Cannabis Industrial Facilities Generate Premium Rents

Paul Britvar

Cannabis real estate is generating premium rents for industrial facilities in San Diego. According to research from Newmark Knight Frank, cannabis-zoned industrial product is capturing rents $1 or more per square foot than similar quality product not zoned for cannabis usage. The cannabis market in San Diego is still new, but the leasing activity is already exposing the substantial impact the industry will have in San Diego.

“The primary impacts have been to lease rates and availability,” Paul Britvar, a director at NKF, tells GlobeSt.com. “Many cannabis uses require buildings with substantial power and cannabis operators are able to pay a premium for the space because of the high profit margin their business creates therefore not only are rental rates higher than average in buildings where cannabis operators lease, but the cannabis uses often seek buildings with exceptional power which removes these buildings from the market for industrial uses.”