IIPR a growing Reit

Now look at that paste is working again. Thank you Vickie and TMF.

This Reit is starting to look interesting. They have been growing like a weed (cough, cough). They are a Triple net lease Reit in the Marijuana sector. 81 percent of their leases are to Multi state operators and they have 17 percent of their operations in one state. The other 19 percent is leased to single state operators. Their top lease holder is PharmaCann and it is a private company that takes up 13 percent of their portfolio. The CEO is Alan Gold and he was a co-founder of another Reit Alexandria Real Estate Equities (ARE).

The company currently pays out a dividend of $1.80 each quarter and their share price today is at $90.12 giving them a yield of 7.99 percent at todays price. They have consistently grown their Dividend because they are able to charge high fees for their properties because the companies leasing their properties have a hard time getting financing from banks. So they do a lease back on their properties to IIPR. But the companies leasing the properties are required to maintain the property. So essentially Ippr is bank rolling the companies and taking money back each month.

IPPR claims that the banking act that the Cannabis industry is trying to get through will not hurt them because even when it does go through the banks still won’t want to work with the Cannabis industry. This sounds hollow to me because if there are large sums of money involved the banks will be there. But still they have these companies tied up to long term leases generally 15-20 years.

Recently IIPR has had problems with two of their customers. Kings Garden, which is 8% or their leases and brought it $5.5 million last quarter, stopped paying on their leases. IIPR is taking them to court and hopefully that will come to resolution this year. Also Vertical, another tenant, who is 1 percent of the portfolio, started making partial payments to them. Both of these tenants are in California and California makes up 11 percent of the portfolio.

California has had a problem with illegal marijuana competing with the legal Marijuana and the Governor of California has promised more resources to go after the illegal trade. But another problem is that Marijuana by the pound has been coming down drastically. The producers of Marijuana are selling a commodity so the price will fluctuate as more people grow and collapse as the price comes down.

So what does everyone think of this Reit?



Here is a comparison of IIPR and NLCP. NLCP is following what IIPR is doing but is just starting out. They claim that none of their tenants are having any problems but they are keeping a sharp eye out on them. They say in this environment anyone could have a trouble some property. NLCP did expand their credit facility just recently to 90 million in case they do run into trouble.


Have to say I love this new format it makes it so easy to share

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