IIPR.PRA - Preferred stock of a marijuana REIT with a 9.5% cumulative dividend yield, low bankruptcy risk, and 5% upside if called

Anybody looked at the preferred stock for Innovative Industrial Properties REIT (IIPR, preferred stock IIPR.PRA)? IIPR is a REIT that went public in 2016 and, in simple terms, targeted buying properties to the lease to marijuana companies. Marijuana companies - although a good chunk of states have legalized - are still federally illegal so IIPR was able to charge a premium, on the order of 3x normal rates for industrial type space. IIPR has always been profitable and never missed a dividend. Based on their most recent 10Q filing, they have $2.3 billion in assets - mainly the land and facilities they own - to about $340 million in debt. Recently, their income has gone down as - with marijuana prices decreasing as it becomes more of a commodity - they have had marijuana tenant defaults of about 16% of their revenue over the past year. But, even with that hit, their net income last quarter was still 1.75x their operating costs. Accordingly, from an equity perspective they have a buffer of about $1.8 billion; and, in general, even if all premiums for their rent went away - i.e., their revenues got cut in 1/3 - they would still be profitable. IIPR's common stock is trading down and has a 15% yield right now, which is priced like it will get cut. But, their preferred stock seems like a screaming deal. It has a 9.5% dividend yield - which is cumulative meaning they must pay dividends - and is trading at about 5% below par value. Additionally, the preferred stock value issued is only $44 million. With an approximately $1.8 billion equity cushion, it seems like the $44 million in preferred stock is extremely protected. And, to top it off you're getting a 9.5% yield and it seems like the only true risk is call risk as it can now get called at any time. But, even if it did get called, because it's currently trading 5% below call value, even then you would still get a return. **Summary**: IIPR preferred stock seems to have very little risk of going under. You get 9% yield and the only real risk is that it can get called at any time but, even then, you would still get a 5% immediate return on being called.