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 Ohio, which
comprises approximately 50,000 square feet of industrial space in
the aggregate.
The purchase price for the property was approximately $10.6
million in total (excluding transaction costs). Concurrent with the
closing of the purchase, IIP entered into a long-term, triple-net
lease agreement for the property with a wholly owned subsidiary of
Cresco Labs Inc. (Cresco), which intends to continue to operate the
property as a regulated cannabis cultivation and processing
facility. Cresco is expected to complete additional tenant
improvements for the property, for which IIP has agreed to provide
reimbursement of up to approximately $1.9 million. Assuming full
reimbursement for the tenant improvements, IIP’s total investment
in the property will be approximately $12.5 million.
This sale-leaseback transaction mark IIP’s third acquisition and
lease with Cresco, with prior IIP acquisitions and leases for two
of Cresco’s licensed cannabis cultivation and processing facilities
in Illinois.
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 expand our real estate partnership with
Cresco and its strong management team,” said Paul Smithers,
President and Chief Executive Officer of Innovative Industrial
Properties, Inc. “Cresco continues to execute well on its business
plan and has created a truly nationwide reach in its operations,
benefiting patients and consumers across the United States, while
creating jobs and contributing meaningfully to the local
communities where they operate. We are thrilled to partner with
them again in Ohio, a state that we believe represents a tremendous
market opportunity, where Cresco can bring its high quality,
trusted products to patients in need.”
Founded in 2013, Cresco is one of the largest
vertically-integrated cannabis companies in the United States, with
licensed operations in eleven states. With its pending
acquisitions, Cresco has 18 licensed cannabis production
facilities, 31 retail cannabis licenses and 21 operational cannabis
dispensaries. Employing a consumer-packaged goods (“CPG”) approach
to cannabis, Cresco’s house of brands is designed to meet the needs
of all consumer segments and includes some of the most recognized
and trusted national brands including Cresco, Remedi and Mindy’s, a
line of edibles created by James Beard Award-winning chef Mindy
Segal. Sunnyside*, Cresco’s national dispensary brand, is a
wellness-focused retailer designed to build trust, education and
convenience for both existing and new cannabis consumers.
“Teaming again with IIP as our long-term real estate partner
enables us to further bolster our balance sheet, and redeploy that
additional liquidity into higher yielding opportunities,” said Joe
Caltabiano, President and Co-Founder of Cresco. “We are thrilled
with the footprint we have established, and look forward to
deepening even further our presence in those states, with IIP as
one of our trusted capital providers.”
Ohio’s licensed medical cannabis program is in its early stages,
with first sales occurring at the beginning of this year. In less
than one year of sales, however, there were nearly 80,000 patients
and over 8,000 caregivers registered under the program as of the
end of December.
As of January 27, 2020, IIP owned 48 properties located in
Arizona, California, Colorado, Florida, Illinois, Maryland,
Massachusetts, Michigan, Minnesota, New York, Nevada, North Dakota,
Ohio, Pennsylvania and Virginia, totaling approximately 3.1 million
rentable square feet (including approximately 850,000 rentable
square feet under development/redevelopment), which were 98.9%
leased (based on square footage) with a weighted-average remaining
lease term of approximately 15.6 years. As of January 27, 2020, IIP
had invested approximately $529.3 million in the aggregate
(excluding transaction costs) and had committed an additional
approximately $128.3 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 13.3% for these 48 properties, calculated as (a)
the sum of the current base rents, supplemental rent (with respect
to the lease with a tenant 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 $128.3 million). These
statistics do not include up to approximately $16.4 million that
may be funded in the future pursuant to IIP’s lease with a tenant
at one of IIP’s Illinois properties, approximately $35.7 million
that may be funded in the future pursuant to IIP’s lease with a
tenant at one of IIP’s Massachusetts properties, or the additional
$4.0 million which may be requested by a tenant at one of IIP’s
Pennsylvania properties, as the tenants at those properties may not
elect to have IIP disburse those funds to them and pay IIP the
corresponding base rent on those funds. These statistics also treat
IIP’s Los Angeles, California property as not leased, due to the
tenant’s default in its obligation to pay rent at that location in
January 2020.
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 Ohio property,
Cresco, the Ohio regulated cannabis market and Cresco’s completion
of tenant improvements, 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.
About Cresco Labs
Cresco Labs is one of the largest vertically-integrated
multi-state cannabis operators in the United States. Cresco is
built to become the most important company in the cannabis industry
by combining the most strategic geographic footprint with one of
the leading distribution platforms in North America. Employing a
consumer-packaged goods (“CPG”) approach to cannabis, Cresco’s
house of brands is designed to meet the needs of all consumer
segments and includes some of the most recognized and trusted
national brands including Cresco, Remedi and Mindy’s, a line of
edibles created by James Beard Award-winning chef Mindy Segal.
Sunnyside*, Cresco’s national dispensary brand, is a
wellness-focused retailer designed to build trust, education and
convenience for both existing and new cannabis consumers.
Recognizing that the cannabis industry is poised to become one of
the leading job creators in the country, Cresco has launched the
industry’s first national comprehensive Social Equity and
Educational Development (SEED) initiative designed to ensure that
all members of society have the skills, knowledge and opportunity
to work in and own businesses in the cannabis industry. Learn more
about Cresco Labs at www.crescolabs.com.
Cresco Forward-Looking
Statements
This press release contains “forward-looking information” within
the meaning of applicable Canadian securities legislation and may
also contain statements that may constitute "forward-looking
statements" within the meaning of the safe harbor provisions of the
United States Private Securities Litigation Reform Act of 1995.
Such forward-looking information and forward-looking statements are
not representative of historical facts or information or current
condition, but instead represent only Cresco's beliefs regarding
future events, plans or objectives, many of which, by their nature,
are inherently uncertain and outside of Cresco's control.
Generally, such forward-looking information or forward-looking
statements can be identified by the use of forward-looking
terminology such as, ‘may,’ ‘will,’ ‘should,’ ‘could,’ ‘would,’
‘expects,’ ‘plans,’ ‘anticipates,’ ‘believes,’ ‘estimates,’
‘projects,’ ‘predicts,’ ‘potential’ or ‘continue’ or the negative
of those forms or other comparable terms. Cresco’s forward-looking
statements involve known and unknown risks, uncertainties and other
factors which may cause Cresco’s actual results, performance or
achievements to be materially different from any future results,
performance or achievements expressed or implied by the
forward-looking statements, including but not limited to those
risks discussed under "Risk Factors" in Cresco’s CSE Listing
Statement filed with SEDAR; and other factors, many of which are
beyond the control of Cresco. Readers are cautioned that the
foregoing list of factors is not exhaustive. Because of these
uncertainties, you should not place undue reliance on Cresco’s
forward-looking statements. No assurances are given as to the
future trading price or trading volumes of Cresco’s shares, nor as
to Cresco’s financial performance in future financial periods.
Cresco does not intend to update any of these factors or to
publicly announce the result of any revisions to any of Cresco’s
forward-looking statements contained herein, whether as a result of
new information, any future event or otherwise. Except as otherwise
indicated, this press release speaks as of the date hereof. The
distribution of this press release does not imply that there has
been no change in the affairs of Cresco after the date hereof or
create any duty or commitment to update or supplement any
information provided in this press release or otherwise.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200127005724/en/
IIP Contact: Catherine Hastings Chief Financial Officer, Chief
Accounting Officer and Treasurer Innovative Industrial Properties,
Inc. (858) 997-3332
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