Power REIT borrows $ 20 million from commercial bank to fund new acquisitions, deploying non-dilutive capital strategy – Pittsburgh & West Virginia Railroad (PW)

Power REIT (AMEX: PW), the real estate investment trust confirmed on Thursday that it borrow $ 20 million from a federally regulated commercial bank.

The Old Bethpage, a New York-based company, said it plans to use the proceeds of the loan facility to support further acquisitions of greenhouse growing properties, as well as to finance value-added improvements to its existing properties.

“We are delighted to conclude this financing agreement”, David H. Lesser, said the CEO of Power REIT. “This loan facility is the culmination of months of effort and reflects the close working relationship and the trust we have developed with the Bank. This transaction allows us pursue our growth path by deploying non-dilutive capital at a significant investment return spread over the cost of borrowing. We also believe that this borrowing facility can be extended as we add additional unencumbered assets to the borrowing base used to calculate the amount of funding the Bank is prepared to advance. “

Loan conditions

  • the the interest rate on the loan facility is set at 5.52%.
  • The credit facility has a drawing period of 12 months after that it converts into a term loan that is fully amortizing over five years.
  • In return, Power REIT contributed part of its greenhouse real estate portfolio to a newly formed wholly owned subsidiary which will serve as borrower with assets serving as collateral for the Bank. Power REIT’s remaining unencumbered greenhouse portfolio may be added to the loan facility collateral pool at a later date, which may allow for expansion of the loan facility size.

Portfolio update

The Power REIT portfolio currently includes:

  • 21 agricultural properties in a controlled environment (CEA) totaling over 1,000,000 square feet;
  • 7 land leases for solar farms totaling 601 acres;
  • 112 miles of rail property.

More recent news from Power REIT:

Power REIT shares crumble on Oklahoma debut with new greenhouse grow facility

Power REIT to Reach Booming Michigan Cannabis Market with Pending Acquisition of $ 18.5 Million Greenhouse

Price action

Shares of Power REIT closed the trading session Wednesday up 5.89% to $ 62.00 per share.

Photo: Courtesy of CRYSTALWEED cannabis on Unsplash

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