Innovative Industrial Properties Announces Q4 and FY 2022 Operating, Investment and Capital Markets Activity

IIP owned 110 properties located in 19 states, representing a total of approximately 8.7 million rentable square feet (including approximately 1.9 million rentable square feet under development / redevelopment), including:

- Operating portfolio: 108 properties, representing approximately 8.3 million rentable square feet.

• 100% leased (triple-net).
• Weighted-average lease length: 15.3 years.
• Total invested / committed capital per square foot: $274

- Portfolio statistics by invested / committed capital:

• No tenant represents more than 14% of the total portfolio.
• No state represents more than 16% of the total portfolio.
• Multi-state operators (MSOs) represent 85% of the operating portfolio.
• Public company operators represent 55% of the operating portfolio.
• Industrial (cultivation and/or processing), retail (dispensing) and combined industrial/retail represent 90%, 3% and 7% of operating portfolio, respectively.

- Rent collection / deferrals:

• Rent collection for IIP’s operating portfolio (calculated as base rent and property management fees collected over contractually due amounts) was as follows:
  • 92% collected as of today for the month ending January 31, 2023 (including approximately $324,000 of a security deposit applied for payment of rent for IIP’s lease with Holistic Industries Inc. (Holistic) at IIP’s Michigan property (see discussion below) and receipt of the full rent payment from Sozo Health, Inc. (Sozo));
  • 94% collected for the three months ended December 31, 2022 (including approximately $541,000 of security deposits applied for payment of rent for IIP’s lease with Sozo); and
  • 97% collected for the year ended December 31, 2022 (including an aggregate of approximately $2.7 million of security deposits applied for payment of rent for IIP’s leases with Kings Garden Inc. (Kings Garden) and Sozo).

• As of January 18, 2023:
  • SH Parent, Inc. (Parallel) was in default on its obligations to pay rent at one of IIP’s Pennsylvania properties (approximately 2.9% of invested / committed capital).
    • Rent was paid in full through January 31, 2023 on all other IIP properties leased by Parallel.
  • Green Peak Industries, Inc. (Skymint) was in default on its obligations to pay rent at one of IIP’s Michigan properties under construction (approximately 2.7% of invested / committed capital).
    • Rent was paid in full through January 31, 2023 on all other IIP properties leased by Skymint.
  • Affiliates of Medical Investor Holdings, LLC (Vertical) were in default on their obligations to pay rent at IIP’s California properties (approximately 0.7% of invested / committed capital).

• As of January 18, 2023, IIP had executed lease amendments to include cross-default provisions and/or extend lease terms in exchange for limited base rent deferrals for the following three properties:
  • One California property and one Michigan property leased by Holistic (approximately 1.8% of invested / committed capital in the aggregate):
    • 100% of base rent to be applied from the security deposits held by IIP for the nine months ending September 30, 2023 with respect to the Michigan property and the eight months ending September 30, 2023 with respect to the California property, with pro rata payback of the security deposits over 12 months starting January 2024.
    • Rent was paid in full through January 31, 2023 for Holistic at IIP’s California property and all other IIP properties leased by Holistic.
    • Added cross-default and extended terms of all leases, with no other adjustments to lease terms.
  • One Missouri property leased by Calyx Peak, Inc. (approximately 1.2% of invested / committed capital):
    • 100% base rent deferral through March 31, 2023, with pro rata payback over the following 12 months.
    • Extended term of lease, with no other adjustments to lease terms.

- Kings Garden Update: