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 Athol,
Massachusetts, which comprises approximately 199,000 square feet of
industrial space.
The purchase price for the Massachusetts property was
approximately $26.8 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) for continued operation as a licensed
cannabis cultivation and processing facility. AWH is expected to
complete tenant improvements for the property, for which IIP has
agreed to provide reimbursement of up to approximately $22.2
million. Assuming full reimbursement for the tenant improvements,
IIP’s total investment in the property will be $49.0 million. The
lease provides for an initial annualized aggregate base rent of
13.5% of the sum of the initial purchase price and tenant
improvement allowance, subject to a phase-in of the base rent
associated with the tenant improvement allowance at the beginning
of the term.
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.
This Massachusetts property represents IIP’s third 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
regulated cannabis cultivation and processing facility, with IIP’s
total investment in the property being $33.0 million. In July 2019,
IIP acquired a 145,000 square foot industrial facility in Michigan
and entered into a long-term, triple-net lease agreement with AWH
for use as a regulated cannabis cultivation and processing facility
upon completion of redevelopment, with IIP’s total investment in
the property, assuming full reimbursement for tenant improvements,
expected to be approximately $19.8 million.
AWH is a vertically integrated cannabis company, and is
operating in each of Massachusetts, Illinois, Michigan and Ohio.
AWH has raised $100 million in equity capital to date, including a
$28.2 million round of financing that closed in December of last
year. AWH is expected to have its first cannabis harvest at its
Athol facility this month, and in January, received its provisional
license from the Massachusetts Cannabis Control Commission for what
is expected to be one of the largest dispensaries on the East
Coast, a 16,000 square foot retail location situated near Faneuil
Hall and TD Garden in the heart of downtown Boston. The Boston
location is expected to open in January 2021.
“Abner and his team have achieved a tremendous amount of success
over the past year, executing on their focused business model and
ramping operations, and we are thrilled to support them as their
long-term real estate capital partner on this third transaction in
Massachusetts,” said Paul Smithers, President and Chief Executive
Officer of IIP. “We are pleased that the Commonwealth of
Massachusetts, in step with other state and local jurisdictions,
has deemed medical cannabis an essential product, providing
continued access to patients throughout the Commonwealth during
this very difficult period.”
“We greatly value our real estate partnership with IIP, and are
very pleased to team with them for a third time on our Athol
facility,” said Abner Kurtin, Chief Executive Officer and
Co-Founder of AWH. “With the tremendous acclaim and market success
of our Ozone brand in Illinois and Michigan, we look forward to
bringing our curated selection of cannabis products to the people
of Boston and throughout the Commonwealth.”
Similar to other states during this coronavirus health crisis,
Massachusetts authorities ordered all businesses that are not
offering essential services to close operations for a period of
time. However, the Massachusetts Cannabis Control Commission deemed
Medical Marijuana Treatment Centers and Certifying Health Care
Providers as essential services that will remain open during this
time, while instituting new protocols, such as certifications via
telehealth, social distancing, cleaning and steps to protect
populations particularly vulnerable to COVID-19 infection.
As of April 2, 2020, IIP owned 54 properties located in Arizona,
California, Colorado, Florida, Illinois, Maryland, Massachusetts,
Michigan, Minnesota, New York, Nevada, North Dakota, Ohio,
Pennsylvania and Virginia, totaling approximately 4.0 million
rentable square feet (including approximately 1.2 million rentable
square feet under development/redevelopment), which were 99.1%
leased (based on square footage) with a weighted-average remaining
lease term of approximately 16.1 years. As of April 2, 2020, IIP
had invested approximately $675.5 million in the aggregate
(excluding transaction costs) and had committed an additional
approximately $158.8 million to reimburse certain tenants and
sellers for completion of construction and tenant improvements at
IIP’s properties. These statistics do not include up to
approximately $13.4 million that may be funded in the future
pursuant to IIP’s lease with a tenant at one of IIP’s Illinois
properties, or the approximately $32.5 million that may be funded
in the future pursuant to IIP’s lease with a tenant at one of IIP’s
Massachusetts 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 being in receivership and its ongoing default in its
obligation to pay rent at that location.
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 market leading, vertically-integrated operator with
retail and production facilities in Illinois, Ohio, Massachusetts,
Michigan and New Jersey. AWH is breaking down traditional walls in
the cannabis marketplace to create a unique, in-store customer
experience and providing exclusive brand partnerships. AWH owns and
operates state of the art cultivation facilities, growing heirloom
and exotic-blend strains and producing a curated selection of
products with effect-based categorization. AWH operates under the
retail brands Illinois Supply and Provisions (IS&P), Michigan
Supply and Provisions (MS&P) and Ohio Supply and Provisions
(OS&P). AWH produces and distributes Ozone products and fosters
exclusive brand partnerships with brands such as Cookies. 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 acquisition and lease of the
Massachusetts property, AWH and the Massachusetts 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/20200402005816/en/
Catherine Hastings Chief Financial Officer, Chief Accounting
Officer and Treasurer Innovative Industrial Properties, Inc. (858)
997-3332
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