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Exclusive: Cannabis Real Estate SPAC Plans $182M In Acquisitions

October 6, 2020 7:30 am
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Editor's note: This story has been updated to reflect that Subversive Real Estate Acquisition REIT LP has not yet finalized its purchase of 15 cannabis assets as part of an SPAC deal. 

Subversive Real Estate Acquisition REIT LP (NEO: SVX.U) is planning to announce a series of acquisitions with a total valuation of $182 million.

According to information provided exclusively to Benzinga, these transactions imply the firm — currently operating as a special-purpose acquisition company (SPAC) — will become an active REIT with a portfolio that includes 15 cannabis retail, industrial cultivation, greenhouse cultivation and manufacturing assets across nine states.

“We are very close to being able to announce Subversive REIT’s $182 million qualifying transaction to become the second publicly traded cannabis REIT,” said CEO Richard Acosta. 

The other publicly traded cannabis REIT the executive references is Innovative Industrial Properties Inc (NYSE:IIPR).

Deep Pockets

Having raised $225 million earlier this year, Subversive Real Estate Acquisition REIT still has money to deploy.

Acosta said his team plans to complete two additional acquisitions in 2020, taking its total non-cash assets to $200 million.

Once those deals are closed, the REIT will own assets across nine states, including real property ownership as well as first lien mortgages, totaling 1.6 million square feet of space. 

“Our initial portfolio offers what we believe is an incredibly compelling investment opportunity, represents some of the strongest credits in the industry, and is well-diversified across several of the largest and most important cannabis markets across the country,” Acosta said. 

Subversive plans to target an annual distribution yield of approximately 7.5%, payable on a monthly basis. The asset-level unlevered yield of the initial portfolio including two acquisitions expected to close late this year is 11.9%.

This compares to a current 3.8% dividend for the FTSE NAREIT All Equity REIT index.

Lead image by Ilona Szentivanyi. Copyright: Benzinga.

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