January 5, 2021

By Lynda Kiernan, Global AgInvesting Media

In mid-December Gladstone Land announced that it had increased its secured note purchase facility with Federal Agricultural Mortgage Corporation (Farmer Mac) from $125 million to $225 million. 

At the time, company president and CEO David Gladstone said, “We believe this upsized facility will play an important role in our continued growth.”

Two days later this growth was manifest when Gladstone announced the acquisition of a 368 acre farm in Ventura County, California, for approximately $20.8 million. 

“We are excited to announce the addition of another quality farm in Ventura County,” said Bill Reiman, executive vice president, West Coast Operations, Gladstone Land. “This acquisition is a fine example of our ability to continue adding valuable fresh produce farmland to our portfolio. We are gaining a prominent new tenant who has been in the fresh vegetable business for generations, and we look forward to further expanding our business with them in the future.”

And as we turn the corner into the opening days of 2021, the company continues on its strategic path, announcing two additional farmland deals – also on the U.S. West Coast.

On December 28 Gladstone shared that it had acquired approximately 1,670 acres of farmland and facilities split between San Joaquin County, California and Whatcom County, Washington. The deal brings 1,390 acres planted in organic and conventional blueberries, and a fresh packing and cool facility. 

“Despite the challenges that 2020 has brought to the overall market, we continue to add excellent fresh produce farmland, such as these properties, to our portfolio,” said David Gladstone, president & CEO, Gladstone Land.

In connection with the acquisition Gladstone has cemented a 10-year, triple-net leaseback deal with the seller.

“We are excited to complete these large acquisitions of fresh blueberry farmland and to be entering into a new partnership with an industry leader as a new tenant,” said Joseph Van Wingerden, director, Gladstone Land. “The consumer demand for fresh blueberries, especially organic, continues to expand rapidly. The newer, consumer-preferred varieties, planting methods, and water rights present on these farms position them very well for the long term.”

Organic production and organic produce have become key concerns for consumers. Going hand-in-hand with organic production is an ever greater focus on regenerative agricultural production and carbon sequestration.

The role of organic farming in environmental initiatives was reinforced in September 2017 when a breakthrough study, directed by Northeastern University in collaboration with The Organic Center, found that soils on organic farms stored significantly larger amounts of carbon for longer periods of time compared to soils on traditional farms. On average, soils from organic farms were found to have 44 percent higher levels of humic acid – the soil component that stores carbon in the long term.

This deal not only adds high-value permanent crop acreage, but brings additional value – both through the value attached to organic farmland as a real asset, higher premiums for the organic crops harvested, and as a sizable regenerative carbon sink.

Only days later, permanent crop acreage continued to be in focus for the company when it announced it had acquired 160 gross acres of citrus orchards in Tulare County, California, for $4.2 million. 

As has been the structure of its many previous deals, Gladstone entered into an eight-year leaseback agreement with the seller.

Producing Meyer lemons and two varieties of mandarins, this land expands Gladstone’s portfolio into a new crop type, noted Tony Marci, managing director of Gladstone, who said, “This farm near Ducor, California, is the right combination of varieties and age that we are looking for, and we look forward to owning this relatively young asset for many years.”

Indeed, with this deal Gladstone does more than add new crops to its portfolio. It also expands the company’s portfolio to more than 100,000 acres. Standing at 137 farms across 13 states, the company assets under management have broken the $1 billion mark, at $1.2 billion. 

“We are excited to purchase this citrus orchard that produces Meyer lemons and two varieties of mandarins,” said David Gladstone. “We are equally excited to add another great farmer to our list of tenants. We finished the year well on the acquisition front, and we look forward to another strong year in 2021.”

– Lynda Kiernan is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, and HighQuest Group’s Oilseed & Grain News. She is also a contributor to the GAI Gazette. She can be reached at lkiernan@globalaginvesting.com.