Power REIT (NYSE-AMEX: PW and PW.PRA) (“Power REIT” or the “Trust”)
today announced that it has acquired a 9.35-acre property in Craig
County, Oklahoma (the “Property”) through a wholly owned subsidiary
(“PropCo”). The Property is located in the northeast corner of
Oklahoma which offers a favorable growing climate for greenhouse
cultivation.
As part of the transaction, Power REIT has
agreed to fund the renovation of approximately 40,000 square feet
of greenhouse space, 3,000 square feet of office space, and 100,000
square feet of fully fenced outdoor growing area with 20,000+
square feet of hoop structures. Power REIT’s total capital
commitment for the project including the property acquisition cost
is approximately $2.65 million.
LEASE STRUCTURE
Concurrent with the acquisition, PropCo entered
into a 20-year “triple-net” lease (the “Lease”) with Vinita
Cannabis LLC (“VC”), which will operate the Property as a cannabis
cultivation facility. The Lease requires VC to pay all property
related expenses including maintenance, insurance, and taxes. After
the initial 20-year term, the Lease provides two, five-year renewal
options and has a personal guarantee from an owner of VC. As
mandated by the Lease, VC will maintain a medical marijuana license
and will operate in accordance with all Oklahoma and municipal
regulations. The Lease also prohibits the retail sale of cannabis
at the Property.
After an initial deferred rent period to allow
for renovations, the Lease stipulates rental payments that provide
PropCo with a full return of its invested capital over the next
three years, and thereafter, provides an approximately 13% yield
increasing thereafter at a rate of 3% per annum. The Lease, as
structured, provides straight-line annual rent of approximately
$503,000, representing an unleveraged Core FFO yield of
approximately 19% on the invested capital.
David Lesser, Power REIT’s Chairman and
CEO, commented, “We are expanding our nationwide
footprint and diversifying portfolio risk with this acquisition in
Oklahoma. Our debut in this state positions us to participate in
what has been coined, the “wild-wild-west” and benefit from the
opportunities inherent with the Oklahoma cannabis market rapid
expansion. This cultivation facility is already operational and
will be upgraded to provide operational improvements. There is also
ample expansion opportunity that will allow our tenant to
capitalize on the increasing demand for cannabis products in
Oklahoma.”
VC is led by Jared Schrader, an experienced
cannabis cultivation operator with a solid track record. Mr.
Schrader recently grew revenue at a Colorado cannabis cultivation
facility from annual revenue of $150,000 to weekly revenue of over
$150,000 (i.e. > $8 million annually) over the span of two
years. Simultaneous with Power REIT’s acquisition of the Property,
Millennium Investment and Acquisition Company Inc. (“MILC”)
provided startup capital to VC whereby MILC is a majority owner of
VC in the form of a preferred equity ownership stake in a joint
venture with the management team of WC. David H Lesser, Power
REIT’s Chairman and CEO is also Chairman and CEO of MILC (ticker:
MILC).
“VC is thrilled to have Power REIT’s support to
facilitate taking this project, stated Jared
Schrader, VinCann LLC’s
President. “Taking over the existing
operations gives us a running start in Oklahoma and we look forward
to building a team which can compete favorably within this rapidly
growing market. We believe this property is well-positioned to
allow us to become a large-scale producer of high-quality cannabis
at a competitive cost. We are focused on speed to revenue as well
as ramping up our plant count which will drive substantial revenue
growth.”
Mr.
Lesser concluded “We continue
to deploy capital on very attractive terms within the CEA space,
while focusing on leasing properties to regulated cannabis
tenant-operators. This has driven dramatic growth that we believe
will continue with the current demand for CEA real estate. We also
believe that our relatively low trading multiple of Core FFO
combined with this dramatic growth trajectory creates a compelling
investment opportunity. We look forward to additional announcements
in the near future as we continue to implement our strategic
business plan.”
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 and approximately 4,600 square foot 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 specialized real estate
investment trust (REIT) that owns sustainable 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 for the cultivation
of food and cannabis. Power REIT is focuses on the “Triple Bottom
Line” with a commitment to Profit, Planet and People…
Additional information about Power REIT can be
found on its website: 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.
CONACT: |
|
David H. Lesser, Chairman &
CEO |
Mary Jensen, Investor
Relations |
dlesser@pwreit.com |
mary@irrealized.com |
212-750-0371 |
310-526-1707 |
|
|
301 Winding Road |
|
Old Bethpage, NY 11804 |
|
www.pwreit.com |
|
Power REIT (AMEX:PW)
Historical Stock Chart
From Feb 2024 to Mar 2024
Power REIT (AMEX:PW)
Historical Stock Chart
From Mar 2023 to Mar 2024