Innovative Industrial Properties Acquires Pennsylvania Property and Enters Into Long-Term Lease with Green Leaf Medical
May 20 2019 - 4:30PM
Business Wire
Leading REIT for the Medical-Use Cannabis
Industry Expands Portfolio to 21 Properties Comprising
Approximately 1.6 Million Square Feet in 11 States
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 Saxton,
Pennsylvania, which comprises two buildings totaling approximately
266,000 square feet of industrial space.
The purchase price for the Pennsylvania property was $13.0
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 Green Leaf Medical, LLC (Green Leaf
Medical), which intends to operate the property as a licensed
medical-use cannabis cultivation and processing facility. Green
Leaf Medical has redeveloped approximately 103,000 square feet of
the industrial space for medical-use cannabis cultivation and
processing, with the remaining approximately 163,000 square of
industrial space available for future redevelopment.
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 are pleased to add multi-state operator Green Leaf Medical
to our premier tenant roster," said Paul Smithers, President and
Chief Executive Officer of IIP. "Green Leaf Medical has achieved
tremendous success in Maryland in a short period of time, and is
focused on replicating that model across a number of states,
including Pennsylvania. We are thrilled to serve as one of their
capital sources to allow them to continue those expansion
initiatives and reach an ever-growing number of patients across the
Northeast."
Green Leaf Medical conducts licensed medical-use cannabis
operations in multiple states, holding cultivation, extraction and
retail licenses in Maryland, Pennsylvania, Ohio and Virginia.
According to Green Leaf Medical, its cultivation facility in
Frederick, Maryland, generated over $9 million in sales in its
first eleven months of operations under its gLeaf brand, with Green
Leaf Medical's consolidated operations achieving positive net
operating income in 2018 in excess of 20 percent of sales. Green
Leaf Medical has raised $24 million since its inception in 2014 and
holds one of 25 grower / processor licenses in Pennsylvania.
"Our sale leaseback transaction with IIP was an optimal solution
for us to unlock the capital we had invested in the facility and
redeploy that capital across our multi-state operating platform,"
said Phil Goldberg, Chief Executive Officer of Green Leaf Medical.
"We look forward to launching our cultivation and processing
operations to service the tremendous demand from patients in
Pennsylvania."
As of May 20, 2019, IIP owned 21 properties located in Arizona,
California, Colorado, Illinois, Maryland, Massachusetts, Michigan,
Minnesota, New York, Ohio and Pennsylvania, totaling approximately
1.6 million rentable square feet (including approximately 221,000
rentable square feet under development/redevelopment), which were
100% leased with a weighted-average remaining lease term of
approximately 15.1 years. As of May 20, 2019, IIP had invested
approximately $213.2 million in the aggregate (excluding
transaction costs) and had committed an additional approximately
$45.6 million to reimburse certain tenants and sellers for
completion of construction and tenant improvements at IIP's
properties. IIP's average current yield on invested capital is
approximately 14.7% for these 21 properties, calculated as (a) the
sum of the current base rents, supplemental rent (with respect to
the lease with PharmaCann LLC at one of IIP's New York properties)
and property management fees (after the expiration of applicable
base rent abatement periods), divided by (b) IIP's aggregate
investment in these properties (excluding transaction costs and
including aggregate potential development/redevelopment funding and
tenant reimbursements of approximately $45.6 million).
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, Green Leaf Medical 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/20190520005707/en/
Company Contact:Catherine HastingsChief Financial Officer, Chief
Accounting Officer and TreasurerInnovative Industrial Properties,
Inc.(858) 997-3332
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