What Caught Our Attention in the Investment World? – Week of January 17-20, 2023

By Kuldip K. Ambastha

The stock price of Innovative Industrial Properties, Inc. (IIPR), an American real estate investment trust (REIT) focused on specialized properties rented out to state-licensed cannabis facilities through sale-leaseback agreements, fell by -16.9% per share on the trading day of Thursday, January 19, 2023. Investors were disappointed in the results disclosed by the company for 4Q2022 and 2022. Given how the economy has struggled in 2022, there is a worry that tenants will not be able to make their rent payments going forward. Thus far, three tenants are in default on rent obligations and the company has also renegotiated some leases to allow a delay in rent payments linked with an extended lease term or extra default provisions. Though cannabis has not been legalized fully at the federal level in the USA, Innovative Industrial Properties has carved out a dominant position in real estate linked to cannabis facilities – a dominant position which may be damaged should more tenants not be able to make rent payments in the future.

Keywords – Innovative Industrial Properties, Inc., Innovative Industrial Properties, Innovative Industrial, IIPR, cannabis, marijuana, real estate investment trust, REIT, 4Q2022, 2022, rent.

Disclosure – The principals and clients of Ambastha Financial LLC have no positions in IIPR.

Disclaimer – No recommendations are being made via this post. Past performance is not an indicator of future performance. As an investor, you should do your own research and seek professional advice from a Registered Investment Adviser (RIA). You can lose money by investing in stocks and other instruments. Ambastha Financial LLC does not assume any responsibility (legal or otherwise) for any losses that may occur as a result of actions taken based on this post. All content copyrighted © 2023 – Ambastha Financial LLC.




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