Power REIT (NYSE-AMEX: PW and PW.PRA) (“Power REIT” or the “Trust”)
today announced that it acquired a 4.31-acre parcel in Ordway,
Colorado (the “Property”) through a wholly owned subsidiary
(“PropCo”).
The property has been leased by The Apotheke
(“Apotheke”), a Minority Woman-Owned Business, which is owned and
operated by Ms. Viviana Fernandez, and is one of only a few
minority women owned cannabis businesses in Colorado. Ms. Fernandez
is a seasoned operator with extensive grower and dispensary
expertise.
Ms. Fernandez, The Apotheke’s owner and
operator, commented, “I am excited to expand my operations and
shift my operating focus to Crowley County because I believe
greenhouses are the future for cannabis cultivation and this was a
perfect union between us and Power REIT, which is focused on
greenhouse facilities. As we move forward on our growth trajectory,
we are confident that Power REIT will provide a long-term real
estate solution that will serve our expansion needs. We hope to
quickly grow this facility beyond this initial phase – we certainly
have big plans for this property in the future.”
Power REIT has agreed to fund the immediate
construction of an 21,548 square foot greenhouse and processing
facility with a total capital commitment of approximately $1.8
million including the land acquisition cost. Concurrent with the
acquisition of the Property, PropCo entered into a 20-year
“triple-net” lease with Apotheke, which will operate a cannabis
cultivation facility. The lease requires Apotheke to pay all
property related expenses including maintenance, insurance and
taxes. After the initial 20-year term, Apotheke’s lease provides
two, five-year renewal options. The lease also has a personal
guarantee from the owner.
The lease requires Apotheke to maintain a
medical marijuana license and to operate in accordance with all
Colorado and municipal regulations while prohibiting retail sales
of its products from the property. The lease is structured to
provide straight-line annual rent of approximately $342,000 which
represents an unleveraged CORE FFO yield of approximately 19% on
the invested capital. The transaction increases Power REIT’s CORE
FFO on a run rate basis by approximately $0.09 per share. Core FFO
assumptions are based on using proceeds from the pending Rights
Offering Power REIT is conducting in order to fund the acquisition.
Accordingly, such calculation is based on adding approximately
68,000 shares in order to provide an indication of the pro-forma
impact from such acquisition.
David Lesser, Power REIT’s Chairman and CEO,
commented, “This transaction is evidence of Power REIT’s commitment
to ESG (Environment, Social and Governance), which is part of our
focus on the “Triple Bottom Line and supports our investment thesis
of investing in sustainable real estate while supporting a minority
woman-owned business. We are happy to provide another iteration of
this upgraded prototype greenhouse cultivation facility in Southern
Colorado. We believe Ms. Fernandez is a high-quality business
operator that has the expertise to ramp up her operations with our
financial support.” Mr. Lesser concluded, “In addition, we believe
that our previously announced Rights Offering, should allow
shareholders the opportunity to participate in our immediate growth
plans. We are optimistic about our acquisition pipeline and hope to
announce additional acquisitions soon.”
FFO ASSUMPTIONS
The acquisition described above is immediately
accretive to CORE FFO by adding approximately $342,000 of
straight-line rent that translates to incremental CORE FFO of
approximately $0.09 per share per annum on a run rate basis on a
pro-forma basis adjusting for the shares that would be issued in
the Rights Offering to fund the investment. Omitting any future
acquisition or financing activity, this transaction along with the
other recently announced greenhouse related transactions should
increase CORE FFO per share to approximately $2.44 per year on an
annualized run rate basis. This compares to CORE FFO of $0.56 per
share prior to embarking on the Company’s updated business plan in
July 2019 of focusing its real estate investments in Controlled
Environment Agriculture properties.
UPDATED INVESTOR
PRESENTATION
Power REIT has posted an updated investor
presentation which is available using the following link:
https://www.pwreit.com/investors
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. Additional information about Power REIT
can be found on its website: www.pwreit.com
ABOUT THE APOTHEKE
The Apotheke was founded in 2018 in Colorado
Springs by a woman on a mission to create craft quality Cannabis.
With innovative solutions and cultivating techniques, we are
setting a new standard in the Cannabis industry by breeding a vast
selection of medical strains. We offer high quality cannabis
flowers, edibles, ingestibles and topicals targeted to treat a
variety of ailments. We are focused on creating an exceptional
experience for our customers by educating and working with each
individual to provide a product that will have a positive impact on
their lives. Additional information about The Apotheke can be found
on its website: https://www.theapotheke.co
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.
CONACT:
David H. Lesser, Chairman & CEO |
Mary Jensen, Investor Relations |
dlesser@pwreit.com |
mary@irrealized.com |
212-750-0371 |
310-526-1707 |
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301 Winding RoadOld Bethpage, NY
11804 |
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www.pwreit.com |
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