January 4, 2017

Real Estate Investment Trust (REIT) Gladstone Land, announced that it agreed on December 28, 2016 to acquire 16,595 contiguous acres of farmland in Colorado for $9.1 million in cash and 233,952 common shares of limited liability partnership interest in its operating partnership for a total consideration of $12.1 million. The operation has been farmed in Southeast Colorado for decades producing high-fiber hay for the cattle industry.

Under the terms of the deal, Gladstone also has secured a triple-net lease agreement with the existing operator with a term lasting through 2020 that provides annual rent escalations, a straight-line capitalization rate of 5.9 percent, and including one five-year extension option.

This deal builds upon a previous $6.5 million acquisition of 7,284 acres in Colorado completed by the company in August 2016 that added high-fiber hay as a new crop to Glandstone’s portfolio.

“Similar to our most recent purchase in Colorado, the soil on this farm is ideally suited to grow high-quality crops to serve the cattle industry,” said David Gladstone, president and CEO of Glandstone Land.

Colorado’s feedlots feed about 2.3 million head of cattle per year according to the Colorado Cattlemen’s Association. The state has 11,600 farms with cattle and calves, 206 feedlots, and 24 USDA-certified slaughterhouses, and is the fourth largest exporter of fresh and frozen beef in the country.

“Adding this purchase to our earlier acquisition in Baca County strengthens our commitment to a new region and a new crop specialty,” added Bill Hughes, Midwest managing director with Gladstone Land.

Looking Back and Looking Forward

This latest purchase brings Gladstone’s portfolio to 50,592 acres spread across 58 farms in seven U.S. states with a value of $398 million – the result of a dynamic year for the company.

Other acquisitions announced by the company last year include the previously mentioned 7,384 acres of high-fiber hay producing farmland in Colorado, a 70-acre strawberry farm in Florida for $1.7 million, and the acquisition of 401 acres of farmland in St. Lucie County, Florida, producing green beans and bell peppers for $5.1 million.

In April, the firm acquired 453 acres in Fresno, California, of which 435 were planted in pistachio trees (another new crop for the company), for $15.5 million; and in March, Gladstone acquired 6,190 acres of organic, and soon to be organic farmland in Colorado for a total deal consideration of $25.9 million.

After building an extensive portfolio of farmland focused on fresh produce annual row crops including berries and vegetables, permanent crops such as almonds, blueberries, and pistachios, and high-fiber, low-protein hay, the company remains open to the possibility of also expanding its acquisitions to include ancillary properties related to agriculture including cooling facilities, processing and packaging facilities, and distribution centers.

Looking forward, Mr. Gladstone is positive about the company’s coming year, stating that there is another large-scale farming operation scheduled to close by the end of January pending successful due diligence.

“We believe that 2017 will be the best year in our company’s history,” he said, “and we plan on increasing our dividend if earnings continue to increase.”

– Lynda Kiernan