Staff
There is a new cannabis Real Estate Investment Trust or REIT in the market. MJ REIT was recently formed as a partnership between Rainbow Realty Group and Arcview Capital. Rainbow Realty Group will serve as sub-manager to MJ REIT, responsible for selecting and underwriting investments, while Arcview Capital will serve as the managing broker-dealer, tasked with distributing shares to the investing public and providing sales support.
“With heightened volatility in the public markets and investor concerns around rising rates and inflation, it’s exciting to create a strategy that provides investors an innovative solution to help meet their long-term goals,” said Christopher Reece, CEO of MJ REIT.
Hoya Capital recently wrote on Seeking Alpha that “Cannabis REITs have delivered the strongest dividend growth over the past five years, averaging more than 20% per year. Cannabis REITs pay out roughly 85% of their available FFO, however, higher than the REIT sector average.” Two of the leading cannabis REITs are Innovative Industrial Properties (NYSE: IIPR) and New Lake Capital Partners (OTC: NLCP).
MJ REIT says it seeks to provide investors with solutions to three major investing challenges:
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Income: Targeting approximately 10% annual distributions, paid in monthly 1099 Income
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Diversification: Alternative investments like private commercial real estate can be complementary to a traditional stock & bond portfolio
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Stability: Private commercial real estate has historically provided attractive risk-adjusted returns.
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“By partnering with MJ REIT, we’ll help provide the capital needed for companies in this rapidly growing industry. With our multi-generational history of real estate investing, Rainbow employs a conservative underwriting approach and values properties using ‘non-cannabis’ valuations, unlike other cannabis REITs,” said Kyle Shenfeld, President of Rainbow Realty Group.
