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 Lansing,
Michigan, which comprises approximately 145,000 square feet of
industrial space.
The purchase price for the Michigan property was approximately
$4.8 million (excluding transaction costs). Concurrent with the
closing of the purchase, IIP entered into a long-term, triple-net
lease agreement with a subsidiary of Ascend Wellness Holdings, LLC
(AWH), which intends to operate the property as a licensed
medical-use cannabis cultivation and processing facility upon
completion of redevelopment. AWH is expected to complete tenant
improvements for the building, for which IIP has agreed to provide
reimbursement of up to $15.0 million. Assuming full reimbursement
for the tenant improvements, IIP’s total investment in the property
will be approximately $19.8 million.
This Michigan property represents IIP’s second real estate
transaction with AWH. In December 2018, IIP acquired a
75,000-square-foot industrial facility in Illinois and entered into
a long-term, triple-net lease agreement with AWH for use as a
medical cannabis cultivation and processing facility, with IIP’s
total investment in the property, assuming full reimbursement for
tenant improvements, expected to be $25.0 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 excited to team up with AWH again as their long-term
real estate partner in Michigan,” said Paul Smithers, President and
Chief Executive Officer of IIP. “AWH is very well-positioned, with
a strong management team and balance sheet, as it ramps up its
operations in Massachusetts, Illinois, Michigan and Ohio, each of
which presents a tremendous market opportunity. We look forward to
supporting their continued growth and success for many years to
come.”
AWH is a vertically integrated cannabis company, and expects to
be operating in each of Massachusetts, Illinois, Michigan and Ohio
by the end of this year. AWH has raised over $100 million in
capital to date.
“The IIP team has been a great real estate partner and key
capital source to fund our multi-state expansion initiatives,” said
Abner Kurtin, Chief Executive Officer and Co-Founder of AWH. “We
are thrilled to begin our redevelopment of the Michigan property,
and to bring our highest-quality medical cannabis products and
customer-focus to meet the tremendous patient demand in
Michigan.”
As of July 9, 2019, IIP owned 23 properties located in Arizona,
California, Colorado, Illinois, Maryland, Massachusetts, Michigan,
Minnesota, New York, Ohio and Pennsylvania, totaling approximately
1.8 million rentable square feet (including approximately 466,000
rentable square feet under development/redevelopment), which were
100% leased with a weighted-average remaining lease term of
approximately 15.6 years. As of July 9, 2019, IIP had invested
approximately $234.5 million in the aggregate (excluding
transaction costs) and had committed an additional approximately
$72.0 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 14.7% for these 23 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 or deferral 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 $72.0
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.
About AWH
AWH is a vertically integrated cannabis company with assets in
Massachusetts, Illinois, Michigan and Ohio, four of the largest
cannabis markets in the Eastern United States. Assets include
thirteen municipal approved dispensaries in Michigan, the sixth
largest dispensary group in Illinois, and the first dispensary
approved and permitted by the City of Boston. The flagship store in
Boston will be just steps from Faneuil Hall and the iconic TD
Garden, two of the most highly trafficked tourist destinations in
the country. AWH is redefining the cannabis retail experience,
offering a customer-centric environment and a curated selection of
products with effect-based categorization. For more information
about AWH, visit www.awholdings.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 Michigan
property, AWH and the Michigan 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/20190709005231/en/
Catherine Hastings Chief Financial Officer, Chief Accounting
Officer and Treasurer Innovative Industrial Properties, Inc. (858)
997-3332
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