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Zoned Properties Reaches $3 Million of Annualized Rental Revenue with Acquisition of Property in Surprise, Arizona Leased to Sunday Goods

In This Article:

  • Continues Direct-to-Consumer Portfolio Optimization and Diversification;

  • Absolute-Net Lease in Place and Produces 13.4% Effective Cap Rate;

  • Leased to Best-in-Class Operator, Sunday Goods;

  • Financing Secured by Private Family Office Lender

SCOTTSDALE, AZ / ACCESSWIRE / July 10, 2024 / Zoned Properties®, Inc. ("Zoned Properties" or the "Company") (OTCQB:ZDPY), a technology-driven property investment company for emerging and highly regulated industries, including legalized cannabis, is excited to announce the acquisition of its property in Surprise, Arizona, with tenant Sunday Goods. The acquisition and development of this property have been capitalized through cash on hand and a $1.62 million construction loan from a private family office lender.

Transaction Highlights:

  • The Company will acquire the property for approximately $1.60 million, including purchase price, closing costs, and selling developer's improvements.

  • The Company has obtained a $1.62 million non-recourse construction loan from a private family office lender.

  • The Company will provide a $1.0 million tenant improvement allowance for Sunday Goods to use toward the construction and development of its retail dispensary on the property.

  • The Company believes Sunday Goods will need to invest additional capital to complete the construction and development of its retail dispensary on the property.

  • The investment property is leased to Sunday Goods under a long-term, absolute-net lease agreement, which will produce an approximate 13.4% effective cap rate when straight-lined over the term of the lease agreement.

  • The lease includes 3% annual increases in base rent, yielding approximately $350,000 in annual base rental revenue when straight-lined over the life of the lease term.

Market Highlights:

  • Arizona's cannabis market is one of the strongest in the nation surpassing $1.4 Billion in total sales in 2023, with many projecting sales to reach over $1.5 Billion in 2024.

  • Surprise, Arizona was ranked by a Smart Asset Report as the top place in the country for attracting homebuyers under 35, with a growth rate of 15.88% over a ten-year period.

Management Commentary:

Bryan McLaren, CEO of Zoned Properties, commented, "We are thrilled to announce the acquisition of our property in Surprise, Arizona, and to welcome Sunday Goods, yet another top-tier cannabis operator, to our growing tenant roster. This acquisition is a significant step in our expansion strategy and underscores our commitment to developing high-quality real estate assets in key markets focused on direct-to-consumer cannabis applications. The favorable terms of this construction loan, including its non-recourse nature, allow us to manage our financial strategy effectively while driving growth and value creation. This new property in Surprise, Arizona, represents our ongoing efforts to strategically expand our portfolio and support the growth of the legalized cannabis industry. The partnership with Sunday Goods highlights our ability to attract best-in-class tenants and execute on our mission of seizing above market average cap rates."