Innovative Industrial Properties, Inc. (IIPR), a real estate investment trust (REIT) focused on the acquisition and management of specialized industrial properties for the regulated cannabis industry, reported its financial results for the fiscal year ending December 31, 2024. The company generated rental revenues of $306.9 million, a slight decrease of 0.1% from $307.3 million in 2023. Net income attributable to common stockholders was $159.9 million, down 2.7% from $164.2 million in the previous year. The diluted earnings per share also fell to $5.52 from $5.77, reflecting the challenges faced in the cannabis market.
The company made strategic moves during the year, acquiring two new properties for a total investment of approximately $18.6 million, while also committing an additional $38.3 million for improvements at existing properties. As of December 31, 2024, IIPR owned 109 properties across 19 states, with a total of 9.0 million rentable square feet, of which 666,000 square feet were under development or redevelopment. The operating portfolio was 98.3% leased, with a weighted average remaining lease term of 13.7 years. However, the company faced challenges with tenant defaults, including significant defaults from PharmaCann and Temescal Wellness, which impacted rental income.
Operationally, IIPR's tenant base remains concentrated, with the top five tenants accounting for a significant portion of rental revenues. The company reported that its largest tenant, PharmaCann, represented 17% of total rental income. The ongoing challenges in the cannabis market, including regulatory pressures, competition, and inflation, have led to increased tenant defaults and reduced demand for cannabis cultivation facilities. The company has taken steps to mitigate risks, including geographic diversification and maintaining a flexible capital structure.
Looking ahead, IIPR's management expressed cautious optimism about the future, citing the potential for growth in the regulated cannabis market as more states enact favorable legislation. However, they acknowledged the ongoing risks associated with federal regulations and market dynamics that could impact tenant performance and, consequently, the company's financial results. The company plans to continue focusing on acquiring properties that meet its investment criteria while navigating the complexities of the cannabis industry.
About INNOVATIVE INDUSTRIAL PROPERTIES INC
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