Innovative Industrial Properties Acquires Properties in Pennsylvania and North Dakota and Enters Into Long-Term Leases with Grassroots
SAN DIEGO, December 23, 2019–(BUSINESS WIRE)–Innovative Industrial Properties, Inc. (IIP), the first and only real estate company on the New York Stock Exchange (NYSE: IIPR) focused on the regulated U.S. cannabis industry, announced today that it closed on two sale-leaseback transactions with subsidiaries of GR Companies Inc. (Grassroots) for two properties in Pennsylvania and North Dakota, which comprise approximately 105,000 square feet of industrial space in the aggregate.
The purchase prices for the properties were approximately $24.1 million in total (excluding transaction costs). Concurrent with the closings of the purchases, IIP entered into a long-term, triple-net lease agreement for each property with a subsidiary of Grassroots, which intends to continue to operate the properties as regulated cannabis cultivation and processing facilities. Grassroots is expected to complete additional tenant improvements for the properties, including an approximately 35,000 square foot redevelopment at the Pennsylvania property, for which IIP has agreed to provide aggregate reimbursement of up to approximately $13.2 million. Assuming full reimbursement for the tenant improvements, IIP’s total investment in the two properties will be approximately $37.3 million.
These sale-leaseback transactions mark IIP’s second and third acquisitions and leases with Grassroots, with a prior sale-leaseback transaction for Grassroots’ licensed cannabis cultivation and processing facilities in Illinois completed in October.
Grassroots is one of the leading multi-state cannabis operators, with operations in Illinois, Pennsylvania, Maryland, Ohio, North Dakota, Nevada, Michigan, Oklahoma, Vermont, Connecticut and Arkansas. Mitch Kahn, Founder and Chief Executive Officer of Grassroots, leads a highly experienced management team with a strong track record of founding, building and managing highly successful companies in a broad range of industries, including cannabis, consumer products, merchandising, real estate and finance.
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