Innovative Industrial Properties Faces More Tenant Defaults: Is the Stock in Trouble?
Cannabis real estate investment trust (REIT) Innovative Industrial Properties (NYSE: IIPR) has had a wild year. Like most other stocks in today's bear market, pessimism surrounding the economy and the likelihood of a recession have pushed shares down notably.
Things only got worse for the company when a class action lawsuit was filed against Innovative Industrial Properties in April. Shortly after, it announced the default of one of its major tenants, Kings Garden, which resulted in a massive sell-off.
The REIT was rebounding nicely at the end of 2022, but a recent update on its operating, capital markets, and investment activity revealed several new tenant defaults. In turn, the stock started sinking again.
Does its latest round of tenant defaults spell trouble for the company or can Innovative Industrial Properties overcome these challenges quickly? Let's take a look.
What's going on
Innovative Industrial Properties (IIP for short) released an operating, investment, and capital markets activity update for the fourth-quarter and full-year 2022 on Jan. 18, 2023. The report announced the default of three tenants: Parallel, Skymint, and Vertical. The companies have defaulted on one or more properties leased in Pennsylvania, California, and Michigan. But as of now, they are paying for the remaining properties leased from IIP.
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