Power REIT (NYSE-AMEX: PW and PW.PRA) (“Power REIT” or the “Trust”)
today announced that it has acquired an additional 2.2 acre parcel
in Crowley County, Colorado (the “Property”) through a wholly owned
subsidiary (“PropCo”). The Property is strategically located in a
part of southern Colorado that offers a very favorable business
setting and growing environment for efficient and sustainable
greenhouse cultivation.
As part of the transaction, Power REIT has
agreed to fund the construction of approximately 24,512 square feet
of greenhouse and processing space for its new tenant, Gas Station
LLC (“Gas Station”). Power REIT’s total capital commitment for the
project is approximately $2.1 million including the land
acquisition cost.
Concurrent with the acquisition, PropCo entered
into a 20-year “triple-net” lease (the “Lease”) with Gas Station
which will operate a cannabis cultivation facility. The lease
requires Gas Station to pay all property related expenses including
maintenance, insurance and taxes. After the initial 20-year term,
The Lease provides two, five-year renewal options and has a
personal guarantee from the owners of Gas Station. As mandated by
the Lease, Gas Station will maintain a medical marijuana license
and will operate in accordance with all Colorado and municipal
regulations. The Lease also prohibits retail sales of its products
from the Property.
The Lease is structured whereby after an initial
deferred rent period to allow for construction, the rental payments
provide PropCo with a full return of its invested capital over the
next three years and thereafter, provides an approximately 13.3%
yield increasing thereafter at a rate of 3% per annum.
The Lease as structured provides straight-line
annual rent of approximately $301,000, representing an unleveraged
FFO yield of approximately 19% on the invested capital.
CORE FFO ASSUMPTIONS
The acquisition described above is immediately
accretive to CORE FFO by adding approximately $301,000 of
straight-line rent. As previously announced, Power REIT recently
completed a Rights Offering to raise capital to deploy on
additional acquisitions including this transaction with Gas
Station.
David Lesser, Power REIT’s Chairman and
CEO, commented, “We continue to deploy capital on a highly
accretive basis that supports our investment thesis of investing in
sustainable property investments. Southern Colorado continues to
represent a compelling opportunity for our investment strategy in
cannabis cultivation facilities. We believe that each additional
acquisition diversifies our tenant concentration and further
improves our focused strategy within this vibrant market that
provides significant runway for growth.”
Mr. Lesser,
concluded “We have generated dramatic growth since
July 2019 when we embarked on our new business plan focused on
Controlled Environment Agriculture properties. Power REIT’s
relatively small size combined with the attractive investment
yields that we are generating through CEA property acquisitions,
positions us for continued outpaced growth. We believe Power REIT
represents an attractive investment proposition based on our
relatively low trading multiple than REIT peers with a clear growth
trajectory.
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 70% less energy than indoor
growing operations that do not benefit from “free” sunlight. CEA
facilities use 90% less water than field grown plants, and all of
Power REIT’s greenhouse properties operate without the use of
pesticides and avoid agricultural runoff of fertilizers and
pesticides. These facilities cultivate medical Cannabis, which has
been recommended to help manage a myriad of medical symptoms,
including seizures and spasms, multiple sclerosis, post-traumatic
stress disorder, migraines, arthritis, Parkinson's disease, and
Alzheimer’s.
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 POWER REIT
Power REIT is a specialized real estate
investment trust (REIT) that owns sustainable 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 for the cultivation
of food and cannabis. Power REIT is focuses on the “Triple Bottom
Line” with a commitment to Profit, Planet and People…
Additional information about Power REIT can be
found on its website: www.pwreit.com
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.
CONACT:
David H. Lesser, Chairman & CEO |
Mary Jensen, Investor Relations |
dlesser@pwreit.com |
mary@irrealized.com |
212-750-0371 |
310-526-1707 |
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301 Winding RoadOld Bethpage, NY
11804 |
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www.pwreit.com |
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