Innovative Industrial Properties Acquires California Property Portfolio and Enters into Long-Term Leases with Licensed Operator
April 16 2019 - 4:19PM
Business Wire
Acquisition Represents IIP's Second Investment
in California, Expanding Footprint to 18 Properties in 11
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 acquisition of a five-property portfolio in
southern California, which comprises approximately 102,000 square
feet of industrial space. This acquisition marks IIP’s second
investment in California, following on IIP's acquisition in
Sacramento earlier this year.
The purchase price for the southern California portfolio was
approximately $27.1 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 licensed
operator, which intends to continue to operate the properties as
licensed cannabis cultivation, manufacturing, processing 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 excited to forge this new tenant relationship with one
of the preeminent licensed operators in southern California," said
Paul Smithers, President and Chief Executive Officer of IIP. "This
operator is a true innovator in the industry, developing a strong
brand that is recognized for its consistent high quality, and we
are thrilled to team with them as their long-term real estate
partner. The California regulated cannabis market is poised for
explosive growth in the coming years, as the regulated program
continues to roll out and a focus is made on transitioning illicit
sales to the regulated marketplace."
The operator is licensed for cannabis cultivation, nursery,
manufacturing, processing, delivery and distribution. With its
advanced growing techniques, state-of-the-art facilities and
research and development for the creation of new proprietary
genetics, the tenant has developed a distinguishing brand in the
southern California market, including botanicals, concentrates and
accessories.
As of April 16, 2019, IIP owned 18 properties located in
Arizona, California, Colorado, Illinois, Maryland, Massachusetts,
Michigan, Minnesota, New York, Ohio and Pennsylvania, totaling
approximately 1,230,000 rentable square feet (including
approximately 159,000 rentable square feet under
development/redevelopment), which were 100% leased with a
weighted-average remaining lease term of approximately 14.9 years.
As of April 16, 2019, IIP had invested approximately $191.3 million
in the aggregate (excluding transaction costs) and had committed an
additional approximately $34.7 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 14.9% for these 18 properties, calculated
as (a) the sum of the current base rents, 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 $34.7
million).
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.
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, the tenant 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/20190416005999/en/
Catherine HastingsChief Financial Officer, Chief Accounting
Officer and TreasurerInnovative Industrial Properties, Inc.(858)
997-3332
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