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Real Estate Fund Providing Longer Term Debt for Cannabis Properties

Financing a cannabis property is tricky, banks generally won’t touch them and the private debt funds that are willing to look at cannabis typically will only provide shorter term loans, 1-2 years.

This puts a cannabis real estate owner in the position of having to refinance their asset every couple of years, even if it’s fully stabilized. Each refinance means new origination and underwriting fees which drives up the cost of capital. And, the capital markets may be in a very different position two years from now so that refinance is not guaranteed to get done. (Think about where we are today vs 2022…)

To help solve this problem there is a real estate investment fund that is providing longer term loans to cannabis property owners, up to 5-years.

In addition to loans they’ll also look at sale leasebacks for owner-occupied cannabis real estate. This is a great option to return the capital invested in the property and reinvest it in the operating business. Minimum lease term of 10-years with two 5-year extension option. Tenant has a buy-back option after three years.

Financing Criteria:

Loans:

• Loan Amount: $1M - $15M+

• Max LTV: 75%

• Term: 5-Years w/ 2-Years Interest Only

• Interest Rate: ~13%

• Fees/OID: 1-3%

• Property Types: Retail & Industrial (no farms or greenhouses)

• Deal Types: Acquisition, Refinance, Rehab (no ground-up construction)

• Geography: Nationwide - within one hour drive from major city (no tertiary locations)

Sale Leaseback:

• Total Purchase & Improvements: $1M - $5M+

• Term: 10-Year NNN w/ two 5-Year options

• Cap Rate: ~13%

• Buyback Option: After 3rd Year

If you need financing for a cannabis related property click the button below:

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• EN Capital is capital advisory firm / intermediary and NOT a direct capital source. Seriously, every time we sent out an email someone replies and gets pissy when they realize we’re intermediaries and not direct lenders. It’s clear on our website, LinkedIn and emails. We don’t know how to make it more obvious. Don’t be that guy.

Be sure to connect with EN Capital on Linkedin. and visit our website here.

Nathan Whigham
President
CA DRE Broker License: 01793655

EN Capital Contact Info:
www.encapital.com
[email protected]
Direct Line: 310-465-9253