Power REIT (MD) filed SEC Form 8-K: Completion of Acquisition or Disposition of Assets, Financial Statements and Exhibits
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Item 2.01 – Completion of Acquisition or Disposition of Assets
As previously disclosed, Power REIT, through subsidiaries, invested in a portfolio of Controlled Environment Agriculture properties in the form of greenhouses (the “Greenhouse Portfolio”). About 50% of the Greenhouse Portfolio square footage was focused on growing produce and the other 50% was focused on cannabis. Unfortunately, the portfolio has not performed, and the Greenhouse Portfolio is largely vacant resulting in significant property related expenses without revenue to cover these costs as well as the cash requirements to cover debt service.
As previously disclosed, the Greenhouse Portfolio was security for a loan (the “Greenhouse Loan”) that was in default and the lender filed litigation and foreclosure actions. As previously disclosed, prior forbearance agreements with the lender expired on January 31, 2025. The loan was non-recourse to Power REIT but secured by the Greenhouse Portfolio. The Greenhouse Portfolio has been marketed for sale but, unfortunately, the market for these special purpose assets has been weak and we have not been able to generate enough sales to satisfy the obligations to the lender.
Power REIT, through its subsidiaries, has now resolved issues with its lender concerning the Greenhouse Loan by providing deeds-in-lieu of foreclosure for the properties in Michigan and Nebraska. In return, the lender released the remaining collateral back to subsidiaries of Power REIT and released obligations related to the Greenhouse Loan. Power REIT will continue to manage these retained assets, which are properties in Ordway, Colorado; a property in Walsenburg, Colorado; a property in Desert Hot Springs, California; a first mortgage on two properties in Ordway, Colorado; and a second mortgage on a property in Elliot, Maine. In addition, a subsidiary owns a greenhouse property located in Vinita, Oklahoma that was not security for the Greenhouse Loan.
The transaction related to the Greenhouse Loan results in the write-off of the Nebraska and Michigan properties, along with the remaining balance of the Greenhouse Loan. It will also relieve the ongoing costs associated with maintaining these properties. Power REIT will continue to seek to realize value from the retained assets and is exploring a shift in focus and is evaluating real estate distressed situations including properties, loans and companies.
Item 9.01. Financial Statements and Exhibits.
(b) Pro forma financial information
The pro forma financial information of the Trust as adjusted to give effect for giving deeds-in-lieu for the properties in Michigan and Nebraska to the lender for the Greenhouse Loan in exchange for a release of the remaining collateral and obligations related to the Greenhouse Loan.
(d) Exhibits
99.1 Unaudited Pro Forma Consolidated Financial Statements
104 Cover Page Interactive Data File (embedded within the Inline XBRL document).
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| POWER REIT | ||
| Date: April 15, 2025 | By | /s/ David H. Lesser |
| David H. Lesser | ||
| Chairman of the Board and Chief Executive Officer | ||