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

Innovative Industrial Properties netted 117 percent, but risks abound

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


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

Joel Schreiber (Credit: Shir Stein and Wikipedia)

WeWork’s first investor used his stock as collateral. Now his lenders are suing him

“I can talk about erections all day”: NAR tech consultant’s bizarre fireside chat

Cammeby's International Group founder Rubin Schron and, from top: 194-05 67th Avenue, 189-15 73rd Avenue and 64-05 186th Lane (Credit: Google Maps)

Ruby Schron lands $500M refi for sprawling Queens apartment portfolio

163 North 6th Street and the Tel Aviv Stock Exchange Bull (Credit: Google Maps, Wikipedia)

Joel Gluck’s Israeli bond issuance falls through as Williamsburg rental project faces financing crunch

Council member Vanessa Gibson (Credit: New York City Council)

Commercial landlords face new fines as City Council passes anti-harassment bill

NYC’s foreign investment landscape in the era of trade wars and heightened nationalism