Power REIT (NYSE-AMEX: PW and PW.PRA) (“Power REIT” or the “Trust”)
today announced that it acquired two properties with a total of
4.21 acres 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 approximately
21,732 square foot greenhouse and processing facility for
approximately $1.84 million including the land acquisition
cost.
Concurrent with the acquisition, PropCo entered
into a 20-year “triple-net” lease with The Grail Project LLC
(“Grail Project”) which will operate a cannabis cultivation
facility. The lease requires Grail Project to pay all property
related expenses including maintenance, insurance and taxes. After
the initial 20-year term, Grail Projects’ lease provides four,
five-year renewal options. The lease also has a personal guarantee
from the owner of Grail Project.
The lease requires Grail Project to maintain a
medical marijuana license and to operate in accordance with all
Colorado and municipal regulations and prohibits retail sales of
its products from the property. The lease is structured to provide
straight-line annual rent of approximately $350,000 which
represents an unleveraged CORE FFO yield of approximately 19% on
the invested capital. The transaction increases Power REIT’s CORE
FFO on a run rate basis by approximately $0.18 per share.
David Lesser, Power REIT’s Chairman and
CEO, commented, “We continue to deploy capital on a highly
accretive basis and in a manner that supports our investment thesis
of investing in sustainable greenhouse properties. We remain
enthusiastic about expanding our greenhouse portfolio in Colorado,
which should compete favorably with indoor cultivation facilities,
while providing real estate for Gail Project to grow high quality
cannabis at a competitive cost.”
FFO ASSUMPTIONS
The acquisition described above is immediately
accretive to CORE FFO by adding approximately $350,000 of
straight-line rent that translates to incremental CORE FFO of
approximately $0.18 per share per annum on a run rate basis.
Omitting any future acquisition or financing activity, this
transaction along with the other recently announced transactions
should increase CORE FFO per share to approximately $2.35 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.
Project Grail owner Andrew Duvall,
commented “My team and I are excited about the opportunity
to work and grow with Power REIT. We currently operate two indoor
cultivation facilities and a retail dispensary in Colorado. We look
forward to moving into our new Greenhouse to take our company to
the next level. Coming from craft indoor cannabis cultivation,
greenhouses did not appeal much to me. When I toured some of Power
REIT’s greenhouse properties, my preconceived notions disappeared
and I could see the true potential for our new brand to grow. The
cost of production will be substantially lower than indoor
cultivation and we are confident we can grow high quality cannabis
flower that is competitive with our indoor cultivation. I look
forward to growing with Power REIT as this is just the first phase
of many.”
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 $0.59 per share per quarter assuming no additional transactions
beyond what has now been announced. This represents 354% growth in
about a year and a half. 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 recently announced a Rights Offering that should provide
capital to continue to invest on a highly accretive basis designed
to continue this dramatic growth trajectory. Power REIT has an
attractive investment value proposition - 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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