Cresco Labs Closes $29 Million Sale-And-Leaseback Deal with Innovative Industrial Properties
Chicago’s Cresco Labs has inked yet another sale-and-leaseback agreement with Innovative Industrial Properties (IIP), a real estate investment trust (REIT) focused on the cannabis sector.
In a news release, the multistate marijuana operator said it had closed its agreement to sell 118,000 sq. ft. of cultivation, processing and dispensary space in Fall River, Massachusetts for a total consideration of $29 million, including $21 million in funding for tenant improvements.
It is the fifth transaction that Cresco has negotiated with IIP. Excluding millions in planned reimbursements for facility improvements, the property sales have netted the cannabis firm over $56 million.
“IIP has proven to be a reliable partner, and we are thrilled to work with them for a fifth lease,” Cresco CEO Charlie Bachtell said via the release. “This transaction, along with our expanded real estate partnership with IIP, is allowing us to continue building out Cresco’s presence in three exciting markets: Massachusetts, Michigan, and Ohio.”
Over the last eight months, IIP has agreed to spend about $121 million -- including reimbursements for tenant improvements -- to acquire the five Cresco properties.
- Marshall, Michigan: 115,000 sq. ft., $32 million
- Yellow Springs, Ohio: 50,000 sq. ft., $13.5 million
- Joliet and Kankakee, Illinois: 90,000 combined sq. ft., $46.6 million
- Fall River, Massachusetts: 118,000 sq. ft., $28.8 million
“They have been reliable partners and a consistent source of non-dilutive capital that has allowed us to expand our capacity and go deep in our strategic markets,” Bachtell said.
In a news release, IIP president and CEO Paul Smithers described Cresco as a “true leader in quality, customer experience and patient care.”
“We are pleased to further expand our long-term real estate partnership with them in Massachusetts,” he said.
IIP now owns about 580,000 sq. ft. of property in Massachusetts, according to its website. In addition to the newly acquired Fall River location, the company also owns 199,000 sq. ft. of space in Athol, which is leased by Ascend Wellness, and 150,000 sq. ft. of space that is leased by Trulieve. Two other properties in Monson (55,000 sq. ft.) and Holliston (58,000 sq. ft.) are leased by Holistic Industries and PharmaCann, respectively.
“The Massachusetts regulated cannabis industry is still in its early stages, and is emerging as one of the strongest medical and adult-use cannabis markets on the East Coast,” Smithers said. “We are firmly committed to being a strong real estate partner to the industry here for many years to come.”
IIP now owns a total of 58 properties that span a combined 4.4 million sq. ft. across 15 U.S. states.
According to a news release, IIP has invested more than $791 million in the properties and committed to spending about $190.8 million on tenant reimbursements for the completion of construction and facility improvements.
The company works with several well-known cannabis companies, including Green Thumb Industries and Vireo Health, among many others.
For its part, Cresco has also sold a cultivation facility in Lincoln, Illinois to GreenAcreage Real Estate Corp. for $50 million.
In related Cresco news, the vertically-integrated firm also recently named former Allscripts Healthcare Solutions chief financial officer Dennis Olis as its new CFO.
Press releases with additional information from Cresco and IIP are linked below.