November 16, 2021

By Lynda Kiernan-Stone, Global AgInvesting Media

Farmland Partners (FPI) announced it has acquired 100 percent of Murray Wise Associates (MWA) through a deal valued at $8 million, creating an unparalleled platform for farmland investing. 

FPI is an internally managed real estate investment trust (REIT) that owns and seeks out high-quality farmland in North America, and makes loans to farmers secured by farm real estate. Currently, the company owns approximately 176,300 acres growing 26 crops across 18 U.S. states including Alabama, Arkansas, California, Colorado, Florida, Georgia, South Dakota, Illinois, Iowa, Kansas, Louisiana, Michigan, Mississippi, Missouri, Nebraska, North Carolina, South Carolina, and Virginia which are leased out to more than 100 tenants.

MWA was founded by Murray R. Wise, the founder of Westchester Group (the largest institutional farmland asset manager in the world), as a spin-off from Westchester’s brokers, auction, and farm management business when the company was acquired by TIAA in 2010.

Headquartered in Champaign, Illinois, and with offices in Clarion, Iowa, and Naples, Florida, MWA focuses on farmland brokerage for institutional investors, farmland auctions, and farm management. Over the past 25 years, the professionals at MWA have completed land and agribusiness transactions valued at more than $5 billion in 43 states.

“I first met Murray, the ‘father of farmland investing’, in my late 20s, after reading one of his books,” said Paul A. Pittman, chairman and CEO, FPI.  “By joining forces, we will be able to deliver more value to FPI’s shareholders, while serving a broader array of farmland investors and becoming an ever more attractive real estate partner for farm operators.”

The execution of this deal at this time is a savvy move. Together, FPI and MWA will launch a joint asset management platform during a period of strengthening interest in farmland as an asset class. Murray will continue to act as CEO of MWA, and will attain a seat on the FPI Board of Directors. 

Within the framework of the partnership, MWA is expected to expand its existing brokerage, auction, and farm management services, increasing FPI’s penetration in the market, and enhancing its ability to source acquisitions for both its own portfolio, and for third-party asset managers.

This deal is also expected to diversify FPI’s existing holdings while adding new revenue streams through expanded asset management opportunities and new services not currently offered by FPI.

Murray R. Wise, CEO of MWA, commented, “Farmland Partners has proven itself to be a very effective farmland investor and manager, giving public company investors access to the asset class’ powerful value creation capabilities. I believe that the combination of FPI and MWA creates a formidable platform in many aspects of farmland asset management. Farmland investors will be able to access an unmatched array of integrated services.”

The purchase price for MWA included $5 million in cash and approximately $3 million in FPI common stock, and includes about $3.8 million in net current assets. FPI has entered into an incentive compensation arrangement for up to $3 million in FPI common stock for the benefit of key current and prospective employees, tied to certain profitability and AUM objectives within three years post closing.

“Enhancing our third-party asset management platform is a key objective for FPI,” said Luca Fabbri, president, FPI. “We believe that the acquisition of MWA will allow us to grow our assets under management at times when we are not comfortable raising public equity, increasing fee income while leveraging our existing deal sourcing and farm management infrastructure.”

In the short term, MWA’s business is expected to be modestly accretive to FPI’s adjusted funds from operations, and to provide a more significant accretive impact in the medium and long term from new asset management business and operating synergies as the combined platform grows.

“This transaction opens a new, exciting chapter for MWA’s team,” said Eric Sarff, president, MWA. “We expect that FPI’s scale and expertise will enable us to significantly expand MWA’s reach, benefiting FPI’s and MWA’s clients, investors and tenants.”

– Lynda Kiernan-Stone is editor with GAI Media, and is managing editor and daily contributor for Global AgInvesting’s AgInvesting Weekly News and  Agtech Intel News, as well as HighQuest Group’s Oilseed & Grain News. She can be reached at lkiernan-stone@globalaginvesting.com.