Innovative Industrial Properties Acquires Pennsylvania Property and Enters Into Long-Term Lease with Maitri Genetics
April 24 2019 - 4:30PM
Business Wire
Innovative Industrial Properties, Inc. (IIP), the first and only
real estate company on the New York Stock Exchange (NYSE: IIPR)
focused on the regulated U.S. cannabis industry, announced today
that it closed on the acquisition of a property in Pittsburgh,
Pennsylvania, which comprises approximately 51,000 square feet of
industrial space.
The purchase price for the Pennsylvania property was
approximately $6.3 million (excluding transaction costs).
Concurrent with the closing of the purchase, IIP entered into a
long-term, triple-net lease agreement with Maitri Genetics, LLC
(Maitri), which intends to operate the property as a licensed
medical-use cannabis cultivation and processing facility upon
completion of redevelopment. Maitri is expected to complete tenant
improvements for the building, for which IIP has agreed to provide
reimbursement of up to $10 million. Assuming full reimbursement for
the tenant improvements, IIP’s total investment in the property
will be approximately $16.3 million.
As the pioneering real estate investment trust (REIT) for the
medical-use cannabis industry, IIP partners with experienced
medical-use cannabis operators and serves as a source of capital by
acquiring and leasing back their real estate assets, in addition to
offering other creative real estate-based capital solutions.
"We are thrilled to partner with Maitri," said Paul Smithers,
President and Chief Executive Officer of IIP. "The Maitri team has
quickly distinguished itself in Pennsylvania as an industry leader
with their dedication to compassionate care for their patients and
commitment to the local communities where they operate. We look
forward to supporting the Maitri team in their redevelopment of
this property into a state-of-the-art medical cannabis cultivation
and processing facility, and helping them in the expansion of their
platform to address serious patient needs."
Maitri operates licensed medical-use cannabis dispensaries in
Uniontown and Pittsburgh, Pennsylvania, and expects to be issued
its permanent medical-use cannabis cultivation and processing
license at the property upon completion of the property
redevelopment. Maitri has raised $12 million over the past two
years to launch and support its operations.
"We worked collaboratively with the IIP team to structure a
transaction that provides us with the funding and support necessary
to redevelop our property into an advanced cultivation and
processing facility," said Corinne Ogrodnik, Chief Executive
Officer of Maitri. "IIP is a market leader with sophisticated
insight into this dynamic industry and we look forward to
continuing our close work with them. Redevelopment of this facility
will provide us with the highly controlled, specialized environment
needed to produce the best quality medical cannabis products for
our patients."
The Pittsburgh property marks IIP's second acquisition in
Pennsylvania. Dispensaries in Pennsylvania began selling
medical-use cannabis to patients and caregivers in February 2018.
As of April 2019, nearly 102,000 patients had received their
patient certification and more than 1,500 physicians had registered
for the program. Similar to other states with licensed medical-use
cannabis operations, the Pennsylvania Department of Health made
adjustments to the program after its launch, including expansion of
qualifying medical conditions to include substitute therapy for
opiate addiction and cancer remission therapy, and allowing patient
access to medical cannabis flower. In addition, Pennsylvania
governor Tom Wolf has indicated serious consideration for
legalizing cannabis for adult-use generally, citing polls showing
that a significant majority of state residents support such a
measure and the potential tax revenue that could be utilized to
improve residents' lives, citing greater access to opioid treatment
and better health care access for veterans and children.
As of April 24, 2019, IIP owned 19 properties located in
Arizona, California, Colorado, Illinois, Maryland, Massachusetts,
Michigan, Minnesota, New York, Ohio and Pennsylvania, totaling
approximately 1.3 million rentable square feet (including
approximately 210,000 rentable square feet under
development/redevelopment), which were 100% leased with a
weighted-average remaining lease term of approximately 14.9 years.
As of April 24, 2019, IIP had invested approximately $197.5 million
in the aggregate (excluding transaction costs) and had committed an
additional approximately $44.7 million to reimburse certain tenants
and sellers for completion of construction and tenant improvements
at IIP's properties. IIP's average current yield on invested
capital is approximately 14.8% for these 19 properties, calculated
as (a) the sum of the current base rents, supplemental rent (with
respect to the lease with PharmaCann LLC at one of IIP's New York
properties) and property management fees (after the expiration of
applicable base rent abatement periods), divided by (b) IIP's
aggregate investment in these properties (excluding transaction
costs and including aggregate potential development/redevelopment
funding and tenant reimbursements of approximately $44.7
million).
About Innovative Industrial Properties
Innovative Industrial Properties, Inc. is a self-advised
Maryland corporation focused on the acquisition, ownership and
management of specialized industrial properties leased to
experienced, state-licensed operators for their regulated
medical-use cannabis facilities. Innovative Industrial Properties,
Inc. has elected to be taxed as a real estate investment trust,
commencing with the year ended December 31, 2017. Additional
information is available at
www.innovativeindustrialproperties.com.
Innovative Industrial Properties
Forward-Looking Statements
This press release contains statements that IIP believes to be
"forward-looking statements" within the meaning of the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
All statements other than historical facts, including, without
limitation, statements regarding the lease of the Pennsylvania
property, Maitri and the Pennsylvania regulated cannabis market,
are forward-looking statements. When used in this press release,
words such as we "expect," "intend," "plan," "estimate,"
"anticipate," "believe" or "should" or the negative thereof or
similar terminology are generally intended to identify
forward-looking statements. Such forward-looking statements are
subject to risks and uncertainties that could cause actual results
to differ materially from those expressed in, or implied by, such
statements. Investors should not place undue reliance upon
forward-looking statements. IIP disclaims any obligation to update
or revise any forward-looking statements, whether as a result of
new information, future events or otherwise.
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version on businesswire.com: https://www.businesswire.com/news/home/20190424005931/en/
Catherine HastingsChief Financial Officer, Chief Accounting
Officer and TreasurerInnovative Industrial Properties, Inc.(858)
997-3332
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