Innovative Industrial (IIPR) Q3 2026 Earnings Call Transcript

DATE

Tuesday, Nov. 3, 2026

CALL PARTICIPANTS

• Director of Finance - Eli Kanter
• Executive Chairman - Alan D. Gold
• President and Chief Executive Officer - Paul E. Smithers
• Chief Investment Officer - Ben Regin
• Chief Financial Officer - David J. Smith

TAKEAWAYS

• Total Revenue -- $64.9 million, representing a 0.4% increase versus last year driven by the application of security deposits on repossessed properties.
• AFFO per Share -- $1.96, increasing 7% sequentially from the second quarter of 2026 due to recoveries of past due rents and new leasing activity.
• Alewife Park Mezzanine Loan -- $245 million, carrying an expected average interest rate of approximately 15.8% over the term with a floor of 14.0%.
• Life Science Income Concentration -- 26%, representing the projected share of total annualized income upon the full funding of all life science investments.
• Q3 Leasing Activity -- 604,000 square feet, across six properties located in California, Massachusetts, New York, Ohio, and Washington.
• Total Recent Leasing -- 874,000 square feet, including a 270,000 square foot lease for a Saxton, Pennsylvania, property executed subsequent to quarter end.
• Year-to-Date Portfolio Leasing -- 1.3 million square feet, representing 15% of the total portfolio across 12 properties.
• Series B Preferred Stock Offering -- $54.2 million, in gross proceeds from 2,167,500 shares priced at $25.00 per share subsequent to quarter end.
• Net Debt to Adjusted EBITDA -- 2.1x, representing one of the lowest leverage ratios in the REIT industry as of Sept. 30, 2026.
• Net Debt to Total Gross Assets -- 18.7%, supported by a total gross asset base of $3.0 billion.
• Total Liquidity -- $142.4 million, consisting entirely of cash and cash equivalents as of the end of the third quarter.
• Tenant Recoveries -- $11.6 million, collected from defaulted tenants including 4Front, Parallel, and The Cannabist Company through payments and security deposit applications.
• Interest and Other Income -- $14.3 million, increasing by $9.9 million versus last year primarily due to $10.4 million in income from IQHQ financial investments.
• Alewife Funding Schedule -- $111 million, funded at closing with the remaining $134 million expected to be funded through the fourth quarter of 2027.
• Quarterly Common Dividend -- $1.90 per share, resulting in a payout ratio of 97% for the third quarter.
• Re-tenanting Efficiency -- Under $10 per square foot, covering commissions, tenant improvements, and landlord work for all re-tenanting activities year to date.
• Portfolio Vacancy -- 800,000 square feet, with approximately two-thirds of the vacancy concentrated in two Florida assets previously leased to Parallel.
• Revolving Credit Facility -- $87.5 million, extended for 90 days subsequent to quarter end to a new maturity date of Jan. 21, 2027.
• IQHQ Preferred Equity Investment -- $30 million, invested in Series G preferred equity during the third quarter.
• Total Life Science Capital Commitment -- $545 million, across various mezzanine loans and preferred equity structures including the Alewife Park and IQHQ investments.
• Battle Green Recovery -- $0.15 per share, contributing to quarterly results following the assignment of the lease to an affiliate of Vireo.

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RISKS

• David J. Smith warned that for four of the five defaulted tenants, the security deposits "are all fully exhausted," which limiting the company's ability to offset future unpaid rent from those specific reserves.
• Ben Regin stated, "There can be no assurance that these discussions or negotiations will result in leases," regarding agreements covering an additional 446,000 square feet currently subject to license transfers and regulatory approvals.

SUMMARY

Innovative Industrial Properties, Inc. (NYSE:IIPR) reported an expansion of its life science investment portfolio alongside the active re-leasing of vacated cannabis properties. Management indicated that the company is diversifying its asset base to increase access to various capital sources and new lenders. The company maintained its leverage at 2.1x net debt to adjusted EBITDA while utilizing the public preferred equity market to fund mezzanine loan commitments. Management reported that the re-tenanting of facilities has been executed at a cost under $10 per square foot year to date.

• Management Diversification Goals: Executive Chairman Gold noted that the company's entry into life science real estate has already increased interest from new lenders and capital sources.
• Florida Market Strategy: Ben Regin indicated that the Florida cannabis market remains a primary focus for re-leasing efforts following the recent issuance of 22 new medical cannabis licenses.
• Federal Cannabis Reform: Paul Smithers stated, "We believe federal reform has the potential to provide meaningful benefits to operators, including improved economics, and broader access to traditional sources of capital."
• Regional Demand Trends: Ben Regin noted that combined demand in core life science markets including Boston and San Diego increased 44% year over year, driven by biotech funding and manufacturing reshoring.
• Tenant Transition Management: Paul Smithers noted that regaining possession of properties from Parallel and The Cannabist Company allows the company to pursue new leasing opportunities and improve long-term portfolio performance.

INDUSTRY GLOSSARY

• AFFO: Adjusted Funds From Operations, a financial metric used by REITs to measure cash flow available for distribution to shareholders.
• REIT: Real Estate Investment Trust, a company that owns, operates, or finances income-producing real estate.
• Mezzanine Loan: A hybrid form of capital that sits between senior debt and equity in a company's capital structure.
• Series B Preferred Stock: A class of equity that typically pays a fixed dividend and has priority over common stock in the event of liquidation.
• Alewife Park: A 27-acre life science campus located in Cambridge, Massachusetts, representing a major mezzanine investment for the company.
• IQHQ: A life science real estate company that IIP has partnered with for strategic investments.
• Tenant Improvements (TIs): Customized alterations a landlord makes to a rental space as part of a lease agreement.

Full Conference Call Transcript

Operator: Hello everyone. Thank you for joining us and welcome to the Innovative Industrial Properties, Inc. Q3 2026 Earnings Call. After today's prepared remarks, we will host a question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, press star 1 again. I will now hand the conference over to Eli Kanter, Director of Finance.

Eli Kanter: Thank you for joining the call. Presenting today are Alan D. Gold, Executive Chairman; Paul E. Smithers, President and Chief Executive Officer; David J. Smith, Chief Financial Officer; and Ben Regin, Chief Investment Officer. Before we begin, I would like to remind everyone that some of the statements made during today's conference call including statements regarding potential lease transactions that are subject of letters of intent are forward looking statements within the meaning of the safe harbor of the Private Securities Litigation Reform Act of 2 thousand and subject to risks and uncertainties.

Actual results may differ materially and we refer you to our SEC filings, specifically our most recent on Forms 10 ks and 10 Q. for a full discussion of risk factors that could cause actual results to differ materially from those contained in the forward looking statements we are not obligated to update or revise any forward looking statements whether due to new information, future events or otherwise except as required by law. In addition, on today's call, we will discuss certain non GAAP financial information such as FFO, normalized FFO, AFFO, and adjusted EBITDA.

You can find this information together with reconciliations to the most directly comparable GAAP financial measures, which is available on the Investor Relations section of our website at www.innovativeindustrialproperties.com. In our earnings release issued yesterday, as well as in our 8-K filed with the SEC.

Alan D. Gold: I will now hand the call over to-- Thanks, Eli. Good morning, everyone. And thank you for joining our third quarter 2026 earnings call. The third quarter marked another period of significant execution for us. Highlighted by the continued expansion of our life science investments, strong leasing activity across our existing portfolio, significant growth in our AFFO per share versus the second quarter, and disciplined capital allocation. Most notably, in September, we entered into $245 million mezzanine loan commitment as a member of a lender syndicate. To IQHQ for Alewife Park a premier life science campus in Cambridge, Massachusetts, 1 of the country's leading life science markets.

This highly accretive investment builds on our existing relationship with IQHQ and is expected to generate an average interest rate of ~15.8% over the term of the loan. Together with our original $270 million commitment to IQHQ and an additional $30 million investment through the preferred equity structure in September, we have now committed approximately $545 million to life science Upon full funding, our life science investments are projected to account for ~26% of our total annualized income. We believe the current market environment continues to present compelling opportunities to deploy capital into the life science sector at attractive entry points.

Our recent investments reflect both our confidence in the sector's long term fundamentals and our disciplined approach to expanding our platform. At the same time, our team delivered strong leasing results across our cannabis portfolio. During the quarter, we executed new leases at 6 properties totaling approximately 604 thousand square feet. Followed by an additional 270 thousand square foot lease subsequent to quarter end. Together, these transactions represent approximately 874 thousand feet of gross leasing activity since the beginning of the third quarter. Bringing our total gross leasing activity year to date to approximately 1.3 million square feet across 12 properties or 15% of our total portfolio.

Importantly, we continue to see strong interest across our portfolio reinforcing our confidence in the underlying value of our real estate with an active pipeline of additional transactions, we remain focused on building upon this momentum driving occupancy, and positioning the portfolio for strong long term performance. We delivered strong quarterly earnings as well with AFFO per share up 7% sequentially to $1.96 per share as we had continued recoveries of past due rents from certain tenants. On the capital front, and subsequent to quarter end, we completed $54 million public offering of our 9.25% Series B preferred stock.

We intend to use the net proceeds to fund all or a portion of our remaining funding under our Alewife Park mezzanine loan commitment and for general corporate purposes. This transaction further demonstrates our ability to access the capital markets to fund attractive, accretive investments and support the continued growth diversification of our platform. Taken together, we believe these accomplishments underscore our strong management team and ability to deploy capital into accretive investments, while actively managing and maximizing the value of our existing portfolio. We believe the combination of our growing life science investments leasing momentum, and financial flexibility positions us for future growth and long term shareholder value creation. With that, I will turn the call over to Paul.

Paul?

Paul E. Smithers: Thanks, Alan. At the federal level, cannabis reform continued to advance. Over the summer, the DEA completed its hearing on the proposed rescheduling of marijuana more broadly from Schedule I to Schedule III. While the proceedings remain subject to further administrative review, and the timing and outcome of any final decision remains uncertain, we believe federal reform has the potential to provide meaningful benefits to operators, including improved economics, and broader access to traditional sources of capital. We have also seen encouraging investment and M&A activity across the cannabis industry with established operators pursuing expansion in attractive markets, including Pennsylvania, Ohio, New York, and Colorado.

We believe this activity signals that well capitalized operators remain committed to strategic growth and are actively investing in markets with strong long term fundamentals. While financial challenges persist for certain operators, we continue to take decisive action across our portfolio. During the quarter, we regained possession of properties previously leased to Parallel, Pharmacan, and the cannabis company. These transitions allow us to pursue leasing opportunities, strengthen our tenant base, and improve overall portfolio performance. Turning to the state level, Florida recently approved 22 additional vertically integrated medical cannabis licenses. Representing a meaningful expansion of 1 of the country's largest medical cannabis markets.

We believe the addition of new operators creates opportunities for further investment and expansion in the state including demand for mission critical real estate. More broadly, regulated cannabis markets continue to reach significant milestones. Massachusetts surpassed $10 billion in cumulative adult use cannabis sales in September. While California has generated nearly $8.4 billion in cannabis tax revenue since 2018. These achievements underscore the scale and economic significance of established cannabis markets. Even as operators continue to navigate a challenging environment. With that, I will turn the call over to Ben to provide additional details on our portfolio activities.

Ben Regin: Thanks, Paul. Starting with our investment activity, we expanded our life science portfolio this quarter, closing on $275 million in new commitments. We invested an additional $30 million in IQHQ preferred equity, and closed on $245 million mezzanine loan commitment for Alewife Park, our premier life science campus in Cambridge, Massachusetts. Alewife Park is a 27-acre campus comprised of 3 existing buildings totaling 392 thousand square feet and 2 pad-ready sites with up to 364 thousand square feet of additional development potential. The existing buildings are 78% leased to Lila Sciences, an AI enabled scientific discovery company.

In addition to the approximately $800 million invested in the campus prior to our investment, We believe the quality of the real estate, established tenancy, and location within 1 of the country's leading life science markets provide a strong foundation for our accretive investment. Under the terms of our commitment, we funded approximately $111 million at closing with the remaining $134 million expected to be funded through the fourth quarter of 2027. The loan is expected to generate an average interest rate of ~15.8% over the term. The financing will support the completion of tenant improvements, lease-up, and stabilization of the campus. We believe the current environment continues to present attractive entry points in life science real estate.

Specifically for high quality assets in the core life science markets of Boston, San Diego, and the Bay Area. According to JLL, these 3 markets, along with Raleigh Durham, have seen combined demand increase 44% year over year to nearly 8 million square feet in Q1 2026. Driven by improved biotech funding conditions and biomanufacturing reshoring. Against this backdrop, we are actively growing our acquisition pipeline, seeing opportunities to invest in high quality assets in these core markets at attractive risk adjusted returns. Turning to leasing, we had our most active quarter to date with substantial activity across multiple properties and markets.

During the third quarter, we executed new leases totaling 604 thousand square feet across 6 properties located in California, Massachusetts, New York, Ohio, and Washington. That momentum continued into the fourth quarter with an additional 270 thousand square foot lease at a property located in Pennsylvania. Bringing total leasing activity since July to 874 thousand square feet. Beyond these completed transactions, we have a pipeline of additional transactions we believe are progressing toward execution. We have agreements in place covering 3 properties in Colorado, totaling 72 thousand square feet. Subject to the license transfer and regulatory approval process. As well as agreements across 3 properties previously leased to 4Front Ventures, totaling another 374 thousand square feet.

In total, these agreements cover an additional 446 thousand square feet beyond the leases already executed. These agreements remain subject to customary due diligence including licensing and regulatory approvals, and there can be no assurance that these discussions or negotiations will result in leases. With that, I will turn the call over to David.

David J. Smith: Thank you, Ben. For the third quarter, we generated total revenues of $64.9 million compared to $63.3 million in the second quarter. Our results benefited from new leases, executed across our portfolio and recoveries of past due rents primarily from Battle Green, which added $0.15 per share to our results this quarter, as detailed in our press release yesterday. Adjusted funds from operations or AFFO, for the quarter totaled $54.8 million or $1.96 per diluted share compared to $53 million or $1.83 per diluted share in the prior quarter. Driven by the previously mentioned items. We also continue to benefit from our investments in the life science sector.

During the quarter, we recognized $10.4 million of interest and dividend income related to our financial investments in IQHQ contributing to total interest and other income of $14.3 million for the quarter. Our third quarter results only had a few days of benefit from our recent Alewife investment, and we will have a larger beneficial impact in our fourth quarter results. Turning to capital markets, subsequent to quarter end, priced an underwritten public offering of 2.2 million shares of its 9.25% Series B preferred stock at $25.00 per share representing $54 million in gross proceeds of attractively priced perpetual capital.

The proceeds from this offering are intended to support our previously announced mezzanine loan investment in the life science sector while providing additional flexibility to pursue future investment opportunities. We believe this transaction further demonstrates our ability to access sources of the capital to support the continued diversification and growth of our platform. Also, subsequent to quarter end, we executed a 90-day extension of our existing $87.5 million revolving credit facility extending its maturity to January 2027. This extension provides us with additional flexibility to continue to evaluate our financing alternatives, and manage our capital structure as we are seeing increased lender interest as a result of our continued diversification into the life science industry.

Furthermore, as part of our diversification efforts, we are continuing to obtain increased research coverage and are pleased to welcome Stifel Nicolaus and Huntington Capital Markets to our equity research coverage. Bringing the total number of firms covering IIP to 8. We appreciate the continued interest in our company and look forward to engaging with the broader investment community as we execute on our strategy. Our balance sheet remains strong, supported by $142 million in total liquidity at quarter end, which does not include our recent $50 million preferred raise that further bolstered our total liquidity.

We ended the quarter with net debt to adjusted EBITDA of 2.1x, 1 of the lowest in the REIT industry, and net debt to total gross assets at a strong 19%. We continue to remain focused on maintaining a conservative capital structure and liquidity position while selectively pursuing attractive investment opportunities that support our long term growth. With that, operator, could you please open the call for questions?

Operator: Thank you. We will now begin the question and answer session. If you would like to ask a question, please press star 1 to raise your hand. To withdraw your question, please press star 1 again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please standby while we compile the Q&A roster. Your first question is from the line of Aaron Grey with Alliance Global Partners. Aaron, your line is now open. Please go ahead.

Aaron Grey: Hi, and thank you very much for the questions. So first question, for me, just regarding some of the facilities that you have taken back possession of. Appreciate the color in terms of the timing for the 4 front properties. As you think about some of the other properties, PharmaCann, Parallel, and The Cannabis Company that you have possession of in August and September, how best to think about timing of when you can get those getting re-leased and rent revenue from those? Thanks.

Alan D. Gold: You wanna take that?

Ben Regin: Yeah. Hey, Aaron, No problem. Yeah, I mean, I think historically, we have seen that can be anywhere from 6 to 18 months between sourcing a new tenant, lease commencement, license transfer, the regulatory process. I think we feel very good about our position and those assets in particular. Of the current vacancy, about 2-thirds of that is our 2 Florida assets leased to parallel. Or previously leased to parallel. And the Florida market has been performing very well. this year. They set a new sales record in July, and we really like where that market is going. And feel that those assets are well positioned for future leasing activity.

You know, as well as we like to highlight the capital efficient nature in which we have been able to re-tenant these assets. For year-to-date, you are well below $10 a foot. You know, all in for commissions, TIs, landlord work, really everything to re-tenant these assets.

Aaron Grey: Okay. Great. Appreciate that color. Second question for me. I know last quarter, we talked about diversification split between cannabis and life sciences, but wanted to dive more now in terms of diversification. within the life sciences sector specifically and how you think about further opportunities within life sciences and having some diversification versus concentration, with existing IQHQ and affiliates. Thanks.

Alan D. Gold: Yeah, I mean, I think that we, the as we started the process of diversification, we have I think, executed well. We have focused our efforts today with investments in. Into IQHQ, which we think are investments that are well secured by the positions in which we are in at IQHQ. We believe that has given us a very good window into what is going on in the life science industry. And we believe that our diversification will continue and that there are unique opportunities not only within IQHQ, but within the broad life science industry that we are, certainly exploring and look forward to exploring those opportunities in the future.

Aaron Grey: Okay. Great. Appreciate the color. I will jump back in the queue.

Operator: Your next question is from the line of Bill Kirk with Roth Capital Partners. Bill, your line is open. Please go ahead.

William Kirk: Hey, everybody. Thank you for taking the questions. I guess to start, there is still a chunk of AFFO that is still coming from defaulted properties, whether it is security deposits or payments that are continuing. I guess the simple question is, would you expect quarterly AFFO to remain above that $1.90 payout?

Alan D. Gold: David, why do not you take that?

David J. Smith: Yeah, I think, Bill, as you noted, obviously, we had a very strong quarter. I mean, AFFO was up 7% sequentially. Drove our payout ratio down to 97%. For this quarter. So we are very happy with our results there. In terms of the go forward, obviously, do not give guidance. I think we have done a great job historically of recovering these past due rent payments that are owed to us.

William Kirk: And, again, that benefit this quarter, I think, as you are noting, there were a number of benefits this quarter as we detail in our press release that will be nonrecurring. Including Pharmacan, Parallel, and Bavarian benefit as well. And maybe that segues into opening a follow-up there. For the Battle Green, there was a change in control there, right, with Vireo. Know? So what should we expect from that 1 going forward? We can see the payments in the third quarter. But what are those payments maybe look like going forward from those assets?

Ben Regin: Yeah, hey, Bill. it is Ben. Yeah. I mean, we typically do not disclose lease terms on new leases. I mean, we really viewed that as. You know, we had a defaulted tenant. And we were very aggressive in forcing our rights under the lease. And received interest from a new group that wanted to execute a lease for that asset before we are even able to wrap up that legal process. I thought that was really spoke to the quality of the real estate and getting their tenant in there so quickly, and we are very pleased to have Vireo in there and up and running.

William Kirk: Thank you. I am going to sneak 1 last 1 in. Could you give us a little more detail on the. I think it was 16 terminated leases looks to me like a mix of retail and cultivation. So I guess what type of properties were they? Was it concentrated to a particular tenant or a particular market? And then I will pass it along.

Ben Regin: Yeah. No problem. Yeah. So of those, vast majority from a square footage perspective is gonna be the cultivation assets. You know, almost half of that is the 2 Florida assets that we recovered from Parallel. You know, you also had a couple from PharmaCann, you know, as well as Battle Green and 4Front. I think it is also important to note that there is a number of those that we already have new leases executed. So that Battle Green example we just talked about there was a lease that we signed in New York that was the termination of getting PharmaCann out and bringing a new tenant in there.

And then the 4Front asset in Washington where, again, we have a new tenant in there up and running and paying rent already. So, again, very, very pleased with the execution on those. Thank you for clearing up my confusion there.

Operator: Thank you. Your next question is from the line of Tom Catherwood with BTIG. Tom, your line is open. Please go ahead.

William Thomas Catherwood: Thank you so much, and good morning, everybody. Maybe circling back on Aaron's leasing question. Your Q3 leasing activity was a record Was the increase more a result of deals that you have been working on for a long time all reaching a conclusion at once, or has customer activity accelerated if it is the latter, what is driving the change and how sustainable do you think that demand is?

Ben Regin: Yeah, hey, Tom. it is Ben. Yeah. I think it is a combination of those. I mean, real estate transactions are obviously chunky in nature so we had a number of those all come together in the same quarter. I think we are still pleased with the velocity we have seen on the retenanting. And I think that, you know, there is some optimism and some increased M&A activity that we have seen. The groups that are out there that, you know, are getting back on offense. In some of these states where they want to expand and they see the value in the real estate that we have.

You Going forward, the remaining vacancy, you know, currently is a little over 800 thousand square feet in the vast-- well, 2-thirds of that is our 2 parallel assets in Florida. So, you that will be our focus. Like we mentioned before, we feel very good about the Florida market. Setting a new monthly sales record here in July and you know, 20% year over year increase in sales in the Florida market They just issued some new licenses, and we feel we are very well positioned with those 2 assets. Great. Appreciate that, Ben.

William Thomas Catherwood: And then maybe last 1 for me. Going over to the IQHQ investment and kind of thinking specifically about the preferreds. When you first looked at the original investment with IQHQ, and the milestones that would have been associated with the Series G funding, the draws the company would have made. How has the performance compared to your initial underwriting or expectations? And is the incremental $30 million that you put in this quarter tied to better execution or higher costs?

Alan D. Gold: So I think, as we have described in the prepared remarks, you know, the life science industry continues to improve. And that is. so that, and I think IQHQ is benefiting from that increase. It including, you know, having a stronger. Having more leasing activity particularly at Alewife, getting it up to 78% and perhaps additional demand for their emerging. So we see-- and we see their success in their Redwood City Elko Yards property and even some, you know, new leasing activity emerging in the San Diego market. So we are. They are performing. that is number 1. And number 2 is the additional capital investment is. Was an opportunity that we had that we took advantage of There.

They had good use capital needs, and we had capital available that we believe was a very well-priced and very accretive to IIPR.

William Thomas Catherwood: Got it. Appreciate the answers. Thanks, everyone.

Operator: Your next question is from the line of Rob Stevenson with Huntington. Rob, your line is open. Please go ahead.

Analyst: Good morning, guys.

David J. Smith: David, I guess, to ask the revenue question a little differently. Are there any additional security deposits beyond the $3.8 million you did in the third quarter that you can pull down in the fourth quarter for those tenants that are currently not paying or where the lease is in transition but not yet commenced, etcetera? Or are you tapped out of the security deposits for those tenants that you listed in the earnings release at this point? Yeah. Sure. Rob, 4 of the 5 tenants those are all fully exhausted. We do still have a handful of properties with The Cannabis Company where we do still have some security deposits on hand.

Analyst: Okay. that is helpful. Thank you. And then Alan, how should we be thinking about the likelihood that you will acquire the incremental $155 million of the IQHQ mezz loan? And sort of what dictates that in your mind?

Alan D. Gold: Well, not acquire it. They will draw on that additional 155 million as they continue to build out the improvements and for the Lila the Lila lease. And so we believe that will get drawn over time. Barring any changes. So that is in addition to the $134 million that is yet to be drawn? So it is actually 289 million of incremental draw for you guys on that? Right? Because it was $245 million, with $111 million at closing, and there was $134 million left on that $245 million. And then you had the option to acquire the $155 million from another lender on the same terms. Oh, I see. I see. I am sorry.

I did not understand that. Okay. Go ahead. Alright. So the opportunity for us to acquire that additional-- you know, I think that is a possibility. it is part of our agreement. it is what we are looking to do. We have to have the access to capital available to us to be able to make that determination. And if we determine that is the best allocation of capital when the opportunity surfaces, we will certainly look at that. It would be a very accretive transaction should it occur. Okay. And then I guess just the last 1 to sort of follow-up on that. How is the Board thinking about sort of max investment in IQHQ at this point?

Has that continues to ratchet up? I mean, are you getting to the point where if you did pull down that 1, the extra $155 million, that would be it, or is there still, you know, the board thinking that there is still room for incremental investment there? I mean, if you think about the opportunity we believe the assets that IQHQ has are of high quality, which is why we made an additional investment in the Alewife transaction. That is just what is 1 example of a very high-quality asset that has, you know, tremendous amount of leasing already in place and additional leasing activity.

So if they are if there are other opportunities, I think the board would look. Certainly would consider it. We do not think that our investments are really just investments in IQHQ, but tangentially, also investments in the life science industry. And are a vehicle for us to diversify from our portfolio from just the cannabis focus that we had. This diversification that we are doing has increased our access to new lenders and new capital sources. So it is proven to be what board had thought it would be, which is a very good move for the company. And to give us a greater access to capital.

And we think that will probably-- That if there are other opportunities, we will probably continue to do that given that our diversification desire is higher than where we are sitting today.

Analyst: Okay and then I lied. 1 last 1, David. With the new preferred issuance, do you have the opportunity to open that up via an ATM and issue incrementally there? Or is that you would need to come back if you wanted to issue additional on that series that you would have to do a fully marketed offering?

David J. Smith: No. We do have the ability to do the ATM on that. new Series B. So I think as you are alluding to, we had that capability in our series a. We had very strong demand and success of raising perpetual capital for that series a this year, and as you know, Series B has that ability as well.

Analyst: Okay. Guys. Appreciate the time. Thank you.

Operator: There are no further questions at this time. I will now turn the call back to Alan D. Gold for closing remarks.

Alan D. Gold: Thank you. First of all, I would like to thank all of those who have joined on the call today and for those very good questions. I would like to thank our team for their very hard work and this past quarter. And we certainly look forward to the opportunities for IIPR in the future. With that, thank you all, and we will end the call.

Operator: This concludes today's call. Thank you for attending. You may now disconnect.

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