The ink is drying on a major cannabis deal…
A new cannabis mega-deal is in the books.
Innovative Industrial Properties Inc. (NYSE: IIPR) has announced it is purchasing nearly 200,000 square feet of industrial cannabis space in Athol, Massachusetts from privately-held Ascend Wellness Holdings LLC.
In a press release, the company announced it will purchase the property from Ascend for roughly $26.8 million. The release also notes that as part of the deal, Ascend will make significant improvements to the facility “for which IIPR has agreed to provide reimbursement of up to approximately $22.2 million.”
This brings the total value of the deal up to $49 million.
It’s the largest sale-leaseback deal IIPR has done with Ascend Wellness to date.
But Here’s the Real Interesting Nugget…
By way of this deal, IIPR will enter a three-way lease agreement that includes an unnamed Ascend subsidiary already operating out of the Athol property.
As owner and lessor in this three-way agreement, IIPR will earn a base rent of 13.5% of the total purchase price, which includes the initial purchase price and tenant improvement costs. That works out to more than $6.3 million in base rent each year, paid to IIPR.
It’s always easier to turn a profit on a real estate deal when you have a tenant in place already.
And $6.3 million is no small chunk of change.
So, even during this time of uncertainty, there are still deals being made.
We’ll talk again soon,
P.S. We know you have a ton of questions about the state of the cannabis market, stocks like IIPR, and other unique investments… That’s why on April 8, in real-time, Executive Director Don Yocham will answer your pressing questions as part of our first-ever NICI Town Hall. It kicks off this Wednesday, April 8 at 2:00 P.M. Register right now by clicking here.
5 responses to “Deal Watch: Cannabis REIT Makes $49 Million Move”
April 07 2020