Power REIT (NYSE: PW) exhibited an upward trajectory during the extended trading session yesterday. Notably, Power REIT's shares witnessed a notable surge of 16.38%, reaching a price of $0.81 in the after-hours trading on Thursday. This came on the heels of the standard trading session, during which the stock saw a modest decline of merely 0.5714%, concluding at $0.6960. The remarkable upswing in PW stock price can be attributed to a strategic maneuver executed by its wholly-owned subsidiary.
In a disclosure filed with the U.S. Securities and Exchange Commission on Thursday, Power REIT unveiled a pivotal transaction that transpired on November 1, 2023. In this transaction, a wholly owned subsidiary of Power REIT (PW SD) divested its stake in a greenhouse facility dedicated to the cultivation of cannabis in Maine. The facility was sold to an affiliate of its tenant.
The Purchase and Sale Agreement related to this property, initially established by PW SD, underwent renegotiations to align with the prevailing circumstances leading up to the closure. The entire worth of the deal reached $4.25 million. Within this exchange, PW SD issued an $850,000 note with an 8.5% interest rate, and the interest will accrue until it's due on October 30, 2025.
The note is secured by a secondary mortgage on the property, backed by specific corporate and personal guarantees. The divestiture of the Sweet Dirt property forms an integral component of Power REIT's strategic evaluation, aimed at enhancing liquidity and fostering new prospects. In 2019, Power REIT underwent a strategic shift in its focus, directing its attention toward the realm of Controlled Environment Agriculture, specifically in the form of technologically advanced greenhouse-based real estate opportunities.
Power REIT holds substantial exposure to tenants involved in cannabis cultivation, particularly at the wholesale level, which has lately experienced profound transformations across multiple U.S. markets, exerting considerable financial pressures on our tenants, including Sweet Dirt. The team at PW remains committed to addressing tenant-related challenges and exploring various avenues with the objective of augmenting shareholder value, potentially involving additional asset dispositions.