Legal Pot Growers To Drive Up California Warehouse Rates

CALIFORNIA: Legalizing recreational marijuana in California is creating a gold rush for a decidedly less intoxicating sector: warehouses in which to grow the plants.

Investors have few options to cash in directly on the state’s recent decision to legalize the drug, as there are no publicly traded cannabis producing companies and marijuana remains illegal under federal law. However, they are anticipating a lift in demand for warehouses as legal pot companies search for space to grow their supply.

Shares of industrial warehouse companies such as Prologis Inc, Rexford Industrial Realty Inc and Terreno Realty Corp that have significant exposure to the California market should benefit even if they do not lease to marijuana companies directly, fund managers and analysts say.

This is because cannabis companies are expected to pay above-market rates for older, outmoded facilities that are more suitable for growing plants indoors and storing products containing marijuana, taking out some of the vacancy in an already-tight market and pushing overall rents higher, said Michael Underhill, a portfolio manager at RidgeWorth Capital.

“Cannabis companies are going to find some distressed properties and get them up and running, and in many cases they will have the capital to pay whatever it takes to get space,” said Underhill, adding that this allows companies with more modern facilities to charger higher rents.

Kalyx Development Surpasses 600,000 Square Feet Under Management With The Acquisition Of Properties In Washington State and Arizona

COLORADO: Kalyx Development, a private real estate investment trust and pioneer in providing specialized real estate to the cannabis industry, announces the acquisition of two facilities in Washington State and Arizona.  At a combined 348,000 square feet, these two acquisitions advance the company’s holdings to over 600,000 square feet of cultivation and processing space, across seven buildings in four states.

The Washington State acquisition gives Kalyx control of the single largest multi-tenant facility in the state and is leased to 14 licensed and operating i502 tenants.  The Arizona property, located in the greater Phoenix area, is leased to an established cultivator and dispensary operator, licensed under the Arizona State Medical Marijuana program.

“We are excited to continue to expand our portfolio of cannabis leased facilities with the acquisition of these two great assets.  The quality of the operators in place reflect the continued evolution of the industry and they join the strong tenant list of our existing facilities in ColoradoWashington and Oregon,” said Co-Founder and President, Potter Polk.

“These two deals follow Kalyx’s charter of delivering value to the cannabis industry through transactions that are structured to allow entrepreneurial operators to make the most efficient use of their capital and grow their revenue base,” said George M. Stone, CEO of Kalyx Development.

Mr. Stone added, “Having spent decades in the real estate business where leverage was a common driver of returns, it’s precisely the absence of traditional financing sources that has created the opportunity for Kalyx to provide value to the industry.”  “By creating a new vertical within the industrial sector and the cannabis market, Kalyx represents a unique opportunity for investors to benefit from risk appropriate exposure to the complex and rapidly evolving cannabis industry. The unparalleled combination of real estate and cannabis expertise, has enabled Kalyx to build a national footprint, thereby sagaciously growing shareholder value.  The winning combination, as we see it, is employing a value-oriented approach to real estate acquisitions such that we amass a portfolio of properties with a reasonably low cost basis and high residual value, while carefully vetting and leasing to operators who are truly best-in-class,” concluded Mr. Stone.

 

Diego Pellicer Worldwide Tenant’s Secure New Licenses For Operations in Colorado

COLORADO: Diego Pellicer Worldwide, a real estate and consumer retail development company that is focused on developing the world’s first “premium” cannabis brand, today announced that their Colorado tenants have been approved for three new state licenses for medical and retail operations in the state of Colorado. Diego Pellicer Worldwide’s tenants have been approved for a total of ten state licenses at three properties in Denver, CO.

The West Alameda Avenue property has received its medical marijuana center and retail marijuana store licenses by the state ofColorado. The 3,300 square foot property is currently under construction with operations expected to begin late fourth quarter of 2016. The tenants have eight additional state licenses at its Elizabeth Street and Jason Street properties with the Elizabeth Street property recently securing a recreational Marijuana Infused Product license to its facility.  The Elizabeth and Jason Streetproperties represent almost 40,000 square feet of cannabis production capacity and both are currently in operation.

Ron Throgmartin, CEO of Diego Pellicer Worldwide, stated, “The licenses our tenants have secured for the West Alameda property is a step closer to expanding Diego Pellicer’s footprint in the Colorado market as we strive to become the premium cannabis brand in the industry. It is our goal to become the premium brand in the U.S. cannabis market and capitalize on the long term potential of this industry. The progress of our tenants’ operations in Colorado, and the upcoming opening of our branded flagship store in Seattle, allows us to take one step closer to achieving our goals.”