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 Pittsburgh, Pennsylvania, which
comprises approximately 51,000 square feet of industrial space.
The purchase price for the Pennsylvania property was approximately $6.3
million (excluding transaction costs). Concurrent with the closing of
the purchase, IIP entered into a long-term, triple-net lease agreement
with Maitri Genetics, LLC (Maitri), which intends to operate the
property as a licensed medical-use cannabis cultivation and processing
facility upon completion of redevelopment. Maitri is expected to
complete tenant improvements for the building, for which IIP has agreed
to provide reimbursement of up to $10 million. Assuming full
reimbursement for the tenant improvements, IIP’s total investment in the
property will be approximately $16.3 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 thrilled to partner with Maitri," said Paul Smithers, President
and Chief Executive Officer of IIP. "The Maitri team has quickly
distinguished itself in Pennsylvania as an industry leader with their
dedication to compassionate care for their patients and commitment to
the local communities where they operate. We look forward to supporting
the Maitri team in their redevelopment of this property into a
state-of-the-art medical cannabis cultivation and processing facility,
and helping them in the expansion of their platform to address serious
patient needs."
Maitri operates licensed medical-use cannabis dispensaries in Uniontown
and Pittsburgh, Pennsylvania, and expects to be issued its permanent
medical-use cannabis cultivation and processing license at the property
upon completion of the property redevelopment. Maitri has raised $12
million over the past two years to launch and support its operations.
"We worked collaboratively with the IIP team to structure a transaction
that provides us with the funding and support necessary to redevelop our
property into an advanced cultivation and processing facility," said
Corinne Ogrodnik, Chief Executive Officer of Maitri. "IIP is a market
leader with sophisticated insight into this dynamic industry and we look
forward to continuing our close work with them. Redevelopment of this
facility will provide us with the highly controlled, specialized
environment needed to produce the best quality medical cannabis products
for our patients."
The Pittsburgh property marks IIP's second acquisition in Pennsylvania.
Dispensaries in Pennsylvania began selling medical-use cannabis to
patients and caregivers in February 2018. As of April 2019, nearly
102,000 patients had received their patient certification and more than
1,500 physicians had registered for the program. Similar to other states
with licensed medical-use cannabis operations, the Pennsylvania
Department of Health made adjustments to the program after its launch,
including expansion of qualifying medical conditions to include
substitute therapy for opiate addiction and cancer remission therapy,
and allowing patient access to medical cannabis flower. In addition,
Pennsylvania governor Tom Wolf has indicated serious consideration for
legalizing cannabis for adult-use generally, citing polls showing that a
significant majority of state residents support such a measure and the
potential tax revenue that could be utilized to improve residents'
lives, citing greater access to opioid treatment and better health care
access for veterans and children.
As of April 24, 2019, IIP owned 19 properties located in Arizona,
California, Colorado, Illinois, Maryland, Massachusetts, Michigan,
Minnesota, New York, Ohio and Pennsylvania, totaling approximately 1.3
million rentable square feet (including approximately 210,000 rentable
square feet under development/redevelopment), which were 100% leased
with a weighted-average remaining lease term of approximately 14.9
years. As of April 24, 2019, IIP had invested approximately $197.5
million in the aggregate (excluding transaction costs) and had committed
an additional approximately $44.7 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 14.8% for these 19 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 $44.7 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, Maitri 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.
View source version on businesswire.com: https://www.businesswire.com/news/home/20190424005931/en/
Catherine Hastings
Chief Financial Officer, Chief Accounting
Officer and Treasurer
Innovative Industrial Properties, Inc.
(858)
997-3332
Source: Innovative Industrial Properties, Inc.