Innovative Industrial Properties closed on the acquisition of a property located at 911 Industrial Street in New Castle, Pennsylvania, which comprises approximately 108,000 square feet of industrial space situated on approximately 7.4 acres.
"The purchase price for the property was approximately $8.9 million (excluding transaction costs)," the team with the company explains. "Concurrent with the closing of the purchase, IIP entered into a long-term, triple-net lease agreement with Holistic Industries, which intends to continue to operate the property as a medical-use cannabis cultivation and processing facility. Holistic is expected to complete additional tenant improvements for the property, for which IIP has agreed to provide reimbursement of up to approximately $6.4 million. Assuming full reimbursement for the tenant improvements, IIP’s total investment in the property will be approximately $15.3 million."
This sale-leaseback transaction marks IIP’s third acquisition and lease with Holistic, with prior IIP acquisitions and leases for Holistic’s licensed cannabis cultivation and processing facilities in Maryland and Massachusetts.
“We have teamed with Holistic as their long-term real estate partner since the acquisition and lease of our Maryland property in 2017, and are thrilled to further expand our relationship with them in Pennsylvania, which continues to develop as one of the most vibrant medical cannabis markets in the United States,” said Paul Smithers, President and Chief Executive Officer of IIP. “We greatly value our long-term relationship with the Holistic team, and look forward to supporting their real estate capital needs for many years to come.”
“Over the past three years, we have partnered with the IIP team for real estate-based capital solutions that have helped us fund key expansion initiatives and the development of our cannabis cultivation and processing facilities,” said Josh Genderson, Chief Executive Officer of Holistic. “IIP’s strong support allows us to continue to focus on our growth as a national medical and consumer goods company, a cultivation and extraction network and a retail dispensary chain.”
With first sales in 2018, the Pennsylvania medical cannabis market has grown significantly, and according to the Pennsylvania Department of Health’s report dated May 15, 2020, over 300,000 patient certifications have been issued by approved practitioners since the program began. Similar to other states during this coronavirus health epidemic, in March 2020, Pennsylvania state authorities issued orders to close operations for all non-essential businesses, though deemed regulated medical-use cannabis providers as essential businesses, allowing them to remain open, subject to certain social-distancing measures and other regulations focused on protecting the health of patients and employees.
For more information:
Innovative Industrial Properties
11440 West Bernardo Court, STE 220
San Diego, CA 92127
858-997-3332
ir@iipreit.com