September 11, 2018

Real Estate Investment Trust (REIT) Gladstone Land has had an eye toward Florida this quarter, announcing the acquisition of a farm in the north of the state totaling 574 acres for $2.6 million.

Upon closing, Gladstone assumed a lease with more than two years remaining on the term with the farming operation growing mainly peanuts and melons.

“We are pleased to acquire our first farm in the Florida panhandle,” said Bill Frisbie, managing director of Gladstone Land.  “This region has very fertile ground and many strong farm operators who we can partner with to continue expanding our farmland holdings in the region.”

This is the second deal for Gladstone in the state of Florida in as many months. On July 17 GAI News reported on the company’s agreement to acquire five farms in southern Florida totaling 5,630 acres for a consideration of $37.4 million.

And Within Days…

Within days of the latest Florida acquisition, Gladstone released another statement announcing its acquisition of two permanent crop farms totaling 194 acres of cherry orchards in Kings County, California for approximately $6.9 million.

“This acquisition adds two more great farms and another strong tenant to our growing list of farms, further strengthening the diversification within our farmland holdings,” said David Gladstone, president and CEO of Gladstone Land. “Cherries are one of the many healthy foods that are produced on our farms, and these two farms produce some of the types of cherries that you typically see in grocery stores in the early spring.  As many people know, our strategy is to own farms that produce healthy foods that are found in the produce and nut sections of your grocery stores,” added Gladstone.

Helping to make these deals possible, Gladstone announced on July 12 the successful sale of one of its Oregon-based farming assets for $20.5 million.

Although the company’s strategy is to hold portfolio assets for the long-term, the tenant currently managing the property made Gladstone an offer for the farm that drew the company’s attention.

“Our sale in Oregon was driven by a very compelling purchase offer from our current tenant,” said Frisbie at the time. “Our strategy is to buy and hold for the long term, but occasionally we receive an offer that warrants serious consideration.”

The offer of $20.5 million reflects a premium of 22 percent above the farm’s most recent valuation, and resulted in a 22 cent increase to Gladstone’s estimated net asset value per common share; a 20 percent internal rate of return on its initial equity investment; and a gain of $6.4 million on the sale.

In July, the intention to continue pursuing acquisitions was hinted at by Gladstone, who commented at the time, “We look forward to continuing to build on our existing tenant-farmer partnerships during 2018.”

The addition of the farm in northern Florida and Kings County, California, bring Gladstone’s farmland portfolio to 82 farms, comprised of 67,826 acres across nine U.S. states with a value of approximately $569 million. The acreage is predominantly in locations compatible with the production of fresh produce annual row crops such as berries and vegetables, or permanent crops including blueberries, almonds, or pistachios. The company remains open, however, to the possibility of adding ancillary assets such as cooling facilities, processing plants, packaging facilities, or distribution centers to its holdings.

Commenting on future plans for the company, Gladstone noted, “This acquisition adds another strong tenant and farm growing healthy produce to our growing list of owned and leased farmland. We hope to have several more acquisitions to announce throughout the rest of 2018.”

-Lynda Kiernan