Innovative Industrial Properties (NYSE: IIPR) , a real estate investment trust (REIT) servicing the regulated cannabis industry, had notable gains in Q2 2022. Meanwhile, in early spring it raised funds via a common stock sale, which helped it keep down its debt while continuing to grow the company. But, it's already spent a portion of that, has a large debt due in 2026, just had a default on a lease obligation, and then there's that ever-present regulatory lag at the state and federal level. All that leaves investors with the same question, will IIP's latest investments pay off during tough economic times?
IIP's total revenue grew to $70.5 million, up 9.3% sequentially and 44% year-over-year thanks to the acquisition and leasing of new properties, combined with rent increases. The company has 110 properties around the country and 80% of those are attributable to multi-state operators (MSOs). Net income rose sequentially by 98% to $40.2 million with a net profit margin of 57%, a notable number as this is the money left over after IIP paid its bills. One thing it did with those funds on July 15 was its stockholders, who'd invested by June 30, a dividend of $1.75 a share, or $7.00 for a yearly dividend rate.
Lastly, it said in its recent investor call it had 12% debt to total gross assets, with approximately $2.5 billion in total gross assets, representing a total annual fixed cash interest obligation of approximately $16.7 million. Lucky for IIP most of the $300 million debt -- with the exception of $6.5 million in senior exchangeable notes -- isn't due until 2026.
For further details see:
Can Innovative Industrial Properties Survive the Remainder of 2022?