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 5900 West
Greenhouse Drive in Willcox, Arizona, which comprises approximately
358,000 square feet of greenhouse and industrial space.
As previously disclosed, the purchase price for the property was $15.0
million. A subsidiary of The Pharm, LLC (“The Pharm”), 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 $3.0 million (the "TI Allowance"). Assuming full reimbursement for
the tenant improvements, the Company’s total investment in the property
will be $18.0 million. The Pharm is one of the largest wholesalers of
medical-use cannabis in the state of Arizona.
Concurrent with the closing of the purchase, the Company entered into a
long-term, triple-net lease agreement with a subsidiary of The Pharm,
which intends to continue to operate the property as a medical-use
cannabis cultivation and processing facility in accordance with Arizona
medical-use cannabis regulations. The initial term of the lease is 15
years, with two options to extend the term for two additional five-year
periods. The lease provides for an initial annualized aggregate base
rent of $2,520,000, payable monthly, which is equal to 14% of the sum of
the purchase price of the property and the TI Allowance, subject to an
initial partial base rent abatement. The aggregate base rent is subject
to 3.25% annual increases during the term of the lease, and The Pharm
subsidiary 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, The Pharm subsidiary also
deposited with the Company a security deposit of $630,000.
“We are very pleased to introduce The Pharm as our newest tenant, and to
be able to creatively structure a real estate transaction to meet their
capital needs for planned expansion in the Arizona market and beyond,”
said Ben Regin, Director of Investments and Finance of the Company. “We
believe that The Pharm's highly experienced, multi-disciplinary
management team is well positioned to continue to grow its market share
in a rapidly expanding Arizona medical-use cannabis market, in addition
to carrying its highly successful program to new markets in other
states. We look forward to working with The Pharm and supporting their
real estate needs for many years to come.”
“Innovative Industrial Properties collaborated with us closely
throughout this transaction, providing creative solutions to address our
specific capital needs,” said Randy Smith, Founder and Chief Executive
Officer of The Pharm. “We are thrilled to have a great real estate
partner like Innovative Industrial Properties that provides us the key
capital we need to drive our strong growth and execution on strategic
priorities.”
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 The Pharm
The Pharm is one of the largest wholesalers of medical grade cannabis in
the state of Arizona and serves 45 of Arizona's 104 retail dispensaries.
The Pharm is focused on cultivating the highest quality, organically
grown cannabis and cannabis-based derivative products tailored for the
treatment of specified medical conditions. The company's products, with
the retail trade brand "Sunday Goods", are available to state-licensed
patients in both dispensaries and online through the company's
e-commerce platform www.sundaygoods.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 lease of the Arizona property, The Pharm and
the Arizona 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/20171218005189/en/
Innovative Industrial Properties, Inc.
Catherine Hastings,
858-997-3332
Chief Financial Officer, Chief Accounting Officer and
Treasurer
Source: Innovative Industrial Properties, Inc.