For the full-year 2019, net income came in at $22.1 million or $2.03 per diluted share.
IIP attributes its impressive Q4 and full-year 2019 earnings growth to the company’s acquisition and leasing of new properties, as well as contractual rental escalations at certain properties.
On January 15, 2020, IIP paid its shareholders of record as of December 31, 2019, a quarterly dividend of $1.00 per common share. The quarterly dividend payment represented an increase of 28% compared to the company’s Q3 2019 dividend of $0.78 and a 186% increase over the previous year’s Q4.
This past September, IIP established an “at-the-market” equity offering program raising net proceeds of roughly $184.8 million through the issuance of common shares from September 2019 until today.
In January, the company also completed an underwritten public offering of 3,412,969 common shares, which included the full exercise of an additional 445,170 shares from the underwriter’s options. IIP netted gross proceeds of about $250 million.
Since October 1, 2019, IIP has acquired 20 additional properties located in Illinois, Michigan, Florida, Colorado, Ohio, North Dakota, Pennsylvania and Virginia, totalling roughly 1 million rentable square feet. The company signed five lease amendment deals to provide additional tenant improvements at its properties in California, Massachusetts, Arizona and Pennsylvania.
In relation to the above transactions, IIP formed new tenant relationships with leading U.S. multi-state operators (MSOs) Green Thumb Industries (CSE: GTII) (OTCQX: GTBIF) (FRA: R9U2) and Cresco Labs (CSE: CL) (OTCQX: CRLBF) (FRA: 6CQ) while expanding its existing relationships with Trulieve Cannabis (CSE: TRUL) (OTCQX: TCNNF) and Vireo Health (CSE: VREO) (OTCQX: VREOF) (FRA: 0ZF1).
In total, IIP’s investment related to the 20 properties and five lease amendments came it at approximately $308.4 million.
IIPR Stock Price Action & Chart
Shares of Innovative Industrial Properties’ NYSE listed IIPR stock closed Thursday’s trading session at $94.98 per share, down 1.19% on the day. Under normal circumstances, IIPR’s stellar Q4 earnings report should have caused the stock rise. Unfortunately for the company, the release of its financial results came amid a record-setting market correction thanks to Coronavirus induced panic selling.
This week alone, the Dow Jones Industrial Average (^DJI) and S&P 500 (^GSPC) plummetted a stunning 3,225 points (-11.13%) and 358.99 points (-10.76%), respectively. On Thursday, the DOW dropped another 1,190.95 points (-4.42%), its largest single-day point drop ever. This week also saw the DOW set the record for the fastest 10% correction from the highs in the history of the stock market. As of Thursday’s close, markets appear to be oversold, with the DOW’s RSI closing at just 18.68.
Disclosure: The Cannabis Investor does not hold a position in any of the stocks mentioned in this article.