NEW YORK, NY / ACCESS Newswire / January 17, 2025 / Pomerantz LLP announces that a class action lawsuit has been filed against Innovative Industrial Properties, Inc. ("IIPR", "IIP", or the "Company") (NYSE:IIPR) and certain officers. The class action, filed in the United States District Court for the District of Maryland, and docketed under 25-cv-00182, is on behalf of a class consisting of all persons and entities other than Defendants that purchased or otherwise acquired IIPR securities between February 27, 2024 and December 19, 2024, both dates inclusive (the "Class Period"), seeking to recover damages caused by Defendants' violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 10b-5 promulgated thereunder, against the Company and certain of its top officials.
If you are a shareholder who purchased or otherwise acquired IIPR securities during the Class Period, you have until March 18, 2025 to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Danielle Peyton at newaction@pomlaw.com or 646-581-9980 (or 888.4-POMLAW), toll-free, Ext. 7980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
[Click here for information about joining the class action]
IIPR is an internally managed real estate investment trust ("REIT") purportedly focused on the acquisition, ownership, and management of specialized properties leased to state-licensed operators for their regulated medical-use cannabis facilities.
As a REIT, IIPR's primary source of income is derived from rental revenue generated by the properties that it acquires. To measure its financial performance, IIPR uses funds from operations ("FFO"), a metric calculated by adding depreciation, amortization, and losses on sales of property to earnings and then subtracting any gains on sales of property and any interest income. REITs tend to consider FFO to be a more accurate measure of a REIT's value than net income because it addresses the limitations of traditional accounting methods-particularly regarding depreciation, which can misrepresent the true value of real estate assets-and focuses on the cash flow generated by a REIT's core operations. As a result, FFO provides investors with a clearer picture of a REIT's ability to generate revenue and pay dividends.
The complaint alleges that, throughout the Class Period, Defendants made materially false and misleading statements regarding the Company's business, operations, and prospects. Specifically, Defendants made false and/or misleading statements and/or failed to disclose that: (i) IIPR was experiencing significant declines in rent and property-management fees in connection with certain customer leases; (ii) the foregoing would likely impair the Company's ability to maintain FFO and revenue growth; (iii) accordingly, IIPR's leasing operations were less profitable than the Company had represented to investors; and (iv) as a result, the Company's public statements were materially false and misleading at all relevant times.
On November 6, 2024, IIPR reported its financial results for the third quarter of 2024. Among other items, IIPR reported normalized FFO per share of $2.02, missing the consensus estimate of $2.03 and declining from $2.09 in the same period in 2023. IIPR also reported revenue of $76.5 million, missing the consensus estimate of $77.5 million and declining from $77.8 million in the same period in 2023. IIPR stated that the year-over-year decrease was due to a $3.0 million decline in contractual rent and property management fees in the third quarter related to properties that IIPR regained possession of since June 2023; a decline of $1.3 million due to rent received but not recognized in rental revenues resulting from the re-classifications of two sales-type leases beginning January 1, 2024; and $1.3 million of contractually due rent and property management fees that were not collected during the current quarter.
On this news, IIPR's stock price fell $12.93 per share, or 10.51%, to close at $110.07 per share on November 7, 2024. 7.
Then, on December 20, 2024, IIPR announced that on the previous day, PharmaCann Inc. ("PharmaCann"), the tenant for eleven properties that IIPR owns-and the revenues from which represented 17% of IIPR's total rental revenues for the three and nine months ended September 30, 2024-defaulted on its obligations to pay rent for the month of December under six of its eleven leases (the "Leases"), for properties located in Illinois, Massachusetts, Michigan, New York, Ohio and Pennsylvania. December rent, including base rent, property management fees, and estimated tax and insurance payments, totaled $4.2 million for these six properties. Further, IIPR stated that it applied security deposits held by IIPR pursuant to these Leases for the payment in full of the defaulted rent, in addition to late penalties and interest. Finally, the Company revealed that "although PharmaCann paid rent in full under the remaining five Leases totaling $90,000 for the month of December, as a result of cross-default provisions contained in each of the Leases, on December 19, 2024, PharmaCann also defaulted on its obligations under these five Leases, as a result of the non-payment of rent on the other six Leases."
On this news, IIPR's stock price fell $21.68 per share, or 22.73%, to close at $73.66 per share on December 20, 2024.
Pomerantz LLP, with offices in New York, Chicago, Los Angeles, London, Paris, and Tel Aviv, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, Pomerantz pioneered the field of securities class actions. Today, more than 85 years later, Pomerantz continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered billions of dollars in damages awards on behalf of class members. See www.pomlaw.com.
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SOURCE: Pomerantz LLP
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