Innovative Industrial Properties Inc (IIPR) 2023 Q4 法說會逐字稿

Good day, and welcome to the Innovative Industrial Properties Incorporated fourth-quarter and full-year 2023 earnings call. (Operator Instructions) Please note that this event is being recorded.

美好的一天，歡迎參加創新工業地產公司 2023 年第四季和全年財報電話會議。（操作員說明）請注意，該事件正在被記錄。

I'd now like to turn the conference over to Brian Wolfe, General Counsel. Please go ahead.

我現在想將會議交給總法律顧問布萊恩沃爾夫 (Brian Wolfe)。請繼續。

Thank you for joining the call. Presenting today are Alan Gold, Executive Chairman; Paul Smithers, President and Chief Executive Officer; David Smith, Chief Financial Officer; Catherine Hastings, Chief Operating Officer; and Ben Regin, Chief Investment Officer.

感謝您加入通話。今天出席會議的有執行主席艾倫‧戈爾德 (Alan Gold)；保羅‧史密瑟斯 (Paul Smithers)，總裁兼執行長；大衛‧史密斯，財務長；凱瑟琳‧黑斯廷斯，營運長；和首席投資長 Ben Regin。

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 for 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.

在我們開始之前，我想提醒大家，今天的電話會議中所做的陳述可能被視為1995 年《私人證券訴訟改革法案》安全港含義內的前瞻性陳述，實際結果可能因以下因素而存在重大差異：各種風險、不確定性和其他因素，請參閱公司向 SEC 提交的文件。具體來說，是關於 10 K 表格和 10 Q 表格的最新報告，其中確定了可能導致實際結果與前瞻性陳述中包含的結果不同的重要風險因素。我們沒有義務公開更新或修改任何前瞻性陳述，無論是由於新資訊、未來事件或其他原因。

In addition, on today's call, we will discuss certain non-GAAP financial information such as FFO normalized FFO and adjusted FFO. You can find this information together with reconciliations to the most directly comparable GAAP financial measures in our earnings release issued yesterday as well as in our eight K filed with the SEC.

此外，在今天的電話會議上，我們將討論某些非 GAAP 財務信息，例如 FFO 標準化 FFO 和調整後 FFO。您可以在我們昨天發布的收益報告以及我們向 SEC 提交的 8 K 中找到這些資訊以及與最直接可比較的 GAAP 財務指標的調整表。

I'll now hand the call over to Alan.

我現在將電話轉交給艾倫。

Thank you, Brian, and welcome, everyone. We are pleased to discuss our results for the full year 2023 and recent activity as we enter into our eighth full year of operations, the Company performed well in 2023 and has continued to execute year to date, demonstrated by one annual a FFO per share growth of 7%. Two, increasing our annual dividends declared each year since inception in 2016, three, committing capital totaling $119.5 million during 2023 for executing new leases and analyze to release five properties representing over $140 million of invested capital and five further enhancing our liquidity position and strong balance sheet with the closing of a new $45 million revolving credit facility for the year, IP generated total revenues of $310 million and adjusted funds from operations of $256 million, increases of 12% and 10% over 2022 respective. I will note that these growth results were achieved during a time when we strategically determined to reduce our investment activity in light of macroeconomic uncertainties and significant increased cost of capital. That financial performance allowed us to continue to grow our dividend with $7.22 of common stock dividends declared over the course of 2023 Annual dividends increasing each year since inception, our most recent dividend declared in Q4 of $1.82 per share was at the midpoint of our Board's target dividend payout range of 75% to 85% of AFFO. We have one of the strongest and most experienced teams of real estate professionals in the cannabis industry, a high quality portfolio and a conservative and flexible balance sheet with a 12% debt to total gross assets, no variable-rate debt, no debt maturities until May 2026. We further enhanced our balance sheet position during Q4 with introduction of a revolving credit facility and then recently upsized that facility earlier this month, which David will touch on further.

謝謝你，布萊恩，歡迎大家。隨著我們進入第八個全年運營，我們很高興討論我們 2023 年全年的業績和最近的活動，公司在 2023 年表現良好，並繼續執行年初至今，每股 FFO 的年度增長證明了這一點7%。第二，自2016 年成立以來每年增加我們宣布的年度股息，第三，承諾在2023 年期間投入總計1.195 億美元的資本用於執行新租賃，並分析釋放五項代表超過1.4 億美元投資資本的房產，五項進一步增強我們的流動性狀況和強勁的平衡隨著今年新的4500 萬美元循環信貸額度的關閉，IP 總收入達到3.1 億美元，調整後的營運資金達到2.56 億美元，分別比2022年增長12% 和10%。我要指出的是，這些成長成果是在我們鑑於宏觀經濟不確定性和資本成本大幅增加而策略性地決定減少投資活動的時期取得的。這種財務表現使我們能夠繼續增加股息，在2023 年期間宣派的普通股股息為7.22 美元。自成立以來，年度股息每年都在增加，我們在第四季度宣派的最新股息為每股1.82美元，處於董事會目標的中點股息支付範圍為 AFFO 的 75% 至 85%。我們擁有大麻產業最強大、最有經驗的房地產專業團隊之一、高品質的投資組合和保守且靈活的資產負債表，債務佔總資產的12%，無可變利率債務，無債務到期日2026 年 5 月。我們在第四季度透過引入循環信貸便利進一步增強了我們的資產負債表狀況，然後在本月早些時候擴大了該便利，大衛將進一步談到這一點。

On the investments front, we are very pleased with our execution on re-leasing initiatives as well as the opportunities we are seeing to selectively close on new investments, which Ben will discuss in more detail from a regulatory perspective.

在投資方面，我們對再租賃計劃的執行以及我們看到的有選擇地完成新投資的機會感到非常滿意，本將從監管角度更詳細地討論這些機會。

As we noted in our prior call, we continue to follow closely the potential rescheduling of candidates from Schedule one to Schedule three under the Controlled Substance Act. Of course, there are significant benefits to this. The most important, which from our perspective is the potential lifting of the consistent story to 80 E. federal taxes imposed on regulated cannabis operators, and Paul will discuss our thoughts in more detail.

正如我們在先前的電話會議中指出的那樣，我們將繼續密切關注根據《管制物質法》將候選人從附表一重新安排到附表三的情況。當然，這樣做有很大的好處。最重要的是，從我們的角度來看，對受監管的大麻經營者徵收的聯邦稅可能會提高到 80 E. 聯邦稅，保羅將更詳細地討論我們的想法。

I will now turn the call over to Paul to discuss licensing, regulatory and industry dynamics. Paul?

我現在將把電話轉給保羅，討論許可、監管和行業動態。保羅？

Thanks, Joe. And licensing. Before discussing overall market developments, I'd like to provide an update on the properties leased or previously leased to parallel Green Peak and Kings Garden.

謝謝，喬。和許可。在討論整體市場發展之前，我想先介紹一下與 Green Peak 和 Kings Garden 平行出租或之前出租的物業的最新情況。

As we have noted in the past, and I think it is worth repeating here. We are, of course, first and foremost, focused on maximizing the value of each for our properties and having tenants with strong teams that can manage their businesses successfully through the inevitable ups and downs with the industry. As we discussed in detail previously, Green Peak was placed into receivership in March of last year, and we subsequently regained possession of the Summit building a cultivation and processing facility on a redevelopment and three small retail locations. The receiver also decided to turn back the harvest Park cultivation and processing facility to us, but we expect the buyer of the remaining Green Peak receivership estate to assume the leases for the other three retail locations with no changes to terms. As you also know, we filed actions against ParAllele for position and damages at our Texas and Pennsylvania properties and regain position of those two properties in March and October of last year, respectively. We are actively exploring all options for these properties with respect to the Pennsylvania property. A consent order was issued in October, affording us damages of $15.5 million, of which we collected $1.7 million in Q4. And in late September. As we previously disclosed, we regained possession of the remaining four properties previously occupied by Kings Garden. As Alan noted, we are pleased with our re-leasing efforts to date for these properties, and Ben will provide further detail in his prepared remarks.

正如我們過去所指出的，我認為值得在此重複。當然，我們首先關注的是最大化我們每個房產的價值，並擁有擁有強大團隊的租戶，能夠在行業不可避免的起起落落中成功管理自己的業務。正如我們之前詳細討論的那樣，Green Peak 去年 3 月進入接管程序，隨後我們重新獲得了 Summit 的所有權，在重建項目上建立了種植和加工設施以及三個小型零售店。接管人也決定將 Harves Park 種植和加工設施歸還給我們，但我們預計剩餘 Green Peak 接管房地產的買家將承擔其他三個零售地點的租賃，且條款不變。如您所知，我們分別於去年 3 月和 10 月就德克薩斯州和賓夕法尼亞州房產的地位和損害對 ParAllele 提起訴訟，並重新獲得了這兩個房產的地位。我們正在積極探索與賓州房產有關的這些房產的所有選擇。10 月發布了一份同意令，給予我們 1550 萬美元的賠償，其中我們在第四季度收取了 170 萬美元。並在九月下旬。正如我們之前披露的，我們重新獲得了 Kings Garden 之前佔用的剩餘四處房產的所有權。正如艾倫所指出的，我們對迄今為止這些房產的重新租賃工作感到滿意，本將在他準備好的演講中提供更多細節。

Market developments.

市場發展。

Growth of the overall cannabis industry in the US continues to remain strong with BDSA. projecting cannabis sales to increase approximately 10% in 2024. Bdsi estimate U.S. cannabis sales were $29.5 billion in 2023, representing approximately a 12% growth from 2022, although unit pricing for regulated cannabis products has been under pressure in certain states at the wholesale level for some time now, indoor cannabis cultivation continues to command significant sustained premiums versus greenhouse and outdoor counterparts. Several factors affecting unit pricing, including basic supply demand dynamics, lack of meaningful enforcement in certain states on illicit non-license cannabis sales by state and local law enforcement authorities, taxation and general macro economic conditions.

在 BDSA 的推動下，美國整個大麻產業的成長持續保持強勁。預計 2024 年大麻銷量將成長約 10%。Bdsi 估計 2023 年美國大麻銷售額為 295 億美元，較 2022 年增長約 12%，儘管一段時間以來某些州的批發水平受管制大麻產品的單位定價一直面臨壓力，但室內大麻種植仍然佔據重要地位與溫室和室外同類產品相比，具有持續的溢價。影響單位定價的幾個因素，包括基本的供需動態、某些州和地方執法機構對非法無證大麻銷售缺乏有意義的執法、稅收和一般宏觀經濟狀況。

From a state market perspective, we continue to see divergence in performance and dynamics with new markets experiencing high growth while some mature markets become increasingly competitive, especially after an extended period of price compression and the aforementioned challenges in competing with the illicit markets. For example, 2023 saw strong rollouts for adult use sales in Missouri and Maryland and Ohio legalized adult use in November with sales expected to commence this year, and I expect it to be one of the fastest-growing markets in the near future.

從國家市場的角度來看，我們繼續看到表現和動態的差異，新市場經歷了高速成長，而一些成熟市場的競爭變得越來越激烈，特別是在經歷了長時間的價格壓縮以及與非法市場競爭的上述挑戰後。例如，2023 年，密蘇裡州和馬裡蘭州成人用品銷售強勁，俄亥俄州於 11 月使成人用品合法化，預計今年開始銷售，我預計它將在不久的將來成為成長最快的市場之一。

On the flip side, while New York introduced its adult-use program more than a year ago, it remains constrained by limited retail availability and a thriving illicit market. So there are efforts in the state to ramp up enforcement efforts for additional perspective, BDSI put out recent estimates that illicit competition drives more than three-quarters of total sales in the New York market and that there were roughly 50 active adult use retailers in the state earlier this month versus over 2000 illicit retailers, capital availability.

另一方面，雖然紐約一年多前推出了成人使用計劃，但它仍然受到有限的零售供應和蓬勃發展的非法市場的限制。因此，紐約州正在努力加強執法力度，以獲得更多視角，BDSI 最近估計，非法競爭推動了紐約市場總銷售額的四分之三以上，並且紐約市場大約有50 家活躍的成人用品零售商。本月早些時候國家對 2000 多家非法零售商的資金可用性進行了調查。

Another continuing theme from our prior calls is the impact that the tightening of financial conditions has had on capital availability for the cannabis industry. As with other industries, the cost of capital and capital availability have fundamentally changed for cannabis operators over the course of the past few years with Veridian Capital Advisors reporting that both US operator capital raising and mergers and acquisitions activity in 2023 were at their lowest levels since before 2018. The funding environment continues to be challenged right now. That said, we've seen a significant bounce in many publicly traded MSOs stock prices since the announcement by the Department of Health and Human Services that have recommended to the FDA a reclassification of cannabis from Schedule one to Schedule three federal legislation on the federal legislation front, we are closely watching for progress on the FDA's evaluation of the HHS recommendation to reschedule cannabis to Schedule three. Most importantly, such a reclassification is expected to end the two 80 E. tax treatment, which has imposed an extreme unsustainable tax burden on regulated operators. For years, we expect such a change to be a great win and potentially significant positive catalyst for the industry immediately providing meaningful improvement in many operators financials. To give you a sense of magnitude for this potential adjustment, a recent Veridian analysis estimated that removal of two, 80 burdens could reduce the 12 largest publicly-traded operators collective tax burden by $700 million annually, providing for a rational tax structure with these operations, many of which faced effective tax rates of well over 100% under the two e. regime.

我們先前電話會議的另一個持續主題是金融狀況收緊對大麻產業資本可用性的影響。與其他行業一樣，過去幾年大麻業者的資本成本和資本可用性發生了根本性變化，Veridian Capital Advisors 報告稱，2023 年美國運營商的融資和併購活動均處於自以來的最低水平。2018 年之前。目前融資環境持續面臨挑戰。也就是說，自從衛生與公眾服務部宣佈建議 FDA 將大麻從聯邦立法附表一重新分類為附表三聯邦立法以來，我們看到許多公開交易的 MSO 股價大幅反彈首先，我們正在密切關注FDA 對HHS 將大麻重新安排到附表三的建議的評估進展。最重要的是，這樣的重新分類預計將結束兩個80E的稅收待遇，這給受監管的運營商帶來了極不可持續的稅收負擔。多年來，我們預計這種變化將是一次巨大的勝利，並可能對該行業產生重大的積極催化劑，立即為許多營運商的財務狀況帶來有意義的改善。為了讓您了解這一潛在調整的規模，Veridian 最近的一項分析估計，消除2、80 項負擔可以使12 家最大的上市運營商每年的集體稅負減少7 億美元，從而為這些業務提供合理的稅收結構，其中許多在兩個 e 下面臨遠超過 100% 的有效稅率。政權。

I'd like to now turn the call over to Ben to discuss our portfolio and leasing activity in the fourth quarter and into 2020 for Ben?

我現在想把電話轉給 Ben，討論我們第四季和 2020 年的投資組合和租賃活動。

Thanks, Paul. For my prepared remarks, I plan to highlight our leasing progress for our vacant and under development assets. We took back possession of our summer property in Michigan in March of 2023, while it was under redevelopment, we signed an LOI for the asset in Q three less than six months after repossession and executed a lease in Q4. We anticipate completing redevelopment of the 201,000 square foot project in Q4 of this year and are looking forward to our new tenant moving in and activating the building.

謝謝，保羅。在我準備好的演講中，我計劃重點介紹我們的空置和開發中資產的租賃進度。我們於2023 年3 月收回了位於密西根州的夏季房產的所有權，當時該房產正在重建中，我們在收回後不到六個月的時間內就該資產簽署了意向書，並在第四季度執行了租賃。我們預計在今年第四季完成這個 201,000 平方英尺項目的重建，並期待我們的新租戶搬入並啟用該建築。

In addition to the lease for the summer building, we've also executed LOIs for both our McLean and 19th Avenue properties in Southern California. We are working diligently through lease negotiations on these assets, and we'll provide updates as we progress. These two assets, along with Summit represent over $120 million of invested capital. And we are very pleased with the demand we saw for the space and the speed in which we were able to get each asset under LOI or lease also, as Paul noted, Green Peak is expected to move out of our harvest Park property on March first, we saw significant interest in the asset since the announcement of Greenpeace departure and executed a letter of intent earlier this month ahead of green Peak's move out date.

除了夏季大樓的租賃外，我們還為南加州麥克萊恩和第 19 大道的房產簽署了意向書。我們正在努力進行這些資產的租賃談判，並將隨著進展提供最新資訊。這兩項資產與 Summit 一起代表了超過 1.2 億美元的投資資本。我們對我們看到的空間需求以及我們能夠根據意向書或租賃獲得每項資產的速度感到非常滿意，正如保羅指出的那樣，Green Peak 預計將於 3 月 1 日搬出我們的 Harves Park 房產自綠色和平組織宣布退出以來，我們看到了對該資產的濃厚興趣，並在本月早些時候在綠色高峰退出日期之前簽署了一份意向書。

Lastly, we signed a lease last month for one of our three vacant retail assets in Michigan. We are continuing to market for lease the remaining two retail assets as well as our Northampton and Del Sol assets in Southern California, the total of which is less than 1% of our total invested capital.

最後，我們上個月為密西根州三處空置零售資產之一簽署了租約。我們正在繼續推銷剩餘的兩個零售資產以及我們在南加州的北安普頓和德爾索爾資產，它們的總和不到我們總投資資本的1%。

Regarding our San Bernardino property, as noted on previous calls, we are exploring a potential mixed-use development at the property, and we'll continue to provide updates on progress on future calls for our land site in San Marcos, Texas. We continue to explore options for that site for vertical construction has not yet and at our Pittsburgh Pennsylvania asset ParAllele wound down its operations in late October, and we were awarded a consent judgment for possession and damages at that time, as Paul noted, and collected about $1.7 million on that judgment in December. As we now have control of the asset, we are actively exploring leasing options for the property.

關於我們的聖貝納迪諾地產，正如先前的電話中所指出的，我們正在探索該地產潛在的混合用途開發項目，我們將繼續提供德克薩斯州聖馬科斯土地未來招標的最新進展。我們繼續探索該地點尚未進行垂直施工的選擇，我們在賓夕法尼亞州匹茲堡的資產 ParAllele 已於 10 月下旬結束了運營，正如 Paul 指出的那樣，我們當時獲得了關於佔有和損害的同意判決，並收集了根據12 月的判決，該金額約為170 萬美元。由於我們現在擁有該資產的控制權，因此我們正在積極探索該物業的租賃選擇。

Regarding new investment activity, we have continued to selectively close on new opportunities supporting our tenant partners and their growth initiatives in key markets. As we previously reported, we amended our lease with goodness growth in New York in Q4, providing additional funding to complete the development of the expanded cultivation and processing facility and increasing rent accordingly, as business growth previously disclosed, and we noted on the last call, the Company is exploring the sale of its New York operations, including the operations at this facility. We also executed a lease amendment with PharmaCann to provide additional construction funding of $16 million to our New York asset and PharmaCann executes on its strategy to expand production capacity after being awarded an adult use production license late last year. We are pleased with the demand we are seeing for assets across markets and the significant leasing progress we have made in the last year, also continuing to source attractive new investment opportunities, which we will continue to pursue on a very selective, disciplined basis.

關於新的投資活動，我們繼續有選擇地抓住新機會，支持我們的租戶合作夥伴及其在關鍵市場的成長計劃。正如我們之前所報道的，我們在第四季度修改了紐約的租約，提供了額外的資金來完成擴大種植和加工設施的開發，並相應提高了租金，正如之前披露的業務增長一樣，我們在上次電話會議中指出，該公司正在考慮出售紐約業務，包括該工廠的業務。我們還與 PharmaCann 執行了一項租賃修正案，為我們的紐約資產提供 1,600 萬美元的額外建設資金，PharmaCann 在去年年底獲得成人使用生產許可證後執行了擴大產能的策略。我們對各個市場對資產的需求以及去年在租賃方面取得的重大進展感到滿意，同時我們也將繼續尋找有吸引力的新投資機會，我們將繼續在非常有選擇性、嚴格的基礎上尋求這些機會。

With that, I'll turn it over to Karen Katen.

有了這個，我會把它交給凱倫·卡滕。

Thanks. Then for this call, I'll describe our property portfolio and tenant roster. In addition to our rent collection statistics and updates on our development projects. As of December 31st, we owned 108 properties across 19 states, comprising 8.9 million rentable square feet, including 1.4 million square feet under development or redevelopment. Of these 108 properties, 103 properties are included in our operating portfolio, which was 96% leased at year end with a weighted average remaining lease term of approximately 14.6 years. Our portfolio continues to be well diversified, with no one tenant representing more than 16% of our annualized base rent and no state, representing more than 15% of our annualized base rent. We have relationships with some of the largest and most experienced operators in the industry with our leased operating portfolio comprised of 90% multistate operators and 62% leased to public company tenants. The total amount of capital invested and committed across our operating portfolio equates to $275 per square foot, which we believe remains significantly below replacement costs.

謝謝。然後，在這次電話會議中，我將描述我們的房產組合和租戶名冊。除了我們的租金收集統計數據和我們的開發項目的更新。截至 12 月 31 日，我們在 19 個州擁有 108 處房產，包括 890 萬平方英尺的可出租面積，其中 140 萬平方英尺正在開發或重建。在這 108 處房產中，有 103 處房產屬於我們的營運投資組合，截至年底，96% 的房產已出租，加權平均剩餘租賃期約為 14.6 年。我們的投資組合持續多元化，沒有一個租戶占我們年化基本租金的 16% 以上，也沒有一個州占我們年化基本租金的 15% 以上。我們與業內一些規模最大、經驗最豐富的營運商建立了合作關係，我們的租賃營運組合包括 90% 的跨國營運商和 62% 租賃給上市公司租戶的營運商。我們的營運投資組合投資和承諾的資本總額相當於每平方英尺 275 美元，我們認為這仍然大大低於重置成本。

Moving on to rent collection, we collected 100% of contractually due base rent and property management fees from our operating portfolio in Q4. Rent collected for the quarter included approximately 800,000 of security deposits applied for the payment of rent in connection with an amendment with forefront at one of our Illinois properties. As we indicated in the past, this property has been under development since August of 2021 and has experienced significant delays to get permanent power delivered to the building, which is needed to get it operational. We recognize this hardship and in January this year, restructured for France, Illinois rental obligation to reduce the base rent due through September 2024 and increase their obligation there after allowing for better alignment of for France, future Illinois rental obligations with their ability to generate revenue from the property while also extending the term of all four leases we have with forefront. We're also pleased to report that the building did finally get permanent power in January, and we look forward to this project's completion in the near future.

接下來是租金收取，我們在第四季度從我們的營運組合中收取了 100% 的合約到期基本租金和物業管理費。本季度收取的租金包括約 80 萬筆保證金，用於支付與我們伊利諾伊州一處物業最前沿的修正案有關的租金。正如我們過去所指出的，該物業自 2021 年 8 月以來一直在開發中，並且在向建築物提供永久電力（使其運營所需）方面經歷了嚴重的延誤。我們認識到這一困難，並於今年1 月對法國、伊利諾伊州的租賃義務進行了重組，以減少截至2024 年9 月到期的基本租金，並在允許法國、伊利諾伊州未來的租賃義務與其創造收入能力更好地保持一致後增加其在那裡的義務同時也延長了我們與前線的所有四項租約的期限。我們也很高興地報告，該建築終於在一月份獲得了永久供電，我們期待該項目在不久的將來完工。

Q4 rent collection included approximately $700,000 of the $1.7 million collected in December 2023 from ParAllele pursuant to a consent judgment award in our favor and applied to rent due from ParAllele for October 2023.

第四季的租金收取包括 2023 年 12 月根據對我們有利的同意判決裁決從 ParAllele 收取的 170 萬美元中的約 70 萬美元，並應用於 ParAllele 2023 年 10 月應付的租金。

At one of our Pennsylvania properties, which ParAllele vacated on October 31st. As David will describe next, the full $1.7 million from ParAllele increased our revenue for the fourth quarter but only the 700,000 impacted our Q4 rent collections statistics. Overall, for the full year 2023, we collected 98% of our contractual rent on our operating portfolio. As for the first two months of 2024, we collected 100% of contractually due base rent and property management fees from our operating portfolio. We also continued to fund draws for improvement allowances or construction development to our operators under our leases. As we've previously noted on prior calls, these improvements are critical for the efficient production of quality cannabis products at scale. In Q4 of 2023, we funded $21 million for building improvements and construction activities at our properties. Recently, several projects received their operational status, including battle green in Ohio with several other projects projected to complete this next quarter.

ParAllele 於 10 月 31 日騰空了我們賓州的一處房產。正如 David 接下來將描述的，ParAllele 的 170 萬美元增加了我們第四季度的收入，但只有 70 萬美元影響了我們第四季的租金收取統計數據。總體而言，2023 年全年，我們的營運組合收取了 98% 的合約租金。2024年前兩個月，我們從營運組合中收取了100%的合約到期基本租金和物業管理費。我們也繼續根據租約向營運商提供改善津貼或建築開發資金。正如我們之前在先前的電話會議中指出的那樣，這些改進對於大規模高效生產優質大麻產品至關重要。2023 年第四季度，我們資助了 2,100 萬美元，用於我們物業的建築改進和建設活動。最近，幾個項目獲得了運營狀態，包括俄亥俄州的戰鬥綠地以及其他幾個項目預計將於下個季度完成。

And with that, I'll turn it over to David Davis.

有了這個，我會把它交給大衛戴維斯。

Thank you, Catherine. For the fourth quarter, we generated total revenues of $79 million, a 12% increase from Q4 of last year. The increase was driven primarily by an increase in tenant reimbursements versus the prior period as well as activity in prior periods for the acquisition and leasing of new properties, additional funding of building improvements provided to tenants at certain properties that resulted in base rent increases and contractual rental escalations. $79 million of revenue for the fourth quarter included approximately $0.8 million of security deposits applied for payment of rents, or $0.03 per share and $1.7 million or $0.06 per share received as partial payment from the consent judgment against ParAllele for its failure to pay rent at one of our Pennsylvania properties previously leased to parallel.

謝謝你，凱瑟琳。第四季度，我們的總營收為 7,900 萬美元，比去年第四季成長 12%。這一增長的主要原因是租戶報銷額較上一期增加，以及前期購買和租賃新房產的活動、為某些房產的租戶提供的建築改進額外資金導致基本租金上漲和合約租金增加。租金上漲。第四季收入7,900 萬美元，其中包括用於支付租金的約80 萬美元保證金，即每股0.03 美元，以及根據對ParAllele 未能支付租金的同意判決而收到的170 萬美元或每股0.06 美元的部分付款。我們在賓夕法尼亞州的房產之前被出租給平行。

For the three months ended December 31st, 2023, we recorded net income attributable to common stockholders of $41 million or $1.45 per share. Adjusted funds from operations for the fourth quarter was $64 million or $2.28 per share, an increase of 8% compared to the fourth quarter of 2022, driven by increased tenant reimbursements, revenue generated by properties acquired in prior periods, contractual rent escalations and revenue earned on additional CapEx investments at existing properties FFO for the fourth quarter was down $0.01 per share versus the third quarter FFO of 20 $0.29 with a decrease primarily due to our taking back the remaining four properties at Kings Garden occupied until late September.

截至 2023 年 12 月 31 日的三個月，我們錄得歸屬於普通股股東的淨利潤為 4,100 萬美元，即每股 1.45 美元。第四季調整後的營運資金為6,400 萬美元，即每股2.28 美元，與2022 年第四季相比成長8%，這是由於租戶報銷增加、前期收購的房產產生的收入、合約租金上漲和賺取的收入推動的第四季度現有物業FFO 的額外資本支出投資每股下降0.01 美元，而第三季度FFO 為20 美元0.29 美元，下降的主要原因是我們收回了截至9 月底佔用的Kings Garden剩餘四處物業。

Regarding Kings Garden, as mentioned on last quarter's call, results in the third quarter included $1.7 million or $0.06 per share of rent from Kings Garden applicable to those four properties, which was partially offset by $0.4 million in payments made by Kings Garden in the fourth quarter. Pursuant to a consent judgment issued in our favor. On January 12th, we paid a quarterly dividend of $1.82 per share to common stockholders of record as of December 29th, an increase of $0.02 per share versus the third quarter dividend of $1.80. As Alan noted, our dividend remains covered by our AFFO during the quarter with a payout ratio of 80%, which is in line with the Board's targeted payout ratio of 75% to 85% of AFFO.

Regarding Kings Garden, as mentioned on last quarter's call, results in the third quarter included $1.7 million or $0.06 per share of rent from Kings Garden applicable to those four properties, which was partially offset by $0.4 million in payments made by Kings Garden in the fourth四分之一.根據對我們有利的同意判決。1 月 12 日，我們向截至 12 月 29 日登記在冊的普通股股東支付了每股 1.82 美元的季度股息，較第三季度每股 1.80 美元的股息增加了 0.02 美元。正如 Alan 指出的那樣，本季我們的股息仍然由 AFFO 支付，支付率為 80%，這符合董事會 AFFO 75% 至 85% 的目標支付率。

Turning to the balance sheet at year end, we had approximately $2.6 billion in total gross assets and roughly $304 million in fixed rate debt. Our debt outstanding as of today consists solely of $300 million in unsecured bonds, not maturing until May 2026, with the holders of the remaining $4 million of exchangeable senior notes having exchanged their notes in full earlier this month for a mix of cash and common stock or receive cash payment at maturity. We continue to maintain credit metrics that are among the best in the entire publicly traded read industry with a debt to gross assets ratio of less than 12% and a debt service coverage ratio in excess of 16 times.

看看年底的資產負債表，我們的總資產約為 26 億美元，固定利率債務約為 3.04 億美元。截至目前，我們的未償債務僅包括3 億美元的無擔保債券，直到2026 年5 月才到期，剩餘400 萬美元可交換優先票據的持有者已於本月初將其票據全部交換為現金和普通股的組合或到期時收取現金。我們持續維持整個公開交易閱讀產業中最好的信用指標，債務與總資產比率低於12%，償債覆蓋率超過16倍。

On the liquidity front, we ended the fourth quarter with over $175 million of total liquidity comprised of our cash, short-term investments and availability under our revolving credit facility. We closed on this credit facility last October, which at that time was a $30 million three-year facility. I'm pleased to report that just this month we were able to increase our capacity at $15 million to provide us $45 million in total availability. We are well positioned as we continue to maintain a conservative and low leverage balance sheet, generate positive free cash flow and have now added another liquidity option for the company with the closing of this credit facility in the fourth quarter.

在流動性方面，第四季結束時，我們的流動性總額超過 1.75 億美元，其中包括現金、短期投資和循環信貸安排下的可用資金。去年 10 月，我們完成了這項信貸安排，當時是一筆 3,000 萬美元的三年期貸款。我很高興地向大家報告，就在這個月，我們的容量就增加了 1500 萬美元，從而提供了 4500 萬美元的總可用性。我們處於有利地位，因為我們繼續保持保守和低槓桿的資產負債表，產生正的自由現金流，並且隨著第四季度這一信貸安排的關閉，現在為公司增加了另一個流動性選擇。

Finally, as a result of the investment activity that Ben mentioned, we opportunistically tapped our ATM program on a limited basis, issuing 101,000 shares of common stock for $9.6 million in net proceeds with that I will turn it back to Alan Allen.

最後，由於本提到的投資活動，我們在有限的基礎上機會主義地利用了我們的ATM 計劃，發行了101,000 股普通股，獲得了960 萬美元的淨收益，我將把它返還給艾倫·艾倫(Alan Allen)。

Thanks to that I'd like to note the following and closing now into our 8th year of operations. I am proud of what our team of dedicated professionals has accomplished over that time. With our property footprint, team expertise, balance sheet position and strategic focus, I believe we are well positioned for the journey ahead serving a dynamic industry with a continued long-term growth trajectory.

因此，我想指出以下內容，並結束我們營運的第八年。我對我們敬業的專業團隊在這段時間內所取得的成就感到自豪。憑藉我們的物業足跡、團隊專業知識、資產負債表狀況和戰略重點，我相信我們已做好充分準備，為未來的旅程做好準備，為充滿活力的行業提供持續的長期成長軌跡。

With that, I'd like to open it up to questions. Operator, could you please open the call up for questions?

說到這裡，我想提出一些問題。接線員，可以撥打電話詢問問題嗎？

(Operator Instructions) Tom Catherwood, BTIG.

（操作員說明）Tom Catherwood，BTIG。

Thank you and good morning, everyone from Paul. You had previously talked about and kind of mentioned that you expected weaker operators to exit mature markets over time. And there was an article out this week that spoke to a year over year decline in active U.S. cannabis licenses in 23 despite expansions of states like Maryland, New Jersey and Illinois? And how is this tightening impacted your markets? And are you expecting more consolidation in 2024?

謝謝保羅的大家，早安。您之前曾談到並提到您預計實力較弱的運營商將隨著時間的推移退出成熟市場。本周有一篇文章談到，儘管馬裡蘭州、新澤西州和伊利諾伊州等州進行了擴張，但美國 23 個州的有效大麻許可證仍同比下降？這種緊縮政策對您的市場有何影響？您預計 2024 年會有更多整合嗎？

So Thomas, Allen first, I have to say that we are we're really very proud of our current tenant base and our current portfolio and the geographic diversification of our of our properties. We think that we have some of the strongest tenants in the industry. And we we believe that the growth that we exhibited in 2023 or 7% year-over-year growth is something that is replicable. And we look forward to continued growth in 2024. But now I'm going to turn it over to Paul to answer the question.

首先，托馬斯、艾倫，我必須說，我們對我們目前的租戶基礎、我們目前的投資組合以及我們的房產的地理多元化感到非常自豪。我們認為我們擁有一些業內最強大的租戶。我們相信，我們在 2023 年所展現的成長或 7% 的年成長是可以複製的。我們期待 2024 年繼續成長。但現在我要把這個問題交給保羅來回答。

Yes, I hate, John. So yes, I think we've always figured out that there would be some consolidation over the years and we have seen that. But I think it's important to note that we are our tenant base is, as you know, primarily indoor grows. So what we're seeing a lot of the consolidation is on some of the states that have more outdoor grow and our greenhouse grow. So we're very happy with the performance of our operators. And if we do see some consolidation, some of the bigger states with Michigan and California, as we've noted in the past, we think that's only a positive 90% of our tenant base are MSOs, as you know. So we think we're there really well-positioned going forward.

是的，我討厭，約翰。所以，是的，我認為我們一直認為多年來會進行一些整合，我們也已經看到了這一點。但我認為重要的是要注意，正如您所知，我們的租戶基礎主要是室內種植。因此，我們看到許多整合發生在一些擁有更多戶外種植和溫室種植的州。因此，我們對操作員的表現非常滿意。如果我們確實看到一些整合，例如密西根州和加利福尼亞州等一些較大的州，正如我們過去所指出的，我們認為我們的租戶群中只有 90% 是 MSO，如您所知。所以我們認為我們在未來的發展中處於有利位置。

It's really helpful. And then we're trying pieced together a couple of items since three QU., it put more capital to work than you did over the prior two quarters. David, you mentioned tapping the equity markets opportunistically in 4Q and obviously upsizing the credit facility to $45 million. How do these items relate to your interest and maybe comfort level in pursuing additional investments this year?

這真的很有幫助。然後我們嘗試將三個季度以來的幾個項目拼湊在一起，它比前兩個季度投入了更多的資金。David，您提到第四季會趁機利用股票市場，並將信貸額度擴大到 4,500 萬美元。這些項目與您今年追求額外投資的興趣和舒適程度有何關係？

So again, Tom, this is Alan. I mean, I think that we are we are cautiously as we were in 2023, keeping the same sort of you on in 2024 being very cautious, but opportunistic we believe that we have been able to drive strong returns to for our shareholders and and are going to continue to do so and that we believe that the or the strength of our existing tenants continues to be exceptional, and we look forward to a bright 2024. But nonetheless, then talk about our portfolio pipeline.

再說一遍，湯姆，這是艾倫。我的意思是，我認為我們像 2023 年一樣謹慎，在 2024 年保持同樣的謹慎態度，但我們相信我們已經能夠為股東帶來豐厚的回報，並且是機會主義的我們將繼續這樣做，並且我們相信現有租戶的實力或實力仍然非常出色，我們期待光明的2024 年。儘管如此，接下來還是談談我們的投資組合管道。

And Tom, appreciate the question on the pipeline, we're seeing a lot of attractive new opportunities. And when we really think about driving revenue growth going forward, there's the pipeline where we're seeing opportunistic and transactions out there that we can take advantage of. And I also want to highlight the 460,000 square feet of leasing and LOI activity we had out of out of our development portfolio as well as another 128,000 square feet within our operating portfolio that we have under lease or LOI in the last year. So not only did the new transactions that we can pursue, but but nearly 600,000 square feet of leasing activity between our new leases in LOI and last year, Thinkful can to set us up well for continued revenue growth going forward.

湯姆，感謝有關管道的問題，我們看到了很多有吸引力的新機會。當我們真正考慮推動未來收入成長時，我們會看到我們可以利用的機會主義和交易。我還想強調我們在開發投資組合中進行的 460,000 平方英尺的租賃和意向書活動，以及去年我們在營運投資組合中進行的租賃或意向書活動中的另外 128,000 平方英尺。因此，不僅是我們可以追求的新交易，而且我們在 LOI 的新租賃與去年之間的近 600,000 平方英尺的租賃活動，Thinkful 可以為我們未來持續的收入增長做好準備。

Appreciate that color. And then last one for me, Dan and Paul, I know you both touched on on New York and the challenges that it has had, but sentiment from MSOs seems to be improving in the market. I think PharmaCann announced plans to increase headcount by nearly three X in the state and obviously, you've made incremental investments over the last few months in New York. What are you seeing on the ground in the state? And how do you expect the market to evolve going forward?

欣賞那個顏色。最後一個是我，丹和保羅，我知道你們都談到了紐約及其所面臨的挑戰，但 MSO 的市場情緒似乎正在改善。我認為 PharmaCann 宣布了將紐約州員工人數增加近三倍的計劃，顯然，過去幾個月你在紐約進行了增量投資。您在該州實地看到了什麼？您預計市場未來將如何發展？

I think we're seeing we're happy to see the additional retail licenses being issued. There's certainly been some historical challenges, but we very much like the position that our tenant partners are in the state and to your comment about PharmaCann. So we feel there's a tremendous amount of value of that asset, in particular, a lot of the cultivation in the state is either outdoor greenhouse, as Paul touched on, that is one of the very few high-quality indoor facilities in the state. I think it sets PharmaCann up very well to take advantage of the wholesale opportunities that we're going to see. That's projected to be one of the top markets in the country, perhaps not it's growing as fast as some had hoped in previous years, but we're really seeing some improvement seeing the improved sentiment from the MSOs. As you mentioned, people that are very bullish on the state want to get into the market. They recognize the potential there, and we're very happy to support it tenant partners on their growth initiatives in that state.

我認為我們很高興看到額外的零售許可證被發放。當然存在一些歷史挑戰，但我們非常喜歡我們的租戶合作夥伴在州內的地位以及您對 PharmaCann 的評論。因此，我們認為該資產具有巨大的價值，特別是，該州的許多種植要么是室外溫室，正如保羅所提到的，這是該州為數不多的高品質室內設施之一。我認為這使 PharmaCann 能夠很好地利用我們將看到的批發機會。預計這將成為全國最大的市場之一，也許它的成長速度不像一些人前幾年所希望的那樣快，但我們確實看到了一些改善，因為 MSO 的情緒有所改善。正如您所提到的，非常看好國家的人希望進入市場。他們認識到那裡的潛力，我們非常高興支持租戶合作夥伴在該州的發展計劃。

Appreciate all your thoughts. That's it for me. Thanks, everyone.

欣賞你所有的想法。對我來說就是這樣。感謝大家。

Scott Fortune, Roth MKM.

斯科特·福瓊，羅斯·MKM。

Yes, thank you, and thanks for the questions here. Just kind of want to dig a little deeper in there, probably for being in that as you talk with your tenant partners, we see most of them really focus on cost efficiencies, improving yields within kind of cultivation facilities to drive their profitability and margins as the prices compressed here and some of these markets, but two things, one, a better ops and improves your tenants cash flow generation, which is important for the tenant health, but more importantly, second, what is IPAs on your your help or your involvement in improving these facility efficiencies, improving yield and you expect to see kind of facility improvement needed more moving forward here to be successful in a normalized lower pricing environment for them? And just a little follow-up on that, would be kind of and while demand volume for cannabis remains very robust, kind of where you are you seeing pricing stabilize in your tenants in these key states to kind of further strengthen that tenant now from our standpoint. Sorry, long-winded question there, but just wanted to dig deeper into the up front.

是的，謝謝你，也謝謝你在這裡問問題。只是想更深入地挖掘一下，可能是因為當您與租戶合作夥伴交談時，我們看到他們中的大多數人真正關注成本效率，提高種植設施的產量，以提高其盈利能力和利潤率這裡和其中一些市場的價格壓縮，但有兩件事，第一，更好的營運並改善租戶的現金流生成，這對租戶的健康很重要，但更重要的是，第二，IPAs 對你的幫助或你的幫助是什麼？參與提高這些設施效率、提高產量，您希望看到需要更多的設施改進才能在正常化的較低定價環境中取得成功？對此進行一點後續行動，雖然大麻的需求量仍然非常強勁，但你會看到這些關鍵州的租戶價格穩定，以進一步加強該租戶現在從我們的立場。抱歉，這是一個冗長的問題，但我只是想更深入地了解前面的內容。

So Scott, this is Alan. So first start from the very beginning our business model and business plan was to provide our capital to some of the smartest and best growers in the country. And we've done we've done that. We have a very strong portfolio. And as big as it's been noted earlier, that over 90% of our portfolio are MSOs and matter of fact, over 62% of our of our tenants are public public tenants and the majority, if not almost all of them, are now cash flow breakeven and or EBITDA breakeven or positive. And the business model is to provide them capital so that they can create a very efficient spaces and that they are the ones who are focused on the efficiency of their of their operations. And as you can see that they've been they've been the ones doing that work and continue to do that work in and are our, I think, doing a very good job of keeping up with the technology and the efficiencies to be able to deal with on pricing pressures and the macroeconomic issues that the broader economy is exhibiting. So I think I think that that would be how we would look at it.

斯科特，這是艾倫。因此，從一開始我們的商業模式和商業計劃就是向國內一些最聰明、最好的種植者提供我們的資金。我們已經做到了，我們已經做到了。我們擁有非常強大的產品組合。正如之前所指出的，我們超過 90% 的投資組合都是 MSO，事實上，我們超過 62% 的租戶是公共租戶，而且大多數（如果不是幾乎全部）現在都是現金流盈虧平衡和/或EBITDA損益平衡或正值。商業模式是為他們提供資金，以便他們能夠創造一個非常有效率的空間，並且他們是專注於營運效率的人。正如你所看到的，他們一直在做這項工作，並將繼續做這項工作，我認為，我們在跟上技術和效率方面做得很好，能夠應對價格壓力和更廣泛的經濟表現出的宏觀經濟問題。所以我想我們會這樣看待它。

Now as to I don't know if Paul or Ben want to talk about the overall pricing pressures on the wholesale pricing, but just keep in mind that as both both Paul and and Ben have reiterated that we deal with a indoor grow primarily in US facilities and products and or have tenants that deal with those type of products as opposed to the outdoor grow product that is that is exhibiting the most pricing pressure.

現在我不知道保羅或本是否想談論批發定價的整體定價壓力，但請記住，保羅和本都重申我們主要在美國處理室內種植設施和產品和/或擁有處理此類產品的租戶，而不是表現出最大定價壓力的戶外種植產品。

And Scott, this has been to follow up on Alan's comments on pricing things. I've been very pleased to see the stabilization in particular, some of the markets people have been focusing on historically being California and Michigan and the sentiment there has certainly gotten better. And I think that's evidenced by the leasing success we've had in those two markets and we had a good chunk of the nearly 600,000 square feet of leasing activity we mentioned was both in Michigan and California and most recently the harvest Park facility that Green Peak intends to move out of after they announced that we received a tremendous amount of interest, multiple offers, and we're able to successfully put that under LOI before Green Peak even moved out of the building. So I think that really speaks to the way operators on the ground in those markets, their confidence going forward and the pricing stability in the market. So overall.

斯科特，這是對艾倫關於定價的評論的跟進。我非常高興看到穩定，特別是人們一直關注的一些市場歷史上是加州和密西根州，那裡的情緒肯定有所改善。我認為我們在這兩個市場取得的成功租賃證明了這一點，我們提到的近 600,000 平方英尺的租賃活動中很大一部分是在密西根州和加利福尼亞州，以及最近 Green Peak 的收穫公園設施。在他們宣布我們收到了巨大的興趣和多個報價後，我們打算搬出，並且我們能夠在Green Peak 搬出大樓之前成功地將其納入意向書。因此，我認為這確實說明了這些市場中營運商的方式、他們對未來的信心以及市場的定價穩定性。總體而言。

Got it. I appreciate that color. And maybe a follow-up on this discussion on 23, we saw a year of retrenching by your tenants. Obviously, CapEx for for most of the major MSOs that you work with came off anywhere from 30% to 50% and kind of similar expectations of our earnings are coming up here shortly for 24 as far as the CapEx, but what are you hearing from your from your tenants kind of moving forward. If we get the federal relief, obviously you highlighted that the cash flow from the tax savings will be generated by the MSOs. That could be pass through the pricing, but also they are looking to grow. Right. And just kind of give a sense for your tenants and what are you hearing from them as far as regarding sales leaseback opportunities going into later in 24 into 25 compared to last two, three quarters versus kind of their CapEx expectations, just kind of the temperature around your tenants from that standpoint improving, right.

知道了。我很欣賞那種顏色。也許是 23 日討論的後續，我們看到你們的租戶一年來都在緊縮開支。顯然，與您合作的大多數主要MSO 的資本支出都在30% 到50% 之間，就資本支出而言，我們的收益的類似預期很快就會出現在24 小時內，但您從哪裡聽到的消息是什麼呢？您的租戶正在向前邁進。如果我們獲得聯邦減免，顯然您強調了稅收節省的現金流將由 MSO 產生。這可以透過定價來傳遞，但他們也希望實現成長。正確的。讓您的租戶了解一下，以及您從他們那裡聽到的有關24 至25 年晚些時候的銷售回租機會的信息，與過去兩、三個季度相比，與他們的資本支出預期相比，只是溫度的變化從這個角度來看，你的租戶周圍的環境正在改善，對吧。

So this is Alan again. And I first saw, I think that I think as we've stated, we believe that the 24 is going to look kind of similar to 23. We believe there's still tremendous demand for our capital and the type of capital that we provide. And there are significant opportunities as we as we've also shown that we've been able to to opportunistically take advantage of some investment opportunities most recently and which has allowed us to generate that the above average growth year over year. So we still think that that's that is out there, but we're being cautious. And I think I think, Ben, you would agree that we're I think, given the tenants out there remaining cautious?

這又是艾倫。我第一次看到，我認為正如我們所說，我們相信 24 看起來會與 23 有點相似。我們相信，對我們的資本和我們提供的資本類型仍然有巨大的需求。我們也存在重大機會，因為我們也表明，我們能夠機會主義地利用最近的一些投資機會，這使我們能夠實現高於平均水平的同比增長。所以我們仍然認為這就是事實，但我們持謹慎態度。我想，本，考慮到租戶仍然保持謹慎態度，你會同意我們的看法嗎？

Yes, I think I think that's fair. I think we will be very strategic and disciplined in investing additional capital. I think as Alan mentioned, 24, looking like 23 where we are we're able to source very accretive and attractive opportunities to support our tenants, grow our portfolio and intend to continue to do that. Yes. And then Ray, and then one but no, I'm sorry. Maybe, Paul, you talked about the overall industry growth rate.

是的，我認為這是公平的。我認為我們在投資額外資本時將非常具有策略性和紀律性。我認為，正如艾倫所提到的，24 歲，看起來像 23 歲，我們能夠找到非常增值和有吸引力的機會來支持我們的租戶，擴大我們的投資組合，並打算繼續這樣做。是的。然後是雷，然後是一位，但抱歉，沒有。保羅，也許您談到了整個行業的成長率。

And yes, I think it's when we talk about relatively slower years in 23 and maybe going for 24, we can't lose fact that we had a 12% increase in the overall market in 23. And looking forward in 2024, it's projected to have a 10% increase. So those are not insignificant numbers. And I think we look at potential states coming on primarily Florida and Pennsylvania, perhaps with the adult-use programs this year is really exciting. I think that's not lost on a lot of our operators, especially in those states. So they're excited.

是的，我認為當我們談論 23 年相對較慢的年份以及可能的 24 年時，我們不能忘記 23 年整體市場成長了 12% 的事實。展望 2024 年，預計將成長 10%。所以這些都不是微不足道的數字。我認為我們主要關注佛羅裡達州和賓夕法尼亞州的潛在州，也許今年的成人使用計劃確實令人興奮。我認為我們的許多運營商並沒有忽視這一點，特別是在那些州。所以他們很興奮。

There's that excitement. I think even if you put aside the rescheduling conversation. So we see significant growth with or without rescheduling. And so our operators are excited about that also and we have this year.

有那種興奮。我想即使你把重新安排的談話放在一邊。因此，無論是否重新安排，我們都看到了顯著的成長。因此，我們的營運商也對此感到興奮，今年也是如此。

Yes, last year, Oklahoma, Minnesota Delaware, Ohio, they passed their programs and we're looking at 24 tests and development in those. So those states new potential states for adult use are pretty exciting for the industry. No, I agree completely Ohio, Minnesota and Virginia are expected really come on board to Then last question real quick and just from a housekeeping side of things and congrats on the pre-leases in LOIs in place.

是的，去年，俄克拉荷馬州、明尼蘇達州、特拉華州、俄亥俄州通過了他們的項目，我們正在研究其中的 24 項測試和開發。因此，這些適合成人使用的新的潛在狀態對於該行業來說是非常令人興奮的。不，我完全同意俄亥俄州、明尼蘇達州和維吉尼亞州預計很快就會加入到最後一個問題，並且只是從內政方面來看，並祝賀意向書的預租到位。

But to follow up on the amended leases you have had from 23. Are those now being fully paid back as the increased or the pro rata payback was supposed to start January 24th. Is that starting going forward here?

但要跟進 23 日起修改後的租約。那些現在是否已按增加的比例全額償還，或者按比例償還本應於 1 月 24 日開始。這是從這裡開始的嗎？

So I'm I have I can't address that, but just it goes. It goes to the strength of our tenants and how how well there was some need to provide some additional relief. I think things seem to be proceeding very well count and we were pleased to receive the limited deferral that we had issued to some of our tenants last quarter and they've all started paying rent. Again, cash rent and holistic tenants go in forefront where the three tenants that we had offered that program to, and we're happy to see them start paying cash again.

所以我無法解決這個問題，但事情就是這樣。這取決於我們租戶的實力，以及是否需要提供一些額外的救濟。我認為事情似乎進展順利，我們很高興收到上個季度向一些租戶發出的有限延期，他們都已經開始支付租金。同樣，現金租金和整體租戶在我們向其提供該計劃的三個租戶中走在最前面，我們很高興看到他們再次開始支付現金。

Great. Thank you for all the detail.

偉大的。謝謝你提供的所有細節。

(Operator Instructions) Alexander Goldfarb, Piper Sandler.

（操作員說明）Alexander Goldfarb、Piper Sandler。

Morning.Morning out there. A few questions for me. First. Yes, just thinking about the the spaces that you guys have recaptured and then reletting, how much NOI is coming back online this year from the spaces that you recaptured last year or previous that you've now backfilled and have tenants that are opening up this year. Just want to get a sense for how much NOI that is on an annualized basis. And then when that NOI will come online this year from a earnings perspective?

早安，早安。有幾個問題問我。第一的。是的，只要想想你們重新奪回然後重新出租的空間，今年有多少 NOI 從你們去年或之前重新奪回的空間中重新上線，這些空間現在已經回填，並且有租戶正在開放這個空間年。只是想了解每年的 NOI 是多少。那麼從獲利角度來看，NOI 今年何時上線？

Yes, this has been the I would just say that each each situation's going to be different. Some of the deals that we mentioned are under LOI. We are diligently working through lease negotiations, but it's a real estate company that takes some time. So I can't give you an exact number as to when that revenue will commence given the status of negotiations. But again, I think we, as a company are fairly very happy with not only the amount of leasing activity the pace of leasing activity, the quality of the tenants that we've been able to source to backfill these properties. And I think it's been a tremendous amount of progress that we've made but as you know, as to specific timing, we will we will continue to report and provide updates as we can throughout the year.

是的，這就是我想說的，每個情況都會有所不同。我們提到的一些交易屬於意向書。我們正在努力進行租賃談判，但這是一家房地產公司，需要一些時間。因此，鑑於談判狀況，我無法向您提供有關何時開始收入的確切數字。但我再次認為，作為一家公司，我們不僅對租賃活動的數量、租賃活動的節奏，而且對我們能夠用來回填這些房產的租戶的品質感到非常滿意。我認為我們已經取得了巨大的進步，但正如您所知，至於具體時間，我們將在全年中盡可能繼續報告和提供更新。

Okay. But then along those lines, is there a sense of how much in aggregate NOI there is or it sounds like this is this leasing that you guys have done really is more of a 2025 impact just trying to get a sense because you clearly have been busy. You spoke positively about some of the markets that have stabilized and the intensity of the leasing in California and Michigan, which is a good thing. I'm just trying to see when we should expect it to hit the bottom line. And it almost sounds like it's more of a 25 I mean, yes, without we don't want to get into providing guidance. We don't want to get into specific deal terms. I would say that we're very happy with the returns that we're getting on our investment in each of these assets in each case. Again, these things take time and we'll work through otherwise work that we couldn't get tenants in the space get them up and running, get them revenue-generating as fast as we can to continue to provide them drive revenue growth and provide value to our shareholders.

好的。但沿著這些思路，是否能感覺到 NOI 總量有多少，或者聽起來你們所做的租賃實際上更多的是對 2025 年的影響，只是想了解一下，因為你們顯然一直很忙。您積極評價了一些已經穩定的市場以及加州和密西根州的租賃強度，這是一件好事。我只是想看看我們什麼時候應該達到底線。聽起來幾乎更像是 25，我的意思是，是的，如果沒有我們不想提供指導。我們不想討論具體的交易條款。我想說，我們對每種資產的投資所獲得的回報感到非常滿意。同樣，這些事情需要時間，我們將解決我們無法讓租戶進入該空間的其他工作，讓他們啟動並運行，讓他們盡快創造收入，我們將繼續為他們提供推動收入成長和提供為我們的股東創造價值。

Our next question is Paul I think I think it was you who spoke about the difference in pricing and how your indoor product is commanding a premium outdoor and hot house product is under pricing pressure and then I guess separately, there would be of the illicit market. I'm going to go back to a theme that I've you and I've spoken about before, especially with Fendt now are you seeing it sounds like the the market is finally coming around to understanding there the regulatory benefits of the product that's grown in Europe in your facilities. Is that the case.

我們的下一個問題是保羅，我想我認為是你談到了定價的差異以及你的室內產品如何指揮優質的戶外產品，而溫室產品面臨著定價壓力，然後我想分別地，會有非法市場。我要回到我和你之前談過的一個主題，尤其是 Fendt，現在你是否看到，聽起來市場終於開始理解該產品的監管優勢了。在歐洲您的工廠中種植。是這樣嗎。

And do you think that gives you a leg up versus the illicit market? Or does the cannabis market remain purely price driven and therefore, people don't pay don't put a volume premium on, you know, the quality that you guys provide versus what's going on in from the illicit market or other sources?

您認為這會讓您在對抗非法市場方面佔據優勢嗎？或者大麻市場仍然純粹是價格驅動的，因此，人們不會支付不支付數量溢價，你知道，你們提供的品質與來自非法市場或其他來源的品質相比？

Yes. So Alex, this is Alan. Before I turn it over to Paul, I just want to just remind you and all the listeners that we don't touch the plant. We don't sell a single.

是的。亞歷克斯，這是艾倫。在我把它交給保羅之前，我只想提醒你們和所有聽眾，我們不碰這種植物。我們一個也不賣。

Yes, I didn't.

是的，我沒有。

Yes, sorry about that, Alan, sorry, sorry, yes.

是的，對此感到抱歉，艾倫，抱歉，抱歉，是的。

And but our tenants who do who are working them, we're going to probably come in with perhaps, Paul, you want to say, yes, we talked about Houston, you're right, it was a product grown in a controlled environment is vastly superior to a product that's grown outdoors and is subject to everything outdoors, pulling pests and variances and the weather. So you just start with the idea that when you can control the growth, you get a better product. And that's certainly true for the medical product, which can be manipulated in such a way during the growth and to address very certain medical conditions. So a medical product really used to be drawn in George, when you talk about the quality of the adult-use product is also somewhere because you can really maintain potency consistencies in the indoor environment. And that's very important, I think, for consumers.

但是我們的租戶誰正在為他們工作，我們可能會進來，保羅，你想說，是的，我們談到了休斯頓，你是對的，這是在受控環境中種植的產品遠遠優於在戶外種植的產品，並且會受到戶外一切因素的影響，包括害蟲、變異和天氣。因此，您只需從以下想法開始：當您可以控製成長時，您就會獲得更好的產品。對於醫療產品當然也是如此，它可以在生長過程中以這種方式進行操縱，以解決某些特定的醫療狀況。因此，當您談論成人使用產品的品質時，喬治確實曾經提到過醫療產品，因為您確實可以在室內環境中保持效力的一致性。我認為這對消費者來說非常重要。

And when you talk about the illicit market. Certainly a risk that people do see a consumer state buying it off the street corner is you don't have consistency of product, and that's very important. And you don't have the quality controls with the testing. So yes, I do believe that and for consumers certainly are going to the regulated cannabis environment for their products. But people are beating our people, our people and there is a price driving quotient to. And I think some of the states that really did create an artificial pricing structure based on taxing are coming around and California is one of them and figuring out that when they overtaxed the product, it makes it really hard for the consumer to buy it. So we're very optimistic that the states will come around and pricing will be more in line where it should be. And yes, the indoor product will remain the choice of foreign consumers and just quality and safety and then just the final question is on the two e.

當你談論非法市場時。當然，人們確實看到消費者國家在街角購買產品的風險是產品缺乏一致性，這一點非常重要。而且您沒有測試的品質控制。所以，是的，我確實相信，對於消費者來說，他們的產品肯定會進入受監管的大麻環境。但人們正在毆打我們的人民，我們的人民，這是有價格驅動因素的。我認為一些確實建立了基於稅收的人為定價結構的州正在轉變，加利福尼亞州就是其中之一，並且發現當他們對產品徵稅過高時，消費者真的很難購買它。因此，我們非常樂觀地認為各州會做出改變，定價將更符合應有的水準。是的，室內產品仍將是外國消費者的選擇，只是品質和安全，最後的問題是關於兩個e。

Given the administration's sort of pro cannabis mindset, is there anything that's going on within the discussions or the process that gives you pause that it may not happen or is this merely going through a typical governmental time line and it's got to go through X months, X process, whatever. But this will happen. I'm just trying to figure out, yes, if any, if there's any holdup or if this is just typical government process and the news came out a while ago and now we just have to sit around and wait out the shot clock, but you know, this is Allen.

考慮到政府支持大麻的心態，討論或過程中是否有任何事情讓你猶豫，認為它可能不會發生，或者這只是按照典型的政府時間表，並且必須經過 X 個月， X 進程，無論如何。但這將會發生。我只是想弄清楚，是的，如果有的話，是否有任何阻礙，或者這是否只是典型的政府流程，消息不久前就出來了，現在我們只能坐下來等待計時結束，但是你知道，這是艾倫。

And before I turn it over five, and I'm sure Paul is going to say the same thing is just the number, but our job is not to we're not we're not politicians were not in the government. We're not in the government. The political process takes a long time, and we're operating our business with a very strong and solid balance sheet that will allow us to deal with any any different tailwinds or headwinds that may come from any actions that occur in the broader economy or the broader market?

在我把它交給五個之前，我相信保羅會說同樣的事情只是數字，但我們的工作不是我們不是我們不是政客，我們不是政府中的人。我們不在政府。政治進程需要很長時間，我們正在以非常強大和穩健的資產負債表來運營我們的業務，這將使我們能夠應對任何可能來自更廣泛的經濟或整體經濟中發生的任何行動的任何不同的順風或逆風。更廣闊的市場？

Yes.

是的。

So yes, obviously, we're kind of reading what you're reading and there's a lot of guesswork going on as to when that will be an announcement what the announcement will be, but it's guesswork. What we do know is the FDA did confirm that it is conducting its review. So that's a fact we know. So that's a very positive thing, I think so we're going to stay tuned. And and if history is any indicator, the FDA does typically follow HHS regulations, but that certainly doesn't mean they have to. So we'll see. But we are optimistic like the rest of the world, but anything can happen.

所以，是的，顯然，我們正在閱讀你們正在閱讀的內容，並且對於何時發佈公告以及公告內容存在很多猜測，但這只是猜測。我們所知道的是 FDA 確實確認正在進行審查。這是我們知道的事實。所以這是一件非常積極的事情，我認為我們將繼續關注。如果歷史可以作為參考的話，FDA 通常會遵守 HHS 的規定，但這並不意味著他們必須這樣做。所以我們拭目以待。但我們和世界其他地方一樣樂觀，但任何事情都有可能發生。

So we haven't Thank you very much.

所以我們還沒有非常感謝你。

Eric Des Lauriers, Craig-Hallum Capital Group.

艾瑞克‧德斯‧勞裡爾斯 (Eric Des Lauriers)，克雷格-哈勒姆資本集團。

Great. Thanks for taking my questions. First one, a bit of a high-level question for me. Just kind of understanding the mechanics behind the rent collection statistics. So and kind of wondering if you can help me understand what happens sort of mechanically statistics when a tenant stops paying some. We have some some defaulted properties and development properties, some operational properties, not fully leased, some security deposits being applied towards rents, but then rent collection statistics remain at 100%. So could you maybe just walk us through the mechanics of what happens to your rent collection statistics, where the tenants are paying? And then maybe to help with modeling, is there a simple way to quantify the difference between the rents you're collecting from tenants any given quarter versus what you would be collecting if your portfolio was 100% operational, 100% leased to 100% rent collection. Yet there's a way to quantify sort of the rent that you're actually collecting versus the total potential rent to be collected, I think they'd be helpful. Thank you.

偉大的。感謝您回答我的問題。第一個問題對我來說是一個高階問題。只是了解租金收取統計數據背後的機制。所以有點想知道你是否可以幫助我理解當租戶停止支付一些費用時會發生什麼機械統計。我們有一些拖欠的房產和開發房產，一些經營性房產，沒有完全出租，一些保證金被用來支付租金，但租金收取統計仍保持在100%。那麼，您能否向我們介紹一下您的租金收取統計數據（租戶在哪裡付款）會發生什麼情況？然後，也許為了幫助建模，有沒有一種簡單的方法可以量化您在任何給定季度向租戶收取的租金與您的投資組合100% 運營、100% 租賃到100% 租金時收取的租金之間的差異收藏。然而，有一種方法可以量化您實際收取的租金與潛在收取的總租金，我認為它們會有所幫助。謝謝。

So I mean, in general, I mean, we think that we have a very strong portfolio and one, we are operating very very similar to what other real estate companies do. If a property and some of the properties that we have, we happened to get back. We're in a development stage. We put them in a development portfolio because there's work that has to be done. It's very hard to lease a product, a property that is not completed or needed or needs additional work to actually get into the lease statement. But if it was a fully completed asset, then it would stay in our operating portfolio and it would affect our leasing statistics. An example of an asset, not that went into our development portfolio was the San Marcos Texas asset, which was really just the land of the. And to note, I think, Ben, what do we collect on the yellow.

所以我的意思是，總的來說，我的意思是，我們認為我們擁有非常強大的投資組合，而且我們的運作方式與其他房地產公司的運作方式非常相似。如果我們有一個財產和一些財產，我們碰巧就拿回來了。我們正處於發展階段。我們將它們放入開發組合中，因為還有工作要做。租賃一個產品、一個未完成、不需要或需要額外工作才能真正進入租賃聲明的財產是非常困難的。但如果它是完全完工的資產，那麼它將保留在我們的營運投資組合中，並將影響我們的租賃統計數據。德州聖馬科斯資產就是一個資產範例，但並未納入我們的開發投資組合，它實際上只是土地。值得注意的是，我想，本，我們在黃色上收集了什麼。

So our basis in that our asset is about $8 million, and we collected over $6 million in rent from the tenant during their occupancy.

因此，我們的基礎是我們的資產約為 800 萬美元，並且我們在租戶入住期間向他們收取了超過 600 萬美元的租金。

But it's still just land. And in order for us to re-lease it, we'd have to either build it out or find a A., a tenant who wanted to actually complete the full it fully design the projects that that was designed by parallel at the time. So that's why that's in our development portfolio, not and not part of our operating statistics.

但它仍然只是陸地。為了讓我們重新出租它，我們必須要么建造它，要么找到一個 A.，一個想要真正完成完整的、完全設計當時並行設計的項目的租戶。這就是為什麼它出現在我們的開發組合中，而不是我們的營運統計數據的一部分。

Yes.

是的。

Okay. And is there a way to sort of help us help us calculate or quantify the difference between sort of total rent potential and then what you're collecting and especially at some of these development properties and other lease properties potentially start collecting revenue or I guess collecting rents in 24? Just kind of kind of help quantify the potential impact here given the rent collection discretionary, not 100% because it's something that we'll have to get back to off-line if you don't mind on that, if you can just.

好的。有沒有一種方法可以幫助我們計算或量化總租金潛力與您所收取的費用之間的差異，特別是在其中一些開發物業和其他租賃物業可能開始收取收入或我猜收取收入之間24號的租金？考慮到租金收取的自由裁量權，這只是一種幫助量化這裡的潛在影響，而不是 100%，因為如果你不介意的話，如果可以的話，我們將不得不回到離線狀態。

Yes, that would be the best I think you know from.

是的，我想這將是你所知道的最好的。

And then just last question from me is just kind of a bit of a housekeeping one for me. Property expenses and tenant reimbursements Is it still these these property expenses are still 100% and reimbursed. And so in the instance where there is a difference between property expense and the amount reimbursed, it's just kind of a timing issue. So that's I guess my first question here and then the second one is how should we think about this going forward? It's increased each quarter softened past two years here? And is this related to specific tenants or specific property? Will this begin to decrease at any time? Just any kind of insight into how to model the these these property expenses would be great. Thank you.

我的最後一個問題對我來說只是一個家務問題。物業費用和租戶報銷還是這些嗎？這些物業費用仍然是 100% 報銷的。因此，在財產費用和報銷金額之間存在差異的情況下，這只是一個時間問題。所以我想我的第一個問題是，第二個問題是我們未來該如何思考這個問題？過去兩年這裡每季都有增加？這與特定租戶或特定財產有關嗎？這個數字會隨時開始減少嗎？只要對如何對這些財產費用進行建模的任何形式的見解都會很棒。謝謝。

Yes, sure, Eric. It's David harm. So one I will just clarify your comment. So the net expense that we've had throughout this year from Q1 to Q3 has actually gone gone down, not gone up versus what you said. But separately, I think you're alluding to going from Q3 to Q4, we did see it increase in the overall net expense. So in other words, are reimbursements we received from tenants a lessee of taxes and insurance that we paid that was driven by the properties we took back from Kings Garden in September in parallel, Pennsylvania in October. So we did have elevated property expenses in Q4 just because we are on the hook for those expenses. That being said, you've given what Paul and Ben mentioned on the releasing activity that we've had, those will go down over time, just given again the substantial re-leasing efforts that we've announced today with our results.

是的，當然，埃里克。這是大衛的傷害。所以我只是澄清一下你的評論。因此，我們今年從第一季到第三季的淨支出實際上有所下降，而不是像您所說的那樣上升。但單獨而言，我認為您指的是從第三季度到第四季度，我們確實看到整體淨費用增加。換句話說，我們從租戶那裡收到的報銷是我們支付的稅款和保險的承租人，這些費用是由我們於 9 月從賓夕法尼亞州國王花園收回的房產所驅動的。因此，我們在第四季的財產支出確實有所增加，只是因為我們要承擔這些費用。話雖這麼說，你已經給出了保羅和本提到的我們已經進行的釋放活動，這些活動將隨著時間的推移而下降，只是再次考慮到我們今天宣布的大量重新租賃工作以及我們的結果。

So yes, sorry, maybe just to clarify here. So I'm I'm referring to the first line item and the expenses property expenses, which of them increased each quarter here. And my understanding was that those were basically some of those are also reflected in revenue and that they were simply kind of reimbursement that you recognize the expenses out and then get reimbursed. So I don't know if that helps clarify my question. Does this cause looking at that first line item would probably yes.

所以，是的，抱歉，也許只是為了在這裡澄清一下。所以我指的是第一行項目和物業費用，其中每個季度都會增加。我的理解是，這些基本上其中一些也反映在收入中，它們只是一種報銷，您可以確認費用，然後獲得報銷。所以我不知道這是否有助於澄清我的問題。這是否會導致查看第一個行項目可能是的。

And yes, you're looking at just that line item?

是的，您正在查看該訂單項目嗎？

That's correct.

這是正確的。

But those can also go up. You're going to see inflationary increases in insurance and property taxes. But to your point, Eric, the actual reimbursement from the tenants that's coming through the revenue line as well. So you really need to you net those two together. But they can yes, they can be episodic to your point, depending on when when those when those come through for the taxes and insurance. So there can be a timing difference as well.

但這些也可能會上升。你會看到保險和財產稅的通貨膨脹增加。但就你的觀點而言，艾瑞克，租戶的實際報銷也來自收入線。所以你真的需要將這兩者結合起來。但他們可以是的，他們可以是間歇性的，這取決於這些稅收和保險的時間。因此也可能存在時間差異。

Okay.

好的。

And then I guess just kind of last thing on this like overall, I mean, this had been increasing each quarter. Is this what we should expect to continue going forward? Just give I mean, assuming inflation, steady inflationary environment, I guess I'm just trying to understand that first Expedia and I don't have feedback.

然後我想這就是最後一件事，總體而言，我的意思是，每個季度都在增加。這是我們應該期待繼續前進的嗎？我的意思是，假設通貨膨脹，穩定的通貨膨脹環境，我想我只是想先了解 Expedia 並且我沒有回饋。

I'm sure. Yes, I would just go back to my prior comment on on that, Eric, where you did see the expenses increase from Q3 to Q4. And again, that was driven by taking back properties from King's yard and parallel. So as those properties get released with the re-leasing activities that Ben had mentioned. You'll see some of those come down over time.

我敢肯定。是的，我只想回到我之前對此的評論，埃里克，你確實看到從第三季度到第四季度的費用增加。再次，這是透過從國王的院子和平行地收回財產來推動的。因此，隨著本提到的轉租活動，這些房產得到釋放。隨著時間的推移，你會發現其中一些會下降。

Thank you.

謝謝。

This concludes our question and answer session. I would like to turn the conference back over to Alan Gold for any closing remarks.

我們的問答環節到此結束。我想將會議轉回艾倫·戈爾德（Alan Gold）發表閉幕詞。

Thank you, and I'd like to thank all the stakeholders for your continued support. Thank all the team here at the Innovative Industrial Properties for their continued hard and fantastic work. Thank you all. With that, we'll sign off. Thank you.

謝謝你們，我還要感謝所有利害關係人的持續支持。感謝創新工業地產的所有團隊一直以來的辛勤和出色的工作。謝謝你們。這樣，我們就結束了。謝謝。

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

會議現已結束。感謝您參加今天的演講。您現在可以斷開連線。