Power REIT (NYSEAMERICAN:PW) announced it has signed an agreement to acquire 522,530 square feet (sq ft) of high-tech greenhouse and cannabis processing space in Michigan for a purchase price of about $18.5 million.
The company said the greenhouse will be operated as a Michigan Regulated Cannabis Cultivation and Processing Facility and will be the largest of its kind in Michigan and one of the largest in the US.
“This acquisition is a great opportunity for Power REIT to gain scale. Like our other Controlled Environment Agriculture properties, this has significant potential for expansion,” Power REIT CEO David Lesser said in a statement.
READ: Power REIT is generating predictable cash flow from its sustainable cannabis and food cultivation land investments
“With this possible acquisition, Power REIT enters the Michigan market which is currently experiencing dramatic growth in cannabis sales at prices that are higher than national averages,” Lesser added.
“The acquisition is consistent with Power REIT’s investment strategy of focusing on sustainability, which is associated with growing in a greenhouse which will be less expensive and have a much lower carbon footprint than growing in an industrial property.”
Power REIT noted that the state-of-the-art facility features advanced greenhouse cultivation controls and a state-of-the-art irrigation/fertigation system – a turnkey setup that is ready to start growing immediately.
It added that the 66 acre property is located in an area that offers the potential for unlimited cannabis cultivation licenses as well as the possibility of adding 330,236 sq ft of cultivation and processing space in the next phase of expansion.
Power REIT said as it finalizes the transaction details it will be better able to provide guidance as to the impact of the acquisition on the company’s Core Funds From Operations (FFO), but it believes the returns should be “extremely accretive” and generally similar to recent transactions.
The company noted it has a due diligence period of about 75 days followed by a 30-day period to close the transaction, which can be extended by up to 30 additional days, but said there can be no assurance as to when or if the transaction will close.
Power REIT is a specialized real estate investment trust (REIT) that owns sustainable real estate related to infrastructure assets, including properties for controlled environment agriculture (greenhouses for the cultivation of food and cannabis), renewable energy, and transportation.
The company also boasts an acquisition pipeline in excess of $100 million at various stages of negotiations.
Contact Sean at [email protected]
Story by ProactiveInvestors
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