Innovative Industrial Properties downgraded to Sell from Neutral at Compass Point

Compass Point downgraded Innovative Industrial Properties (IIPR) to Sell from Neutral with a price target of $50, down from $61. The company reported in a regulatory filing that it declared certain tenants in default and declared a default on a mortgage loan to Medical Investor Holdings, the analyst tells investors in a research note. The firm says that unless the four tenants cure the defaults, Innovative’s Q2 earnings will be impacted, but not by more than 2%. Compass thinks these tenants are not likely to cure their default, and that Innovative will resort to taking control of the properties with the intent of re-leasing them. It believes the process will be protracted and that regaining possession of the properties will be expensive.