Innovative Industrial Properties Preferred: High Income Yield But Not A Buy-And-Hold Allocation

Innovative Industrial Properties Series A preferred shares offer an 9.17% yield but are best suited for short-term, moderate allocations. IIPR.PR.A trades just below par, post-call date, exposing investors to negative convexity and heightened interest-rate sensitivity, limiting upside if rates decline. IIPR's low leverage and robust common equity base ($1.8B) provide strong coverage for preferred obligations, with 19x earnings coverage on preferred dividends. Current elevated interest rates and cautious outlook suggest only moderate position sizing in IIPR.PR.A, as rising rates pose a downside risk. The preferred shares of Innovative Industrial Properties ( IIPR ), namely Series A ( IIPR.PR.A ), offer an interesting complementary allocation for yield investors. The preferred obligations form a fairly small part of the overall operations.