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January 12, 2013

Solar farm land sold for $1M

Real estate investment trust buys True North Energy site

SALISBURY — A publicly traded real estate investment trust has purchased the Rabbit Road land housing the True North solar farm for about $1 million.

PW Salisbury Solar, LLC, a nonoperating subsidiary of Power REIT, purchased the 54-acre site from True North, developed by Jim Vaughn of West Newbury, on Dec. 27, according to the deed posted on the Essex County Registry of Deeds’ website.

Along with the land, Power REIT bought the buildings and improvements on it, according to the deed.

Power REIT paid $915,000 for the land and assumed another $122,000 for sewer financing, bringing the total price to $1.037 million, according to Ton Konrad, editor at AltEnergyStocks.com and “Green Stocks” blogger at Forbes.com. Locally, the property is assessed at $715,000, according to town records.

The property was put up for sale this fall, not long after the solar farm began producing electricity. The land was advertised through LandVest requiring a sealed bid by Oct. 12 for a minimum of $1.75 million. The terms stipulated that the solar electric-generating facility was not part of the sale, but would become a tenant on the land.

According to Konrad, True North has a 21-year lease on the property at a rate of $80,800 a year, with a 1 percent escalation rate. The terms of the deal have Power REIT paying the real estate taxes on the property, but not on the solar farm, Konrad said.

Konrad has been following the progress of Power REIT, a small, publicly traded company, which in recent years altered its business plan to focus on acquiring real estate in renewable energy resources, such as solar and wind power. Konrad said Power REIT is the first real estate investment trust to invest in a solar energy site. Prior to its new focus, Power REIT invested primarily in railroad-related real estate, Konrad said.

A real estate investment trust, or REIT, is a business entity that doesn’t pay corporate income tax because it meets specific criteria. Konrad said the trusts must invest in real estate and pass on nearly all their income to their shareholders, who in turn pay tax.

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