Zoned Properties Continues Expansion with Agreement to Acquire Property for $2.75 Million Leased to Sunday Goods After Receiving Cannabis Approvals for New Retail Dispensary in Arizona

Absolute-Net Lease in Place and Produces 12.7% Cap Rate over the Life of the Lease Term.

SCOTTSDALE, AZ / ACCESSWIRE / February 29, 2024 / Zoned Properties, Inc. ("Zoned Properties" or the "Company") (OTCQB:ZDPY), a leading real estate development firm for emerging and highly regulated industries, including legalized cannabis, today announced that the Company has received final cannabis approvals related to an investment property in Surprise, Arizona (the "Investment Property"). The Company is under contract to acquire the Investment Property after initial site work has been completed by the selling developer. Zoned Properties has also entered into a long-term, absolute-net lease agreement with a best-in-class Arizona cannabis company, Sunday Goods, to operate a retail dispensary.

"Arizona's cannabis market stands out as one of the most dynamic and consumer-driven in the United States. The strongest brands in the nation look to Arizona to create consumer market awareness. Following this acquisition, we expect to near $3 million in passive rental revenue annually. We continue implementing our plan to grow our investment portfolio by adding best-in-class operators and direct-to-consumer assets with attractive cap rates. This lease with Sunday Goods further diversifies our tenant roster with a cannabis brand that will establish the property's highest and best use at this retail location," commented Bryan McLaren, Chief Executive Officer of Zoned Properties. "We are excited to strengthen our tenant roster with such a high-quality brand in Sunday Goods and look forward to expanding our relationship with their executive team."

Transaction Highlights

• Zoned Properties is under contract to acquire the Investment Property in Surprise, Arizona from the selling developer following the completion of site work by the seller.
• The Company intends to acquire the Investment Property for approximately $1.75 Million, including purchase price, closing costs, and selling developer's improvements; and is planning for a $1.0 Million tenant improvement allowance providing the initial capital for Sunday Goods to construct a retail dispensary.
• The Company believes Sunday Goods will need to invest additional capital to complete construction and development of the property.
• The Investment Property is leased to Sunday Goods under a long-term, absolute-net lease agreement, which will produce an approximate 12.7% cap rate when straight-lined over the term of the lease agreement. The lease includes 3% annual increases in base rent, yielding approximately $372,000 in annual base rental revenue when straight-lined over the life of the lease term.
• Zoned Properties has received final cannabis approvals from the City of Surprise authorizing the operation of a cannabis retail dispensary at the Investment Property.

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