US (CO): Crowely County-based 2.2 acres acquired to build cannabis greenhouse

Power REIT has acquired an additional 2.2 acre parcel in Crowley County, Colorado through a wholly owned subsidiary (“PropCo”). The Property is strategically located in a part of southern Colorado that offers a very favorable business setting and growing environment for efficient and sustainable greenhouse cultivation.

As part of the transaction, Power REIT has agreed to fund the construction of approximately 24,512 square feet of greenhouse and processing space for its new tenant, Gas Station. Power REIT’s total capital commitment for the project is approximately $2.1 million including the land acquisition cost.

Concurrent with the acquisition, PropCo entered into a 20-year “triple-net” lease with Gas Station which will operate a cannabis cultivation facility. The lease requires Gas Station to pay all property related expenses including maintenance, insurance and taxes. After the initial 20-year term, The Lease provides two, five-year renewal options and has a personal guarantee from the owners of Gas Station. As mandated by the Lease, Gas Station will maintain a medical marijuana license and will operate in accordance with all Colorado and municipal regulations. The Lease also prohibits retail sales of its products from the Property.

The acquisition described above is immediately accretive to CORE FFO by adding approximately $301,000 of straight-line rent. As previously announced, Power REIT recently completed a Rights Offering to raise capital to deploy on additional acquisitions including this transaction with Gas Station.

David Lesser, Power REIT’s Chairman and CEO, commented, “We continue to deploy capital on a highly accretive basis that supports our investment thesis of investing in sustainable property investments. Southern Colorado continues to represent a compelling opportunity for our investment strategy in cannabis cultivation facilities. We believe that each additional acquisition diversifies our tenant concentration and further improves our focused strategy within this vibrant market that provides significant runway for growth.”

Mr. Lesser, concluded “We have generated dramatic growth since July 2019 when we embarked on our new business plan focused on Controlled Environment Agriculture properties. Power REIT’s relatively small size combined with the attractive investment yields that we are generating through CEA property acquisitions, positions us for continued outpaced growth. We believe Power REIT represents an attractive investment proposition based on our relatively low trading multiple than REIT peers with a clear growth trajectory.