Innovative Industrial Properties, Inc. (IIP) (NYSE:IIPR) closed on the acquisition of a property in Texas, and entered into a long-term lease with a subsidiary of Texas Original Holdings, LLC.
The purchase price for the property was approximately $12.0 million, which was derived from costs Texas Original incurred to acquire the 25 acres of land and develop the property through the date of closing. At the time of closing, the majority of project sitework had been completed and two of the four buildings have been dried in with interior finish out under construction.
Texas Original is expected to complete construction of the approximately 85,000 square foot industrial and hybrid greenhouse facility, for which IIP has agreed to provide reimbursement of up to approximately $10.0 million, consisting of completion of building shell, interior buildout of cultivation and production rooms, and mechanical, electrical and plumbing systems. Assuming full reimbursement for the construction, IIP’s total investment in the property is expected to be $22.0 million, or approximately $259 per square foot. Upon completion, the property is expected to include approximately 49,000 square feet of cultivation space, with the balance of the space utilized for manufacturing, processing, testing and administrative activities.
Texas Original is one of three vertically integrated cannabis license holders in Texas, is the only provider headquartered in the state, and is estimated to hold a large majority of the current market share within Texas’ medical cannabis program. After raising approximately $40.0 million to date, Texas Original currently operates a regulated cannabis production and dispensary facility in Austin as well as the state’s largest distribution and delivery network. Texas Original’s daily and weekly deliveries, in addition to its statewide pickup locations, provide qualifying patients across the state of Texas access to medical cannabis under the Texas Compassionate Use Program.
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