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Fund IV

Fundamentals

Patience

Rainbow Realty Group has been operating in the real estate industry since 1962 and in the cannabis industry since 2018. The organization is extremely selective when deploying capital. Rainbow Realty Group has flourished during the last 3 years - the most challenging times that the cannabis industry has faced - due to its careful underwriting standards. Our team has reviewed thousands of opportunities, but we have closed on less than 30 transactions. Simply put, RRG is the tortoise in the race.

Diligence

When reviewing any potential deal, our team conducts rigorous diligence to best quantify the risk and opportunity. We consult local real estate brokers who know the market, and we speak to cannabis industry insiders that know the counterparty. Our real estate valuations are based on market non-cannabis rents for traditional retail and industrial users in the given location. Rainbow Realty Group does not finance ground up construction. This standard diligence and underwriting practice has kept Rainbow Realty Group safe. RRG has recorded 0 losses on 57 properties financed since inception.

Selectivity

Rainbow Realty Group has taken a very conservative approach to the industry. 95% of opportunities we review do not make it past step one, which is the real estate evaluation. Once we are satisfied that the real estate bid/ask is market non-cannabis for the area, we will then dissect the counterparty’s business model to ensure we believe in the plan and viability of the counterparty. Once satisfied with the real estate and the counterparty, our investment team will formally present to our investment committee, which has over 210 years of combined real estate experience.

Flexibility

Rainbow Realty Group purchases real property and Rainbow Realty Group mortgages real property. The dual offering allows RRG to work with potential borrowers and tenants to craft a deal that works. Sometimes cannabis companies don’t know what they want or need. RRG’s flexibility is a huge advantage, in an industry where the demand for capital far exceeds the capital available.

Sale- Leasebacks

Senior Mortgage

• 9-13% capitalization rates based on purchase price
• Term: 10-15 years, multiple 5 or 10 year extension options available
• Absolute NNN leases
• Tenant improvement allowances available in certain instances
  

• Retain ownership interest in your property or finance a purchase option in your lease
• Up to 75% LTV Available (based on non-cannabis Value)
• 10-15% interest rate. Interest only available.
• 2-4 year loans with extension and prepayment flexibility
  

Case Studies

Full list of repaid loans and completed sales here

Case Study - Repaid Loan

In October 2023, Fund I was refinanced out of a loan it made in June 2021.

Cannabis grower, cultivator, & distributer

Detroit, Michigan

Loan

Case Study - Completed Sale

In early 2022, Fund I completed a sale of 5 assets it purchased in 2019.

Cannabis Cultivation and Dispensaries

Denver, Colorado

Sale-Leaseback

Case Study - Repaid Loan

In March 2024, our tenant in Ravenna, Ohio, purchased the building and paid off the loan that was made in 2022.

Cannabis Dispensary

Ravenna, Ohio

Loan

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