Power REIT Acquires Greenhouse Cannabis Cultivation Facility in Highly Accretive Transaction
February 04 2021 - 7:16AM
Power REIT (NYSE-AMEX: PW and PW.PRA) (“Power REIT” or the “Trust”)
today announced that it has acquired a 37,000 square foot
state-of-the art greenhouse cannabis cultivation facility located
in Riverside County, California (the “Property”) through a wholly
owned subsidiary (“PropCo”) for $7.685 million. Power REIT funded
the transaction using $2.685 million of cash on hand and the
issuance of 192,308 shares of Power REIT’s Series A Preferred Stock
(NYSE American ticker: PW.PRA), which had a closing price of $26.00
per share on February 2, 2021.
The property is leased to Canndescent
(“Canndescent”), the #1 selling flower brand for luxury cannabis,
with over 50% store penetration in California. Canndescent offers
ultra-premium products grown through a proprietary cultivation
process. The lease provides straight-line annual rent of
approximately $1,074,000 which represents an unleveraged CORE FFO
yield to the Common Shares of Power REIT of greater than 26%. The
transaction increases Power REIT’s CORE FFO on a run rate basis by
approximately $0.21 per share relative to the prior run rate
guidance. This increase in CORE FFO is based on using proceeds from
the pending Rights Offering that Power REIT is conducting in order
to fund the acquisition. Accordingly, such calculation is based on
adding approximately 101,000 common shares in order to provide an
indication of the pro-forma impact from the acquisition.
David Lesser, Power REIT’s Chairman and CEO,
commented, “This transaction demonstrates Power REIT’s ability to
source and close accretive real estate acquisitions that we believe
should result in the creation of significant shareholder value.
This acquisition expands our national footprint into the California
market, which is the largest cannabis market in the United States.
The acquisition provides attractive valuation metrics including a
discount to replacement cost and a lower price than recent
comparable property sales in the market. We are also pleased to
establish a relationship with Canndescent which is a sophisticated
cannabis operator with premier brands and significant customer
loyalty.”
Adrian Sedlin, Founder and CEO of Canndescent,
commented, “We are excited to partner with Power REIT and are
already exploring additional pipeline and business opportunities
that could be mutually beneficial to us and Power REIT as we both
continue to expand our respective businesses.”
Mr. Lesser concluded, “In addition, we believe
that our previously announced Rights Offering is a very investor
friendly component of our capital plan that should allow
shareholders the opportunity to participate in our immediate growth
plans. As previously announced, we have extended the closing on the
Rights Offering to February 5, 2021. This was in response to the
significant interest we have received and to allow as many
shareholders as possible to participate. We are optimistic about
our acquisition pipeline and hope to announce additional
acquisitions in the near future.”
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 CANNDESCENT
CANNDESCENT leads the cannabis industry in
innovation and empowers adults to turn down the noise, unlock the
moment and transform their lives with ultra-premium cannabis
products. In 2015, CANNDESCENT redefined cannabis, launching the
industry's first luxury brand and becoming the first cultivator to
pioneer effects-based cannabis by introducing user-friendly
categories like Calm, Cruise, Create, Connect and Charge. Since
2017, CANNDESCENT has been California's #1-selling,
luxury flower brand; in 2018, it launched the industry's first
commercial-scale solar project; in 2019, CANNDESCENT, with its
other brands, became the #1-selling flower company in
the California market. Consumers can purchase CANNDESCENT
products in select dispensaries across California. Learn more
about the company at: www.canndescent.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.
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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