The High Demand for Marijuana Grow Houses

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May 5 (Bloomberg) –- Commercial Realtor Paul Isenbergh and Bloomberg’s Heather Perlberg discuss the marijuana real estate boom. They speak with Stephanie Ruhle on Bloomberg Television's "Street Smart." (Source: Bloomberg)

On this myself including two documentaries and a book.

One of the things i noticed was pretty incredible over the time that i did this reporting was that colorado started to become increasingly more popular.

I can remember first hearing from some growers that this is unbelievable what is happening.

There are warehouses we can go amazing marijuana.

Everybody was clamoring for warehouse space.

I understand it today, it is pretty difficult to get it.

It is true.

These buildings are in such high demand people will line up to buy them if they are listed on the markets.

They were traditionally used for industrial purposes.

Now they are selling them in less than 24 hours sometimes.

One of the reason so many of these growers told me they like these warehouses versus say growing in parts of northern california were traditionally a lot of this had been done is that you were able to control the environment a lot more.

They really like it.

Colorado then followed suit by legalizing marijuana for recreational purposes.

There is now this tremendous boom in that part of the economy.

What has happened with real estate prices for warehouse this?

Class significant increases in pricing.

There are buildings that when they have the market have four fight contract -- four or five contracts on them.

There are properties owned.

The industrial warehouses are zoning that will only allow this for the industry.

It is challenging to.

As exciting as this may be from a real estate boom perspective as multiple bidders come forth, if you are the landlord for one of these where horses -- warehouses and you people growing marijuana, are you not vulnerable because this is still against federal law?

You have a very minor risk of retained outside counsel that has given us criminal guidance on how to to keep from becoming subject to a money laundering indictment, had to pay for your rent.

No percentage rent.

You still run the risk of a tenant or his employee behaving badly and thereby breaking the federal laws and the state laws and being subject to federal focus.

Is that one of the reasons we are seeing prices increase, not because of demand but the risk that some of the landlord's are taking on?

Prices have grown four times in the last year.

The rents that people are charging double the market rate.

Investors are taking a big risk of becoming landlords to these tenants.

Things are not comfortable lending it.

They still account for that.

Paul, you're going to jump in.

The rents have probably tripled.

The value of the buildings themselves have probably more like doubled.

You're seeing people investing in buildings.

If they do not get the tenant, their investment is not going to make any sense.

They need to have that what?

That was the medical marijuanam mmj business, mmj real estate.

Is very dynamic.

I read in your story that heather rhoda bestie will have bought buildings in sarasota.

My concerning would be that they

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