Innovative Industrial Properties (IIPR) stock climbed 4.0% in Monday after-hours trading after the medical cannabis REIT posted stronger-than-expected Q3 FFO and revenue as the company’s efforts to replace underperforming tenants makes progress.
Q3 normalized FFO per share of $1.60, beating the average analyst estimate of $1.57, rose from $1.56 in Q2 and dropped from $2.08 in last year’s Q3.
Q2 revenue of $64.7M, topping the $63.9M consensus, increased from $62.9M in the previous quarter and declined $76.5M a year ago.
“We are pleased to have made our first investment outside of the cannabis industry during the third quarter with our $270M financial investment into IQHQ, marking IIP’s return to growth and providing meaningful diversification and accretion for IIP’s shareholders,” said Executive Chairman Alan Gold.
During the quarter, the company, also known as IIP, announced the investment in IQHQ life science real estate platform and closed on a $100M credit facility.
The revenue decrease from a year ago was mainly from tenant defaults for properties leased to PharmaCann, Gold Flora, TILT and 4Front. The company also cited a $0.5M decrease related to properties that have been taken back or sold, and a decline of $0.9M in tenant reimbursement revenue, primarily due to tenant defaults.
Those, however, were partly offset by a $1.4M increase from two properties acquired in 2024 and one property acquired in 2025, a $1.6M increase from new leases on four existing properties, and a $1.6M increase from annual contractual rent escalations.
Expenses of $35.3M climbed from $34.0M in Q2 and $34.6M in Q3 2024.
For the three months ended Sept. 30, 2025, the company applied $0.8M of security deposits for the payment of rent on two properties leased to Verdant and a Sacramento-based tenant. For the three months ended Sept. 30, 2024, IIP (IIPR) applied $1.4M of security deposits for payment of rent on six properties leased to 4Front, TILT and Emerald Growth.
Conference call on Nov. 4 at 12:00 PM ET.