Innovative Industrial Properties, a San Diego real estate investment trust (REIT) serving the medical marijuana industry, is spending $13 million to acquire and lease out a property in Michigan slated to be used as an MMJ cultivation and processing facility.
Innovative Industrial Properties, which trades on the New York Stock Exchange as IIPR, bought the property in Dimondale, southwest of Lansing, for $5.5 million, according to a news release.
The REIT also entered into a lease and development agreement with Green Peak Industries, which Michigan regulators pre-qualified for large-scale medical cannabis licenses for cultivation, processing and provisioning centers.
Here’s what you need to know:
- Innovative Industrial Properties has agreed to reimburse the seller of the property about $5.3 million for completing “certain development milestones.”
- The REIT also has agreed to reimburse Green Peak up to $2.2 million for tenant improvements to the facility.
- The initial term of the lease is 15 years, with two options to extend that for two additional five-year periods.
- The aggregate base rent is subject to 3.5% annual increases during the term of the lease, and Green Peak also is responsible for paying Innovative Industrial Properties a property management fee equal to 1.5% of the then-existing aggregate base rent.