Power REIT Acquires Greenhouse Property for Cannabis Cultivation and Processing in Maine in Highly Accretive Transaction
Rhea-AI Summary
Power REIT has announced the acquisition of a 3-acre property in York County, Maine for $1 million, which includes a 32,800 sq. ft. greenhouse and a 2,800 sq. ft. processing building under construction. The deal involves a lease with medical cannabis operator Sweet Dirt, providing annual rent of $920,000, resulting in a yield of over 18.5%. With a total investment of approximately $4.92 million, this acquisition is projected to enhance FFO per share significantly. The greenhouse aims to be the largest cannabis cultivation facility in Maine, targeting completion by November 2020.
Positive
- Acquisition of a strategic property in Maine for $1 million.
- Expected yield of over 18.5% from the annual rent of $920,000.
- Total investment of approximately $4.92 million enhances revenue potential.
- Projected increase in FFO per share from $0.56 to over $1.40 on a run-rate basis.
Negative
- Total investment of $4.92 million could strain capital reserves.
- Construction completion delays could affect rental income timelines.
News Market Reaction – PW
In the trading session that priced this news, PW gained 23.75%, reflecting a significant positive market reaction.
Data tracked by StockTitan Argus on the day of publication.
AI-generated analysis. How Rhea-AI works. Not financial advice.
Publishes Updated Investor Presentation
Old Bethpage, New York, May 15, 2020 (GLOBE NEWSWIRE) -- Power REIT (NYSE-AMEX: PW) (“Power REIT” or the “Trust”) today announced that it acquired a 3 acre property in York County, Maine for
Upon completion of the construction, which is targeted for November 2020, the CEAG is expected to the be largest cannabis greenhouse cultivation facility in the state of Maine. In addition, Power REIT received an option to acquire an adjacent 3 vacant parcel that is owned by Tenant for
David Lesser, Power REIT’s Chairman and CEO, commented, “We are excited to support the efforts of Sweet Dirt as we enter a new market. The Maine market is highly fragmented and is projected for tremendous growth. Power REIT is focused on supporting Sweet Dirt’s efforts to take a leadership role in the Maine Cannabis industry.”
Kristin Pope, Co-Founder of Sweet Dirt commented, “Sweet Dirt is thrilled to have the support of Power REIT as we ramp up production to meet the demand from existing medical cannabis patients and future consumers. The greenhouse will allow us to deliver year-round, organically grown artisanal cannabis to the Maine market.”
Jim Henry, CEO of Sweet Dirt, commented, “Sweet Dirt is preparing to expand our footprint in Maine’s regulated market. This transaction will allow us to focus on cultivation and invest directly into our growth initiatives. The state-of-the-art greenhouse will feature exceptional thermal performance, best- in-class snow and wind load capacity, automated climate control, supplemental lighting and light-deprivation (shade) systems. Power REIT moves us towards our vision of becoming a large-scale producer of the highest quality cannabis in Maine.”
FFO ASSUMPTIONS
The acquisition is immediately accretive to FFO by adding approximately
Mr. Lesser continued, “By this coming fall upon completion of the CEAG, our tenant will not only have the largest cannabis greenhouse cultivation facility in Maine but will also be the first fully vertically integrated cannabis company with greenhouse cultivation, processing and retail sales. We also look forward to funding the expansion of Sweet Dirt’s cultivation capacity in the near term on an adjacent parcel of land that is owned by Sweet Dirt and for which Power REIT has an option to acquire and then fund the improvements. This should solidify a dominant position in the Maine market for Sweet Dirt. Our existing portfolio of cannabis greenhouse properties are all on track with respect to construction and rent payments. With an extensive acquisition pipeline, we feel optimistic that we will be able to deploy the remainder of the capital currently available for investment in the near term. Cannabis operators currently have limited access to capital sources which means that Power REIT should be able to deploy much needed capital at attractive risk adjusted returns.”
Mr. Lesser concluded, “Since embarking on our new business plan focused on CEAG properties in July 2019, Power REIT has now demonstrated dramatic growth in FFO. Given our relatively small size coupled with the attractive rates of return that Power REIT is investing in CEAG properties, translates to the potential for significant additional growth. At this point, Power REIT trades at a lower discount than typical REITs and yet has growth prospects that are much higher than the REIT market in general. I believe this represents a compelling opportunity for investment that should generate attractive risk adjusted returns.”
As previously disclosed, Power REIT recently completed a
UPDATED INVESTOR PRESENTATION
In conjunction with this acquisition, Power REIT has updated its investor presentation to communicate the company’s strategic business plan and recent activities. A copy of the presentation can be found in the investors section of the Power REIT website: www.pwreit.com
STATEMENT ON SUSTAINABILITY
Power REIT owns real estate related to infrastructure assets including properties for Controlled Environment Agriculture (CEA Facilities), Renewable Energy and Transportation.
CEA Facilities, such as greenhouses, provide an extremely environmentally friendly solution, which consume approximately
Renewable Energy assets are comprised of land and infrastructure associated with utility scale solar farms. These projects produce power without the use of fossil fuels thereby lowering carbon emissions. The solar farms produce approximately 50,000,000 kWh of electricity annually which is enough to power approximately 4,600 home on a carbon free basis.
Transportation assets are comprised of land associated with a railroad, an environmentally friendly mode of bulk transportation.
ABOUT SWEET DIRT
Sweet Dirt and its affiliates is a Maine state-licensed medical cannabis caregiver and producer of organically grown cannabis and wholesome CBD/hemp products. Sweet Dirt provides patients with affordable, effective healing through clean medical cannabis and has a focus on sustainability including environmental and social benefits. Additional information about Sweet Dirt can be found on its website: www.sweetdirt.com
ABOUT POWER REIT
Power REIT is a real estate investment trust (REIT) that owns real estate related to infrastructure assets including properties for Controlled Environment Agriculture, Renewable Energy and Transportation. Power REIT is actively seeking to expand its real estate portfolio related to Controlled Environment Agriculture and Renewable Energy. Additional information about Power REIT can be found on its website: www.pwreit.com
CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING STATEMENTS
This document includes forward-looking statements within the meaning of the U.S. securities laws. Forward-looking statements are those that predict or describe future events or trends and that do not relate solely to historical matters. You can generally identify forward-looking statements as statements containing the words “believe,” “expect,” “will,” “anticipate,” “intend,” “estimate,” “project,” “plan,” “assume”, “seek” or other similar expressions, or negatives of those expressions, although not all forward-looking statements contain these identifying words. All statements contained in this document regarding our future strategy, future operations, future prospects, the future of our industries and results that might be obtained by pursuing management’s current or future plans and objectives are forward-looking statements. You should not place undue reliance on any forward-looking statements because the matters they describe are subject to known and unknown risks, uncertainties and other unpredictable factors, many of which are beyond our control. Our forward-looking statements are based on the information currently available to us and speak only as of the date of the filing of this document. Over time, our actual results, performance, financial condition or achievements may differ from the anticipated results, performance, financial condition or achievements that are expressed or implied by our forward-looking statements, and such differences may be significant and materially adverse to our security holders.
CONTACT:
David H. Lesser, Chairman & CEO
dlesser@pwreit.com
301 Winding Road
Old Bethpage, NY 11804
212-750-0371
www.pwreit.com