Acquisition Expands Footprint to 2.2 Million
Square Feet in Twelve 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 final parcel of a four-property portfolio in
southern California, which comprises approximately 79,000 square
feet of industrial space in total.
The purchase price for the southern California portfolio was
approximately $17.3 million in the aggregate (excluding transaction
costs). Concurrent with the closing of the purchase, IIP entered
into a long-term, triple-net lease at each property with a
subsidiary of Medical Investor Holdings LLC (d/b/a Vertical) for
continued operation as licensed cannabis cultivation, extraction,
manufacturing and distribution facilities in accordance with
California regulations.
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 thrilled to add Vertical and its strong management team
to our tenant roster,” said Paul Smithers, President and Chief
Executive Officer of IIP. “With its breadth of cannabis brands and
highly experienced team, Vertical is well-positioned to capitalize
on the tremendous growth of the California regulated cannabis
industry in the many years to come, and we look forward to
continuing to support Vertical and its long-term growth
initiatives.”
Vertical is a multi-state operator licensed for cannabis
cultivation, extraction, manufacturing and distribution in
California and cultivation operations in Arizona and Ohio, with an
extensive portfolio of branded cannabis products. Vertical’s
management team has decades of experience in starting, building and
running highly successful businesses in the alcohol, agriculture,
consumer product goods, distribution, entertainment, food
healthcare and medical industries.
“This strategic transaction with IIP allows us to unlock our
capital tied to our real estate and redeploy those proceeds into
the tremendous opportunities we see ahead in the cannabis industry,
in California and beyond,” said Bill Sutman, CFO of Vertical.
Smoke Wallin, Vertical’s Vice Chairman and CEO of Vertical
Wellness, added, “With our vertical integration in California and
the strength of our brand portfolio across all form factors, we
believe our brands will emerge as the preferred products across a
broad spectrum of retail customers and target consumers. We look
forward to exploring additional ways to partner with IIP as a real
estate capital partner as our company continues scale our
operations.”
As of September 12, 2019, IIP owned 30 properties located in
Arizona, California, Colorado, Illinois, Maryland, Massachusetts,
Michigan, Minnesota, New York, Nevada, Ohio and Pennsylvania,
totaling approximately 2.2 million rentable square feet (including
approximately 685,000 rentable square feet under development /
redevelopment), which were 100% leased with a weighted-average
remaining lease term of approximately 15.9 years. As of September
12, 2019, IIP had invested approximately $287.2 million in the
aggregate (excluding transaction costs) and had committed an
additional approximately $98.8 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 14.5% for these 30 properties, calculated
as (a) the sum of the current base rents (after the expiration of
applicable base rent abatement or deferral periods), supplemental
rent (with respect to the lease with PharmaCann LLC at one of IIP’s
New York properties) and property management fees, 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
$98.8 million). These statistics do not include $40.0 million that
may be funded in the future pursuant to IIP’s lease with Trulieve
Cannabis Corp. at one of IIP’s Massachusetts properties or the
additional $4.0 million which may be requested by PharmaCann LLC at
one of IIP’s Pennsylvania properties, as the tenants at those
properties may not elect to have us disburse those funds to them
and pay us the corresponding base rent on those funds.
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.
About Vertical™
Vertical is a leading vertically integrated multi-state operator
and brand and distribution company in the medical and adult-use
cannabis and hemp-based CBD industries. With have operations in
Arizona, California and Ohio which position Vertical well to take
advantage of the legalization and normalization of cannabis
globally. Vertical is led by an executive team of entrepreneurs and
business leaders from the alcohol beverage, agriculture, CPG,
distribution, entertainment, food, healthcare, and medical
industries.
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 southern
California property portfolio, Vertical and the California
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/20190912005209/en/
Catherine Hastings Chief Financial Officer, Chief Accounting
Officer and Treasurer Innovative Industrial Properties, Inc. (858)
997-3332
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