STABLE QUARTERLY FFO WITH POTENTIAL FOR SIGNIFICANT INTERNAL GROWTH

PROGRESS WITH RESPECT TO MICHIGAN GREENHOUSE CANNABIS LICENSING

Outdated Bethpage, New York, Aug. 12, 2022 (GLOBE NEWSWIRE) — Energy REIT (NYSE-AMEX: PW and PW.PRA) (“Energy REIT” or the “Belief”), with a centered “Triple Backside Line” technique and a dedication to individuals, planet, and revenue, is offering data concerning its quarterly monetary efficiency, hashish licensing at is Michigan greenhouse property and different portfolio updates. The data supplied beneath contains highlights from its quarterly report and present enterprise actions as reported on its Type 10Q filed with the SEC.

Q2 -2022 FINANCIAL HIGHLIGHTS

• Throughout the second quarter of 2022, the Belief reported Core FFO of $0.41 per share in comparison with Core FFO per share of $0.51 for the comparable interval in 2021.
• Core FFO for the interval ended June 30, 2022, of $0.41 per share compares to $0.40 per share for the quarter ended March 31, 2022.

Commenting on the outcomes and Q2-2022 achievements, David Lesser, Chief Government Officer said, “Energy REIT is at present centered on greenhouse as a singular actual property asset class as a sustainable answer for the cultivation of sure crops. Since pivoting to deal with greenhouses, we’ve got acquired roughly 2.2 million sq. toes of which roughly 51% is at present centered on meals cultivation and 49% is at present centered on hashish cultivation. We lately acquired a 1.1 million sq. foot greenhouse centered on the cultivation of tomatoes which we consider was acquired at a deep low cost to alternative value. Relating to our hashish portfolio, the wholesale worth for hashish has exhibited important worth compression over the previous a number of quarters in most markets, which is impacting our hashish tenants. As we work by way of this market dynamic, we stay optimistic that our funding thesis centered on greenhouses offers a aggressive benefit relative to the widespread strategy to hashish cultivation within the type of warehouse/indoor services. Merely put, greenhouses value much less to construct and are extra environment friendly to function than warehouse model indoor cultivation services.”

MICHIGAN GREENHOUSE CANNABIS LICENSING UPDATE

As beforehand disclosed in a Type 8K filed July 18, 2022, hashish licensing for Energy REIT’s property situated in Michigan has been delayed. The Michigan Hashish Regulatory Authority (“CRA”) software requires submitting a Certificates of Occupancy (“CO”) or various documentation the place a CO doesn’t exist, Because the property has Agricultural zoning, it’s exempt from the Marengo Township constructing code and the requirement for a CO. Energy REIT requested a easy two sentence letter from Marengo Township that the CRA had pre-approved in an effort to meet this requirement however Marengo Township refused to supply the letter which in the end led to Energy REIT submitting two litigations in opposition to Marengo Township. As beforehand disclosed, PW Marengo lately secured the requested assertion from Marengo Township and the applying for hashish licensing was submitted to CRA. With respect to the litigations, Energy REIT agreed to dismiss one of many two actions and Marengo Township has agreed to proceed with a court docket ordered mediation course of to resolve remaining points.

With the licensing course of now transferring ahead, on August 9, 2022, CRA carried out a pre-licensure inspection and recognized that no deficiencies existed. Along with the CRA approval we obtained, we’re required to safe the approval of the Michigan Bureau of Fireplace Providers (“BFS”). The BFS course of is underway however there is no such thing as a certainty as to the timing to finish this course of and in the end safe the hashish licenses. We are going to proceed to supply updates because the licensing course of progresses.

Because of the uncertainty of the timing for receipt of money hire, efficient Q1 2022, we concluded that earnings from this lease can be acknowledged on a money foundation fairly than on a straight-line foundation till there may be extra readability concerning the power to pay hire based mostly on graduation of operations. As such, no earnings was reported for this property throughout Q1 2022 and Q2 2022. The Michigan greenhouse property represents the one largest asset by way of potential earnings technology inside Energy REIT’s current portfolio. Based mostly on the lease charge in place, and assuming earnings is acknowledged on a straight-line foundation, the incremental Core FFO from this asset can be roughly $0.38 per share per quarter.

Q2–2022 LEASING AND TENANT ACTIVITY

After we began investing in hashish greenhouses in Colorado in mid-2019, we created a sculpted hire schedule to designed to repay Energy REIT’s funding over 36 months adopted by a decrease long-term ongoing hire. This was established based mostly on market situations that confirmed important revenue potential, however we in the end anticipated worth compression and felt this construction arrange a greater dynamic for long-term success. For a few of our Colorado tenants, we’ve got already obtained a major quantity of our complete funding again within the type of hire. On account of latest dramatic wholesale hashish worth compression in Colorado, the Belief has supplied aid to a number of of our Colorado tenants whereby month-to-month money funds are restructured to decrease hire funds throughout 2022 and improve hire funds in 2023 or 2024. The restructurings nonetheless ponder a full return of Energy REIT’s funding over 36 months however lowers the near-term quantities paid. These amendments additionally don’t have an effect on the entire quantity of hire to be collected or the straight-line income calculation from these leases assuming the tenants can proceed to carry out. As of June 30, 2022, the Belief has executed seven of those lease amendments.

On Might 1, 2022, PW CO CanRE MF LLC (“CanRE MF”), an entirely owned subsidiary of the Belief, entered into a brand new triple-net lease (the “EB Lease”) with Elevate & Bloom, LLC (“EB Tenant”) for one of many two subdivided heaps owned in Ordway, CO and beforehand occupied by PSP Administration LLC (“PSP”) which was evicted. The time period of the EB Lease is 20 years and offers two choices to increase for added five-year intervals. Energy REIT’s complete dedication to this venture is roughly $1,282,000 with $750,283 remaining to be funded. The EB Lease additionally has monetary ensures from associates of the EB Tenant. The EB Tenant intends to function as a licensed hashish cultivation and processing facility. The EB Lease is structured to supply an annual straight-line hire of roughly $239,000, representing an roughly 18.6% unleveraged FFO yield on invested capital.

On June 1, 2022, PW CO CanRE Apotheke LLC (“PW Apotheke”) amended its lease with Dom F LLC (the “Apotheke Tenant”) to supply $364,650 for added enhancements to the property in addition to to restructure the timing of lease funds. The extra income on an annualized straight-line foundation is roughly $62,000 which represents roughly 17% unleveraged FFO yield. Nevertheless, based mostly on the historical past of funds, hire for this property is at present being handled on a money foundation and never on a straight-line foundation. Belief might start straight-lining based mostly on an ongoing evaluation of the power of the tenant to pay hire.

On June 1, 2022, PW CO CanRE Grail LLC (“PW Grail”) amended its lease with The Sandlot, LLC to restructure the timing of the hire funds however the complete straight-line hire over the lifetime of the lease is unchanged and an extra guarantor was added to the lease. Income recognition for the Sandlot Lease is at present being dealt with on a cash-basis and the Belief might start straight-lining based mostly on an ongoing evaluation of the power of the tenant to pay hire.

On June, 27, 2022, PW MI CanRE Marengo LLC (“PW Marengo”) entered right into a lease modification with Marengo Hashish LLC (the Marengo Lease Modification), to push out hire graduation to Q1 2023 to mirror the uncertainty across the timing of hashish licensing. The modification was structured to take care of the identical degree of straight-line accounting for hire for Energy REIT. As beforehand disclosed, the Belief has stopped together with income from our property situated Michigan on account of uncertainty round timing for hashish licensing and graduation of operations. As soon as there may be extra certainty across the timing of the power of the tenant to pay hire, Energy REIT will resume recognition of income. Had the straight-line hire for the Michigan property been included within the second quarter 2022 calculation, the incremental FFO can be $0.38 per share per quarter.

Mr. Lesser commented on the latest leasing and tenant exercise, “As beforehand talked about, wholesale hashish costs nationwide have compressed with Colorado among the many most extreme. We’re working with our tenants to get by way of this era of extra provide and have executed plenty of lease amendments to assist their viability on this market local weather. With wholesale costs beneath the price of manufacturing, particularly for indoor/warehouse model cultivation services, provide ought to proceed to come back off-line. We’re seeing cultivation services shutting down and fire-selling product which is additional driving down costs. Finally, we count on provide and demand to revert to sustainable ranges that may generate income for environment friendly operators of cultivation services. We consider that this market local weather will reaffirm our funding thesis that the decrease value of manufacturing in greenhouses in the end characterize the viable path ahead for hashish cultivation.”

PORTFOLIO

Energy REIT’s portfolio at present contains:

• 22 Managed Setting Agriculture (CEA) properties within the type of greenhouses totaling greater than 2.2 million sq. toes;
• 7 photo voltaic farm floor leases totaling 601 acres; and
• 112 miles of railroad property.

Mr. Lesser commented on Energy REIT’s outlook, “Whereas there are definitely challenges inside our portfolio, we at present commerce at a comparatively low a number of of Core FFO. As well as, we consider the price foundation in our belongings ought to present some type of draw back safety together with the truth that we personal actual property fairly than the underlying working companies. We sit up for transferring ahead with our deal with greenhouse cultivation properties as a know-how play within the type of actual property.”

CAPITAL MARKETS ACTIVITY

As beforehand introduced, Energy REIT entered right into a Debt Facility with preliminary availability of $20 million with a 5.52% mounted rate of interest. As of June 30, 2022, $11,500,000 was drawn on the Debt Facility.

DISTRIBUTIONS

Throughout the three months ended June 30, 2022, the Belief paid quarterly dividends of roughly $163,000 ($0.484375 per share) on Energy REIT’s 7.75% Collection A Cumulative Redeemable Perpetual Most well-liked Inventory., which was payable on September 15, 2022 to shareholders of file on August 15, 2022.

UPDATED INVESTMENT PRESENTATION

Energy REIT has posted an up to date investor presentation which is out there utilizing the next hyperlink: https://www.pwreit.com/buyers

STATEMENT ON SUSTAINABILITY

Energy REIT owns actual property associated to infrastructure belongings together with properties for Managed Setting Agriculture services with a deal with greenhouses, Renewable Power and Transportation.

CEA services within the type of greenhouses, present an especially environmentally pleasant answer, which devour roughly 70% much less vitality than indoor rising operations that don’t profit from “free” daylight. greenhouses use 90% much less water than area grown crops, and Energy REIT’s greenhouse properties function with out using pesticides and keep away from agricultural runoff of fertilizers and pesticides. These services domesticate medical Hashish, which has been beneficial to assist handle a myriad of medical signs, together with seizures and spasms, a number of sclerosis, post-traumatic stress dysfunction, migraines, arthritis, Parkinson’s illness, and Alzheimer’s. So far, the FDA has not accepted a advertising software for hashish for the therapy of any illness or situation.

Renewable Power belongings are comprised of land and infrastructure related to utility scale photo voltaic farms. These initiatives produce energy with out using fossil fuels thereby decreasing carbon emissions. The photo voltaic farms produce roughly 50,000,000 kWh of electrical energy yearly which is sufficient to energy roughly 4,600 houses on a carbon free foundation.

Transportation belongings are comprised of land related to a railroad, an environmentally pleasant mode of bulk transportation.

ABOUT POWER REIT
Energy REIT, with a deal with the “Triple Backside Line” and a dedication to individuals, planet and revenue, is a specialised actual property funding belief (REIT) that owns sustainable actual property associated to infrastructure belongings together with properties for Managed Setting Agriculture, Renewable Power and Transportation. Energy REIT is actively looking for to broaden its actual property portfolio associated to Managed Setting Agriculture within the type of greenhouses for the cultivation of meals and hashish.

Extra details about Energy REIT might be discovered on its web site: www.pwreit.com

Cautionary Assertion About Ahead-Wanting Statements
This doc contains forward-looking statements inside the which means of the U.S. securities legal guidelines. Ahead-looking statements are people who predict or describe future occasions or traits and that don’t relate solely to historic issues. You’ll be able to typically establish forward-looking statements as statements containing the phrases “consider,” “count on,” “will,” “anticipate,” “intend,” “estimate,” “venture,” “plan,” “assume”, “search” or different related expressions, or negatives of these expressions, though not all forward-looking statements comprise these figuring out phrases. All statements contained on this doc concerning our future technique, future operations, future prospects, the way forward for our industries and outcomes that may be obtained by pursuing administration’s present or future plans and aims are forward-looking statements. You shouldn’t place undue reliance on any forward-looking statements as a result of the issues they describe are topic to identified and unknown dangers, uncertainties and different unpredictable components, lots of that are past our management. Our forward-looking statements are based mostly on the knowledge at present out there to us and converse solely as of the date of the submitting of this doc. Over time, our precise outcomes, efficiency, monetary situation or achievements might differ from the anticipated outcomes, efficiency, monetary situation or achievements which might be expressed or implied by our forward-looking statements, and such variations could also be important and materially antagonistic to our safety holders.

Non-GAAP Monetary Measures

This doc accommodates supplemental monetary measures that aren’t calculated pursuant to U.S. typically accepted accounting ideas (“GAAP”), together with the measure recognized by us as Core Funds From Operations Accessible to Frequent Shares (“Core FFO”). Administration believes that Core FFO is a helpful supplemental measure of the Belief’s working efficiency. Administration believes that various measures of efficiency, resembling internet earnings computed underneath GAAP, or Funds From Operations computed in accordance with the definition utilized by the Nationwide Affiliation of Actual Property Funding Trusts (“NAREIT”), embody sure monetary gadgets that aren’t indicative of the outcomes supplied by the Belief’s asset portfolio and inappropriately have an effect on the comparability of the Belief’s period-over-period efficiency. This stuff embody non-recurring bills, resembling these incurred in reference to litigation, one-time upfront acquisition bills that aren’t capitalized underneath ASC-805 and sure non-cash bills, together with non-cash, stock-based compensation expense. Subsequently, administration makes use of Core FFO and defines it as internet earnings excluding such gadgets. Administration believes that, for the foregoing causes, these changes to internet earnings are applicable. The Belief believes that Core FFO is a helpful supplemental measure for the investing neighborhood to make use of, together with when evaluating the Belief to different REITs that disclose equally adjusted FFO figures, and when analyzing adjustments within the Belief’s efficiency over time. Readers are cautioned that different REITs might use completely different changes to their GAAP monetary measures than we do, and that consequently the Belief’s Core FFO will not be akin to the FFO measures utilized by different REITs or to different non-GAAP or GAAP monetary measures utilized by REITs or different corporations.

CONACT: