- IIPR Oct 2021 option contracts are only pricing in 9% to 11% share moves, but shares will likely move 20% or more if capital deployment falls short or exceeds expectations.
- Size of recent debt raise suggests management is confident they have a sufficient pipeline of investment to cover incremental annual interest expense of $16.5 million or $0.63 per share.
- At 11% to 12% leasing rates, IIPR will need to deploy about 50% of the $293.4 million of proceeds before $300 million debt offering is cash flow accretive.
- IIPR's speed of capital deployment provides trading opportunities as shares could easily sink or rally 20% depending upon how the $293.4 million of proceeds are invested.
- IIPR tenant Green Thumb Industries securing $217 million of debt at 7% sends a signal to peer MSOs and is a forewarning for IIPR's double-digit underwriting rates.
For further details see:
Innovative Industrial Properties' Debt Raise Costs 63 Cents Per Share