SAN DIEGO — Innovative Industrial Properties Inc., the first real estate company on the New York Stock Exchange focused on the regulated U.S. cannabis industry, reported results for the first quarter ended March 31, 2025.
First Quarter 2025 and Year-to-Date Highlights
Financial Results and Dividend
- Total revenues of $71.7 million for the quarter.
- Net income attributable to common stockholders of $30.3 million for the quarter, or $1.03 per share (all per share amounts in this press release are reported on a diluted basis unless otherwise noted).
- AFFO of $55.3 million, or $1.94 per share.
- Paid a quarterly dividend of $1.90 per common share on April 15, 2025 to stockholders of record as of March 31, 2025.
Balance Sheet Highlights (at March 31, 2025)
- 11% debt to total gross assets, with $2.6 billion in total gross assets.
- Total liquidity was $220.8 million as of March 31, 2025, consisting of cash and cash equivalents and short-term investments (each as reported in IIP’s consolidated balance sheet as of March 31, 2025) and availability under IIP’s revolving credit facility.
- Debt service coverage ratio of 16.8x (calculated in accordance with IIP’s 5.50% Unsecured Senior Notes due 2026).
Financing Activity Year-to-Date
- Issued 406,125 shares of Series A Preferred Stock under IIP’s “at-the-market” equity offering program for $9.7 million in net proceeds.
- Repurchased 371,538 shares of common stock for $20.1 million at a weighted average price of $54.09 per share under the Company’s $100 million share repurchase program, which expires March 2026.
- Repurchased $8.8 million of the Company’s 5.50% Unsecured Notes at a discount for $8.7 million.
Portfolio Updates
In February, acquired a 22,000 square foot Maryland property for $7.8 million and executed a long-term lease with a private Maryland operator for use as a regulated cannabis facility.
In January, leased 6,000 square feet at IIP’s North Del Sol Road property in Palm Springs, California to a non-cannabis tenant.
In March, the Company announced multiple lease defaults, including a $2.7 million March rent default by PharmaCann. The Company also declared defaults on leases with 4Front, Gold Flora, and TILT (totaling $13.1 million owed), and a $16.1 million loan default secured by certain California properties, as part of a broader tenant replacement initiative aimed at strengthening tenant credit quality and improving long-term portfolio performance amid ongoing challenges in the regulated cannabis industry.
In April, leased 205,000 square feet to Berry Green at IIP’s property in Warren, Michigan.
In April, sold a property in Michigan for $9.0 million (excluding transaction costs) and provided an interest only, secured loan for $8.5 million to the buyer of the property. The Company also received a $1.0 million loan origination fee in connection with the transaction.
In April, executed a purchase and sale agreement to sell a property in Palm Springs, California for $2.0 million. In connection with the expected sale, the Company recognized an impairment loss on real estate of $3.5 million during the three months ended March 31, 2025.
Property Portfolio Statistics (as of March 31, 2025)
Total property portfolio comprises 110 properties across 19 states, with 9.0 million RSF (including 666,000 RSF under development / redevelopment), consisting of:
Operating portfolio: 107 properties, representing 8.6 million RSF.
Under development / redevelopment portfolio consists of three properties expected to comprise 491,000 RSF at completion and is as follows:
- 236,000 square feet located at 63795 19th Avenue in Palm Springs, California (pre-leased)
- 192,000 square feet located at Inland Center Drive in San Bernardino, California
- 12-acre development site located at Leah Avenue in San Marcos, Texas
Select Financial Results
For the three months ended March 31, 2025, IIP generated total revenues of $71.7 million, compared to $75.5 million for the same period in 2024, a decrease of 5%. The decline was primarily driven by a decrease of $4.4 million on properties leased to PharmaCann due to the tenant’s default, a decrease of $1.6 million on properties leased to TILT due to the tenant’s default, and a decrease of $1.0 million related to certain properties vacated or sold since the first quarter of 2024. This decline was partially offset by an increase of $2.2 million related to new acquisitions and new leases executed on existing properties that commenced since March 31, 2024, and an increase of $1.6 million primarily driven by contractual rent escalations.
For the three months ended March 31, 2025, $5.8 million of security deposits were applied for payment of rent on properties leased to PharmaCann, Gold Flora, TILT and Sozo. No security deposits were applied for rent during the three months ended March 31, 2024.
The Company has re-leased three properties in which rent commencement is contingent on the tenants obtaining the requisite approvals to operate. As a result, the Company does not expect to recognize rental revenue from these properties until such events have occurred.
Dividend
On March 14, 2025, the Board of Directors declared a first quarter 2025 dividend of $1.90 per common share, representing an annualized dividend of $7.60 per common share. The dividend was paid on April 15, 2025 to stockholders of record as of March 31, 2025. Since its inception, IIP has paid over $940 million in common stock dividends to its shareholders.
About Innovative Industrial Properties
Innovative Industrial Properties Inc. is a real estate investment trust (REIT) focused on the acquisition, ownership and management of specialized industrial properties leased to experienced, state-licensed operators for their regulated cannabis facilities.
