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  "docSlug": "6acbd8e96867",
  "documentTitle": "Innovative Industrial Properties, Inc. (IIPR)",
  "authorId": "62_Grizzly_Research",
  "authorName": "Grizzly Reports",
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  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2020-04-09 00:00:00",
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  "notes": "Includes a bear icon at the top, signaling a short-selling thesis.",
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      "kind": "callout",
      "text": "We have shown in this report that IIPR's assets are risky and overpriced, and we do not believe that the current spread between the company's cost of capital and the yield on the underlying assets is sustainable.",
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      "text": "book value per share: $46.84",
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      "text": "At the end of 2019, IIPR had cash and cash equivalents and restricted cash of $117.3M and exchangeable senior notes of $134.7M. IIPR has meaningful obligations towards its tenants to fund improvements, amounting as of December 31st 2019 to $195M.",
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      "kind": "paragraph",
      "text": "However, investors should also pay attention to the reimbursement options that IIPR extended to certain tenants including Trulieve and Grassroots, amounting according to the company's 10K to approximately $53.8M.",
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      "kind": "paragraph",
      "text": "Alan Gold has not yet officially resigned from any of his positions with IIPR and the company continues to pay him over $2.6M per year. This is about 2.5x the annual salary for IIPR's CEO.",
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      "kind": "paragraph",
      "text": "At current prices and with the current dividend run rate, IIPR sports a cost of equity capital around 5.38%, while its risky portfolio of assets yields over 13%.",
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      "kind": "paragraph",
      "text": "As the March 2020, the company's shareholder equity was $798.0M, and the company's majority asset is Net Real Estate held for Investment of $505.9M. We note that IIPR's current book value is only $46.84 per share.",
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      "kind": "paragraph",
      "text": "Based on our rental income analysis, we estimate that IIPR's rental income would be 38% lower in a Good Case Scenario and 49% lower in a Bad Case Scenario in 2020 compared to 2019.",
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      "text": "We noticed that an increasing number of tenants start to cancel tenant improvements in the first few weeks of 2020. $4M of construction funding commitments related to IIPR's lease with PharmaCann... Green Peak... $15.2M. DionyMed... $2M.",
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      "kind": "title",
      "text": "7 Our Independent Analysis Suggests Significant Downside",
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