Innovative Industrial Properties, Inc. · NYSE:IIPR
Innovative Industrial Properties — Q3 2023 Earnings Presentation
16 slides from Innovative Industrial Properties's earnings presentation, Nov 2, 2023
Slide 1: Innovative Industrial Properties Company Presentation
INNOVATIVE INDUSTRIAL PROPERTIES NYSE: IIPR INNOVATIVEINDUSTRIALPROPERTIES.COM COMPANY PRESENTATION POSTED: NOVEMBER 3, 2023 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, 2023
IIPR AS OF SEPTEMBER 30, 2023 102 110 108 # of Properties 65 45 by Year 1 5 11 $2.4B 2016 2017 2018 2019 2020 2021 2022 9/30 Total Committed / Invested 2.4B Capital (1) 2.3B 2.0B Capital 1.3B 14.9 Years 108 Weighted Properties Committed by 690.0M Average Lease (Operating 30.0M 73.3M 167.4M Length (4
Slide 6: Portfolio Overview
PORTFOLIO OVERVIEW IIPR has a geographically diversified portfolio of properties throughout the United States Public vs. Private(1) 62% Public 38% Private Operator Type(1)(2) 90% MSO 10% SSO Property Type(1) State Diversification(1) 91% 3% 6% IL PA MA MI NY FL OH NJ CA MD Other Total Industrial(3) R
Slide 7: Six-Year Financial Performance Track Record
SIX-YEAR FINANCIAL PERFORMANCE TRACK RECORD Year Over Year Net Operating Income (NOI)(1)(2) Year Over Year G&A as a % of NOI(1)(3) $265,839 89.0% G&A G&A % of NOI $200,108 44.4% 22.6% 12.7% 11.5% 14.5% $111,944 $38,520 $43,352 $22,961 $14,342 $9,818 $14,182 $6,302 $5,610 $6,375 2017 2018 2019 2020 2
Slide 8: Comparative Performance
COMPARATIVE PERFORMANCE Common Stock Dividend Per Share(1) Net Income Attributable to Common Stockholders Per Share(1) 39% 47% 15% 19% 16% 6% 7% 5% 10% 10% 3% 6% 7% - 0% 4% (1%) (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 IIPR (Di
Slide 9: Top Ten Tenants by ABR
TOP TEN TENANTS BY ABR Top ten tenants represent ~78% of the company’s annualized base rent IIP Portfolio Second Quarter 2023(3) Tenant Information Annualized Base Rent(1) ABR # of Adjusted Market MSO # Tenant $ % Square Feet(2) / Square Feet Leases Revenue EBITDA(4) Capitalization(5) / SSO(6) 1 Pha
Slide 10: Balance Sheet Highlights
BALANCE SHEET HIGHLIGHTS Balance Sheet Statistics Debt Overview IIP Is One of the Lowest Leveraged Public REITs Exchangeable Senior Notes: • $4.4M of 3.75% exchangeable senior notes, maturing February 21, 2024 • Exchangeable for cash, common stock, or a combination (at IIP’s option) 12% Debt to >16x
Slide 11: 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 12: 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 13: 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 14: Cannabis Is a Large and Growing Industry
CANNABIS IS A LARGE AND GROWING INDUSTRY Long-Term Growth Outlook US Legal Cannabis Sales for Cannabis Forecast(1) $43B $43B 68% +$600M $26B Estimated U.S. 2Q 2023 Legal Population of Cannabis Cannabis States with an Excise Sales Sales by IIP Presence(2) Tax 2027(1) Collections(3) 2022 2023E 2024E 2
Slide 15: 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 16: Senior Management Team
SENIOR MANAGEMENT TEAM Paul Smithers David Smith Catherine Hastings Ben Regin 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 experienc
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