The acquisition is valued at approximately $1,600,000, which includes the purchase price, closing costs, and improvements made by the selling developer. To finance this acquisition and related developments, Zoned Properties secured a $1,620,000 non-recourse construction loan from a private family office lender.
Key details of the transaction include:
- The property acquisition cost totals around $1,600,000.
- A $1,620,000 non-recourse construction loan has been secured.
- Zoned Properties will provide a $1,000,000 tenant improvement allowance for Sunday Goods to develop a retail dispensary.
- Sunday Goods is expected to invest additional capital to complete the development.
- The property features a long-term, absolute-net lease agreement with Sunday Goods, yielding approximately 13.4% effective cap rate over the lease term.
- The lease includes 3% annual increases in base rent, generating about $350,000 in annual base rental revenue when straight-lined over the lease term.
Arizona's cannabis market is robust, with total sales surpassing $1.4 billion in 2023 and projected to exceed $1.5 billion in 2024. Surprise, Arizona, has been highlighted as an attractive location, notably for homebuyers under 35, contributing to its favorable growth dynamics.
Bryan McLaren, CEO of Zoned Properties, emphasizes the strategic nature of this acquisition: 'We are thrilled to announce the acquisition of our property in Surprise, Arizona, marking a significant step in our expansion strategy. This highlights our commitment to developing high-quality real estate assets for the direct-to-consumer cannabis sector. The favorable terms of the construction loan enable effective financial management while fostering growth and value creation. The partnership with Sunday Goods demonstrates our ability to attract top-tier cannabis operators and seize above-market average cap rates.'
Zoned Properties focuses on acquiring value-add real estate within the regulated cannabis industry in the U.S., leveraging its proprietary property technology and a decade-long national experience in real estate development. The company targets commercial properties facing zoning or development challenges, aiming to enhance their value through strategic acquisitions and long-term, absolute-net leases.
For more details, visit www.ZonedProperties.com or contact Zoned Properties at 877-360-8839.
Twitter: @ZonedProperties
LinkedIn: @ZonedProperties
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