My name is Connor and I am working under the sponsor that is fundraising for a cannabis real estate opportunity in Whately, MA. Below is a bullet-point summary of the opportunity. We have sourced $24.2m in funding through a construction loan, and as the sponsor, have also absorbed a large number of initial costs as we developed this project to the point of being where it is at now. There is still $15.7m needed and the opportunity is available to accredited investors, internationally, through 62.8 separate $250,000 blocks (which represent the entire $15.7m).
The market is fairly new and taking off in MA, with neighboring states still living in the past when it comes to their consumption laws, lots of customers continue to cross state lines from NY and Connecticut to partake!
The entire breakdown can be found through the website link www.mustangwhately.com under the investor section. There you will find the entire investment summary along with 15 supporting documents.
Project: 176,000 SF existing facility to be renovated to cannabis cultivation on 40-acre site
Location: Whately, MA
Developer: Mustang Renewable Power Ventures, LLC (experienced developer of a recently completed $175M renewable energy/recycling project in Santa Barbara, CA)
Tenant: Dr. Robb Farms, $38M PE-backed, operator/developer of 160,000 SF of greenhouse facilities in Desert Hot Springs, CA, $36M revenue next 12 months.
Status: Fully permitted locally, Tenant was approved for adult use cultivation license by the MA CCC
Lease: $8.8M/year ($50/SF/Year) NNN, 1-year construction, 12-year base term, 2 separate 5-year options
CapEx: $41.6M total ($12.6M greenhouse acquisition, $7.8M new construction, $9.5M turnkey cannabis TI’s, $8.5M soft costs, interest reserve, loan fees including 10% contingency)
Yield: 21% Cap Rate
Equity: $13M (35%): $1.7M from Mustang, $11M from JV partner (85/15)
Debt: $23.5m (60% Loan to Cost, 14% Interest only, 2 years, then amortized over 15 years, due in 5 years)
Cash on Cash: 30% per annum, 3.3-year equity payback from cash flow distributions
3 years on Tenant stabilized operations via Sale to $5 billion market cap Innovative Industrial Property REIT (NYSE: IIPR), 11-12% Cap Rate or other favorable REIT. This would be an extremely accretive acquisition for IIPR as they are currently trading at a 2.35% dividend yield. Alternatively, we will consider a Long Term (12-year) Hold for Cash Flow Distributions.
IRR-3 Yr. Flip: 84%
IRR-12 Yr. Hold: 31%
Project Website: MustangWhately.com
Please do not hesitate to reach out with any questions or concerns at any time.
Thank you and happy Monday,