Rainbow Realty Group, LLC and Rainbow Realty Group II, LLC (collectively "Rainbow") and MJ Real Estate Investment Trust, nationwide owners and lenders of real estate to the US cannabis industry, acquired in a sale-leaseback, a 21,600 square foot modern concrete industrial building located in Sacramento for $4.0 million. The going-in unlevered cap rate on the transaction is 12.6%.
At closing, the tenant entered into a 15-year absolute net lease. According to the company, the tenant, who has been a profitable operator in California since 2019, is consolidating its operations into the subject property and further improving the facility for cultivation, distribution, and manufacturing operations. Rainbow will also fund up to $420,000 in tenant improvements subject to certain construction milestones being reached.
Additionally, Rainbow closed a $5.85 million bank loan which is secured by a 5-unit portfolio of owned retail properties in Missouri. The 10-year loan has a fixed rate of 7.53%.
Kyle Shenfeld, president of Rainbow, stated: "We are excited to add yet another high-quality industrial property to our growing portfolio at an unlevered 12.6% cap rate. The closing of the bank loan, at a 7.53% fixed interest rate, is at an excellent cost of capital considering the financing challenges that exist within the cannabis industry. Both transactions reinforce our initial business strategy of providing above market risk-adjusted returns on down-side-protected real estate collateral, which is usable by both cannabis and non-cannabis operators."
Benzinga Cannabis Capital Conference
The Benzinga Cannabis Capital Conference, the place where deals get done, is returning to Chicago this Sept 27-28 for its 17th edition. Get your tickets today before prices increase and secure a spot at the epicenter of cannabis investment and branding.
Photo: Benzinga edit with photos by geralt and lindsayfox on Pixabay
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The Benzinga Cannabis Capital Conference is coming to Florida
The Benzinga Cannabis Capital Conference is returning to Florida, in a new venue in Hollywood, on April 16 and 17, 2024. The two-day event at The Diplomat Beach Resort will be a chance for entrepreneurs, both large and small, to network, learn and grow. Renowned for its trendsetting abilities and influence on the future of cannabis, mark your calendars – this conference is the go-to event of the year for the cannabis world.
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