Power REIT (NYSE-AMEX: PW and PW.PRA) (“Power REIT” or the “Trust”)
today announced that it acquired a 2.11 acre parcel in Crowley
County, Colorado (the “Property”) through a wholly owned subsidiary
(“PropCo”). The Property is strategically located in a part of
southern Colorado that offers a very favorable business setting and
climate for greenhouse cultivation.
As part of the transaction, Power REIT has
agreed to fund the immediate construction of an 18,528 square foot
greenhouse and processing facility for approximately $1.3 million
including the land acquisition cost.
Concurrent with the acquisition of the Property,
PropCo entered into a 20-year “triple-net” lease with a tenant
(“Green Mile”) which will operate a cannabis cultivation facility.
The lease requires Green Mile to pay all property related expenses
including maintenance, insurance and taxes. After the initial
20-year term, Green Mile’s lease provides two, five-year renewal
options. The lease also has personal guarantees from the owners of
Green Mile.
The lease requires Green Mile 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 $252,000 which
represents an unleveraged CORE FFO yield of approximately 19.2% on
the invested capital. The transaction increases Power REIT’s CORE
FFO on a run rate basis by approximately $0.13 per share.
David Lesser, Power REIT’s Chairman and
CEO, commented, “This recent acquisition represents the
latest iteration of an upgraded prototype greenhouse cultivation
facility in Southern Colorado and supports our investment thesis of
investing in sustainable greenhouse properties. We remain
enthusiastic about expanding our greenhouse portfolio in Colorado,
which should allow our tenant to compete favorably with indoor
cultivation facilities by growing high quality cannabis at a
competitive cost.”
Mr. Lesser continued, “We are
optimistic about our current acquisition pipeline and hope to
announce additional activity in the near term in Colorado as well
as other states that allow for regulated cannabis growing and
sales.”
FFO ASSUMPTIONS
The acquisition described above is immediately
accretive to CORE FFO by adding approximately $252,000 of
straight-line rent that translates to incremental CORE FFO of
approximately $0.13 per share per annum on a run rate basis.
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 $2.17 per year on an annualized run rate basis which
compares to $0.56 per share prior to embarking on our updated
business plan in July 2019.
Mr. Lesser,
concluded “Since embarking on our new business
plan focused on Controlled Environment Agriculture properties in
July 2019, Power REIT has now demonstrated dramatic growth in CORE
FFO. Our CORE FFO per share for the second quarter of 2019 was
$0.13 and we are now offering guidance that our run rate CORE FFO
is $0.54 per share per quarter assuming no additional transactions
beyond what has now been announced. This represents 315% growth in
a little over a year. Given Power REIT’s relatively small size and
the attractive investment yields that we are generating through CEA
property acquisitions positions us for continued dramatic growth.
We are actively working on a capital plan designed to continue this
dramatic growth trajectory. We have a unique value proposition,
where we currently trade at a lower multiple than typical REITs and
with a clear path to growth that far exceeds the REIT market in
general. I believe this represents a compelling opportunity for
investment that should generate attractive risk adjusted
returns.”
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
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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