Power REIT

As of December 31, 2023, our portfolio consisted of a total of approximately 112 miles of railroad infrastructure plus branch lines and related real estate, approximately 501 acres of fee simple land leased to a number of utility scale solar power generating projects with an aggregate generating capacity of approximately 88 Megawatts (“MW”), and approximately 256 acres of land with approximately 2,162,000 square feet of existing or partially complete greenhouse/processing space.

As of December 31, 2023, the Trust considered Desert Hot Spring (CA), Walsenburg (CO), Vinita (OK), Maverick 14 (Ordway, CO), Tamarack 4 and 5 (Ordway, CO), Sherman 6 (Ordway, CO), Tamarack 14 (Ordway, CO), Tamarack 13 (Ordway, CO), Maverick 1 (Ordway, CO) and Salisbury (MA) as Assets Held for Sale. See Note 8 of our Financial Statements for discussion of impairments and of our assets held for sale.

Below is a chart that summarizes our properties owned as of December 31, 2023:

1 Solar Farm Land size represents Megawatts and CEA property size represents greenhouse square feet

2 Building structure construction incomplete

3 Gross Book Value for our Greenhouse Portfolio represents purchase price (excluding capitalized acquisition costs) plus improvements costs

4Property is vacant

5Tenant is not current on rent/in default

6An impairment has been taken against this asset

7Asset held for sale

8Loan secured by a second mortgage related to property in Maine sold on November 1, 2023

9Property sold after December 31, 2023 - see Note 13 Subsequent Events

Railway Property

Pittsburgh & West Virginia Railroad (“P&WV”), a wholly owned subsidiary, is a business trust organized under the laws of Pennsylvania which owns railroad assets that are currently leased to Norfolk Southern Railway (“NSC”) pursuant to a 99-year lease that became effective in 1964 and is subject to an unlimited number of 99-year renewal periods under the same terms and conditions, including annual rent payments, at the option of NSC (the “Railroad Lease”). Norfolk Southern Corporation has an investment grade rating of BBB+ by S&P Global Ratings. P&WV’s assets consist of a railroad line of approximately 112 miles in length plus branch lines, extending through Connellsville, Washington and Allegheny Counties in the Commonwealth of Pennsylvania, through Brooke County in the State of West Virginia and through Jefferson and Harrison Counties in the State of Ohio, to Pittsburgh Junction in Harrison County, Ohio. There are also branch lines that total approximately 20 miles in length located in Washington and Allegheny Counties in Pennsylvania and Brooke County in West Virginia. NSC pays P&WV base cash rent of $915,000 per year, payable in quarterly installments.

Solar Properties

PW Salisbury Solar, LLC (“PWSS”) is a Massachusetts limited liability company and a wholly owned subsidiary of the Trust, that until January 30, 2024 owned approximately 54 acres of land located in Salisbury, Massachusetts that was leased by Power REIT to a 5.7 Megawatts (MW) utility scale solar farm. Pursuant to the lease agreement, PWSS’ tenant pays rent of $80,800 cash for the year December 1, 2012 to November 30, 2013, with a 1.0% escalation in each corresponding year thereafter. Rent was payable to Power REIT quarterly in advance and was recorded by Power REIT for accounting purposes on a straight-line basis with $89,494 having been recorded during the year ended December 31, 2023. The PWSS property was sold on January 30, 2024 (see Note 13 Subsequent Events in the notes to the financial statements contained elsewhere in this Annual Report).

PW Regulus Solar, LLC (“PWRS”) is a California limited liability company and a wholly owned subsidiary of the Trust that owns approximately 447 acres of land leased to a utility scale solar farm with an aggregate generating capacity of approximately 82 Megawatts in Kern County, California near Bakersfield. PWRS’s lease was structured to provide it with initial quarterly rental payments until the solar farm achieved commercial operation which occurred on November 11, 2014. During the primary term of the lease which extends for 20 years from achieving commercial operations, PWRS receives an initial annual rent of approximately $735,000 per annum which grows at 1% per annum. The lease is a “triple net” lease with all expenses to be paid by the tenant. At the end of the primary term of the lease, the tenant has three options to renew the lease for 5-year terms in the first two options, and 4 years and 11 months in the third renewal option. Rent during the renewal option periods is to be calculated as the greater of a minimum stated rental amount or a percentage of the total project-level gross revenue. The acquisition price, not including transaction and closing costs, was approximately $9.2 million. For the twelve months ended December 31, 2023, PWRS recorded rental income of $803,117.

CEA Greenhouse Properties – Cannabis Related

Colorado Portfolio

From July 2019 to June 2021, through a series of wholly owned indirect subsidiaries, the Trust acquired a number of properties located in Ordway, Colorado for the development of greenhouse cannabis cultivation facilities. The total size of the Ordway, Colorado portfolio is approximately 59 acres and approximately 300,000 square feet of greenhouse and related structures have been constructed for a total investment of approximately $24 million. Each property was acquired based on entering into a triple-net lease with a cultivation operator. A significant portion of the Ordway portfolio is vacant and the Trust is seeking to sell or re-tenant these properties. The Trust has taken an impairment against the Ordway, CO assets.

On May 21, 2021, through a wholly owned indirect subsidiary, the Trust purchased a 35-acre property that includes greenhouses plus processing/auxiliary facilities (“Walsenburg Property”) approved for cannabis cultivation in Huerfano County, Colorado. PW Walsenburg’s total capital investment as of December 31, 2023 is approximately $4.2 million. Concurrent with the acquisition, PW Walsenburg entered into a 20-year “triple-net” lease (the “Walsenburg Lease”) with Walsenburg Cannabis LLC. During 2022, the Trust recognized revenue of $250,000 related to a security deposit from the tenant and the Walsenburg Property is considered an asset held for sale as the Trust has initiated an active program to locate a buyer through a third party and the assets are not in operations, therefore, not generating any rental income and we are evaluating collectability related to the guaranties. No income was recognized for this property in 2023. The Trust has taken an impairment against the PW Walsenburg assets.

Unfortunately, the market for cannabis cultivation in Colorado deteriorated dramatically in 2022 and 2023 and all of the tenants have encountered an inability to pay contracted rent and are either paying a reduced amount or have vacated the premises.

California

On February 3, 2021, through a wholly owned indirect subsidiary, the Trust acquired an .85 acre property with a 37,000 square foot greenhouse located in Riverside County, CA (the “Canndescent Property”) and the Trust assumed an existing lease. During the fourth quarter of 2022, the tenant defaulted on the lease and vacated the property. On October 2, 2023 a lease with a replacement tenant was executed and the tenant is gearing up for operations. As of December 31, 2023, the Canndescent Property is considered held for sale as the Trust initiated an active program to locate a buyer through a third party. The Trust has taken an impairment against this asset.

Oklahoma

On June 11, 2021, through a wholly owned subsidiary, the Trust purchased a 9.35-acre property that includes approximately 40,000 square feet of greenhouse space, 3,000 square feet of office space and 100,000 square feet of fully fenced outdoor growing space including hoop houses (“Vinita Property”) that was approved for medical cannabis cultivation in Craig County, OK. Concurrent with the acquisition, PW Vinita entered into a 20-year “triple-net” lease with VinCann LLC (“VC LLC”) to operate a cannabis cultivation facility. During the second quarter of 2022, the tenant defaulted on the lease and revenue recognition is currently being handled on a cash-basis but no revenue is expected as the tenant has ceased operations and we are evaluating collectability related to the guaranties. The Trust has taken an impairment against this asset.

Michigan

On September 3, 2021, Power REIT, through a wholly owned indirect subsidiary, PW MI CanRE Marengo, LLC, (“PW Marengo”), completed the acquisition of a 556,146 square foot greenhouse cultivation facility on a 61.14-acre property in Marengo Township, Michigan (“Marengo Property”).

Concurrent with the acquisition, PW Marengo entered into a 20-year “triple-net” lease (the “Marengo Lease”) with Marengo Cannabis, LLC (“MC”) for the operation of a cannabis cultivation facility.

As previously announced, cannabis licensing at the Marengo Township greenhouse cultivation facility was delayed based on a dispute with Marengo Township Building Official (“BO”). The BO has taken the position that changing the plant grown in the greenhouse to cannabis would require building permits and a Certificate of Occupancy for the existing structure which previously did not require any. On November 21, 2022, representatives of Power REIT met with the Marengo Township Construction Board of Appeals which has agreed to allow the project to proceed as follows:

We continue to work on a strategy related to seeking the required permits for some work that has been completed or is in process after which we could receive a Certificate of Occupancy for cannabis cultivation purposes but the process the process with Marengo Township remains quite challenging. There can be no assurance that Marengo Township will ultimately approve proceeding with cannabis cultivation at this property or do so on terms that are economically feasible given the current state of the market.

Unfortunately, the market for cannabis has compressed dramatically in Michigan over the course of 2022 and 2023. This greenhouse property would be the largest cultivation facility in Michigan if put into operation for cannabis and would have the potential to produce a significant percentage of the overall Michigan cannabis market opportunity. The Trust is currently evaluating alternatives for this asset included but not limited to: (i) restructuring the lease with the original Tenant, (ii) finding a replacement tenant interested in the cultivation of cannabis at the property, or (iii) finding a replacement tenant interested in the cultivation of produce at the property, or (iv) the sale of the property. There can be no assurance as to how long this process will take.

CEA Greenhouse Properties – Food Related

Nebraska

On March 31, 2022, Power REIT, through a wholly owned subsidiary, completed its first acquisition with the focus on the cultivation of food crops. The property consists of an approximately 1.1 million square foot greenhouse cultivation facility on an approximately 86-acre property and a separate approximately 4.88-acre property with a 21-room employee housing building. Simultaneous with the acquisition, the subsidiary entered into a 10-year “triple-net” lease (the “MillPro Lease”) with Millennium Produce of Nebraska LLC (“MillPro”), a subsidiary of Millennium Sustainable Ventures Corp., of which David Lesser is CEO and Chairman. During 2022, MillPro operated the Facility for the cultivation of tomatoes. During the third quarter of 2022, the tenant defaulted on the lease by not paying rent that was due and revenue recognition is currently being handled on a cash-basis but no rental income is expected as the tenant has ceased operations at the property.

Unfortunately, the market for tomatoes compressed and the tenant was unable to meet its financial obligations and has vacated the property. We have been actively exploring alternatives to secure a new tenant to put the facility back into operation and the potential to sell the MillPro Facility. In February of 2024, our subsidiary entered into a 20 year triple-net lease with an initial rent of $1 million per year after a 6 month deferred rent period along with a Letter of Intent to purchase the property for $9.2 million with a deadline of December 31, 2024. There can be no assurance that the tenant will perform on either the Lease or Purchase.

Revenue Concentration

The Trust’s revenue is highly concentrated. For the fiscal year ended 2023, Power REIT collected approximately 84% of its consolidated revenue from two properties. The tenants are Norfolk Southern Railway and Regulus Solar LLC which represent 45% and 39% of consolidated revenue respectively. For the fiscal year ended 2022, Power REIT collected approximately 57% of its consolidated revenue from four properties. The tenants are NorthEast Kind Assets, LLC (“Sweet Dirt”), Fiore Management LLC (“Canndescent”), Norfolk Southern Railway and JAB Industries, Ltd (“JAB”), which represent 22%, 10%, 11% and 14% of consolidated revenue respectively.