Power REIT Borrows $20M From Commercial Bank To Fund New Acquisitions, Deploying Non-Dilutive Capital Strategy

Power REIT PW, the real estate investment trust confirmed Thursday it will borrow $20 million from a commercial federally regulated bank.  

The Old Bethpage, a New York-based company noted it plans to use the debt facility proceeds to support further acquisitions of greenhouse cultivation properties, as well as fund value-add improvements at its existing properties.

"We are excited to enter into this financing arrangement," David H. Lesser, CEO of Power REIT stated. "This Debt Facility culminates months of effort and reflects the close working relationship and trust that we have developed with the Bank. This transaction allows us to continue our growth trajectory by deploying non-dilutive capital at a significant investment yield spread to the borrowing cost. We also believe this Debt Facility can be expanded as we add additional unencumbered assets to the borrowing base used to calculate the amount of funding the Bank is prepared to advance."

Loan Terms

• The interest rate on the debt facility is fixed at 5.52%.
• The debt facility has a 12-month draw period after which it converts to a five-year fully amortizing term loan.
• As consideration for it, Power REIT contributed a portion of its greenhouse real estate portfolio to a newly formed wholly-owned subsidiary that will serve as the borrower with assets serving as collateral for the Bank. Power REIT’s remaining unencumbered greenhouse portfolio can be added to the collateral pool for the debt facility at a later date, which could allow for the expansion of the size of the debt facility.

Portfolio update

Power REIT’s portfolio currently comprises:

• 21 controlled environment agriculture (CEA) properties totaling more than 1,000,000 square feet;
• 7 solar farm ground leases totaling 601 acres;
• 112 miles of railroad property.

More recent news from Power REIT:

Power REIT's Shares Plummet On Its Oklahoma Debut With New Greenhouse Cultivation Facility

Power REIT To Reach The Booming Michigan Cannabis Market With Pending $18.5M Greenhouse Acquisition

Price Action

Power REIT shares closed Wednesday market session 5.89% higher at $62.00 per share.

Photo: Courtesy of CRYSTALWEED cannabis on Unsplash