Power REIT Acquires Property for Cannabis Processing and Expansion of Existing Property in Highly Accretive Transactions
Old Bethpage, New York, Sept. 18, 2020 (GLOBE NEWSWIRE) -- Power REIT (NYSE-AMEX: PW) (“Power REIT” or the “Trust”) today announced that it has acquired a 3.0 acre property in York County, Maine
(the “505 Property”) for $400,000 through a wholly owned subsidiary (“PropCo”).
The Property is adjacent to a property (the “495 Property”) that was acquired by PropCo on May 15, 2020 that is leased to “Sweet Dirt” as the operator. The 495 Property has a 32,800 square-foot greenhouse that is under active construction and is on track for completion by the end of 2020. It also has a 2,800 square foot processing/distribution building with construction recently completed. A virtual tour of the recent status of the greenhouse construction can be accessed here: Sweet Dirt Virtual Tour
In acquiring the 505 Property, PropCo exercised an option it received at the time of the acquisition of the 495 Property. Concurrent with the acquisition, PropCo amended the lease with Sweet Dirt whereby the lease will cover both properties and PropCo will fund the construction of an additional approximately 9,900 square feet of processing space and the renovation of an existing approximately 2,738 square foot building on the 505 Property. The completion of construction on the 505 Property is targeted for the Summer of 2021.
Sweet Dirt’s owners are authorized by the state of Maine for medical cannabis cultivation, processing and distribution at the 495 Property and will secure an additional cannabis processing license for the 495 Property before construction is completed. As part of the acquisition, the existing triple net lease is being amended whereby PropCo will fund approximately $1.56 million of costs to complete the construction. Accordingly, Power REIT’s total investment in the 505 Property is approximately $1.96 million. The lease amendment is structured to provide straight-line annual rent of approximately $373,000 which is an FFO yield of approximately 19% on the incremental invested capital.
The combined properties are expected to be one of the largest cannabis greenhouse cultivation and processing/distribution properties in the state of Maine upon completion of construction at both parcels. In addition, PropCo has the option to finance the construction of additional greenhouse cultivation space on the 505 Property for Sweet Dirt which is targeted for 2021.
David Lesser, Power REIT’s Chairman and CEO, commented, “This transaction further strengthens our relationship with Sweet Dirt as we build out a multifaceted cannabis campus for them. Sweet Dirt has demonstrated that they can become a strong leader in the Maine regulated cannabis market. We are excited to support their tremendous growth efforts in the highly fragmented Maine market which is projected for tremendous growth.”