Power REIT (NYSE American: PW) announces that it has completed the
acquisition of two greenhouse properties in southern Colorado
through two wholly owned subsidiaries for $3.75 million. The
acquisitions represent combined straight-line annual rent estimated
to be approximately $700 thousand, which translates to an
approximate 18.7% yield.
The acquisitions complement 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, “These acquisitions represent an expansion
of our new focus on investing in CEA greenhouse properties and are
immediately accretive to FFO. 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 43%, 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 relative to the more than 18% yield we have been
investing at. This is approximately triple our Stabilized FFO prior
to embarking on our new business plan.”
Mr. Lesser continued, “Both
properties are well positioned for near-term expansions of
greenhouse growing and processing space. The leases provide that we
have the option to fund expansions on comparable terms to the
original leases 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.”
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. A portion of the funds were
utilized to acquire the two aforementioned assets. In addition to
these 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 closings on the
acquisitions, Power REIT entered into “triple-net” leases that
require each 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 leases
require each 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 PROPERTIES
- Maverick 14 was acquired for $850 thousand.
The 5.54-acre property has an existing greenhouse and processing
facility totaling 8,300 square feet. As part of the transaction,
Power REIT has agreed to fund the immediate expansion of 15,120
square feet of greenhouse space for approximately $1.1 million. The
tenant has also agreed to fund the construction of an additional
2,520 square feet of processing space. Power REIT’s total capital
commitment is approximately $1.9 million.
The property is
located in the subdivision, which has been developed through an
alliance with the existing tenant and developer who have extensive
experience constructing greenhouses. An affiliate of the tenant has
also received preliminary approval to operate a dispensary in the
town where the properties are located.
- Sherman 6 was acquired for $150,000. The
vacant land parcel is comprised of 5.0 acres, which has been
approved for cannabis cultivation. As part of this transaction, the
Trust has agreed to fund the immediate construction of 15,120
square feet of greenhouse space and 7,520 square feet of processing
space on the property for approximately $1.7 million. Power REIT’s
total capital commitment is approximately $1.8 million.
The Sherman
6 tenant is owned by an affiliate of a company that
currently has three retail dispensaries in southern Colorado and
operates an 18,000 square foot indoor cannabis growing facility
that is on a short-term lease. 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.
UPDATED INVESTOR
PRESENTATION
In conjunction with these transactions, Power
REIT has updated its investor presentation to communicate the
company’s strategic business plan and recent activities. A copy of
the presentation can be found in the investors section of the Power
REIT website: www.pwreit.com
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.
CONACT:
David H. Lesser, Chairman & CEO (212) 750-0371
dlesser@pwreit.com
301 Winding Road Old Bethpage, NY 11804
212-750-0371www.pwreit.com
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