Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 07, 2019 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | INNOVATIVE INDUSTRIAL PROPERTIES INC | |
Entity Central Index Key | 0001677576 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Trading Symbol | IIPR | |
Entity Small Business | true | |
Entity Common Stock, Shares Outstanding | 11,853,788 | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Real estate, at cost: | ||
Land | $ 37,959 | $ 20,475 |
Buildings and improvements | 231,252 | 109,425 |
Tenant improvements | 43,397 | 14,732 |
Construction in progress | 0 | 6,298 |
Total real estate, at cost | 312,608 | 150,930 |
Less accumulated depreciation | (8,625) | (3,571) |
Net real estate held for investment | 303,983 | 147,359 |
Cash and cash equivalents | 99,917 | 13,050 |
Restricted Cash | 9,354 | 0 |
Short-term investments, net | 208,828 | 120,443 |
Other assets, net | 1,068 | 614 |
Total assets | 623,150 | 281,466 |
Liabilities and stockholders' equity | ||
Exchangeable senior notes, net | 134,158 | 0 |
Tenant improvements and construction funding payable | 12,700 | 2,433 |
Accounts payable and accrued expenses | 1,044 | 1,968 |
Dividends payable | 9,204 | 3,759 |
Offering cost liability | 62 | 0 |
Rent received in advance and tenant security deposits | 16,199 | 9,014 |
Total liabilities | 173,367 | 17,174 |
Commitments and contingencies (Notes 6 and 11) | ||
Stockholders' equity: | ||
Preferred stock, par value $0.001 per share, 50,000,000 shares authorized: 9.00% Series A cumulative redeemable preferred stock, $15,000 liquidation preference ($25.00 per share), 600,000 shares issued and outstanding at September 30, 2019 and December 31, 2018 | 14,009 | 14,009 |
Common stock, par value $0.001 per share, 50,000,000 shares authorized: 11,367,828 and 9,775,800 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively | 11 | 10 |
Additional paid-in capital | 452,634 | 260,540 |
Dividends in excess of earnings | (16,871) | (10,267) |
Total stockholders' equity | 449,783 | 264,292 |
Total liabilities and stockholders' equity | $ 623,150 | $ 281,466 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | |
Preferred Stock, Shares Authorized | 50,000,000 | |
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 50,000,000 | 50,000,000 |
Common Stock, Shares, Issued | 11,367,828 | 9,775,800 |
Common Stock, Shares, Outstanding | 11,367,828 | 9,775,800 |
Series A Preferred Stock [Member] | ||
Preferred Stock, Shares Issued | 600,000 | |
Preferred Stock, Shares Outstanding | 600,000 | |
Preferred Stock, Dividend Rate, Percentage | 9.00% |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Revenues: | ||||
Rental | $ 11,198 | $ 3,716 | $ 26,054 | $ 9,639 |
Tenant reimbursements | 357 | 210 | 941 | 365 |
Total revenues | 11,555 | 3,926 | 26,995 | 10,004 |
Expenses: | ||||
Property expenses | 357 | 210 | 941 | 365 |
General and administrative expense | 2,156 | 1,442 | 6,667 | 4,393 |
Depreciation expense | 2,221 | 703 | 5,054 | 1,715 |
Total expenses | 4,734 | 2,355 | 12,662 | 6,473 |
Income from operations | 6,821 | 1,571 | 14,333 | 3,531 |
Interest and other income | 1,537 | 261 | 3,702 | 788 |
Interest expense | (1,838) | 0 | (4,462) | 0 |
Net income | 6,520 | 1,832 | 13,573 | 4,319 |
Preferred stock dividend | (338) | (338) | (1,014) | (1,014) |
Net income attributable to common stockholders | $ 6,182 | $ 1,494 | $ 12,559 | $ 3,305 |
Net income attributable to common stockholders per share (Note 8): | ||||
Basic | $ 0.56 | $ 0.22 | $ 1.22 | $ 0.50 |
Diluted | $ 0.55 | $ 0.21 | $ 1.20 | $ 0.49 |
Weighted average shares outstanding: | ||||
Basic | 10,918,477 | 6,636,638 | 10,088,036 | 6,388,058 |
Diluted | 11,057,697 | 6,785,800 | 10,225,574 | 6,534,300 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity - USD ($) | Common Stock [Member] | Additional Paid-In-Capital [Member] | Dividends in Excess of Earnings [Member] | Series A Preferred Stock [Member] | Total |
Balances at beginning of period at Dec. 31, 2017 | $ 4,000 | $ 66,248,000 | $ (6,712,000) | $ 14,009,000 | $ 73,549,000 |
Balances at beginning of period (in shares) at Dec. 31, 2017 | 3,501,147 | ||||
Net income | $ 0 | 0 | 4,319,000 | 0 | 4,319,000 |
Equity component of exchangeable senior notes | 0 | 0 | 0 | 0 | 0 |
Net proceeds from sale of common stock | $ 3,000 | 79,311,000 | 0 | 0 | 79,314,000 |
Net proceeds from sale of common stock (in shares) | 3,220,000 | ||||
Net issuance of unvested restricted stock | $ 0 | (390,000) | 0 | 0 | (390,000) |
Net issuance of unvested restricted stock (in shares) | 64,653 | ||||
Preferred stock dividend | $ 0 | 0 | (1,014,000) | 0 | (1,014,000) |
Common stock dividend | 0 | 0 | (5,767,000) | 0 | (5,767,000) |
Stock-based compensation | 0 | 1,079,000 | 0 | 0 | 1,079,000 |
Balances at end of period at Sep. 30, 2018 | $ 7,000 | 146,248,000 | (9,174,000) | 14,009,000 | 151,090,000 |
Balances at end of period (in shares) at Sep. 30, 2018 | 6,785,800 | ||||
Balances at beginning of period at Jun. 30, 2018 | $ 7,000 | 145,862,000 | (8,293,000) | 14,009,000 | 151,585,000 |
Balances at beginning of period (in shares) at Jun. 30, 2018 | 6,785,800 | ||||
Net income | $ 0 | 0 | 1,832,000 | 0 | 1,832,000 |
Net issuance of unvested restricted stock | 0 | 0 | 0 | 0 | 0 |
Preferred stock dividend | 0 | 0 | (338,000) | 0 | (338,000) |
Common stock dividend | 0 | 0 | (2,375,000) | 0 | (2,375,000) |
Stock-based compensation | 0 | 386,000 | 0 | 0 | 386,000 |
Balances at end of period at Sep. 30, 2018 | $ 7,000 | 146,248,000 | (9,174,000) | 14,009,000 | 151,090,000 |
Balances at end of period (in shares) at Sep. 30, 2018 | 6,785,800 | ||||
Balances at beginning of period at Dec. 31, 2018 | $ 10,000 | 260,540,000 | (10,267,000) | 14,009,000 | 264,292,000 |
Balances at beginning of period (in shares) at Dec. 31, 2018 | 9,775,800 | ||||
Net income | $ 0 | 0 | 13,573,000 | 0 | 13,573,000 |
Equity component of exchangeable senior notes | 0 | 5,569,000 | 0 | 0 | 5,569,000 |
Net proceeds from sale of common stock | $ 1,000 | 185,623,000 | 0 | 0 | 185,624,000 |
Net proceeds from sale of common stock (in shares) | 1,558,000 | ||||
Net issuance of unvested restricted stock | $ 0 | (939,000) | 0 | 0 | (939,000) |
Net issuance of unvested restricted stock (in shares) | 34,028 | ||||
Preferred stock dividend | $ 0 | 0 | (1,014,000) | 0 | (1,014,000) |
Common stock dividend | 0 | 0 | (19,163,000) | 0 | (19,163,000) |
Stock-based compensation | 0 | 1,841,000 | 0 | 0 | 1,841,000 |
Balances at end of period at Sep. 30, 2019 | $ 11,000 | 452,634,000 | (16,871,000) | 14,009,000 | 449,783,000 |
Balances at end of period (in shares) at Sep. 30, 2019 | 11,367,828 | ||||
Balances at beginning of period at Jun. 30, 2019 | $ 10,000 | 266,356,000 | (14,187,000) | 14,009,000 | 266,188,000 |
Balances at beginning of period (in shares) at Jun. 30, 2019 | 9,809,171 | ||||
Net income | $ 0 | 0 | 6,520,000 | 0 | 6,520,000 |
Net proceeds from sale of common stock | $ 1,000 | 185,623,000 | 185,624,000 | ||
Net proceeds from sale of common stock (in shares) | 1,558,000 | ||||
Net issuance of unvested restricted stock | $ 0 | 0 | 0 | 0 | 0 |
Net issuance of unvested restricted stock (in shares) | 657 | ||||
Preferred stock dividend | $ 0 | 0 | (338,000) | 0 | (338,000) |
Common stock dividend | 0 | 0 | (8,866,000) | 0 | (8,866,000) |
Stock-based compensation | 0 | 655,000 | 0 | 0 | 655,000 |
Balances at end of period at Sep. 30, 2019 | $ 11,000 | $ 452,634,000 | $ (16,871,000) | $ 14,009,000 | $ 449,783,000 |
Balances at end of period (in shares) at Sep. 30, 2019 | 11,367,828 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows from operating activities | ||
Net income | $ 13,573 | $ 4,319 |
Adjustments to reconcile net income to net cash provided by operating activities | ||
Depreciation | 5,054 | 1,715 |
Stock-based compensation | 1,841 | 1,079 |
Amortization of discounts on short-term investments | (2,870) | (332) |
Amortization of debt discounts and issuance costs | 1,181 | 0 |
Changes in assets and liabilities | ||
Other assets, net | 46 | (37) |
Accounts payable and accrued expenses | (924) | 97 |
Rent received in advance and tenant security deposits | 7,185 | 2,710 |
Net cash provided by operating activities | 25,086 | 9,551 |
Cash flows from investing activities | ||
Acquisitions of real estate | (107,644) | (27,177) |
Reimbursements of tenant improvements and construction funding | (43,767) | (11,120) |
Deposits in escrow for acquisitions | (500) | 0 |
Purchases of short-term investments | (249,015) | (65,151) |
Maturities of short-term investments | 163,500 | 61,500 |
Net cash used in investing activities | (237,426) | (41,948) |
Cash flows from financing activities | ||
Issuance of common stock, net of offering costs | 185,687 | 79,314 |
Net proceeds from issuance of exchangeable senior notes | 138,545 | 0 |
Dividends paid to common stockholders | (13,718) | (4,267) |
Dividends paid to preferred stockholders | (1,014) | (999) |
Taxes paid related to net share settlement of equity awards | (939) | (390) |
Net cash provided by financing activities | 308,561 | 73,658 |
Net increase in cash, cash equivalents and restricted cash | 96,221 | 41,261 |
Cash, cash equivalents and restricted cash, beginning of period | 13,050 | 11,758 |
Cash, cash equivalents and restricted cash, end of period | 109,271 | 53,019 |
Supplemental disclosure of cash flow information: | ||
Cash paid during the period for interest | 3,056 | 0 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Accrual for reimbursements of tenant improvements and construction funding | 12,700 | 4,341 |
Accrual for common and preferred stock dividends declared | 9,204 | 2,713 |
Accrual for stock issuance costs | $ 62 | $ 21 |
Organization
Organization | 9 Months Ended |
Sep. 30, 2019 | |
Organization | |
Organization | 1. Organization As used herein, the terms “we”, “us”, “our” or the “Company” refer to Innovative Industrial Properties, Inc., a Maryland corporation, and any of our subsidiaries, including IIP Operating Partnership, LP, a Delaware limited partnership (our “Operating Partnership”). We are an internally-managed real estate investment trust (“REIT”) focused on the acquisition, ownership and management of specialized properties leased to experienced, state-licensed operators for their regulated medical-use cannabis facilities. We have acquired and intend to continue to acquire our properties through sale-leaseback transactions and third-party purchases. We have leased and expect to continue to lease our properties on a triple-net lease basis, where the tenant is responsible for all aspects of and costs related to the property and its operation during the lease term, including structural repairs, maintenance, taxes and insurance. We were incorporated in Maryland on June 15, 2016. We conduct our business through a traditional umbrella partnership real estate investment trust, or UPREIT structure, in which our properties are owned by our Operating Partnership, directly or through subsidiaries. We are the sole general partner of our Operating Partnership and own, directly or through subsidiaries, 100% of the limited partnership interests in our Operating Partnership. |
Summary of Significant Accounti
Summary of Significant Accounting Policies and Procedures and Recent Accounting Pronouncements | 9 Months Ended |
Sep. 30, 2019 | |
Summary of Significant Accounting Policies and Procedures and Recent Accounting Pronouncements | |
Summary of Significant Accounting Policies and Procedures and Recent Accounting Pronouncements | 2. Summary of Significant Accounting Policies and Procedures and Recent Accounting Pronouncements Basis of Presentation. The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10‑Q and Article 10 of Regulation S-X. They do not include all of the information and footnotes required by GAAP for complete financial statements. This interim financial information should be read in conjunction with the audited consolidated financial statements in the Company’s Annual Report on Form 10‑K for the year ended December 31, 2018. Any references to square footage or occupancy percentage, and any amounts derived from these values in these notes to consolidated financial statements, are outside the scope of our independent registered public accounting firm's review. Management believes that all adjustments of a normal, recurring nature considered necessary for a fair presentation have been included. This interim financial information does not necessarily represent or indicate what the operating results will be for the year ending December 31, 2019. Federal Income Taxes. We believe that we have operated our business so as to qualify to be taxed as a REIT for U.S. federal income tax purposes. Under the REIT operating structure, we are permitted to deduct dividends paid to our stockholders in determining our taxable income. Assuming our dividends equal or exceed our taxable net income, we generally will not be required to pay federal corporate income taxes on such income. The income taxes recorded on our consolidated statement of income represent amounts paid for city and state income and franchise taxes and are included in general and administrative expenses in the accompanying condensed consolidated statements of income. Use of Estimates. The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make a number of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Actual results may differ materially from these estimates and assumptions. Acquisition of Real Estate Properties. Our investment in real estate is recorded at historical cost, less accumulated depreciation. Upon acquisition of a property, the tangible and intangible assets acquired and liabilities assumed are initially measured based upon their relative fair values. We estimate the fair value of land by reviewing comparable sales within the same submarket and/or region, the fair value of buildings on an as-if vacant basis and may engage third-party valuation specialists. Acquisition costs are capitalized as incurred. All of our acquisitions to date were recorded as asset acquisitions. Depreciation. We are required to make subjective assessments as to the estimated useful lives of our depreciable assets. We consider the period of future benefit of the assets to determine the appropriate estimated useful lives. Depreciation of our assets is charged to expense on a straight-line basis over the estimated useful lives. We depreciate each of our buildings and improvements over its estimated remaining useful life, generally not to exceed 35 years. We depreciate tenant improvements at our buildings over the shorter of the estimated useful lives or the terms of the related leases. We depreciate office equipment and furniture and fixtures over estimated useful lives ranging from three to six years. Provision for Impairment. On a quarterly basis, we review current activities and changes in the business conditions of all of our properties prior to and subsequent to the end of each quarter to determine the existence of any triggering events or impairment indicators requiring an impairment analysis. If triggering events or impairment indicators are identified, we review an estimate of the future undiscounted cash flows for the properties, including, if necessary, a probability-weighted approach if multiple outcomes are under consideration. Long-lived assets are individually evaluated for impairment when conditions exist that may indicate that the carrying amount of a long-lived asset may not be recoverable. The carrying amount of a long-lived asset to be held and used is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. Impairment indicators or triggering events for long-lived assets to be held and used are assessed by project and include significant fluctuations in estimated net operating income, occupancy changes, significant near-term lease expirations, current and historical operating and/or cash flow losses, construction costs, estimated completion dates, rental rates, and other market factors. We assess the expected undiscounted cash flows based upon numerous factors, including, but not limited to, construction costs, available market information, current and historical operating results, known trends, current market/economic conditions that may affect the property, and our assumptions about the use of the asset, including, if necessary, a probability-weighted approach if multiple outcomes are under consideration. Upon determination that an impairment has occurred, a write-down is recognized to reduce the carrying amount to its estimated fair value. We may adjust depreciation of properties that are expected to be disposed of or redeveloped prior to the end of their useful lives. No impairment losses were recognized during the three and nine months ended September 30, 2019 and 2018. Revenue Recognition. Our leases are and future tenant leases are expected to be triple-net leases, an arrangement under which the tenant maintains the property while paying us rent. We account for our current leases as operating leases and anticipate that future leases will be accounted for as operating leases. Under this method, leases that have fixed and determinable rent increases are recognized on a straight-line basis over the lease term, unless the collectability of minimum lease payments is not reasonably predictable. Rental increases based upon changes in the consumer price index are recognized only after the changes in the indexes have occurred and are then applied according to the lease agreements. Contractually obligated reimbursements from tenants for recoverable real estate taxes and operating expenses are included in tenant reimbursements in the period when such costs are incurred. Contractually obligated real estate taxes that are paid directly by the tenant to the tax authorities are not reflected in our consolidated financial statements. We record revenue for each of our properties on a cash basis due to the uncertainty of collectability of lease payments from each tenant due to its limited operating history and the uncertain regulatory environment in the United States relating to the medical-use cannabis industry. Future contractual minimum rent (including base rent, supplemental base rent (for one of our properties in New York) and property management fees) under the operating leases as of September 30, 2019 for future periods is summarized as follows (in thousands): Year Contractual Minimum Rent 2019 (three months ending December 31) $ 13,940 2020 58,971 2021 60,815 2022 61,528 2023 63,526 Thereafter 940,786 Total $ 1,199,566 Cash and Cash Equivalents . We consider all highly-liquid investments with original maturities of three months or less to be cash equivalents. As of September 30, 2019, approximately $85.9 million were invested in short-term obligations of the U.S. government and money market funds. As of December 31, 2018, approximately $7.7 million were invested in short-term money market funds and certificates of deposit. Restricted Cash . Restricted cash relates to cash held in an escrow account for the reimbursement of tenant improvements for a tenant in accordance with the lease agreement at one of our properties. Short-Term Investments . Short-term investments consist of obligations of the U.S. government with an original maturity at the time of purchase of greater than three months. Investments are classified as held-to-maturity and stated at amortized cost. Exchangeable Notes. The “Debt with Conversion and Other Options” Topic of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification requires the liability and equity components of exchangeable debt instruments that may be settled in cash upon exchange, including partial cash settlement, to be separately accounted for in a manner that reflects the issuer’s nonexchangeable debt borrowing rate. The initial proceeds from the sale of exchangeable notes are allocated between a liability component and an equity component in a manner that reflects interest expense at the rate of similar nonexchangeable debt that could have been issued at such time. The equity component represents the excess initial proceeds received over the fair value of the liability component of the notes as of the date of issuance. We measured the estimated fair value of the debt component of our Exchangeable Senior Notes (as defined below) as of the respective issuance dates based on our nonexchangeable debt borrowing rate with the assistance of a third party valuation specialist. The equity component of our Exchangeable Senior Notes is reflected within additional paid-in capital on our condensed consolidated balance sheets, and the resulting debt discount is amortized over the period during which the Exchangeable Senior Notes are expected to be outstanding (through the maturity date) as additional non-cash interest expense. The additional non-cash interest expense attributable to our Exchangeable Senior Notes will increase in subsequent periods through the maturity date as the Exchangeable Senior Notes accrete to the par value over the same period. Deferred Financing Costs. The deferred financing costs that are included as a reduction in the net book value of the related liability on our condensed consolidated balance sheets reflect issuance and other costs related to our Exchangeable Senior Notes. These costs are amortized as non-cash interest expense using the effective interest method over the life of the Exchangeable Senior Notes. Stock-Based Compensation. Stock-based compensation for equity awards is based on the grant date fair value of the equity investment and is recognized over the requisite service period. If awards are forfeited prior to vesting, we reverse any previously recognized expense related to such awards in the period during which the forfeiture occurs and reclassify any nonforfeitable dividends previously paid on these awards from retained earnings to compensation expense. Recent Accounting Pronouncements. In May 2014, the FASB issued ASU 2014‑09, Revenue from Contracts with Customers (“ASU 2014‑09”). ASU 2014‑09 outlines a comprehensive model for companies to use in accounting for revenue arising from contracts with customers, and will apply to transactions such as the sale of real estate. The Company’s adoption of ASU 2014‑09 beginning on January 1, 2019 did not have a material impact on our consolidated financial statements. In February 2016, the FASB issued ASU 2016‑02, Leases; in July 2018, the FASB issued ASU 2018‑10, Codification Improvements to Topic 842, Leases, and ASU 2018‑11, Leases — Targeted Improvements; and in December 2018, the FASB issued ASU 2018‑20, Narrow-Scope Improvements for Lessors. This group of ASUs is collectively referred to as Topic 842 and is expected to be effective for the Company for its Annual Report on Form 10-K for the year ending December 31, 2019, as a result of the Company’s expectation that it will cease being an emerging growth company on December 31,2019. Topic 842 supersedes the existing standards for lease accounting (Topic 840, Leases). The Company expects to elect the practical expedients provided by Topic 842, including: the package of practical expedients that allows an entity not to reassess upon adoption (i) whether an expired or existing contract contains a lease, (ii) whether a lease classification related to expired or existing lease arrangements, and (iii) whether costs incurred on expired or existing leases qualify as initial direct costs, and as a lessor, the practical expedient not to separate certain non-lease components, such as common area maintenance, from the lease component if the timing and pattern of transfer are the same for the non-lease component and associated lease component, and the lease component would be classified as an operating lease if accounted for separately. Topic 842 requires lessees to record most leases on their balance sheet through a right-of-use (“ROU”) model, in which a lessee records an ROU asset and a lease liability on their balance sheet. Leases that are less than 12 months do not need to be accounted for under the ROU model. Lessees will account for leases as financing or operating leases, with the classification affecting the timing and pattern of expense recognition in the income statement. Lease expense will be recognized based on the effective interest method for leases accounted for as finance leases and on a straight-line basis over the term of the lease for leases accounted for as operating leases. At September 30, 2019, the Company is the lessee under one office lease that would require accounting under the ROU model. The accounting by a lessor under Topic 842 is largely unchanged from that of Topic 840. Under Topic 842, lessors will continue to account for leases as a sales-type, direct-financing, or operating. A lease will be treated as a sale if it is considered to transfer control of the underlying asset to the lessee. A lease will be classified as direct-financing if risks and rewards are conveyed without the transfer of control. Otherwise, the lease is treated as an operating lease. Topic 842 requires accounting for a transaction as a financing in a sale leaseback in certain circumstances, including when the seller-lessee is provided an option to purchase the property from the landlord at the tenant’s option. The Company expects that this provision could change the accounting for these types of leases in the future. Topic 842 also includes the concept of separating lease and non-lease components. Under Topic 842, non-lease components, such as common area maintenance, would be accounted for under Topic 606 and separated from the lease payments. However, the Company will elect the lessor practical expedient allowing the Company to not separate these components when certain conditions are met. Upon adoption of Topic 842, the Company expects to combine tenant reimbursements with rental revenues on its consolidated statements of income. Further, the Company has historically capitalized allocated payroll cost incurred as part of the leasing process, which will no longer qualify for classification as initial direct costs under Topic 842. The Company will elect the lessor practical expedient, allowing the Company to continue to amortize previously capitalized initial direct leasing costs incurred prior to the adoption and Topic 842 and does not expect a material impact to its consolidated financial statements related to the capitalization of leasing costs. Also, the Narrow-Scope Improvements for Lessors under ASU 2018‑20 allow the Company to continue to exclude from revenue, costs paid by our tenants on our behalf directly to third parties, such as property taxes. Topic 842 provides two transition alternatives. The Company expects to apply this standard based on the prospective optional transition method, in which comparative periods will continue to be reported in accordance with Topic 840. The Company also anticipates expanded disclosures upon adoption, as the new standard requires more extensive quantitative and qualitative disclosures as compared to Topic 840 for both lessees and lessors. We are continuing to evaluate this guidance and the impact to us, as both lessor and lessee, on our consolidated financial statements. In June 2016, the FASB issued ASU 2016‑13, Financial Instruments — Credit Losses, which changes the impairment model for most financial assets and certain other instruments. For trade and other receivables, held-to-maturity debt securities, loans and other instruments, companies will be required to use a new forward-looking “expected loss” model that generally will result in the earlier recognition of allowances for losses. In November 2018, the FASB issued ASU 2018‑19, Codification Improvements to Topic 326, Financial Instruments — Credit Losses, which among other updates, clarifies that receivables arising from operating leases are not within the scope of this guidance and should be evaluated in accordance with Topic 842. For available-for-sale debt securities with unrealized losses, companies will measure credit losses in a manner similar to what they do today, except that the losses will be recognized as allowances rather than as reductions in the amortized cost of the securities. Companies will have to disclose significantly more information, including information they use to track credit quality by year of origination for most financing receivables. Companies will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. This standard is expected to be effective for the Company on January 1, 2020,as a result of the Company's expectation that it will cease being an emerging growth company on December 31,2019, with early adoption permitted. We do not expect this amendment to have a material impact on our consolidated financial statements. In August 2016, the FASB issued ASU 2016‑15, Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments (“ASU 2016‑15”), which clarifies or provides guidance relating to eight specific cash flow classification issues. The standard should be applied retrospectively for each period presented, as appropriate. The Company’s adoption of ASU 2016‑15 beginning on January 1, 2019 did not have a material impact on our consolidated financial statements. In February 2017, the FASB issued ASU 2017‑05, Other Income — Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610‑20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets (“Subtopic 610‑20”). A contract may involve the transfer of both nonfinancial assets and financial assets (e.g., cash and receivables). The amendments clarify that a financial asset is within the scope of Subtopic 610‑20 if it meets the definition of an in substance nonfinancial asset. The amendments also define the term in substance nonfinancial asset. The amendments clarify that nonfinancial assets within the scope of Subtopic 610‑20 may include nonfinancial assets transferred within a legal entity to a counterparty. For example, a parent may transfer control of nonfinancial assets by transferring ownership interests in a consolidated subsidiary. A contract that includes the transfer of ownership interests in one or more consolidated subsidiaries is within the scope of Subtopic 610‑20 if substantially all of the fair value of the assets that are promised to the counterparty in a contract is concentrated in nonfinancial assets. The amendments clarify that an entity should identify each distinct nonfinancial asset or in substance nonfinancial asset promised to a counterparty and derecognize each asset when a counterparty obtains control of it. The Company’s adoption of ASU 2017‑05 beginning on January 1, 2019 did not have a material impact on our consolidated financial statements. Concentration of Credit Risk . As of September 30, 2019, we owned 31 properties located in Arizona, California, Colorado, Illinois, Maryland, Massachusetts, Michigan, Minnesota, New York, Nevada, Ohio and Pennsylvania. The ability of any of our tenants to honor the terms of its lease is dependent upon the economic, regulatory, competition, natural and social factors affecting the community in which that tenant operates. During the three months and nine months ended September 30, 2019, PharmaCann LLC's ("PharmaCann") leases at certain of our properties located in New York, Massachusetts, Ohio and Pennsylvania accounted for approximately 25% and 28%, respectively, of our rental revenues. During the three and nine months ended September 30, 2018, PharmaCann's leases at certain of our properties located in New York and Massachusetts accounted for approximately 36% and 41%, respectively, of our rental revenues. In addition, during the three months and nine months ended September 30, 2019, Ascend Wellness Holdings, LLC's ("AWH") leases at certain of our properties located in Illinois and Michigan accounted for approximately 14% and 12%, respectively, of our rental revenue. The tenant at our property in Maryland accounted for approximately 6% and 18% of our rental revenues for the three months ended September 30, 2019 and 2018, respectively, and approximately 8% and 20% of our rental revenues for the nine months ended September 30, 2019 and 2018, respectively. At September 30, 2019 and December 31, 2018, one of our properties in New York accounted for approximately 9% and 20%, respectively, of our net real estate held for investment. We have deposited cash with a financial institution that is insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. As of September 30, 2019, we had cash accounts in excess of FDIC insured limits. We have not experienced any losses in such accounts. Reclassifications. Certain prior period amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations. |
Common Stock
Common Stock | 9 Months Ended |
Sep. 30, 2019 | |
Common Stock | |
Common Stock | 3. Common Stock As of September 30, 2019, the Company was authorized to issue up to 50,000,000 shares of common stock, par value $0.001 per share, and there were 11,367,828 shares of common stock issued and outstanding. In July 2019, we issued 1,495,000 shares of common stock, including the exercise in full of the underwriters’ option to purchase an additional 195,000 shares, resulting in net proceeds of approximately $180.1 million. In September 2019, we entered into equity distribution agreements with three sales agents, pursuant to which we may offer and sell from time to time through an “at-the-market” offering program, or ATM Program, up to $250.0 million in shares of our common stock. In September 2019, we sold 63,000 shares of our common stock for net proceeds of approximately $5.6 million under the ATM Program and paid approximately $118,000 to one sales agent as commission for such sales. |
Preferred Stock
Preferred Stock | 9 Months Ended |
Sep. 30, 2019 | |
Preferred Stock | |
Preferred Stock | 4. Preferred Stock As of September 30, 2019, the Company was authorized to issue up to 50,000,000 shares of preferred stock, par value $0.001 per share, and there were issued and outstanding 600,000 shares of 9.00% Series A Cumulative Redeemable Preferred Stock, $0.001 par value per share (the “Series A Preferred Stock”). Generally, the Company is not permitted to redeem the Series A Preferred Stock prior to October 19, 2022, except in limited circumstances relating to the Company’s ability to qualify as a REIT and in certain other circumstances related to a change of control/delisting (as defined in the articles supplementary for the Series A Preferred Stock). On or after October 19, 2022, the Company may, at its option, redeem the Series A Preferred Stock, in whole or in part, at any time or from time to time, for cash at a redemption price of $25.00 per share, plus all accrued and unpaid dividends on such Series A Preferred Stock up to, but excluding the redemption date. Holders of the Series A Preferred Stock generally have no voting rights except for limited voting rights if the Company fails to pay dividends for six or more quarterly periods (whether or not consecutive) and in certain other circumstances. |
Dividends
Dividends | 9 Months Ended |
Sep. 30, 2019 | |
Dividends | |
Dividends | 5. Dividends The following table describes the dividends declared by the Company during the nine months ended September 30, 2019: Amount Per Dividend Declaration Date Security Class Share Period Covered Paid Date Dividend Amount (In thousands) March 12, 2019 Common Stock $ 0.45 January 1, 2019 to March 31, 2019 April 15, 2019 $ 4,412 March 12, 2019 Series A preferred stock $ 0.5625 January 15, 2019 to April 14, 2019 April 15, 2019 $ 338 June 14, 2019 Common Stock $ 0.60 April 1, 2019 to June 30, 2019 July 15, 2019 $ 5,885 June 14, 2019 Series A preferred stock $ 0.5625 April 15, 2019 to July 14, 2019 July 15, 2019 $ 338 September 13, 2019 Common Stock $ 0.78 July 1, 2019 to September 30, 2019 October 15, 2019 $ 8,866 September 13, 2019 Series A preferred stock $ 0.5625 July 15, 2019 to October 14,2019 October 15, 2019 $ 338 |
Investments in Real Estate
Investments in Real Estate | 9 Months Ended |
Sep. 30, 2019 | |
Investments in Real Estate | |
Investments in Real Estate | 6. Investments in Real Estate The Company acquired the following properties during the nine months ended September 30, 2019 (dollars in thousands): Rentable Initial Square Purchase Transaction Property Market Closing Date Feet (1) Price Costs Total Sacramento CA California February 8, 2019 43,000 $ 6,664 $ 35 $ 6,699 (2) PharmaCann OH Ohio March 13, 2019 58,000 700 11 711 (3) Southern CA Portfolio California April 16, 2019 102,000 27,097 51 27,148 Maitri PA Pennsylvania April 24, 2019 51,000 6,250 234 6,484 (4) Vireo OH Ohio May 14, 2019 11,000 1,018 18 1,036 (5) Green Leaf PA Pennsylvania May 20, 2019 266,000 13,000 207 13,207 Emerald Growth MI Michigan June 7, 2019 45,000 6,860 18 6,878 (6) Ascend MI Michigan July 2, 2019 145,000 4,750 18 4,768 (7) MJardin NV Nevada July 12, 2019 43,000 3,830 26 3,856 (8) DYME CA California July 23, 2019 35,000 13,000 19 13,019 (9) Trulieve MA Massachusetts July 26, 2019 150,000 3,500 25 3,525 (10) PharmaCann PA Pennsylvania August 9, 2019 54,000 942 12 954 (11) Vertical CA Portfolio California Various 79,000 17,300 32 17,332 (12) The Pharm AZ - Retail Arizona September 19, 2019 2,000 2,000 27 2,027 (13) Total 1,084,000 $ 106,911 $ 733 $ 107,644 (1) Includes expected rentable square feet at completion of construction of certain properties. (2) The seller of the property is expected to complete redevelopment of the property, for which we have agreed to provide reimbursement of up to approximately $4.8 million as additional purchase price. As of September 30, 2019, we incurred and funded approximately $4.7 million of the additional purchase price. (3) Concurrent with the closing, we entered into a long-term lease and development agreement with a subsidiary of PharmaCann, which is expected to construct two buildings at the property, for which we have agreed to provide reimbursement of up to $19.3 million. As of September 30, 2019, we incurred approximately $13.2 million of the development costs, of which we funded approximately $11.9 million. (4) The tenant is expected to complete redevelopment of the property for which we have agreed to provide reimbursement of up to $10.0 million. As of September 30, 2019, we incurred approximately $1.7 million of the redevelopment costs, of which we funded approximately $694,000. (5) The tenant is expected to complete redevelopment of the property for which we have agreed to provide reimbursement of up to approximately $2.6 million. As of September 30, 2019, we incurred approximately $2.4 million of the redevelopment costs, of which we funded approximately $2.2 million. (6) The tenant is expected to complete redevelopment of the property for which we have agreed to provide reimbursement of up to approximately $3.1 million. As of September 30, 2019, we incurred approximately $2.6 million of the redevelopment costs, of which we funded approximately $2.4 million. (7) The tenant is expected to complete redevelopment of the property for which we have agreed to provide reimbursement of up to $15.0 million. As of September 30, 2019, we incurred approximately $261,000, of which no amount was funded. (8) The tenant is expected to complete redevelopment of the property for which we have agreed to provide reimbursement of up to approximately $5.8 million. As of September 30, 2019, we incurred approximately $2.8 million of the redevelopment costs, of which we funded approximately $2.4 million. (9) The tenant is expected to complete redevelopment of the property for which we have agreed to provide reimbursement of up to $2.0 million. As of September 30, 2019, no amount has been incurred. (10) The tenant is expected to complete redevelopment of the property for which we have agreed to provide reimbursement of up to $40.0 million, which funding is subject to reduction at the tenant's option within the first six months of the lease term. As of September 30, 2019, the tenant has not submitted any request for reimbursement. (11) Concurrent with the closing, we entered into a long-term lease and development agreement with a subsidiary of PharmaCann, which is expected to construct two buildings at the property, for which we have agreed to provide reimbursement of up to $25.1 million. The construction funding may be increased by up to an additional $4.0 million at PharmaCann's election within the first nine months of the lease term, subject to the satisfaction of certain conditions. As of September 30, 2019, we incurred approximately $706,000 of the development costs, of which no amount was funded. (12) Portfolio consists of four properties, with three properties closing on august 29, 2019 and the remaining property closing on September 11, 2019. (13) The tenant is expected to complete development of the property for which we have agreed to provide reimbursement of up to $500,000. As of September 30, 2019, we incurred approximately $310,000 of the development costs, of which no amount was funded. In addition, in June 2019, we entered into an amendment to our lease with Green Peak Industries, LLC ("GPI") at one of our Michigan properties, making available an additional $18.0 million in funding for further expansion of cannabis cultivation and processing facilities at the property. Assuming full payment of the additional funding, our total tenant improvement allowance will be approximately $25.5 million and our total investment in the property will be $31.0 million. As of September 30, 2019, we incurred approximately $9.8 million of the redevelopment costs, of which $9.5 million was funded. In September 2019, we entered into an amendment to our lease with a wholly owned subsidiary of AWH at one of our Illinois properties, making available an additional $8.0 million in funding for further expansion of cannabis cultivation and processing facilities at the property. Assuming full payment of the additional funding, our total tenant improvement allowance will be $14.0 million and our total investment in the property will be $33.0 million. As of September 30, 2019, we incurred approximately $10.7 million of the redevelopment costs, of which $4.5 million was funded. In September 2019, we entered into an amendment to our lease with Holistic Industries, Inc. ("Holistic") at one of our Massachusetts properties, making available up to $2.0 million in reimbursement for tenant improvements at the property, which is subject to reduction at the tenant's option before March 31, 2020. Assuming full payment of the additional funding, our total investment in the property will be approximately $14.8 million. As of September 30, 2019, no amounts have been incurred. In September 2019, we entered into amendments to our lease and development agreement with a subsidiary of PharmaCann at one of our Massachusetts properties, making available an additional $8.0 million in construction funding for further expansion of cannabis cultivation and processing facilities at the property. Assuming full payment of the additional funding, our total construction funding will be $23.5 million and our total investment in the property will be $26.5 million. As of September 30, 2019, we incurred approximately $17.3 million of the redevelopment costs, of which $16.5 million was funded. In September 2019, we entered into an amendment to our lease with a subsidiary of Vireo Health, Inc. at our Minnesota property, making available an additional $2.6 million in reimbursement for tenant improvements at the property. Assuming full payment of the additional funding, our total tenant improvements will be approximately $5.6 million and our total investment in the property will be $8.6 million. As of September 30, 2019, we incurred approximately $3.8 million of the redevelopment costs, of which $3.5 million was funded. Including all of our properties, during the nine months ended September 30, 2019, we capitalized costs of approximately $54.0 million relating to tenant improvements and construction activities at our properties. |
Exchangeable Senior Notes
Exchangeable Senior Notes | 9 Months Ended |
Sep. 30, 2019 | |
Exchangeable Senior Notes | |
Exchangeable Senior Notes | 7. Exchangeable Senior Notes In February 2019, our Operating Partnership issued $143.75 million of 3.75% Exchangeable Senior Notes due 2024 (the "Exchangeable Senior Notes") in a private offering, including the exercise in full of the initial purchasers’ option to purchase additional Notes. The Exchangeable Senior Notes are senior unsecured obligations of our Operating Partnership, are fully and unconditionally guaranteed by us and our Operating Partnership’s subsidiaries and are exchangeable for cash, shares of our common stock, or a combination of cash and shares of our common stock, at our Operating Partnership’s option, at any time prior to the close of business on the second scheduled trading day immediately preceding the stated maturity date. The exchange rate for the Exchangeable Senior Notes at September 30, 2019 was 14.37298 shares of our common stock per $1,000 principal amount of Notes and the exchange price at September 30, 2019 was approximately $69.575 per share of our common stock. The exchange rate and exchange price are subject to adjustment in certain circumstances. The Exchangeable Senior Notes will pay interest semiannually at a rate of 3.75% per annum and will mature on February 21, 2024, unless earlier exchanged or repurchased in accordance with their terms. Our Operating Partnership will not have the right to redeem the Exchangeable Senior Notes prior to maturity, but may be required to repurchase the Exchangeable Senior Notes from holders under certain circumstances. As of September 30, 2019, we have the intent and ability to settle the Exchangeable Senior Notes in cash. Upon our issuance of the Exchangeable Senior Notes, we recorded an approximately $5.8 million discount based on the implied value of the exchange option and an assumed effective interest rate of 4.65%, as well as approximately $5.2 million of initial issuance costs, of which approximately $5.0 million and $200,000 were allocated to the liability and equity components, respectively, based on their relative fair values. Issuance costs allocated to the liability component are being amortized using the effective interest method and recognized as non-cash interest expense over the expected term of the Exchangeable Senior Notes. The following table details our interest expense related to the Exchangeable Senior Notes (in thousands): Three Months Ended Nine Months Ended September 30, 2019 September 30, 2019 Cash coupon $ 1,349 $ 3,281 Amortization of debt discount 262 632 Amortization of issuance costs 227 549 Total interest expense $ 1,838 $ 4,462 The following table details the carrying value of our Exchangeable Senior Notes on our condensed consolidated balance sheets (in thousands): September 30, 2019 Principal amount $ 143,750 Unamortized discount (5,144) Unamortized issuance costs (4,448) Carrying value $ 134,158 Accrued interest payable for the Exchangeable Senior Notes was approximately $225,000 as of September 30, 2019. |
Net Income Per Share
Net Income Per Share | 9 Months Ended |
Sep. 30, 2019 | |
Net Income Per Share | |
Net Income Per Share | 8. Net Income Per Share Grants of restricted stock of the Company in share-based payment transactions are considered participating securities prior to vesting and, therefore, are considered in computing basic earnings per share under the two-class method. The two-class method is an earnings allocation method for calculating earnings per share when a company’s capital structure includes either two or more classes of common stock or common stock and participating securities. Earnings per basic share under the two-class method is calculated based on dividends declared on common shares and other participating securities (“distributed earnings”) and the rights of participating securities in any undistributed earnings, which represents net income remaining after deduction of dividends accruing during the period. The undistributed earnings are allocated to all outstanding common shares and participating securities based on the relative percentage of each security to the total number of outstanding participating securities. Earnings per basic share represents the summation of the distributed and undistributed earnings per share class divided by the total number of shares. Through September 30, 2019, all of the Company's participating securities received dividends at an equal dividend rate per share. As a result, distributions to participating securities for the three and nine months ended September 30, 2019 and 2018 have been included in net income attributable to common stockholders to calculate net income per basic and diluted share. As the Company has the intent and ability to settle the debt component of the Exchangeable Senior Notes in cash and the excess exchange premium in shares, the Company only includes the effect of the excess exchange premium in the calculation of diluted shares. For the three and nine months ended September 30, 2019, the effect of the excess exchange premium was anti-dilutive and therefore, excluded from the calculation of diluted shares. Computations of net income per basic and diluted share (in thousands, except share data) were as follows: For the Three Months Ended For the Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Net income $ 6,520 $ 1,832 $ 13,573 $ 4,319 Preferred stock dividend (338) (338) (1,014) (1,014) Distribution to participating securities (109) (52) (256) (127) Net income attributable to common stockholders used to compute net income per share $ 6,073 $ 1,442 $ 12,303 $ 3,178 Weighted average common share outstanding: Basic 10,918,477 6,636,638 10,088,036 6,388,058 Diluted 11,057,697 6,785,800 10,225,574 6,534,300 Net income attributable to common stockholders per share: Basic $ 0.56 $ 0.22 $ 1.22 $ 0.50 Diluted $ 0.55 $ 0.21 $ 1.20 $ 0.49 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value of Financial Instruments | |
Fair Value of Financial Instruments | 9. Fair Value of Financial Instruments Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. Accounting guidance also establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. The standard describes three levels of inputs that may be used to measure fair value: Level 1—Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2—Includes other inputs that are directly or indirectly observable in the marketplace. Level 3—Unobservable inputs that are supported by little or no market activities, therefore requiring an entity to develop its own assumptions. The following table presents the carrying value in the condensed consolidated financial statements and approximate fair value of financial instruments at September 30, 2019 and December 31, 2018: September 30, 2019 December 31, 2018 Carrying Value Fair Value Carrying Value Fair Value Short-term investments (1) $ 208,828 $ 208,828 $ 120,443 $ 120,443 Exchangeable Senior Notes (2) $ 134,158 $ 207,000 $ — $ — (1) Short-term investments consisting of obligations of the U.S. government with an original maturity at the time of purchase of greater than three months are classified as held-to-maturity and valued using Level 1 inputs. (2) The fair value is determined based upon Level 2 inputs as the Exchangeable Senior Notes were trading in the private market as of September 30, 2019. At September 30, 2019, cash equivalent instruments consisted of $27.0 million in short-term money market funds that were measured using the net asset value per share that have not been classified using the fair value hierarchy. The fund invests primarily in short-term U.S. Treasury and government securities. Short-term investments consisting of certificate of deposits and obligations of the U.S. government are stated at amortized cost, which approximates their relative fair values due to the short-term maturities and market rates of interest of these instruments. The carrying amounts of financial instruments such as cash equivalents invested in certificates of deposit, accounts payable, accrued expenses and other liabilities approximate their relative fair values due to the short-term maturities and market rates of interest of these instruments. |
Common Stock Incentive Plan
Common Stock Incentive Plan | 9 Months Ended |
Sep. 30, 2019 | |
Common Stock Incentive Plan | |
Common Stock Incentive Plan | 10. Common Stock Incentive Plan Our board of directors adopted our 2016 Omnibus Incentive Plan (the “2016 Plan”) to enable us to motivate, attract and retain the services of directors, employees and consultants considered essential to our long-term success. The 2016 Plan offers our directors, employees and consultants an opportunity to own our stock or rights that will reflect our growth, development and financial success. Under the terms of the 2016 Plan, the aggregate number of shares of our common stock subject to options, restricted stock, stock appreciation rights, restricted stock units and other awards, will be no more than 1,000,000 shares. The 2016 Plan has a term of ten years from the date it was adopted by our board of directors. A summary of the activity under the 2016 Plan and related information is included in the table below. Weighted- Unvested Average Grant Restricted Date Fair Shares Value Balance at December 31, 2018 147,359 $ 23.98 Granted 54,745 $ 55.19 Vested (41,753) $ 26.21 Forfeited (1) (20,717) $ 18.98 Balance at September 30, 2019 139,634 $ 36.29 (1) Shares that were forfeited to cover the employees’ tax withholding obligation upon vesting. The remaining unrecognized compensation cost of $3.4 million will be recognized over a weighted-average amortization period of approximately 1.8 years as of September 30, 2019. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies | |
Commitments and Contingencies | 11. Commitments and Contingencies Tenant Improvement Allowances . As of September 30, 2019, we had approximately $49.0 million of commitments related to tenant improvement allowances, which generally may be requested by the tenants at any time up until a date that is near the expiration of the initial term of the applicable lease. Construction Funding. As of September 30, 2019, we had approximately $6.2 million, $6.0 million and $24.4 million of commitments relating to construction funding for the development of certain properties in Massachusetts, Ohio and Pennsylvania, which the tenant has agreed to use commercially reasonable efforts to complete by March 31, 2020, June 13, 2020 and February 9, 2021, respectively. Additional Purchase Price. As of September 30, 2019, we had approximately $57,000 of commitments relating to certain development milestones for a property in California, which the seller is required to complete by December 31, 2019. Office and Equipment Leases. As of September 30, 2019, we had approximately $98,000 outstanding in commitments related to our office and equipment leases, with approximately $23,000 to be paid in the remainder of 2019 and approximately $75,000 to be paid in 2020. Environmental Matters. We follow the policy of monitoring our properties, both targeted acquisition and existing properties, for the presence of hazardous or toxic substances. While there can be no assurance that a material environmental liability does not exist, we are not currently aware of any environmental liabilities that would have a material adverse effect on our financial condition, results of operations and cash flow, or that we believe would require disclosure or the recording of a loss contingency. Litigation . We may, from time to time, be a party to legal proceedings, which arise in the ordinary course of our business. We are not aware of any pending or threatened litigation that, if resolved against us, would have a material adverse effect on our consolidated financial position, results of operations or cash flows. |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events | |
Subsequent Events | 12. Subsequent Events In October 2019, we sold 485,300 shares of our common stock for net proceeds of approximately $41.3 million under our ATM Program. In October 2019, we executed a lease amendment for our principal executive offices with our current landlord, pursuant to which we agreed to lease a larger space comprising approximately 6,000 rentable square feet for a term of five years and four months, with one option to extend the term of the lease for an additional five years. Subject to a base rent abatement, the initial annual base rent is approximately $228,000, subject to an annual adjustment of three percent during the initial term. Subsequent to September 30, 2019, the Company acquired the following properties, including commitments to fund tenant improvements and construction (dollars in thousands): Tenant Improvement Rentable and Closing Square Purchase Construction Property Market Date Feet (1) Price Commitments Total (2) LivWell MI Michigan October 9, 2019 156,000 $ 19,000 $ 23,000 $ 42,000 Cresco IL Portfolio Illinois October 22, 2019 90,000 $ 32,800 $ 13,750 $ 46,550 (3) Trulieve FL Florida October 23, 2019 120,000 $ 17,000 $ — $ 17,000 GPI MI - Retail Portfolio Michigan Various 27,000 $ 7,775 $ 1,245 $ 9,020 (4) PharmaCann IL Illinois October 30, 2019 66,000 $ 18,000 $ 7,000 $ 25,000 (5) Grassroots IL Illinois October 30, 2019 120,000 $ 10,500 $ — $ 10,500 (6) Total 579,000 $ 105,075 $ 44,995 $ 150,070 (1) Includes expected rentable square feet at completion of construction of certain properties. (2) Excludes transaction costs. (3) Includes two properties comprising approximately 39,000 and 51,000 rentable square feet. (4) Portfolio consists of four properties, with one property closing on October 25, 2019 and the remaining three properties closing on November 4, 2019. (5) Tenant improvements include funding for the construction of an approximately 18,000 square foot expansion. (6) Tenant improvements exclude funding for the construction of an approximately 50,000 square foot expansion of approximately $10.7 million and $7.0 million, which are subject to reduction at the tenant’s option before April 30, 2020 and July 30, 2020, respectively. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies and Procedures and Recent Accounting Pronouncements (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Summary of Significant Accounting Policies and Procedures and Recent Accounting Pronouncements | |
Basis of Presentation | Basis of Presentation. The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10‑Q and Article 10 of Regulation S-X. They do not include all of the information and footnotes required by GAAP for complete financial statements. This interim financial information should be read in conjunction with the audited consolidated financial statements in the Company’s Annual Report on Form 10‑K for the year ended December 31, 2018. Any references to square footage or occupancy percentage, and any amounts derived from these values in these notes to consolidated financial statements, are outside the scope of our independent registered public accounting firm's review. Management believes that all adjustments of a normal, recurring nature considered necessary for a fair presentation have been included. This interim financial information does not necessarily represent or indicate what the operating results will be for the year ending December 31, 2019. |
Federal Income Taxes | Federal Income Taxes. We believe that we have operated our business so as to qualify to be taxed as a REIT for U.S. federal income tax purposes. Under the REIT operating structure, we are permitted to deduct dividends paid to our stockholders in determining our taxable income. Assuming our dividends equal or exceed our taxable net income, we generally will not be required to pay federal corporate income taxes on such income. The income taxes recorded on our consolidated statement of income represent amounts paid for city and state income and franchise taxes and are included in general and administrative expenses in the accompanying condensed consolidated statements of income. |
Use of Estimates | Use of Estimates. The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make a number of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Actual results may differ materially from these estimates and assumptions. |
Acquisition of Real Estate Properties | Acquisition of Real Estate Properties. Our investment in real estate is recorded at historical cost, less accumulated depreciation. Upon acquisition of a property, the tangible and intangible assets acquired and liabilities assumed are initially measured based upon their relative fair values. We estimate the fair value of land by reviewing comparable sales within the same submarket and/or region, the fair value of buildings on an as-if vacant basis and may engage third-party valuation specialists. Acquisition costs are capitalized as incurred. All of our acquisitions to date were recorded as asset acquisitions. |
Depreciation | Depreciation. We are required to make subjective assessments as to the estimated useful lives of our depreciable assets. We consider the period of future benefit of the assets to determine the appropriate estimated useful lives. Depreciation of our assets is charged to expense on a straight-line basis over the estimated useful lives. We depreciate each of our buildings and improvements over its estimated remaining useful life, generally not to exceed 35 years. We depreciate tenant improvements at our buildings over the shorter of the estimated useful lives or the terms of the related leases. We depreciate office equipment and furniture and fixtures over estimated useful lives ranging from three to six years. |
Provision for Impairment | Provision for Impairment. On a quarterly basis, we review current activities and changes in the business conditions of all of our properties prior to and subsequent to the end of each quarter to determine the existence of any triggering events or impairment indicators requiring an impairment analysis. If triggering events or impairment indicators are identified, we review an estimate of the future undiscounted cash flows for the properties, including, if necessary, a probability-weighted approach if multiple outcomes are under consideration. Long-lived assets are individually evaluated for impairment when conditions exist that may indicate that the carrying amount of a long-lived asset may not be recoverable. The carrying amount of a long-lived asset to be held and used is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. Impairment indicators or triggering events for long-lived assets to be held and used are assessed by project and include significant fluctuations in estimated net operating income, occupancy changes, significant near-term lease expirations, current and historical operating and/or cash flow losses, construction costs, estimated completion dates, rental rates, and other market factors. We assess the expected undiscounted cash flows based upon numerous factors, including, but not limited to, construction costs, available market information, current and historical operating results, known trends, current market/economic conditions that may affect the property, and our assumptions about the use of the asset, including, if necessary, a probability-weighted approach if multiple outcomes are under consideration. Upon determination that an impairment has occurred, a write-down is recognized to reduce the carrying amount to its estimated fair value. We may adjust depreciation of properties that are expected to be disposed of or redeveloped prior to the end of their useful lives. No impairment losses were recognized during the three and nine months ended September 30, 2019 and 2018. |
Revenue Recognition | Revenue Recognition. Our leases are and future tenant leases are expected to be triple-net leases, an arrangement under which the tenant maintains the property while paying us rent. We account for our current leases as operating leases and anticipate that future leases will be accounted for as operating leases. Under this method, leases that have fixed and determinable rent increases are recognized on a straight-line basis over the lease term, unless the collectability of minimum lease payments is not reasonably predictable. Rental increases based upon changes in the consumer price index are recognized only after the changes in the indexes have occurred and are then applied according to the lease agreements. Contractually obligated reimbursements from tenants for recoverable real estate taxes and operating expenses are included in tenant reimbursements in the period when such costs are incurred. Contractually obligated real estate taxes that are paid directly by the tenant to the tax authorities are not reflected in our consolidated financial statements. We record revenue for each of our properties on a cash basis due to the uncertainty of collectability of lease payments from each tenant due to its limited operating history and the uncertain regulatory environment in the United States relating to the medical-use cannabis industry. Future contractual minimum rent (including base rent, supplemental base rent (for one of our properties in New York) and property management fees) under the operating leases as of September 30, 2019 for future periods is summarized as follows (in thousands): Year Contractual Minimum Rent 2019 (three months ending December 31) $ 13,940 2020 58,971 2021 60,815 2022 61,528 2023 63,526 Thereafter 940,786 Total $ 1,199,566 |
Cash and Cash Equivalents | Cash and Cash Equivalents . We consider all highly-liquid investments with original maturities of three months or less to be cash equivalents. As of September 30, 2019, approximately $85.9 million were invested in short-term obligations of the U.S. government and money market funds. As of December 31, 2018, approximately $7.7 million were invested in short-term money market funds and certificates of deposit. |
Restricted Cash | Restricted Cash . Restricted cash relates to cash held in an escrow account for the reimbursement of tenant improvements for a tenant in accordance with the lease agreement at one of our properties. |
Short-Term Investments | Short-Term Investments . Short-term investments consist of obligations of the U.S. government with an original maturity at the time of purchase of greater than three months. Investments are classified as held-to-maturity and stated at amortized cost. |
Exchangeable Notes | Exchangeable Notes. The “Debt with Conversion and Other Options” Topic of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification requires the liability and equity components of exchangeable debt instruments that may be settled in cash upon exchange, including partial cash settlement, to be separately accounted for in a manner that reflects the issuer’s nonexchangeable debt borrowing rate. The initial proceeds from the sale of exchangeable notes are allocated between a liability component and an equity component in a manner that reflects interest expense at the rate of similar nonexchangeable debt that could have been issued at such time. The equity component represents the excess initial proceeds received over the fair value of the liability component of the notes as of the date of issuance. We measured the estimated fair value of the debt component of our Exchangeable Senior Notes (as defined below) as of the respective issuance dates based on our nonexchangeable debt borrowing rate with the assistance of a third party valuation specialist. The equity component of our Exchangeable Senior Notes is reflected within additional paid-in capital on our condensed consolidated balance sheets, and the resulting debt discount is amortized over the period during which the Exchangeable Senior Notes are expected to be outstanding (through the maturity date) as additional non-cash interest expense. The additional non-cash interest expense attributable to our Exchangeable Senior Notes will increase in subsequent periods through the maturity date as the Exchangeable Senior Notes accrete to the par value over the same period. |
Deferred Financing Costs | Deferred Financing Costs. The deferred financing costs that are included as a reduction in the net book value of the related liability on our condensed consolidated balance sheets reflect issuance and other costs related to our Exchangeable Senior Notes. These costs are amortized as non-cash interest expense using the effective interest method over the life of the Exchangeable Senior Notes. |
Stock-Based Compensation | Stock-Based Compensation. Stock-based compensation for equity awards is based on the grant date fair value of the equity investment and is recognized over the requisite service period. If awards are forfeited prior to vesting, we reverse any previously recognized expense related to such awards in the period during which the forfeiture occurs and reclassify any nonforfeitable dividends previously paid on these awards from retained earnings to compensation expense. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements. In May 2014, the FASB issued ASU 2014‑09, Revenue from Contracts with Customers (“ASU 2014‑09”). ASU 2014‑09 outlines a comprehensive model for companies to use in accounting for revenue arising from contracts with customers, and will apply to transactions such as the sale of real estate. The Company’s adoption of ASU 2014‑09 beginning on January 1, 2019 did not have a material impact on our consolidated financial statements. In February 2016, the FASB issued ASU 2016‑02, Leases; in July 2018, the FASB issued ASU 2018‑10, Codification Improvements to Topic 842, Leases, and ASU 2018‑11, Leases — Targeted Improvements; and in December 2018, the FASB issued ASU 2018‑20, Narrow-Scope Improvements for Lessors. This group of ASUs is collectively referred to as Topic 842 and is expected to be effective for the Company for its Annual Report on Form 10-K for the year ending December 31, 2019, as a result of the Company’s expectation that it will cease being an emerging growth company on December 31,2019. Topic 842 supersedes the existing standards for lease accounting (Topic 840, Leases). The Company expects to elect the practical expedients provided by Topic 842, including: the package of practical expedients that allows an entity not to reassess upon adoption (i) whether an expired or existing contract contains a lease, (ii) whether a lease classification related to expired or existing lease arrangements, and (iii) whether costs incurred on expired or existing leases qualify as initial direct costs, and as a lessor, the practical expedient not to separate certain non-lease components, such as common area maintenance, from the lease component if the timing and pattern of transfer are the same for the non-lease component and associated lease component, and the lease component would be classified as an operating lease if accounted for separately. Topic 842 requires lessees to record most leases on their balance sheet through a right-of-use (“ROU”) model, in which a lessee records an ROU asset and a lease liability on their balance sheet. Leases that are less than 12 months do not need to be accounted for under the ROU model. Lessees will account for leases as financing or operating leases, with the classification affecting the timing and pattern of expense recognition in the income statement. Lease expense will be recognized based on the effective interest method for leases accounted for as finance leases and on a straight-line basis over the term of the lease for leases accounted for as operating leases. At September 30, 2019, the Company is the lessee under one office lease that would require accounting under the ROU model. The accounting by a lessor under Topic 842 is largely unchanged from that of Topic 840. Under Topic 842, lessors will continue to account for leases as a sales-type, direct-financing, or operating. A lease will be treated as a sale if it is considered to transfer control of the underlying asset to the lessee. A lease will be classified as direct-financing if risks and rewards are conveyed without the transfer of control. Otherwise, the lease is treated as an operating lease. Topic 842 requires accounting for a transaction as a financing in a sale leaseback in certain circumstances, including when the seller-lessee is provided an option to purchase the property from the landlord at the tenant’s option. The Company expects that this provision could change the accounting for these types of leases in the future. Topic 842 also includes the concept of separating lease and non-lease components. Under Topic 842, non-lease components, such as common area maintenance, would be accounted for under Topic 606 and separated from the lease payments. However, the Company will elect the lessor practical expedient allowing the Company to not separate these components when certain conditions are met. Upon adoption of Topic 842, the Company expects to combine tenant reimbursements with rental revenues on its consolidated statements of income. Further, the Company has historically capitalized allocated payroll cost incurred as part of the leasing process, which will no longer qualify for classification as initial direct costs under Topic 842. The Company will elect the lessor practical expedient, allowing the Company to continue to amortize previously capitalized initial direct leasing costs incurred prior to the adoption and Topic 842 and does not expect a material impact to its consolidated financial statements related to the capitalization of leasing costs. Also, the Narrow-Scope Improvements for Lessors under ASU 2018‑20 allow the Company to continue to exclude from revenue, costs paid by our tenants on our behalf directly to third parties, such as property taxes. Topic 842 provides two transition alternatives. The Company expects to apply this standard based on the prospective optional transition method, in which comparative periods will continue to be reported in accordance with Topic 840. The Company also anticipates expanded disclosures upon adoption, as the new standard requires more extensive quantitative and qualitative disclosures as compared to Topic 840 for both lessees and lessors. We are continuing to evaluate this guidance and the impact to us, as both lessor and lessee, on our consolidated financial statements. In June 2016, the FASB issued ASU 2016‑13, Financial Instruments — Credit Losses, which changes the impairment model for most financial assets and certain other instruments. For trade and other receivables, held-to-maturity debt securities, loans and other instruments, companies will be required to use a new forward-looking “expected loss” model that generally will result in the earlier recognition of allowances for losses. In November 2018, the FASB issued ASU 2018‑19, Codification Improvements to Topic 326, Financial Instruments — Credit Losses, which among other updates, clarifies that receivables arising from operating leases are not within the scope of this guidance and should be evaluated in accordance with Topic 842. For available-for-sale debt securities with unrealized losses, companies will measure credit losses in a manner similar to what they do today, except that the losses will be recognized as allowances rather than as reductions in the amortized cost of the securities. Companies will have to disclose significantly more information, including information they use to track credit quality by year of origination for most financing receivables. Companies will apply the standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is adopted. This standard is expected to be effective for the Company on January 1, 2020,as a result of the Company's expectation that it will cease being an emerging growth company on December 31,2019, with early adoption permitted. We do not expect this amendment to have a material impact on our consolidated financial statements. In August 2016, the FASB issued ASU 2016‑15, Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments (“ASU 2016‑15”), which clarifies or provides guidance relating to eight specific cash flow classification issues. The standard should be applied retrospectively for each period presented, as appropriate. The Company’s adoption of ASU 2016‑15 beginning on January 1, 2019 did not have a material impact on our consolidated financial statements. In February 2017, the FASB issued ASU 2017‑05, Other Income — Gains and Losses from the Derecognition of Nonfinancial Assets (Subtopic 610‑20): Clarifying the Scope of Asset Derecognition Guidance and Accounting for Partial Sales of Nonfinancial Assets (“Subtopic 610‑20”). A contract may involve the transfer of both nonfinancial assets and financial assets (e.g., cash and receivables). The amendments clarify that a financial asset is within the scope of Subtopic 610‑20 if it meets the definition of an in substance nonfinancial asset. The amendments also define the term in substance nonfinancial asset. The amendments clarify that nonfinancial assets within the scope of Subtopic 610‑20 may include nonfinancial assets transferred within a legal entity to a counterparty. For example, a parent may transfer control of nonfinancial assets by transferring ownership interests in a consolidated subsidiary. A contract that includes the transfer of ownership interests in one or more consolidated subsidiaries is within the scope of Subtopic 610‑20 if substantially all of the fair value of the assets that are promised to the counterparty in a contract is concentrated in nonfinancial assets. The amendments clarify that an entity should identify each distinct nonfinancial asset or in substance nonfinancial asset promised to a counterparty and derecognize each asset when a counterparty obtains control of it. The Company’s adoption of ASU 2017‑05 beginning on January 1, 2019 did not have a material impact on our consolidated financial statements. |
Concentration of Credit Risk | Concentration of Credit Risk . As of September 30, 2019, we owned 31 properties located in Arizona, California, Colorado, Illinois, Maryland, Massachusetts, Michigan, Minnesota, New York, Nevada, Ohio and Pennsylvania. The ability of any of our tenants to honor the terms of its lease is dependent upon the economic, regulatory, competition, natural and social factors affecting the community in which that tenant operates. During the three months and nine months ended September 30, 2019, PharmaCann LLC's ("PharmaCann") leases at certain of our properties located in New York, Massachusetts, Ohio and Pennsylvania accounted for approximately 25% and 28%, respectively, of our rental revenues. During the three and nine months ended September 30, 2018, PharmaCann's leases at certain of our properties located in New York and Massachusetts accounted for approximately 36% and 41%, respectively, of our rental revenues. In addition, during the three months and nine months ended September 30, 2019, Ascend Wellness Holdings, LLC's ("AWH") leases at certain of our properties located in Illinois and Michigan accounted for approximately 14% and 12%, respectively, of our rental revenue. The tenant at our property in Maryland accounted for approximately 6% and 18% of our rental revenues for the three months ended September 30, 2019 and 2018, respectively, and approximately 8% and 20% of our rental revenues for the nine months ended September 30, 2019 and 2018, respectively. At September 30, 2019 and December 31, 2018, one of our properties in New York accounted for approximately 9% and 20%, respectively, of our net real estate held for investment. We have deposited cash with a financial institution that is insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. As of September 30, 2019, we had cash accounts in excess of FDIC insured limits. We have not experienced any losses in such accounts. |
Reclassifications | Reclassifications. Certain prior period amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies and Procedures and Recent Accounting Pronouncements (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Summary of Significant Accounting Policies and Procedures and Recent Accounting Pronouncements | |
Schedule of future minimum rental payments for operating leases | Future contractual minimum rent (including base rent, supplemental base rent (for one of our properties in New York) and property management fees) under the operating leases as of September 30, 2019 for future periods is summarized as follows (in thousands): Year Contractual Minimum Rent 2019 (three months ending December 31) $ 13,940 2020 58,971 2021 60,815 2022 61,528 2023 63,526 Thereafter 940,786 Total $ 1,199,566 |
Dividends (Tables)
Dividends (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Dividends | |
Schedule of dividends payable | The following table describes the dividends declared by the Company during the nine months ended September 30, 2019: Amount Per Dividend Declaration Date Security Class Share Period Covered Paid Date Dividend Amount (In thousands) March 12, 2019 Common Stock $ 0.45 January 1, 2019 to March 31, 2019 April 15, 2019 $ 4,412 March 12, 2019 Series A preferred stock $ 0.5625 January 15, 2019 to April 14, 2019 April 15, 2019 $ 338 June 14, 2019 Common Stock $ 0.60 April 1, 2019 to June 30, 2019 July 15, 2019 $ 5,885 June 14, 2019 Series A preferred stock $ 0.5625 April 15, 2019 to July 14, 2019 July 15, 2019 $ 338 September 13, 2019 Common Stock $ 0.78 July 1, 2019 to September 30, 2019 October 15, 2019 $ 8,866 September 13, 2019 Series A preferred stock $ 0.5625 July 15, 2019 to October 14,2019 October 15, 2019 $ 338 |
Investments in Real Estate (Tab
Investments in Real Estate (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Investments in Real Estate | |
Schedule of real estate properties | The Company acquired the following properties during the nine months ended September 30, 2019 (dollars in thousands): Rentable Initial Square Purchase Transaction Property Market Closing Date Feet (1) Price Costs Total Sacramento CA California February 8, 2019 43,000 $ 6,664 $ 35 $ 6,699 (2) PharmaCann OH Ohio March 13, 2019 58,000 700 11 711 (3) Southern CA Portfolio California April 16, 2019 102,000 27,097 51 27,148 Maitri PA Pennsylvania April 24, 2019 51,000 6,250 234 6,484 (4) Vireo OH Ohio May 14, 2019 11,000 1,018 18 1,036 (5) Green Leaf PA Pennsylvania May 20, 2019 266,000 13,000 207 13,207 Emerald Growth MI Michigan June 7, 2019 45,000 6,860 18 6,878 (6) Ascend MI Michigan July 2, 2019 145,000 4,750 18 4,768 (7) MJardin NV Nevada July 12, 2019 43,000 3,830 26 3,856 (8) DYME CA California July 23, 2019 35,000 13,000 19 13,019 (9) Trulieve MA Massachusetts July 26, 2019 150,000 3,500 25 3,525 (10) PharmaCann PA Pennsylvania August 9, 2019 54,000 942 12 954 (11) Vertical CA Portfolio California Various 79,000 17,300 32 17,332 (12) The Pharm AZ - Retail Arizona September 19, 2019 2,000 2,000 27 2,027 (13) Total 1,084,000 $ 106,911 $ 733 $ 107,644 (1) Includes expected rentable square feet at completion of construction of certain properties. (2) The seller of the property is expected to complete redevelopment of the property, for which we have agreed to provide reimbursement of up to approximately $4.8 million as additional purchase price. As of September 30, 2019, we incurred and funded approximately $4.7 million of the additional purchase price. (3) Concurrent with the closing, we entered into a long-term lease and development agreement with a subsidiary of PharmaCann, which is expected to construct two buildings at the property, for which we have agreed to provide reimbursement of up to $19.3 million. As of September 30, 2019, we incurred approximately $13.2 million of the development costs, of which we funded approximately $11.9 million. (4) The tenant is expected to complete redevelopment of the property for which we have agreed to provide reimbursement of up to $10.0 million. As of September 30, 2019, we incurred approximately $1.7 million of the redevelopment costs, of which we funded approximately $694,000. (5) The tenant is expected to complete redevelopment of the property for which we have agreed to provide reimbursement of up to approximately $2.6 million. As of September 30, 2019, we incurred approximately $2.4 million of the redevelopment costs, of which we funded approximately $2.2 million. (6) The tenant is expected to complete redevelopment of the property for which we have agreed to provide reimbursement of up to approximately $3.1 million. As of September 30, 2019, we incurred approximately $2.6 million of the redevelopment costs, of which we funded approximately $2.4 million. (7) The tenant is expected to complete redevelopment of the property for which we have agreed to provide reimbursement of up to $15.0 million. As of September 30, 2019, we incurred approximately $261,000, of which no amount was funded. (8) The tenant is expected to complete redevelopment of the property for which we have agreed to provide reimbursement of up to approximately $5.8 million. As of September 30, 2019, we incurred approximately $2.8 million of the redevelopment costs, of which we funded approximately $2.4 million. (9) The tenant is expected to complete redevelopment of the property for which we have agreed to provide reimbursement of up to $2.0 million. As of September 30, 2019, no amount has been incurred. (10) The tenant is expected to complete redevelopment of the property for which we have agreed to provide reimbursement of up to $40.0 million, which funding is subject to reduction at the tenant's option within the first six months of the lease term. As of September 30, 2019, the tenant has not submitted any request for reimbursement. (11) Concurrent with the closing, we entered into a long-term lease and development agreement with a subsidiary of PharmaCann, which is expected to construct two buildings at the property, for which we have agreed to provide reimbursement of up to $25.1 million. The construction funding may be increased by up to an additional $4.0 million at PharmaCann's election within the first nine months of the lease term, subject to the satisfaction of certain conditions. As of September 30, 2019, we incurred approximately $706,000 of the development costs, of which no amount was funded. (12) Portfolio consists of four properties, with three properties closing on august 29, 2019 and the remaining property closing on September 11, 2019. (13) The tenant is expected to complete development of the property for which we have agreed to provide reimbursement of up to $500,000. As of September 30, 2019, we incurred approximately $310,000 of the development costs, of which no amount was funded. |
Exchangeable Senior Notes (Tabl
Exchangeable Senior Notes (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Exchangeable Senior Notes | |
Schedule of interest expense related to exchangeable senior notes | The following table details our interest expense related to the Exchangeable Senior Notes (in thousands): Three Months Ended Nine Months Ended September 30, 2019 September 30, 2019 Cash coupon $ 1,349 $ 3,281 Amortization of debt discount 262 632 Amortization of issuance costs 227 549 Total interest expense $ 1,838 $ 4,462 |
Schedule of carrying value of senior exchangeable notes on condensed consolidated balance sheet | The following table details the carrying value of our Exchangeable Senior Notes on our condensed consolidated balance sheets (in thousands): September 30, 2019 Principal amount $ 143,750 Unamortized discount (5,144) Unamortized issuance costs (4,448) Carrying value $ 134,158 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Net Income Per Share | |
Schedule of earnings per share, basic and diluted | Computations of net income per basic and diluted share (in thousands, except share data) were as follows: For the Three Months Ended For the Nine Months Ended September 30, September 30, 2019 2018 2019 2018 Net income $ 6,520 $ 1,832 $ 13,573 $ 4,319 Preferred stock dividend (338) (338) (1,014) (1,014) Distribution to participating securities (109) (52) (256) (127) Net income attributable to common stockholders used to compute net income per share $ 6,073 $ 1,442 $ 12,303 $ 3,178 Weighted average common share outstanding: Basic 10,918,477 6,636,638 10,088,036 6,388,058 Diluted 11,057,697 6,785,800 10,225,574 6,534,300 Net income attributable to common stockholders per share: Basic $ 0.56 $ 0.22 $ 1.22 $ 0.50 Diluted $ 0.55 $ 0.21 $ 1.20 $ 0.49 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Fair Value of Financial Instruments | |
Schedule of condensed financial statements | The following table presents the carrying value in the condensed consolidated financial statements and approximate fair value of financial instruments at September 30, 2019 and December 31, 2018: September 30, 2019 December 31, 2018 Carrying Value Fair Value Carrying Value Fair Value Short-term investments (1) $ 208,828 $ 208,828 $ 120,443 $ 120,443 Exchangeable Senior Notes (2) $ 134,158 $ 207,000 $ — $ — (1) Short-term investments consisting of obligations of the U.S. government with an original maturity at the time of purchase of greater than three months are classified as held-to-maturity and valued using Level 1 inputs. (2) The fair value is determined based upon Level 2 inputs as the Exchangeable Senior Notes were trading in the private market as of September 30, 2019. |
Common Stock Incentive Plan (Ta
Common Stock Incentive Plan (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Common Stock Incentive Plan | |
Summary of the activity under the 2016 Plan | A summary of the activity under the 2016 Plan and related information is included in the table below. Weighted- Unvested Average Grant Restricted Date Fair Shares Value Balance at December 31, 2018 147,359 $ 23.98 Granted 54,745 $ 55.19 Vested (41,753) $ 26.21 Forfeited (1) (20,717) $ 18.98 Balance at September 30, 2019 139,634 $ 36.29 (1) Shares that were forfeited to cover the employees’ tax withholding obligation upon vesting. |
Subsequent Events (Tables)
Subsequent Events (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Subsequent Events | |
Schedule of commitments to fund tenant improvements and construction | Subsequent to September 30, 2019, the Company acquired the following properties, including commitments to fund tenant improvements and construction (dollars in thousands): Tenant Improvement Rentable and Closing Square Purchase Construction Property Market Date Feet (1) Price Commitments Total (2) LivWell MI Michigan October 9, 2019 156,000 $ 19,000 $ 23,000 $ 42,000 Cresco IL Portfolio Illinois October 22, 2019 90,000 $ 32,800 $ 13,750 $ 46,550 (3) Trulieve FL Florida October 23, 2019 120,000 $ 17,000 $ — $ 17,000 GPI MI - Retail Portfolio Michigan Various 27,000 $ 7,775 $ 1,245 $ 9,020 (4) PharmaCann IL Illinois October 30, 2019 66,000 $ 18,000 $ 7,000 $ 25,000 (5) Grassroots IL Illinois October 30, 2019 120,000 $ 10,500 $ — $ 10,500 (6) Total 579,000 $ 105,075 $ 44,995 $ 150,070 (1) Includes expected rentable square feet at completion of construction of certain properties. (2) Excludes transaction costs. (3) Includes two properties comprising approximately 39,000 and 51,000 rentable square feet. (4) Portfolio consists of four properties, with one property closing on October 25, 2019 and the remaining three properties closing on November 4, 2019. (5) Tenant improvements include funding for the construction of an approximately 18,000 square foot expansion. (6) Tenant improvements exclude funding for the construction of an approximately 50,000 square foot expansion of approximately $10.7 million and $7.0 million, which are subject to reduction at the tenant’s option before April 30, 2020 and July 30, 2020, respectively. |
Organization (Details)
Organization (Details) | Sep. 30, 2019 |
Iip Operating Partnership Lp [Member] | |
Percentage Leased | 100.00% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies and Procedures and Recent Accounting Pronouncements - Operating Leases For Future Periods (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Contractual Minimum Rent | |
2019 (three months ending December 31) | $ 13,940 |
2020 | 58,971 |
2021 | 60,815 |
2022 | 61,528 |
2023 | 63,526 |
Thereafter | 940,786 |
Total | $ 1,199,566 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies and Procedures and Recent Accounting Pronouncements - Additional Information (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Short-term Investments | $ 208,828,000 | $ 208,828,000 | $ 120,443,000 | ||
Cash, FDIC Insured Amount | 250,000 | 250,000 | |||
Asset Impairment Charges | 0 | $ 0 | 0 | $ 0 | |
Money Market Funds [Member] | |||||
Short-term Investments | $ 85,900,000 | $ 85,900,000 | $ 7,700,000 | ||
Net Real Estate Held For Investment [Member] | New York Property [Member] | |||||
Concentration Risk, Percentage | 9.00% | 20.00% | |||
Building [Member] | |||||
Property, Plant and Equipment, Useful Life | 35 years | ||||
PharmaCann LLC [Member] | |||||
Concentration Risk, Percentage | 25.00% | 36.00% | 28.00% | 41.00% | |
Ascend Wellness Holdings, LLC's [Member] | |||||
Concentration Risk, Percentage | 14.00% | 12.00% | |||
Maryland Property [Member] | |||||
Concentration Risk, Percentage | 6.00% | 18.00% | 8.00% | 20.00% | |
Minimum [Member] | Office Equipment And Furniture And Fixtures [Member] | |||||
Property, Plant and Equipment, Useful Life | 3 years | ||||
Maximum | Office Equipment And Furniture And Fixtures [Member] | |||||
Property, Plant and Equipment, Useful Life | 6 years |
Common Stock (Details)
Common Stock (Details) - USD ($) | 1 Months Ended | 9 Months Ended | |||
Sep. 30, 2019 | Jul. 31, 2019 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | |
Common Stock, Shares Authorized | 50,000,000 | 50,000,000 | 50,000,000 | ||
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | $ 0.001 | ||
Common Stock, Shares, Outstanding | 11,367,828 | 11,367,828 | 9,775,800 | ||
Common Stock, Shares, Issued | 11,367,828 | 11,367,828 | 9,775,800 | ||
Net proceeds from issuance | $ 185,687,000 | $ 79,314,000 | |||
Common Stock [Member] | |||||
Common Stock, Shares Authorized | 50,000,000 | 50,000,000 | |||
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | |||
Common Stock, Shares, Outstanding | 11,367,828 | 11,367,828 | |||
Common Stock, Shares, Issued | 11,367,828 | 11,367,828 | |||
Number of shares sold | 1,495,000 | ||||
Stock Issued During Period Share Purchase Of Common Stock | 195,000 | ||||
Proceeds from Issuance or Sale of Equity | $ 180,100,000 | ||||
Common Stock [Member] | ATM Program | |||||
Common Stock, Shares Authorized | 250,000,000 | 250,000,000 | |||
Number of shares sold | 63,000 | ||||
Net proceeds from issuance | $ 5,600,000 | ||||
Payments Of Stock Issuance Commissions | $ 118,000 |
Preferred Stock (Details)
Preferred Stock (Details) | 9 Months Ended |
Sep. 30, 2019$ / sharesshares | |
Preferred Stock, Shares Authorized | 50,000,000 |
Preferred Stock, Par or Stated Value Per Share | $ / shares | $ 0.001 |
Series A Preferred Stock [Member] | |
Preferred Stock, Dividend Rate, Percentage | 9.00% |
Shares Issued, Price Per Share | $ / shares | $ 25 |
Preferred Stock, Shares Issued | 600,000 |
Preferred Stock, Shares Outstanding | 600,000 |
Dividends (Details)
Dividends (Details) - USD ($) $ / shares in Units, $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | Sep. 30, 2018 |
Dividend Amount | $ 9,204 | $ 3,759 | $ 2,713 |
March 12 2019 [Member] | |||
Amount Per Share | $ 0.45 | ||
Dividend Amount | $ 4,412 | ||
March 12 2019 One [Member] | |||
Amount Per Share | $ 0.5625 | ||
Dividend Amount | $ 338 | ||
June 14 2019 [Member] | |||
Amount Per Share | $ 0.60 | ||
Dividend Amount | $ 5,885 | ||
June 14 2019 One [Member] | |||
Amount Per Share | $ 0.5625 | ||
Dividend Amount | $ 338 | ||
September 13 2019 [Member] | |||
Amount Per Share | $ 0.78 | ||
Dividend Amount | $ 8,866 | ||
September 13 2019 One [Member] | |||
Amount Per Share | $ 0.5625 | ||
Dividend Amount | $ 338 |
Investments in Real Estate (Det
Investments in Real Estate (Details) $ in Thousands | Oct. 01, 2019USD ($)ft² | Sep. 30, 2019USD ($)ft² |
Rentable Square Feet | ft² | 579,000 | 1,084,000 |
Initial Purchase Price | $ 105,075 | $ 106,911 |
Transaction Costs | 44,995 | 733 |
Total | $ 150,070 | $ 107,644 |
Sacramento CA [Member] | ||
Rentable Square Feet | ft² | 43,000 | |
Initial Purchase Price | $ 6,664 | |
Transaction Costs | 35 | |
Total | $ 6,699 | |
PharmaCann OH [Member] | ||
Rentable Square Feet | ft² | 58,000 | |
Initial Purchase Price | $ 700 | |
Transaction Costs | 11 | |
Total | $ 711 | |
Southern CA Portfolio [Member] | ||
Rentable Square Feet | ft² | 102,000 | |
Initial Purchase Price | $ 27,097 | |
Transaction Costs | 51 | |
Total | $ 27,148 | |
Maitri PA [Member] | ||
Rentable Square Feet | ft² | 51,000 | |
Initial Purchase Price | $ 6,250 | |
Transaction Costs | 234 | |
Total | $ 6,484 | |
Vireo OH [Member] | ||
Rentable Square Feet | ft² | 11,000 | |
Initial Purchase Price | $ 1,018 | |
Transaction Costs | 18 | |
Total | $ 1,036 | |
Green Leaf PA | ||
Rentable Square Feet | ft² | 266,000 | |
Initial Purchase Price | $ 13,000 | |
Transaction Costs | 207 | |
Total | $ 13,207 | |
Emerald growth MI [Member] | ||
Rentable Square Feet | ft² | 45,000 | |
Initial Purchase Price | $ 6,860 | |
Transaction Costs | 18 | |
Total | $ 6,878 | |
Ascend MI | ||
Rentable Square Feet | ft² | 145,000 | |
Initial Purchase Price | $ 4,750 | |
Transaction Costs | 18 | |
Total | $ 4,768 | |
MJardin NV | ||
Rentable Square Feet | ft² | 43,000 | |
Initial Purchase Price | $ 3,830 | |
Transaction Costs | 26 | |
Total | $ 3,856 | |
DYME CA | ||
Rentable Square Feet | ft² | 35,000 | |
Initial Purchase Price | $ 13,000 | |
Transaction Costs | 19 | |
Total | $ 13,019 | |
Trulieve MA | ||
Rentable Square Feet | ft² | 150,000 | |
Initial Purchase Price | $ 3,500 | |
Transaction Costs | 25 | |
Total | $ 3,525 | |
PharmaCann PA | ||
Rentable Square Feet | ft² | 54,000 | |
Initial Purchase Price | $ 942 | |
Transaction Costs | 12 | |
Total | $ 954 | |
Vertical CA Portfolio | ||
Rentable Square Feet | ft² | 79,000 | |
Initial Purchase Price | $ 17,300 | |
Transaction Costs | 32 | |
Total | $ 17,332 | |
The Pharm AZ - Retail | ||
Rentable Square Feet | ft² | 2,000 | |
Initial Purchase Price | $ 2,000 | |
Transaction Costs | 27 | |
Total | $ 2,027 |
Investments in Real Estate - Ad
Investments in Real Estate - Additional Information (Details) - USD ($) | 9 Months Ended | |
Sep. 30, 2019 | Dec. 31, 2018 | |
Reimbursement Payable for Acquisition of Real Estate and Tenant Improvement | $ 4,800,000 | |
Payments for Building Improvements | 54,000,000 | |
Additional Purchase for Building Improvements Payable | 4,700,000 | |
Tenant improvements allowance | 43,397,000 | $ 14,732,000 |
Total investment in property | 303,983,000 | $ 147,359,000 |
PharmaCann LLC [Member] | ||
Payments for Building Improvements | 19,300,000 | |
Amount funded by the entity | 11,900,000 | |
Amount incurred | 13,200,000 | |
Portfolio Maitri PA | ||
Amount funded by the entity | 694,000 | |
Amount incurred | 1,700,000 | |
Portfolio Maitri PA | Maximum | ||
Agreed reimbursement for redevelopment of building | 10,000,000 | |
Vireo OH [Member] | ||
Amount funded by the entity | 2,200,000 | |
Amount incurred | 2,400,000 | |
Vireo OH [Member] | Maximum | ||
Agreed reimbursement for redevelopment of building | 2,600,000 | |
Emerald Growth MI [Member] | ||
Amount funded by the entity | 2,400,000 | |
Amount incurred | 2,600,000 | |
Emerald Growth MI [Member] | Maximum | ||
Agreed reimbursement for redevelopment of building | 3,100,000 | |
Ascend MI | ||
Amount funded by the entity | 0 | |
Amount incurred | 261,000 | |
Ascend MI | Maximum | ||
Agreed reimbursement for redevelopment of building | 15,000,000 | |
MJardin NV | ||
Amount funded by the entity | 2,400,000 | |
Amount incurred | 2,800,000 | |
MJardin NV | Maximum | ||
Agreed reimbursement for redevelopment of building | 5,800,000 | |
DYME CA | Maximum | ||
Agreed reimbursement for redevelopment of building | 2,000,000 | |
Trulieve MA | Maximum | ||
Agreed reimbursement for redevelopment of building | 40,000,000 | |
PharmaCann PA | ||
Additional Purchase for Building Improvements Payable | 4,000,000 | |
Amount funded by the entity | 0 | |
Amount incurred | 706,000 | |
PharmaCann PA | Maximum | ||
Agreed reimbursement for redevelopment of building | 25,100,000 | |
The Pharm AZ - Retail | ||
Amount funded by the entity | 0 | |
Amount incurred | 310,000 | |
The Pharm AZ - Retail | Maximum | ||
Agreed reimbursement for redevelopment of building | 500,000 | |
Green peak industries, LLC | ||
Additional Purchase for Building Improvements Payable | 18,000,000 | |
Amount funded by the entity | 9,500,000 | |
Amount incurred | 9,800,000 | |
Tenant improvements allowance | 25,500,000 | |
Total investment in property | 31,000,000 | |
Ascend Wellness Holdings, LLC | ||
Additional Purchase for Building Improvements Payable | 8,000,000 | |
Amount funded by the entity | 4,500,000 | |
Amount incurred | 10,700,000 | |
Tenant improvements allowance | 14,000,000 | |
Total investment in property | 33,000,000 | |
Holistic Industries | ||
Amount incurred | 0 | |
Total investment in property | 14,800,000 | |
Holistic Industries | Maximum | ||
Agreed reimbursement for redevelopment of building | 2,000,000 | |
Subsidiary of PharmaCann LLC | ||
Additional Purchase for Building Improvements Payable | 8,000,000 | |
Amount funded by the entity | 16,500,000 | |
Amount incurred | 17,300,000 | |
Construction funding | 23,500,000 | |
Total investment in property | 26,500,000 | |
Subsidiary of Vireo Health | ||
Additional Purchase for Building Improvements Payable | 2,600,000 | |
Amount funded by the entity | 3,500,000 | |
Amount incurred | 3,800,000 | |
Total investment in property | $ 8,600,000 |
Exchangeable Senior Notes - Int
Exchangeable Senior Notes - Interest expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Exchangeable Senior Notes | ||
Cash coupon | $ 1,349 | $ 3,281 |
Amortization of debt discount | 262 | 632 |
Amortization of issuance costs | 227 | 549 |
Total interest expense | $ 1,838 | $ 4,462 |
Exchangeable Senior Notes - Car
Exchangeable Senior Notes - Carrying value (Details) $ in Thousands | Sep. 30, 2019USD ($) |
Exchangeable Senior Notes | |
Principal amount | $ 143,750 |
Unamortized discount | (5,144) |
Unamortized issuance costs | (4,448) |
Carrying value | $ 134,158 |
Exchangeable Senior Notes - Add
Exchangeable Senior Notes - Additional Information (Details) | 1 Months Ended | 9 Months Ended |
Feb. 28, 2019USD ($)$ / shares | Sep. 30, 2019USD ($) | |
Debt Instrument, Discount | $ 5,800,000 | |
Debt Instrument, Interest Rate, Stated Percentage | 4.65% | |
Debt Issuance Costs, Gross | $ 5,200,000 | |
Debt Issuance Costs, Net | 5,000,000 | |
Equity Components | 200,000 | |
Accrued Interest Payable | $ 225,000 | |
Senior Notes [Member] | ||
Debt Instrument, Face Amount | $ 143,750,000 | |
Debt Instrument, Interest Rate, Stated Percentage | 3.75% | |
Common Stock [Member] | Senior Notes [Member] | ||
Debt Instrument, Convertible, Conversion Ratio | 14.37298 | |
Conversion of Stock, Amount Converted | $ 1,000 | |
Debt Instrument, Convertible, Conversion Price | $ / shares | $ 69.575 |
Net Income Per Share (Details)
Net Income Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Net Income Per Share | ||||
Net income | $ 6,520 | $ 1,832 | $ 13,573 | $ 4,319 |
Preferred stock dividend | (338) | (338) | (1,014) | (1,014) |
Distributions to participating securities | (109) | (52) | (256) | (127) |
Net income attributable to common stockholders used to compute net income per share | $ 6,073 | $ 1,442 | $ 12,303 | $ 3,178 |
Weighted average common share outstanding: | ||||
Basic | 10,918,477 | 6,636,638 | 10,088,036 | 6,388,058 |
Diluted | 11,057,697 | 6,785,800 | 10,225,574 | 6,534,300 |
Net income attributable to common stockholders per share: | ||||
Basic | $ 0.56 | $ 0.22 | $ 1.22 | $ 0.50 |
Diluted | $ 0.55 | $ 0.21 | $ 1.20 | $ 0.49 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Fair Value of Financial Instruments | ||
Short-term Investments | $ 208,828 | $ 120,443 |
Exchangeable senior notes, net | 134,158 | 0 |
Investments, Fair Value Disclosure | 208,828 | 120,443 |
Convertible Debt, Fair Value Disclosures | $ 207,000 | $ 0 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Additional Information (Details) $ in Millions | Sep. 30, 2019USD ($) |
Fair Value, Inputs, Level 1 [Member] | Money Market Funds [Member] | |
Cash and Cash Equivalents, Fair Value Disclosure | $ 27 |
Common Stock Incentive Plan (De
Common Stock Incentive Plan (Details) | 9 Months Ended |
Sep. 30, 2019$ / sharesshares | |
Common Stock Incentive Plan | |
Unvested Restricted Shares, Beginning Balance | shares | 147,359 |
Unvested Restricted Shares, Granted | shares | 54,745 |
Unvested Restricted Shares, Vested | shares | (41,753) |
Unvested Restricted Shares, Forfeited | shares | (20,717) |
Unvested Restricted Shares, Ending Balance | shares | 139,634 |
Weighted-Average Grant Date Fair Value, Beginning Balance | $ / shares | $ 23.98 |
Weighted-Average Grant Date Fair Value, Granted | $ / shares | 55.19 |
Weighted-Average Grant Date Fair Value, Vested | $ / shares | 26.21 |
Weighted-Average Grant Date Fair Value, Forfeited | $ / shares | 18.98 |
Weighted-Average Grant Date Fair Value, Ending Balance | $ / shares | $ 36.29 |
Common Stock Incentive Plan - A
Common Stock Incentive Plan - Additional Information (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2019USD ($)shares | |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $ | $ 3.4 |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 1 year 9 months 18 days |
2016 Plan [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | shares | 1,000,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 10 years |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) | Sep. 30, 2019USD ($) |
Other Commitments [Line Items] | |
Tenant Improvement Payable | $ 49,000,000 |
Development Milestones Payable | 57,000 |
Massachusetts [Member] | |
Other Commitments [Line Items] | |
Other Commitment | 6,200,000 |
Ohio [Member] | |
Other Commitments [Line Items] | |
Other Commitment | 6,000,000 |
Pennsylvania [Member] | |
Other Commitments [Line Items] | |
Other Commitment | 24,400,000 |
Office and Equipment Leases [Member] | |
Other Commitments [Line Items] | |
Operating Leases, Future Minimum Payments Due | 98,000 |
Operating Leases, Future Minimum Payments Due, Next Twelve Months | 23,000 |
Operating Leases, Future Minimum Payments, Due in Two Years | $ 75,000 |
Subsequent Events (Details)
Subsequent Events (Details) $ in Thousands | Oct. 01, 2019USD ($)ft² | Sep. 30, 2019USD ($)ft² | Oct. 31, 2019ft² |
Rentable Square Feet | ft² | 579,000 | 1,084,000 | |
Initial Purchase Price | $ 105,075 | $ 106,911 | |
Tenant Improvement and Construction Commitments | 44,995 | 733 | |
Total | $ 150,070 | $ 107,644 | |
Subsequent event | |||
Rentable Square Feet | ft² | 6,000 | ||
Subsequent event | LivWell MI | |||
Rentable Square Feet | ft² | 156,000 | ||
Initial Purchase Price | $ 19,000 | ||
Tenant Improvement and Construction Commitments | 23,000 | ||
Total | $ 42,000 | ||
Subsequent event | Cresco IL Portfolio | |||
Rentable Square Feet | ft² | 90,000 | ||
Initial Purchase Price | $ 32,800 | ||
Tenant Improvement and Construction Commitments | 13,750 | ||
Total | $ 46,550 | ||
Subsequent event | Cresco IL Portfolio | Property one | |||
Number of properties comprised in the real estate property | ft² | 39,000 | ||
Subsequent event | Cresco IL Portfolio | Property two | |||
Number of properties comprised in the real estate property | ft² | 51,000 | ||
Subsequent event | Trulieve FL | |||
Rentable Square Feet | ft² | 120,000 | ||
Initial Purchase Price | $ 17,000 | ||
Total | $ 17,000 | ||
Subsequent event | GPI MI - Retail Portfolio | |||
Rentable Square Feet | ft² | 27,000 | ||
Initial Purchase Price | $ 7,775 | ||
Tenant Improvement and Construction Commitments | 1,245 | ||
Total | $ 9,020 | ||
Subsequent event | PharmaCann IL | |||
Rentable Square Feet | ft² | 66,000 | ||
Initial Purchase Price | $ 18,000 | ||
Tenant Improvement and Construction Commitments | 7,000 | ||
Total | $ 25,000 | ||
Area for expansion (in sq ft) | ft² | 18,000 | ||
Subsequent event | Grassroots IL | |||
Rentable Square Feet | ft² | 120,000 | ||
Initial Purchase Price | $ 10,500 | ||
Total | $ 10,500 | ||
Area for expansion (in sq ft) | ft² | 50,000 | ||
Funding for construction before April 30, 2020 | $ 10,700 | ||
Funding for construciton before July 30, 2020 | $ 7,000 |
Subsequent Event - Additional i
Subsequent Event - Additional information (Details) | 1 Months Ended | 9 Months Ended | ||
Oct. 31, 2019USD ($)ft²shares | Sep. 30, 2019USD ($)ft² | Sep. 30, 2018USD ($) | Oct. 01, 2019ft² | |
Subsequent Event [Line Items] | ||||
Net proceeds from issuance | $ 185,687,000 | $ 79,314,000 | ||
Rentable Square Feet | ft² | 1,084,000 | 579,000 | ||
Subsequent event | ||||
Subsequent Event [Line Items] | ||||
Rentable Square Feet | ft² | 6,000 | |||
Term of lease | 5 years 4 months 24 days | |||
Option to extend | true | |||
Renewal term | 5 years | |||
Initial annual base rent | $ 228,000 | |||
Annual adjustment in base rent (as a percent) | 3.00% | |||
ATM Program | Subsequent event | ||||
Subsequent Event [Line Items] | ||||
Number of shares sold | shares | 485,300 | |||
Net proceeds from issuance | $ 41,300,000 |