According to a recent article in P-V Tech, real-estate investment trusts (REITS) are growing across the country, and California is no exception. Earlier this month, a large land sale indicated that REITS are also beginning to have a hold in the solar industry. Near Fresno, the New York-based company Power REIT purchased approximately 100 acres of land that will support over 20MW of utility-scale projects in the area.
This recent land acquisition is likely to have implications for commercial solar energy solutions in California. If you have questions about commercial real estate and renewable energy, contact an experienced commercial lawyer today.
REITS and Commercial Real Estate
What is a REIT? It’s simply a company that owns and usually operates income-producing real estate. They’re used in the real estate sector “to raise capital to build commercial spaces like car parks, shopping centres and office blocks.” To qualify as a REIT, a company has to have most of its assets and income linked to real estate investment, and it has to distribute 90 percent or more of its taxable income to shareholders in the form of dividends.
Power REIT and the Solar Scene
Power REIT is no different, but it has a special focus: it owns and manages real-estate related to energy and transportation infrastructure, according to the company’s website. Specifically, Power REIT focuses on acquiring land and other real-estate interests that are open to “renewable energy based generating facilities.” Its properties fall under the categories of “solar land” and “railroad property.” The recent land acquisition in Fresno falls squarely into the “solar land” type.
The Fresno property will be the second area acquired by Power REIT. In Massachusetts, the company’s investment supports one of the largest solar farms in New England. The 20MW projects in Fresno come on the close heels of the Salisbury, Massachusetts 6MW investment, which the company made at the end of 2012. The company plans to continue growing its solar business, according to P-V Tech.
Indeed, about “80 to 90 percent of Power REIT’s transactions are in solar, with some wind projects.” The company’s solar transactions are putting it “well on its way to become the nation’s first REIT to get most of its revenue from renewable energy,” according to a report in Forbes.
Fresno Real Estate and Renewable Energy
The executive vice president at Power REIT, Arun Mittal, indicated that the company is “looking to invest in very clearly defined real estate.” In California, they’re seeing ample opportunities to invest in real estate for solar projects. In its news release about the company’s Fresno purchase, P-V Tech emphasized that Power REIT “is seeking to expand its real estate portfolio within the renewable energy sector,” and much of that work might lead to a California focus.
Indeed, Forbes has described the Fresno area as “a hotbed of PV development activity.” Since 2011, Fresno County has approved nearly twenty utility scale projects. In other words, commercial solar farms have been increasing in great numbers in northern California over just the last couple of years.
Do you have questions about commercial real estate acquisitions? Don’t hesitate to speak to an experienced commercial real estate attorney. Contact us today for more information.