Innovative Industrial Properties Enters into A Sale-Leaseback Deal for USD 10.5 Million with Cresco Labs

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Feb 11, 2020, 07:30 EST

Feb 11, 2020, 07:30 /Comserve / -- Innovative Industrial Properties, Inc. (NYSE: IIPR), a real estate investment trust completed its purchase of a facility for a sum of close to USD 10.5 million at Ohio from Cresco Labs, Inc. (CNSX:CL), a medical cannabis cultivation at Chicago

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Innovative Industrial Properties Inc. just completed the signing of the USD 10.5 million sale-leaseback deal with Cresco Labs, Inc., which would involve the purchase of the facility at Ohio from Cresco Labs for making improvements and leasing the same back to Cresco Labs.

The funds that have come in from the completion of deal would be utilized for making tenant improvements in the facility, which Cresco Labs would be using for both cultivation and processing of product. The facility is currently located in Yellow Springs, a village that forms part of the Dayton Metropolitan Statistical Area. The facility has a space of close to 50,000 square feet.

Many similar sale lease-back deals have existed earlier between Innovative Industrial Properties and Cresco Labs, with at least two deals getting closed in Illinois. Currently, the property in Ohio is seeing its first sale-leaseback arrangement coming from both the above companies. Cresco Labs and Innovative Industrial Properties will sign a triple net-lease contract, under which Cresco Labs will be the tenant for the property.

The cannabis industry has already been a witness to several Sale-leaseback deals that are considered to be popular in the industry. Several factors have been known to restrict the companies belonging to this sector from raising capital. The option available to the company to sell property belonging to it helps to generate sufficient funds immediately for the working of the company.

The sale-leaseback arrangements made by Innovative has helped the company to improve its results. The recent addition to its portfolio currently comprises of 48 properties in total spread over fifteen (15) states. About 3.1 million square feet that can be rented is currently held by the company.

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