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Innovative Industrial Properties, Inc. (IIP) (NYSE: IIPR), the first and only real estate company on the New York Stock Exchange focused on the regulated U.S. cannabis industry, announced today that it closed on the acquisition of a property in Pittsburgh, Pennsylvania, which is expected to comprise approximately 239,000 square feet of industrial space upon completion of redevelopment.
The purchase price for the property was approximately $41.8 million (excluding transaction costs). Concurrent with the closing of the purchase, IIP entered into a long-term, triple-net master lease for the entire property with a subsidiary of Parallel, one of the largest privately-held multi-state cannabis operators in the United States, for use as a regulated cannabis growing and processing facility. Upon completion of the initial phase of development, Parallel is expected to utilize 124,000 square feet of space, as well as an additional 36,000 square feet of expansion space, with the remaining 79,000 square feet being subleased. Parallel is expected to complete additional tenant improvements for the property, for which IIP has agreed to provide reimbursement of up to $26.0 million. Assuming full reimbursement for the tenant improvements, IIP’s total investment in the property is expected to be approximately $67.8 million.
IIP also owns and leases to subsidiaries of Parallel two regulated cannabis cultivation and processing facilities in Florida and one property in Texas expected to be utilized for regulated cannabis cultivation, processing and retail activities upon completion of development. Assuming full reimbursement for tenant improvements under the leases, IIP’s total investment in properties leased to Parallel is expected to be approximately $195.1 million, encompassing approximately 895,000 square feet.
As the pioneering real estate investment trust (REIT) for the medical-use cannabis industry, IIP partners with