Farmland Partners Inc. has made its third biggest acquisition agreement to date, agreeing to buy a 7,400 farm in Louisiana for $31.8 million in cash. Congruent with the purchase agreement, the company has also forged a three-year lease agreement with the seller, including rental payments on the property that are based on a percentage of gross farm proceeds, and including a minimum cash payment to fund improvements on the property.

 

Considering conservative forecasts for crop yields and commodity prices, the company has expectations of returns of approximately 5% per year on the transaction.

 

The property encompasses 7,400 contiguous, irrigated, precision-leveled acres – the bulk of which had been dedicated to the production of rice. The acquisition will not only broaden Farmland Partners’ geographic portfolio but its crop portfolio, as well.

 

"This agreement, which was enabled in part by the structure of our recently announced $197 million Paris, Illinois pending acquisition, demonstrates our ability to consistently put capital to work at good cap rates," said Farmland Partners chief executive officer, Paul Pittman in a company release.

 

This transaction brings Farmland Partners’ portfolio to a total of 253 farms totaling 104,742 acres with 130 farms totaling 32,319 acres under contract, across the states of Arkansas, Colorado, Georgia, Illinois, Kansas, Louisiana, Michigan, Mississippi, Nebraska, North Carolina, South Carolina, and Virginia.