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Acquisitions

3 Months Ended

Mar. 31, 2020

3. ACQUISITIONS

On January 30, 2020, through a newly formed wholly owned subsidiary, PW CO CanRe Mav 14, LLC, Power REIT completed the acquisition of a greenhouse property in southern Colorado (“Maverick 14”). Maverick 14 was acquired for $850,000 and is 5.54 acres with an existing greenhouse and processing facility totaling approximately 8,300 square feet approved for medical cannabis cultivation. The purchase price plus acquisition expenses of $10,424 was paid with existing working capital. As part of the transaction, the Trust agreed to fund the construction of 15,120 square feet of greenhouse space for $1,058,400 of which $414,000 is in construction in progress as of March 31, 2020 and the tenant has agreed to fund the construction of approximately 2,520 additional square feet of head-house/processing space on the property. Accordingly, Power REIT’s total capital commitment totals $1,908,400 plus acquisition expenses.

On February 20, 2020, through a newly formed wholly owned subsidiary, PW CO CanRE Sherman 6, LLC, Power REIT completed the acquisition of a property in southern Colorado (“Sherman 6”). Sherman 6 was acquired for $150,000 plus $724 in acquisition expenses and is 5.0 acres of vacant land approved for medical cannabis cultivation. As part of the transaction, the Trust agreed to fund the construction of 15,120 square feet of greenhouse space and 7,520 square feet of head-house/processing space on the property for $1,693,800 of which $498,000 is in construction in progress as of March 31, 2020 . Accordingly, Power REIT’s total capital commitment totals $1,843,800 plus acquisition costs.

On March 19, 2020, Power REIT, through a newly formed wholly owned subsidiary, PW CO CanRE Mav 5, LLC completed the acquisition of a property in southern Colorado (“Maverick 5”). Maverick 5 was acquired for $150,000 and is 5.2 acres of vacant land approved for medical cannabis cultivation. As part of the transaction, the Trust has agreed to fund the construction of 5,040 square feet of greenhouse space and 4,920 square feet of head-house/processing space on the property for $868,125 of which $125,000 is in construction in progress as of March 31, 2020 . Accordingly, Power REIT’s total capital commitment totals $1,018,125.

The acquisitions are accounted for as asset acquisitions under ASC 805-50. Power REIT has established a depreciable life for the property improvements of 20 years.

Concurrent with the closing on the acquisitions, Power REIT entered into leases with tenants that are licensed for the production of medical marijuana at the facilities

The combined straight-line annual rent from these three acquisitions is approximately $894,000. Each tenant is responsible for paying all expenses related to the properties including maintenance, insurance and taxes. The term of each lease is 20 years and provides two options to extend for additional five-year periods. The leases also have financial guarantees from affiliates of the tenant.

The following table summarizes the allocation of the purchase consideration for Maverick 14 based on the fair values of the assets acquired:

Land	$	150,000
Assets subject to depreciation:
Improvements (greenhouses)		710,424

Total Assets Acquired	$	860,424