REAL ESTATE TECHNOLOGY
Innovative Industrial Properties | May 17, 2022
Innovative Industrial Properties, Inc. (IIP), the first and only real estate company on the New York Stock Exchange focused on the regulated U.S. cannabis industry, announced that it closed on the acquisition of a property comprising approximately 104,000 square feet of industrial space in Taunton, Massachusetts.
The purchase price for the property was $40.0 million (approximately $384 per square foot), which is fully built out and operational as a regulated cannabis cultivation, processing and dispensing facility. Concurrent with the closing of the purchase, IIP entered into a long-term, triple-net lease agreement for the property with a subsidiary of TILT Holdings Inc. (TILT).
TILT was a tenant of the prior owner of the property, and executed a purchase agreement with the prior owner to acquire the property for $13.0 million (approximately $125 per square foot). In addition, during TILT’s tenancy with the prior owner, TILT invested in excess of $27.0 million (approximately $260 per square foot) of its own funds in improvements to the building. IIP’s investment of $40.0 million consists of the original purchase price for the approximately 12-acre site and standard industrial building to the prior owner and a portion of the costs invested in the building by TILT for buildout of the facility, which included the HVAC, electrical, plumbing, cultivation, extraction and processing room buildouts and other building systems infrastructure necessary to support regulated cannabis cultivation and processing. The property consists of approximately 60,000 square feet of cultivation space, 8,000 square feet of production space (including a full commercial kitchen and extraction facility), 2,400 square feet of retail space and mechanical, office, administrative and storage space. The property currently produces a wide variety of form factors, both in-house and with third-party branded partners, including packaged and pre-rolled flower, concentrates, edibles and vaporizers.
As the pioneering real estate investment trust (REIT) for the regulated cannabis industry, IIP partners with experienced, regulated cannabis operators and serves as a source of capital by acquiring and leasing back their real estate assets, in addition to offering other creative real estate-based capital solutions.
TILT is a vertically integrated enterprise with a portfolio of companies focused on inhalation technology and regulated cannabis operations, and in 2021 generated approximately $203 million in revenues. Jupiter Research LLC, a wholly-owned subsidiary of TILT and leader in the vaporization segment, focuses on hardware design, research, development and manufacturing with customers across the United States, as well as Canada, Israel, Mexico, South America and the European Union. TILT also conducts regulated cannabis operations in Massachusetts, Pennsylvania, Ohio and New York (through its partnership with the Shinnecock Indian Nation).
TILT owns a vertically integrated license in Massachusetts, with its Taunton facility dually licensed for both medical and adult-use cultivation, product manufacturing and retail. In addition to the Taunton facility, TILT operates a dispensary in Brockton that is licensed for both medical and adult-use cannabis, and expects regulatory approval soon for an additional medical-use dispensary in the city of Cambridge. TILT’s products recently were awarded first-place gold in “solvent concentrates” and second-place silver in the “edibles category” at the 2022 NECANN Canna Competition in Boston.
According to the Massachusetts Cannabis Control Commission, 2021 regulated cannabis sales in Massachusetts were approximately $1.6 billion. Including this property, IIP owns nine properties in Massachusetts, comprising approximately 879,000 rentable square feet (including square footage under redevelopment) and representing a total investment, including commitments to fund future improvements, of approximately $282.7 million (approximately $322 per square foot).
As of May 16, 2022, IIP owned 110 properties located in Arizona, California, Colorado, Florida, Illinois, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nevada, New Jersey, New York, North Dakota, Ohio, Pennsylvania, Texas, Virginia and Washington, representing a total of approximately 8.2 million rentable square feet (including approximately 2.4 million rentable square feet under development / redevelopment). As of May 16, 2022, IIP had committed approximately $2.2 billion across its portfolio, including capital invested to date (excluding transaction costs) and additional capital commitments to fund future construction and improvements at IIP’s properties. These statistics do not include an $18.5 million loan from IIP to a developer for construction of a regulated cannabis cultivation and processing facility in California and up to $55.0 million that may be funded between June 15, 2022 and July 31, 2022 pursuant to IIP’s lease with a tenant at one of IIP’s Pennsylvania properties, as the tenant at that property may not elect to have IIP disburse those funds and pay IIP the corresponding base rent on those funds.
About Innovative Industrial Properties
Innovative Industrial Properties, Inc. is a self-advised Maryland corporation focused on the acquisition, ownership and management of specialized industrial properties leased to experienced, state-licensed operators for their regulated cannabis facilities. Innovative Industrial Properties, Inc. has elected to be taxed as a real estate investment trust, commencing with the year ended December 31, 2017.
REAL ESTATE TECHNOLOGY
Balfour Beatty Communities | April 07, 2022
Balfour Beatty Communities, a national residential real estate investment and management company, received national honors for its military, multifamily, and student property management services based on an independent satisfaction survey conducted by SatisFacts, a national leader for technology, data, and education in the multifamily industry. Balfour Beatty Communities received honors in three categories: National Company Award for overall military housing, National Company Award for overall multifamily/student housing, and National Property Awards across its military, multifamily, and student housing portfolio, which numbers close to 50,000 units.
We are honored to receive this recognition for our efforts to provide exceptional service across our military, multifamily, and student housing properties. These awards are a testament to the dedication of our employees who embody our mission-driven culture through the hard work and high-quality services that they provide to our residents, partners, and communities every day.”
Chris Williams, Balfour Beatty Communities president
The SatisFacts surveys measure the resident experience from move-in to move-out and include resident scores on their interaction with office and maintenance staff on a 5-point scale. The SatisFacts Index allows Balfour Beatty Communities to benchmark resident satisfaction compared to other residential management companies. Balfour Beatty Communities then uses the scores to enhance resident satisfaction, retention, and overall community performance.
This year, SatisFacts received over 40,000 survey responses from Balfour Beatty Communities military housing residents and scored in the top percentile for both move-in and work order performance. These high scores resulted in the company receiving the National Company Award for overall military housing services and National Property Awards across almost all its military properties. For Balfour Beatty Communities’ military housing installations, current reporting indicates the company scored:
4.41 out of 5 on overall move-in performance
4.61 out of 5 on overall work order performance
Balfour Beatty Communities received similarly high scores across its 18-property multifamily and student housing portfolio, obtaining over 4,200 survey responses from its residents and performing highly on both move-in and work order experiences. The company was awarded the National Company Award for overall multifamily/student housing services and National Property Awards across almost all its multifamily and student properties.
About Balfour Beatty Communities
Balfour Beatty Communities is an active owner and operator of residential real estate in the multifamily, student and military housing sectors across the United States. Since its inception in 1999, Balfour Beatty Communities has invested in nearly 100 properties representing more than $7.9 billion of gross asset value. Our broad in-house expertise includes decades of acquisition, development, finance, renovation, leasing and property/facility management experience. Leveraging this extensive expertise and a customer service-focused approach, Balfour Beatty Communities seeks to create value in its real estate projects while delivering exceptional living experiences.
Balfour Beatty Communities is a subsidiary of Balfour Beatty Investments, Inc. and Balfour Beatty plc, a leading international infrastructure group.
REAL ESTATE INVESTMENT
Terreno Realty Corporation | May 09, 2022
Terreno Realty Corporation, an acquirer, owner and operator of industrial real estate in six major coastal U.S. markets, acquired an industrial property located in Santa Clara, California on May 4, 2022 for a purchase price of approximately $54.6 million.
The property consists of one industrial distribution building containing approximately 135,000 square feet on 6.5 acres. The property is at 3660 Thomas Road, adjacent to US 101, the Bayshore Freeway, provides 13 dock-high and five grade-level loading positions and parking for 91 cars. The property is 100% leased to four tenants, which expire between 2022 and 2027, and the estimated stabilized cap rate is 2.5%.
Estimated stabilized cap rates are calculated as annualized cash basis net operating income stabilized to market occupancy (generally 95%) divided by total acquisition cost. Total acquisition cost includes the initial purchase price, the effects of marking assumed debt to market, buyer’s due diligence and closing costs, estimated near-term capital expenditures and leasing costs necessary to achieve stabilization.
AboutTerreno Realty Corporation
Terreno Realty Corporation acquires, owns and operates industrial real estate in six major coastal U.S. markets: Los Angeles, Northern New Jersey/New York City, San Francisco Bay Area, Seattle, Miami, and Washington, D.C.
REAL ESTATE INVESTMENT
Taconic Capital Advisors | May 23, 2022
Taconic Capital Advisors, a global institutional investment firm, announced that it has closed its third real estate fund, Taconic CRE Dislocation Onshore Fund lll (TCREDF III), with $500 million in capital commitments. The fund comprises investments from a diverse group of existing and new investors with flexibility to tap into an overflow vehicle for more concentrated transactions.
One year into its investment period, TCREDF III has already committed or closed on $300 million of investments across 15 distinct transactions. Taconic believes the COVID pandemic accelerated pre-existing trends and distress in the CRE market. A combination of aggressive pre-COVID financing and transaction assumptions, oversupply in specific markets and COVID-related societal and demographic shifts should continue to apply significant pressure on the CRE market providing ample investment opportunities. Taconic anticipates that hotel and office assets will comprise the majority of the fund’s investments.
We are pleased to build on the performance of Funds l and ll with the close of our third real estate fund, TCREDF III. Our team has a proven ability to identify inefficiencies and dislocated investment opportunities across a host of market sectors, positioning our funds to maximize value for new and existing investors."
James Jordan, principal and portfolio manager of Taconic Capital Advisors’ CRE investments
About Taconic Capital Advisors
Taconic Capital Advisors is a global institutional investment firm that pursues an event-driven, multi-strategy investment approach designed to generate strong, risk-adjusted returns over multiple market cycles. Taconic was founded in 1999 by former Goldman Sachs partners Frank Brosens and Ken Brody. The company has roughly $8 billion of total assets under management with offices in New York, London, and Hong Kong, and more than 100 employees worldwide.
Taconic’s full-service commercial real estate platform invests in all asset classes and across the capital structure in both public and private markets. The strategy’s broad mandate offers flexibility to capitalize on shifting market opportunities, creating uncorrelated risk-adjusted return profiles for investors. Rooted in distressed and opportunistic investing, the team applies high-touch asset management capabilities to drive strong asset-level performance and capital market executions. Well-established relationships drive Taconic’s unique and diverse transaction sourcing channels which including local operating partners, investor partners and a broad network of lenders, CMBS special servicers, trading desks and brokerage houses. Taconic’s series of closed-ended real estate funds are fully discretionary and have received over $1 billion in capital commitments. Investments to date across all Taconic funds total over $3 billion of gross asset value across roughly 165 distinct transactions.