Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | May 11, 2017 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Entity Registrant Name | INNOVATIVE INDUSTRIAL PROPERTIES INC | |
Entity Central Index Key | 1,677,576 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Company | |
Trading Symbol | IIPR | |
Entity Common Stock, Shares Outstanding | 3,526,428 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Real estate, at cost: | ||
Land | $ 7,600 | $ 7,600 |
Buildings and improvements | 22,475 | 22,475 |
Total real estate, at cost | 30,075 | 30,075 |
Less accumulated depreciation | (187) | (27) |
Net real estate held for investment | 29,888 | 30,048 |
Cash and cash equivalents | 33,351 | 33,003 |
Prepaid insurance and other assets, net | 268 | 276 |
Total assets | 63,507 | 63,327 |
Liabilities and stockholders' equity | ||
Accounts payable, accrued expenses and other liabilities | 344 | 70 |
Offering cost liability | 0 | 276 |
Rents received in advance and tenant security deposit | 2,545 | 2,542 |
Total liabilities | 2,889 | 2,888 |
Commitments and contingencies (Note 8) | ||
Stockholders' equity: | ||
Preferred stock, par value $0.001 per share, 50,000,000 shares authorized, no shares issued and outstanding as of March 31, 2017 and December 31, 2016 | 0 | 0 |
Common Stock, Value, Issued | 4 | 0 |
Additional paid-in-capital | 65,597 | 64,828 |
Accumulated deficit | (4,983) | (4,392) |
Total stockholders' equity | 60,618 | 60,439 |
Total liabilities and stockholders' equity | 63,507 | 63,327 |
Common Class A [Member] | ||
Stockholders' equity: | ||
Common Stock, Value, Issued | 0 | 3 |
Common Class B [Member] | ||
Stockholders' equity: | ||
Common Stock, Value, Issued | $ 0 | $ 0 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2017 | Dec. 31, 2016 |
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 50,000,000 | 50,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 50,000,000 | 0 |
Common Stock, Shares, Issued | 3,525,564 | 0 |
Common Stock, Shares, Outstanding | 3,525,564 | 0 |
Common Class A [Member] | ||
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 0 | 49,000,000 |
Common Stock, Shares, Issued | 0 | 3,416,508 |
Common Stock, Shares, Outstanding | 0 | 3,416,508 |
Common Class B [Member] | ||
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Common Stock, Shares Authorized | 0 | 1,000,000 |
Common Stock, Shares, Issued | 0 | 0 |
Common Stock, Shares, Outstanding | 0 | 0 |
Condensed Consolidated Statemen
Condensed Consolidated Statement of Operations $ in Thousands | 3 Months Ended |
Mar. 31, 2017USD ($)$ / sharesshares | |
Revenues: | |
Rental | $ 1,290 |
Other | 35 |
Total revenues | 1,325 |
Expenses: | |
General and administrative | 985 |
Stock-based compensation | 770 |
Depreciation | 161 |
Total expenses | 1,916 |
Net loss | $ (591) |
Net loss per share (basic and diluted) | $ / shares | $ (0.18) |
Weighted average shares outstanding: | |
Basic and diluted | shares | 3,350,000 |
Condensed Consolidated Stateme5
Condensed Consolidated Statement of Stockholders' Equity - 3 months ended Mar. 31, 2017 - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in capital | Accumulated deficit | ||
Balance at Dec. 31, 2016 | $ 60,439 | $ 3 | $ 64,828 | $ (4,392) | ||
Balance (in shares) at Dec. 31, 2016 | 3,416,508 | |||||
Net loss | (591) | $ 0 | 0 | (591) | ||
Reclassification of Class A and Class B common stock to common stock | 0 | [1] | 0 | 0 | ||
Reclassification of Class A and Class B common stock to common stock (in shares) | [1] | |||||
Stock-based compensation | 770 | $ 1 | 769 | 0 | ||
Stock-based compensation (in shares) | 109,056 | |||||
Balance at Mar. 31, 2017 | $ 60,618 | $ 4 | $ 65,597 | $ (4,983) | ||
Balance (in shares) at Mar. 31, 2017 | 3,525,564 | |||||
[1] | Effective as of January 26, 2017, each share of the Company’s outstanding Class A common stock and Class B common stock was reclassified as, and become one share of, a new single class of common stock named “common stock”. There were no shares of Class B common stock outstanding as of January 26, 2017, as all such shares were redeemed by the Company for $0.001 per share (par value) immediately prior to the Company's initial public offering in December 2016. |
Condensed Consolidated Stateme6
Condensed Consolidated Statement of Stockholders' Equity (Parenthetical) - $ / shares | Mar. 31, 2017 | Jan. 26, 2017 | Dec. 31, 2016 |
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | $ 0.001 |
Condensed Consolidated Stateme7
Condensed Consolidated Statement of Cash Flows $ in Thousands | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Cash flows from operating activities | |
Net loss | $ (591) |
Adjustments to reconcile net loss to net cash provided by operating activities | |
Depreciation | 161 |
Amortization of stock-based compensation awards | 770 |
Changes in assets and liabilities | |
Prepaid insurance and other assets, net | 7 |
Accounts payable, accrued expenses, and other liabilities | 275 |
Security deposit | 2 |
Net cash provided by operating activities | 624 |
Cash flows from financing activities | |
Initial public offering costs | (276) |
Net cash used in financing activities | (276) |
Net increase in cash and cash equivalents | 348 |
Cash and cash equivalents, December 31, 2016 | 33,003 |
Cash and cash equivalents, March 31, 2017 | $ 33,351 |
Organization
Organization | 3 Months Ended |
Mar. 31, 2017 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization | 1. Organization Innovative Industrial Properties, Inc. (the "Company", "we", "us", and "our"), formerly known as Innovative Greenhouse Properties, Inc. and incorporated in Maryland on June 15, 2016 On December 5, 2016, the Company completed its initial public offering of 3,350,000 0.001 20.00 61.1 As of March 31, 2017, the Company owned one 127,000 30.0 IIP Operating Partnership, LP, a Delaware limited partnership (the "Operating Partnership"), was formed on June 20, 2016 and is a wholly-owned subsidiary of the Company. The Company is the sole general partner of the Operating Partnership and conducts substantially all of its business through the Operating Partnership. |
Summary of Significant Accounti
Summary of Significant Accounting Policies and Procedures and Recent Accounting Pronouncements | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies and Procedures and Recent Accounting Pronouncements | 2. Summary of Significant Accounting Policies and Procedures and Recent Accounting Pronouncements 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 consolidated financial statements and Management's Discussion and Analysis of Financial Condition and Results of Operations included in this report and in the Company's Annual Report on Form 10-K for the period from June 15, 2016 (date of incorporation) through December 31, 2016. 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, 2017. We intend to elect and to operate our business so as to qualify, and to be taxed, as a real estate investment trust ("REIT") for U.S. federal income tax purposes, commencing with our taxable year ending December 31, 2017. 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 operations represent amounts paid for city and state income and franchise taxes. 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 and disclosures in the condensed consolidated financial statements. Actual results may differ materially from these estimates and assumptions. 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 and the fair value of buildings on as as-if vacant basis. Acquisition costs are capitalized as incurred. The acquisition of our Initial Property was recorded as an asset acquisition. 35 We depreciate furniture and fixtures over estimated useful lives ranging from three to six years. Another significant judgment must be made as to if, and when, impairment losses should be taken on our property when events or a change in circumstances indicate that the carrying amount of the asset may not be recoverable. A provision is made for impairment if estimated future operating cash flows (undiscounted and without interest charges) plus estimated disposition proceeds (undiscounted) are less than the current book value of the property. Key inputs that we utilize in this analysis include projected rental rates, estimated holding periods, capital expenditures, and property sales capitalization rates. As of March 31, 2017, no impairment losses were recognized. Our Initial Property lease and future tenant leases are expected to be triple-net leases, an arrangement under which 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 anticipate that all 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. We recognize an allowance for doubtful accounts relating to accounts receivable for amounts deemed uncollectible. We consider tenant specific issues, such as financial stability and ability to pay, when determining collectability of accounts receivable and appropriate allowances to record. We record revenue for our Initial Property on a cash basis due to the uncertainty of collectability of lease payments from the tenant due to their lack of operating history. 32.8 Stock-Based Compensation. Basic and diluted net loss per common share for the three months ended March 31, 2017 is computed by dividing net loss by the weighted-average number of common shares outstanding during the period, without consideration of common stock equivalents. Common stock equivalents, determined on a weighted-average outstanding basis, that could potentially reduce net income per common share in the future that were not included in the determination of diluted loss per common share as their effects were antidilutive totaled 154,921 In May 2015, the FASB issued ASU No. 2015-07 that eliminates the requirement to categorize investments within the fair value hierarchy if their fair value is measured using the net asset value per share practical expedient in the FASB’s fair value measurement guidance. The amendments also limit certain disclosures to investments for which the entity has elected to measure at fair value using the net asset value per share practical expedient. The amendments were applied retrospectively by removing from the fair value hierarchy any investments for which fair value is measured using the net asset value per share practical expedient. Adoption of this guidance did not have an impact on the Company’s financial position or results of operations. Recent Accounting Pronouncements. In February 2016, the FASB issued Accounting Standards Update ("ASU") 2016-02, Leases ("ASU 2016-02"). Under this new standard the large majority of operating leases are expected to remain classified as operating leases, and lessors should continue to recognize lease income for those leases on a generally straight-line basis over the lease term. ASU 2016-02 is effective for years beginning after December 15, 2019 as a result of the Company’s election as an emerging growth company, using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. We are not currently a lessee in any material lease arrangements and the amendments in ASU 2016-02 do not significantly change the current lessor accounting model; therefore, we do not currently believe that the adoption of this standard will have a material impact on our consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation Stock Compensation; Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"). The FASB issued ASU 2016-09 to simplify several aspects of the accounting for share-based payment transactions, including classification of awards as either equity or liabilities, estimation of forfeitures, and classification on the statement of cash flows. ASU 2016-09 is effective for years beginning after December 15, 2017 as a result of the Company’s election as an emerging growth company, and early adoption is permitted. ASU 2016-09 is not expected to have a material impact on our consolidated financial statements. In June 2016, the FASB issued ASU No. 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. 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 effective for years beginning after December 15, 2020 as a result of the Company’s election as an emerging growth company with early adoption permitted. The Company is in the initial stage of evaluating the impact of this new standard. 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. ASU 2014-09 is effective for years beginning after December 15, 2018 as a result of the Company’s election as an emerging growth company. The majority of our revenues related to rental income from leasing arrangements, which is excluded from ASU 2014-09. The Company is currently evaluating the impact that ASU 2014-09 will have on any non-lease components and revenues generated from activities other than leasing. In February 2017, the FASB has issued ASU No. 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. Revenue from Contracts with Customers, In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments, 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. This new standard is effective for years beginning after December 15, 2018 as a result of the Company’s election as an emerging growth company with early adoption permitted. The impact of this new guidance will depend on future transactions, though the impact will only be related to the classification of those items on the statement of cash flows and will not impact the Company's cash flows or its consolidated results of operations. . Our Initial Property is located in the state of New York. The ability of our tenant to honor the terms of its lease is dependent upon the economic, regulatory, competition, natural and social factors affecting the community in which our tenant operates. As of March 31, 2017, our tenant, PharmaCann, represented 100 We have deposited cash with a financial institution that is insured by the Federal Deposit Insurance Corporation ("FDIC") up to $ 250,000 |
Common Stock
Common Stock | 3 Months Ended |
Mar. 31, 2017 | |
Stockholders' Equity Note [Abstract] | |
Common Stock | 3. Common Stock The Company is authorized to issue up to 50,000,000 0.001 |
Preferred Stock
Preferred Stock | 3 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
Preferred Stock | 4. Preferred Stock The Company is authorized to issue up to 50,000,000 0.001 |
Initial Property
Initial Property | 3 Months Ended |
Mar. 31, 2017 | |
Leases [Abstract] | |
Initial Property | 5. Initial Property We purchased the Initial Property located in New York, from PharmaCann for approximately $ 30.0 The lease term is 15 years, with two options to extend the term of the lease for two additional five-year periods. 319,580 annual increases at a rate based on the higher of (i) 4% or (ii) 75% of the consumer price index, or CPI. 1.5 105,477 Year Contractual Minimum Rent 2017 (nine months ending December 31) $ 3,882 2018 5,327 2019 5,490 2020 5,659 2021 5,729 Thereafter 56,246 Total $ 82,333 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2017 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | 6. 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 1Observable inputs that reflect quoted prices (unadjusted) for identical assets or liabilities in active markets. Level 2Includes other inputs that are directly or indirectly observable in the marketplace. Level 3Unobservable inputs that are supported by little or no market activities, therefore requiring an entity to develop its own assumptions. At March 31, 2017, cash equivalent instruments consisted of $ 6.8 The carrying amounts of financial instruments such as cash equivalents invested in certificates of deposit, receivables, 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 | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Common Stock Incentive Plan | 7. 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 ten 109,056 Stock-based awards, beginning of period 66,508 Stock awards granted 109,056 Stock-based awards, end of period 175,564 Weighted average grant date fair value of: Stock-based awards, beginning of period $ 17.47 Stock-based awards granted during the period $ 18.68 Stock-based awards, end of period $ 18.55 Grant date fair value of shares granted during the period $ 2,037,268 The remaining unrecognized compensation cost of $ 2.4 two three 2.4 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 8. Commitments and Contingencies 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 | 3 Months Ended |
Mar. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | 9. Subsequent Events On May 1, 2017, the Company executed an agreement to purchase the 9220 Alaking Court property in Capitol Heights, Maryland, which is currently under development and expected to comprise approximately 72,000 8 3 4 1.9 The initial term of the lease is 16 years, with three options to extend the term of the lease for three additional five year periods. 15 3.25 1.5 |
Summary of Significant Accoun17
Summary of Significant Accounting Policies and Procedures and Recent Accounting Pronouncements (Policies) | 3 Months Ended |
Mar. 31, 2017 | |
Accounting Policies [Abstract] | |
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 consolidated financial statements and Management's Discussion and Analysis of Financial Condition and Results of Operations included in this report and in the Company's Annual Report on Form 10-K for the period from June 15, 2016 (date of incorporation) through December 31, 2016. 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, 2017. |
Federal Income Taxes | Federal Income Taxes. We intend to elect and to operate our business so as to qualify, and to be taxed, as a real estate investment trust ("REIT") for U.S. federal income tax purposes, commencing with our taxable year ending December 31, 2017. 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 operations represent amounts paid for city and state income and franchise taxes. |
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 and disclosures in the condensed consolidated financial statements. 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 and the fair value of buildings on as as-if vacant basis. Acquisition costs are capitalized as incurred. The acquisition of our Initial Property was recorded as an asset acquisition. |
Depreciation | Depreciation. 35 We depreciate furniture and fixtures over estimated useful lives ranging from three to six years. |
Provision for Impairment | Provision for Impairment. Another significant judgment must be made as to if, and when, impairment losses should be taken on our property when events or a change in circumstances indicate that the carrying amount of the asset may not be recoverable. A provision is made for impairment if estimated future operating cash flows (undiscounted and without interest charges) plus estimated disposition proceeds (undiscounted) are less than the current book value of the property. Key inputs that we utilize in this analysis include projected rental rates, estimated holding periods, capital expenditures, and property sales capitalization rates. As of March 31, 2017, no impairment losses were recognized. |
Revenue Recognition and Accounts Receivable | Revenue Recognition and Accounts Receivable. Our Initial Property lease and future tenant leases are expected to be triple-net leases, an arrangement under which 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 anticipate that all 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. We recognize an allowance for doubtful accounts relating to accounts receivable for amounts deemed uncollectible. We consider tenant specific issues, such as financial stability and ability to pay, when determining collectability of accounts receivable and appropriate allowances to record. We record revenue for our Initial Property on a cash basis due to the uncertainty of collectability of lease payments from the tenant due to their lack of operating history. |
Cash and Cash Equivalents | Cash and Cash Equivalents. 32.8 |
Stock-Based Compensation | Stock-Based Compensation. |
Net Loss Per Share | Net Loss Per Share. Basic and diluted net loss per common share for the three months ended March 31, 2017 is computed by dividing net loss by the weighted-average number of common shares outstanding during the period, without consideration of common stock equivalents. Common stock equivalents, determined on a weighted-average outstanding basis, that could potentially reduce net income per common share in the future that were not included in the determination of diluted loss per common share as their effects were antidilutive totaled 154,921 |
Recent Accounting Pronouncements | Recently Adopted Accounting Pronouncements. In May 2015, the FASB issued ASU No. 2015-07 that eliminates the requirement to categorize investments within the fair value hierarchy if their fair value is measured using the net asset value per share practical expedient in the FASB’s fair value measurement guidance. The amendments also limit certain disclosures to investments for which the entity has elected to measure at fair value using the net asset value per share practical expedient. The amendments were applied retrospectively by removing from the fair value hierarchy any investments for which fair value is measured using the net asset value per share practical expedient. Adoption of this guidance did not have an impact on the Company’s financial position or results of operations. Recent Accounting Pronouncements. In February 2016, the FASB issued Accounting Standards Update ("ASU") 2016-02, Leases ("ASU 2016-02"). Under this new standard the large majority of operating leases are expected to remain classified as operating leases, and lessors should continue to recognize lease income for those leases on a generally straight-line basis over the lease term. ASU 2016-02 is effective for years beginning after December 15, 2019 as a result of the Company’s election as an emerging growth company, using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements, with certain practical expedients available. We are not currently a lessee in any material lease arrangements and the amendments in ASU 2016-02 do not significantly change the current lessor accounting model; therefore, we do not currently believe that the adoption of this standard will have a material impact on our consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, Compensation Stock Compensation; Improvements to Employee Share-Based Payment Accounting ("ASU 2016-09"). The FASB issued ASU 2016-09 to simplify several aspects of the accounting for share-based payment transactions, including classification of awards as either equity or liabilities, estimation of forfeitures, and classification on the statement of cash flows. ASU 2016-09 is effective for years beginning after December 15, 2017 as a result of the Company’s election as an emerging growth company, and early adoption is permitted. ASU 2016-09 is not expected to have a material impact on our consolidated financial statements. In June 2016, the FASB issued ASU No. 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. 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 effective for years beginning after December 15, 2020 as a result of the Company’s election as an emerging growth company with early adoption permitted. The Company is in the initial stage of evaluating the impact of this new standard. 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. ASU 2014-09 is effective for years beginning after December 15, 2018 as a result of the Company’s election as an emerging growth company. The majority of our revenues related to rental income from leasing arrangements, which is excluded from ASU 2014-09. The Company is currently evaluating the impact that ASU 2014-09 will have on any non-lease components and revenues generated from activities other than leasing. In February 2017, the FASB has issued ASU No. 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. Revenue from Contracts with Customers, In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments, 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. This new standard is effective for years beginning after December 15, 2018 as a result of the Company’s election as an emerging growth company with early adoption permitted. The impact of this new guidance will depend on future transactions, though the impact will only be related to the classification of those items on the statement of cash flows and will not impact the Company's cash flows or its consolidated results of operations. |
Concentration of Credit Risk | Concentration of Credit Risk . Our Initial Property is located in the state of New York. The ability of our tenant to honor the terms of its lease is dependent upon the economic, regulatory, competition, natural and social factors affecting the community in which our tenant operates. As of March 31, 2017, our tenant, PharmaCann, represented 100 We have deposited cash with a financial institution that is insured by the Federal Deposit Insurance Corporation ("FDIC") up to $ 250,000 |
Initial Property (Tables)
Initial Property (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Leases [Abstract] | |
Schedule of Future Minimum Rental Payments for Operating Leases | Future contractual minimum rent (including base rent, supplemental base rent and property management fees) under the operating lease as of March 31, 2017 for future periods is summarized as follows (dollars in thousands): Year Contractual Minimum Rent 2017 (nine months ending December 31) $ 3,882 2018 5,327 2019 5,490 2020 5,659 2021 5,729 Thereafter 56,246 Total $ 82,333 |
Common Stock Incentive Plan (Ta
Common Stock Incentive Plan (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value | A summary of the activity under the 2016 Plan and related information for the three months ended March 31, 2017 is included in the table below. Stock-based awards, beginning of period 66,508 Stock awards granted 109,056 Stock-based awards, end of period 175,564 Weighted average grant date fair value of: Stock-based awards, beginning of period $ 17.47 Stock-based awards granted during the period $ 18.68 Stock-based awards, end of period $ 18.55 Grant date fair value of shares granted during the period $ 2,037,268 |
Organization (Details Textual)
Organization (Details Textual) $ / shares in Units, $ in Millions | Dec. 05, 2016USD ($)$ / sharesshares | Mar. 31, 2017USD ($)ft²$ / shares | Jan. 26, 2017$ / shares | Dec. 31, 2016$ / shares |
Entity Incorporation, Date of Incorporation | Jun. 15, 2016 | |||
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | $ 0.001 | |
PharmaCann LLC [Member] | ||||
Area of Real Estate Property | ft² | 127,000 | |||
Payments to Acquire Real Estate | $ | $ 30 | |||
Common Class A [Member] | ||||
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | $ 0.001 | |
Common Class A [Member] | IPO [Member] | ||||
Stock Issued During Period, Shares, New Issues | shares | 3,350,000 | |||
Common Stock, Par or Stated Value Per Share | $ 0.001 | |||
Shares Issued, Price Per Share | $ 20 | |||
Proceeds from Issuance Initial Public Offering | $ | $ 61.1 |
Summary of Significant Accoun21
Summary of Significant Accounting Policies and Procedures and Recent Accounting Pronouncements (Details Textual) | 3 Months Ended |
Mar. 31, 2017USD ($)shares | |
Cash, FDIC Insured Amount | $ 250,000 |
Impairment Losses on Property | $ 0 |
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | shares | 154,921 |
Money Market Funds [Member] | |
Short-term Investments | $ 32,800,000 |
Building [Member] | |
Property, Plant and Equipment, Useful Life | 35 years |
Minimum [Member] | Furniture and Fixtures [Member] | |
Property, Plant and Equipment, Estimated Useful Lives | 3 years |
Maximum [Member] | Furniture and Fixtures [Member] | |
Property, Plant and Equipment, Estimated Useful Lives | 6 years |
PharmaCann LLC [Member] | Rental Revenue, Net [Member] | |
Concentration Risk, Percentage | 100.00% |
Common Stock (Details Textual)
Common Stock (Details Textual) - $ / shares | Mar. 31, 2017 | Jan. 26, 2017 | Dec. 31, 2016 |
Common Stock, Shares Authorized | 50,000,000 | 0 | |
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | $ 0.001 |
Common Stock [Member] | |||
Common Stock, Shares Authorized | 50,000,000 | ||
Common Stock, Par or Stated Value Per Share | $ 0.001 | ||
Common Class A [Member] | |||
Common Stock, Shares Authorized | 0 | 49,000,000 | |
Common Stock, Par or Stated Value Per Share | $ 0.001 | 0.001 | $ 0.001 |
Common Class B [Member] | |||
Common Stock, Shares Authorized | 0 | 1,000,000 | |
Common Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | $ 0.001 |
Preferred Stock (Details Textua
Preferred Stock (Details Textual) - $ / shares | Mar. 31, 2017 | Dec. 31, 2016 |
Preferred Stock, Shares Authorized | 50,000,000 | 50,000,000 |
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Issued | 0 | 0 |
Initial Property (Details)
Initial Property (Details) $ in Thousands | Mar. 31, 2017USD ($) |
Contractual Minimum Rent | |
2017 (nine months ending December 31) | $ 3,882 |
2,018 | 5,327 |
2,019 | 5,490 |
2,020 | 5,659 |
2,021 | 5,729 |
Thereafter | 56,246 |
Total | $ 82,333 |
Initial Property (Details Textu
Initial Property (Details Textual) | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Operating Leased Assets [Line Items] | |
Sale Leaseback Transaction, Lease Terms | The lease term is 15 years, with two options to extend the term of the lease for two additional five-year periods. |
Description of Operating Leases Rate | annual increases at a rate based on the higher of (i) 4% or (ii) 75% of the consumer price index, or CPI. |
PharmaCann LLC [Member] | |
Operating Leased Assets [Line Items] | |
Payments to Acquire Real Estate | $ 30,000,000 |
Operating Leases, Monthly Dynamic Rental Revenue | $ 319,580 |
Property Management Fee, Percent Fee | 1.50% |
Operating Leases, Monthly Static Rental Revenue | $ 105,477 |
Fair Value of Financial Instr26
Fair Value of Financial Instruments (Details Textual) $ in Millions | Mar. 31, 2017USD ($) |
Money Market Funds [Member] | Fair Value, Inputs, Level 1 [Member] | |
Cash and Cash Equivalents, Fair Value Disclosure | $ 6.8 |
Common Stock Incentive Plan (De
Common Stock Incentive Plan (Details) | 3 Months Ended |
Mar. 31, 2017USD ($)$ / sharesshares | |
Stock-based awards, beginning of period | shares | 66,508 |
Stock awards granted | shares | 109,056 |
Stock-based awards, end of period | shares | 175,564 |
Weighted average grant date fair value of: | |
Stock-based awards, beginning of period | $ / shares | $ 17.47 |
Stock-based awards granted during the period | $ / shares | 18.68 |
Stock-based awards, end of period | $ / shares | $ 18.55 |
Grant date fair value of shares granted during the period | $ | $ 2,037,268 |
Common Stock Incentive Plan (28
Common Stock Incentive Plan (Details Textual) $ in Millions | 3 Months Ended |
Mar. 31, 2017USD ($)shares | |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized | $ | $ 2.4 |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 2 years 4 months 24 days |
Maximum [Member] | |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 3 years |
Minimum [Member] | |
Employee Service Share-based Compensation, Nonvested Awards, Compensation Cost Not yet Recognized, Period for Recognition | 2 months |
2016 Plan [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 1,000,000 |
Share-based Compensation Arrangement by Share-based Payment Award, Expiration Period | 10 years |
2016 Plan [Member] | Executive Officers and Employees [Member] | |
Share-based Compensation Arrangement by Share-based Payment Award, Shares Issued in Period | 109,056 |
Subsequent Events (Details Text
Subsequent Events (Details Textual) - Subsequent Event [Member] - 9220 Alaking Court property [Member] $ in Millions | 1 Months Ended |
May 01, 2017USD ($)ft² | |
Payments to Acquire Real Estate | $ 8 |
Long-term Purchase Commitment, Amount | 3 |
Reimbursement of Tenant Improvements Payable | $ 4 |
Lease Term Description | The initial term of the lease is 16 years, with three options to extend the term of the lease for three additional five year periods. |
Lessor Leasing Arrangements, Operating Leases, Term of Contract | 16 years |
Percentage of Expected To Provide Return On Total Purchase Price | 15.00% |
Percentage of Annual Rent Escalations | 3.25% |
Property Management Fee Percentage | 1.50% |
Area of Real Estate Property | ft² | 72,000 |
Advance Rent | $ 1.9 |