Power REIT (NYSEAMERICAN:PW) announced that it has acquired 4.0 acres of land, consisting of two adjacent property parcels, in Crowley County, Colorado through its wholly-owned PropCo subsidiary for sustainable greenhouse cannabis cultivation.
The company said the transaction is valued at about $2.95 million, which includes the construction of a 38,440 square foot greenhouse cultivation facility.
“We continue to deploy capital on a highly accretive basis that supports our investment thesis of investing in sustainable properties. Southern Colorado continues to represent a compelling opportunity for our investment strategy in cannabis cultivation facilities,” Power REIT CEO David Lesser said in a statement.
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“We believe that each additional acquisition diversifies our tenant concentration and further improves our focused strategy within this vibrant market, which we believe has significant runway for growth,” Lesser added.
As well, the company’s PropCo subsidiary agreed to lease the cannabis cultivation facility to Cloud Nine Farms LLC, a minority-owned business, for a period of 20 years, with two, five-year renewal options. Cloud Nine is expected to maintain a medical marijuana license but is prohibited from making retail sales from the property.
Power REIT noted the lease, as structured, is immediately accretive to the company’s core funds from operations (FFO) and with annual rent of about $552,870, it represents an unleveraged FFO yield of about 18.7% on the invested capital.
The company added that it has now invested about $10 million from its recently-closed rights offering across several transactions, with about $26.5 million remaining to be deployed.
Power REIT is a specialized real estate investment trust (REIT) that owns sustainable real estate related to infrastructure assets, including properties for controlled environment agriculture (greenhouses for the cultivation of food and cannabis), renewable energy, and transportation.
The company also boasts an acquisition pipeline in excess of $100 million at various stages of negotiations.
Contact Sean at sean@proactiveinvestors.com