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 property in southern
California, which comprises approximately 70,000 square feet of
industrial space.
The purchase price for the property was $17.5 million (excluding
transaction costs). Concurrent with the closing of the purchase,
IIP entered into a long-term, triple-net lease at the property with
Kings Garden Inc., for continued operation as a licensed cannabis
cultivation, manufacturing and distribution facility. Including
this property, IIP leases five properties to Kings Garden, which
includes the four-property industrial portfolio comprising an
aggregate of approximately 102,000 square feet that IIP acquired in
April of last year in southern California.
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.
“Kings Garden has truly differentiated itself in the California
market over the past five-plus years by its dedication to
developing the highest quality cannabis products, which has
translated to its consistent strong growth and success throughout
that time,” said Paul Smithers, President and Chief Executive
Officer of IIP. “We are thrilled to expand our long-term real
estate partnership with a proven operator dedicated to excellence
in product quality and operations.”
Kings Garden 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, Kings Garden has developed a distinguishing brand in the
southern California market, including botanicals, concentrates and
accessories. Kings Garden has over 200 employees, and has raised
approximately $55 million in capital since inception.
“We are excited to partner again with the IIP team on this
transaction,” said Michael King, Chairman and Chief Executive
Officer of Kings Garden. “IIP has been a great long-term real
estate partner, providing flexible real estate solutions, being
highly responsive and moving quickly to address our needs, while
enabling us to retain full operational control over our
state-of-the-art facilities, where we plan to continue to develop
the highest quality cannabis products for our California customers
in the many years to come.”
Similar to other states during this coronavirus health crisis,
California authorities ordered all businesses that are not offering
essential services to close operations for a period of time.
However, regulated cannabis operators are permitted to continue
selling both adult-use and medical-use cannabis products, and have
been categorized as essential. Despite stay-at-home restrictions,
according to Marijuana Business Daily, regulated adult-use cannabis
sales in California were approximately $248 million for April,
representing a 17% increase from one year ago. Also according to
Marijuana Business Daily, while only 180 of California’s 482
municipalities and 29 of its 58 counties allow for regulated
cannabis companies to operate within their borders, the current
coronavirus pandemic and associated severe economic disruption are
causing localities to reevaluate their positions on banning
cannabis operations, in consideration of much-needed job creation
and tax revenue.
As of May 12, 2020, IIP owned 56 properties located in Arizona,
California, Colorado, Florida, Illinois, Maryland, Massachusetts,
Michigan, Minnesota, New York, Nevada, North Dakota, Ohio,
Pennsylvania and Virginia, totaling approximately 4.1 million
rentable square feet (including approximately 1.3 million rentable
square feet under development/redevelopment), which were 99.2%
leased (based on square footage) with a weighted-average remaining
lease term of approximately 16.0 years. As of May 12, 2020, IIP had
invested approximately $739.7 million in the aggregate (excluding
transaction costs) and had committed an additional approximately
$140.6 million to reimburse certain tenants and sellers for
completion of construction and tenant improvements at IIP’s
properties. These statistics do not include up to approximately
$10.7 million that may be funded in the future pursuant to IIP’s
lease with a tenant at one of IIP’s Illinois properties, or
approximately $23.8 million that may be funded in the future
pursuant to IIP’s lease with a tenant at one of IIP’s Massachusetts
properties, as the tenants at those properties may not elect to
have IIP disburse those funds to them and pay IIP the corresponding
base rent on those funds. These statistics also treat IIP’s Los
Angeles, California property as not leased, due to the tenant being
in receivership and its ongoing default in its obligation to pay
rent at that location.
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 California
property, Kings Garden 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.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200512005972/en/
Catherine Hastings Chief Financial Officer, Chief Accounting
Officer and Treasurer Innovative Industrial Properties, Inc. (858)
997-3332
Innovative Industrial Pr... (NYSE:IIPR)
Historical Stock Chart
From Apr 2024 to May 2024
Innovative Industrial Pr... (NYSE:IIPR)
Historical Stock Chart
From May 2023 to May 2024