Power REIT Closes Rights Offering and Raises $36.7 Million

Power REIT (NYSE-AMEX: PW and PW.PRA) announced today the closing of its previously announced rights offering (the “Rights Offering”) which expired at 5:00 p.m., Eastern time, on February 5, 2021. 

At the closing of the rights offering, the Trust sold and issued an aggregate of 1,383,394 shares of the Trust’s common shares (“Common Shares”) at the subscription price of $26.50, pursuant to the exercise of rights issued to the Trust’s shareholders of record on December 28, 2020. The Company raised aggregate gross proceeds of $36,659,941 from the Rights Offering. After giving effect to the Rights Offering, the Trust has 3,299,533 shares of common stock issued and outstanding. 

The rights offering was made pursuant to the Trust’s Registration Statement on Form S-11 (File No. 333-251276) (the “Registration Statement”) that was previously filed with the Securities and Exchange Commission (the “SEC”) and became effective on December 29, 2020. The Rights Offering was made only by means of the prospectus supplement (the “prospectus supplement”) and the accompanying prospectus, which was filed with the SEC and can be accessed through the SEC’s website at www.sec.gov. 

David Lesser, Power REIT’s Chairman and CEO stated “We are pleased with the outcome of our Rights Offering. The process demonstrated strong shareholder interest and participation in what we structured as an investor-friendly form of capital raise that was handled in a very cost-effective manner. The majority of investors who participated sought shares in the Over-Subscription Privilege and were granted all requested shares. The capital generated from the Rights Offering provides Power REIT with the immediate ability to continue its growth strategy through accretive acquisitions. The Rights Offering demonstrates our focus on shareholder value while creatively sourcing capital to execute on our extensive acquisition pipeline which we believe can create long-term sustainable cash flow.” 

Pursuant to the terms of the Rights Offering, Power REIT has directed its Transfer Agent, Broadridge Corporate Issuer Solutions, Inc., to issue the Common Shares in book entry form. Shareholders who properly exercised their Rights will receive an email from Power REITexplaining how to transfer the shares to a brokerage account. 

As previously announced in July, 2019, Power REIT pivoted its focus for new investments to Controlled Environment Agriculture (“CEA”) which Power REIT believes is a sustainable business approach for the cultivation of certain crops. Power REIT’s current portfolio consists of approximately 50 acres encompassing approximately 300,000 square feet of greenhouse cultivation and processing space. To date, all of Power REIT’s CEA related investments have tenants who are cultivating cannabis in regulated markets pursuant to state licenses. 

Power REIT recently announced two acquisitions totaling approximately $4.5 million that will use a portion of the proceeds from the Rights offering leaving approximately $32.2 million available for additional investment. 

Mr. Lesser continued, “Power REIT’s capital commitment to its existing CEA portfolio is approximately $32 million, with an average equity yield of approximately 19%. Based on our in-place portfolio including the two recently announced acquisitions that required approximately $4.5 million of proceeds from the Rights Offering (generated by the sale of approximately 101,000 shares), Power REITwould have an annualized run rate of Core FFO per common share of approximately $2.64. Including the near term dilutive impact of the increase in share count from the Rights Offering and the timing of deploying approximately $32.2 million of its remaining proceeds, the annualized run rate of Core FFO per common share is projected to be approximately $1.67. Assuming we deploy those remaining proceeds at an average unleveraged yield of 16%, our pro-forma annualized run rate of Core FFO per share would be approximately $3.15, net of adding approximately $250,000 (annualized) of run-rate additional G&A expense as we look to expand the depth of our team to support continuing our dramatic growth.” 


Power REIT has posted an updated investor presentation which is available using the following link: https://www.pwreit.com/investors 

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