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Innovative Industrial Properties IIPR announced completion of the acquisition of a portfolio comprising 27 properties in Colorado, Pennsylvania and North Dakota for $72.7 million. The buyout expands Innovative Industrial Properties’ footprint to 103 properties, consisting of 7.7 million rentable square feet across 19 states.
The property portfolio comprises 24 properties in Colorado, two in North Dakota and one in Pennsylvania. The properties are fully leased for use as regulated cannabis dispensing, processing and/or cultivation facilities.
Of the 27 properties, 16 are leased to a subsidiary of Columbia Care Inc., four are leased to the subsidiaries of Medicine Man Technologies, Inc. (Schwazze) and three are leased to the subsidiaries of Curaleaf Holdings, Inc. Also, three properties are leased to the subsidiaries of LivWell Holdings, Inc. and one property is leased to a subsidiary of Southwest Alternative Care, LLC (Kaya Cannabis).
For Innovative Industrial Properties, which is a real estate investment trust focused on a cannabis-centered real estate portfolio, this transaction expands its long-term real estate partnerships with Columbia Care, Curaleaf and LivWell as well as adds Kaya Cannabis and Schwazze to the company’s tenant roster.
A privately held, vertically integrated operator in Colorado — Kaya Cannabis — has seven dispensaries and one production facility. Schwazze, a publicly-traded company, is a reputed regulated cannabis operator in Colorado, with 19 retail locations along with cultivation and processing facilities.
The legalization of marijuana for medical use across several U.S. states,as well as the permission of adult consumption in a few, has opened up opportunities for the cannabis industry. Therefore, with states signaling the green light for cannabis, Innovative Industrial Properties has incentives to partner with experienced medical-use cannabis operators and serve as a vital source of capital by acquiring and leasing back their real-estate assets. Its strategy is to acquire the existing, redeveloped and under-development industrial buildings, including enclosed greenhouse facilities.
Over the past six months, shares of Zacks Rank #3 (Hold) IIPR have outperformed the industry. The stock has surged 24.8% compared with the industry’s rally of 6.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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Key Picks
Some better-ranked stocks from the REIT sector include Prologis PLD, Extra Space Storage Inc. EXR and Rexford Industrial Realty REXR.
Prologis carries a Zacks Rank of 2 (Buy) at present. Its 2021 FFO per share is expected to increase 8.4% year over year.
The Zacks Consensus Estimate for Prologis’ 2021 FFO per share has been revised marginally upward in a month.
Extra Space Storage holds a Zacks Rank of 2 at present. 2021 FFO per share for Extra Space Storage is expected to increase 29.9% year over year.
The Zacks Consensus Estimate for EXR’s 2021 FFO per share has been revised 3.3% upward in a month.
The Zacks Consensus Estimate for Rexford Industrial’s ongoing-year FFO per share has moved 4.5% north to $1.63 over the last two months.
The Zacks Consensus Estimate for Rexford Industrial’s 2021 FFO per share suggests an increase of 23.5% year over year. Currently, REXR carries a Zacks Rank of 2.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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Prologis, Inc. (PLD): Free Stock Analysis Report
Extra Space Storage Inc (EXR): Free Stock Analysis Report
Rexford Industrial Realty, Inc. (REXR): Free Stock Analysis Report
Innovative Industrial Properties, Inc. (IIPR): Free Stock Analysis Report
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