Leading REIT for the Medical-Use Cannabis Industry Expands Portfolio
to 21 Properties Comprising Approximately 1.6 Million Square Feet in 11
States
SAN DIEGO–(BUSINESS WIRE)–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 Saxton, Pennsylvania, which comprises
two buildings totaling approximately 266,000 square feet of industrial
space.
The purchase price for the Pennsylvania property was $13.0 million
(excluding transaction costs). Concurrent with the closing of the
purchase, IIP entered into a long-term, triple-net lease agreement with
a subsidiary of Green Leaf Medical, LLC (Green Leaf Medical), which
intends to operate the property as a licensed medical-use cannabis
cultivation and processing facility. Green Leaf Medical has redeveloped
approximately 103,000 square feet of the industrial space for
medical-use cannabis cultivation and processing, with the remaining
approximately 163,000 square of industrial space available for future
redevelopment.
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 pleased to add multi-state operator Green Leaf Medical to our
premier tenant roster,” said Paul Smithers, President and Chief
Executive Officer of IIP. “Green Leaf Medical has achieved tremendous
success in Maryland in a short period of time, and is focused on
replicating that model across a number of states, including
Pennsylvania. We are thrilled to serve as one of their capital sources
to allow them to continue those expansion initiatives and reach an
ever-growing number of patients across the Northeast.”
Green Leaf Medical conducts licensed medical-use cannabis operations in
multiple states, holding cultivation, extraction and retail licenses in
Maryland, Pennsylvania, Ohio and Virginia. According to Green Leaf
Medical, its cultivation facility in Frederick, Maryland, generated over
$9 million in sales in its first eleven months of operations under its
gLeaf brand, with Green Leaf Medical’s consolidated operations achieving
positive net operating income in 2018 in excess of 20 percent of sales.
Green Leaf Medical has raised $24 million since its inception in 2014
and holds one of 25 grower / processor licenses in Pennsylvania.
“Our sale leaseback transaction with IIP was an optimal solution for us
to unlock the capital we had invested in the facility and redeploy that
capital across our multi-state operating platform,” said Phil Goldberg,
Chief Executive Officer of Green Leaf Medical. “We look forward to
launching our cultivation and processing operations to service the
tremendous demand from patients in Pennsylvania.”
As of May 20, 2019, IIP owned 21 properties located in Arizona,
California, Colorado, Illinois, Maryland, Massachusetts, Michigan,
Minnesota, New York, Ohio and Pennsylvania, totaling approximately 1.6
million rentable square feet (including approximately 221,000 rentable
square feet under development/redevelopment), which were 100% leased
with a weighted-average remaining lease term of approximately 15.1
years. As of May 20, 2019, IIP had invested approximately $213.2 million
in the aggregate (excluding transaction costs) and had committed an
additional approximately $45.6 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 14.7% for these 21 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 (after the expiration of applicable base rent abatement
periods), 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 $45.6 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 Pennsylvania property, Green Leaf
Medical and the Pennsylvania 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.
Contacts
Company Contact:
Catherine Hastings
Chief Financial Officer,
Chief Accounting Officer and Treasurer
Innovative Industrial
Properties, Inc.
(858) 997-3332
