IIP - Innovative Industrial Properties Inc.
05/04/2026 | Press release | Distributed by Public on 05/04/2026 15:14
Innovative Industrial Properties Reports First Quarter 2026 Results (Form 8-K)
Innovative Industrial Properties Reports First Quarter 2026 Results
$128 Million of Equity and Debt Capital Raised Year-To-Date
Executed Leases for 389,000 Square Feet Year-To-Date
SAN DIEGO, CA - May 4, 2026 - Innovative Industrial Properties, Inc. (NYSE: IIPR) ("IIP" or the "Company") announced today results for the first quarter ended March 31, 2026.
Executive Chairman Remarks
"We are encouraged by the pace of leasing activity year-to-date, including nearly 400,000 square feet of executed leases, which underscores the ongoing demand for our properties," said Alan Gold, Executive Chairman of IIP. "At the same time, we have taken deliberate steps to fortify our balance sheet through equity and debt capital raising activity, and have additional secured and unsecured debt financings underway totaling nearly $130 million, to be used to address our upcoming bond maturity and position us for growth."
First Quarter 2026 and Second Quarter to Date Highlights
Financial Results and Dividend
| • | Total revenues of $69.0 million and net income attributable to common stockholders of $30.2 million, or $1.02 per diluted share (all per share amounts in this press release are reported on a diluted basis unless otherwise noted). |
| • | Adjusted funds from operations ("AFFO") of $53.4 million, or $1.88 per share |
| • | Declared dividends to common stockholders totaling $1.90 per share. Since its inception, IIP has paid over $1.1 billion in common stock dividends to its stockholders. |
| Three Months Ended | Three Months Ended | |||||||||||||||
| March 31, 2026 | March 31, 2025 | |||||||||||||||
| (in thousands, except per share amounts) | Amount | Per Share | Amount | Per Share | ||||||||||||
| Net income attributable to common stockholders | $ | 30,155 | $ | 1.02 | $ | 30,296 | $ | 1.03 | ||||||||
| Normalized FFO | 50,585 | 1.78 | 52,761 | 1.85 | ||||||||||||
| AFFO | 53,434 | 1.88 | 55,332 | 1.94 | ||||||||||||
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Definitions of the above-mentioned non-GAAP financial measures, together with reconciliations to net income in accordance with GAAP and other definitions of capitalized terms used herein, appear at the end of this release.
IQHQ Investment
| • | As of March 31, 2026, the Company had funded an aggregate of $150.0 million of its strategic investment in IQHQ, Inc., consisting of a fully funded $100.0 million revolving credit facility and $50.0 million of Series G preferred equity. Subsequent to quarter end, the Company funded an additional $25.0 million of Series G preferred equity. The Company remains committed to funding up to an additional $95.0 million of preferred equity, in multiple tranches through the second quarter of 2027. |
Portfolio - Leasing
| • | In January 2026, executed a 204,000 square foot full-building lease in Desert Hot Springs, California with Gramlin, a private California operator. |
| • | In March 2026, executed a 5,000 square foot lease in Palm Springs, California. |
| • | In March 2026, executed a 56,000 square foot full-building lease in Palm Springs, California with Gramlin, a private California operator. |
| • | In March 2026, executed a 66,000 square foot full-building lease in Dwight, Illinois with Grown Rogue, a public multi-state operator. |
| • | In April 2026, executed a 58,000 square foot full-building lease in Buckeye Lake, Ohio with Curaleaf, a public multi-state operator. |
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Portfolio - Tenant Updates
| • | The following table summarizes payments received from certain defaulted tenants during the periods presented and the corresponding per share impact (in thousands, except per share amounts): |
|
Three Months Ended December 31, 2025 |
Three Months Ended March 31, 2026 |
Q2'26 To Date | ||||||||||||||||||||||
| Tenant | Total Payments | Per Share(1) | Total Payments | Per Share(1) | Total Payments | Per Share(1) | ||||||||||||||||||
| Gold Flora | $ | 3,738 | $ | 0.13 | $ | 1,500 | $ | 0.05 | $ | - | $ | - | ||||||||||||
| PharmaCann | 242 | 0.01 | 3,244 | 0.11 | 850 | 0.03 | ||||||||||||||||||
| 4Front | - | - | 225 | 0.01 | 400 | 0.01 | ||||||||||||||||||
| Total | $ | 3,980 | $ | 0.14 | $ | 4,969 | $ | 0.17 | $ | 1,250 | $ | 0.04 | ||||||||||||
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| (1) | For the three months ended December 31, 2025, the weighted-average common stock outstanding was 28,303,530 shares. For the three months ended March 31, 2026, the weighted-average common stock outstanding was 28,467,184 shares, which was also used to calculate the total payments per share for the period Q2'26 To Date. |
| • | PharmaCann |
| • | During the first quarter of 2026, the Ohio and Pennsylvania courts released $1.7 million and $1.3 million, respectively, to the Company comprised of the rent payments previously required to be escrowed with the court by PharmaCann. |
| • | As previously disclosed, the Company has resolved all pending litigation with PharmaCann with respect to PharmaCann's prior lease defaults. The settlement agreement that the Company has entered into with PharmaCann includes monetary judgments for amounts owed by PharmaCann under the leases for New York, Ohio and Pennsylvania and mandates the turnover of these properties to the Company by May 20, 2026 for the New York and Pennsylvania properties and by May 26, 2026 for the Ohio property. |
| • | As noted above in "Portfolio - Leasing", the Company has executed new leases for its properties in Ohio and Illinois that were previously leased to PharmaCann. |
| • | Gold Flora |
| • | During the first quarter of 2026, the Company received $1.5 million in settlement of all remaining unpaid administrative rents due from the receivership. |
| • | The Company has executed lease agreements for the three properties previously leased by Gold Flora, executing a lease agreement for its 70,000 Palm Springs property in November 2025, executing a lease agreement for its 204,000 square foot Desert Hot Springs property in January 2026, and executing a lease agreement for its 56,000 square foot Palm Springs property in March 2026. |
| • | 4Front |
| • | The Company has reached tentative arrangements with prospective new tenants for the four assets leased to 4Front, including a 250,000 square foot asset in Illinois, a 114,000 square foot asset in Washington, and two assets in Massachusetts totaling 124,000 square feet. Each of these arrangements is subject to customary diligence and licensing processes and are expected to go into effect at the conclusion of receivership proceedings, expected by year end 2026. |
Balance Sheet Highlights (at March 31, 2026)
| • | 13% debt to total gross assets, with $2.8 billion in total gross assets. |
| • | Total liquidity was $176.6 million, consisting of cash and cash equivalents (as reported in IIP's consolidated balance sheet as of March 31, 2026) and availability under IIP's revolving credit facility. |
| • | Debt service coverage ratio of 11.6x (calculated in accordance with IIP's 5.50% Unsecured Senior Notes due 2026). |
Financing Activity
| • | Preferred Stock |
| • | In total, the Company has raised $70.9 million in net proceeds from preferred stock issuances year-to-date comprised of the following: |
| • | During the quarter ended March 31, 2026, the Company issued 2,698,523 shares its of 9.00% Series A Preferred Stock under its ATM Program for $60.3 million in net proceeds. |
| • | Subsequent to March 31, 2026, the Company issued an additional 506,628 shares of its 9.00% Series A Preferred Stock under its ATM Program for $10.6 million in net proceeds. |
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| • | Common Stock |
| • | In total, the Company has raised $34.9 million in net proceeds from common stock issuances year-to-date comprised of the following: |
| • | During the quarter ended March 31, 2026, the Company issued 178,655 shares of its common stock under its ATM Program for $9.3 million in net proceeds. |
| • | Subsequent to March 31, 2026, the Company issued an additional 514,950 shares of its common stock under its ATM Program for $25.6 million in net proceeds. |
| • | Note Repurchase |
| • | Subsequent to March 31, 2026, the Company repurchased $9.1 million of the Company's 5.50% Unsecured Notes at a discount to par. |
| • | Secured Debt |
| • | Subsequent to March 31, 2026, the Company closed on a $20.0 million, three-year secured term loan which bears interest at a fixed rate of 9.0%. |
Financial Results
For the three months ended March 31, 2026, IIP generated total revenues of $69.0 million, compared to $71.7 million for the same period in 2025, a decrease of 3.8%. The decline was primarily driven by a $6.9 million decrease related to tenant defaults, partially offset by increases due to annual contractual rent escalations, rental revenue related to the property acquired in February 2025 and new leases executed on existing properties.
For the three months ended March 31, 2026, the Company applied $1.2 million of security deposits for payment of rent on properties leased to Battle Green and The Cannabist Company. For the three months ended March 31, 2025, we applied $5.8 million of security deposits for payment of rent on properties leased to PharmaCann, Gold Flora, TILT and Sozo.
For the three months ended March 31, 2026, interest and other income increased by $4.6 million to $6.3 million compared to $1.6 million for the three months ended March 31, 2025. The increase was primarily driven by the recognition of $5.5 million of interest and dividend income related to our financial investments in IQHQ. The increase was partially offset by lower income from interest-bearing investments as a result of lower invested balances and lower interest rates earned on those balances.
Dividend
On March 13, 2026, the Board of Directors declared a first quarter 2026 dividend of $1.90 per common share, representing an annualized dividend of $7.60 per common share. The dividend was paid on April 15, 2026 to stockholders of record as of March 31, 2026.
Supplemental Information
Supplemental financial information is available in the Investor Relations section of IIP's website at www.innovativeindustrialproperties.com.
Teleconference and Webcast
Innovative Industrial Properties, Inc. will conduct a conference call and webcast at 9:00 a.m. Pacific Time (12:00 p.m. Eastern Time) on Tuesday, May 5, 2026 to discuss IIP's financial results and operations for the first quarter ended March 31, 2026. The call will be open to all interested investors through a live audio webcast at the Investor Relations section of IIP's website at www.innovativeindustrialproperties.com, or live by calling 1-800-715-9871 (domestic) or 1-646-307-1963 (international) and asking to be joined to the Innovative Industrial Properties, Inc. conference call. The complete webcast will be archived for one year on IIP's website. A telephone playback of the conference call will also be available from 12:00 p.m. Pacific Time on Tuesday, May 5, 2026 until 8:59 p.m. Pacific Time on Tuesday, May 12, 2026, by calling 1-800-770-2030 (domestic), or 1-609-800-9909 (international) and using access code 5072512. The website replay will be posted in the Investor Relations section of innovativeindustrialproperties.com.
About Innovative Industrial Properties
Innovative Industrial Properties, Inc. is a real estate investment trust (REIT) focused on the acquisition, ownership and management of specialized industrial properties and life science real estate. Additional information is available at www.innovativeindustrialproperties.com.
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