IIP Expands Portfolio to Over One Million Square Feet in Nine 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 Barry, Illinois, which comprises
approximately 75,000 square feet of industrial space situated on
approximately ten acres.
The purchase price for the property was $19 million (excluding
transaction costs). Concurrent with the closing of the purchase, IIP
entered into a long-term, triple-net lease agreement with a wholly owned
subsidiary of Ascend Wellness Holdings, LLC (Ascend), which intends to
operate the property as a medical-use cannabis cultivation and
processing facility in accordance with Illinois medical-use cannabis
regulations. Ascend is expected to complete additional tenant
improvements for the building, for which IIP has agreed to provide
reimbursement of up to $6 million. Assuming full reimbursement for the
tenant improvements, IIP’s total investment in the property will be $25
million.
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 very pleased to close on this transaction with Ascend in
Illinois, marking our ninth state where we own properties," said Paul
Smithers, President and Chief Executive Officer of Innovative Industrial
Properties, Inc. "We look forward to supporting Ascend as their
long-term real estate partner, as they launch and continue to expand
their operations in a number of states to meet the tremendous demand for
patient treatment."
"The IIP team was instrumental in proposing creative solutions and
closing this transaction quickly," said Abner Kurtin, Chief Executive
Officer and Co-Founder of Ascend. "We are thrilled to start our work in
Illinois, and to provide our patients with individualized, trusted
guidance for treatment, utilizing cannabis products that are unrivaled
in quality and consistency."
Ascend has raised nearly $40 million in capital to date, including from
investors Poseidon Asset Management, Salveo Capital, JM10 Partners and
Shire Capital Advisors, and has targeted Massachusetts, Illinois and
Michigan as its initial states of operation. Ascend's experienced
management team is led by Abner Kurtin, Chief Executive Officer and
Founder, who is also Co-Founder, Managing Partner, Chief Investment
Officer and Portfolio Manager of K Capital Partners, LLC, having
previously served as Managing Director at The Baupost Group.
Illinois, with approximately 12.8 million residents, ranks as the fifth
most populous state in the United States. As of November 30, 2018, there
were nearly 50,000 patients with approved applications, and 55 licensed
medical-use cannabis dispensaries, which generated approximately $123
million in retail sales to date. Similar to many other states, Illinois
continues to expand its medical-use cannabis program's reach, including
legislation in August 2018 permitting physicians to recommend medical
cannabis to patients as an alternative treatment for pain, in lieu of
opioids.
In addition, the Illinois Economic Policy Institute issued its report
last month regarding the potential impact of legalizing cannabis for
adult-use consumption, citing the support of 66% of registered voters in
Illinois, the potential creation of over 23,600 new jobs, the estimated
$1 billion annual increase to the state's economy and the impact that
legalizing cannabis for adult-use consumption would have on reducing the
illicit market. In recent weeks, governor-elect JB Pritzker also
indicated his strong support for legalizing cannabis for adult-use
cannabis in Illinois.
As of December 21, 2018, IIP owned eleven properties located in Arizona,
Colorado, Illinois, Maryland, Massachusetts, Michigan, Minnesota, New
York and Pennsylvania, totaling approximately 1,027,000 rentable square
feet (including approximately 114,000 rentable square feet under
development), which were 100% leased with a weighted-average remaining
lease term of approximately 14.8 years. As of December 21, 2018, IIP had
invested approximately $147.9 million in the aggregate (excluding
transaction costs) and had committed an additional approximately $19.5
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 15.3% for these
eleven 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 funding and tenant
reimbursements of approximately $19.5 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 Illinois property, Ascend and the
Illinois 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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20181221005559/en/
Company Contact:
Catherine Hastings
Chief Financial Officer,
Chief Accounting Officer and Treasurer
Innovative Industrial
Properties, Inc.
(858) 997-3332
Source: Innovative Industrial Properties, Inc.