Innovative Industrial Properties: Falling Knife Worth Catching – Market Overreaction Triggers Richer Yields

Summary:

• IIPR has lost nearly half of its value, thanks to the drastic PharmaCann default on all of its leases announced on December 20, 2024.
• The deep selloff is unsurprising indeed, given that the largest tenant comprises 17% of the cannabis REIT’s rental revenues, as many investors likely feared a similar downward spiral as MPW.
• Even so, we believe that the correction triggers an excellent buying opportunity, thanks to IIPR’s healthy balance sheet, high AFFO payout ratio, and richer dividend yields at 11.4%.
• While there may be some uncertainty surrounding a potential dividend cut in the near-term, we believe that IIPR is a falling knife worth catching for investors with a higher risk tolerance.
• We shall further discuss why.

Innovative Industrial Properties: PharmaCann’s Default Triggers Richer Yields Ahead – Buy The Plunge

We previously covered Innovative Industrial Properties (NYSE:IIPR) in August 2024, discussing its tailwinds from the potential cannabis rescheduling and the bullish support

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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