Subversive Real Estate Acquisition REIT LP (NEO: SVU.U) is announcing 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 eight states.
“We are very excited to announce Subversive REIT’s $182 million qualifying transaction to become the second publicly traded cannabis REIT,” CEO Richard Acosta said during a recent call with shareholders.
The other publicly traded cannabis REIT the executive references is Innovative Industrial Properties Inc (NYSE:IIPR).
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, with 1.6 million square feet of space in total.
“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 added.
Below is a breakdown of the assets the REIT plans to own by the end of this year:
- California: eight assets across Los Angeles, North Hollywood, Desert Hot Springs, Coachella, Greenfield, San Francisco and Grover Beach (total of 432,400 square feet).
- Florida: two assets in Alachua and Jacksonville (296,000 square feet).
- Nevada: one asset in North Las Vegas (455,000 square feet).
- Arizona: one asset in Mesa (9,000 square feet).
- Maryland: one asset in Lutherville-Timonium (6,000 square feet).
- Michigan: one asset in Lansing (65,000 square feet).
- Ohio: one asset in Columbus (7,000 square feet).
- Pennsylvania: one asset in Johnstown (3,000 square feet).
- Washington: one asset in Tacoma (320,000 square feet).
Subversive targets an annual distribution yield of approximately 7.5%, payable on a monthly basis. The asset-level unlevered yield of the initial portfolio 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.