Innovative Industrial Properties Announces Q4 and FY 2022 Operating, Investment and Capital Markets Activity - Seite 2

• Kings Garden is paying rent for the four properties in California that it continues to occupy, including rent on the capital invested in the expansion project which is a part of the lease of one of the properties (this project is included as construction in progress below).
  • For the three months ended December 31, 2022, Kings Garden paid approximately $1.8 million in base rent at these four properties, in addition to reimbursement to IIP for pro rata taxes and insurance and direct payments for all other property operating costs.
• Kings Garden indicated that it is exploring potential merger transactions.
• IIP recovered an additional approximately $5.4 million from Kings Garden during the three months ended December 31, 2022, which is expected to be accounted for as a reduction to construction in progress.

- Construction in progress: two properties (previously leased to Kings Garden), and an expansion project at a property where Kings Garden continues to occupy the property and pay rent, representing approximately 395,000 rentable square feet in the aggregate.

• San Bernardino property (approximately 192,000 rentable square feet): IIP is actively evaluating alternative non-cannabis uses for the property due to market conditions in California and changes in the zoning of the property.
• Cathedral City property (approximately 23,000 rentable square feet): IIP executed a letter of intent to lease the property and is negotiating lease terms with the potential tenant. There can be no assurance that IIP will lease the property on the terms anticipated, or at all.

Investment Activity

In 2022, IIP made nine acquisitions for properties located in seven states, and executed 12 lease amendments to provide additional improvement allowances at properties in seven states, totaling an aggregate of approximately $394 million (including initial acquisition investments and commitments to fund future improvement allowances).

In November 2022, IIP sold a Pennsylvania industrial property leased to a subsidiary of Maitri Holdings, LLC for $23.5 million (approximately $461 per square foot).

As of January 18, 2023, IIP has entered into two definitive purchase agreements to acquire two properties for a total aggregate investment of approximately $63.0 million, which includes amounts expected to be made available as reimbursement to the applicable tenants for qualifying improvements to the properties. As of January 18, 2023, IIP has also executed four non-binding letters of intent to acquire two properties and to make available additional funding for improvements at two of IIP’s properties, representing a total expected investment by IIP of approximately $93.8 million. Each potential acquisition and additional funding is subject to ongoing diligence, execution of definitive agreements (as applicable) and the satisfaction of closing conditions, and there can be no assurance that IIP will consummate the acquisition of any of these properties or make available any additional funding at its existing properties on the terms anticipated, or at all.