SAN DIEGO--(BUSINESS WIRE)--
Innovative Industrial Properties, Inc. (the “Company”) (NYSE: IIPR), the
leading provider of creative real estate capital solutions to the
medical-use cannabis industry, announced today that it closed on the
previously announced acquisition of the property located at 9220 Alaking
Court in Capitol Heights, Maryland, which is currently under development
and expected to comprise approximately 72,000 square feet upon
completion.
As previously disclosed, the initial purchase price for the property was
$8 million, and the seller will be responsible for completing certain
development milestones, for which the seller is expected to be
reimbursed $3 million. Holistic Industries LLC (“Holistic”), the tenant
at the property, is also expected to complete tenant improvements for
the building, for which the Company has agreed to provide reimbursement
of up to $4 million. Assuming full payment for each step of the
development, the Company’s total investment in the property will be $15
million. Holistic received provisional approval for the cultivation,
processing and dispensing of medical-use cannabis in the State of
Maryland by the Maryland Medical Cannabis Commission. Holistic is led by
Josh Genderson, who brings years of experience and a proven track record
in the medicinal cannabis industry.
Concurrent with the closing of the purchase, the Company entered into a
long-term, triple-net lease agreement with Holistic, which intends to
use the facility as the only medical cannabis cultivation facility in
Prince George’s County. The initial term of the lease is 16 years, with
three options to extend the term for three additional five-year periods.
The lease provides for an initial annualized aggregate base rent of 15%
of the sum of the initial purchase price, any additional seller
reimbursement and any reimbursed tenant improvements, subject to three
months of rent abatement at the beginning of the term and the Company’s
additional establishment of a rent reserve of $1.9 million that is
amortized over the initial term of the lease. The aggregate base rent is
subject to 3.25% annual increases during the initial term of the lease,
and Holistic is also responsible for paying the Company a property
management fee equal to 1.5% of the then-existing aggregate base rent.
In connection with the execution of the lease, Holistic also deposited
with the Company its initial security deposit of $1.1 million.
“We are excited to have Holistic and its experienced management team as
our tenant, and we believe the 9220 Alaking Court property will provide
the ideal, highly controlled environment for Holistic to deliver
Maryland patients the best products for treatment,” said Paul Smithers,
President and Chief Executive Officer of the Company. “In less than six
months from our initial public offering, we have committed approximately
75% of the net proceeds, and look forward to investing the balance of
the proceeds in real estate investments that meet our rigorous
underwriting standards.”
“This closing represents an important next step in achieving our
ultimate goal of providing the highest-quality, cannabis-derived medical
products at the best possible value,” said Mr. Genderson, Chief
Executive Officer of Holistic. “We will continue on our path of
providing the needful patients of Maryland with this important medicine,
and we are fortunate to have a partner like Innovative Industrial
Properties to help make that happen.”
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. intends to elect to be taxed as a
real estate investment trust. Additional information is available at www.innovativeindustrialproperties.com.
About Holistic Industries LLC
Holistic Industries LLC was founded with the mission of providing the
highest-quality medicinal cannabis to the medical patients of Maryland.
Holistic has been awarded Stage One license pre-approvals by the State
of Maryland for the cultivation and processing of medical cannabis in
Prince George's County, Maryland, and for the dispensing of medical
cannabis in Rockville, Maryland. Holistic was founded by Josh Genderson,
who brings years of experience in the medicinal cannabis industry. For
more information, visit www.holisticindustries.com.
Innovative Industrial Properties Forward-Looking Statements
This press release contains statements that the Company 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 development and lease of the Alaking Court
property and the Maryland medical-use 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.The Company 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: http://www.businesswire.com/news/home/20170530005303/en/
Innovative Industrial Properties, Inc.
Robert Sistek
Chief
Financial Officer and Executive Vice President, Investments
858-997-3332
Source: Innovative Industrial Properties, Inc.