Cannabis REIT Innovative Industrial Properties (NYSE: IIPR) reported that its revenue increased by 150% to $3.9 million for the third quarter ending September 2018 versus $1.6 million for the same time period last year. The company also delivered a net income of $1.5 million or $0.21 per diluted share. The adjusted funds from operations, a measure typical of REITs was $2.6 million or $0.38 per share.
According to the company statement, the increases were due to the company’s acquisition of new properties and the annual escalation of base rent for two of the leases. The statement said that “Base rent under the lease with the PharmaCann subsidiary for one of the Massachusetts properties is abated until November 30, 2018, and base rent under the lease with GPI at the Michigan property was deferred until November 2, 2018.”
IIPR is also one of the few cannabis companies that pay a dividend and this quarter was no different. It is paying out its sixth consecutive dividend of $0.35 per share. This is a 40% jump over the second quarter dividend.
After The Quarter
After the quarter ended, the company acquired an approximately 58,000 square foot industrial property in Colorado for $11.25 million (excluding transaction costs) and entered into a long-term, triple-net lease with TGS for continued operation as a cannabis cultivation facility.
In addition to acquiring the Colorado property, IIPR completed an underwritten public offering of 2,990,000 shares of common stock, including the exercise in full of the underwriters’ option to purchase an additional 390,000 shares, resulting in net proceeds of approximately $113.9 million.
As of November 7, 2018, IIPR owned 10 properties located in Arizona, Colorado, Maryland, Massachusetts, Michigan, Minnesota, New York and Pennsylvania, totaling approximately 952,000 rentable square feet (including approximately 114,000 rentable square feet under development), which were 100% leased with a weighted-average remaining lease term of approximately 14.7 years.
IIPR has invested approximately $121.5 million and has committed an additional approximately $15.9 million to reimburse certain tenants and sellers for completion of construction and tenant improvements at the properties. The average current yield on invested capital is approximately 15.4% for these ten properties.