The Best Ever CRE Show JF 4011: Cannabis Real Estate Debt, Evergreen REIT Structure and Risk-First Diligence ft. Chris Reece
Aug 28, 2025
Chris Reece, Founder & CEO of MJ REIT, shares insights from his nearly 30 years in asset management, focusing on cannabis real estate debt. He explains how he mitigates risks by underwriting properties for alternative uses. The discussion highlights MJ REIT’s flexible investment structure, contrasting construction and stabilized asset financing, and the persistent challenges due to federal regulations. Reece emphasizes the importance of diligence for investors, revealing strategic considerations for navigating this burgeoning market.
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Why Chris Entered Cannabis Lending
- Chris Reece transitioned from institutional public markets to private credit looking for dampened volatility and higher risk-adjusted returns.
- He targeted cannabis because of high growth, limited capital, and low institutional exposure.
Underwrite To Alternative Use
- MJ REIT underwrites cannabis real estate to a non-cannabis alternative use to de-risk senior mortgages.
- That ensures loans remain recoverable by enabling replacement tenants and lower downside valuations.
Scarcity Keeps Yields Elevated
- Scarcity of bank financing keeps private lenders in the cannabis market and sustains elevated yields.
- As federal policy changes, competition and cost of capital will likely push yields lower over time.