Last December, fellow Dividend Kings founder Dividend Sensei wrote an article on Innovative Industrial Properties (IIPR). In it, he explained that it’s likely to be the fastest-growing real estate investment trust (REIT) of 2020.
Sure enough, IIPR has returned 100.4% so far in 2020:
(Source: FAST Graphs)
Think about it folks…
IIPR has returned more than 100% in the midst of a global pandemic, and we’re still buying! I know that sounds crazy, but the growth opportunities in legal cannabis – what its tenants operate in – is enormous.
In 2017 alone, U.S. sales were $8.6 billion, with $5.9 billion being of the medical variety. And ArcView Market Research estimates that, by 2022, it will be a $22 billion industry.
Many investors today focus on cannabis growers themselves. But that isn’t likely the best way to profit from this hyper-growth industry. The “weed” in question is a commodity product with unproven branding power that may end up being no more profitable than corn.
With that said, spending by state-licensed cannabis operators is growing, creating a unique opportunity for a REIT like IIPR. Since roaring out of the gate in late 2016, it appears to have cracked the code on legally minting money from marijuana.
This triple net lease/industrial REIT has delivered some of the best total returns of any stock in America in the past four years. Shares are now trading at $124.79, drawing ever closer to their all-time high of $130.16 from July 1, 2019.
(Source: Yahoo Finance)
A Closer Look…
Innovative Industrial Properties is the NYSE’s first and only to provide real estate capital to the medical-use cannabis industry. As viewed below, it holds 61 properties amounting to 4.5 million square feet in 16 states.
Better yet, its portfolio is 99.2% leased with a weighted average lease