Real estate investment trust Power REIT secured a debt financing facility worth $20 million from an unspecified “commercial federally regulated bank,” with room to borrow more in the future.
Loan proceeds will be used “as a growth vehicle to acquire additional greenhouse cultivation properties as well as fund value-add improvements at (Power REIT’s) existing greenhouse properties,” according to a Thursday news release.
Old Bethpage, New York-based Power REIT owns commercial real estate, including cannabis production greenhouses such as a recent investment in a Michigan facility.
The company also invests in land and infrastructure for solar farms as well as railroad land.
Power REIT’s debt facility has been borrowed through a new subsidiary, to which Power REIT “contributed a portion of its greenhouse real estate portfolio” that will serve as collateral.
“Power REIT’s remaining unencumbered greenhouse portfolio can be added to the collateral pool for the debt facility at a later date, which could allow for the expansion of the size of the debt facility,” the company said.
The debt facility carries an interest rate of 5.52%.
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After a year-long draw period, the debt facility “converts to a five-year fully amortizing term loan,” the release noted.
Power REIT said its greenhouse portfolio includes 21 properties measuring more than 1 million square feet in total.
Shares of Power REIT trade on the New York Stock Exchange.