Innovative Industrial (IIPR) Acquires Property In Michigan
Zacks Investment Research | Jun 23, 2019 09:56PM ET
Innovative Industrial Properties (NYSE:IIPR) has completed the acquisition of a Michigan property and entered into a long-term, triple-net lease agreement with an affiliate of Emerald Growth Partners.
Specifically, Innovative Industrial Properties shelled out $6.9 million (excluding transaction costs) for this property in Harrison, which comprises around 45,000 square feet of industrial space. The affiliate of Emerald Growth Partners will use the property as licensed medical-use cannabis cultivation and processing facility following some redevelopment efforts.
Innovative Industrial Properties has also committed to provide up to approximately $3.1 million as reimbursement for the tenant improvements, resulting in its total investment in the property reaching around $10 million.
The expansion in Michigan is a strategic fit for Innovative Industrial Properties which is focused on cannabis-centered real estate portfolio. This is because Michigan is one of the largest medical-use cannabis markets in the United States, including around 270,000 medical-use cannabis cardholders as of the end of 2017, per ArcView Market Research.
Also, last year, the state legalized adult-use cannabis and according to ArcView projections, by 2022, Michigan is set emerge as one of the top 10 regulated cannabis markets, with total regulated cannabis sales of $1.4 billion.
Moreover, according to Innovative Industrial Properties’ press release, Emerald Growth Partners obtained pre-qualification status for comprehensive vertical incorporation by the Michigan Marijuana Regulatory Agency for four “Class C” cultivation licenses, one “Class A” cultivation license, one processor license, as well as 12 provisioning center licenses.
Amid these, the expansion of portfolio in the state and its lease with an affiliate of Emerald Growth Partners is expected to help Innovative Industrial Properties bank on the favorable trends and boost its top line.
Innovative Industrial Properties currently carries a Zacks Rank #3 (Hold). In the year-to-date period, shares of the company have outperformed the Zacks Investment Research
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