Power REIT Creates Efficiencies of Scale with Tenant Expansion
Old Bethpage, New York, Feb. 23, 2021 (GLOBE NEWSWIRE) -- Power REIT (NYSE-AMEX: PW and PW.PRA) (“Power REIT” or the “Trust”) today announced that it has entered into a lease amendment with The
Grail Project LLC (“Grail Project”) to fund the expansion of its existing property leased to Grail Project by 6,256 square feet. Power REIT’s capital commitment related to the expansion is
approximately $517,000 and the increase in annual straight-line rent is approximately $105,000. The property, which is strategically located in a part of southern Colorado that offers a very
favorable business setting and climate for greenhouse cultivation, is owned through a wholly owned subsidiary of Power REIT.
Including the expansion announced today, Power REIT has committed to invest approximately $2.36 million for the construction of approximately 28,000 square feet of greenhouse and processing space for its tenant, Grail Project. The 20 year “triple-net” lease is structured to provide straight-line annual rent of approximately $455,000, which represents an unleveraged FFO yield of approximately 19.3% on Power REIT’s invested capital.
David Lesser, Power REIT’s Chairman and CEO, commented, “This transaction demonstrates an attractive element of our business plan whereby our existing portfolio has the potential for built in growth and we can deploy incremental capital at very attractive yields. As we facilitate the expansion of a property, we also help create efficiencies of scale for our tenants which should improve their competitiveness. We continue to deploy capital on a highly accretive basis and in a manner that supports our investment thesis of investing in sustainable greenhouse properties. We remain enthusiastic about expanding our greenhouse portfolio in Colorado, which should compete favorably with indoor cultivation facilities, while providing quality real estate for Gail Project to grow high quality cannabis at a competitive cost.”
Project Grail owner Andrew Duvall, commented “We are excited to expand the cultivation facility with the help of Power REIT. This expansion is a first step in our goal of rapid expansion and should help drive economies of scale and reduced production expense associated with greenhouse facilities compared to other indoor cultivation solutions.”
STATEMENT ON SUSTAINABILITY
Power REIT owns real estate related to infrastructure assets including properties for Controlled Environment Agriculture (CEA Facilities), Renewable Energy and Transportation.