March 17, 2021

By Lynda Kiernan, Global AgInvesting Media

Gladstone Land has further diversified its portfolio with the acquisition of 108.000 square-feet of cold storage and supporting facilities in Stockton, California, for an undisclosed amount. 

In connection with the deal, Gladstone has entered into a 10-year lease agreement with the seller (who is an existing tenant of the company) on the assets, which are primarily used to cool and store fresh organic and conventional blueberries.

These facilities are critical to the tenant’s local farming operations,” said Joseph Van Wingerden, director, Gladstone Land. “Blueberries need to be cooled very quickly after being harvested in order to preserve their quality. We are excited to continue our role as capital partners for our growers and expand our portfolio of both farmland and farm-related facilities in the fresh fruit and produce space.”

Gladstone’s latest blueberry deal occurred in the closing days of 2020, when it announced its acquisition of approximately 1,670 acres of farmland and facilities split between San Joaquin County, California, and Whatcom County, Washington, that included 1,390 acres planted in organic and conventional blueberries. 

“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 at the time.

“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.

Organic produce sales in the U.S. increased by 14.2 percent in 2020, equalling an increase of $1 billion to sales topping $8.5 billion, according to the 2020 Organic Produce Performance Report.

Broken down, berries (strawberries, blueberries, and raspberries) were counted in the highest categories for growth at 12.2 percent, following only packaged salads which saw growth of 15.4 percent, potatoes at 21 percent, and herbs and spices at 26 percent. 

COVID-19 was a driver for this uptick in demand, pushing growth rates well beyond the average 10 percent posted between 2010 and 2016, and giving a fresh kickstart to sales that have moderated in the face of increased consumer saturation.

With this newly added infrastructure asset in-hand, and several additional farm acquisitions closed at the end of 2020, Gladstone stated that is optimistic that 2021 will be another strong year for the company. 

“Gladstone Land has had two consecutive years of very strong growth, and we hope to continue that trend,” said David Gladstone, president and CEO, Gladstone Land. “We are also expecting another strong year from an operational standpoint. We have several additional farms that were purchased at the end of 2020 that had little impact on last year’s financial results. In addition, we have more farms scheduled to pay participation rents later in 2021. We are hopeful that these additional participation rents, along with the higher margins achieved on our recent acquisitions, will allow us to further grow our adjusted funds from operations.”

– 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.