Progressive Industrial Properties, Inc. (IIP)(NYSE: IIPR) introduced that its hire collections have dropped from 100% presently final yr to simply 92% for the month ending January 31, 2023. The corporate stated it had collected 97% of its hire on the finish of December. The corporate’s inventory was plunging by over 14% on the information to these days promote at $94. This can be a large drop from the 52-week excessive of $211.
The hashish REIT (Actual Property Funding Belief) outlined the assorted hashish firms which have slipped of their hire funds.
Missed Hire Funds
IIP reported that SH Mum or dad, Inc. also called Parallel was in default on its obligations to pay hire at one among IIP’s Pennsylvania properties (roughly 2.9% of invested/dedicated capital). Nevertheless, IIP did observe that hire was paid in full by means of January 31, 2023, on all different IIP properties leased by Parallel.
Along with Parallel, Inexperienced Peak Industries, Inc. (Skymint) was in default on its obligations to pay hire at one among IIP’s Michigan properties below development (roughly 2.7% of invested/dedicated capital). Nevertheless, hire was paid in full by means of January 31, 2023, on all different IIP properties leased by Skymint.
In California, Associates of Medical Investor Holdings, LLC (Vertical) have been in default on their obligations to pay hire at IIP’s California properties (roughly 0.7% of invested/dedicated capital).
centered on the regulated U.S. hashish trade, introduced at present its working, funding and capital markets exercise for the quarter and yr ended December 31, 2022.
Lease Changes
IIP additionally made adjustments to some lease agreements to incorporate cross-default provisions and/or lengthen lease phrases in trade for restricted base hire deferrals. One California property and one Michigan property leased by Holistic (roughly 1.8% of invested/dedicated capital within the mixture) have used safety deposits with a purpose to pay the leases. Along with that, one Missouri property leased by Calyx Peak, Inc. (roughly 1.2% of invested/dedicated capital) acquired a 100% base hire deferral by means of March 31, 2023, with pro-rata payback over the next 12 months and an prolonged time period of the lease, with no different changes to lease phrases.
There’s additionally bother with the Kings Backyard, which has stated it’s on the lookout for a merger. For now Kings Backyard is paying hire for the 4 properties in California that it continues to occupy, together with hire on the capital invested within the growth venture which is part of the lease of one of many properties. Nevertheless, there are two properties that have been leased to Kings Backyard that it appears the corporate is making an attempt to get go away. The San Bernardino property (roughly 192,000 rentable sq. toes), which IIP stated it’s actively evaluating various non-cannabis makes use of for the property resulting from market circumstances in California and adjustments within the zoning of the property. The Cathedral Metropolis property (roughly 23,000 rentable sq. toes), which IIP stated it has executed a letter of intent to lease the property and is negotiating lease phrases with the potential tenant. Nevertheless, IIP stated there might be no assurance that it’ll lease the property on the phrases anticipated, or in any respect.
Portfolio
IIP says it now owns 110 properties situated in 19 states, representing a complete of roughly 8.7 million rentable sq. toes (together with roughly 1.9 million rentable sq. toes below growth/redevelopment). The corporate states that no tenant represents greater than 14% of the full portfolio and no state represents greater than 16% of the full portfolio. Parallel had accounted for 10% of the corporate’s rental revenues and PharmaCann accounted for 12%. As Parallel defaulted on its money owed, many have been questioning if the corporate was persevering with to pay hire on its properties and now that query has been answered. Multi-state operators (MSOs) symbolize 85% of the working portfolio and public firm operators symbolize 55% of the working portfolio.
With regard to the stability sheet, the corporate acknowledged the next:
- 12% debt to whole gross belongings, with roughly $2.6 billion in whole gross belongings.
- Complete quarterly mounted money curiosity obligation of roughly $4.2 million.
- No secured debt.
- No debt maturities till Might 2026, apart from $6.4 million principal quantity of three.75% Exchangeable Senior Notes in 2024.
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