Fersko: Real estate investment opportunities - NJ Cannabis Media

Real estate is a prime area of interest for investors as New Jersey continues to inch toward adult-use legalization of cannabis and expansion of the medical marijuana program.

Jack Fersko, the head of Greenbaum Rowe Smith & Davis LLP’s cannabis practice group, offered advice during an interview with National Real Estate Investor, including identifying properties for potential cannabis operations.

“Once recreational use is legalized, owners can get a premium for these assets,” he said, noting that this is especially true for industrial assets.

After Governor Phil Murphy’s announcement earlier this year that adult-use cannabis would be legal within the first days of his administration – as we know that still hasn’t happened – investors sought industrial properties that would suit the industry. One client offered to pay $300,000 above asking price for one asset, Fersko said.

Obsolete class-B and -C industrial and office buildings in less desirable locations are a good fit for cannabis operations, he said, in what is a tight industrial market in the state.

He cautioned that issues surrounding site selection include: title, insurance, ventilation systems, power requirements and the extensive security required for marijuana operations.

Richard Acosta, CEO and managing partner of Beverly Hills, Calif.-based Inception Real Estate Investment Trust (I-REIT), said that legalization will have a significant impact on the New Jersey real estate market due to already high property values and the anticipated size of the cannabis end-user market.

“Those owners in the right zoning areas of New Jersey will make a lot of money overnight,” Acosta said.

Funded with capital from family office and high-net-worth individuals, I-REIT is a new funding platform focused on providing real estate debt and equity capital solutions to the rapidly growing U.S. medicinal and adult-use cannabis industry.

Acosta said that rents paid by cannabis operators are generally two to three times higher as those paid by tenants in other industries.

read original article at NJ Cannabis Media

Eric Clarke