16 slides from Innovative Industrial Properties's earnings presentation, Aug 6, 2024
Slide 1: Innovative Industrial Properties Company Presentation – August 2024
INNOVATIVE INDUSTRIAL PROPERTIES NYSE: IIPR INNOVATIVEINDUSTRIALPROPERTIES.COM COMPANY PRESENTATION – AUGUST 2024 Innovative Industrial Properties 1
Slide 2: Forward Looking Statements
FORWARD LOOKING STATEMENTS This presentation and our associated comments include "forward-looking statements" (within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as
Slide 3: IIPR at a Glance
IIPR AT A GLANCE NNN cannabis REIT $2.5B • Large diversified portfolio of over $2.5B of cannabis real estate Total • Diversified across 19 states and 30 tenants(4) Committed / Invested • Contractual, annual escalations provide built in cash flow growth Capital (1) 14.4 Years 108 COMPANY SPOTLIGHT We
Slide 4: Why IIPR Was Formed
WHY IIPR WAS FORMED Operators’ Outsized Founded in 2016 to Support the Growth Specialized Real Need for Capital and Capital Needs of the Regulated Estate U.S. cannabis operators have an outsized Cannabis Industry U.S. cannabis operators require mission need for capital to fund growth critical facili
Slide 5: Our Business Model & Benefits
OUR BUSINESS MODEL & BENEFITS Structured long-term cash flows • Generally, 15-20 year initial lease terms (vs. ~5 years for traditional industrial leases) Align closely with Execute sale-leasebacks • Leases generally subject to parent company state-licensed and fund improvements cannabis operators f
Slide 6: Portfolio Overview
PORTFOLIO OVERVIEW IIPR has a geographically diversified portfolio of properties throughout the United States State ABR ($000s)(1) % of ABR(1) # of Properties Square Feet (000s) Pennsylvania $40,446 14.2% 10 1,361 Massachusetts 38,309 13.5% 10 989 Illinois 37,127 13.0% 7 965 New York 32,008 11.2% 2
Slide 7: Balance Sheet Highlights
BALANCE SHEET HIGHLIGHTS Balance Sheet Statistics Debt Overview IIPR is One of the Lowest Leveraged Public REITs Revolving Credit Facility: • Entire $50.0M capacity is undrawn Unsecured Senior Notes: 11% Debt to No Debt 17x Debt Service • Investment grade rating BBB+ from Egan Jones, since May 2021
Slide 8: Diversified Tenant Base
DIVERSIFIED TENANT BASE Tenant ABR ($000s) ABR (%)(1) Square Feet (000s) ABR/SF Total Committed / Invested Capital & Tenant Growth(2) 29 30 30 $48,505 17.0% 697 $70 26 18 20 8 30,288 10.6% 624 49 1 4 $2.4B $2.5B $2.3B 21,913 7.7% 664 33 Invested Capital $2.0B 20,087 7.1% 578 35 # of Tenants $1.3B 18
Slide 9: Consistent Growth in AFFO and Dividends
CONSISTENT GROWTH IN AFFO AND DIVIDENDS Annual AFFO Per Diluted Share CAGR (1,2) ‘17 – ’23: 54% Annual Dividend Per Share CAGR (2) ‘17 – ’23: 54% $9.08 Average AFFO Payout Ratio ‘17 – ’23: 85% $8.45 $7.10 $7.22 $6.66 $5.72 $5.01 $4.47 $3.28 $2.83 $1.20 $1.34 $0.55 $0.67 2017 2018 2019 2020 2021 2022
Slide 10: Underwriting & Monitoring
UNDERWRITING & MONITORING Diligent underwriting process with a focus on best-in-class operators within the regulated cannabis industry Detailed Background Ability to Raise Detailed Financial Guarantees and Ongoing on Management Capital Underwriting Security Deposits Monitoring • Experienced • Evalua
Slide 11: U.S. Cannabis Market Continues to Grow
U.S. CANNABIS MARKET CONTINUES TO GROW Market Overview Increasing U.S. Acceptance(3) 75% % Americans Supporting Legalization 70% • Rapid Market Growth: The projected 2028 U.S. legal cannabis sales forecast is $46 billion, surpassing the 2023 U.S. spirits market ($38 billion), beer market ($37 60% bi
Slide 12: Industry Tailwinds: Growing Legal Cannabis Market
INDUSTRY TAILWINDS: GROWING LEGAL CANNABIS MARKET Long-Term Growth Outlook US Legal Cannabis Sales for Cannabis Forecast(1) $46B $46B 68% 88% $30B Estimated U.S. U.S. adults say Legal Population of marijuana Cannabis States with an should be Sales by IIP Presence(2) legal at some 2028(1) level(3) 20
Slide 13: Increased Banking Services for Cannabis Industry
INCREASED BANKING SERVICES FOR CANNABIS INDUSTRY Institutional Adoption Continues Percentage of FDIC Banks that Offer Services to MRBs(1) • Increasing trend in FDIC banks offering services to marijuana-related 12% business (“MRBs”) (from 2014 to 2023) reaching an all-time high of ~12% of the total n
Slide 14: Licensing, Zoning & Regulatory Dynamics
LICENSING, ZONING & REGULATORY DYNAMICS IIPR has built a strong competitive advantage through its scale, industry network and long-term industry experience Licensing Zoning Regulatory • A regulated cannabis operator must obtain • Limited opportunities for locating regulated • Highly regulated at the
Slide 15: Executive Chairman & Co-Founder
EXECUTIVE CHAIRMAN & CO-FOUNDER Alan Gold has experience founding and leading real estate companies focused on nuanced, regulated industries. Co-founded Alexandria Real Estate Equities (NYSE: ARE) in 1994 and served as President and a director until 1998 • Invests in office buildings and laboratorie
Slide 16: Senior Management Team
SENIOR MANAGEMENT TEAM Paul Smithers David Smith Catherine Hastings Ben Regin President, CEO and Co-Founder CFO and Treasurer COO CIO • 35+ years of legal and • 20+ years of finance and real • 20+ years of accounting and • 18+ years of real estate and regulatory experience estate experience real est