Innovative Industrial Properties (NYSE: IIPR) edged past Wall Street expectations during its fourth-quarter earnings as portfolio occupancy improved while still facing tenant challenges.
Cannabis real estate investment trust reported net income of $39.5 million or $1.36 per diluted share for its third quarter ending Dec 31, according to a news release. Revenue totaled $76.7 million which exceeded Seeking Alpha analyst forecasts of $76.2 million but fell 3% year over year compared with revenue totalling 79.2 million during that same time frame last year.
Normalized funds from operations reached $2.03 per share for IIP in 2016, surpassing Seeking Alpha’s consensus estimate of $1.99. Their operating portfolio also showed signs of improvement with occupancy reaching 98.3% by year-end up from 95.7% at third quarter’s end.
Last month, PharmaCann filed another shareholder lawsuit alleging it misled investors about tenant risks while funding PharmaCann’s expansion. As part of an agreement between both parties to resolve lease defaults across 11 properties by lowering monthly base rent from $2.8 million down to $2.6 million for nine properties; additionally the REIT is working toward transitioning two cultivation facilities located in Michigan and Massachusetts to new operators.
Security deposit applications for rent payments were up significantly year over year in the fourth quarter, totalling nearly $5 Million across five tenants compared to just $800,000 from one.
Still, IIP maintained its dividend, paying stockholders $1.90 per share last month – increasing it every year since 2016.
Multistate operators make up 90% of IIP’s annualized base rent; public company operators represent 62%. No single tenant accounts for more than 17% of rental income.
According to its earnings release, IIP announced it has entered into an agreement for a contract purchase price of $7.8 million for a property located in Maryland totalling 20,000 square feet — however this transaction remains subject to closing conditions and additional conditions may need to be satisfied in order for its closing to take place.
Quarterly expenses rose marginally to $34.7 million from $34.6 million during the third quarter while diminishing from last year’s figure of $35.21 million.
Innovative Industrial Properties beat fourth quarter revenue estimates – MEDCAN24
