Innovative Industrial Properties IIPR
Property-by-property forensic appendix shows IIPR overpaid for cannabis-grow real estate while tenants sit on empty or unbuilt sites, implying inflated rents and looming defaults.
Thesis
This Appendix II to Grizzly Research's April 2020 short report on Innovative Industrial Properties (IIPR) walks property-by-property through ~35 cannabis cultivation sites the REIT acquired and leased back to operators. For each site Grizzly compares IIPR's purchase price to county assessor valuations and prior deed sales, often finding 5x-40x markups within days or weeks of IIPR's closing, and documents on-the-ground visits showing empty warehouses, unbuilt facilities, or stalled construction. Tenants such as PharmaCann are flagged as financially distressed, making the implied 15%+ yields uncollectible. For each property Grizzly applies a 'Discount Treatment' that haircuts assumed 2020 rent by 26%-100%, building the quantitative case that IIPR's reported revenue and asset values are materially overstated and the equity is mispriced.
SCQA
IIPR is a cannabis-focused REIT that buys industrial and greenhouse properties from licensed operators and leases them back at headline yields above 15%, fueling fast revenue and stock-price growth.
On-site visits and county records show many properties were bought far above prior sale prices and assessor values, with buildings empty or unbuilt and tenants in dire financial shape — meaning the contractual rents are unlikely to be paid.
Investors should haircut IIPR's reported rent stream property-by-property using the 'Discount Treatment' (26%-100% per site) reflecting overpayment and default risk, and reprice the equity accordingly.
Re-running IIPR's revenue with these per-property discounts collapses the yield narrative and supports a sharply lower fair value than the market is awarding the stock.
The three reasons
- 1
IIPR systematically overpaid for cannabis grow properties vs. county assessor values and prior sales
- 2
On-site visits show many properties empty, unfinished, or far from operational
- 3
Tenants like PharmaCann face dire financials, making rent collection at quoted yields implausible
KPIs cited
Pattern membership
Composition what's on the 75 slides
Slide gallery ·
Notes
This is Appendix II to Grizzly Research's main short report on IIPR (cannabis REIT), not the main thesis deck — it is a property-by-property due-diligence catalog supporting the overpayment / inflated-rent claims. Format is Word-style report with consistent template per property: Core Issue / Transaction details / Address / Initial Terms / Independent due diligence / Discount Treatment, illustrated with site photos, satellite views, deed records, and county assessor screenshots. The 'Discount Treatment' mechanic — applying explicit 20%-100% haircuts to 2020 rent per site — is the distinctive analytical pattern. Branding is light (a small bear logo top-right of every page); no named human author on the appendix. Tenant PharmaCann's spokesman Jeremy Unruh is quoted as claiming a property would be operational in Q2 2020, then contradicted by Grizzly's site visit — a CEO/spokesman-quote-contradiction pattern. Sum-of-parts framing is implicit through aggregation of per-property valuations. Set thesis_one_liner / summary / SCQA from inferred main-report context since this appendix supports rather than restates the equity thesis.