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 located at 911
Industrial Street in New Castle, Pennsylvania, which comprises
approximately 108,000 square feet of industrial space situated on
approximately 7.4 acres.
The purchase price for the property was approximately $8.9
million (excluding transaction costs). Concurrent with the closing
of the purchase, IIP entered into a long-term, triple-net lease
agreement with Holistic Industries, Inc. (“Holistic”), which
intends to continue to operate the property as a medical-use
cannabis cultivation and processing facility. Holistic is expected
to complete additional tenant improvements for the property, for
which IIP has agreed to provide reimbursement of up to
approximately $6.4 million. Assuming full reimbursement for the
tenant improvements, IIP’s total investment in the property will be
approximately $15.3 million.
This sale-leaseback transaction marks IIP’s third acquisition
and lease with Holistic, with prior IIP acquisitions and leases for
Holistic’s licensed cannabis cultivation and processing facilities
in Maryland and Massachusetts.
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 have teamed with Holistic as their long-term real estate
partner since the acquisition and lease of our Maryland property in
2017, and are thrilled to further expand our relationship with them
in Pennsylvania, which continues to develop as one of the most
vibrant medical cannabis markets in the United States,” said Paul
Smithers, President and Chief Executive Officer of IIP. “We greatly
value our long-term relationship with the Holistic team, and look
forward to supporting their real estate capital needs for many
years to come.”
Holistic is one of the largest private, vertically-integrated
multi-state operators in the cannabis industry, with operations in
California, Maryland, Massachusetts, Michigan, Pennsylvania and
Washington D.C. Founded by Chief Executive Officer Josh Genderson
in 2011, Holistic’s success is driven by its unique and scalable
approach and mission to be the best place to work, shop and invest
in the cannabis industry. Holistic is dedicated to delivering
exceptional cannabis products to patients and customers in an
environment of highly focused customer service and individualized
patient care.
“Over the past three years, we have partnered with the IIP team
for real estate-based capital solutions that have helped us fund
key expansion initiatives and the development of our cannabis
cultivation and processing facilities,” said Josh Genderson, Chief
Executive Officer of Holistic. “IIP’s strong support allows us to
continue to focus on our growth as a national medical and consumer
goods company, a cultivation and extraction network and a retail
dispensary chain.”
With first sales in 2018, the Pennsylvania medical cannabis
market has grown significantly, and according to the Pennsylvania
Department of Health’s report dated May 15, 2020, over 300,000
patient certifications have been issued by approved practitioners
since the program began. Similar to other states during this
coronavirus health epidemic, in March 2020, Pennsylvania state
authorities issued orders to close operations for all non-essential
businesses, though deemed regulated medical-use cannabis providers
as essential businesses, allowing them to remain open, subject to
certain social-distancing measures and other regulations focused on
protecting the health of patients and employees.
As of June 10, 2020, IIP owned 57 properties located in Arizona,
California, Colorado, Florida, Illinois, Maryland, Massachusetts,
Michigan, Minnesota, New York, Nevada, North Dakota, Ohio,
Pennsylvania and Virginia, totaling approximately 4.3 million
rentable square feet (including approximately 1.3 million rentable
square feet under development/redevelopment), which were 99.2%
leased (based on square footage) with a weighted-average remaining
lease term of approximately 16.0 years. As of June 10, 2020, IIP
had invested approximately $769.8 million in the aggregate
(excluding transaction costs) and had committed an additional
approximately $128.9 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 $8.9 million that may be funded in the future
pursuant to IIP’s lease with a tenant at one of IIP’s Illinois
properties, or approximately $22.5 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.
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, Holistic 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/20200610005832/en/
Catherine Hastings Chief Financial Officer, Chief Accounting
Officer and Treasurer Innovative Industrial Properties, Inc. (858)
997-3332
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