IIPR - Here's How Innovative Industrial Properties Can Afford Its 9.7% Dividend Yield
2023-06-25 05:41:00 ET
Wall Street loves a good story, often painting an entire industry with the same brush without looking more deeply at the individual companies. Sometimes the price moves, both higher and lower, can be dramatic. Marijuana-focused real estate investment trust (REIT) Innovative Industrial Properties (NYSE: IIPR) has experienced this on the upside and now the downside, with a roughly 70% drawdown from 2021 highs pushing the yield up to 9.7%. What's going on, and how safe is the dividend?
The huge run-up on Innovative Industrial's price was helped along by the hype surrounding marijuana legalization. Effectively a new (or at least newly legal) industry, this REIT was one of the first companies to offer a funding alternative to the quickly expanding businesses in the space. This was accomplished via sale/leaseback transactions, which allowed marijuana growers to access cash locked up in properties so they could invest it in growth. With marijuana still illegal at the federal level, there are few banks willing to step in on the financing front.
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Here's How Innovative Industrial Properties Can Afford Its 9.7% Dividend Yield