Power Stock Price, News & Analysis

Power REIT (PW) is an internally managed real estate investment trust (REIT) that focuses on owning sustainable real estate related to infrastructure assets. According to the company’s disclosures, Power REIT concentrates on properties for Controlled Environment Agriculture (CEA), Renewable Energy, and Transportation. The trust’s shares of common stock and its 7.75% Series A Cumulative Redeemable Perpetual Preferred Stock trade on the NYSE American under the symbols PW and PW.PRA.

Business focus and asset types

Power REIT describes itself as a specialized REIT with a “Triple Bottom Line” focus and a commitment to people, planet and profit. Its portfolio has included:

• Controlled Environment Agriculture (CEA) properties in the form of greenhouse facilities. The company has reported owning more than 20 greenhouse properties totaling over 2 million square feet, with uses that include the cultivation of food crops such as tomatoes and the cultivation of cannabis.
• Renewable Energy assets consisting of land and infrastructure associated with utility-scale solar farms. Company statements note that these solar projects generate electricity without the use of fossil fuels.
• Transportation assets consisting of land associated with a railroad, characterized by the company as an environmentally friendly mode of bulk transportation.

Power REIT has emphasized that its CEA greenhouses are intended as a sustainable farming platform. The company has stated that greenhouse facilities consume significantly less energy than indoor growing operations that do not use sunlight and use substantially less water than traditional field-grown crops, while also avoiding agricultural runoff of fertilizers and pesticides at its greenhouse properties.

Controlled Environment Agriculture and greenhouse strategy

The trust has highlighted CEA greenhouses as a core part of its business strategy. In various updates, Power REIT has reported a portfolio of greenhouse properties that support the cultivation of medical cannabis and food crops. The company has stated that its greenhouse properties operate without the use of pesticides and avoid agricultural runoff, and that greenhouses can provide an environmentally friendly solution for cultivating certain crops.

Power REIT has also disclosed that it is actively seeking to expand its real estate portfolio related to CEA in the form of greenhouses for the cultivation of food and cannabis. In its communications, the trust has described greenhouses as a lower-cost and more energy-efficient alternative to warehouse-style indoor cultivation facilities for certain types of crops.

Renewable energy and transportation holdings

In addition to CEA assets, Power REIT owns real estate related to renewable energy and transportation. Company statements describe its renewable energy assets as land and infrastructure associated with utility-scale solar farms that produce power without fossil fuels, thereby lowering carbon emissions. The company has reported that these solar farms produce a material amount of electricity on a carbon-free basis.

The transportation segment consists of land associated with a railroad. Power REIT characterizes rail transportation as an environmentally friendly mode of bulk transport, aligning this asset class with its broader sustainability focus.

Capital structure and financing approach

Power REIT has disclosed that it is an internally managed REIT and has discussed the use of both equity and debt financing. The trust has issued 7.75% Series A Cumulative Redeemable Perpetual Preferred Stock, and it has described using proceeds from a rights offering to acquire greenhouse properties and fund improvements. The company has also announced a debt financing facility with a commercial bank, with an initial amount of $20 million, intended to support acquisitions of greenhouse cultivation properties and value-add improvements at existing properties.

In its communications, Power REIT has referred to a focus on non-dilutive capital, including debt and potential preferred stock issuance, to fund growth in its portfolio. The trust has also described lease structures at certain greenhouse properties that are intended to provide specified yields on invested capital.

Triple Bottom Line and sustainability orientation

A recurring theme in Power REIT’s public statements is its “Triple Bottom Line” strategy and commitment to people, planet and profit. The company has emphasized that its CEA, renewable energy and transportation assets are intended to support environmental sustainability while also generating financial returns.

Power REIT has highlighted the environmental attributes of greenhouse cultivation, such as lower energy and water use compared to some alternatives, and the benefits of utility-scale solar farms in reducing carbon emissions. The trust has also described railroad land as part of an environmentally friendly transportation mode.

Listing status and recent exchange notice

Power REIT has reported that its common and preferred shares are listed on the NYSE American. On September 4, 2024, the company announced that it had received a written notice from NYSE Regulation stating that it was not in compliance with a continued listing standard related to stockholders’ equity and recent losses. The notice indicated that the trust was below the stockholders’ equity requirement in Section 1003(a)(i) of the NYSE American Company Guide and was not eligible for an exemption under that section.

According to the company’s announcement, Power REIT is required to submit a plan to the exchange describing actions it has taken or will take to regain compliance within a specified period. The notice stated that if a plan is accepted, the company would be subject to periodic reviews, and that failure to submit an acceptable plan or to make sufficient progress could lead to delisting proceedings, which the company could appeal. The company has stated that the notice has no immediate impact on the listing of its common and preferred shares, which continue to trade on the NYSE American with an added “.BC” designation indicating below-compliance status, subject to satisfaction of other listing requirements.

Audit opinion and going concern explanatory paragraph

On March 29, 2024, Power REIT announced that its audited financial statements included in its Annual Report on Form 10-K for the year ended December 31, 2023, carried an unqualified audit opinion that contained an explanatory paragraph related to the trust’s ability to continue as a going concern. The company indicated that further discussion of this matter appears in a footnote to its financial statements in the Form 10-K and that the public announcement of the audit opinion was made pursuant to NYSE American Company Guide requirements.

Investor considerations

According to its disclosures, Power REIT positions itself as a REIT focused on sustainable infrastructure-related real estate, with an emphasis on CEA greenhouses, renewable energy land and railroad property. Its communications highlight a combination of environmental considerations and financial metrics such as yields on invested capital and funds from operations, while also noting risks such as market conditions affecting tenants and regulatory or listing-related requirements.