Investors who upgraded their portfolios with cannabis-focused Real Estate Investment Trust - Innovative Industrial Properties (NYSE:IIPR) five years ago are now loving their sky-high returns.
Launched in 2016, IIP is the first publicly-traded company on the New York Stock Exchange to provide real estate capital to the regulated cannabis industry. The company's sale-leaseback program includes cultivation, processing and retail properties with carefully chosen tenants that are licensed operators under long-term, triple net leases.
Over the last five years, IIP's stock has outperformed some of the most popular stocks in the world, such as Nvidia (NASDAQ: NVDA), Amazon (NASDAQ:AMZN), Square (NYSE:SQ) and Pfizer (NYSE:PFE).
IIP concentrated on well-capitalized and state-licensed marijuana businesses across all product types, targeting deals in the amounts of $5 million to $30+ million. Its standard lease terms last from 10 to 20 years, with initial base rents of 10% to 16% on total investment.
Among the company's lessees are some of the biggest multi-state operators like Curaleaf Holdings (OTCQX:CURLF), Trulieve Cannabis (OTCQX:TCNNF), PharmaCann, Cresco Labs (OTCQX:CRLBF), Columbia Care (OTCQX:CCHWF), Green Thumb Industries (OTCQX:GTBIF), Vireo Health, Harvest Health (OTC:HRVSF), 4Front Ventures (OTCQX:FFNTF), Holistic Industries, Ayr Wellness (OTCQX:AYRWF), Parallel, etc.
As of November 3, IPP owned 76 properties across 19 states, accounting for a total of around 7.5 million rentable square feet that are 100% leased.
In its latest earnings report for the third quarter, the company disclosed total revenue of around $53.9 million, up by 57% year-over-year from $34.3 million. Rental revenues reached $1.4 million, compared to $2.8 million in the same quarter of 2020. Net income attributable to common stockholders amounted to $29.8 million, or $1.20 per diluted share, compared to net income of $18.88 million, or $0.87 per diluted share in the same period a year ago.
Here's how returns break down from December 2016 to the present:
Pfizer is up from $29.85 share to $53.04 for a return of 77.69%;
Amazon is up from $743.65 a share to $3,437.36 for a return of 362.23%;
Nvidia is up from $21.91 a share to $321.26 for a return of 1369.01%;
Square is up from $12.71 a share to $192.15 for a return of 1411.80%;
And finally, Innovative Industrial Properties is up from $16.89 per share to $255.86 for a return of 1414.86%
Photo: Courtesy of Jeff W on Unsplash
