Innovative Industrial Properties, Inc. · NYSE:IIPR
Innovative Industrial Properties — Q3 2022 Earnings Presentation
15 slides from Innovative Industrial Properties's earnings presentation, Nov 10, 2022
Slide 1: Innovative Industrial Properties Company Presentation
INNOVATIVE INDUSTRIAL PROPERTIES NYSE: IIPR INNOVATIVEINDUSTRIALPROPERTIES.COM COMPANY PRESENTATION POSTED: NOVEMBER 10, 2022 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: Why IIPR Was Formed
WHY IIPR WAS FORMED Outsized Need for Specialized Real Capital Estate U.S. cannabis operators have an outsized need for capital to fund growth Founded in 2016 U.S. cannabis operators require mission critical facilities with specialized buildouts to optimize environment and conform to We are the firs
Slide 4: 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) We work closely with Execute sale-leasebacks • Leases generally subject to parent company state-licensed and fund improvements guarantees coverin
Slide 5: IIPR as of September 30, 2022
IIPR AS OF SEPTEMBER 30, 2022 102 111 # of Properties 65 45 by Year 1 5 11 $2.3B 2016 2017 2018 2019 2020 2021 9/30 Total Committed/ Invested Capital (1) 2.3B 2.0B Capital 1.3B 15.5 Years 111 Weighted Properties Committed by 690.0M Average Lease (Operating 30.0M 73.3M 167.4M Length (5) Portfolio - 1
Slide 6: Portfolio Overview
PORTFOLIO OVERVIEW IIPR has a geographically diversified portfolio of properties throughout the United States Public vs. Private(1) 55% Public 45% Private Operator Type(1)(2) 85% MSO 15% SSO Property Type(1) State Diversification(1) 90% 3% 7% PA MA MI IL CA NY FL NJ MD CO Other Total Industrial(3) R
Slide 7: Track Record of Growth and Profitability
TRACK RECORD OF GROWTH AND PROFITABILITY Year Over Year Net Operating Income (NOI)(1)(2) Year Over Year G&A as a % of NOI(1)(3) $200,108 89.0% G&A G&A % of NOI 44.4% $111,944 22.6% 12.7% 11.5% $43,352 $22,961 $14,342 $9,818 $14,182 $6,302 $5,610 $6,375 2017 2018 2019 2020 2021 2017 2018 2019 2020 20
Slide 8: Comparative Performance
COMPARATIVE PERFORMANCE Common Stock Dividend Per Share(1) Net Income Attributable to Common Stockholders Per Share(1) 64% 71% 32% 34% 20% 13% 10% 16% 15% 8% 9% 9% 10% 11% 12% 7% (6%) (3%) 1-Year CAGR 3-Year CAGR 5-Year CAGR 1-Year CAGR 3-Year CAGR 5-Year CAGR REIT(2) S&P 500 IIPR REIT(2) S&P 500 II
Slide 9: Top Fifteen Tenants by Invested Capital
TOP FIFTEEN TENANTS BY INVESTED CAPITAL Top 15 tenants represent ~86% of the company’s invested capital IIP Portfolio 2nd Quarter 2022(3) Tenant Information Total Invested Capital(1) Investment # of Adjusted Market MSO # Tenant $ % Square Feet(2) / Square Feet Leases Revenue EBITDA(4) Capitalization
Slide 10: Licensing, Zoning, & Regulatory Dynamics
LICENSING, ZONING, & REGULATORY DYNAMICS Establishing a Cultivation, Processing or Dispensary Facility is a Multifaceted Process with Significant Hurdles Licensing Zoning Regulatory • A regulated cannabis operator must • Limited opportunities for locating • Highly regulated at the state and obtain p
Slide 11: Underwriting & Monitoring
UNDERWRITING & MONITORING Detailed Background Ability to Raise Detailed Financial Guarantees and Ongoing on Management Capital Underwriting Security Deposits Monitoring • Experienced • Evaluation of the • Evaluation of • Leases generally • Quarterly reviews management team macro environment financia
Slide 12: Inside Look: Cultivation and Processing Facility
INSIDE LOOK: CULTIVATION AND PROCESSING FACILITY Grow Rooms: Extraction Room Methods: • Mother room – houses the large plants with • Carbon dioxide extraction genetics desired for the production plants • Ethanol extraction • Clone room – leaves from the mother plants are used to propagate new plants
Slide 13: Cannabis Is a High Growth Sector
CANNABIS IS A HIGH GROWTH SECTOR Long-Term Growth Outlook 10 Yr. Est. Sales U.S. Current Legal Cannabis(1) for Cannabis $56B $58B $54B $51B $48B $45B $42B $37B $32B $27B 2021 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E $72B 68% +12% Est. Legal 10 Yr. Est. Sales U.S. Potential Legal Cannabi
Slide 14: Executive Chairman & Co-Founder
EXECUTIVE CHAIRMAN & CO-FOUNDER Alan Gold has experience starting 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 laboratories leased to
Slide 15: Senior Management Team
SENIOR MANAGEMENT TEAM Paul Smithers Catherine Hastings Brian Wolfe President, CEO and Co-Founder CFO and Treasurer VP, GC, and Secretary • 35+ years of legal and • 20+ years of accounting and • Former VP, Corporate Legal of regulatory experience real estate experience BioMed Realty • Previously co-
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