Power REIT Reports Revenue Increase to $3.05 Million Amid Significant Net Loss

Power REIT, a Maryland-based real estate investment trust (REIT), reported a significant increase in revenue for the fiscal year ending December 31, 2024, totaling $3.05 million, compared to $2.22 million in 2023. This growth was primarily driven by a notable rise in rental income from related parties, which accounted for $785,000 of the total revenue. However, the company also faced substantial challenges, including a net loss attributable to common shareholders of $25.36 million, a sharp increase from the $15.02 million loss reported in the previous year. The net loss per common share after impairment was $7.48, compared to $4.43 in 2023.

The financial performance of Power REIT was heavily impacted by a $20 million impairment charge related to its Controlled Environment Agriculture (CEA) properties, which have been underperforming due to a downturn in the cannabis market. The company has been actively marketing its greenhouse portfolio for sale, but the market conditions remain weak, leading to significant vacancies and defaults among tenants. As of December 31, 2024, the Trust's total assets were valued at approximately $46.1 million, a decrease from $70.2 million in 2023, largely due to the impairments and the classification of several properties as "assets held for sale."

In terms of strategic developments, Power REIT has been focusing on improving its liquidity by selling non-core and underperforming assets. In 2024, the Trust completed sales of four properties, generating approximately $2.6 million in unrestricted cash. The proceeds from these sales were primarily used to service the Greenhouse Loan, which is currently in default and subject to litigation. The company is exploring options to resolve the loan situation, including potential distressed sales of its greenhouse properties.

Operationally, Power REIT's revenue concentration remains a concern, with approximately 88% of its revenue derived from just three tenants: Norfolk Southern Railway, Regulus Solar LLC, and Marengo Cannabis LLC. This concentration poses risks, as any financial difficulties faced by these tenants could significantly impact the Trust's revenue. As of the end of 2024, the Trust's cash and cash equivalents totaled $2.23 million, a decrease of $1.87 million from the previous year, raising concerns about its ability to continue as a going concern.

Looking ahead, Power REIT's management has indicated a commitment to enhancing shareholder value through strategic asset sales, re-leasing efforts, and potential capital raises. However, the company acknowledges substantial doubt regarding its ability to continue operations without additional capital or successful asset sales, particularly in light of its current liabilities exceeding its assets. The Trust's future performance will depend on its ability to navigate these challenges and capitalize on potential growth opportunities in the evolving real estate market.