James Capital Advisors is pleased to present this rare opportunity to purchase The Plant, a newly constructed cannabis cultivation facility located in the high-profile Coachillin’ Industrial Cultivation & Ancillary Canna-Business Park in Desert Hot Springs, CA.
The Plant is a state-of-the-art facility that focuses on three main disciplines: 1. cultivation 2. manufacturing 3. product development & retail development and implements both B2B and B2C business strategies, servicing cannabis business owners looking to manufacture plant material, bulk oil and CBD compound as well as other consumer products sold at dispensaries throughout California. The business is currently on track to generate $4 million in annual revenue in 2020, and is planning an expansion of the existing facility to increase the footprint by 20,000 square feet. Upon completion of the proposed expansion, revenue is expected to jump to $53 million in 2021, and climb to $82 million in 2022.
At the close of escrow, The Plant will sign a 20-year absolute net lease with zero landlord responsibilities. The lease will feature 3% annual increases and four (4), five-year extension options. The subject lease will be backed by a family office with a net worth north of $200 million. The company was founded by two-multi generational farming families with extensive experience in large-scale commercial agricultural development, production, manufacturing, and marketing.
- Mission-Critical Cannabis Cultivation Facility & Manufacturing Plant – This flagship facility is the sole facility of the company and services all of its clientele.
- Long-Term Sale Leaseback – At close of escrow, The Plant will be executing a brand new, 20-year lease with 3% annual increases and four (4), five-year options to extend.
- Absolute Net (NNN) Lease Structure – The lease structure calls for zero landlord responsibilities or operating expenses making this a true Absolute Net (NNN) investment.
- Trophy Real Estate Investment in Coachillin’ Industrial Cultivation – This Ancillary Canna-Business Park provides support to business owners with energy efficiency, cost control, regulatory compliance, and easy access to retail locations.
- Strong Operating History – Founded by two-multi generational farming families with extensive experience in large-scale commercial agricultural development, production, manufacturing, and marketing.
- Strong Guarantee from High Net Worth Family Office – The lease will be guaranteed by the McGah Family, a family office with $200M+ in net worth.
- Rent / SF in Line With Market With Room for Growth – The Plant will be paying $32.02 / SF, which is in line with the market for comparable properties in the area and provides a runway for continued rent growth over the life of the investment.
- High Yield Investment – This offering features an 11% cap rate, more than double the average yield obtained from other Industrial assets in the Coachella Valley.
- High Barrier-to-Entry Market – There are only 270 active Type 7 Manufacturing Licenses in CA making this a high barrier to entry business.
- Brand New Construction – This location is currently under development, with approximately $7 million in planned capital improvements to be made by the Tenant.