As legal marijuana continues to gain traction, it’s bringing another economic force up with it: The next real estate heyday.
The New York Times calls it a “real estate boom, powered by pot.”
Commercial real estate developers say they have never seen a change so swift in so many places at once. From Monterey, Calif., to Portland, Me., the new industry is reshaping once-blighted neighborhoods and sending property values soaring. In some Denver neighborhoods, the average asking lease price for warehouse space jumped by more than 50 percent from 2010 to 2015, according to an industry report. In the city over all, there are five times as many retail pot stores as stand-alone Starbucks shops.
“This is a new segment of the industrial real estate market that is being created in front of our eyes,” real estate executive George M. Stone told the New York Times. “It’s a huge industry and only getting bigger.”
So far, legal weed seems like a win-win for everyone involved, from tenant to landlord. Owners can charge growers above-market for warehouses that require little maintenance, landlords can sublease these fixtures out, and growers can sell all the weed they can grow and afford the higher rent. Instead of dilapidated buildings and factories, community economies get jobs and new businesses — especially since the weed must be grow and sold all within the same state.
There are, of course, risks to this growth: If the federal government steps in to crack down on legal marijuana, all of this investment could be for naught. But for now, cannabis companies and landlords are growing together and reaping the benefits.
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