Innovative Industrial (IIPR) buys Massachusetts asset for $ 3.1 million
Innovative industrial properties The IIPR recently announced the completion of the acquisition of a property in Massachusetts for $ 3.1 million. The company acquired the property with the aim of enhancing its portfolio and building on sound market fundamentals.
Located in North Adams, Northwestern Massachusetts (much closer to Albany, New York than Boston), this property extends the company’s footprint to 72 properties, with 6.6 million square feet in area. in several states. The property comprises approximately 70,000 square feet of industrial space.
The Real Estate Investment Trust (REIT), focused on a cannabis-focused real estate portfolio, has also entered into a triple net long-term lease for the property with Temescal Wellness of Massachusetts, LLC. It is intended for use as a regulated cannabis cultivation and processing facility after the redevelopment is complete. Taking into account the full repayment of leasehold improvements, the total investment of Innovative Industrial Properties would be $ 18.1 million for the same amount.
The legalization of medical marijuana in several states in the United States, as well as the authorization of adult consumption in some, has opened up opportunities for the cannabis industry. Therefore, with more states across the country giving cannabis the green light, Innovative Industrial Properties has incentives to partner with experienced medical cannabis operators and serve as a vital source of capital by acquiring and leasing their assets. real estate assets. Its strategy is to acquire existing, refurbished and developing industrial buildings, including adjoining closed greenhouses.
Over the past six months, the company’s shares have outperformed the industry. The stock was up 18.1% from the industry rally of 14.3%.
Additionally, expanding the Massachusetts footprint makes sense because of its growth potential. Notably, Massachusetts was the eighth regulated cannabis market in terms of sales in 2020. Additionally, according to New Frontier Data, Massachusetts is expected to capture 5% of the $ 41.5 billion in total regulated cannabis sales in the United States d ‘by 2025.
Innovative Industrial Properties is also well positioned to take advantage of this favorable trend, with a total investment of $ 203.1 million in the seven properties it owns in Massachusetts, including funding committed for future development, redevelopment and leasehold improvements.
However, the trend to revise the 2021 Funds From Operations (FFO) per share estimates does not indicate a bullish outlook, with the estimate being revised downward in the past month. Currently, Innovative Industrial Properties carries a Zacks # 5 (sale) rank.
You can see The full list of current Zacks # 1 Rank (Strong Buy) stocks here.
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To note: Everything related to profit presented in this description represents funds from operations (FFO) – a measure widely used to assess the performance of REITs..
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