Innovative Industrial Properties, Inc. (IIP)(NYSE: IIPR) reported total revenues of approximately $34.3 million for the third quarter ending September 30, 2020. This was a 197% increase from the prior year’s third quarter. It also beat the Yahoo Finance average analyst estimate for revenue of $29.63 million. The stock rose over 8% ahead of the company’s earnings to lately trade at $133.
IIP recorded net income available to common stockholders of approximately $18.9 million for the quarter, or $0.86 per diluted share, which beat the Yahoo Finance estimate for $0.78. The adjusted funds from operations (AFFO) were approximately $27.9 million, or $1.28 per diluted share. Net income available to common stockholders and AFFO increased by 205% and 192% from the prior year’s third quarter, respectively.
IIP said that it had approximately $161.1 million in cash and cash equivalents and approximately $451.2 million in short-term investments, totaling approximately $612.3 million. The company said it had no debt, other than approximately $143.7 million of unsecured debt, consisting solely of 3.75% exchangeable senior notes maturing in 2024, representing a fixed cash interest obligation of approximately $5.4 million annually, or approximately $1.3 million quarterly.
IIP paid a quarterly dividend of $1.17 per share on October 15, 2020 to common stockholders of record as of September 30, 2020, representing an approximately 10% increase over the second quarter 2020’s dividend and a 50% increase over the third quarter 2019’s dividend.
COVID Rent Update
IIP has said during the first quarter earnings release, that it worked with three of its 22 tenants to provide temporary rent deferrals, structured to apply a portion of the security deposit IIP holds under each lease to pay April rent in full, defer rent for May and June in full, and provide for the pro rata repayment of the security deposit and deferred rent over an 18 month time period starting July 1. The company said that all three tenants paid rent in full for each of July, August, September and October, including pro rata repayments of the security deposit and deferred rent.
IIP also said that it collected 100% of contractual rent due for each of the months of July, August, September and October 2020 across IIP’s total portfolio (other than the tenant at IIP’s Los Angeles, California property that is in receivership), and has not executed rent deferrals for any additional tenants, other than the three tenants described above.
IIP Is Up To 63 Properties
As of November 4, 2020, IIP said it owned 63 properties located in Arizona, California, Colorado, Florida, Illinois, Maryland, Massachusetts, Michigan, Minnesota, Nevada, New Jersey, New York, North Dakota, Ohio, Pennsylvania and Virginia, totaling approximately 5.0 million rentable square feet (including approximately 1.7 million rentable square feet under development/redevelopment), which were 99.3% leased (based on square footage) with a weighted-average remaining lease term of approximately 16.1 years.
IIP has raised total net proceeds of over $1.4 billion from all of its capital raising activities to date, after deducting underwriters’ discounts and commissions and offering expenses, and had invested approximately $908.4 million in the aggregate (excluding transaction costs) and had committed an additional approximately $273.5 million to reimburse certain tenants and sellers for completion of construction and tenant improvements at IIP’s properties. These statistics do not include up to approximately $7.2 million that may be funded in the future pursuant to IIP’s lease with a tenant at one of IIP’s Massachusetts properties, as the tenant at that property may not elect to have IIP disburse those funds to the tenant and pay IIP the corresponding base rent on those funds. These statistics also treat IIP’s Los Angeles, California property as not leased, due to the tenant being in receivership and its ongoing default in its obligation to pay rent at that location.