Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2022 | May 05, 2022 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2022 | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-37949 | |
Entity Registrant Name | Innovative Industrial Properties, Inc. | |
Entity Incorporation, State or Country Code | MD | |
Entity Tax Identification Number | 81-2963381 | |
Entity Address, Address Line One | 1389 Center Drive, Suite 200 | |
Entity Address, City or Town | Park City | |
Entity Address, State or Province | UT | |
Entity Address, Postal Zip Code | 84098 | |
City Area Code | 858 | |
Local Phone Number | 997-3332 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 27,970,618 | |
Amendment Flag | false | |
Entity Central Index Key | 0001677576 | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 | |
Common Stock | ||
Title of 12(b) Security | Common Stock, par value $0.001 per share | |
Trading Symbol | IIPR | |
Security Exchange Name | NYSE | |
Series A Preferred Stock | ||
Title of 12(b) Security | Series A Preferred Stock, par value $0.001 per share | |
Trading Symbol | IIPR-PA | |
Security Exchange Name | NYSE |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Real estate, at cost: | ||
Land | $ 131,925 | $ 122,386 |
Buildings and improvements | 1,070,431 | 979,417 |
Tenant improvements | 694,251 | 620,301 |
Total real estate, at cost | 1,896,607 | 1,722,104 |
Less accumulated depreciation | (95,608) | (81,938) |
Net real estate held for investment | 1,800,999 | 1,640,166 |
Construction loan receivable | 15,525 | 12,916 |
Cash and cash equivalents | 43,094 | 81,096 |
Restricted cash | 1,930 | 5,323 |
Investments | 209,935 | 324,889 |
Right of use office lease asset | 2,011 | 1,068 |
In-place lease intangible assets, net | 9,215 | 9,148 |
Other assets, net | 25,399 | 9,996 |
Total assets | 2,108,108 | 2,084,602 |
Liabilities and stockholders' equity | ||
Exchangeable Senior Notes, net | 9,369 | 32,232 |
Notes due 2026, net | 294,167 | 293,860 |
Tenant improvements and construction funding payable | 43,802 | 46,274 |
Accounts payable and accrued expenses | 8,990 | 7,718 |
Dividends payable | 46,168 | 38,847 |
Other liabilities | 2,150 | 1,167 |
Rent received in advance and tenant security deposits | 56,801 | 52,805 |
Total liabilities | 461,447 | 472,903 |
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 March 31, 2022 and December 31, 2021 | 14,009 | 14,009 |
Common stock, par value $0.001 per share, 50,000,000 shares authorized: 26,107,769 and 25,612,541 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively | 26 | 26 |
Additional paid-in capital | 1,718,234 | 1,672,882 |
Dividends in excess of earnings | (85,608) | (75,218) |
Total stockholders' equity | 1,646,661 | 1,611,699 |
Total liabilities and stockholders' equity | $ 2,108,108 | $ 2,084,602 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2022 | Dec. 31, 2021 | |
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 |
Preferred Stock, Shares Authorized | 50,000,000 | 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 | 26,107,769 | 25,612,541 |
Common Stock, Shares, Outstanding | 26,107,769 | 25,612,541 |
Series A Preferred Stock | ||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | |
Preferred Stock, Dividend Rate, Percentage | 9.00% | 9.00% |
Preferred Stock, Liquidation Preference, Value | $ 15,000 | $ 15,000 |
Preferred Stock, Liquidation Preference Per Share | $ 25 | $ 25 |
Preferred Stock, Shares Issued | 600,000 | 600,000 |
Preferred Stock, Shares Outstanding | 600,000 | 600,000 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Income - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Revenues: | ||
Rental (including tenant reimbursements) | $ 64,114 | $ 42,885 |
Other revenue | 390 | |
Total revenues | 64,504 | 42,885 |
Expenses: | ||
Property expenses | 1,982 | 770 |
General and administrative expense | 8,777 | 5,600 |
Depreciation and amortization expense | 13,868 | 8,839 |
Total expenses | 24,627 | 15,209 |
Income from operations | 39,877 | 27,676 |
Interest and other income | 57 | 124 |
Interest expense | (4,766) | (1,873) |
Loss on exchange of Exchangeable Senior Notes | (118) | |
Net income | 35,050 | 25,927 |
Preferred stock dividends | (338) | (338) |
Net income attributable to common stockholders | $ 34,712 | $ 25,589 |
Net income attributable to common stockholders per share (Note 8): | ||
Basic | $ 1.35 | $ 1.07 |
Diluted | $ 1.32 | $ 1.05 |
Weighted-average shares outstanding: | ||
Basic | 25,620,253 | 23,889,398 |
Diluted | 26,340,224 | 26,152,551 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Series A Preferred StockPreferred Stock | Common Stock | Additional Paid-In-CapitalAdjustment | Additional Paid-In-Capital | Dividends in Excess of EarningsAdjustment | Dividends in Excess of Earnings | Adjustment | Total |
Balances at beginning of period at Dec. 31, 2020 | $ 14,009 | $ 24 | $ 1,559,059 | $ (48,120) | $ 1,524,972 | |||
Balances at beginning of period (in shares) at Dec. 31, 2020 | 23,936,928 | |||||||
Net income | 25,927 | 25,927 | ||||||
Issuance of unvested restricted stock, net of forfeitures | (3,384) | (3,384) | ||||||
Issuance of unvested restricted stock, net of forfeitures (in shares) | (10,611) | |||||||
Preferred stock dividend | (338) | (338) | ||||||
Common stock dividend | (31,660) | (31,660) | ||||||
Stock-based compensation | 2,101 | 2,101 | ||||||
Balances at end of period at Mar. 31, 2021 | 14,009 | $ 24 | 1,557,776 | (54,191) | 1,517,618 | |||
Balances at end of period (in shares) at Mar. 31, 2021 | 23,926,317 | |||||||
Balances at beginning of period at Dec. 31, 2021 | 14,009 | $ 26 | $ (1,340) | 1,672,882 | $ 728 | (75,218) | $ (612) | 1,611,699 |
Balances at beginning of period (in shares) at Dec. 31, 2021 | 25,612,541 | |||||||
Net income | 35,050 | 35,050 | ||||||
Net proceeds from sale of common stock | 21,103 | 21,103 | ||||||
Net proceeds from sale of common stock (in shares) | 117,023 | |||||||
Exchange of exchangeable senior notes | 23,651 | 23,651 | ||||||
Exchange of exchangeable senior notes (in shares) | 365,842 | |||||||
Issuance of unvested restricted stock, net of forfeitures | (2,441) | (2,441) | ||||||
Issuance of unvested restricted stock, net of forfeitures (in shares) | 12,363 | |||||||
Preferred stock dividend | (338) | (338) | ||||||
Common stock dividend | (45,830) | (45,830) | ||||||
Stock-based compensation | 4,379 | 4,379 | ||||||
Balances at end of period at Mar. 31, 2022 | $ 14,009 | $ 26 | $ 1,718,234 | $ (85,608) | $ 1,646,661 | |||
Balances at end of period (in shares) at Mar. 31, 2022 | 26,107,769 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash flows from operating activities | ||
Net income | $ 35,050 | $ 25,927 |
Adjustments to reconcile net income to net cash provided by operating activities | ||
Depreciation and amortization | 13,868 | 8,839 |
Loss on exchange of Exchangeable Senior Notes | 118 | |
Other non-cash adjustments | 70 | 22 |
Stock-based compensation | 4,379 | 2,101 |
Amortization of discounts on short-term investments | (46) | (116) |
Amortization of debt discount and issuance costs | 365 | 525 |
Changes in assets and liabilities | ||
Other assets, net | 812 | 80 |
Accounts payable, accrued expenses and other liabilities | 1,272 | (2,283) |
Rent received in advance and tenant security deposits | 3,996 | 7,513 |
Net cash provided by operating activities | 59,884 | 42,608 |
Cash flows from investing activities | ||
Purchases of investments in real estate | (47,820) | (28,390) |
Reimbursements of tenant improvements and construction funding | (129,395) | (64,160) |
Funding of construction loan and other investments | (18,279) | |
Deposits in escrow for acquisitions | (600) | (550) |
Purchases of short-term investments | (209,932) | |
Maturities of short-term investments | 115,000 | 290,000 |
Net cash used in investing activities | (81,094) | (13,032) |
Cash flows from financing activities | ||
Issuance of common stock, net of offering costs | 21,103 | |
Dividends paid to common stockholders | (38,509) | (29,727) |
Dividends paid to preferred stockholders | (338) | (338) |
Taxes paid related to net share settlement of equity awards | (2,441) | (3,384) |
Net cash used by financing activities | (20,185) | (33,449) |
Net decrease in cash, cash equivalents and restricted cash | (41,395) | (3,873) |
Cash, cash equivalents and restricted cash, beginning of period | 86,419 | 126,006 |
Cash, cash equivalents and restricted cash, end of period | 45,024 | 122,133 |
Supplemental disclosure of cash flow information: | ||
Cash paid during the period for interest | 626 | 2,695 |
Supplemental disclosure of non-cash investing and financing activities: | ||
Accrual for reimbursements of improvements and construction funding | 43,802 | 66,074 |
Deposits applied for acquisitions | 25 | 200 |
Accrual for common and preferred stock dividends declared | 46,168 | $ 31,998 |
Accrual for stock issuance costs | 126 | |
Exchange of Exchangeable Senior Notes for common stock | 23,870 | |
Operating lease liability for obtaining right of use asset | $ 1,017 |
Organization
Organization | 3 Months Ended |
Mar. 31, 2022 | |
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 industrial properties leased to experienced, state-licensed operators for their regulated 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, real estate 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 | 3 Months Ended |
Mar. 31, 2022 | |
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. 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, 2021. Any references to square footage or occupancy percentage, and any amounts derived from these values in these notes to the condensed 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, 2022. Federal Income Taxes. Use of Estimates. Reportable Segment. Acquisition of Real Estate Properties. The fair value of acquired in-place leases is derived based on our assessment of estimated lost revenue and costs incurred for the period required to lease the “assumed vacant” property to the occupancy level when purchased. The amounts recorded for acquired in-place leases are reflected as in-place lease intangible assets, net on our condensed consolidated balance sheets and are amortized on a straight-line basis as a component of depreciation and amortization expense over the remaining term of the applicable leases. The fair value of the above-market component of an acquired in-place operating lease is based upon the present value (calculated using a market discount rate) of the difference between (i) the contractual rents to be paid pursuant to the lease over its remaining non-cancellable lease term and (ii) our estimate of the rents that would be paid using fair market rental rates and rent escalations at the date of acquisition measured over the remaining non-cancellable term of the lease. The amount recorded for one above-market operating lease is included in other assets, net on our condensed consolidated balance sheets and is amortized on a straight-line basis as a reduction of rental revenue over the remaining term of the applicable lease. Cost Capitalization and Depreciation. Amounts capitalized are depreciated over estimated useful lives determined by management. We depreciate buildings and improvements and tenant improvements based on our evaluation of the estimated useful life of each specific asset, not to exceed 40 years. For the three months ended March 31, 2022 and 2021, we recognized depreciation expense of approximately $13.7 million and $8.8 million, respectively, which are included in depreciation and amortization expense in our condensed consolidated statements of income. We depreciate office equipment and furniture and fixtures over estimated useful lives ranging from three Determining whether expenditures meet the criteria for capitalization and the assignment of depreciable lives requires management to exercise significant judgment. Project costs that are clearly associated with the acquisition and development or redevelopment of a real estate project, for which we are the accounting owner, are capitalized as a cost of that project. Expenditures that meet one or more of the following criteria generally qualify for capitalization: ● the expenditure provides benefit in future periods; and ● the expenditure extends the useful life of the asset beyond our original estimates Provision for Impairment. 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 months ended March 31, 2022 and 2021. Revenue Recognition. Construction Loan. Cash and Cash Equivalents Restricted Cash Investments. Exchangeable Notes. In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. ASU 2020-06 simplifies the accounting for convertible debt by eliminating the beneficial conversion and cash conversion accounting models, and convertible debt proceeds, unless issued with a substantial premium or an embedded conversion feature, will no longer be allocated between debt and equity components. ASU 2020-06 also updates the earnings per share calculation and requires entities to assume share settlement when the convertible debt can be settled in cash or shares. We adopted ASU 2020-06 on January 1, 2022 and recognized a cumulative-effect adjustment of approximately $728,000 to the opening balance of retained earnings and derecognized approximately $1.3 million of the remaining equity component relating to the outstanding principal balance of our Exchangeable Senior Notes at the date of adoption. Deferred Financing Costs. Stock-Based Compensation. Lease Accounting. As lessee, we recognized a liability to account for our future obligations and a corresponding right-of-use asset related to our corporate office lease. The lease liability was initially measured based on the present value of the future lease payments discounted using the estimated incremental borrowing rate of 7.25%, which was the interest rate that we estimate we would have to pay to borrow on a collateralized basis over a similar term for an amount equal to the lease payments. In November 2021, we amended the lease to extend the term from April 2025 to January 2027 in connection with an expansion of the leased space which did not commence until February 2022. As a result of the lease amendment, we re-measured the lease liability relating to the existing leased space and measured the lease liability relating to the expansion space based on the present value of the respective future lease payments (excluding the extension option that we are not reasonably certain to exercise), discounted using the estimated incremental borrowing rate of 5.5%, which was the interest rate that we estimate we would have to pay to borrow on a collateralized basis over a similar term for an amount equal to the lease payments. Subsequently, the lease liability is accreted by applying a discount rate established at the lease commencement date to the lease liability balance as of the beginning of the period and is reduced by the payments made during the period. The right-of-use asset is measured based on the corresponding lease liability. We did not incur any initial direct leasing costs and any other consideration exchanged with the landlord prior to the commencement of the lease. Subsequently, the right-of-use asset is amortized on a straight-line basis during the lease term. For the three months ended March 31, 2022 and 2021, we recognized office lease expense of approximately $101,000 and $57,000, respectively, which are included in general and administrative expense in our condensed consolidated statements of income. For the three months ended March 31, 2022 and 2021, amounts paid and classified as operating activities in our condensed consolidated statements of cash flows for the office lease were approximately $60,000 and $59,000, respectively. As lessor, for each of our real estate transactions involving the leaseback of the related property to the seller or affiliates of the seller, we determine whether these transactions qualify as sale and leaseback transactions under the accounting guidance. For these transactions, we consider various inputs and assumptions including, but not necessarily limited to, lease terms, renewal options, discount rates, and other rights and provisions in the purchase and sale agreement, lease and other documentation to determine whether control has been transferred to the Company or remains with the lessee. A transaction involving a sale leaseback will be treated as a purchase of a real estate property if it is considered to transfer control of the underlying asset from the lessee. A lease will be classified as direct-financing if risks and rewards are conveyed without the transfer of control and will be classified as a sales-type lease if control of the underlying asset is transferred to the lessee. Otherwise, the lease is treated as an operating lease. These criteria also include estimates and assumptions regarding the fair value of the leased facilities, minimum lease payments, the economic useful life of the facilities, the existence of a purchase option, and certain other terms in the lease agreements. The lease accounting guidance requires accounting for a transaction as a financing in a sale leaseback when the seller-lessee is provided an option to purchase the property from the landlord at the tenant’s option. Substantially all of our leases continued to be classified as operating leases and we continue to record revenue for each of our properties on a cash basis. Our tenant reimbursable revenue and property expenses continue to be presented on a gross basis as rental revenue and as property expenses, respectively, on our consolidated statements of income. Property taxes paid directly by the lessee to a third party continue to be excluded from our consolidated financial statements. Lease amendments are evaluated to determine if the modification grants the lessee an additional right-of-use not included in the original lease and if the lease payments increase commensurate with the standalone price of the additional right-of-use, adjusted for the circumstances of the particular contract. If both conditions are present, the lease amendment is accounted for as a new lease that is separate from the original lease. Our leases generally contain options to extend the lease terms at the prevailing market rate or at the expiring rental rate at the time of expiration. Certain of our leases provide the lessee with a right of first refusal or right of first offer in the event we market the leased property for sale. Concentration of Credit Risk The following table sets forth the five tenants in our portfolio that represented the largest percentage of our total rental revenues for the three months ended March 31, 2022 and 2021, including tenant reimbursements: For the Three Months Ended March 31, 2022 Percentage of Number of Rental Leases Revenue PharmaCann Inc. 11 14 % SH Parent, Inc. ("Parallel") 4 11 % Ascend Wellness Holdings, Inc. 4 9 % Kings Garden Inc. 7 8 % Columbia Care, Inc. 21 7 % For the Three Months Ended March 31, 2021 Percentage of Number of Rental Leases Revenue PharmaCann Inc. 5 13 % Ascend Wellness Holdings, LLC 3 10 % Cresco Labs Inc. 5 9 % Curaleaf Holdings, Inc. 4 8 % Green Thumb Industries, Inc. 3 7 % In each of the tables above, these leases include leases with affiliates of each entity, for which the entity has provided a corporate guaranty. As of March 31, 2022 and December 31, 2021, none of our properties individually represented more than 5% 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 March 31, 2022, we had cash accounts in excess of FDIC insured limits. We have not experienced any losses in such accounts. |
Common Stock
Common Stock | 3 Months Ended |
Mar. 31, 2022 | |
Common Stock. | |
Common Stock | 3. Common Stock As of March 31, 2022, the Company was authorized to issue up to 50,000,000 shares of common stock, par value $0.001 per share, and there were 26,107,769 shares of common stock issued and outstanding. We are party to equity distribution agreements with certain sales agents, pursuant to which we may offer and sell from time to time through an “at-the-market” offering program (the “ATM Program”) up to $500.0 million in shares of our common stock. During the three months ended March 31, 2022, we sold 117,023 shares of our common stock for net proceeds of approximately $21.1 million under the ATM Program, which includes the payment of approximately $434,000 to one sales agent as commission for such sales. During the three months ended March 31, 2022, we issued 365,842 shares of our common stock upon exchange by holders of approximately $23.9 million of outstanding principal amount of our Exchangeable Senior Notes. |
Preferred Stock
Preferred Stock | 3 Months Ended |
Mar. 31, 2022 | |
Preferred Stock. | |
Preferred Stock | 4. Preferred Stock As of March 31, 2022, 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 | 3 Months Ended |
Mar. 31, 2022 | |
Dividends | |
Dividends | 5. Dividends The following table describes the dividends declared by the Company during the three months ended March 31, 2022: Amount Dividend Dividend Declaration Date Security Class Per Share Period Covered Paid Date Amount (In thousands) March 14, 2022 Common stock $ 1.75 January 1, 2022 to March 31, 2022 April 14, 2022 $ 45,830 March 14, 2022 Series A preferred stock $ 0.5625 January 15, 2022 to April 14, 2022 April 14, 2022 $ 338 |
Investments in Real Estate
Investments in Real Estate | 3 Months Ended |
Mar. 31, 2022 | |
Investments in Real Estate | |
Investments in Real Estate | 6. Investments in Real Estate Acquisitions The Company acquired the following properties during the three months ended March 31, 2022 (dollars in thousands): Rentable Square Purchase Transaction Property Market Closing Date Feet (1) Price Costs Total 4Front MA Massachusetts January 28, 2022 57,000 $ 16,000 $ 20 $ 16,020 (2) Ascend NJ New Jersey February 10, 2022 114,000 35,400 8 35,408 (3) Verano PA Pennsylvania March 23, 2022 3,000 2,750 57 2,807 Kings Garden CA California March 25, 2022 23,000 8,158 7 8,165 (4) Total 197,000 $ 62,308 $ 92 $ 62,400 (5) (1) Includes expected rentable square feet at completion of construction of certain properties. (2) The acquisition of the property did not satisfy the requirements for sale-leaseback accounting and therefore, the transaction is recognized as a note receivable and is included in other assets, net on our condensed consolidated balance sheet. (3) The tenant is expected to complete improvements at the property, for which we agreed to provide reimbursement of up to $4.6 million. (4) The purchase price includes $1.8 million holdback held in an escrow account, which is subject to distribution to the seller upon seller’s completion of certain improvements at the property, which is included in restricted cash on our condensed consolidated balance sheet. (5) Approximately $16.0 million was included in other assets; $1.8 million was included in restricted cash; approximately $6.3 million was allocated to land; approximately $38.0 million was allocated to building and improvements; and approximately $265,000 was allocated to an in-place lease. The properties acquired during the three months ended March 31, 2022 generated approximately $532,000 of rental revenues (including tenant reimbursements) and approximately $388,000 of net operating income after deducting property and depreciation expenses, during that period. The properties acquired during the three months ended March 31, 2021 generated approximately $911,000 of rental revenue (including tenant reimbursements) and approximately $743,000 of net operating income after deducting property and depreciation expenses, during that period. During the three months ended March 31, 2022, the acquisition of the property which did not satisfy the requirements for sale-leaseback accounting generated approximately $298,000 of interest revenue, which is included in other revenue on our condensed consolidated statements of income. In addition, we acquired additional land adjacent to one of our existing properties in Pennsylvania on February 2, 2022. In connection with the acquisition, we amended the lease for the existing property to incorporate this land into the leased area and reduced the existing improvement allowance under the lease by an amount equal to the purchase price for the land, which was approximately $3.3 million. Acquired In-Place Lease Intangible Assets In-place lease intangible assets and related accumulated amortization as of March 31, 2022 and December 31, 2021 is as follows (in thousands): March 31, 2022 December 31, 2021 In-place lease intangible assets $ 9,446 $ 9,181 Accumulated amortization (231) (33) In-place lease intangible assets, net $ 9,215 $ 9,148 Amortization of in-place lease intangible assets classified in depreciation and amortization expense in our condensed consolidated statements of income was approximately $198,000 for the three months ended March 31, 2022. The weighted-average amortization period of the value of acquired in-place leases was approximately 11.4 years, and the estimated annual amortization of the value of the acquired in-place leases as of March 31, 2022 is as follows (in thousands): Year Amount 2022 (nine months ending December 31) $ 613 2023 817 2024 817 2025 817 2026 817 Thereafter 5,334 Total $ 9,215 Above-Market Lease The above-market lease and related accumulated amortization included in other assets, net on our condensed consolidated balance sheets as of March 31, 2022 and December 31, 2021 is as follows (in thousands): March 31, 2022 December 31, 2021 Above-market lease $ 1,054 $ 1,054 Accumulated amortization (27) (4) Above-market lease, net $ 1,027 $ 1,050 The above-market lease is amortized on a straight-line basis as a reduction to rental revenue over the remaining lease term of approximately 11.2 years. For the three months ended March 31, 2022, the amortization of the above-market lease was approximately $23,000. Lease Amendments In February 2022, we amended our lease with Green Peak Industries, Inc. at one of our Michigan properties, increasing the improvement allowance under the lease by $18.0 million to a total of approximately $47.5 million, which also resulted in a corresponding adjustment to the base rent for the lease at the property. In March 2022, we amended our lease with Holistic Industries Inc. at one of our Michigan properties, increasing the improvement allowance under the lease by $3.5 million to a total of $22.3 million, which also resulted in a corresponding adjustment to the base rent for the lease at the property. In March 2022, we amended our lease with a subsidiary of Ascend Wellness Holdings, Inc. at one of our Michigan properties, increasing the improvement allowance under the lease by $4.4 million to a total of $19.4 million, which also resulted in a corresponding adjustment to the base rent for the lease at the property. In March 2022, we amended our lease with a subsidiary of Ascend Wellness Holdings, Inc. at one of our Massachusetts properties, increasing the improvement allowance under the lease by $14.9 million to a total of approximately $37.2 million, which also resulted in a corresponding adjustment to the base rent for the lease at the property. Including all of our properties, during the three months ended March 31, 2022, we capitalized costs of approximately $126.9 million and funded approximately $129.4 million relating to improvements and construction activities at our properties. Future contractual minimum rent (including base rent and property management fees) under the operating leases as of March 31, 2022 for future periods is summarized as follows (in thousands): Year Contractual Minimum Rent 2022 (nine months ending December 31) $ 203,721 2023 283,242 2024 291,552 2025 300,208 2026 309,155 Thereafter 4,434,845 Total $ 5,822,723 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2022 | |
Debt | |
Debt | 7. Debt Exchangeable Senior Notes As of March 31, 2022, our Operating Partnership had outstanding approximately $9.5 million principal amount of 3.75% Exchangeable Senior Notes due 2024 (the “Exchangeable Senior 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 March 31, 2022 was 15.42947 shares of our common stock per $1,000 principal amount of Notes and the exchange price at March 31, 2022 was approximately $64.81 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 on March 15 and September 15 of each year 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. At March 31, 2022, the if-exchanged value of the Exchangeable Senior Notes exceeded the principal amount by approximately $20.6 million. During the three months ended March 31, 2022, we issued 365,842 shares of our common stock upon exchanges by holders of approximately $23.9 million of outstanding principal amount of our Exchangeable Senior Notes and recognized a loss on the exchanges totaling approximately $118,000 , resulting from the difference between the fair value and carrying value of the debt as of the date of the exchange. The issuance of the shares pursuant to the exchanges resulted in a non-cash increase to our additional paid-in capital account of approximately $23.7 million. The following table details our interest expense related to the Exchangeable Senior Notes (in thousands): For the Three Months Ended March 31, 2022 2021 Cash coupon $ 276 $ 1,348 Amortization of debt discount — 282 Amortization of issuance cost 58 243 Total interest expense $ 334 $ 1,873 The following table details the carrying value of our Exchangeable Senior Notes (in thousands): At March 31, 2022 At December 31, 2021 Principal amount $ 9,503 $ 33,373 Unamortized discount — (612) Unamortized issuance cost (134) (529) Carrying value $ 9,369 $ 32,232 Accrued interest payable for the Exchangeable Senior Notes as of March 31, 2022 and December 31, 2021 was approximately $15,000 and $365,000, respectively, and is included in accounts payable and accrued expenses on our condensed consolidated balance sheets. Notes due 2026 On May 25, 2021, our Operating Partnership issued $300.0 million aggregate principal amount of its 5.50% Senior Notes due 2026 (the “Notes due 2026”). The Notes due 2026 are senior unsecured obligations of our Operating Partnership, are fully and unconditionally guaranteed by us and our Operating Partnership’s subsidiaries and rank equally in right of payment with all of the Operating Partnership’s existing and future senior unsecured indebtedness, including the Exchangeable Senior Notes. However, the Notes due 2026 are effectively subordinated to any of the Company’s, the Operating Partnership’s and the Operating Partnership’s subsidiaries’ future secured indebtedness to the extent of the value of the assets securing such indebtedness. Interest at a rate of 5.50% per year is payable on May 15 and November 15 of each year, beginning on November 15, 2021, until the stated maturity date of May 25, 2026. The terms of the Notes due 2026 are governed by an indenture, dated May 25, 2021, among the Operating Partnership, as issuer, the Company and the Operating Partnership’s subsidiaries, as guarantors, TMI Trust Company, as trustee (as successor-in-interest to GLAS Trust Company LLC), and Securities Transfer Corporation, as registrar (as successor-in-interest to GLAS Trust Company LLC). The terms of the indenture provide that if the debt rating on the Notes due 2026 is downgraded or withdrawn entirely, interest on the Notes due 2026 will increase to a range of 6.0% to 6.5% based on such debt rating. In connection with the issuance of the Notes due 2026, we recorded approximately $6.8 million of issuance costs, which are being amortized using the effective interest method and recognized as non-cash interest expense over the term of the Notes due 2026. The following table details our interest expense related to the Notes due 2026 (in thousands): For the Three Months Ended March 31, 2022 Cash coupon $ 4,125 Amortization of issuance cost 307 Total interest expense $ 4,432 The following table details the carrying value of our Notes due 2026 (in thousands): At March 31, 2022 December 31, 2021 Principal amount $ 300,000 $ 300,000 Unamortized issuance cost (5,833) (6,140) Carrying value $ 294,167 $ 293,860 The Operating Partnership may redeem some or all of the notes at its option at any time at the applicable redemption price. If the notes are redeemed prior to February 25, 2026, the redemption price will be equal to 100% of the principal amount of the notes being redeemed, plus a make-whole premium and accrued and unpaid interest thereon to, but excluding, the applicable redemption date. If the notes are redeemed on or after February 25, 2026, the redemption price will be equal to 100% of the principal amount of the notes being redeemed, plus accrued and unpaid interest thereon to, but excluding, the applicable redemption date. The terms of the indenture for the Notes due 2026 require compliance with various financial covenants, including minimum level of debt service coverage and limits on the amount of total leverage and secured debt maintained by the Operating Partnership. Management believes that it was in compliance with those covenants as of March 31, 2022. Accrued interest payable for the Notes due 2026 as of March 31, 2022 and December 31, 2021 was approximately $6.2 million and $2.1 million, respectively, and is included in accounts payable and accrued expenses on our condensed consolidated balance sheets. The following table summarizes the principal payments on our outstanding indebtedness as of March 31, 2022 (in thousands): Payments Due by Year Amount 2022 (nine months ended December 31) $ — 2023 — 2024 9,503 2025 — 2026 300,000 Thereafter — Total $ 309,503 |
Net Income Per Share
Net Income Per Share | 3 Months Ended |
Mar. 31, 2022 | |
Net Income Per Share | |
Net Income Per Share | 8. Net Income Per Share Grants of restricted stock and restricted stock units (“RSUs”) 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 March 31, 2022, all of the Company’s participating securities received dividends or dividend equivalents at an equal dividend rate per share or unit. As a result, distributions to participating securities for the three months ended March 31, 2022 and 2021 have been included in net income attributable to common stockholders to calculate net income per basic and diluted share. The 507,181 and 2,170,959 shares necessary to settle the Exchangeable Senior Notes on the if-exchanged method basis were dilutive for the three months ended March 31, 2022 and 2021, respectively, and were included in the computation of diluted earnings per share. For the three months ended March 31, 2022, 102,333 shares issuable upon vesting of performance share units (“PSUs”) granted to certain employees were included in dilutive securities, as the performance thresholds for vesting of these PSUs were met as measured as of March 31, 2022. For the three months ended March 31, 2021, the PSUs granted to certain employees were not included in dilutive securities as of March 31, 2021 as the performance thresholds for vesting of any performance share units were not met (see Note 10 for further discussion of the PSUs). Computations of net income per basic and diluted share (in thousands, except share and per share data) were as follows: For the Three Months Ended March 31, 2022 2021 Net income $ 35,050 $ 25,927 Preferred stock dividends (338) (338) Distribution to participating securities (202) (126) Net income attributable to common stockholders used to compute net income per share - basic 34,510 25,463 Dilutive effect of Exchangeable Senior Notes 334 1,873 Net income attributable to common stockholders used to compute net income per share - diluted $ 34,844 $ 27,336 Weighted-average common shares outstanding: Basic 25,620,253 23,889,398 Restricted stock and RSUs 110,457 92,194 PSUs 102,333 — Dilutive effect of Exchangeable Senior Notes 507,181 2,170,959 Diluted 26,340,224 26,152,551 Net income attributable to common stockholders per share: Basic $ 1.35 $ 1.07 Diluted $ 1.32 $ 1.05 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2022 | |
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 and approximate fair value of financial instruments at March 31, 2022 and December 31, 2021 (in thousands): At March 31, 2022 At December 31, 2021 Carrying Value Fair Value Carrying Value Fair Value Investments (1) $ 209,935 $ 209,507 $ 324,889 $ 324,772 Exchangeable Senior Notes (2) $ 9,369 $ 29,451 $ 32,232 $ 134,270 Notes due 2026 (2) $ 294,167 $ 300,255 $ 293,860 $ 318,486 (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 and Notes due 2026 were trading in the private market. As of March 31, 2022 and December 31, 2021, cash equivalent instruments consisted of $32.5 million and $72.0 million, respectively, 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, obligations of the U.S. government with an original maturity at the time of purchase of less than or equal to three months, construction loan receivable, accounts payable, accrued expenses and other liabilities approximate their 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, 2022 | |
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. Any equity awards that lapse, expire, terminate, are canceled or are forfeited (including forfeitures in connection with satisfaction of tax withholdings obligations of the recipient) are re-credited to the 2016 Plan’s reserve for future issuance. The 2016 Plan automatically terminates on the date which is ten years following the effective date of the 2016 Plan. A summary of the restricted stock activity under the 2016 Plan and related information for the three months ended March 31, 2022 is included in the table below: Weighted- Unvested Average Restricted Grant Date Fair Stock Value Balance at December 31, 2021 37,767 $ 92.49 Granted 21,645 $ 215.69 Vested (16,064) $ 80.47 Forfeited (1) (9,282) $ 56.94 Balance at March 31, 2022 34,066 $ 186.12 (1) Shares that were forfeited to cover the employees’ tax withholding obligation upon vesting . The remaining unrecognized compensation cost of approximately $5.5 million for restricted stock awards is expected to be recognized over a weighted-average amortization period of approximately 2.5 years as of March 31, 2022. The fair value of restricted stock that vested during the three months ended March 31, 2022 was approximately $6.7 million. The following table summarizes our RSU activity for the three months ended March 31, 2022. RSUs are issued as part of the Innovative Industrial Properties, Inc. Nonqualified Deferred Compensation Plan (the “Deferred Compensation Plan”), which allows a select group of management and our non-employee directors to defer receiving certain of their cash and equity-based compensation. RSUs are subject to vesting conditions of the Deferred Compensation Plan and have the same economic rights as shares of restricted stock under the 2016 Plan: Weighted-Average Restricted Grant Date Fair Stock Units Value Balance at December 31, 2021 60,326 $ 120.24 Granted 20,853 $ 215.84 Balance at March 31, 2022 81,179 $ 144.79 The remaining unrecognized compensation cost of approximately $7.2 million for RSU awards is expected to be recognized over an amortization period of approximately 2.3 years as of March 31, 2022. In January 2021, we issued 70,795 “target” PSUs to a select group of officers, which vest and are settled in shares of common stock (“2021 PSU Award Shares”) based on the Company’s total stockholder return over a period commencing on January 11, 2021 and ending on December 31, 2023 (the “ 2021 PSU Performance Period”) relative to two different comparator groups of companies. In January 2022, we issued 102,641 “target” PSUs to a select group of officers, which vest and are settled in shares of common stock (referred to herein together with the 2021 PSU Award Shares as the “Award Shares”) based on the Company’s total stockholder return over a period commencing on January 11, 2022 and ending on December 31, 2024 (referred to herein together with the 2021 PSU Performance Period as the “Performance Periods”) relative to two different comparator groups of companies. At the end of the applicable Performance Periods, a recipient of PSUs may receive as few as zero Award Shares or as many as 150% of the number of target PSUs in Award Shares, plus deemed dividends. PSUs will also be reduced as necessary so the total value at the vesting date does not exceed of the grant date PSU price, and if the Company’s absolute total stockholder return during the applicable Performance Periods is negative, the payout of Award Shares is capped at the target number of PSUs, notwithstanding the Company’s outperformance of comparator groups. No dividends are paid to the recipient during the applicable Performance Periods. At the end of the applicable Performance Periods, if the Company’s total stockholder return is such that the recipient earns Award Shares, the recipient will receive additional shares of common stock relating to dividends deemed to have been paid and reinvested on the Award Shares. The recipient of the Award Shares may not sell, transfer or otherwise dispose of the Award Shares for a one-year period following the vesting date of the Award Shares. The grant date fair values of the PSUs granted in January 2021 and January 2022 were $12.0 million and $20.0 million, respectively. The fair values were calculated using a Monte Carlo simulation pricing model based on the following assumptions: 2021 PSU Award 2022 PSU Award Fair Value Assumptions Fair Value Assumptions Valuation date January 6, 2021 January 7, 2022 Fair value per share on valuation date $169.51 $194.86 Expected term 3 years 3 years Expected price volatility 57.64% 55.99% Risk-free interest rate 0.20% 1.17% Discount for post vesting restriction 12.44% 12.22% The expected share price volatility was based on the historical volatility of our shares of common stock over a period of approximately the applicable Performance Periods. The risk-free interest rate was based on the zero-coupon risk-free interest rate derived from the Treasury Constant Maturities yield curve on the applicable valuation date. The discount for the post vesting restriction was estimated using the Finnerty model. Stock-based compensation for market-based PSU awards is based on the grant date fair value of the equity awards and is recognized over the applicable Performance Period. For the three months ended March 31, 2022, we recognized stock-based compensation expense of $2.7 million relating to PSU awards. As of March 31, 2022, the remaining unrecognized compensation cost of approximately $25.3 million relating to PSU awards is expected to be recognized over the remaining Performance Period of approximately 2.5 years. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies | |
Commitments and Contingencies | 11. Commitments and Contingencies Office Lease Year Amount 2022 (nine months ending December 31) $ 342 2023 496 2024 511 2025 526 2026 543 Thereafter 45 Total future contractual lease payments 2,463 Effect of discounting (338) Office lease liability $ 2,125 Improvement Allowances Construction Loan. Environmental Matters. Litigation We may, from time to time, be a party to other legal proceedings, which arise in the ordinary course of our business. Although the results of these proceedings, claims, inquiries, and investigations cannot be predicted with certainty, we do not believe that the final outcome of these matters is reasonably likely to have a material adverse effect on our business, financial condition, or results of operations. Regardless of final outcomes, however, any such proceedings, claims, inquiries, and investigations may nonetheless impose a significant burden on management and employees and may come with significant defense costs or unfavorable preliminary and interim rulings. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2022 | |
Subsequent Events | |
Subsequent Events | 12. Subsequent Events Investments Subsequent to March 31, 2022, we acquired the following properties and made the following additional funds available to a tenant for improvements at one of our existing properties (dollars in thousands): Rentable Square Purchase Improvement Property Market Closing Date Feet (1) Price Commitments Total (2) MCP MD Maryland April 13, 2022 84,000 $ 25,000 $ — $ 25,000 Trulieve AZ Arizona April 27, 2022 17,000 5,238 — 5,238 PharmaCann NY New York April 27, 2022 98,000 — 45,000 45,000 (3) Total 199,000 $ 30,238 $ 45,000 $ 75,238 (1) Includes expected rentable square feet at completion of construction. (2) Excludes transaction costs. (3) The amount relates to amendments to our lease and development agreement which provides for an increase in the construction funding at one of our New York properties of up to $45.0 million to a total of $78.5 million, and also resulted in a corresponding adjustment to the base rent for the lease at the property. The tenant is expected to construct approximately 98,000 square feet of additional industrial space at the property. Capital Activity Subsequent to March 31, 2022, in April 2022, we issued 1,815,790 shares of common stock, including the exercise in full of the underwriters’ option to purchase an additional 236,842 shares, resulting in gross proceeds of approximately $345.0 million. Subsequent to March 31, 2022, we issued 47,059 shares of our common stock upon exchanges by a holder of approximately $3.1 million of outstanding principal amount of our Exchangeable Senior Notes. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies and Procedures and Recent Accounting Pronouncements (Policies) | 3 Months Ended |
Mar. 31, 2022 | |
Summary of Significant Accounting Policies and Procedures and Recent Accounting Pronouncements | |
Basis of Presentation | Basis of Presentation. 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, 2021. Any references to square footage or occupancy percentage, and any amounts derived from these values in these notes to the condensed 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, 2022. |
Federal Income Taxes | Federal Income Taxes. |
Use of Estimates | Use of Estimates. |
Reportable Segment | Reportable Segment. |
Acquisition of Real Estate Properties | Acquisition of Real Estate Properties. The fair value of acquired in-place leases is derived based on our assessment of estimated lost revenue and costs incurred for the period required to lease the “assumed vacant” property to the occupancy level when purchased. The amounts recorded for acquired in-place leases are reflected as in-place lease intangible assets, net on our condensed consolidated balance sheets and are amortized on a straight-line basis as a component of depreciation and amortization expense over the remaining term of the applicable leases. The fair value of the above-market component of an acquired in-place operating lease is based upon the present value (calculated using a market discount rate) of the difference between (i) the contractual rents to be paid pursuant to the lease over its remaining non-cancellable lease term and (ii) our estimate of the rents that would be paid using fair market rental rates and rent escalations at the date of acquisition measured over the remaining non-cancellable term of the lease. The amount recorded for one above-market operating lease is included in other assets, net on our condensed consolidated balance sheets and is amortized on a straight-line basis as a reduction of rental revenue over the remaining term of the applicable lease. |
Cost Capitalization and Depreciation | Cost Capitalization and Depreciation. Amounts capitalized are depreciated over estimated useful lives determined by management. We depreciate buildings and improvements and tenant improvements based on our evaluation of the estimated useful life of each specific asset, not to exceed 40 years. For the three months ended March 31, 2022 and 2021, we recognized depreciation expense of approximately $13.7 million and $8.8 million, respectively, which are included in depreciation and amortization expense in our condensed consolidated statements of income. We depreciate office equipment and furniture and fixtures over estimated useful lives ranging from three Determining whether expenditures meet the criteria for capitalization and the assignment of depreciable lives requires management to exercise significant judgment. Project costs that are clearly associated with the acquisition and development or redevelopment of a real estate project, for which we are the accounting owner, are capitalized as a cost of that project. Expenditures that meet one or more of the following criteria generally qualify for capitalization: ● the expenditure provides benefit in future periods; and ● the expenditure extends the useful life of the asset beyond our original estimates |
Provision for Impairment | Provision for Impairment. 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 months ended March 31, 2022 and 2021. |
Revenue Recognition | Revenue Recognition. |
Construction Loan | Construction Loan. |
Cash and Cash Equivalents | Cash and Cash Equivalents |
Restricted Cash | Restricted Cash |
Investments | Investments. |
Exchangeable Notes | Exchangeable Notes. In August 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity. ASU 2020-06 simplifies the accounting for convertible debt by eliminating the beneficial conversion and cash conversion accounting models, and convertible debt proceeds, unless issued with a substantial premium or an embedded conversion feature, will no longer be allocated between debt and equity components. ASU 2020-06 also updates the earnings per share calculation and requires entities to assume share settlement when the convertible debt can be settled in cash or shares. We adopted ASU 2020-06 on January 1, 2022 and recognized a cumulative-effect adjustment of approximately $728,000 to the opening balance of retained earnings and derecognized approximately $1.3 million of the remaining equity component relating to the outstanding principal balance of our Exchangeable Senior Notes at the date of adoption. |
Deferred Financing Costs | Deferred Financing Costs. |
Stock-Based Compensation | Stock-Based Compensation. |
Lease Accounting | Lease Accounting. As lessee, we recognized a liability to account for our future obligations and a corresponding right-of-use asset related to our corporate office lease. The lease liability was initially measured based on the present value of the future lease payments discounted using the estimated incremental borrowing rate of 7.25%, which was the interest rate that we estimate we would have to pay to borrow on a collateralized basis over a similar term for an amount equal to the lease payments. In November 2021, we amended the lease to extend the term from April 2025 to January 2027 in connection with an expansion of the leased space which did not commence until February 2022. As a result of the lease amendment, we re-measured the lease liability relating to the existing leased space and measured the lease liability relating to the expansion space based on the present value of the respective future lease payments (excluding the extension option that we are not reasonably certain to exercise), discounted using the estimated incremental borrowing rate of 5.5%, which was the interest rate that we estimate we would have to pay to borrow on a collateralized basis over a similar term for an amount equal to the lease payments. Subsequently, the lease liability is accreted by applying a discount rate established at the lease commencement date to the lease liability balance as of the beginning of the period and is reduced by the payments made during the period. The right-of-use asset is measured based on the corresponding lease liability. We did not incur any initial direct leasing costs and any other consideration exchanged with the landlord prior to the commencement of the lease. Subsequently, the right-of-use asset is amortized on a straight-line basis during the lease term. For the three months ended March 31, 2022 and 2021, we recognized office lease expense of approximately $101,000 and $57,000, respectively, which are included in general and administrative expense in our condensed consolidated statements of income. For the three months ended March 31, 2022 and 2021, amounts paid and classified as operating activities in our condensed consolidated statements of cash flows for the office lease were approximately $60,000 and $59,000, respectively. As lessor, for each of our real estate transactions involving the leaseback of the related property to the seller or affiliates of the seller, we determine whether these transactions qualify as sale and leaseback transactions under the accounting guidance. For these transactions, we consider various inputs and assumptions including, but not necessarily limited to, lease terms, renewal options, discount rates, and other rights and provisions in the purchase and sale agreement, lease and other documentation to determine whether control has been transferred to the Company or remains with the lessee. A transaction involving a sale leaseback will be treated as a purchase of a real estate property if it is considered to transfer control of the underlying asset from the lessee. A lease will be classified as direct-financing if risks and rewards are conveyed without the transfer of control and will be classified as a sales-type lease if control of the underlying asset is transferred to the lessee. Otherwise, the lease is treated as an operating lease. These criteria also include estimates and assumptions regarding the fair value of the leased facilities, minimum lease payments, the economic useful life of the facilities, the existence of a purchase option, and certain other terms in the lease agreements. The lease accounting guidance requires accounting for a transaction as a financing in a sale leaseback when the seller-lessee is provided an option to purchase the property from the landlord at the tenant’s option. Substantially all of our leases continued to be classified as operating leases and we continue to record revenue for each of our properties on a cash basis. Our tenant reimbursable revenue and property expenses continue to be presented on a gross basis as rental revenue and as property expenses, respectively, on our consolidated statements of income. Property taxes paid directly by the lessee to a third party continue to be excluded from our consolidated financial statements. Lease amendments are evaluated to determine if the modification grants the lessee an additional right-of-use not included in the original lease and if the lease payments increase commensurate with the standalone price of the additional right-of-use, adjusted for the circumstances of the particular contract. If both conditions are present, the lease amendment is accounted for as a new lease that is separate from the original lease. Our leases generally contain options to extend the lease terms at the prevailing market rate or at the expiring rental rate at the time of expiration. Certain of our leases provide the lessee with a right of first refusal or right of first offer in the event we market the leased property for sale. |
Concentration of Credit Risk | Concentration of Credit Risk The following table sets forth the five tenants in our portfolio that represented the largest percentage of our total rental revenues for the three months ended March 31, 2022 and 2021, including tenant reimbursements: For the Three Months Ended March 31, 2022 Percentage of Number of Rental Leases Revenue PharmaCann Inc. 11 14 % SH Parent, Inc. ("Parallel") 4 11 % Ascend Wellness Holdings, Inc. 4 9 % Kings Garden Inc. 7 8 % Columbia Care, Inc. 21 7 % For the Three Months Ended March 31, 2021 Percentage of Number of Rental Leases Revenue PharmaCann Inc. 5 13 % Ascend Wellness Holdings, LLC 3 10 % Cresco Labs Inc. 5 9 % Curaleaf Holdings, Inc. 4 8 % Green Thumb Industries, Inc. 3 7 % In each of the tables above, these leases include leases with affiliates of each entity, for which the entity has provided a corporate guaranty. As of March 31, 2022 and December 31, 2021, none of our properties individually represented more than 5% 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 March 31, 2022, we had cash accounts in excess of FDIC insured limits. We have not experienced any losses in such accounts. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies and Procedures and Recent Accounting Pronouncements (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Summary of Significant Accounting Policies and Procedures and Recent Accounting Pronouncements | |
Schedule of tenants in the company's portfolio that represented the largest percentage of total rental revenue for each period presented, including tenant reimbursements | The following table sets forth the five tenants in our portfolio that represented the largest percentage of our total rental revenues for the three months ended March 31, 2022 and 2021, including tenant reimbursements: For the Three Months Ended March 31, 2022 Percentage of Number of Rental Leases Revenue PharmaCann Inc. 11 14 % SH Parent, Inc. ("Parallel") 4 11 % Ascend Wellness Holdings, Inc. 4 9 % Kings Garden Inc. 7 8 % Columbia Care, Inc. 21 7 % For the Three Months Ended March 31, 2021 Percentage of Number of Rental Leases Revenue PharmaCann Inc. 5 13 % Ascend Wellness Holdings, LLC 3 10 % Cresco Labs Inc. 5 9 % Curaleaf Holdings, Inc. 4 8 % Green Thumb Industries, Inc. 3 7 % In each of the tables above, these leases include leases with affiliates of each entity, for which the entity has provided a corporate guaranty. |
Dividends (Tables)
Dividends (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Dividends | |
Schedule of dividends declared | The following table describes the dividends declared by the Company during the three months ended March 31, 2022: Amount Dividend Dividend Declaration Date Security Class Per Share Period Covered Paid Date Amount (In thousands) March 14, 2022 Common stock $ 1.75 January 1, 2022 to March 31, 2022 April 14, 2022 $ 45,830 March 14, 2022 Series A preferred stock $ 0.5625 January 15, 2022 to April 14, 2022 April 14, 2022 $ 338 |
Investments in Real Estate (Tab
Investments in Real Estate (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Schedule of real estate properties | The Company acquired the following properties during the three months ended March 31, 2022 (dollars in thousands): Rentable Square Purchase Transaction Property Market Closing Date Feet (1) Price Costs Total 4Front MA Massachusetts January 28, 2022 57,000 $ 16,000 $ 20 $ 16,020 (2) Ascend NJ New Jersey February 10, 2022 114,000 35,400 8 35,408 (3) Verano PA Pennsylvania March 23, 2022 3,000 2,750 57 2,807 Kings Garden CA California March 25, 2022 23,000 8,158 7 8,165 (4) Total 197,000 $ 62,308 $ 92 $ 62,400 (5) (1) Includes expected rentable square feet at completion of construction of certain properties. (2) The acquisition of the property did not satisfy the requirements for sale-leaseback accounting and therefore, the transaction is recognized as a note receivable and is included in other assets, net on our condensed consolidated balance sheet. (3) The tenant is expected to complete improvements at the property, for which we agreed to provide reimbursement of up to $4.6 million. (4) The purchase price includes $1.8 million holdback held in an escrow account, which is subject to distribution to the seller upon seller’s completion of certain improvements at the property, which is included in restricted cash on our condensed consolidated balance sheet. (5) Approximately $16.0 million was included in other assets; $1.8 million was included in restricted cash; approximately $6.3 million was allocated to land; approximately $38.0 million was allocated to building and improvements; and approximately $265,000 was allocated to an in-place lease. |
Schedule of future contractual minimum rent | Future contractual minimum rent (including base rent and property management fees) under the operating leases as of March 31, 2022 for future periods is summarized as follows (in thousands): Year Contractual Minimum Rent 2022 (nine months ending December 31) $ 203,721 2023 283,242 2024 291,552 2025 300,208 2026 309,155 Thereafter 4,434,845 Total $ 5,822,723 |
Acquired In-Place Lease Intangible Assets | |
Schedule of intangible assets and related accumulated amortization | In-place lease intangible assets and related accumulated amortization as of March 31, 2022 and December 31, 2021 is as follows (in thousands): March 31, 2022 December 31, 2021 In-place lease intangible assets $ 9,446 $ 9,181 Accumulated amortization (231) (33) In-place lease intangible assets, net $ 9,215 $ 9,148 |
Schedule of estimated annual amortization | Year Amount 2022 (nine months ending December 31) $ 613 2023 817 2024 817 2025 817 2026 817 Thereafter 5,334 Total $ 9,215 |
Above-Market Lease | |
Schedule of intangible assets and related accumulated amortization | The above-market lease and related accumulated amortization included in other assets, net on our condensed consolidated balance sheets as of March 31, 2022 and December 31, 2021 is as follows (in thousands): March 31, 2022 December 31, 2021 Above-market lease $ 1,054 $ 1,054 Accumulated amortization (27) (4) Above-market lease, net $ 1,027 $ 1,050 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Summary of principal payments on outstanding indebtedness | The following table summarizes the principal payments on our outstanding indebtedness as of March 31, 2022 (in thousands): Payments Due by Year Amount 2022 (nine months ended December 31) $ — 2023 — 2024 9,503 2025 — 2026 300,000 Thereafter — Total $ 309,503 |
Exchangeable Senior Notes | |
Schedule of interest expense | The following table details our interest expense related to the Exchangeable Senior Notes (in thousands): For the Three Months Ended March 31, 2022 2021 Cash coupon $ 276 $ 1,348 Amortization of debt discount — 282 Amortization of issuance cost 58 243 Total interest expense $ 334 $ 1,873 |
Schedule of carrying value | The following table details the carrying value of our Exchangeable Senior Notes (in thousands): At March 31, 2022 At December 31, 2021 Principal amount $ 9,503 $ 33,373 Unamortized discount — (612) Unamortized issuance cost (134) (529) Carrying value $ 9,369 $ 32,232 |
Notes due 2026 | |
Schedule of interest expense | The following table details our interest expense related to the Notes due 2026 (in thousands): For the Three Months Ended March 31, 2022 Cash coupon $ 4,125 Amortization of issuance cost 307 Total interest expense $ 4,432 |
Schedule of carrying value | The following table details the carrying value of our Notes due 2026 (in thousands): At March 31, 2022 December 31, 2021 Principal amount $ 300,000 $ 300,000 Unamortized issuance cost (5,833) (6,140) Carrying value $ 294,167 $ 293,860 |
Net Income Per Share (Tables)
Net Income Per Share (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
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 and per share data) were as follows: For the Three Months Ended March 31, 2022 2021 Net income $ 35,050 $ 25,927 Preferred stock dividends (338) (338) Distribution to participating securities (202) (126) Net income attributable to common stockholders used to compute net income per share - basic 34,510 25,463 Dilutive effect of Exchangeable Senior Notes 334 1,873 Net income attributable to common stockholders used to compute net income per share - diluted $ 34,844 $ 27,336 Weighted-average common shares outstanding: Basic 25,620,253 23,889,398 Restricted stock and RSUs 110,457 92,194 PSUs 102,333 — Dilutive effect of Exchangeable Senior Notes 507,181 2,170,959 Diluted 26,340,224 26,152,551 Net income attributable to common stockholders per share: Basic $ 1.35 $ 1.07 Diluted $ 1.32 $ 1.05 |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Fair Value of Financial Instruments | |
Schedule of condensed financial statements | The following table presents the carrying value and approximate fair value of financial instruments at March 31, 2022 and December 31, 2021 (in thousands): At March 31, 2022 At December 31, 2021 Carrying Value Fair Value Carrying Value Fair Value Investments (1) $ 209,935 $ 209,507 $ 324,889 $ 324,772 Exchangeable Senior Notes (2) $ 9,369 $ 29,451 $ 32,232 $ 134,270 Notes due 2026 (2) $ 294,167 $ 300,255 $ 293,860 $ 318,486 (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 and Notes due 2026 were trading in the private market. |
Common Stock Incentive Plan (Ta
Common Stock Incentive Plan (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Restricted Shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of the activity | A summary of the restricted stock activity under the 2016 Plan and related information for the three months ended March 31, 2022 is included in the table below: Weighted- Unvested Average Restricted Grant Date Fair Stock Value Balance at December 31, 2021 37,767 $ 92.49 Granted 21,645 $ 215.69 Vested (16,064) $ 80.47 Forfeited (1) (9,282) $ 56.94 Balance at March 31, 2022 34,066 $ 186.12 (1) Shares that were forfeited to cover the employees’ tax withholding obligation upon vesting . |
RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of the activity | The following table summarizes our RSU activity for the three months ended March 31, 2022. RSUs are issued as part of the Innovative Industrial Properties, Inc. Nonqualified Deferred Compensation Plan (the “Deferred Compensation Plan”), which allows a select group of management and our non-employee directors to defer receiving certain of their cash and equity-based compensation. RSUs are subject to vesting conditions of the Deferred Compensation Plan and have the same economic rights as shares of restricted stock under the 2016 Plan: Weighted-Average Restricted Grant Date Fair Stock Units Value Balance at December 31, 2021 60,326 $ 120.24 Granted 20,853 $ 215.84 Balance at March 31, 2022 81,179 $ 144.79 |
PSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Summary of fair value assumptions | The grant date fair values of the PSUs granted in January 2021 and January 2022 were $12.0 million and $20.0 million, respectively. The fair values were calculated using a Monte Carlo simulation pricing model based on the following assumptions: 2021 PSU Award 2022 PSU Award Fair Value Assumptions Fair Value Assumptions Valuation date January 6, 2021 January 7, 2022 Fair value per share on valuation date $169.51 $194.86 Expected term 3 years 3 years Expected price volatility 57.64% 55.99% Risk-free interest rate 0.20% 1.17% Discount for post vesting restriction 12.44% 12.22% |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Commitments and Contingencies | |
Schedule of future contractual lease payments | Office Lease Year Amount 2022 (nine months ending December 31) $ 342 2023 496 2024 511 2025 526 2026 543 Thereafter 45 Total future contractual lease payments 2,463 Effect of discounting (338) Office lease liability $ 2,125 |
Subsequent Events (Tables)
Subsequent Events (Tables) | 3 Months Ended |
Mar. 31, 2022 | |
Subsequent Events | |
Schedule of commitments to fund tenant improvements and construction | Subsequent to March 31, 2022, we acquired the following properties and made the following additional funds available to a tenant for improvements at one of our existing properties (dollars in thousands): Rentable Square Purchase Improvement Property Market Closing Date Feet (1) Price Commitments Total (2) MCP MD Maryland April 13, 2022 84,000 $ 25,000 $ — $ 25,000 Trulieve AZ Arizona April 27, 2022 17,000 5,238 — 5,238 PharmaCann NY New York April 27, 2022 98,000 — 45,000 45,000 (3) Total 199,000 $ 30,238 $ 45,000 $ 75,238 (1) Includes expected rentable square feet at completion of construction. (2) Excludes transaction costs. (3) The amount relates to amendments to our lease and development agreement which provides for an increase in the construction funding at one of our New York properties of up to $45.0 million to a total of $78.5 million, and also resulted in a corresponding adjustment to the base rent for the lease at the property. The tenant is expected to construct approximately 98,000 square feet of additional industrial space at the property. |
Organization (Details)
Organization (Details) | Mar. 31, 2022 |
Iip Operating Partnership Lp [Member] | |
Percentage Leased | 100.00% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies and Procedures and Recent Accounting Pronouncements - Additional Information (Details) | Jan. 01, 2019 | Mar. 31, 2022USD ($)segment | Mar. 31, 2021USD ($) | Dec. 31, 2021USD ($) | Nov. 30, 2021 | Jun. 30, 2021USD ($) | Dec. 31, 2018 |
Number of Reportable Segments | segment | 1 | ||||||
Depreciation expense | $ 13,700,000 | $ 8,800,000 | |||||
Impairment loss | 0 | 0 | |||||
Maximum construction loan agreed to lend | $ 18,500,000 | ||||||
Construction loan funded | 15,525,000 | $ 12,916,000 | |||||
Cash equivalents | 32,500,000 | 72,000,000 | |||||
Lease, Practical Expedients, Package [true false] | true | ||||||
Incremental borrowing rate | 5.50% | 7.25% | |||||
Amounts paid and classified as operating activities for the office lease | $ 60,000 | 59,000 | |||||
Adjustment | Accounting Standards Update 2020-06 | |||||||
Accumulated deficit | 728,000 | ||||||
Equity Components | $ 1,300,000 | ||||||
Geographic Concentration Risk [Member] | Net real estate held for investment | |||||||
Concentration Risk, Threshold Percentage | 5.00% | 5.00% | |||||
General and administrative expense | |||||||
Office lease expense | $ 101,000 | $ 57,000 | |||||
Maximum | |||||||
Cash, FDIC Insured Amount | $ 250,000 | ||||||
Building and Improvements | |||||||
Property, Plant and Equipment, Useful Life | 40 years | ||||||
Office equipment and furniture and fixtures | Minimum | |||||||
Property, Plant and Equipment, Useful Life | 3 years | ||||||
Office equipment and furniture and fixtures | Maximum | |||||||
Property, Plant and Equipment, Useful Life | 6 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies and Procedures and Recent Accounting Pronouncements - Concentration of Credit Risk (Details) | 3 Months Ended | |
Mar. 31, 2022leasetenantproperty | Mar. 31, 2021lease | |
Concentration Risk [Line Items] | ||
Number of Properties | property | 107 | |
Rental revenues (including tenant reimbursements) | Customer concentration | ||
Concentration Risk [Line Items] | ||
Number of Tenants | tenant | 5 | |
Rental revenues (including tenant reimbursements) | Customer concentration | PharmaCann Inc. | ||
Concentration Risk [Line Items] | ||
Number of Leases | 11 | 5 |
Percentage of Rental Revenue | 14.00% | 13.00% |
Rental revenues (including tenant reimbursements) | Customer concentration | SH Parent, Inc. (Parallel) | ||
Concentration Risk [Line Items] | ||
Number of Leases | 4 | |
Percentage of Rental Revenue | 11.00% | |
Rental revenues (including tenant reimbursements) | Customer concentration | Ascend Wellness Holdings, Inc. | ||
Concentration Risk [Line Items] | ||
Number of Leases | 4 | 3 |
Percentage of Rental Revenue | 9.00% | 10.00% |
Rental revenues (including tenant reimbursements) | Customer concentration | Cresco Labs Inc. | ||
Concentration Risk [Line Items] | ||
Number of Leases | 5 | |
Percentage of Rental Revenue | 9.00% | |
Rental revenues (including tenant reimbursements) | Customer concentration | Kings Garden Inc. | ||
Concentration Risk [Line Items] | ||
Number of Leases | 7 | |
Percentage of Rental Revenue | 8.00% | |
Rental revenues (including tenant reimbursements) | Customer concentration | Columbia Care, Inc [Member] | ||
Concentration Risk [Line Items] | ||
Number of Leases | 21 | |
Percentage of Rental Revenue | 7.00% | |
Rental revenues (including tenant reimbursements) | Customer concentration | Curaleaf Holdings Inc. | ||
Concentration Risk [Line Items] | ||
Number of Leases | 4 | |
Percentage of Rental Revenue | 8.00% | |
Rental revenues (including tenant reimbursements) | Customer concentration | Green Thumb Industries Inc. | ||
Concentration Risk [Line Items] | ||
Number of Leases | 3 | |
Percentage of Rental Revenue | 7.00% |
Common Stock (Details)
Common Stock (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | |
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, Issued | 26,107,769 | 25,612,541 |
Common Stock, Shares, Outstanding | 26,107,769 | 25,612,541 |
Issuance of common stock, net of offering costs | $ 21,103,000 | |
Number of shares issued upon conversion | 365,842 | |
Outstanding principal amount | $ 23,900,000 | |
At The Market Offerings | ||
Maximum number of common stock issuable | 500,000,000 | |
Number of shares issued | 117,023 | |
Issuance of common stock, net of offering costs | $ 21,100,000 | |
Payment of stock offering costs | $ 434,000 |
Preferred Stock (Details)
Preferred Stock (Details) - $ / shares | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2022 | Dec. 31, 2021 | Oct. 19, 2022 | |
Preferred Stock, Shares Authorized | 50,000,000 | 50,000,000 | |
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | $ 0.001 | |
Series A Preferred Stock | |||
Preferred Stock, Par or Stated Value Per Share | $ 0.001 | ||
Preferred Stock, Shares Issued | 600,000 | 600,000 | |
Preferred Stock, Shares Outstanding | 600,000 | 600,000 | |
Preferred Stock, Dividend Rate, Percentage | 9.00% | 9.00% | |
Preferred Stock, Voting Rights | 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. | ||
Series A Preferred Stock | Forecast | |||
Preferred Stock, Redemption Price Per Share | $ 25 |
Dividends (Details)
Dividends (Details) - USD ($) $ / shares in Units, $ in Thousands | Apr. 14, 2022 | Mar. 14, 2022 | Mar. 31, 2022 | Mar. 31, 2021 |
Dividends declared per common share | $ 1.75 | |||
Dividends declared per Series A preferred stock | $ 0.5625 | |||
Dividend amount - Common stock | $ 38,509 | $ 29,727 | ||
Dividend amount - Series A preferred stock | $ 338 | $ 338 | ||
Subsequent event | ||||
Dividend amount - Common stock | $ 45,830 | |||
Dividend amount - Series A preferred stock | $ 338 |
Investments in Real Estate (Det
Investments in Real Estate (Details) | 3 Months Ended | |
Mar. 31, 2022USD ($)ft² | Feb. 02, 2022USD ($) | |
Rentable Square Feet | ft² | 197,000 | |
Initial Purchase Price | $ 62,308,000 | $ 3,300,000 |
Transaction Costs | 92,000 | |
Total | 62,400,000 | |
Acquired In-Place Lease Intangible Assets | ||
Total | $ 265,000 | |
4Front MA | ||
Rentable Square Feet | ft² | 57,000 | |
Initial Purchase Price | $ 16,000,000 | |
Transaction Costs | 20,000 | |
Total | $ 16,020,000 | |
Ascend NJ | ||
Rentable Square Feet | ft² | 114,000 | |
Initial Purchase Price | $ 35,400,000 | |
Transaction Costs | 8,000 | |
Total | $ 35,408,000 | |
Verano PA | ||
Rentable Square Feet | ft² | 3,000 | |
Initial Purchase Price | $ 2,750,000 | |
Transaction Costs | 57,000 | |
Total | $ 2,807,000 | |
Kings Garden CA | ||
Rentable Square Feet | ft² | 23,000 | |
Initial Purchase Price | $ 8,158,000 | |
Transaction Costs | 7,000 | |
Total | $ 8,165,000 |
Investments in Real Estate - Ad
Investments in Real Estate - Additional Information (Details) | 1 Months Ended | 3 Months Ended | |||||
Mar. 31, 2022USD ($)ft² | Feb. 28, 2022USD ($) | Mar. 31, 2022USD ($)ft² | Mar. 31, 2021USD ($) | Apr. 27, 2022USD ($)ft² | Feb. 02, 2022USD ($) | Dec. 31, 2021USD ($) | |
Rentable Square Feet | ft² | 197,000 | 197,000 | |||||
Total Property Acquisitions | $ 62,400,000 | $ 62,400,000 | |||||
Rental (including tenant reimbursements) | 64,114,000 | $ 42,885,000 | |||||
Operating Income (Loss) | 39,877,000 | 27,676,000 | |||||
Real Estate Property Cost | 126,900,000 | 126,900,000 | |||||
Total investment in property | 1,800,999,000 | 1,800,999,000 | $ 1,640,166,000 | ||||
Tenant improvements and construction activities funded | 129,400,000 | 129,400,000 | |||||
Tenant Improvements | 694,251,000 | 694,251,000 | 620,301,000 | ||||
Purchase Price | 62,308,000 | 62,308,000 | $ 3,300,000 | ||||
Other Revenue | |||||||
Interest revenue | 298,000 | ||||||
Other assets | |||||||
Total Property Acquisitions | 16,000,000 | 16,000,000 | |||||
Restricted Cash. | |||||||
Total Property Acquisitions | 1,800,000 | 1,800,000 | |||||
Subsequent Event | |||||||
Rentable Square Feet | ft² | 199,000 | ||||||
Total Property Acquisitions | $ 75,238,000 | ||||||
Purchase Price | $ 30,238,000 | ||||||
Acquired In-Place Lease Intangible Assets | |||||||
Total Property Acquisitions | 265,000 | 265,000 | |||||
Initial value | 9,215,000 | 9,215,000 | 9,148,000 | ||||
Amortization expense | $ 198,000 | ||||||
Weighted-average amortization period (in years) | 11 years 4 months 24 days | ||||||
Above-Market Lease | |||||||
Initial value | 1,027,000 | $ 1,027,000 | $ 1,050,000 | ||||
Amortization period (in years) | 11 years 2 months 12 days | ||||||
Amortization expense | $ 23,000 | ||||||
Land | |||||||
Total Property Acquisitions | 6,300,000 | 6,300,000 | |||||
Building and Improvements | |||||||
Total Property Acquisitions | $ 38,000,000 | 38,000,000 | |||||
Properties Acquired In 2021 | |||||||
Rental (including tenant reimbursements) | 532,000 | ||||||
Operating Income (Loss) | $ 388,000 | ||||||
Properties Acquired In 2020 | |||||||
Rental (including tenant reimbursements) | 911,000 | ||||||
Operating Income (Loss) | $ 743,000 | ||||||
Kings Garden CA | |||||||
Rentable Square Feet | ft² | 23,000 | 23,000 | |||||
Total Property Acquisitions | $ 8,165,000 | $ 8,165,000 | |||||
Purchase price holdback held in escrow account | 1,800,000 | 1,800,000 | |||||
Purchase Price | 8,158,000 | 8,158,000 | |||||
Ascend Wellness Holdings, Inc. | Michigan Properties | |||||||
Increase amount of tenant improvement allowance | 4,400,000 | ||||||
Tenant improvement allowance | 19,400,000 | 19,400,000 | |||||
Ascend Wellness Holdings, Inc. | Massachusetts properties | |||||||
Increase amount of tenant improvement allowance | 14,900,000 | ||||||
Tenant improvement allowance | 37,200,000 | 37,200,000 | |||||
Holistic At Massachusetts [Member] | Michigan Properties | |||||||
Increase amount of tenant improvement allowance | 3,500,000 | ||||||
Tenant improvement allowance | $ 22,300,000 | $ 22,300,000 | |||||
Green Peak Industries LLC [Member] | Michigan Properties | |||||||
Increase amount of tenant improvement allowance | $ 18,000,000 | ||||||
Tenant improvement allowance | $ 47,500,000 | ||||||
4Front MA | |||||||
Rentable Square Feet | ft² | 57,000 | 57,000 | |||||
Total Property Acquisitions | $ 16,020,000 | $ 16,020,000 | |||||
Purchase Price | 16,000,000 | 16,000,000 | |||||
4Front MA | Maximum | |||||||
Agreed reimbursement for redevelopment of building | $ 4,600,000 | $ 4,600,000 | |||||
Ascend NJ | |||||||
Rentable Square Feet | ft² | 114,000 | 114,000 | |||||
Total Property Acquisitions | $ 35,408,000 | $ 35,408,000 | |||||
Purchase Price | $ 35,400,000 | $ 35,400,000 | |||||
Verano PA | |||||||
Rentable Square Feet | ft² | 3,000 | 3,000 | |||||
Total Property Acquisitions | $ 2,807,000 | $ 2,807,000 | |||||
Purchase Price | $ 2,750,000 | $ 2,750,000 |
Investments in Real Estate - In
Investments in Real Estate - Intangible assets and related accumulated amortization (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Acquired In-Place Lease Intangible Assets | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | $ 9,446 | $ 9,181 |
Accumulated amortization | (231) | (33) |
Net | 9,215 | 9,148 |
Above-Market Lease | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross | 1,054 | 1,054 |
Accumulated amortization | (27) | (4) |
Net | $ 1,027 | $ 1,050 |
Investments in Real Estate - Es
Investments in Real Estate - Estimated annual amortization (Details) - Acquired In-Place Lease Intangible Assets - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2022 (nine months ending December 31) | $ 613 | |
2023 | 817 | |
2024 | 817 | |
2025 | 817 | |
2026 | 817 | |
Thereafter | 5,334 | |
Net | $ 9,215 | $ 9,148 |
Investments in Real Estate - Fu
Investments in Real Estate - Future Contractual Minimum Rent (Details) $ in Thousands | Mar. 31, 2022USD ($) |
Contractual Minimum Rent | |
2022 (nine months ending December 31) | $ 203,721 |
2023 | 283,242 |
2024 | 291,552 |
2025 | 300,208 |
2026 | 309,155 |
Thereafter | 4,434,845 |
Total | $ 5,822,723 |
Debt - Exchangeable Senior Note
Debt - Exchangeable Senior Notes - Additional Information (Details) | 3 Months Ended | |
Mar. 31, 2022USD ($)$ / sharesshares | Dec. 31, 2021USD ($) | |
Number of shares issued upon conversion | shares | 365,842 | |
Loss on exchange of Exchangeable Senior Notes | $ 118,000 | |
Threshold Limit of Convertible Debt for Issue of Shares | 20,600,000 | |
Debt Conversion, Loss on Conversion of Debt | 118,000 | |
Outstanding principal amount | 23,900,000 | |
Exchange of exchangeable senior notes | 23,651,000 | |
Additional Paid-In-Capital | ||
Exchange of exchangeable senior notes | $ 23,651,000 | |
Exchangeable Senior Notes | ||
Interest rate | 3.75% | |
Exchangeable Senior Notes | Accounts payable and accrued expenses | ||
Accrued interest payable | $ 15,000 | $ 365,000,000,000 |
Exchangeable Senior Notes | Common Stock | ||
Debt Instrument, Convertible, Conversion Ratio | 15.42947 | |
Conversion of Stock, Amount Converted | $ 1,000 | |
Debt Instrument, Convertible, Conversion Price | $ / shares | $ 64.81 |
Debt - Exchangeable Senior No_2
Debt - Exchangeable Senior Notes - Interest expense (Details) - Exchangeable Senior Notes - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Cash coupon | $ 276 | $ 1,348 |
Amortization of debt discount | 282 | |
Amortization of issuance cost | 58 | 243 |
Total interest expense | $ 334 | $ 1,873 |
Debt - Exchangeable Senior No_3
Debt - Exchangeable Senior Notes - Carrying value (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Principal amount | $ 309,503 | |
Exchangeable Senior Notes | ||
Principal amount | 9,503 | $ 33,373 |
Unamortized discount | (612) | |
Unamortized issuance cost | (134) | (529) |
Carrying value | $ 9,369 | $ 32,232 |
Debt - Notes due 2026 (Details)
Debt - Notes due 2026 (Details) - USD ($) $ in Thousands | May 25, 2021 | Mar. 31, 2022 | Dec. 31, 2021 | May 05, 2021 |
Principal amount | $ 309,503 | |||
Notes due 2026 | ||||
Principal amount | $ 300,000 | $ 300,000 | $ 300,000 | |
Interest rate | 5.50% | 5.50% | ||
Issuance costs | $ 6,800 | |||
Notes due 2026 | Minimum | ||||
Debt instrument change in debt rating interest rate | 6.00% | |||
Notes due 2026 | Maximum | ||||
Debt instrument change in debt rating interest rate | 6.50% | |||
Notes due 2026 | Redeemed Prior To February 25, 2026 | ||||
Percentage of principal amount redeemed | 100.00% | |||
Notes due 2026 | Redeemed On Or After February 25, 2026 [Member] | ||||
Percentage of principal amount redeemed | 100.00% | |||
Notes due 2026 | Accounts payable and accrued expenses | ||||
Accrued interest payable | $ 6,200 | $ 2,100 |
Debt - Notes due 2026 - Interes
Debt - Notes due 2026 - Interest expense (Details) - Notes due 2026 $ in Thousands | 3 Months Ended |
Mar. 31, 2022USD ($) | |
Cash coupon | $ 4,125 |
Amortization of issuance cost | 307 |
Total interest expense | $ 4,432 |
Debt - Notes due 2026 - Carryin
Debt - Notes due 2026 - Carrying value (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 | May 25, 2021 |
Principal amount | $ 309,503 | ||
Notes due 2026 | |||
Principal amount | 300,000 | $ 300,000 | $ 300,000 |
Unamortized issuance cost | (5,833) | (6,140) | |
Carrying value | $ 294,167 | $ 293,860 |
Debt - Principal Payments (Deta
Debt - Principal Payments (Details) $ in Thousands | Mar. 31, 2022USD ($) |
Debt | |
2024 | $ 9,503 |
2026 | 300,000 |
Total | $ 309,503 |
Net Income Per Share - Addition
Net Income Per Share - Additional information (Details) - shares | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Dilutive effect of Exchangeable Senior Notes | 507,181 | 2,170,959 |
PSUs | Employees | ||
Shares issuable | 102,333 |
Net Income Per Share - Computat
Net Income Per Share - Computations of net income per basic and diluted share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2022 | Mar. 31, 2021 | |
Net income | $ 35,050 | $ 25,927 |
Preferred stock dividends | (338) | (338) |
Distribution to participating securities | (202) | (126) |
Net income attributable to common stockholders used to compute net income per share - basic | 34,510 | 25,463 |
Dilutive effect of Exchangeable Senior Notes | 334 | 1,873 |
Net income attributable to common stockholders used to compute net income per share - diluted | $ 34,844 | $ 27,336 |
Weighted average common shares outstanding: | ||
Basic | 25,620,253 | 23,889,398 |
Dilutive effect of Exchangeable Senior Notes | 507,181 | 2,170,959 |
Diluted | 26,340,224 | 26,152,551 |
Net income attributable to common stockholders per share: | ||
Basic | $ 1.35 | $ 1.07 |
Diluted | $ 1.32 | $ 1.05 |
Restricted stock and RSUs | ||
Weighted average common shares outstanding: | ||
Restricted stock and RSUs | 110,457 | 92,194 |
PSUs | ||
Weighted average common shares outstanding: | ||
Restricted stock and RSUs | 102,333 |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | Mar. 31, 2022 | Dec. 31, 2021 |
Fair Value of Financial Instruments | ||
Investments, Carrying Value | $ 209,935 | $ 324,889 |
Exchangeable Senior Notes, Carrying Value | 9,369 | 32,232 |
Notes due 2026, Carrying Value | 294,167 | 293,860 |
Investments, Fair Value | 209,507 | 324,772 |
Exchangeable Senior Notes, Fair Value | 29,451 | 134,270 |
Notes due 2026, Fair Value | $ 300,255 | $ 318,486 |
Fair Value of Financial Instr_4
Fair Value of Financial Instruments - Additional Information (Details) - USD ($) $ in Millions | Mar. 31, 2022 | Dec. 31, 2021 |
Money market funds | ||
Cash and Cash Equivalents, Fair Value Disclosure | $ 32.5 | $ 72 |
Common Stock Incentive Plan - A
Common Stock Incentive Plan - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | |
Jan. 31, 2022 | Jan. 31, 2021 | Mar. 31, 2022 | |
Restricted Shares | |||
Unrecognized compensation cost | $ 5,500,000 | ||
Amortization period | 2 years 6 months | ||
Fair value of restricted stock | $ 6,700,000 | ||
Granted | 21,645 | ||
RSUs | |||
Unrecognized compensation cost | $ 7,200,000 | ||
Amortization period | 2 years 3 months 18 days | ||
Granted | 20,853 | ||
PSUs | |||
Amortization period | 2 years 6 months | ||
Granted | 102,641 | 70,795 | |
Maximum total value at the at the vesting date as a percentage of the grant date price | 800.00% | ||
Dividends | $ 0 | ||
Minimum Term of Holding of Vested Shares | 1 year | ||
Granted date fair value | $ 20,000,000 | $ 12,000,000 | |
PSUs | Minimum | |||
Percentage of Number of Target Awards and Deemed Dividend | 0.00% | ||
PSUs | Maximum | |||
Percentage of Number of Target Awards and Deemed Dividend | 150.00% | ||
2016 Plan | |||
Expiration term | 10 years | ||
2016 Plan | Maximum | |||
Number of shares authorized | 1,000,000 |
Common Stock Incentive Plan -_2
Common Stock Incentive Plan - Activity (Details) | 3 Months Ended |
Mar. 31, 2022$ / sharesshares | |
Restricted Shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares, Beginning Balance | shares | 37,767 |
Granted | shares | 21,645 |
Vested | shares | (16,064) |
Forfeited | shares | (9,282) |
Shares, Ending Balance | shares | 34,066 |
Weighted-Average Grant Date Fair Value, Beginning Balance | $ / shares | $ 92.49 |
Weighted-Average Grant Date Fair Value, Granted | $ / shares | 215.69 |
Weighted-Average Grant Date Fair Value, Vested | $ / shares | 80.47 |
Weighted-Average Grant Date Fair Value, Forfeited | $ / shares | 56.94 |
Weighted-Average Grant Date Fair Value, Ending Balance | $ / shares | $ 186.12 |
RSUs | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares, Beginning Balance | shares | 60,326 |
Granted | shares | 20,853 |
Shares, Ending Balance | shares | 81,179 |
Weighted-Average Grant Date Fair Value, Beginning Balance | $ / shares | $ 120.24 |
Weighted-Average Grant Date Fair Value, Granted | $ / shares | 215.84 |
Weighted-Average Grant Date Fair Value, Ending Balance | $ / shares | $ 144.79 |
Common Stock Incentive Plan - S
Common Stock Incentive Plan - Summary of Fair Value Assumption (Details) - PSUs - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 3 Months Ended | |
Jan. 31, 2022 | Jan. 31, 2021 | Mar. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value per share on valuation date | $ 194.86 | $ 169.51 | |
Expected term | 3 years | 3 years | |
Expected price volatility | 55.99% | 57.64% | |
Risk-free interest rate | 1.17% | 0.20% | |
Discount for post vesting restriction | 12.22% | 12.44% | |
Stock-based compensation expense | $ 2.7 | ||
Unrecognized compensation cost | $ 25.3 | ||
Remaining Performance Period | 2 years 6 months |
Commitments and Contingencies_2
Commitments and Contingencies (Details) $ in Thousands | Mar. 31, 2022USD ($) |
Commitments and Contingencies | |
2022 (nine months ending December 31) | $ 342 |
2023 | 496 |
2024 | 511 |
2025 | 526 |
2026 | 543 |
Thereafter | 45 |
Total future contractual lease payments | 2,463 |
Effect of discounting | (338) |
Office lease liability | $ 2,125 |
Operating Lease, Liability, Statement of Financial Position [Extensible Enumeration] | Other Liabilities |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Details) $ in Millions | Mar. 31, 2022USD ($) |
Commitments related to improvement allowances | |
Other Commitments [Line Items] | |
Other Commitment | $ 185.3 |
Commitments related to construction loan | |
Other Commitments [Line Items] | |
Other Commitment | $ 3 |
Subsequent Events (Details)
Subsequent Events (Details) $ in Thousands | Apr. 27, 2022USD ($)ft² | Apr. 13, 2022USD ($)ft² | Mar. 31, 2022USD ($)ft² | Feb. 02, 2022USD ($) |
Rentable Square Feet | ft² | 197,000 | |||
Purchase Price | $ 62,308 | $ 3,300 | ||
Total | $ 62,400 | |||
Subsequent Event | ||||
Rentable Square Feet | ft² | 199,000 | |||
Purchase Price | $ 30,238 | |||
Improvement Commitments | 45,000 | |||
Total | $ 75,238 | |||
Subsequent Event | MCP MD | ||||
Rentable Square Feet | ft² | 84,000 | |||
Purchase Price | $ 25,000 | |||
Total | $ 25,000 | |||
Subsequent Event | Trulieve AZ | ||||
Rentable Square Feet | ft² | 17,000 | |||
Purchase Price | $ 5,238 | |||
Total | $ 5,238 | |||
Subsequent Event | PharmaCann NY | ||||
Rentable Square Feet | ft² | 98,000 | |||
Improvement Commitments | $ 45,000 | |||
Total | $ 45,000 |
Subsequent Events - Additional
Subsequent Events - Additional information (Details) $ in Thousands | Apr. 27, 2022USD ($)ft² | May 04, 2022USD ($)shares | Apr. 30, 2022USD ($)shares | Mar. 31, 2022USD ($)shares | Feb. 02, 2022USD ($) |
Subsequent Event [Line Items] | |||||
Initial Purchase Price | $ 62,308 | $ 3,300 | |||
Issuance of common stock, net of offering costs | $ 21,103 | ||||
Number of shares issued upon conversion | shares | 365,842 | ||||
Outstanding principal amount | $ 23,900 | ||||
PharmaCann NY | |||||
Subsequent Event [Line Items] | |||||
Tenant improvement allowance | $ 78,500 | ||||
Additional industrial space tenant expected to construct | ft² | 98,000 | ||||
PharmaCann NY | Maximum | |||||
Subsequent Event [Line Items] | |||||
Tenant Improvement Allowance, Increase | $ 45,000 | ||||
Subsequent Event | |||||
Subsequent Event [Line Items] | |||||
Initial Purchase Price | $ 30,238 | ||||
Number of shares issued | shares | 1,815,790 | ||||
Issuance of common stock, net of offering costs | $ 345,000 | ||||
Number of shares issued upon conversion | shares | 47,059 | ||||
Outstanding principal amount | $ 3,100 | ||||
Subsequent Event | Over-Allotment Option [Member] | |||||
Subsequent Event [Line Items] | |||||
Number of shares issued | shares | 236,842 |