A cannabis landlord is this year’s best-performing REIT

Innovative Industrial Properties netted 117 percent, but risks abound

National /
Nov.November 10, 2018 02:00 PM

(Credit: Getty Images, Pixabay)

The country’s best-performing real estate investment trust specializes in an unusual type of tenant: marijuana farms.

Innovative Industrial Properties, which owns warehouses where farmers grow cannabis, netted investors a profit of 117 percent over the past year, Bloomberg reported. That makes it by far the most successful REIT at a time when many big-name trusts are struggling.

But the returns come with a major risk: it is technically breaking federal laws. Although all the states that the REIT owns real estate in have legalized the sale of marijuana, it is still illegal under federal law.

“There’s a lot of institutional investors, when looking at their risk criteria, that are still hesitant to invest even though we’re on the New York Stock Exchange,” the company’s chief financial officer Catherine Hastings told Bloomberg.

The REIT is so profitable because most landlords shy away from leasing space to cannabis companies, meaning it has little competition and can charge higher rents.

On Tuesday, voters in Michigan voted to legalize the recreational use of Marijuana. Innovative Industrial is developing a property in the state. [Bloomberg] — Konrad Putzier


Related Articles

arrow_forward_ios
With a cooling trade war, stocks perform well, including real estate. (Credit: iStock)
Real estate stocks push up this week as U.S.-China trade tensions ease
Real estate stocks push up this week as U.S.-China trade tensions ease
416 West 25th Street and Maverick Real Estate Partners principal David Aviram (Credit: Google Maps and LinkedIn)
Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case
Chelsea landlord claims “predatory” lender is charging a crippling interest rate as punishment after losing foreclosure case
Southold Town Supervisor Scott Russell and 12500 Main Road in Mattituck (Google Maps, Getty, Town of Southold)
North Fork town smells victory in eminent domain fight
North Fork town smells victory in eminent domain fight
Carlyle's David Rubenstein (Carlyle)
Real estate venture backed by Carlyle’s David Rubenstein raises $240M
Real estate venture backed by Carlyle’s David Rubenstein raises $240M
A photo illustration of 111 East 59th Street (Google Maps, Getty)
Loancore seeks forced sale of Plaza District building
Loancore seeks forced sale of Plaza District building
(Getty)
Manhattan office leasing jumps as availability and rents drop
Manhattan office leasing jumps as availability and rents drop
Stephen Ross and 50 Hudson Yards (Getty Images, Hudson Yards New York)
Related lands $349M for 50 Hudson Yards
Related lands $349M for 50 Hudson Yards
New York attorney general Letitia James and 109-20 Queens Boulevard in Forest Hills (Getty, Google Maps)
Pinnacle’s Joel Wiener penalized for hiding condo conversion costs
Pinnacle’s Joel Wiener penalized for hiding condo conversion costs
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...