Benzinga | May 25, 2021 03:05PM EDT

Power REIT Signs Agreement To Acquire 522,530 Square Foot Greenhouse Cultivation And Processing Facility for $18.5M

Power REIT (AMEX:PW) ("Power REIT" or the "Trust") today announced that it has entered into an agreement to acquire what will be Michigan's largest greenhouse cannabis cultivation and processing facility (the "Property") for approximately $18.5 million. The Property is strategically located in an area that offers the potential for unlimited cannabis cultivation licenses and features 522,530 square-feet of high-tech greenhouse and processing space. The approximately 66 acre property has the capability to add significantly more cultivation and processing space with plans in place to add 330,236 square feet as a potential next phase.

This state-of-the-art facility features advanced greenhouse cultivation controls and a state-of-the-art irrigation/fertigation system. This is a turnkey setup that is ready to start growing immediately offering an attractive speed-to-revenue opportunity. Power REIT is finalizing a budget for upgrades that will enhance the cultivation performance for cannabis as a crop.

Power REIT has an approximately 75-day due diligence period followed by a 30-day period to close the transaction which can be extended by up to 30 additional days. Power REIT is actively working to finalize its due diligence and hopes to expedite the closing although there can be no assurance as to when or if the transaction will close.

David Lesser, Power REIT's Chairman and CEO, commented, "This acquisition is a great opportunity for Power REIT to gain scale. Like our other Controlled Environment Agriculture properties, this has significant potential for expansion. Once operational, this will be one of the largest cannabis greenhouse cultivation facilities in the United States even before any expansion. With this possible acquisition, Power REIT enters the Michigan market which is currently experiencing dramatic growth in cannabis sales at prices that are higher than national averages. The acquisition is consistent with Power REIT's investment strategy of focusing on sustainability which is associated with growing in a greenhouse which will be less expensive and have a much lower carbon footprint than growing in an industrial property."

Mr. Lesser continued, "We were able to seize this opportunity due to our flexible balance sheet, our expansive network and focused investment strategy. As we finalize the transaction details, we will be better able to provide guidance as to the impact on Core FFO but we currently believe the returns should be generally similar to recent transactions which would be extremely accretive to Core FFO. We look forward to providing further updates as information becomes available."