Innovative Industrial Properties Inc (IIPR)

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$IIPR DD w/Links & Article excerpt

$IIPR DD Info with Links

INNOVATIVE INDUSTRIAL PROPERTIES, INC.
17190 Bernardo Center Drive
San Diego, California 92128
[phone]
innovativeindustrialproperties.com/

We were incorporated on June 15, 2016 as a Maryland corporation. We intend to elect to be taxed and to operate in a manner that will allow us to qualify as a REIT for U.S. federal income tax purposes commencing with our taxable year ending December 31, 2016 or, if later, the first year in which we have material real estate assets and operations


Ticker Information
Symbol - IIPR
ISIN - US45781V1017
Shares in Issue - 3,350,000

Websites:
Company Website: http://innovativeindustrialproperties.com/
Stock Trading Platform Webpage: http://www.nasdaq.com/symbol/iipr
SEC Filings Link: http://investors.innovativeindustrialproperties.com/sec-filings
iHub Board: http://investorshub.advfn.com/Innovative-Industrial-Properties-IIPR-31418/
Stock Charts: http://stockcharts.com/h-sc/ui?s=IIPR

Executive Team
Our Executive Chairman, Alan Gold, is a 30-year veteran of the real estate industry, including co-founding two New York Stock Exchange-listed REITs: BioMed Realty Trust (formerly NYSE: BMR), a REIT focused on acquiring, leasing, developing and managing laboratory and office space for the life science industry, where he served as chairman, chief executive officer, and president until Blackstone’s acquisition of BioMed Realty in 2016 for $8 billion; and Alexandria Real Estate Equities (NYSE: $ARE), an urban office REIT focused on collaborative science and technology campuses, where he served as president and a director. Our senior management team has significant experience in all aspects of the real estate industry, including acquisitions, dispositions, construction, development, management and lending.

Company Target Market
The Licensed Medical-Use Cannabis Industry
We target medical-use cannabis facilities for acquisition, including sale-leaseback transactions, with tenants that are licensed growers under long-term triple-net leases. We believe this industry is poised for significant growth in coming years, and we are focused on being a creative capital provider to this industry through the long-term ownership of cultivators’ mission-critical facilities.

According to The ArcView Group, nationwide sales of legal cannabis grew to $5.4 billion up from $4.6 billion in 2014. Of the $4.6 billion in estimated sales in 2014, approximately 92% of such sales consisted of medical-use sales. By 2020, legal market sales are expected to grow to an estimated $21.8 billion, of which estimated medical-use sales will be approximately $10.2 billion.

As of November 15, 2016, 29 states and the District of Columbia allow their citizens to use medical cannabis, with an estimated combined population of 203.3 million. We expect other states to approve medical-use cannabis in coming years as well. A 2015 poll by Harris found that 81% of Americans support legalization of cannabis for medical use.


Company Properties
Medical-Use Cannabis Cultivation and Processing Facilities
We acquire specialized industrial real estate assets that are used for growing medical-use cannabis and operated by state-licensed growers. We focus on properties with sophisticated technology and infrastructure to meet rigorous quality standards for medical-use cannabis. Concurrently with our acquisition of these properties, we enter into leases with the state-licensed growers under long-term, triple-net lease agreements. We act as a source of capital to these licensed medical-use cannabis growers by entering into sale-leaseback transactions with them for their specialized industrial real estate.

Company Tenants
Sophisticated, Best-in-Class Medical-Use Cannabis Growers
We work with growers who have been among the top candidates in the rigorous state licensing process.
Through thorough research and analysis of the companies and their management teams, we identify what we consider to be the best licensed medical-use cannabis growers that would benefit from financing for their properties to raise capital to meet their growing needs. Our research expertise is instrumental to uncovering opportunities with the most qualified growers.

Company Leases
Long-Term, Triple-Net Arrangements
Our leases with tenants are generally long-term triple-net lease arrangements, where the tenant is responsible for taxes, maintenance, insurance and structural repairs, in addition to base rent. Our lease terms are generally fifteen years or more, with renewal options exercisable by the tenant, and with contractual annual rent adjustments. By selling the property and building to us, and then leasing it back from us, growers are able to redeploy the proceeds into their company’s core operation and yield a higher return than they would otherwise get from owning their own real estate.


Full Management Team:

Alan Gold
Executive Chairman

Paul Smithers
Chief Executive Officer, President, and Director
LinkedIn Profile

Robert Sistek
Chief Financial Officer & Executive Vice President, Investments
LinkedIn Profile

Greg Fahey
Chief Accounting Officer and Treasurer

Brian Wolfe
Vice President, General Counsel and Secretary
LinkedIn Profile

Gary Kreitzer
Vice Chairman

Gary Malino
Director
LinkedIn Profile

David Stecher
Director
LinkedIn Profile

Scott Shoemaker, MD
Director
Possible LinkedIn Profil

S-11/A : As filed with the Securities and Exchange Commission on November 29, 2016
Registration No. 333-214148
Filing Link

Share Information

Authorized Shares
50,000,000 shares of common stock, $0.001 par value per share, including
(i) 49,000,000 shares of Class A common stock
(ii) 1,000,000 shares of Class B common stock [to be cancelled by management]
(iii) up to 50,000,000 shares of preferred stock, $0.001 par value per share

Outstanding shares
4,000,000 shares of Class A common stock ( 4,600,000 shares is underwriters exercise option)

Treasury / IIPR Reserved for future issuance under Incentive Plan
1,000,000 Shares of Class A common

Class A Common Stock
Innovative Industrial Properties, Inc. is a newly-formed, self-advised Maryland corporation focused on the acquisition, ownership and management of specialized industrial properties leased to experienced, state-licensed operators for their regulated medical-use cannabis facilities.

This is our initial public offering. We are selling 4,000,000 shares of our Class A common stock.

We expect the initial public offering price of our Class A common stock to be $20.00 per share. Prior to this offering, no public market exists for our shares. We have been approved to list our shares of Class A common stock on the New York Stock Exchange, or the NYSE, subject to official notice of issuance, under the symbol “IIPR.”


UNDERWRITING
The estimated expenses of this offering payable by us, exclusive of the underwriting discount, are approximately $1,550,000. We have agreed to reimburse the underwriters for fees and expenses of counsel up to $20,000 related to the review by Financial Industry Regulatory Authority, Inc. of the terms of the sale of the shares of the Class A common stock in this offering and up to $5,000 related to the preparation of a “blue sky” memorandum. Additionally, we or our affiliates will pay up to $20,000 of certain transportation costs in connection with the roadshow. We have also agreed to reimburse $25,000 of out-of-pocket expenses of certain participating dealers.

The underwriters may also purchase up to an additional 600,000 shares of our Class A common stock from us at the public offering price, less the underwriting discount, within 30 days from the date of this prospectus solely to cover over-allotments, if any.

Transfer Agent and Registrar
The transfer agent and registrar for our Class A common stock is expected to be Computershare Trust Company, N.A.

Listing
We have been approved to list our shares of Class A common stock on the NYSE, subject to official notice of issuance, under the symbol “IIPR.”

IPO Share Info
All IPO shares od Class A common stock are free tradable

We expect to issue 13,750 shares of Class A common stock to each of Messrs. Sistek and Wolfe at the first meeting of the compensation committee of our board of directors after completion of this offering, and intend to reserve an additional 972,500 shares of Class A common stock for future issuance under the Incentive Plan.

Lock-up Agreements
We and each of our executive officers and directors have agreed with the underwriters not to offer, sell or otherwise dispose of any common stock or any securities convertible into or exercisable or exchangeable for or repayable with common stock (including limited partnership interests in our Operating Partnership) or any rights to acquire common stock for 180 days after the date of this prospectus, without first obtaining the written consent of Ladenburg Thalmann & Co. Inc., the representative of the underwriters. Specifically, we and these other persons have agreed, with certain limited exceptions, not to directly or indirectly:

• offer, pledge, sell or contract to sell any common stock;
• sell any option or contract to purchase any common stock;
• purchase any option or contract to sell any common stock;
• grant any option, right or warrant for the sale of any common stock;
• lend or otherwise transfer or dispose of any common stock;
• exercise any right to request or require registration of any common stock or other securities;
• file or cause to be filed any registration statement related to the common stock; or
• enter into any swap or other agreement or transaction that transfers, in whole or in part, directly or indirectly, the economic consequence of ownership of any common stock whether any such swap, agreement or transaction is to be settled by the delivery of shares of common stock or other securities, in cash or otherwise.
This lock-up provision applies to common stock and to securities convertible into or exchangeable or exercisable for or repayable with common stock. It also applies to common stock owned now or acquired later by the person executing the agreement or for which the person executing the agreement later acquires the power of disposition.


Restrictions on Ownership and Transfer
In order for us to qualify as a REIT under the Code, shares of our stock must be owned by 100 or more persons during at least 335 days of a taxable year of 12 months (other than the first year for which an election to be taxed as a REIT has been made) or during a proportionate part of a shorter taxable year. Also, under Section 856(h) of the Code, a REIT cannot be “closely held.” In this regard, not more than 50% of the value of the outstanding shares of stock may be owned, directly or indirectly, by five or fewer individuals (as defined in the Code to include certain entities) during the last half of a taxable year (other than the first year for which an election to be a REIT has been made). See the section entitled “Material U.S. Federal Income Tax Considerations” in this prospectus for further discussion on this topic.


Requirements for Qualification as a REIT
A REIT is a corporation, trust or association that satisfies each of the following requirements:

(1) It is managed by one or more trustees or directors;

(2) Its beneficial ownership is evidenced by transferable shares of stock, or by transferable shares or certificates of beneficial interest;

(3) It would be taxable as a domestic corporation, but for Sections 856 through 860 of the Code, i.e., the REIT provisions;

(4) It is neither a financial institution nor an insurance company subject to special provisions of the U.S. federal income tax laws;
(5) At least 100 persons are beneficial owners of its stock or ownership shares or certificates (determined without reference to any rules of attribution);

(6) Not more than 50% in value of its outstanding stock or shares of beneficial interest are owned, directly or indirectly, by five or fewer individuals, which the U.S. federal income tax laws define to include certain entities, during the last half of any taxable year;

(7) It elects to be a REIT, or has made such election for a previous taxable year, and satisfies all relevant filing and other administrative requirements established by the Service that must be met to qualify to be taxed as a REIT for U.S. federal income tax purposes;

(8) It uses a calendar year for U.S. federal income tax purposes and complies with the recordkeeping requirements of the U.S. federal income tax laws;

(9) It meets certain other requirements described below, regarding the sources of its gross income, the nature and diversification of its assets and the distribution of its income;

(10) It has no undistributed earnings and profits from any non-REIT taxable year at the close of any taxable year.
We must satisfy requirements 1 through 4, and 8 during our entire taxable year and must satisfy requirement 5 during at least 335 days of a taxable year of 12 months, or during a proportionate part of a taxable year of less than 12 months. Requirements 5 and 6 apply to us beginning with our 2016 taxable year. If we comply with certain requirements for ascertaining the beneficial ownership of our outstanding stock in a taxable year and have no reason to know that we violated requirement 6, we will be deemed to have satisfied requirement 6 for that taxable year. For purposes of determining stock ownership under requirement 6, an “individual” generally includes a supplemental unemployment compensation benefits plan, a private foundation, or a portion of a trust permanently set aside or used exclusively for charitable purposes. An “individual,” however, generally does not include a trust that is a qualified employee pension or profit sharing trust under the U.S. federal income tax laws, and beneficiaries of such a trust will be treated as holding our stock in proportion to their actuarial interests in the trust for purposes of requirement 6.

We believe that we will issue sufficient stock with enough diversity of ownership to allow us to satisfy requirements 5 and 6 above. In addition, our charter provides for restrictions regarding the ownership and transfer of shares of our capital stock. The restrictions in our charter are intended, among other things, to assist us in satisfying requirements 5 and 6 described above. These restrictions, however, may not ensure that we will be able to satisfy such share ownership requirements in all cases. If we fail to satisfy these share ownership requirements, our qualification as a REIT may terminate.
To monitor compliance with the share ownership requirements, we generally will be required to maintain records regarding the actual ownership of our shares. To do so, we must demand written statements each year from the record holders of significant percentages of our shares pursuant to which the record holders must disclose the actual owners of the shares (i.e., the persons required to include our dividends in their gross income). We must maintain a list of those persons failing or refusing to comply with this demand as part of our records. We could be subject to monetary penalties if we fail to comply with these record-keeping requirements. If you fail or refuse to comply with the demands, you will be required by Treasury Regulations to submit a statement with your tax return disclosing your actual ownership of our shares and other information. In addition, we must satisfy all relevant filing and other administrative requirements that must be met to elect and maintain REIT status. We intend to comply with these requirements.
For purposes of requirement 8, we have adopted December 31 as our year end for U.S. federal income tax purposes, and thereby satisfy this requirement.

Cannabis REIT IPOs On NYSE [Today]- What You Need To Know
Article Link
Article Date: Nov.30.16

Summary

Innovative Industrial Properties will be the first ever publicly traded cannabis-focused REIT.

Despite cutting down the offering size, we believe investor demand has been parent.

We will be watching the IPO closely today as things unfold.

We compiled a list of everything investors need to know before the IPO.



Innovative Industrial Properties, Inc. (NYSE:IIPR) is set to IPO on the NYSE today. This is the first publicly traded cannabis-focused REIT out there. Despite cutting the offering down in size from 8.75 million shares offered to 4 million shares offered, we expect a high level of investor interest following cannabis reform in a handful of states this election.

We believe this decrease in shares offered is due to the difficulty of efficiently deploying a $175,000,000 capital raise before expenses. As you will read, the REIT is brand new and has yet to invest in any properties.

What You Need to Know

According to their Form S-11 filing, "Innovative Industrial Properties, Inc. is a newly-formed, self-advised Maryland corporation focused on the acquisition, ownership and management of specialized industrial properties leased to experienced, state-licensed operators for their regulated medical-use cannabis facilities."

Innovative Industrial Properties does not currently own any cannabis properties, however they "have entered into a definitive purchase agreement for the acquisition of one 127,000-square foot industrial property, or our Initial Property, located in New York for a purchase price of approximately $30 million in a sale-leaseback transaction."

Innovative Industrial Properties will be listing shares of Class A common stock on the NYSE under the ticker symbol "IIPR"

The current filing price is $20 per share, with 4 million shares offered, and an additional 600,000 shares offered for over-allotment purchase. This makes for a $92,000,000 offer before expenses of $1,550,000.

The IPO was initially supposed to be an offering of 8.75 million shares at $20, which would have raised $175 million before expenses.

The bookrunners / underwriters for the IPO are Ladenburg Thalmann, and Compass Point. These underwriters have options to purchase the additional 600,000 over-allotment shares at the IPO price minus the underwriters discount if they decide to exercise their right to purchase. This would bring the total offer after expenses to $90,450,000.

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