After the market closed on Wednesday, Innovative Industrial Properties, Inc. (IIP) (NYSE: IIPR) announced results for the second quarter ended June 30, 2023.
The cannabis REIT delivered total revenues of approximately $76.5 million in the quarter, representing an 8% increase from the prior year’s quarter. The company also reported net income of approximately $40.9 million for the quarter, or $1.44 per diluted share.
The company attributed the increase in revenue to activity in prior periods for the acquisition and leasing of new properties, additional building infrastructure allowances provided to tenants at certain properties that resulted in increases to base rent, tenant reimbursements and contractual rental escalations at certain properties.
The adjusted fund from operations (AFFO) of approximately $64.0 million, or $2.26 per diluted share, demonstrated increases of 6% and 5% from the prior year’s quarter, respectively.
IIP noted that rent collections for its clients were at 97%. However, the default from Parallel Cannabis represented $2.1 million in uncollected rent.
The company did manage to sign a lease on a building associated with another problem child Kings Garden. IIP said it has a new tenant at the location in Cathedral City, CA.
IIP said in a statement that rental revenues in the quarter also included approximately $1.5 million of security deposits applied for payment of rent for IIP’s leases with Holistic and Temescal. Total revenues for the quarter included approximately $5.4 million of tenant reimbursements for property insurance premiums and property taxes.