Innovative Industrial Properties, Inc.

Good day and welcome to the Innovative Industrial Properties, Inc. Q3 2022 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on a touchtone phone. To withdraw your question, please press star, then two. Please note this event is being recorded. I would now like to turn the conference over to Brian Wolf, General Counsel. Please go ahead, sir.

Thank you for joining the call. Presenting today are Alan Gold, Executive Chairman, Paul Smithers, President and Chief Executive Officer, Catherine Hastings, Chief Financial Officer, and Ben Regan, Vice President of Investments. Before we begin, I'd like to remind everyone that statements made during today's conference call may be deemed forward-looking statements within the meaning of the safe harbor of the Private Securities Litigation Reform Act of 1995, and actual results may differ materially due to a variety of risks, uncertainties, and other factors. Please refer to the documents filed by the company with the SEC, specifically the most recent reports on Forms 10-K and 10-Q, which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements. We are not obligated to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. addition on today's call we will discuss certain non-gap financial information such as ffo normalized ffo and adjusted ffo you can find this information together with reconciliations to the most directly comparable gap financial measure in our earnings release issued yesterday as well as in our 8k filed with sec i'll now hand the call over to alan alan

Thank you, Brian, and welcome everyone. We are pleased to report another solid quarter of operations and financial results, especially in the context of the challenging macroeconomic conditions across industries that we are all experiencing. We believe we have positioned ourselves well in this context, with one of the strongest and most experienced teams of real estate professionals in the cannabis industry, with a high quality portfolio, and arguably one of the most conservative flexible balance sheets across the real estate sector. Now to recap the quarter, we generated total revenues of 71 million in Q3 with growth in excess of 30% over the prior year's third quarter. Rent collection for IIP's operating portfolio was 97% for the nine months ended September 30th, 2022. with only tenants Kings Garden and Vertical not paying their full contractual rent. As we noted in our 8-K filed in September, we entered into a confidential conditional settlement agreement with Kings Garden. We are limited at this juncture as to what we can discuss, but we expect to provide further information in the coming months as we can. For now, Kings Garden continues to occupy four of the properties under that agreement. while relinquishing two of the properties that are under development back to us. We are pleased to report that we have an LOI for a long-term lease at one of the properties in just over a month of marketing the property for lease and look forward to finalizing the arrangement with that operator. With respect to the San Bernardino property under development, With the current California market environment, we are evaluating all possible uses for that property, including non-cannabis uses. And earlier this week, we executed on our first property disposition, selling a property in Pennsylvania that we acquired in 2019 and leased to Mitre, a private, single-state operator. We sold the property for $23.5 million, or about $461 per square foot, which was above our basis in the property, including all funded improvements. We are pleased to execute on this transaction, and with our pipeline of potential additional investments, we see an opportunity to recycle that capital into superior risk-adjusted returns for our stockholders. We continue to see significant opportunities to place capital. However, we continue to be highly selective and patient in our process, with the tightening of financial conditions also having a significant impact on our own cost of capital. That said, we are pleased with the progress we have made in placing capital over the course of the year, with just under $370 million of new acquisitions and additional investments in the nine months ended September 30th. Of course, we continue to maintain one of the most conservative balance sheets in the commercial real estate industry with 12% debt to total assets, no material maturities until 2026, and a debt service coverage ratio in excess of 15 times. As we have noted throughout our six years of reporting our results to UOM, we continue to have a deep conviction in the long-term growth prospects of the regulated cannabis industry and our position as the preeminent provider of real estate capital for operators' mission-critical real estate. I will now turn the call over to Paul to discuss industry dynamics. Paul?