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.
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.