Chicago Atlantic Real Estate Net Income Increases 19% YoY, Expands Cannabis Loan Portfolio

Chicago Atlantic Real Estate Finance, Inc. REFI announced strong third-quarter results for 2024. The company, a commercial mortgage real estate investment trust (REIT) specializing in cannabis-related assets, reported significant net income growth and expanding portfolio performance, underpinned by disciplined loan management.

Key Financial Highlights for Q3 2024

• Net Interest Income: $14.5 million, up from $13.2 million in Q2 2024 and a 9.1% increase from Q3 2023.
• Net Income: $11.2 million, or $0.56 per share, a 21.7% sequential increase and a 19% year-over-year increase.
• Distributable Earnings: $11.2 million, or $0.56 per share, reflecting a 12% quarterly increase and a 15% year-over-year rise.
• Book Value: $15.05 per share, up slightly from $14.92 in Q2 2024, showing growth in shareholder equity.

Portfolio And Investment Activity

As of September 30, 2024, Chicago Atlantic's portfolio included $362.3 million in loan principal across 29 companies, with a real estate collateral coverage of 1.2x, slightly down from 1.3x in June.

The company originated $32.7 million in gross loans during Q3, including $24 million to new borrowers and $8.7 million to existing ones, with a weighted average yield to maturity of 18.3%.

After the quarter's close, Chicago Atlantic funded an additional $36.5 million, including a $25 million credit facility with an Illinois operator.

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"We have managed our portfolio and its maturities very well throughout 2024 with extensions, modifications, and refinancings, while improving credit quality and loan coverage,” stated co-CEO Peter Sack. “A strong pipeline in both existing and new states with adult-use legislation keeps us well-positioned for the balance of the year and into 2025."

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Capital And Liquidity Management

During Q3, Chicago Atlantic increased its secured revolving credit facility to $110 million, with a drawdown of $54 million as of quarter-end, resulting in a leverage ratio of 18%.

In October, the company secured a $50 million unsecured term loan with a fixed interest rate of 9.0% and received an investment-grade BBB+ rating from Egan-Jones. This loan strengthens Chicago Atlantic's liquidity, leaving $94.5 million available under the facility and approximately $80 million in total liquidity as of early November.

The company also paid a quarterly dividend of $0.47 per share on October 15, reflecting its steady return to shareholders amid robust performance.

REFI Stock Price Action

REFI shares closed Wednesday at $15.58 per share gaining +0.33 during the trading session, which represents a 2.16% increase.

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