This Sector Is Producing Huge Yields

Mark Paul is the founder and co-CEO of MJ Real Estate Investors.

LOS ANGELES—While cap rates are bottoming out in nearly all product types, cannabis-related real estate is generating 11% to 15% cap rates. MJ Real Estate Investors is a new investment firm that is focusing on the emerging cannabis real estate market, which it anticipates will become its own asset class after legalization. The firm has already generated double-digit cap rates in their first transactions.

“This space offers opportunities to generate double-digit cap rates. In a cap-rate starved world where we are seeing 4% and 5% cap rates on a lot of things, this is something that will be of interest to a lot of people,” Mark Paul, co-founder and CEO, tells GlobeSt.com. “We have done several deals now at double-digit cap rates, producing yields in the 11% to 15% range without investors having to invest at the company level. We are not growers; we are not cultivators; we are not dispensary owners. We are purely commercial real estate owners and landlords.”