Innovative Industrial Properties – a San Diego-based real estate investment trust (REIT) which leases real estate to medical marijuana businesses – has agreed to buy an Arizona property for $15 million.
The property comprises over 350,000 square feet of greenhouse and industrial space.
The deal involves a sale-leaseback transaction with a subsidiary of The Pharm, one of Arizona’s largest MMJ wholesalers.
Under the agreement, The Pharm unit plans to continue to use the facility for medical cannabis cultivation.
The Pharm subsidiary is also expected to make certain improvements to the property after the deal closes.
Innovative Industrial Properties will reimburse the subsidiary for up to $3 million, meaning the REIT’s total investment in the property could total as much as $18 million.
The least is set to last for 15 years, with two options to extend the term for two additional five-year periods. The lease provides for an initial annualized aggregate base rent of $2.5 million.