Innovative Industrial Properties Inc. (NYSE:IIPR) has announced that it has acquired a five-property portfolio in California of approximately 102,000 square feet of space. This is the second acquisition the company is making in California after it had earlier made an investment in Sacramento.
Property acquired at $27 million
The company purchased the southern California portfolio for an aggregate cost of $27.1 million excluding transaction expenses. Concurrent with the closing of the acquisition the company signed a long-term lease for both properties with a licensed operator. It will continue operating the properties as a licensed cannabis processing, cultivation, distribution, and manufacturing facilities in line with California laws.
Innovative Industrial Properties has partnered with experienced cannabis operators and it generates capital from purchasing and leasing real estate facilities besides the offering of other creative real estate capital solutions.
Paul Smithers, the CEO and President of the company stated that they were delighted to establish a new tenant relationship with the best-licensed operators in southern California. He added that the operator was a great innovator in the cannabis industry and has developed a brand that is acknowledged for its consistency and that Innovative cannabis was excited to partner with the operator. In the coming years, the cannabis market in California is poised for exponential growth.
The operator has established a market in California
The licensed operator carries cannabis growing, processing, manufacturing as well as the distribution of products in its ultramodern facilities and using modern technologies in the development of proprietary genetics. The operator has an established market base in California for their cannabis products including concentrates, botanicals, and accessories.
The company had various properties in over 18 locations in states such as Colorado, Arizona, Illinois, California, Michigan, and New York among others. They have rentable space of approximately 1.23 million square feet that is on 100% lease with the remaining term estimated to be 14.9 years. The real estate company has an aggregate investment of $191.3 million and has made a commitment of $34.7 million that will go into reimbursing tenants for improvement and completion of construction at their properties.