v3.25.1
Document and Entity Information - shares
 3 Months Ended
Mar. 31, 2025
May 08, 2025
Document Information [Line Items]    
Document Type 10-Q  
Document Quarterly Report true  
Document Period End Date Mar. 31, 2025  
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   28,011,229
Entity Central Index Key 0001677576  
Amendment Flag false  
Document Fiscal Period Focus Q1  
Document Fiscal Year Focus 2025  
Current Fiscal Year End Date --12-31  
Common Stock    
Document Information [Line Items]    
Title of 12(b) Security Common Stock, par value $0.001 per share  
Trading Symbol IIPR  
Security Exchange Name NYSE  
Series A Preferred Stock    
Document Information [Line Items]    
Title of 12(b) Security Series A Preferred Stock, par value $0.001 per share  
Trading Symbol IIPR-PA  
Security Exchange Name NYSE  
v3.25.1
Condensed Consolidated Balance Sheets - USD ($)
$ in Thousands
Mar. 31, 2025
Dec. 31, 2024
Real estate, at cost:    
Land $ 147,385 $ 146,772
Buildings and improvements 2,244,156 2,230,807
Construction in progress 60,494 62,393
Total real estate, at cost 2,452,035 2,439,972
Less accumulated depreciation (289,366) (271,190)
Net real estate held for investment 2,162,669 2,168,782
Construction loan receivable 22,800 22,800
Cash and cash equivalents 128,010 146,245
Investments 5,258 5,000
Right of use office lease asset 839 946
In-place lease intangible assets, net 7,170 7,385
Other assets, net 25,841 26,889
Total assets 2,352,587 2,378,047
Liabilities:    
Notes due 2026, net 289,499 297,865
Building improvements and construction funding payable 9,009 10,230
Accounts payable and accrued expenses 12,418 10,561
Dividends payable 55,244 54,817
Rent received in advance and tenant security deposits 53,403 57,176
Other liabilities 10,850 11,338
Total liabilities 430,423 441,987
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, liquidation preference of $25.00 per share, 1,387,820 and 1,002,673 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively 32,818 23,632
Common stock, par value $0.001 per share, 50,000,000 shares authorized: 28,378,181 and 28,331,833 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively 28 28
Additional paid-in capital 2,125,109 2,124,113
Dividends in excess of earnings (235,791) (211,713)
Total stockholders’ equity 1,922,164 1,936,060
Total liabilities and stockholders’ equity $ 2,352,587 $ 2,378,047
v3.25.1
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares
 3 Months Ended 12 Months Ended
Mar. 31, 2025
Dec. 31, 2024
Preferred stock par value (in dollars per share) $ 0.001 $ 0.001
Preferred Stock, shares authorized (in shares) 50,000,000 50,000,000
Common Stock, Par Value (in dollars per share) $ 0.001 $ 0.001
Common Stock, shares authorized (in shares) 50,000,000 50,000,000
Common Stock, shares issued (in shares) 28,378,181 28,331,833
Common Stock, shares outstanding (in shares) 28,378,181 28,331,833
Series A Preferred Stock    
Preferred Stock, dividend rate 9.00% 9.00%
Preferred Stock, liquidation preference (in dollars per share) $ 25.00 $ 25.00
Preferred Stock, shares issued (in shares) 1,387,820 1,002,673
Preferred Stock, shares outstanding (in shares) 1,387,820 1,002,673
v3.25.1
Condensed Consolidated Statements of Income - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2025
Mar. 31, 2024
Revenues:    
Rental (including tenant reimbursements) $ 71,697 $ 74,914
Other 25 540
Total revenues 71,722 75,454
Expenses:    
Property expenses 7,379 6,709
General and administrative expense 8,461 9,562
Depreciation and amortization expense 18,391 17,150
Impairment loss on real estate 3,527 0
Total expenses 37,758 33,421
Income from operations 33,964 42,033
Interest income 1,613 1,784
Interest expense (4,500) (4,389)
Net income 31,077 39,428
Preferred stock dividends (781) (338)
Net income attributable to common stockholders $ 30,296 $ 39,090
Net income attributable to common stockholders per share (Note 8):    
Basic (in dollars per share) $ 1.05 $ 1.37
Diluted (in dollars per share) $ 1.03 $ 1.36
Weighted-average shares outstanding:    
Basic (in shares) 28,275,549 28,145,017
Diluted (in shares) 28,588,022 28,461,986
v3.25.1
Condensed Consolidated Statements of Stockholders' Equity - USD ($)
$ in Thousands
Total
Common Stock
Additional Paid-In- Capital
Dividends in Excess of Earnings
Series A Preferred Stock
Series A Preferred Stock
Balances at beginning of period (in shares) at Dec. 31, 2023   28,140,891     600,000
Balances at beginning of period at Dec. 31, 2023 $ 1,952,972 $ 28 $ 2,095,789 $ (156,854) $ 14,009
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Net income 39,428     39,428  
Issuance of unvested restricted stock, net of forfeitures (in shares)   36,124      
Issuance of unvested restricted stock, net of forfeitures (750)   (750)    
Exchange of Exchangeable Senior Notes (in shares)   28,408      
Net proceeds from sale of common stock (in shares)   123,224      
Net proceeds from sale of common stock 11,757   11,757    
Preferred stock dividends (338)     (338)  
Common stock dividends (51,957)     (51,957)  
Stock-based compensation 4,315   4,315    
Balances at end of period (in shares) at Mar. 31, 2024   28,328,647     600,000
Balances at end of period at Mar. 31, 2024 1,955,427 $ 28 2,111,111 (169,721) $ 14,009
Balances at beginning of period (in shares) at Dec. 31, 2024   28,331,833     1,002,673
Balances at beginning of period at Dec. 31, 2024 1,936,060 $ 28 2,124,113 (211,713) $ 23,632
Increase (Decrease) in Stockholders' Equity [Roll Forward]          
Net income 31,077     31,077  
Issuance of unvested restricted stock, net of forfeitures (in shares)   50,934      
Issuance of unvested restricted stock, net of forfeitures (792)   (792)    
Net proceeds from sale of preferred stock (in shares)         385,147
Net proceeds from sale of preferred stock 9,186       $ 9,186
Repurchase of common stock (in shares)   (4,586)      
Repurchase of common stock (290)   (290)    
Preferred stock dividends (781)     (781)  
Common stock dividends (54,463)     (54,463)  
Forfeiture of unvested restricted stock units 89     89  
Stock-based compensation 2,078   2,078    
Balances at end of period (in shares) at Mar. 31, 2025   28,378,181     1,387,820
Balances at end of period at Mar. 31, 2025 $ 1,922,164 $ 28 $ 2,125,109 $ (235,791) $ 32,818
v3.25.1
Condensed Consolidated Statements of Cash Flows - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2025
Mar. 31, 2024
Cash flows from operating activities    
Net income $ 31,077 $ 39,428
Adjustments to reconcile net income to net cash provided by (used in) operating activities    
Depreciation and amortization 18,391 17,150
Impairment loss on real estate 3,527 0
Other non-cash adjustments (11) 28
Stock-based compensation 2,078 4,315
Amortization of discounts on investments 0 (188)
Amortization of debt discount and issuance costs 470 406
Changes in assets and liabilities    
Other assets, net 906 1,760
Accounts payable, accrued expenses and other liabilities 1,577 7,874
Rent received in advance and tenant security deposits (3,773) 793
Net cash provided by (used in) operating activities 54,242 71,566
Cash flows from investing activities    
Investments in real estate (7,857) 0
Funding of draws for improvements and construction (9,041) (16,505)
Purchases of short-term investments (5,258) (20,026)
Maturities of short-term investments 5,000 22,136
Net cash provided by (used in) investing activities (17,156) (14,395)
Cash flows from financing activities    
Issuance of common stock, net of offering costs 0 11,757
Repurchase of common stock (290) 0
Issuance of preferred stock, net of offering costs 9,186 0
Principal payment on exchangeable senior notes 0 (4,436)
Principal payment on notes due 2026 (8,697) 0
Payment of deferred financing costs 0 (112)
Dividends paid to common stockholders (54,253) (51,489)
Dividends paid to preferred stockholders (564) (338)
Taxes paid related to net share settlement of equity awards (703) (750)
Net cash provided by (used in) financing activities (55,321) (45,368)
Net increase (decrease) in cash and cash equivalents (18,235) 11,803
Cash and cash equivalents, beginning of period 146,245 141,699
Cash and cash equivalents, end of period 128,010 153,502
Supplemental disclosure of cash flow information:    
Cash paid during the period for interest, net of interest capitalized 81 71
Supplemental disclosure of non-cash investing and financing activities:    
Accrual for current-period additions to real estate 6,093 8,980
Accrual for common and preferred stock dividends declared $ 55,244 $ 52,295
v3.25.1
Organization
 3 Months Ended
Mar. 31, 2025
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Organization 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.
v3.25.1
Summary of Significant Accounting Policies and Procedures and Recent Accounting Pronouncements
 3 Months Ended
Mar. 31, 2025
Accounting Policies [Abstract]  
Summary of Significant Accounting Policies and Procedures and Recent Accounting Pronouncements Summary of Significant Accounting Policies and Procedures and Recent Accounting Pronouncements
Basis of Presentation. The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. They do not include all of the information and footnotes required by GAAP for complete financial statements.
This interim financial information should be read in conjunction with the audited consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. 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, 2025.
Federal Income Taxes. We believe that we have operated our business so as to qualify to be taxed as a REIT for U.S. federal income tax purposes. Under the REIT operating structure, we are permitted to deduct dividends paid to our stockholders in determining our taxable income. Assuming our dividends equal or exceed our taxable net income, we generally will not be required to pay federal corporate income taxes on such income. The income taxes recorded on our condensed consolidated statements of income represent amounts paid for city and state income and franchise taxes and are included in general and administrative expenses in the accompanying condensed consolidated statements of income.
Use of Estimates. The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make a number of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Actual results may differ materially from these estimates and assumptions. The most significant estimates and assumptions made include determination of lease accounting and fair value of acquisition of real estate properties.
Reportable Segment. We have aggregated our properties into one reportable segment as the properties share similar long-term economic characteristics and have other similarities, including the fact that they are operated using consistent business strategies. The financial information disclosed herein represents all of the financial information related to our one reportable segment. Our chief operating decision maker ("CODM") reviews financial information for our entire
consolidated operations when making decisions related to assessing our operating performance. See Note 12 "Segment Information" for additional information.
Acquisition of Real Estate Properties. Our investment in real estate is recorded at historical cost, less accumulated depreciation. Upon acquisition of a property, the tangible and intangible assets acquired and liabilities assumed are initially measured based upon their relative fair values. We estimate the fair value of land by reviewing comparable sales within the same submarket and/or region. We estimate the fair value of buildings and improvements as if the property was vacant utilizing a direct capitalization approach and take into consideration current replacement costs and other relevant market rate information and may engage third-party valuation specialists. Acquisition costs are capitalized as incurred. All of our acquisitions to date were recorded as asset acquisitions.
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 revenues over the remaining term of the applicable lease.
Certain acquisitions of real estate did not satisfy the requirements for sale-leaseback accounting and therefore as of both March 31, 2025 and December 31, 2024, acquisitions of $16.8 million have been recognized as notes receivable and are included in other assets, net on our condensed consolidated balance sheets.
Sale of Real Estate. When a real estate asset is sold, we evaluate the provisions of Accounting Standards Codification (“ASC”) 610-20, Gains and Losses from the Derecognition of Nonfinancial Assets (“ASC 610-20”) to determine whether the asset is within the scope of ASC 610-20, including an evaluation of whether the asset being sold is a nonfinancial asset and whether the buyer has gained control of an asset within the scope of ASC 610-20. In assessing whether the buyer has gained control of the asset, we must determine whether the contract criteria in ASC 606, Revenue from Contracts with Customers (Topic 606) have been met, including 1) the parties to the contract have approved the contract and the contract has commercial substance, 2) we can identify each party’s rights regarding the asset to be transferred, 3) we can identify the payment terms for the asset to be transferred, and 4) it is probable that we will collect substantially all of the consideration to which we will be entitled in exchange for the asset to be transferred. If all of the contract criteria have been met, the carrying amount of the applicable asset is derecognized with a corresponding gain or loss from the sale recognized in our condensed consolidated statements of income. If the contract criteria are not all met, the asset transferred is not derecognized and we continue to report the asset in our condensed consolidated balance sheet. See Note 6 “Investments in Real Estate - Property Dispositions” for further information.
Cost Capitalization and Depreciation. We capitalize costs (including interest) associated with development and redevelopment activities and improvements when we are considered to be the accounting owner of the resulting assets. The development and redevelopment activities may be funded by us pursuant to the lease. We are generally considered the accounting owner for such improvements that are attached to or built into the premises, which are required under the lease to be surrendered to us upon the expiration or earlier termination of the lease. Typically, such improvements include, but are not limited to, ground up development, and enhanced HVAC, plumbing, electrical and other building systems.
Amounts capitalized are depreciated on a straight-line basis over the estimated useful lives determined by management. We depreciate buildings and 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, 2025 and 2024, we recognized depreciation expense of $18.2 million and $16.9 million, respectively. Depreciation expense relating to our real estate held for investment is included in depreciation and amortization expense in our condensed consolidated statements of income. We depreciate office equipment and furniture and fixtures on a straight-line basis over the estimated useful lives ranging from three to seven years. We depreciate the leasehold improvements at our corporate office on a straight-line basis over the
shorter of the estimated useful lives or the remaining lease term. Depreciation expense relating to our corporate assets is included in general and administrative expense in our condensed consolidated statements of income.
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.
We define redevelopment properties as existing properties for which we expect to spend significant development and construction costs that are not reimbursements to tenants for improvements at the properties. When existing properties are determined to be redevelopment properties, the net carrying value of the buildings and improvements are transferred to construction in progress while the redevelopment activities are in process. Costs capitalized to construction in progress related to redevelopment properties are transferred to buildings and improvements at historical cost of the properties as the redevelopment project or phases of projects are placed in service.
Provision for Impairment. On a quarterly basis, we review current activities and changes in the business conditions of all of our properties prior to and subsequent to the end of each quarter to determine the existence of any triggering events or impairment indicators requiring an impairment analysis. If triggering events or impairment indicators are identified, we review an estimate of the future undiscounted cash flows for the properties.
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.
During the three months ended March 31, 2025, real estate assets related to one of our properties in Palm Springs, California were determined to be impaired. In April 2025, we marketed the property for sale and have executed a purchase and sale agreement with a prospective buyer in which the estimated net proceeds from sale is less than the carrying value of the property. As a result, we recognized an impairment loss on real estate of $3.5 million during the three months ended March 31, 2025 to reduce its carrying value to the estimated fair value. No impairment losses were recognized during the three months ended March 31, 2024.
Revenue Recognition. Our leases are triple-net leases, an arrangement under which the tenant maintains the property while paying us rent. We recognize revenue for each of the leases at our properties that are classified as operating leases on a cash basis due to the uncertain regulatory environment in the United States pertaining to the regulated cannabis industry, the limited operating history of certain tenants and the resulting uncertainty of collectability of lease payments from each tenant over the duration of the lease term. We evaluate a number of factors in our initial and ongoing assessments of collectability of lease payments for each tenant on a lease-by-lease basis, including evaluations of each tenant’s financial performance, liquidity and overall credit profile, availability and terms of capital for each tenant needed to conduct operations or refinance existing obligations, utilization rates by property and lease duration. We also consider current market conditions, impact of federal, state and local taxation and regulatory burdens and reasonable and supportable forecasts of future economic conditions. Additionally, for operating leases, contractually obligated reimbursements from tenants for recoverable real estate taxes, insurance and operating expenses are included in rental revenues in the period when such costs are reimbursed by the tenants. Contractually obligated real estate taxes that are paid directly by the tenant to the tax authorities are not reflected in our condensed consolidated financial statements.
For the three months ended March 31, 2025, rental revenue recognized included the application of $5.8 million of security deposits for rent. No security deposits were applied for rent during the three months ended March 31, 2024.
Construction Loan. We executed a construction loan agreement with a developer, pursuant to which we agreed to lend up to $23.0 million for the development of a regulated cannabis cultivation and processing facility in California (the “Construction Loan”). We have an option to purchase the property, and may execute a negotiated lease with an affiliate of the developer or with another third party, if we determine to exercise our purchase option. The Construction Loan matures on June 30, 2025. As of both March 31, 2025 and December 31, 2024, we had funded $22.8 million of the $23.0 million total commitment. Interest income on the Construction Loan is recognized on a cash basis.
Cash and Cash Equivalents. We consider all highly-liquid investments with original maturities of 90 days or less to be cash equivalents, which is comprised of short-term money market funds, obligations of the U.S. government and certificates of deposit with an original maturity at the time of purchase of less than or equal to 90 days.
Investments. Investments consist of short-term obligations of the U.S. government and certificates of deposit with an original maturity at the time of purchase of greater than 90 days. Investments in obligations of the U.S. government are classified as held-to-maturity and stated at amortized cost. Investments in certificates of deposit are classified as held-to-maturity and stated at cost.
Deferred Financing Costs. The deferred financing costs relating to our Notes due 2026 are included as a reduction in the net book value of the related liability on our condensed consolidated balance sheets. These costs are amortized as non-cash interest expense using the effective interest method over the life of the related obligations. Deferred financing costs relating to our Revolving Credit Facility (as defined in Note 7 "Debt") are included in other assets, net in our condensed consolidated balance sheets. These costs are being amortized on a straight-line basis and recognized as non-cash interest expense over the remaining term of the Revolving Credit Facility.
Stock-Based Compensation. Stock-based compensation for equity awards is based on the grant date fair value of the equity awards and is recognized over the requisite service or performance period. If awards are forfeited prior to vesting, we reverse any previously recognized expense related to such awards in the period during which the forfeiture occurs and reclassify any non-forfeitable dividends and dividend equivalents previously paid on these awards from retained earnings to compensation expense. Forfeitures are recognized as incurred. Certain equity awards are subject to vesting based upon the satisfaction of various market conditions. Forfeiture of share awards with market-based restrictions does not result in a reversal of previously recognized share-based compensation expense.
Lease Accounting. We account for our leases under ASC 842, Leases, and have elected the practical expedient not to separate certain non-lease components from the lease component if the timing and pattern of transfer are the same for the non-lease component and associated lease component, and the lease component would be classified as an operating lease if accounted for separately. We also elected the short-term lease exception for lessees for leases that are less than 12 months. 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, which ends in January 2027 and contains annual escalations. We measured the lease liability based on the present value of the future lease payments (excluding the extension option that we are not reasonably certain to exercise), discounted using the estimated incremental borrowing rates of 7.25% and 5.5%, which were the interest rates that we estimated we would have to pay to borrow on a collateralized basis over a similar term for an amount equal to the lease payments at initial commencement in December 2019 and upon an amendment in November 2021, respectively. 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 or exchange any other consideration 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. In both the three months ended March 31, 2025 and 2024, we recognized office lease expense of $0.1 million, which is included in general and administrative expenses in our condensed consolidated statements of income. In both the three months ended March 31, 2025 and 2024, amounts paid and classified as operating activities in our condensed consolidated statements of cash flows for the office lease were $0.1 million.
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 revenues and as property expenses, respectively, on our condensed consolidated statements of income. Property taxes paid directly by the lessee to a third party continue to be excluded from our condensed 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. In January 2024, the lease modifications for two of our leases to extend the initial term of each lease changed the lease classification from operating lease to sales-type lease that did not satisfy all the criteria for recognition as a completed sale. Accordingly, we continue to recognize the underlying assets within net real estate held for investment and all lease payments received, as well as any future lease payments, will be recognized as a deposit liability and will be included in other liabilities on our condensed consolidated balance sheet until certain criteria are met. As of March 31, 2025, we have received lease payments of $5.0 million that have been included in other liabilities on our condensed consolidated balance sheet. The underlying assets’ land and building and improvements had a gross carrying value of $4.1 million and $28.9 million, respectively, and accumulated depreciation of $3.8 million as of March 31, 2025.
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.
Recent Accounting Pronouncements. In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses. The amendments in ASU 2024-03 require entities to provide enhanced disclosures related to certain expense categories included in income statement captions. Under ASU 2024-03, entities are required to disaggregate, in a tabular format, expense captions presented on the face of the income statement — excluding earnings or losses from equity method investments — if they include any of the following expense categories: purchases of inventory, employee compensation, depreciation, intangible asset amortization, and depreciation, depletion, and amortization recognized as part of oil and gas-producing activities (or other amounts of depletion expense). For any remaining items within each relevant expense caption, entities must provide a qualitative description of the nature of those expenses. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. We expect to adopt this ASU on January 1, 2027. While the adoption is not expected to have an impact on our consolidated financial statements, it is expected to result in incremental disclosures within the footnotes to our consolidated financial statements.
Concentration of Credit Risk. As of March 31, 2025, we owned 110 properties located in 19 states and leased to 31 tenants (excluding five non-cannabis tenants at three of our properties). The ability of any of our tenants to honor the terms of their leases is dependent upon the economic, regulatory, competition, natural and social factors affecting the community in which that tenant operates.
The following tables set forth the five tenants in our portfolio that represented the largest percentage of our total rental revenues for the three months ended March 31, 2025 and 2024, including tenant reimbursements:
For the Three Months Ended
March 31, 2025
Percentage of
Number of Rental
LeasesRevenue
PharmaCann Inc. ("PharmaCann") (1)
1112 %
Ascend Wellness Holdings, Inc. ("Ascend")411 %
Green Thumb Industries, Inc. ("Green Thumb")38 %
Curaleaf Holdings, Inc. ("Curaleaf")88 %
Trulieve Cannabis Corp. ("Trulieve")67 %
For the Three Months Ended
March 31, 2024
Number of
Leases		Percentage of
Rental
Revenue
PharmaCann1117 %
Ascend411 %
Green Thumb38 %
Curaleaf87 %
Trulieve67 %
(1)See Note 6 "Investment in Real Estate - Lease Amendments" for further information about the leases with PharmaCann.
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 both March 31, 2025 and December 31, 2024, our largest property was located in New York and accounted for 5.5% of our net real estate held for investment. No other properties accounted for more than 5% of our net real estate held for investment as of March 31, 2025 and December 31, 2024.
We have deposited cash with financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. As of March 31, 2025, we had cash accounts in excess of FDIC insured limits. We have not experienced any losses in such accounts.
v3.25.1
Common Stock
 3 Months Ended
Mar. 31, 2025
Stockholders' Equity Note [Abstract]  
Common Stock Common Stock
As of March 31, 2025, the Company was authorized to issue up to 50,000,000 shares of common stock, par value $0.001 per share, and there were 28,378,181 shares of common stock issued and outstanding.
In May 2024, we terminated the previously existing “at-the-market” offering program (the “Prior ATM Program”) and entered into new equity distribution agreements with four sales agents, pursuant to which we may offer and sell from time to time through an “at-the-market” offering program (the “ATM Program”), including on a forward basis, shares of our common stock and 9.00% Series A Cumulative Redeemable Preferred Stock, $0.001 par value per share (the “Series A Preferred Stock”), up to an aggregate offering price of $500.0 million. See Note 4 “Preferred Stock” for information regarding the sale of Series A Preferred Stock under the ATM Program.
No shares of common stock were issued pursuant to the ATM Program during the three months ended March 31, 2025. During the three months ended March 31, 2024, we sold 123,224 shares of common stock that were issued pursuant to the Prior ATM Program for net proceeds of $11.8 million.
During the three months ended March 31, 2024, we issued 28,408 shares of our common stock related to the exchange premium upon exchange by holders of $4.3 million of outstanding principal amount of our 3.75% Exchangeable Senior Notes due 2024 (the “Exchangeable Senior Notes”).
In March 2025, our Board of Directors authorized a share repurchase program of up to $100.0 million of the Company’s common stock. The repurchase program expires on March 17, 2026, and may be extended, suspended, modified or discontinued at any time at the Company’s discretion. During the three months ended March 31, 2025, we repurchased and retired 4,586 shares of common stock for $0.3 million.
v3.25.1
Preferred Stock
 3 Months Ended
Mar. 31, 2025
Equity [Abstract]  
Preferred Stock Preferred Stock
As of March 31, 2025, the Company was authorized to issue up to 50,000,000 shares of preferred stock, par value $0.001 per share, and there were 1,387,820 shares issued and outstanding of Series A Preferred Stock. 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.
During the three months ended March 31, 2025, we sold 385,147 shares of our Series A Preferred Stock pursuant to the ATM Program for net proceeds of $9.2 million.
v3.25.1
Dividends
 3 Months Ended
Mar. 31, 2025
Dividends [Abstract]  
Dividends Dividends
The following table describes the dividends declared by the Company during the three months ended March 31, 2025:
Declaration DateSecurity ClassAmount
Per Share		Period CoveredDividend
Paid Date		Dividend
Amount
(In thousands)
March 14, 2025Common stock$1.90 January 1, 2025 to March 31, 2025April 15, 2025$54,463 
March 14, 2025Series A preferred stock$0.5625 January 15, 2025 to April 14, 2025April 15, 2025$781 
v3.25.1
Investments in Real Estate
 3 Months Ended
Mar. 31, 2025
Real Estate [Abstract]  
Investments in Real Estate Investments in Real Estate
Acquisitions
The Company made the following acquisition during the three months ended March 31, 2025 (dollars in thousands):
PropertyStateClosing Date
Rentable
Square
Feet(1)
Purchase
Price		Transaction
Costs		Total
Harvard PlaceMarylandFebruary 20, 202522,000$7,750 $107 $7,857 
Total22,000$7,750 $107 $7,857 
(2)
(1)Includes expected rentable square feet at completion of construction at the property.
(2)$0.6 million was allocated to land and $7.2 million was allocated to building and improvements.
Acquired In-Place Lease Intangible Assets
In-place lease intangible assets and related accumulated amortization as of March 31, 2025 and December 31, 2024 is as follows (in thousands):
March 31, 2025December 31, 2024
In-place lease intangible assets$9,979 $9,979 
Accumulated amortization(2,809)(2,594)
In-place lease intangible assets, net$7,170 $7,385 
Amortization of in-place lease intangible assets classified in depreciation and amortization expense in our condensed consolidated statements of income was $0.2 million in each of the three months ended March 31, 2025 and 2024. The weighted-average remaining amortization period of the acquired in-place leases was 8.5 years, and the estimated annual amortization of the value of the acquired in-place leases as of March 31, 2025 is as follows (in thousands):
YearAmount
2025 (nine months ending December 31)$645 
2026860 
2027860 
2028860 
2029860 
Thereafter3,085 
Total$7,170 
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, 2025 and December 31, 2024 is as follows (in thousands):
March 31, 2025December 31, 2024
Above-market lease$1,054 $1,054 
Accumulated amortization(302)(279)
Above-market lease, net$752 $775 
The above-market lease is amortized on a straight-line basis as a reduction to rental revenues over the remaining lease term of 8.2 years. For both the three months ended March 31, 2025 and 2024, the amortization of the above-market lease was $23,000.
Lease Amendments
In January 2025, we entered into lease amendments with PharmaCann with respect to nine of its leases for properties located in New York, Illinois, Pennsylvania, Ohio, and Colorado. Those lease amendments reduced cumulative total base rent from $2.8 million per month to $2.6 million per month, with cash rent payments commencing February 1, 2025, and provided for pro-rata replenishment of security deposits over thirty-six months commencing February 1, 2027. We also entered into lease amendments with PharmaCann with respect to two of its leases for cultivation properties in Michigan and Massachusetts. Those amendments provide that monthly base rent of $1.3 million for these two properties will be abated in full effective February 1, 2025 and, if the properties have not been transitioned to new tenant(s) by August 1, 2025, we will regain full control over the properties. We applied security deposits held by us pursuant to all of the PharmaCann leases for the payment in full of all defaulted rent for December 2024 and January 2025 and certain penalties. The lease amendments also provided that if PharmaCann defaults again or is not able to refinance its existing senior secured credit facility maturing June 30, 2025, all modifications to our leases with PharmaCann described above will immediately be null and void and the leases will revert to the terms in effect as of January 1, 2025.
In March 2025, PharmaCann defaulted on its obligations to pay rent for the month of March under nine of its eleven leases for properties located in New York, Illinois, Pennsylvania, Ohio, and Colorado and therefore, all modifications to our leases with PharmaCann described above became null and void and the leases reverted to the terms in effect as of January 1, 2025. Subsequent to March 31, 2025, the lease for the cultivation property in Michigan was terminated concurrently with the execution of a new lease with a new tenant in April 2025.
In March 2025, we amended our lease with a subsidiary of AYR Wellness, Inc. at one of our Florida properties to reduce the improvement allowance by $2.5 million to $27.5 million, which also resulted in a corresponding adjustment to the base rent for the lease at the property.
Capitalized Costs
During the three months ended March 31, 2025, we capitalized costs of $7.7 million relating to improvements and construction activities at our properties.
Property Disposition
In March 2023, we sold the portfolio of four properties in California previously leased to affiliates of Medical Investor Holdings, LLC (“Medical Investor Holdings”) for $16.2 million (excluding transaction costs) and provided a secured loan for $16.1 million to the buyer of the properties. The loan matures on February 29, 2028 with two options to extend the maturity for twelve months, conditional in each instance on the payment of an extension fee and at least $0.5 million of the principal balance. The loan is interest only and payments are payable monthly in advance. The transaction did not qualify for recognition as a completed sale under GAAP since not all of the criteria were met. Accordingly, we have not derecognized the assets transferred on our condensed consolidated balance sheets. All consideration received, as well as any future payments, from the buyer will be recognized as a deposit liability and will be included in other liabilities on our condensed consolidated balance sheet until such time the criteria for recognition as a sale have been met. As of March 31, 2025, we have received interest payments of $2.6 million. In addition, as we have not met all of the held-for-sale criteria, land and building and improvements with a gross carrying value of $3.4 million and $13.9 million, respectively, and accumulated depreciation of $2.1 million as of March 31, 2025, remain on the condensed consolidated balance sheet, and the buildings and improvements continue to be depreciated. We declared this loan in default in March 2025 due to borrower's failure to pay $0.8 million of interest and reimbursement for taxes. As a result, the principal amount of the note, plus accrued and unpaid interest, are immediately due and payable.
Future Contractual Minimum Rent
Future contractual minimum rent (including base rent and property management fees) to be received on our leases as of March 31, 2025 for future periods is summarized as follows (in thousands):
YearContractual Minimum Rent
2025 (nine months ending December 31)$234,273 
2026323,133 
2027334,107 
2028340,466 
2029349,105 
Thereafter3,656,219 
Total$5,237,303 
Future contractual minimum rent includes payments to be received on two sales-type leases, which will be recognized as a deposit liability and will be included in other liabilities on our condensed consolidated balance sheet until certain criteria are met (see Note 2 “Lease Accounting” for further details).
v3.25.1
Debt
 3 Months Ended
Mar. 31, 2025
Debt Disclosure [Abstract]  
Debt Debt
Exchangeable Senior Notes
During the three months ended March 31, 2024, we issued 28,408 shares of our common stock and paid $4.3 million in cash upon exchange by holders of $4.3 million principal amount of Exchangeable Senior Notes and paid off the remaining $0.1 million principal amount at maturity in February 2024, in accordance with terms of the indenture for the Exchangeable Senior Notes.
The following table details our interest expense related to the Exchangeable Senior Notes which matured in February 2024 (in thousands):
For the Three Months Ended March 31,
20252024
Cash coupon$— $24 
Amortization of issuance cost— 5 
Capitalized interest— (1)
Total interest expense$— $28 
Notes due 2026
In May 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 rank equally in right of payment with all of the Operating Partnership’s future senior unsecured indebtedness. 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. The Notes due 2026 pay interest semiannually at a rate of 5.50% per year and will mature on May 25, 2026. The terms of the Notes due 2026 are governed by an indenture dated May 25, 2021, and 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 $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 effective interest rate including amortization of issuance costs is 6.03%.
The following table details our interest expense related to the Notes due 2026 (in thousands):
For the Three Months Ended March 31,
20252024
Cash coupon$4,081 $4,125 
Amortization of issuance cost364 346 
Capitalized interest(56)(165)
Total interest expense$4,389 $4,306 
The following table details the carrying value of our Notes due 2026 (in thousands):
March 31, 2025December 31, 2024
Principal amount$291,215 $300,000 
Unamortized issuance cost(1,716)(2,135)
Carrying value$289,499 $297,865 
The Operating Partnership may redeem some or all of the Notes due 2026 at its option at any time at the applicable redemption price. If the Notes due 2026 are redeemed prior to February 25, 2026, the redemption price will be equal to 100% of the principal amount of the Notes due 2026 being redeemed, plus a make-whole premium and accrued and unpaid interest thereon to, but excluding, the applicable redemption date. If the Notes due 2026 are redeemed on or after February 25, 2026, the redemption price will be equal to 100% of the principal amount of the Notes due 2026 being redeemed, plus accrued and unpaid interest thereon to, but excluding, the applicable redemption date.
In February 2025, we made early partial repayments at a discount totaling $8.7 million on the Notes due 2026, reducing the principal balance by $8.8 million. As of March 31, 2025, the outstanding principal balance was $291.2 million. Following the partial repayment, all other terms and conditions of the debt agreement remain unchanged.
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, 2025.
Accrued interest payable for the Notes due 2026 as of March 31, 2025 and December 31, 2024 was $6.0 million and $2.1 million, respectively, and is included in accounts payable and accrued expenses on our condensed consolidated balance sheets.
Revolving Credit Facility
In October 2023, our Operating Partnership entered into a loan and security agreement (the “Loan Agreement”) with a federally regulated commercial bank, as lender and as agent for lenders that become party thereto from time to time, which matures on October 23, 2026. The Loan Agreement provides $50.0 million in aggregate commitments for secured revolving loans (the “Revolving Credit Facility”), the availability of which is based on a borrowing base consisting of real properties owned by subsidiaries (the “Subsidiary Guarantors”) of the Operating Partnership that satisfy eligibility criteria set forth in the Loan Agreement. The obligations of the Operating Partnership under the Loan Agreement are guaranteed by the Company and the Subsidiary Guarantors, and are secured by (i) operating accounts of the Operating Partnership into which lease payments under the real property included in the borrowing base are paid, (ii) the equity interest of the Subsidiary Guarantors, (iii) the real estate included in the borrowing base and the leases and rents thereunder, and (iv) all personal property of the Subsidiary Guarantors. Borrowings under the Revolving Credit Facility bear interest at a variable rate based on the greater of the prime rate and an applicable margin based on deposits with the participating bank(s) and a stipulated interest rate. The Revolving Credit Facility is subject to an unused line of credit fee, calculated in accordance with the Loan Agreement. The Loan Agreement is subject to certain liquidity and operating covenants and includes customary representations and warranties, affirmative and negative covenants and events of default. The Loan Agreement also allows the Operating Partnership, subject to the satisfaction of certain conditions, to request additional revolving loan commitments up to a specified amount. In November 2024, our Operating Partnership entered into an amendment to the Loan Agreement, pursuant to which the aggregate commitments under the Revolving Credit Facility was increased from $50.0 million to $87.5 million. There were no amounts outstanding under the Revolving Credit Facility as of March 31, 2025.
In connection with the Revolving Credit Facility, we recorded $0.8 million of issuance costs, which are being amortized on a straight-line basis and recognized as non-cash interest expense over the term of the Revolving Credit Facility. For the three months ended March 31, 2025 and 2024, we recognized $0.1 million and $55,000, respectively, of non-cash interest expense related to the Revolving Credit Facility.
The following table summarizes the principal payments on our outstanding indebtedness as of March 31, 2025 (in thousands):
Payments Due
by Year		Amount
2025 (nine months ending December 31)$— 
2026291,215 
2027— 
2028— 
2029— 
Thereafter— 
Total$291,215 
v3.25.1
Net Income Per Share
 3 Months Ended
Mar. 31, 2025
Earnings Per Share [Abstract]  
Net Income Per Share 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, 2025, 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, 2025 and 2024 have been included in net income attributable to common stockholders to calculate net income per basic and diluted share.
The 38,079 shares necessary to settle the Exchangeable Senior Notes on the if-exchanged method basis were dilutive for the three months ended March 31, 2024, and were included in the computation of diluted earnings per share.
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,
20252024
Net income$31,077 $39,428 
Preferred stock dividends(781)(338)
Distribution to participating securities(747)(544)
Net income attributable to common stockholders used to compute net income per share – basic29,54938,546
Dilutive effect of Exchangeable Senior Notes—28
Net income attributable to common stockholders used to compute net income per share – diluted$29,549 $38,574 
Weighted-average common shares outstanding:
Basic28,275,54928,145,017
Restricted stock and RSUs312,473278,890
Dilutive effect of Exchangeable Senior Notes—38,079
Diluted28,588,02228,461,986
Net income attributable to common stockholders per share:
Basic$1.05 $1.37 
Diluted$1.03 $1.36 
v3.25.1
Fair Value
 3 Months Ended
Mar. 31, 2025
Fair Value Disclosures [Abstract]  
Fair Value Fair Value
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, 2025 and December 31, 2024 (in thousands):
At March 31, 2025At December 31, 2024
Carrying ValueFair ValueCarrying ValueFair Value
Investments(1)
$5,258 $5,258 $5,000 $5,000 
Investments as cash equivalents(2)
$17,997 $17,987 $45,714 $45,714 
Notes due 2026(3)
$289,499 $285,015 $297,865 $289,077 
Construction loan(4)
$22,800 $29,241 $22,800 $28,245 
Notes receivable(5)
$16,786 $16,786 $16,786 $16,786 
(1)At March 31, 2025 and December 31, 2024 , investments consisting of short-term certificates of deposit with an original maturity at the time of purchase of greater than 90 days and less than one year are classified as held-to-maturity, stated at cost which approximates fair value using Level 2 inputs.
(2)Investments as cash equivalents include investments of obligations of the U.S. government with an original maturity at the time of purchase of 90 days or less are classified as held-to-maturity, stated at amortized cost and valued using Level 1 inputs. Investments as cash equivalents also include investments in a money market fund that invests 100% in U.S. government securities, which is stated at cost and valued using level 1 inputs.
(3)The fair value is determined based upon Level 2 inputs as the Notes due 2026 were not traded in an active market.
(4)The construction loan receivable is categorized as Level 3 and was valued using a yield analysis, which is typically performed for non-credit impaired loans. To determine fair value using a yield analysis, a current price is imputed for the loan based upon an assessment of the expected market yield for a similarly structured loan with a similar level of risk. In the yield analysis, the Company considers the current contractual interest rate, the maturity and other terms of the loan relative to risk of the company and the specific loan. At each of March 31, 2025 and December 31, 2024, the expected market yield used to determine fair value was 16.25%. Changes in market yields may change the fair value of the construction loan. Generally, an increase in market yields may result in a decrease in the fair value of the construction loan. Due to the inherent uncertainty of determining the fair value of a loan that does not have a readily available market value, the fair value of the construction loan may fluctuate from period to period. Additionally, the fair value of the construction loan may differ significantly from the value that would have been used had a readily available market existed for such loan and may differ materially from the value that the Company may ultimately realize.
(5)Notes receivable relate to certain acquisitions of real estate which did not satisfy the requirements for sale-leaseback accounting (see Note 2 “Acquisition of Real Estate Properties” to our condensed consolidated financial statements for more information). The notes receivable are categorized as Level 3 and were also valued using a yield analysis. At March 31, 2025 and December 31, 2024, the weighted average expected market yields used to determine fair values were 21.6% and 20.6%, respectively.
The carrying amounts of cash equivalents, accounts payable, accrued expenses and other liabilities approximate their fair values.
Nonrecurring Fair Value Measurements
As of March 31, 2025, assets measured at fair value on a nonrecurring basis consist of one real estate asset for which we recorded an impairment and was written down to its estimated fair value. Our estimate of fair value was determined using the stated price within the purchase and sale agreement for this asset, net of estimated transaction costs, which is classified as Level 2 within the GAAP fair value hierarchy. As of March 31, 2025, the fair value of the real estate asset, net of estimated transaction costs, measured on a nonrecurring basis was $1.8 million. Refer to Note 2 "Summary of Significant Accounting Policies and Procedures and Recent Accounting Pronouncements" for further information on the impairment loss on real estate.
v3.25.1
Common Stock Incentive Plan
 3 Months Ended
Mar. 31, 2025
Share-Based Payment Arrangement [Abstract]  
Common Stock Incentive Plan 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 withholding 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, 2025 is included in the table below:
Unvested
Restricted
Stock		Weighted-
Average
Grant Date Fair
Value
Balance at December 31, 202477,268$108.95 
Granted62,817$73.18 
Vested(21,392)$102.04 
Forfeited(1)
(11,883)$165.13 
Balance at March 31, 2025106,810$83.04 
(1)Shares that were forfeited to cover the employees’ tax withholding obligation upon vesting.
The remaining unrecognized compensation cost of $7.8 million for restricted stock awards is expected to be recognized over a weighted-average amortization period of 2.2 years as of March 31, 2025. The fair value of restricted stock that vested during the three months ended March 31, 2025 was $2.3 million.
The following table summarizes our RSU activity for the three months ended March 31, 2025. 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:
Restricted
Stock Units		Weighted-Average
Grant Date Fair
Value
Balance at December 31, 2024222,502$114.68 
Granted73,179$73.18 
Forfeited(1)
(9,242)$97.39 
Balance at March 31, 2025286,439$104.63 
(1)Shares that were forfeited upon employee's cessation of employment.
The remaining unrecognized compensation cost of $9.8 million for RSU awards is expected to be recognized over an amortization period of 0.7 years as of March 31, 2025.
In January 2021 and 2022, we issued 70,795 and 102,641 “target” PSUs, respectively, to a select group of officers, which vest and are settled in shares of common stock based on the Company’s total stockholder return over a performance period beginning on the applicable grant date and ending on December 31, 2023 and 2024, respectively. The PSUs granted in January 2021 and 2022 were forfeited in their entirety on December 31, 2023 and 2024, respectively, pursuant to the terms of the agreements, as the PSUs failed to meet the performance threshold for vesting.
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, 2024, we recognized stock-based compensation expense of $1.7 million relating to PSU awards.
v3.25.1
Commitments and Contingencies
 3 Months Ended
Mar. 31, 2025
Commitments and Contingencies Disclosure [Abstract]  
Commitments and Contingencies Commitments and Contingencies
Office Lease. The future contractual lease payments for our office lease and the reconciliation to the office lease liability reflected in other liabilities in our condensed consolidated balance sheet as of March 31, 2025 is presented in the table below (in thousands):
YearAmount
2025 (nine months ending December 31)$395 
2026543
202745
2028—
2029—
Total future contractual lease payments983
Effect of discounting(51)
Office lease liability $932 
Improvement Allowances. As of March 31, 2025, we had $26.2 million of commitments related to improvement allowances, which generally may be requested by the tenants at any time up until a date that is near the expiration of the initial term of the applicable lease.
Construction Commitments. As of March 31, 2025, we had $1.2 million of commitments related to contracts with vendors for improvements at our properties.
Construction Loan. As of March 31, 2025, we had $0.2 million of commitments related to our Construction Loan for the development of a regulated cannabis cultivation and processing facility in California.
Environmental Matters. We follow the policy of monitoring our properties, both targeted acquisition and existing properties, for the presence of hazardous or toxic substances. While there can be no assurance that a material environmental liability does not exist, we are not currently aware of any environmental liabilities that would have a material adverse effect on our financial condition, results of operations and cash flow, or that we believe would require disclosure or the recording of a loss contingency.
Litigation.
Class Action Lawsuit
On April 25, 2022, a federal securities class action lawsuit was filed against the Company and certain of its officers. The case was named Michael V. Mallozzi, individually and on behalf of others similarly situated v. Innovative Industrial Properties, Inc., Paul Smithers, Catherine Hastings and Andy Bui, Case No. 2-22-cv-02359, and was filed in the U.S. District Court for the District of New Jersey. The lawsuit was purportedly brought on behalf of purchasers of our common stock and alleges that we and certain of our officers made false or misleading statements regarding our business in violation of Section 10(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), SEC Rule 10b-5, and Section 20(a) of the Exchange Act. According to the filed complaint, the plaintiff is seeking an undetermined amount of damages, interest, attorneys’ fees and costs and other relief on behalf of the putative classes of all persons who acquired shares of the Company’s common stock between May 7, 2020 and April 13, 2022.
On September 29, 2022, an Amended Class Action Complaint was filed under the same Case Number, adding as defendants Alan D. Gold and Benjamin C. Regin, and asserting causes of action under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. According to the Amended Class Action Complaint, the plaintiff is seeking an undetermined amount of damages, interest, attorneys’ fees and costs and other relief on behalf of the putative classes of all persons who acquired shares of the Company’s common stock between August 7, 2020 and August 4, 2022. On December 1, 2022, defendants moved to dismiss the Amended Class Action Complaint. On September 19, 2023, the court granted defendants’ motion to dismiss the Amended Class Action Complaint without prejudice.
On October 19, 2023, a Second Amended Class Action Complaint was filed under the same Case Number, and asserted causes of action under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. According to the Second Amended Class Action Complaint, the plaintiff is seeking an undetermined amount of damages, interest, attorneys’ fees and costs and other relief on behalf of the putative classes of all persons who acquired shares of the Company’s common stock between August 7, 2020 and August 4, 2022. On December 18, 2023, defendants moved to dismiss the Second Amended Class Action Complaint; on February 1, 2024, plaintiff responded with their opposition to defendants’ motion to dismiss the Second Amended Class Action Complaint; and on March 1, 2024, defendants replied to plaintiff’s response. On September 25, 2024, the court granted defendants’ motion to dismiss the Second Amended Class Action Complaint with prejudice. On September 30, 2024, plaintiff filed a notice of appeal of the court’s dismissal of the Second Amended Class Action Complaint with prejudice. On December 9, 2024, plaintiff filed their opening appellate brief with the United States Court of Appeals for the Third Circuit. On January 23, 2025, defendants filed their appellate brief. On February 27, 2025, plaintiff filed their reply brief. Oral argument is tentatively set for June 16, 2025.
On January 17, 2025, a second federal securities class action lawsuit was filed against the Company and certain of its officers. The case was named Alain Giraudon, individually and on behalf of others similarly situated v. Innovative Industrial Properties, Inc., Alan D. Gold, Paul E. Smithers, David Smith and Ben Regin, Case No. 1:25-cv-00182-RDB, and was filed in the U.S. District Court for the District of Maryland. The lawsuit was purportedly brought on behalf of purchasers of our common stock and alleges that we and certain of our officers made false or misleading statements regarding our business in violation of Section 10(b) of the Exchange Act, SEC Rule 10b-5, and Section 20(a) of the Exchange Act. According to the filed complaint, the plaintiff is seeking an undetermined amount of damages, interest, attorneys’ fees and costs and other relief on behalf of the putative classes of all persons who acquired shares of the Company’s common stock between February 27, 2024 and December 19, 2024. On April 25, 2025, the court issued an order setting a briefing schedule, which is as follows: plaintiff is to file an Amended Complaint no later than June 23, 2025; defendants are to file an answer, move to dismiss, or otherwise respond no later than August 22, 2025; if defendants move to dismiss, plaintiff is to file a response no later than October 21, 2025; and defendants are to file a reply no later than November 20, 2025.
It is possible that similar lawsuits may yet be filed in the same or other courts that name the same or additional defendants. We intend to defend the lawsuit vigorously. However, at this time, we cannot predict the probable outcome of this action, and, accordingly, no amounts have been accrued in the Company’s condensed consolidated financial statements.
Derivative Action Lawsuits
On July 26, 2022, a derivative action lawsuit was filed against the Company and certain of its officers and directors. The case was named John Rice, derivatively on behalf of Innovative Industrial Properties, Inc. v. Paul Smithers, Catherine Hastings, Andy Bui, Alan Gold, Gary Kreitzer, Mary Curran, Scott Shoemaker, David Stecher, and Innovative Industrial Properties, Inc., Case Number 24-C-22-003312, and was filed in the Circuit Court for Baltimore City, Maryland. The lawsuit asserts putative derivative claims for breach of fiduciary duty, unjust enrichment, abuse of control, gross mismanagement, and waste of corporate assets against the directors and certain officers of the Company. The plaintiffs are seeking declaratory relief, direction to reform and improve corporate governance and internal procedures, and an undetermined amount of damages, restitution, interest, and attorneys’ fees and costs. On September 6, 2022, the defendants in this action filed a Consent Motion to Stay the Proceedings, which was granted on October 11, 2022. On September 28, 2022, a second derivative action lawsuit was filed against the Company and certain of its officers and directors. The case was named Karen Draper, derivatively on behalf of Innovative Industrial Properties, Inc. v. Paul Smithers, Catherine Hastings, Andy Bui, Alan Gold, Gary Kreitzer, Mary Curran, Scott Shoemaker, David Stecher, Defendants, and Innovative Industrial Properties Inc., Nominal Defendant, Case Number 24-C-22-004243, and filed in the Circuit Court for Baltimore City, Maryland. The lawsuit asserts putative derivative claims for breach of fiduciary duty, and seeks actions to reform and improve the Company, and an undetermined amount of damages, restitution, interest, and attorneys’ fees and costs. On October 19, 2022, the parties to both cases filed a Joint Motion to Consolidate Related Shareholder Derivative Actions and to Appoint Lead and Liaison Counsel for plaintiffs, which was granted on December 19, 2022, along with a stay in the lawsuit pending a ruling on the defendants’ motion to dismiss the federal class action lawsuit described above. On April 17, 2023, a third derivative action lawsuit was filed against the Company and certain of its officers and directors. The case was named Ross Weintraub, derivatively on behalf of Innovative Industrial Properties, Inc. v. Alan Gold, Paul Smithers, Catherine Hastings, Ben Regin, Andy Bui, Tracie Hager, Gary Kreitzer, David Stecher, Scott Shoemaker, Mary Curran, and Innovative Industrial Properties, Inc., Case Number 1:23-cv-00737-GLR, and filed in the United States District Court for the District of Maryland. The lawsuit asserts putative derivative claims for breach of fiduciary duty and violations of
Section 14(a) of the Exchange Act, and seeks an undetermined amount of damages, equitable relief, and attorneys’ fees and costs. Defendants in this action filed a Consent Motion to Stay the Proceeding, which was granted on April 17, 2023. On June 5, 2023, a fourth derivative action lawsuit was filed against the Company and certain of its officers and directors. The case was named Franco DeBlasio, on behalf of Gerich Melenth Nin (GMN) LP, derivatively on behalf of Innovative Industrial Properties, Inc. v. Paul Smithers, Catherine Hastings, Alan D. Gold, Tracie J. Hager, Benjamin C. Regin, Andy Bui, Gary A. Kreitzer, David Stecher, Scott Shoemaker, Mary Curran, and Innovative Industrial Properties, Inc., Case Number 1:23-cv-01513-GLR, and filed in the United States District Court for the District of Maryland. On July 19, 2023, the United States Court for the District of Maryland consolidated Case Nos. 1:23-cv-00737-GLR and 1:23-cv-01513-GLR with case number 1:23-cv-00737-GLR as the lead case, and kept the stay in place. The consolidated case remains stayed as Case Number 24-C-22-003312. This derivative action relates to the same allegations as those made in the Mallozzi class action, detailed above.
On May 9, 2024, a fifth derivative action lawsuit was filed against the Company and certain of its officers and directors. The case was named Gary A Gedig, derivatively on behalf of Innovative Industrial Properties, Inc. v. Paul Smithers, Catherine Hastings, Ben Regin, Andy Bui, Tracy Hager, Alan Gold, Gary A. Kreitzer, Mary Curran, Scott Shoemaker, M.D., and David Stecher, and Innovative Industrial Properties, Inc., Civil No. C-24-CV-24-000130, and filed in the Circuit Court for Baltimore City, Maryland. Plaintiff and defendants in this action filed a Joint Stipulation to Stay the Proceedings, which was granted on September 17, 2024. This derivative action relates to the same allegations as those made in the Mallozzi class action, detailed above.
On February 12, 2025, a derivative action lawsuit was filed against the Company and certain of its officers and directors. The case was named Joshua Steffens, derivatively on behalf of Innovative Industrial Properties, Inc. v. Alan Gold, Paul Smithers, David Smith, Ben Regin, Gary Kreitzer, Gary Stecher, Scott Shoemaker, Mary Allis Curran, and Innovative Industrial Properties, Inc., Case Number 1:25-cv-00456-ABA, and was filed in the United States District Court for the District of Maryland. The lawsuit asserts putative derivative claims for violations of the Exchange Act, breach of fiduciary duty, aiding and abetting breach of fiduciary duty, unjust enrichment, waste of corporate assets, and contribution against the directors and certain officers of the Company. The plaintiffs are seeking an undetermined amount of damages, interest, an accounting and constructive trust, punitive damages, and attorneys’ fees and costs. On February 18, 2025, the case was reassigned and given Case Number 1:25-cv-00456-GLR. On February 19, 2025, the United States Court for the District of Maryland consolidated Case Nos. 1:25-cv-00469-BAH (detailed below) with case number 1:25-cv-00456-GLR as the lead case. Plaintiff and defendants in this action filed a Joint Stipulation and Order Staying the Consolidated Action, which was granted on March 13, 2025. This derivative action relates to the same allegations as those made in the Giraudon class action, detailed above.
On February 13, 2025, a derivative action lawsuit was filed against the Company and certain of its officers and directors. The case was named Joshua Albers, derivatively on behalf of Innovative Industrial Properties, Inc. v. Alan Gold, Paul Smithers, David Smith, Ben Regin, Gary Kreitzer, Gary Stecher, Scott Shoemaker, Mary Allis Curran, and Innovative Industrial Properties, Inc., Case Number 1:25-cv-00469-BAH, and was filed in the United States District Court for the District of Maryland. The lawsuit asserts putative derivative claims for violations of the Exchange Act, breach of fiduciary duty, aiding and abetting breach of fiduciary duty, unjust enrichment, waste of corporate assets, and contribution against the directors and certain officers of the Company. The plaintiffs are seeking an undetermined amount of damages, interest, reform, punitive damages, and attorneys’ fees and costs. On February 19, 2025, the United States Court for the District of Maryland consolidated Case Nos. 1:25-cv-00469-BAH with case number 1:25-cv-00456-GLR as the lead case. This derivative action also relates to the same allegations as those made in the Giraudon class action, detailed above.
The Company intends to vigorously defend each of these lawsuits. However, at this time, the Company cannot predict the probable outcome of these actions, and, accordingly, no amounts have been accrued in the Company’s condensed consolidated financial statements.
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.
v3.25.1
Segment Information
 3 Months Ended
Mar. 31, 2025
Segment Reporting [Abstract]  
Segment Information Segment InformationWe operate in one reportable segment of acquiring, developing/redeveloping and leasing real estate to tenants on a long-term triple-net basis. All of our revenues are generated in the United States and the CODM manages the business activities on a consolidated basis. The CODM is our President and Chief Executive Officer. The CODM assesses performance for the segment and decides how to allocate resources based on net income, which is reported on the condensed consolidated statements of income. The CODM uses net income to evaluate return on investments and determine whether to reinvest profits or to pay dividends. The evaluation is also used to establish management’s compensation. The revenues, expenses (including stock-based compensation) and net income for the reportable segment are the same as those presented on the consolidated financial statements. The measure of segment assets is reported on the condensed consolidated balance sheets as total consolidated assets.
v3.25.1
Subsequent Events
 3 Months Ended
Mar. 31, 2025
Subsequent Events [Abstract]  
Subsequent Events Subsequent Events
In April 2025, we sold one of our properties in Michigan for $9.0 million (excluding transaction costs) and provided a secured loan for $8.5 million to the buyer of the property. The loan matures on April 24, 2028 with an option to extend the maturity for twelve months, conditional on the payment of an extension fee. The loan is interest only and payments are payable monthly in advance.
In April 2025, we executed a lease for one of our properties in Michigan that was previously leased to PharmaCann.
In April 2025, we sold 20,978 shares of our Series A Preferred Stock pursuant to the ATM Program for net proceeds of $0.5 million.
In April 2025, we repurchased and retired 366,952 shares of our common stock pursuant to the Company's share repurchase program for $19.8 million.
v3.25.1
Pay vs Performance Disclosure - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2025
Mar. 31, 2024
Pay vs Performance Disclosure    
Net income $ 31,077 $ 39,428
v3.25.1
Insider Trading Arrangements
 3 Months Ended
Mar. 31, 2025
Trading Arrangements, by Individual  
Rule 10b5-1 Arrangement Adopted false
Non-Rule 10b5-1 Arrangement Adopted false
Rule 10b5-1 Arrangement Terminated false
Non-Rule 10b5-1 Arrangement Terminated false
v3.25.1
Summary of Significant Accounting Policies and Procedures and Recent Accounting Pronouncements (Policies)
 3 Months Ended
Mar. 31, 2025
Accounting Policies [Abstract]  
Basis of Presentation
Basis of Presentation. The condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. They do not include all of the information and footnotes required by GAAP for complete financial statements.
This interim financial information should be read in conjunction with the audited consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. 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, 2025.
Federal Income Taxes
Federal Income Taxes. We believe that we have operated our business so as to qualify to be taxed as a REIT for U.S. federal income tax purposes. Under the REIT operating structure, we are permitted to deduct dividends paid to our stockholders in determining our taxable income. Assuming our dividends equal or exceed our taxable net income, we generally will not be required to pay federal corporate income taxes on such income. The income taxes recorded on our condensed consolidated statements of income represent amounts paid for city and state income and franchise taxes and are included in general and administrative expenses in the accompanying condensed consolidated statements of income.
Use of Estimates
Use of Estimates. The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make a number of estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the condensed consolidated financial statements and reported amounts of revenues and expenses during the reporting period. Actual results may differ materially from these estimates and assumptions. The most significant estimates and assumptions made include determination of lease accounting and fair value of acquisition of real estate properties.
Reportable Segment
Reportable Segment. We have aggregated our properties into one reportable segment as the properties share similar long-term economic characteristics and have other similarities, including the fact that they are operated using consistent business strategies. The financial information disclosed herein represents all of the financial information related to our one reportable segment. Our chief operating decision maker ("CODM") reviews financial information for our entire
consolidated operations when making decisions related to assessing our operating performance.
Acquisition and Sale of Real Estate Properties
Acquisition of Real Estate Properties. Our investment in real estate is recorded at historical cost, less accumulated depreciation. Upon acquisition of a property, the tangible and intangible assets acquired and liabilities assumed are initially measured based upon their relative fair values. We estimate the fair value of land by reviewing comparable sales within the same submarket and/or region. We estimate the fair value of buildings and improvements as if the property was vacant utilizing a direct capitalization approach and take into consideration current replacement costs and other relevant market rate information and may engage third-party valuation specialists. Acquisition costs are capitalized as incurred. All of our acquisitions to date were recorded as asset acquisitions.
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 revenues over the remaining term of the applicable lease.
Certain acquisitions of real estate did not satisfy the requirements for sale-leaseback accounting and therefore as of both March 31, 2025 and December 31, 2024, acquisitions of $16.8 million have been recognized as notes receivable and are included in other assets, net on our condensed consolidated balance sheets.
Sale of Real Estate. When a real estate asset is sold, we evaluate the provisions of Accounting Standards Codification (“ASC”) 610-20, Gains and Losses from the Derecognition of Nonfinancial Assets (“ASC 610-20”) to determine whether the asset is within the scope of ASC 610-20, including an evaluation of whether the asset being sold is a nonfinancial asset and whether the buyer has gained control of an asset within the scope of ASC 610-20. In assessing whether the buyer has gained control of the asset, we must determine whether the contract criteria in ASC 606, Revenue from Contracts with Customers (Topic 606) have been met, including 1) the parties to the contract have approved the contract and the contract has commercial substance, 2) we can identify each party’s rights regarding the asset to be transferred, 3) we can identify the payment terms for the asset to be transferred, and 4) it is probable that we will collect substantially all of the consideration to which we will be entitled in exchange for the asset to be transferred. If all of the contract criteria have been met, the carrying amount of the applicable asset is derecognized with a corresponding gain or loss from the sale recognized in our condensed consolidated statements of income. If the contract criteria are not all met, the asset transferred is not derecognized and we continue to report the asset in our condensed consolidated balance sheet. See Note 6 “Investments in Real Estate - Property Dispositions” for further information.
Cost Capitalization and Depreciation
Cost Capitalization and Depreciation. We capitalize costs (including interest) associated with development and redevelopment activities and improvements when we are considered to be the accounting owner of the resulting assets. The development and redevelopment activities may be funded by us pursuant to the lease. We are generally considered the accounting owner for such improvements that are attached to or built into the premises, which are required under the lease to be surrendered to us upon the expiration or earlier termination of the lease. Typically, such improvements include, but are not limited to, ground up development, and enhanced HVAC, plumbing, electrical and other building systems.
Amounts capitalized are depreciated on a straight-line basis over the estimated useful lives determined by management. We depreciate buildings and 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, 2025 and 2024, we recognized depreciation expense of $18.2 million and $16.9 million, respectively. Depreciation expense relating to our real estate held for investment is included in depreciation and amortization expense in our condensed consolidated statements of income. We depreciate office equipment and furniture and fixtures on a straight-line basis over the estimated useful lives ranging from three to seven years. We depreciate the leasehold improvements at our corporate office on a straight-line basis over the
shorter of the estimated useful lives or the remaining lease term. Depreciation expense relating to our corporate assets is included in general and administrative expense in our condensed consolidated statements of income.
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.
We define redevelopment properties as existing properties for which we expect to spend significant development and construction costs that are not reimbursements to tenants for improvements at the properties. When existing properties are determined to be redevelopment properties, the net carrying value of the buildings and improvements are transferred to construction in progress while the redevelopment activities are in process. Costs capitalized to construction in progress related to redevelopment properties are transferred to buildings and improvements at historical cost of the properties as the redevelopment project or phases of projects are placed in service.
Provision for Impairment
Provision for Impairment. On a quarterly basis, we review current activities and changes in the business conditions of all of our properties prior to and subsequent to the end of each quarter to determine the existence of any triggering events or impairment indicators requiring an impairment analysis. If triggering events or impairment indicators are identified, we review an estimate of the future undiscounted cash flows for the properties.
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.
During the three months ended March 31, 2025, real estate assets related to one of our properties in Palm Springs, California were determined to be impaired. In April 2025, we marketed the property for sale and have executed a purchase and sale agreement with a prospective buyer in which the estimated net proceeds from sale is less than the carrying value of the property. As a result, we recognized an impairment loss on real estate of $3.5 million during the three months ended March 31, 2025 to reduce its carrying value to the estimated fair value. No impairment losses were recognized during the three months ended March 31, 2024.
Revenue Recognition
Revenue Recognition. Our leases are triple-net leases, an arrangement under which the tenant maintains the property while paying us rent. We recognize revenue for each of the leases at our properties that are classified as operating leases on a cash basis due to the uncertain regulatory environment in the United States pertaining to the regulated cannabis industry, the limited operating history of certain tenants and the resulting uncertainty of collectability of lease payments from each tenant over the duration of the lease term. We evaluate a number of factors in our initial and ongoing assessments of collectability of lease payments for each tenant on a lease-by-lease basis, including evaluations of each tenant’s financial performance, liquidity and overall credit profile, availability and terms of capital for each tenant needed to conduct operations or refinance existing obligations, utilization rates by property and lease duration. We also consider current market conditions, impact of federal, state and local taxation and regulatory burdens and reasonable and supportable forecasts of future economic conditions. Additionally, for operating leases, contractually obligated reimbursements from tenants for recoverable real estate taxes, insurance and operating expenses are included in rental revenues in the period when such costs are reimbursed by the tenants. Contractually obligated real estate taxes that are paid directly by the tenant to the tax authorities are not reflected in our condensed consolidated financial statements.
Cash and Cash Equivalents
Cash and Cash Equivalents. We consider all highly-liquid investments with original maturities of 90 days or less to be cash equivalents, which is comprised of short-term money market funds, obligations of the U.S. government and certificates of deposit with an original maturity at the time of purchase of less than or equal to 90 days.
Investments
Investments. Investments consist of short-term obligations of the U.S. government and certificates of deposit with an original maturity at the time of purchase of greater than 90 days. Investments in obligations of the U.S. government are classified as held-to-maturity and stated at amortized cost. Investments in certificates of deposit are classified as held-to-maturity and stated at cost.
Deferred Financing Costs
Deferred Financing Costs. The deferred financing costs relating to our Notes due 2026 are included as a reduction in the net book value of the related liability on our condensed consolidated balance sheets. These costs are amortized as non-cash interest expense using the effective interest method over the life of the related obligations. Deferred financing costs relating to our Revolving Credit Facility (as defined in Note 7 "Debt") are included in other assets, net in our condensed consolidated balance sheets. These costs are being amortized on a straight-line basis and recognized as non-cash interest expense over the remaining term of the Revolving Credit Facility.
Stock-Based Compensation
Stock-Based Compensation. Stock-based compensation for equity awards is based on the grant date fair value of the equity awards and is recognized over the requisite service or performance period. If awards are forfeited prior to vesting, we reverse any previously recognized expense related to such awards in the period during which the forfeiture occurs and reclassify any non-forfeitable dividends and dividend equivalents previously paid on these awards from retained earnings to compensation expense. Forfeitures are recognized as incurred. Certain equity awards are subject to vesting based upon the satisfaction of various market conditions. Forfeiture of share awards with market-based restrictions does not result in a reversal of previously recognized share-based compensation expense.
Lease Accounting
Lease Accounting. We account for our leases under ASC 842, Leases, and have elected the practical expedient not to separate certain non-lease components from the lease component if the timing and pattern of transfer are the same for the non-lease component and associated lease component, and the lease component would be classified as an operating lease if accounted for separately. We also elected the short-term lease exception for lessees for leases that are less than 12 months. 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, which ends in January 2027 and contains annual escalations. We measured the lease liability based on the present value of the future lease payments (excluding the extension option that we are not reasonably certain to exercise), discounted using the estimated incremental borrowing rates of 7.25% and 5.5%, which were the interest rates that we estimated we would have to pay to borrow on a collateralized basis over a similar term for an amount equal to the lease payments at initial commencement in December 2019 and upon an amendment in November 2021, respectively. 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 or exchange any other consideration 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. In both the three months ended March 31, 2025 and 2024, we recognized office lease expense of $0.1 million, which is included in general and administrative expenses in our condensed consolidated statements of income. In both the three months ended March 31, 2025 and 2024, amounts paid and classified as operating activities in our condensed consolidated statements of cash flows for the office lease were $0.1 million.
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 revenues and as property expenses, respectively, on our condensed consolidated statements of income. Property taxes paid directly by the lessee to a third party continue to be excluded from our condensed 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. In January 2024, the lease modifications for two of our leases to extend the initial term of each lease changed the lease classification from operating lease to sales-type lease that did not satisfy all the criteria for recognition as a completed sale. Accordingly, we continue to recognize the underlying assets within net real estate held for investment and all lease payments received, as well as any future lease payments, will be recognized as a deposit liability and will be included in other liabilities on our condensed consolidated balance sheet until certain criteria are met. As of March 31, 2025, we have received lease payments of $5.0 million that have been included in other liabilities on our condensed consolidated balance sheet. The underlying assets’ land and building and improvements had a gross carrying value of $4.1 million and $28.9 million, respectively, and accumulated depreciation of $3.8 million as of March 31, 2025.
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.
Recent Accounting Pronouncements
Recent Accounting Pronouncements. In November 2024, the FASB issued ASU 2024-03, Disaggregation of Income Statement Expenses. The amendments in ASU 2024-03 require entities to provide enhanced disclosures related to certain expense categories included in income statement captions. Under ASU 2024-03, entities are required to disaggregate, in a tabular format, expense captions presented on the face of the income statement — excluding earnings or losses from equity method investments — if they include any of the following expense categories: purchases of inventory, employee compensation, depreciation, intangible asset amortization, and depreciation, depletion, and amortization recognized as part of oil and gas-producing activities (or other amounts of depletion expense). For any remaining items within each relevant expense caption, entities must provide a qualitative description of the nature of those expenses. ASU 2024-03 is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. We expect to adopt this ASU on January 1, 2027. While the adoption is not expected to have an impact on our consolidated financial statements, it is expected to result in incremental disclosures within the footnotes to our consolidated financial statements.
Concentration of Credit Risk
Concentration of Credit Risk. As of March 31, 2025, we owned 110 properties located in 19 states and leased to 31 tenants (excluding five non-cannabis tenants at three of our properties). The ability of any of our tenants to honor the terms of their leases is dependent upon the economic, regulatory, competition, natural and social factors affecting the community in which that tenant operates.
The following tables set forth the five tenants in our portfolio that represented the largest percentage of our total rental revenues for the three months ended March 31, 2025 and 2024, including tenant reimbursements:
For the Three Months Ended
March 31, 2025
Percentage of
Number of Rental
LeasesRevenue
PharmaCann Inc. ("PharmaCann") (1)
1112 %
Ascend Wellness Holdings, Inc. ("Ascend")411 %
Green Thumb Industries, Inc. ("Green Thumb")38 %
Curaleaf Holdings, Inc. ("Curaleaf")88 %
Trulieve Cannabis Corp. ("Trulieve")67 %
For the Three Months Ended
March 31, 2024
Number of
Leases		Percentage of
Rental
Revenue
PharmaCann1117 %
Ascend411 %
Green Thumb38 %
Curaleaf87 %
Trulieve67 %
(1)See Note 6 "Investment in Real Estate - Lease Amendments" for further information about the leases with PharmaCann.
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 both March 31, 2025 and December 31, 2024, our largest property was located in New York and accounted for 5.5% of our net real estate held for investment. No other properties accounted for more than 5% of our net real estate held for investment as of March 31, 2025 and December 31, 2024.
We have deposited cash with financial institutions that are insured by the Federal Deposit Insurance Corporation (“FDIC”) up to $250,000. As of March 31, 2025, we had cash accounts in excess of FDIC insured limits. We have not experienced any losses in such accounts.
v3.25.1
Summary of Significant Accounting Policies and Procedures and Recent Accounting Pronouncements (Tables)
 3 Months Ended
Mar. 31, 2025
Accounting Policies [Abstract]  
Schedule of major tenants by rental revenue
The following tables set forth the five tenants in our portfolio that represented the largest percentage of our total rental revenues for the three months ended March 31, 2025 and 2024, including tenant reimbursements:
For the Three Months Ended
March 31, 2025
Percentage of
Number of Rental
LeasesRevenue
PharmaCann Inc. ("PharmaCann") (1)
1112 %
Ascend Wellness Holdings, Inc. ("Ascend")411 %
Green Thumb Industries, Inc. ("Green Thumb")38 %
Curaleaf Holdings, Inc. ("Curaleaf")88 %
Trulieve Cannabis Corp. ("Trulieve")67 %
For the Three Months Ended
March 31, 2024
Number of
Leases		Percentage of
Rental
Revenue
PharmaCann1117 %
Ascend411 %
Green Thumb38 %
Curaleaf87 %
Trulieve67 %
(1)See Note 6 "Investment in Real Estate - Lease Amendments" for further information about the leases with PharmaCann.
v3.25.1
Dividends (Tables)
 3 Months Ended
Mar. 31, 2025
Dividends [Abstract]  
Schedule of dividends declared
The following table describes the dividends declared by the Company during the three months ended March 31, 2025:
Declaration DateSecurity ClassAmount
Per Share		Period CoveredDividend
Paid Date		Dividend
Amount
(In thousands)
March 14, 2025Common stock$1.90 January 1, 2025 to March 31, 2025April 15, 2025$54,463 
March 14, 2025Series A preferred stock$0.5625 January 15, 2025 to April 14, 2025April 15, 2025$781 
v3.25.1
Investments in Real Estate (Tables)
 3 Months Ended
Mar. 31, 2025
Real Estate [Abstract]  
Schedule of real estate properties
The Company made the following acquisition during the three months ended March 31, 2025 (dollars in thousands):
PropertyStateClosing Date
Rentable
Square
Feet(1)
Purchase
Price		Transaction
Costs		Total
Harvard PlaceMarylandFebruary 20, 202522,000$7,750 $107 $7,857 
Total22,000$7,750 $107 $7,857 
(2)
(1)Includes expected rentable square feet at completion of construction at the property.
(2)$0.6 million was allocated to land and $7.2 million was allocated to building and improvements.
Schedule of intangible assets and related accumulated amortization
In-place lease intangible assets and related accumulated amortization as of March 31, 2025 and December 31, 2024 is as follows (in thousands):
March 31, 2025December 31, 2024
In-place lease intangible assets$9,979 $9,979 
Accumulated amortization(2,809)(2,594)
In-place lease intangible assets, net$7,170 $7,385 
The above-market lease and related accumulated amortization included in other assets, net on our condensed consolidated balance sheets as of March 31, 2025 and December 31, 2024 is as follows (in thousands):
March 31, 2025December 31, 2024
Above-market lease$1,054 $1,054 
Accumulated amortization(302)(279)
Above-market lease, net$752 $775 
Schedule of estimated annual amortization The weighted-average remaining amortization period of the acquired in-place leases was 8.5 years, and the estimated annual amortization of the value of the acquired in-place leases as of March 31, 2025 is as follows (in thousands):
YearAmount
2025 (nine months ending December 31)$645 
2026860 
2027860 
2028860 
2029860 
Thereafter3,085 
Total$7,170 
Schedule of future contractual minimum rent
Future contractual minimum rent (including base rent and property management fees) to be received on our leases as of March 31, 2025 for future periods is summarized as follows (in thousands):
YearContractual Minimum Rent
2025 (nine months ending December 31)$234,273 
2026323,133 
2027334,107 
2028340,466 
2029349,105 
Thereafter3,656,219 
Total$5,237,303 
v3.25.1
Debt (Tables)
 3 Months Ended
Mar. 31, 2025
Debt Disclosure [Abstract]  
Schedule of interest expense
The following table details our interest expense related to the Exchangeable Senior Notes which matured in February 2024 (in thousands):
For the Three Months Ended March 31,
20252024
Cash coupon$— $24 
Amortization of issuance cost— 5 
Capitalized interest— (1)
Total interest expense$— $28 
The following table details our interest expense related to the Notes due 2026 (in thousands):
For the Three Months Ended March 31,
20252024
Cash coupon$4,081 $4,125 
Amortization of issuance cost364 346 
Capitalized interest(56)(165)
Total interest expense$4,389 $4,306 
Schedule of carrying value
The following table details the carrying value of our Notes due 2026 (in thousands):
March 31, 2025December 31, 2024
Principal amount$291,215 $300,000 
Unamortized issuance cost(1,716)(2,135)
Carrying value$289,499 $297,865 
Summary of principal payments on outstanding indebtedness
The following table summarizes the principal payments on our outstanding indebtedness as of March 31, 2025 (in thousands):
Payments Due
by Year		Amount
2025 (nine months ending December 31)$— 
2026291,215 
2027— 
2028— 
2029— 
Thereafter— 
Total$291,215 
v3.25.1
Net Income Per Share (Tables)
 3 Months Ended
Mar. 31, 2025
Earnings Per Share [Abstract]  
Schedule of computations of net income per basic and diluted share
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,
20252024
Net income$31,077 $39,428 
Preferred stock dividends(781)(338)
Distribution to participating securities(747)(544)
Net income attributable to common stockholders used to compute net income per share – basic29,54938,546
Dilutive effect of Exchangeable Senior Notes—28
Net income attributable to common stockholders used to compute net income per share – diluted$29,549 $38,574 
Weighted-average common shares outstanding:
Basic28,275,54928,145,017
Restricted stock and RSUs312,473278,890
Dilutive effect of Exchangeable Senior Notes—38,079
Diluted28,588,02228,461,986
Net income attributable to common stockholders per share:
Basic$1.05 $1.37 
Diluted$1.03 $1.36 
v3.25.1
Fair Value (Tables)
 3 Months Ended
Mar. 31, 2025
Fair Value Disclosures [Abstract]  
Schedule of carrying value and approximate fair value of financial instruments
The following table presents the carrying value and approximate fair value of financial instruments at March 31, 2025 and December 31, 2024 (in thousands):
At March 31, 2025At December 31, 2024
Carrying ValueFair ValueCarrying ValueFair Value
Investments(1)
$5,258 $5,258 $5,000 $5,000 
Investments as cash equivalents(2)
$17,997 $17,987 $45,714 $45,714 
Notes due 2026(3)
$289,499 $285,015 $297,865 $289,077 
Construction loan(4)
$22,800 $29,241 $22,800 $28,245 
Notes receivable(5)
$16,786 $16,786 $16,786 $16,786 
(1)At March 31, 2025 and December 31, 2024 , investments consisting of short-term certificates of deposit with an original maturity at the time of purchase of greater than 90 days and less than one year are classified as held-to-maturity, stated at cost which approximates fair value using Level 2 inputs.
(2)Investments as cash equivalents include investments of obligations of the U.S. government with an original maturity at the time of purchase of 90 days or less are classified as held-to-maturity, stated at amortized cost and valued using Level 1 inputs. Investments as cash equivalents also include investments in a money market fund that invests 100% in U.S. government securities, which is stated at cost and valued using level 1 inputs.
(3)The fair value is determined based upon Level 2 inputs as the Notes due 2026 were not traded in an active market.
(4)The construction loan receivable is categorized as Level 3 and was valued using a yield analysis, which is typically performed for non-credit impaired loans. To determine fair value using a yield analysis, a current price is imputed for the loan based upon an assessment of the expected market yield for a similarly structured loan with a similar level of risk. In the yield analysis, the Company considers the current contractual interest rate, the maturity and other terms of the loan relative to risk of the company and the specific loan. At each of March 31, 2025 and December 31, 2024, the expected market yield used to determine fair value was 16.25%. Changes in market yields may change the fair value of the construction loan. Generally, an increase in market yields may result in a decrease in the fair value of the construction loan. Due to the inherent uncertainty of determining the fair value of a loan that does not have a readily available market value, the fair value of the construction loan may fluctuate from period to period. Additionally, the fair value of the construction loan may differ significantly from the value that would have been used had a readily available market existed for such loan and may differ materially from the value that the Company may ultimately realize.
(5)Notes receivable relate to certain acquisitions of real estate which did not satisfy the requirements for sale-leaseback accounting (see Note 2 “Acquisition of Real Estate Properties” to our condensed consolidated financial statements for more information). The notes receivable are categorized as Level 3 and were also valued using a yield analysis. At March 31, 2025 and December 31, 2024, the weighted average expected market yields used to determine fair values were 21.6% and 20.6%, respectively.
v3.25.1
Common Stock Incentive Plan (Tables)
 3 Months Ended
Mar. 31, 2025
Share-Based Payment Arrangement [Abstract]  
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, 2025 is included in the table below:
Unvested
Restricted
Stock		Weighted-
Average
Grant Date Fair
Value
Balance at December 31, 202477,268$108.95 
Granted62,817$73.18 
Vested(21,392)$102.04 
Forfeited(1)
(11,883)$165.13 
Balance at March 31, 2025106,810$83.04 
(1)Shares that were forfeited to cover the employees’ tax withholding obligation upon vesting.
The following table summarizes our RSU activity for the three months ended March 31, 2025. 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:
Restricted
Stock Units		Weighted-Average
Grant Date Fair
Value
Balance at December 31, 2024222,502$114.68 
Granted73,179$73.18 
Forfeited(1)
(9,242)$97.39 
Balance at March 31, 2025286,439$104.63 
(1)Shares that were forfeited upon employee's cessation of employment.
v3.25.1
Commitments and Contingencies (Tables)
 3 Months Ended
Mar. 31, 2025
Commitments and Contingencies Disclosure [Abstract]  
Schedule of future contractual lease payments The future contractual lease payments for our office lease and the reconciliation to the office lease liability reflected in other liabilities in our condensed consolidated balance sheet as of March 31, 2025 is presented in the table below (in thousands):
YearAmount
2025 (nine months ending December 31)$395 
2026543
202745
2028—
2029—
Total future contractual lease payments983
Effect of discounting(51)
Office lease liability $932 
v3.25.1
Summary of Significant Accounting Policies and Procedures and Recent Accounting Pronouncements - Additional Information (Details)
 1 Months Ended 3 Months Ended
Jan. 31, 2024
lease
Mar. 31, 2025
USD ($)
segment
property
lease
Mar. 31, 2024
USD ($)
Dec. 31, 2024
USD ($)
Nov. 30, 2021
Dec. 31, 2019
Property, Plant and Equipment [Line Items]            
Number of reportable segments | segment   1        
Number of above market leases | lease   1        
Acquisitions of real estate did not satisfy the requirements for sale-leaseback accounting   $ 16,800,000   $ 16,800,000    
Depreciation expense   $ 18,200,000 $ 16,900,000      
Properties impaired | property   1        
Impairment losses   $ 3,500,000 0      
Rental revenue   5,800,000 0      
Maximum construction loan agreed to lend   23,000,000.0        
Construction loan funded   22,800,000   $ 22,800,000    
Incremental borrowing rate         5.50% 7.25%
Office lease expense   100,000 100,000      
Amounts paid and classified as operating activities for the office lease   100,000 $ 100,000      
Number of lease modifications | lease 2          
Received lease payments   5,000,000.0        
Underlying assets accumulated depreciation   $ 3,800,000        
Buildings and improvements            
Property, Plant and Equipment [Line Items]            
Estimated useful lives (in years)   40 years        
Underlying assets gross carrying value   $ 28,900,000        
Office equipment and furniture and fixtures | Minimum            
Property, Plant and Equipment [Line Items]            
Estimated useful lives (in years)   3 years        
Office equipment and furniture and fixtures | Maximum            
Property, Plant and Equipment [Line Items]            
Estimated useful lives (in years)   7 years        
Land            
Property, Plant and Equipment [Line Items]            
Underlying assets gross carrying value   $ 4,100,000        
v3.25.1
Summary of Significant Accounting Policies and Procedures and Recent Accounting Pronouncements - Concentration of Credit Risk (Details)
 3 Months Ended 12 Months Ended
Mar. 31, 2025
lease
property
tenant
state
Mar. 31, 2024
tenant
lease
Dec. 31, 2024
Concentration Risk      
Number of properties | property 110    
Number of states in which properties are owned | state 19    
Number of tenants | tenant 31    
Total rental revenue | Tennant      
Concentration Risk      
Number of tenants | tenant 5 5  
Net real estate held for investment | Location      
Concentration Risk      
Concentration risk 5.00%   5.00%
Net real estate held for investment | Location | NEW YORK      
Concentration Risk      
Percentage of Rental Revenue 5.50%   5.50%
Non cannabis tenants      
Concentration Risk      
Number of tenants excluded from lease | tenant 5    
Number of properties excluded from lease | property 3    
PharmaCann | Total rental revenue | Tennant      
Concentration Risk      
Number of leases 11 11  
Percentage of Rental Revenue 12.00% 17.00%  
Ascend | Total rental revenue | Tennant      
Concentration Risk      
Number of leases 4 4  
Percentage of Rental Revenue 11.00% 11.00%  
Green Thumb | Total rental revenue | Tennant      
Concentration Risk      
Number of leases 3 3  
Percentage of Rental Revenue 8.00% 8.00%  
Curaleaf | Total rental revenue | Tennant      
Concentration Risk      
Number of leases 8 8  
Percentage of Rental Revenue 8.00% 7.00%  
Trulieve | Total rental revenue | Tennant      
Concentration Risk      
Number of leases 6 6  
Percentage of Rental Revenue 7.00% 7.00%  
v3.25.1
Common Stock (Details)
 1 Months Ended 3 Months Ended 12 Months Ended
Mar. 31, 2025
USD ($)
$ / shares
shares
May 31, 2024
USD ($)
agent
$ / shares
Mar. 31, 2025
USD ($)
$ / shares
shares
Mar. 31, 2024
USD ($)
shares
Dec. 31, 2024
$ / shares
shares
Class of Stock [Line Items]          
Common Stock, shares authorized (in shares) 50,000,000   50,000,000   50,000,000
Common stock, par value (in dollars per share) | $ / shares $ 0.001   $ 0.001   $ 0.001
Common Stock, shares issued (in shares) 28,378,181   28,378,181   28,331,833
Common Stock, shares outstanding (in shares) 28,378,181   28,378,181   28,331,833
Preferred stock par value (in dollars per share) | $ / shares $ 0.001   $ 0.001   $ 0.001
Net proceeds from issuance | $     $ 0 $ 11,757,000  
Number of shares issued upon conversion       28,408  
Outstanding principal amount | $       $ 4,300,000  
Exchangeable Senior Notes, rate       3.75%  
Authorized amount | $ $ 100,000,000.0   100,000,000.0    
Repurchase of common stock (in shares) 4,586        
Repurchase of common stock | $ $ 300,000   $ 290,000    
Series A Preferred Stock          
Class of Stock [Line Items]          
Preferred Stock, dividend rate     9.00%   9.00%
At The Market Offerings          
Class of Stock [Line Items]          
Number of sales agents | agent   4      
At The Market Offerings | Series A Preferred Stock          
Class of Stock [Line Items]          
Preferred Stock, dividend rate   9.00%      
Preferred stock par value (in dollars per share) | $ / shares   $ 0.001      
Maximum number of common stock issuable | $   $ 500,000,000.0      
Prior ATM Program          
Class of Stock [Line Items]          
Number of shares issued (in shares)     0 123,224  
Net proceeds from issuance | $       $ 11,800,000  
Prior ATM Program | Series A Preferred Stock          
Class of Stock [Line Items]          
Number of shares issued (in shares)     385,147    
v3.25.1
Preferred Stock (Details) - USD ($)
$ / shares in Units, $ in Thousands
 3 Months Ended
Mar. 31, 2025
Mar. 31, 2024
Dec. 31, 2024
Class of Stock [Line Items]      
Preferred Stock, shares authorized (in shares) 50,000,000   50,000,000
Preferred stock par value (in dollars per share) $ 0.001   $ 0.001
Net proceeds $ 9,186 $ 0  
Prior ATM Program      
Class of Stock [Line Items]      
Net proceeds from sale of common stock (in shares) 0 123,224  
Series A Preferred Stock      
Class of Stock [Line Items]      
Preferred Stock, shares issued (in shares) 1,387,820   1,002,673
Preferred Stock, shares outstanding (in shares) 1,387,820   1,002,673
Preferred Stock, redemption price (in dollars per share) $ 25.00    
Series A Preferred Stock | Prior ATM Program      
Class of Stock [Line Items]      
Net proceeds from sale of common stock (in shares) 385,147    
Net proceeds $ 9,200    
v3.25.1
Dividends (Details) - USD ($)
$ / shares in Units, $ in Thousands
 3 Months Ended
Mar. 31, 2025
Mar. 31, 2024
Dividends [Abstract]    
Dividends declared per common share (in dollars per share) $ 1.90  
Dividends declared per Series A preferred stock (in dollars per share) $ 0.5625  
Dividend amount - Common stock $ 54,463  
Dividend amount - Series A preferred stock $ 781 $ 338
v3.25.1
Investments in Real Estate - Schedule of Real Estate Properties (Details)
$ in Thousands
 3 Months Ended
Mar. 31, 2025
USD ($)
ft²
Real Estate [Line Items]  
Rentable Square Feet | ft² 22,000
Purchase Price $ 7,750
Transaction Costs 107
Total 7,857
Land  
Real Estate [Line Items]  
Total 600
Buildings and improvements  
Real Estate [Line Items]  
Total $ 7,200
Harvard Place  
Real Estate [Line Items]  
Rentable Square Feet | ft² 22,000
Purchase Price $ 7,750
Transaction Costs 107
Total $ 7,857
v3.25.1
Investments in Real Estate - Intangible Assets and Related Accumulated Amortization (Details) - USD ($)
$ in Thousands
Mar. 31, 2025
Dec. 31, 2024
Investments in Real Estate    
Total $ 7,170 $ 7,385
Acquired In-Place Lease Intangible Assets    
Investments in Real Estate    
Gross 9,979 9,979
Accumulated amortization (2,809) (2,594)
Total 7,170 7,385
Above Market Lease    
Investments in Real Estate    
Gross 1,054 1,054
Accumulated amortization (302) (279)
Total $ 752 $ 775
v3.25.1
Investments in Real Estate - Estimated Annual Amortization (Details) - USD ($)
$ in Thousands
Mar. 31, 2025
Dec. 31, 2024
Investments in Real Estate    
Total $ 7,170 $ 7,385
Acquired In-Place Lease Intangible Assets    
Investments in Real Estate    
2025 (nine months ending December 31) 645  
2026 860  
2027 860  
2028 860  
2029 860  
Thereafter 3,085  
Total $ 7,170 $ 7,385
v3.25.1
Investments in Real Estate - Additional Information (Details)
 1 Months Ended 3 Months Ended
Dec. 31, 2024
USD ($)
Mar. 31, 2025
USD ($)
property
lease
Jan. 31, 2025
USD ($)
lease
Mar. 31, 2023
USD ($)
extensionOption
property
Mar. 31, 2025
USD ($)
property
lease
Mar. 31, 2024
USD ($)
Real Estate [Line Items]            
Real estate property cost         $ 7,700,000  
Accrued interest   $ 2,600,000     $ 2,600,000  
Number of sales-type leases | lease         2  
PharmaCann            
Real Estate [Line Items]            
Number of leases | lease   11        
Leases Amended | PharmaCann            
Real Estate [Line Items]            
Number of leases | lease     9      
Monthly base rent $ 2,800,000   $ 2,600,000      
Replenishment period     36 months      
Number of defaulted leases | lease   9        
PharmaCann Leases Amended Two | PharmaCann            
Real Estate [Line Items]            
Number of leases | lease     2      
Monthly base rent $ 1,300,000          
Flordia Properties | AYR Wellness, Inc.            
Real Estate [Line Items]            
Number of leased properties | property   1     1  
Reduction of tenant improvement allowance   $ 2,500,000        
Tenant Improvement Allowance   $ 27,500,000     $ 27,500,000  
Acquired In-Place Lease Intangible Assets            
Real Estate [Line Items]            
Amortization expense         $ 200,000 $ 200,000
Weighted-average amortization period (in years)         8 years 6 months  
Above Market Lease            
Real Estate [Line Items]            
Amortization expense         $ 23,000 $ 23,000
Amortization period (in years)   8 years 2 months 12 days     8 years 2 months 12 days  
Medical Investor Holdings LLC | California Property            
Real Estate [Line Items]            
Number of properties sold | property       4    
Contracted sale price of properties disposed       $ 16,200,000    
Real estate loans receivable       $ 16,100,000    
Number of options to extend | extensionOption       2    
Extension term       12 months    
Minimum principal balance payment       $ 500,000    
Accumulated depreciation   $ 2,100,000     $ 2,100,000  
Default amount   800,000     800,000  
Medical Investor Holdings LLC | Land | California Property            
Real Estate [Line Items]            
Gross carrying value   3,400,000     3,400,000  
Medical Investor Holdings LLC | Buildings and improvements | California Property            
Real Estate [Line Items]            
Gross carrying value   $ 13,900,000     $ 13,900,000  
v3.25.1
Investments in Real Estate - Future Contractual Minimum Rent (Details)
$ in Thousands
Mar. 31, 2025
USD ($)
Contractual Minimum Rent  
2024 (three months ending December 31) $ 234,273
2025 323,133
2026 334,107
2027 340,466
2028 349,105
Thereafter 3,656,219
Total $ 5,237,303
v3.25.1
Debt - Exchangeable Senior Notes Narrative (Details) - USD ($)
$ in Thousands
 1 Months Ended 3 Months Ended
Feb. 29, 2024
Mar. 31, 2025
Mar. 31, 2024
Debt Instrument [Line Items]      
Principal amount paid   $ 0 $ 4,436
Exchangeable Senior Notes      
Debt Instrument [Line Items]      
Principal amount paid $ 100    
Principal amount paid off at maturity     $ 4,300
Exchangeable Senior Notes | Common Stock      
Debt Instrument [Line Items]      
Shares issued (in shares)     28,408
Principal amount paid     $ 4,300
v3.25.1
Debt - Exchangeable Senior Notes - Interest expense (Details) - Exchangeable Senior Notes - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2025
Mar. 31, 2024
Debt Instrument [Line Items]    
Cash coupon $ 0 $ 24
Amortization of issuance cost 0 5
Capitalized interest 0 (1)
Total interest expense $ 0 $ 28
v3.25.1
Debt - Notes due 2026 Narrative (Details) - USD ($)
$ in Thousands
 1 Months Ended 3 Months Ended
May 25, 2021
Feb. 28, 2025
Mar. 31, 2025
Dec. 31, 2024
Debt Instrument [Line Items]        
Principal amount     $ 291,215  
Senior Notes        
Debt Instrument [Line Items]        
Principal amount $ 300,000   $ 291,215 $ 300,000
Interest rate 5.50%      
Issuance costs $ 6,800      
Effective interest rate     6.03%  
Early partial repayments   $ 8,700    
Repaid principal   $ 8,800    
Accrued interest payable     $ 6,000 $ 2,100
Senior Notes | Redeemed Prior To February 25, 2026        
Debt Instrument [Line Items]        
Percentage of principal amount redeemed     100.00%  
Senior Notes | Redeemed On Or After February 25, 2026        
Debt Instrument [Line Items]        
Percentage of principal amount redeemed     100.00%  
Senior Notes | Minimum        
Debt Instrument [Line Items]        
Increase in debt rating interest rate 6.00%      
Senior Notes | Maximum        
Debt Instrument [Line Items]        
Increase in debt rating interest rate 6.50%      
v3.25.1
Debt - Notes due 2026 - Interest expense (Details) - Senior Notes - USD ($)
$ in Thousands
 3 Months Ended
Mar. 31, 2025
Mar. 31, 2024
Debt Instrument [Line Items]    
Cash coupon $ 4,081 $ 4,125
Amortization of issuance cost 364 346
Capitalized interest (56) (165)
Total interest expense $ 4,389 $ 4,306
v3.25.1
Debt - Notes due 2026 - Carrying value (Details) - USD ($)
$ in Thousands
Mar. 31, 2025
Dec. 31, 2024
May 25, 2021
Debt Instrument [Line Items]      
Principal amount $ 291,215    
Senior Notes      
Debt Instrument [Line Items]      
Principal amount 291,215 $ 300,000 $ 300,000
Unamortized issuance cost (1,716) (2,135)  
Carrying value $ 289,499 $ 297,865  
v3.25.1
Debt - Revolving Credit Facility Narrative (Details) - Revolving Credit Facility - USD ($)
 3 Months Ended
Mar. 31, 2025
Mar. 31, 2024
Nov. 30, 2024
Oct. 31, 2024
Oct. 31, 2023
Debt Instrument [Line Items]          
Aggregate commitments     $ 87,500,000 $ 50,000,000 $ 50,000,000.0
Loan amount outstanding $ 0        
Issuance costs 800,000        
Non-cash interest expense $ 100,000 $ 55,000      
v3.25.1
Debt - Principal Payments (Details)
$ in Thousands
Mar. 31, 2025
USD ($)
Debt Disclosure [Abstract]  
2025 (nine months ending December 31) $ 0
2026 291,215
2027 0
2028 0
2029 0
Thereafter 0
Total $ 291,215
v3.25.1
Net Income Per Share - Additional information (Details) - shares
 3 Months Ended
Mar. 31, 2025
Mar. 31, 2024
Earnings Per Share [Abstract]    
Dilutive effect of Exchangeable Senior Notes (in shares) 0 38,079
v3.25.1
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, 2025
Mar. 31, 2024
Earnings Per Share [Abstract]    
Net income $ 31,077 $ 39,428
Preferred stock dividends (781) (338)
Distribution to participating securities (747) (544)
Net income attributable to common stockholders used to compute net income per share – basic 29,549 38,546
Dilutive effect of Exchangeable Senior Notes 0 28
Net income attributable to common stockholders used to compute net income per share – diluted $ 29,549 $ 38,574
Weighted-average common shares outstanding:    
Basic (in shares) 28,275,549 28,145,017
Dilutive effect of share-based payment arrangements (in shares) 312,473 278,890
Dilutive effect of Exchangeable Senior Notes (in shares) 0 38,079
Diluted (in shares) 28,588,022 28,461,986
Net income attributable to common stockholders per share:    
Basic (in dollars per share) $ 1.05 $ 1.37
Diluted (in dollars per share) $ 1.03 $ 1.36
v3.25.1
Fair Value (Details)
$ in Thousands
 3 Months Ended 12 Months Ended
Mar. 31, 2025
USD ($)
Dec. 31, 2024
USD ($)
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Investments, Carrying Value $ 5,258 $ 5,000
Investments as cash equivalents, Carrying Value 17,997 45,714
Notes due 2026, Carrying Value 289,499 297,865
Construction loan receivable 22,800 22,800
Notes receivable, Carry Value 16,786 16,786
Investments, Fair Value 5,258 5,000
Investments as cash equivalents, Fair Value 17,987 45,714
Notes due 2026, Fair Value 285,015 289,077
Construction Loan, Fair Value 29,241 28,245
Notes receivable, Fair Value $ 16,786 $ 16,786
Money market funds invested in U.S. government securities 100.00% 100.00%
Nonrecurring | Real estate    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Fair value of real estate assets $ 1,800  
Expected market yield    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Loan receivable fair value input 0.1625 0.1625
Weighted average expected market yield    
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]    
Notes receivable fair value input 0.216 0.206
v3.25.1
Common Stock Incentive Plan - Additional Information (Details) - USD ($)
$ in Millions
 1 Months Ended 3 Months Ended
Jan. 31, 2022
Jan. 31, 2021
Mar. 31, 2025
Mar. 31, 2024
Restricted Stock        
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]        
Unrecognized compensation cost     $ 7.8  
Amortization period     2 years 2 months 12 days  
Fair value of restricted stock     $ 2.3  
Granted (in shares)     62,817  
Restricted Stock Units        
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]        
Unrecognized compensation cost     $ 9.8  
Amortization period     8 months 12 days  
Granted (in shares)     73,179  
PSUs        
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]        
Granted (in shares) 102,641 70,795    
Stock-based compensation expense       $ 1.7
2016 Plan        
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]        
Number of shares authorized     1,000,000  
Expiration term     10 years  
v3.25.1
Common Stock Incentive Plan - Activity (Details)
 3 Months Ended
Mar. 31, 2025
$ / shares
shares
Restricted Stock  
Restricted  
Beginning Balance (in shares) | shares 77,268
Granted (in shares) | shares 62,817
Vested (in shares) | shares (21,392)
Forfeited (in shares) | shares (11,883)
Ending Balance (in shares) | shares 106,810
Weighted-Average Grant Date Fair Value  
Beginning Balance (in dollars per share) | $ / shares $ 108.95
Granted (in dollars per share) | $ / shares 73.18
Vested (in dollars per share) | $ / shares 102.04
Forfeited (in dollars per share) | $ / shares 165.13
Ending Balance (in dollars per share) | $ / shares $ 83.04
Restricted Stock Units  
Restricted  
Beginning Balance (in shares) | shares 222,502
Granted (in shares) | shares 73,179
Forfeited (in shares) | shares (9,242)
Ending Balance (in shares) | shares 286,439
Weighted-Average Grant Date Fair Value  
Beginning Balance (in dollars per share) | $ / shares $ 114.68
Granted (in dollars per share) | $ / shares 73.18
Forfeited (in dollars per share) | $ / shares 97.39
Ending Balance (in dollars per share) | $ / shares $ 104.63
v3.25.1
Commitments and Contingencies - Schedule of Future Contractual Lease Payments (Details)
$ in Thousands
Mar. 31, 2025
USD ($)
Commitments and Contingencies Disclosure [Abstract]  
Operating Lease, Liability, Statement of Financial Position [Extensible Enumeration] Other liabilities
2025 (nine months ending December 31) $ 395
2026 543
2027 45
2028 0
2029 0
Total future contractual lease payments 983
Effect of discounting (51)
Office lease liability $ 932
v3.25.1
Commitments and Contingencies - Additional Information (Details)
Mar. 31, 2025
USD ($)
Amended Class Action Lawsuit  
Commitments and Contingencies  
Amount accrued $ 0
Derivative Action Lawsuit  
Commitments and Contingencies  
Amount accrued 0
Commitments related to improvement allowances  
Commitments and Contingencies  
Other Commitment 26,200,000
Commitments related to construction commitments  
Commitments and Contingencies  
Other Commitment 1,200,000
Commitments related to construction loan  
Commitments and Contingencies  
Other Commitment $ 200,000
v3.25.1
Segment Information (Details)
 3 Months Ended
Mar. 31, 2025
segment
Segment Reporting [Abstract]  
Number of reportable segments 1
v3.25.1
Subsequent Events (Details)
$ in Thousands
 1 Months Ended 3 Months Ended
Apr. 30, 2025
USD ($)
property
shares
Mar. 31, 2025
USD ($)
shares
Mar. 31, 2025
USD ($)
shares
Mar. 31, 2024
USD ($)
shares
Subsequent Events        
Issuance of preferred stock, net of offering costs     $ 9,186 $ 0
Repurchase of common stock (in shares) | shares   4,586    
Repurchase of common stock   $ 300 $ 290  
Prior ATM Program        
Subsequent Events        
Net proceeds from sale of common stock (in shares) | shares     0 123,224
Series A Preferred Stock | Prior ATM Program        
Subsequent Events        
Net proceeds from sale of common stock (in shares) | shares     385,147  
Issuance of preferred stock, net of offering costs     $ 9,200  
Subsequent event        
Subsequent Events        
Repurchase of common stock (in shares) | shares 366,952      
Repurchase of common stock $ 19,800      
Subsequent event | Series A Preferred Stock | Prior ATM Program        
Subsequent Events        
Net proceeds from sale of common stock (in shares) | shares 20,978      
Issuance of preferred stock, net of offering costs $ 500      
Subsequent event | Michigan Properties        
Subsequent Events        
Number of properties sold | property 1      
Contracted sale price of properties disposed $ 9,000      
Real estate loans receivable $ 8,500      
Extension term 12 months      
Number of leased properties | property 1