Power REIT (NYSE American: PW) announces that it has completed the
acquisition of 5.2 acre property in southern Colorado for the
construction of a greenhouse cultivation facility through a wholly
owned subsidiary. Power REIT’s total investment will be
approximately $1 million and has a lease that provided
straight-line annual rent estimated to be approximately $192,000
which translates to an approximate 19% yield.
The acquisition complements Power REIT’s
existing high-quality real estate related to transportation
infrastructure, alternative energy and Controlled Environment
Agriculture (“CEA”). CEA uses innovative methods to grow plants in
optimized indoor growing environments for a given crop. Power REIT
intends to focus on CEA related real estate for growing various
crops, including cannabis.
David Lesser, Power REIT’s Chairman and
CEO, commented, “This acquisition represents additional
progress with respect to our new focus on investing in CEA
greenhouse properties and is immediately accretive to FFO. An
additional $193,000 of straight-line rent translates to incremental
FFO of approximately $0.10 per share. On a run-rate basis, and
omitting future available capital deployments, these acquisitions,
along with the other recently announced CEA related transactions
should increase FFO by over 65%, relative to our stabilized FFO
expectations prior to embarking on our improved business plan in
July 2019. Assuming we are able to deploy the remaining capital
equally over the next three quarters, our year end “run-rate” FFO
per share should exceed $1.50 per share based on deploying capital
at a 12.5% yield. Similarly, if we are able to deploy the capital
at rates in-line with our recent acquisitions, our year end
“run-rate” FFO could exceed $1.80 per share. This is more than
triple our Stabilized FFO prior to embarking on our new business
plan in the middle of last year.”
Mr. Lesser continued, “The
tenant is well positioned for near-term expansions of greenhouse
growing and processing space. The lease provides that we have the
option to fund expansions on comparable terms to the original lease
with a built-in option that allows us to accretively deploy
additional capital on attractive risk adjusted terms.” Mr.
Lesser concluded, “With an extensive acquisition pipeline,
we should be able to deploy the remainder of the capital currently
available for investment in the near term. The cannabis industry
currently suffers from extremely limited access to capital and
Power REIT should continue to see opportunities to deploy capital
on attractive risk adjusted returns.”
As previously disclosed, Power REIT recently
completed a $15.5 million debt financing at a rate of 4.62% which
fully amortizes over a 35-year term. Approximately $3.7 million of
the funds have been earmarked to acquire two assets that were
described in an announcement on February 6, 2020 and approximately
$900,000 was earmarked to expand one of the properties acquired
2019. In addition to this acquisitions, Power REIT has an extensive
pipeline of CEA projects and is actively working to deploy the
remainder of the capital available for investment.
Concurrent with the closing on this acquisition,
Power REIT entered into “triple-net” leases that requires the
tenant to pay all property related expenses including maintenance,
insurance and taxes. Each lease has a term of 20 years and provides
two 5-year renewal options for the tenant with financial guarantees
from affiliates of the tenant. The lease requires the tenant to
maintain a valid medical marijuana license and to operate in
accordance with all Colorado and municipal regulations while
prohibiting the retail sale of its products from the
properties.
ACQUIRED PROPERTY
- Maverick 5 was acquired for $150,000. The
vacant land parcel is comprised of 5.2 acres, which has been
approved for cannabis cultivation. As part of this transaction, the
Trust has agreed to fund the immediate construction of 5,040 square
feet of greenhouse space and 4,920 square feet of
head-house/processing space on the property for approximately
$868,000. Power REIT’s total capital commitment is approximately
$1.0 million.
The Maverick
5 tenant is owned by an affiliate of a company that
currently has an 8,000 square foot combined medical cannabis
dispensary and indoor cultivation facility in southern Colorado.
Given current conditions, it is anticipated that product demand
will far exceed its current production capacity.
STATEMENT ON SUSTAINABILITY
Power REIT owns real estate related to
infrastructure assets including properties for Controlled
Environment Agriculture (CEA Facilities), Renewable Energy and
Transportation.
CEA Facilities, such as
greenhouses, provide an extremely environmentally friendly
solution, which consume approximately 70% less energy than indoor
growing operations that do not benefit from “free” sunlight. CEA
facilities use 90% less water than field grown plants, and all of
Power REIT’s greenhouse properties operate without the use of
pesticides and avoid agricultural runoff of fertilizers and
pesticides. These facilities cultivate medical Cannabis, which has
been recommended to help manage a myriad of medical symptoms,
including seizures and spasms, multiple sclerosis, post-traumatic
stress disorder, migraines, arthritis, Parkinson's disease, and
Alzheimer’s.
Renewable Energy assets are
comprised of land and infrastructure associated with utility scale
solar farms. These projects produce power without the use of fossil
fuels thereby lowering carbon emissions. The solar farms produce
approximately 50,000,000 kWh of electricity annually which is
enough to power approximately 4,600 home on a carbon free
basis.
Transportation assets are
comprised of land associated with a railroad, an environmentally
friendly mode of bulk transportation.
ABOUT POWER REIT
Power REIT is a real estate investment trust
(REIT) that owns real estate related to infrastructure assets
including properties for Controlled Environment Agriculture,
Renewable Energy and Transportation. Power REIT is actively seeking
to expand its real estate portfolio related to Controlled
Environment Agriculture and Renewable Energy. Additional
information on Power REIT can be found on its website at
www.pwreit.com
CAUTIONARY STATEMENT ABOUT
FORWARD-LOOKING STATEMENTS
This document includes forward-looking
statements within the meaning of the U.S. securities laws.
Forward-looking statements are those that predict or describe
future events or trends and that do not relate solely to historical
matters. You can generally identify forward-looking statements as
statements containing the words "believe," "expect," "will,"
"anticipate," "intend," "estimate," "project," "plan," "assume",
"seek" or other similar expressions, or negatives of those
expressions, although not all forward-looking statements contain
these identifying words. All statements contained in this document
regarding our future strategy, future operations, future prospects,
the future of our industries and results that might be obtained by
pursuing management's current or future plans and objectives are
forward-looking statements. You should not place undue reliance on
any forward-looking statements because the matters they describe
are subject to known and unknown risks, uncertainties and other
unpredictable factors, many of which are beyond our control. Our
forward-looking statements are based on the information currently
available to us and speak only as of the date of the filing of this
document. Over time, our actual results, performance, financial
condition or achievements may differ from the anticipated results,
performance, financial condition or achievements that are expressed
or implied by our forward-looking statements, and such differences
may be significant and materially adverse to our security
holders.
CONTACT:
David H. Lesser, Chairman & CEO(212)
750-0371dlesser@pwreit.com
301 Winding RoadOld Bethpage, NY
11804212-750-0371www.pwreit.com
Power REIT (AMEX:PW)
Historical Stock Chart
From Aug 2024 to Sep 2024
Power REIT (AMEX:PW)
Historical Stock Chart
From Sep 2023 to Sep 2024