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Key Factors to Impact Innovative Industrial (IIPR) Q2 Earnings
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Innovative Industrial Properties, Inc. (IIPR - Free Report) is expected to report second-quarter 2022 results after market close on Aug 3. The company’s quarterly results are likely to display year-over-year growth in revenues and funds from operations (FFO) per share.
In the last reported quarter, this real estate investment trust (“REIT”), focused on the cannabis-centered real estate portfolio, delivered a surprise of 2.51% in terms of adjusted FFO per share.
Over the last four quarters, IIPR’s adjusted FFO per share surpassed the consensus mark, with the average beat being 0.85%. The graph below depicts the surprise history of the company:
Innovative Industrial Properties, Inc. Price and EPS Surprise
Let’s see how things have shaped up before the earnings release.
Factors at Play
Innovative Industrial Properties, focused on the acquisition, ownership and management of specialized industrial properties leased to experienced, state-licensed operators for their regulated state-licensed cannabis facilities, is likely to keep gaining from its acquisitions.
The legalization of marijuana for medical use across several U.S. states and recreational use in several states has opened opportunities for the cannabis industry. Therefore, Innovative Industrial Properties has incentives to partner with experienced medical-use cannabis operators and serve as a vital source of capital by acquiring and leasing back their real estate assets. Its strategy is to acquire existing, redeveloped and under-development industrial buildings, including enclosed greenhouse facilities.
This REIT’s expansion efforts continued in the second quarter too, resulting in the company owning 111 properties as of Jun 30, 2022. The properties aggregated 8.6 million rentable square feet of space, including roughly 2.5 million rentable square feet under development/ redevelopment. These expansion efforts are likely to have boosted the top line during the June-end quarter.
During the second quarter, Innovative Industrial Properties announced that it entered into an amendment of the lease with Green Thumb Industries Inc. for a property in Danville, PA. This offered an additional $55 million to Green Thumb for the recently completed development of a new 152,000-square-foot industrial facility for cultivation and processing. Moreover, IIPR announced that it closed the acquisition of a Texas property for $12.0 million and entered into a long-term lease agreement for the property with a subsidiary of Texas Original Holdings, LLC.
Innovative Industrial Properties is anticipated to have benefited from its expansion measures during the quarter under review on contributions from acquisitions and the leasing of new properties, additional tenant improvement allowances and construction funding at existing properties, resulting in adjustments to the base rent and contractual rental escalations at some properties.
The Zacks Consensus Estimate for quarterly revenues is currently pegged at $68.5 million, suggesting a surge of 40.2% year over year.
However, Innovative Industrial Properties’ activities during the quarter in discussion were inadequate to gain analysts’ confidence. The Zacks Consensus Estimate for the second-quarter FFO per share has remained unrevised at $2.02 in a month. However, it calls for nearly 23.2% year-over-year growth.
Here Is What Our Quantitative Model Predicts:
Our proven model does not conclusively predict a surprise in terms of FFO per share for Innovative Industrial Properties this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an FFO beat. However, that’s not the case here.
Innovative Industrial Properties currently carries a Zacks Rank of 4 (Sell) and has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are two stocks from the broader REIT sector — Public Storage (PSA - Free Report) and Host Hotels & Resorts, Inc. (HST - Free Report) — that you may want to consider as our model shows that these have the right combination of elements to report a surprise this quarter.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.
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Key Factors to Impact Innovative Industrial (IIPR) Q2 Earnings
Innovative Industrial Properties, Inc. (IIPR - Free Report) is expected to report second-quarter 2022 results after market close on Aug 3. The company’s quarterly results are likely to display year-over-year growth in revenues and funds from operations (FFO) per share.
In the last reported quarter, this real estate investment trust (“REIT”), focused on the cannabis-centered real estate portfolio, delivered a surprise of 2.51% in terms of adjusted FFO per share.
Over the last four quarters, IIPR’s adjusted FFO per share surpassed the consensus mark, with the average beat being 0.85%. The graph below depicts the surprise history of the company:
Innovative Industrial Properties, Inc. Price and EPS Surprise
Innovative Industrial Properties, Inc. price-eps-surprise | Innovative Industrial Properties, Inc. Quote
Let’s see how things have shaped up before the earnings release.
Factors at Play
Innovative Industrial Properties, focused on the acquisition, ownership and management of specialized industrial properties leased to experienced, state-licensed operators for their regulated state-licensed cannabis facilities, is likely to keep gaining from its acquisitions.
The legalization of marijuana for medical use across several U.S. states and recreational use in several states has opened opportunities for the cannabis industry. Therefore, Innovative Industrial Properties has incentives to partner with experienced medical-use cannabis operators and serve as a vital source of capital by acquiring and leasing back their real estate assets. Its strategy is to acquire existing, redeveloped and under-development industrial buildings, including enclosed greenhouse facilities.
This REIT’s expansion efforts continued in the second quarter too, resulting in the company owning 111 properties as of Jun 30, 2022. The properties aggregated 8.6 million rentable square feet of space, including roughly 2.5 million rentable square feet under development/ redevelopment. These expansion efforts are likely to have boosted the top line during the June-end quarter.
During the second quarter, Innovative Industrial Properties announced that it entered into an amendment of the lease with Green Thumb Industries Inc. for a property in Danville, PA. This offered an additional $55 million to Green Thumb for the recently completed development of a new 152,000-square-foot industrial facility for cultivation and processing. Moreover, IIPR announced that it closed the acquisition of a Texas property for $12.0 million and entered into a long-term lease agreement for the property with a subsidiary of Texas Original Holdings, LLC.
Innovative Industrial Properties is anticipated to have benefited from its expansion measures during the quarter under review on contributions from acquisitions and the leasing of new properties, additional tenant improvement allowances and construction funding at existing properties, resulting in adjustments to the base rent and contractual rental escalations at some properties.
The Zacks Consensus Estimate for quarterly revenues is currently pegged at $68.5 million, suggesting a surge of 40.2% year over year.
However, Innovative Industrial Properties’ activities during the quarter in discussion were inadequate to gain analysts’ confidence. The Zacks Consensus Estimate for the second-quarter FFO per share has remained unrevised at $2.02 in a month. However, it calls for nearly 23.2% year-over-year growth.
Here Is What Our Quantitative Model Predicts:
Our proven model does not conclusively predict a surprise in terms of FFO per share for Innovative Industrial Properties this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an FFO beat. However, that’s not the case here.
Innovative Industrial Properties currently carries a Zacks Rank of 4 (Sell) and has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Stocks to Consider
Here are two stocks from the broader REIT sector — Public Storage (PSA - Free Report) and Host Hotels & Resorts, Inc. (HST - Free Report) — that you may want to consider as our model shows that these have the right combination of elements to report a surprise this quarter.
Public Storage, slated to release quarterly numbers on Aug 4, has an Earnings ESP of +0.31% and carries a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Host Hotels & Resorts, scheduled to report quarterly numbers on Aug 3, currently has an Earnings ESP of +9.18% and carries a Zacks Rank of 2.
Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.
Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.