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Innovative Industrial Properties Inc., the first and only real estate company on the New York Stock Exchange focused on the regulated U.S. cannabis industry, recently revealed that it closed on the acquisition of a property in Warren, Michigan, which comprises approximately 156,000 square feet of industrial space.
The purchase price for the Michigan property was $19 million (excluding transaction costs). Concurrent with the closing of the purchase, IIP entered into a long-term, triple-net lease agreement with LivWell Michigan, LLC, a licensee of LivWell Holdings, Inc. (LivWell), which intends to operate the property as a licensed cannabis cultivation and processing facility upon completion of redevelopment. LivWell is expected to complete tenant improvements for the property, for which IIP has agreed to provide reimbursement of up to $23.0 million. Assuming full reimbursement for the tenant improvements, IIP’s total investment in the property will be $42.0 million.
As the pioneering real estate investment trust (REIT) for the medical-use cannabis industry, IIP partners with experienced medical-use cannabis operators and serves as a source of capital by acquiring and leasing back their real estate assets, in addition to offering other creative real estate-based capital solutions.
“We are excited to announce the beginning of our long-term real estate partnership with LivWell,” said Paul Smithers, President and Chief Executive Officer of IIP. “LivWell has developed a tremendous track record of success in Colorado during the last decade, and we look forward to supporting the rapid expansion of their operations in Michigan.”
Established in 2009, LivWell employs over 700 employees and is one of the preeminent licensed cannabis operators in Colorado with 18 dispensary locations, in addition to operations in Oregon, Michigan, Puerto Rico and Canada. John Lord, Chief Executive Officer of LivWell, leads a highly accomplished management team and brings over 30 years of business management experience to LivWell. Under Mr. Lord’s leadership, LivWell serves as a policy leader on local, national and federal levels, bringing its expertise to assist in the creation of sound statutory and regulatory frameworks for the industry.
“The IIP team has been great to work with, throughout this transaction, and we look forward to working with them in the long-term as a proven, reliable real estate partner for this industry,” said Dean Heizer, Executive Director of LivWell. “We are full-speed ahead on our redevelopment of this property, building to the specifications we need to deliver the highest quality products to the people of Michigan. With the ongoing expansion of our operations, we also plan to provide for well-paying jobs, educational and advancement opportunities for our employees and the broad community engagement that are just a few of the hallmarks of our company.”