Warren Buffett believes that firms with excellent long term economics tend to have consistently higher margins.
Durable competitive advantage creates a high Gross Margin % because of the freedom to price in excess of cost. Companies can be categorized by their Gross Margin %
1. Greater than 40% = Durable competitive advantage
2. Less than 40% = Competition eroding margins
3. Less than 20% = no sustainable competitive advantage
Consistency of Gross Margin is key
Innovative Industrial Properties had a gross margin of 89.02% for the quarter that ended in Mar. 2026 => Durable competitive advantage
Be Aware
If a company loses its competitive advantages, usually its gross margin declines well before its sales declines. Watching Gross Margin % and Operating Margin % closely helps avoid value trap situations.
Innovative Industrial Properties Gross Margin % Related Terms
Innovative Industrial Properties Gross Margin % Historical Data
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the REIT - Industrial subindustry, Innovative Industrial Properties's Gross Margin %, along with its competitors' market caps and Gross Margin % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Innovative Industrial Properties Gross Margin % vs REITs Industry
For the REITs industry and Real Estate sector, Innovative Industrial Properties's Gross Margin % distribution charts can be found below:
* The bar in red indicates where Innovative Industrial Properties's Gross Margin % falls into.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
A positive Gross Profit is only the first step for a company to make a net profit. The gross profit needs to be big enough to also cover related labor, equipment, rental, marketing/advertising, research and development and a lot of other costs in selling the products.
Innovative Industrial Properties (IIPR) has a Gross Margin % of 89.02% as of Mar. 2026. Gross margin is the ratio of total gross profit to net sales. View historical data on Innovative Industrial Properties and its competitors. This is near median its historical median of 95.98. Over the past decade, Innovative Industrial Properties' Gross Margin % has ranged from 72.90 to 98.16. According to the industry distribution chart, Innovative Industrial Properties ranks #123 out of 680 companies in the REITs industry, placing it in the top 18.1%.
Is Innovative Industrial Properties' Gross Margin % too high?
Innovative Industrial Properties' current Gross Margin % of 89.02% is near median its 10-year median of 95.98. Over the past 10 years, this metric has ranged from a low of 72.90 to a high of 98.16. The REITs industry median Gross Margin % is 69.71. Innovative Industrial Properties' value of 89.02% is 27.7% above this industry median. Based on the distribution chart, Innovative Industrial Properties ranks #123 out of 680 companies in the REITs industry, which is in the top quartile — a strong position relative to peers. Overall, Innovative Industrial Properties has a GF Score™ of 77/100 and is considered Fairly Valued, reflecting its overall financial health beyond just this single metric.
How does Innovative Industrial Properties' Gross Margin % compare to SMA and ILPT?
According to the REITs industry distribution chart, Innovative Industrial Properties ranks #123 out of 680 companies for Gross Margin %. This places Innovative Industrial Properties in the top 18% of its industry — outperforming the majority of peers. The industry median Gross Margin % is 69.71. Innovative Industrial Properties' value of 89.02% is 27.7% above this benchmark. Historically, Innovative Industrial Properties' own Gross Margin % has ranged from 72.90 to 98.16 over the past decade. While the company's 10-year median is 95.98 vs. the industry median of 69.71, Innovative Industrial Properties has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Gross Margin % for a REITs company?
The median Gross Margin % among REITs companies is 69.71, based on 680 companies in the industry. Companies in the top quartile (top 25%) have a Gross Margin % significantly above this median, while those in the bottom quartile fall well below. However, Gross Margin % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Innovative Industrial Properties's current Gross Margin % of 89.02% is 27.7% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Gross Margin % mean?
A high Gross Margin % can signal that a stock is expensive relative to its fundamentals. Gross margin is the ratio of total gross profit to net sales. View historical data on Innovative Industrial Properties and its competitors. For the REITs industry, the median Gross Margin % is 69.71 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Innovative Industrial Properties's current Gross Margin % is 89.02%, which is near median its own 10-year median of 95.98. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Innovative Industrial Properties stock overvalued right now?
Based on GuruFocus' analysis, Innovative Industrial Properties (IIPR) is currently considered Fairly Valued. The stock's GF Value™ is $64.70, compared to a current price of $62.93 — trading 2.7% below its estimated fair value. The current Gross Margin % is 89.02%, which is near median its 10-year median of 95.98 and 27.7% above the REITs industry median of 69.71. Innovative Industrial Properties' overall GF Score™ is 77/100 with 12 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Gross Margin % calculated?
Gross Margin % is calculated from a company's financial statements. For Innovative Industrial Properties (IIPR), the current Gross Margin % is 89.02% as of Mar. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Innovative Industrial Properties (IIPR) Overvalued in 2026?
Based on GuruFocus' analysis, Innovative Industrial Properties stock appears to be undervalued.
The current stock price of $62.93 is trading 2.7% below its estimated GF Value™ of $64.70.
GuruFocus considers Innovative Industrial Properties to be Fairly Valued.
Key valuation signals for IIPR:
Gross Margin %: 89.02% (near median its 10-year median of 95.98)
GF Value™: $64.70 vs. price of $62.93 (2.7% below fair value)
Industry Position: 27.7% above the REITs median (#123 of 680)
No single metric tells the full story. See the IIPR stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Innovative Industrial Properties Business Description
Innovative Industrial Properties Inc is a real estate investment trust focused on the acquisition, ownership and management of specialized industrial and commercial properties in the United States. Its properties are prominently leased to state-licensed operators for their regulated cannabis facilities. The company conducts its business through a traditional umbrella partnership real estate investment trust, or UPREIT structure, in which properties are owned by its Operating Partnership, directly or through subsidiaries. Its segments are: Cannabis Portfolio and Life Science Portfolio, with the majority of revenue coming from the Cannabis Portfolio segment, which involves acquiring, developing, and leasing real estate to regulated cannabis operators on long-term triple-net leases.
77GF Score
Get the complete analysis for IIPR
Gross Margin % is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
Quick Browse
Personalize
Premium Gurus 
Create New Portfolio
IIPR has been successfully added to your 
