Farmland Partners Raises Quarterly Dividend for Third Time; Increases Farmer Mac Facility

In connection with its recent closing of its largest farmland acquisition to date, Colorado-based Farmland Partners has announced it is raising its quarterly dividend by 10%, to $0.1275 from a previous rate of $0.116 per share.

This increase was made possible upon the closing of eight row crop farms across South Carolina, North Carolina, and Virginia totaling 15,042 acres for $49.8 million in cash and 2,818,107 shares of common stock and units of limited partnership interest in its operating partnership. Under the terms of the closing, Farmland Partners also entered into a five-year lease agreement with the seller on all eight properties, collecting upon closing, an initial cash rent of $4.3 million for 2015, plus a 10% deposit of cash rent due for the calendar years 2016 through 2019. A second 10% payment of rents due for 2016 through 2019 will be collected in September.

This third dividend increase since Farmland Partners floated last April, represents an annualized yield of $0.51 per share, or 4.6% on the stock upon its closing price of $10.97 on June 2.

In addition, the closing of this deal, which expands Farmland Partners’ land portfolio to 68,550 acres across ten U.S. states, supports the expansion of Farmland Partners’ secured note purchase facility with the Federal Agricultural Mortgage Corporation (Farmer Mac) from $150 million to $165 million, as well as the issuance of a $41.7 million, five-year interest only bond set at a fixed interest rate of 3.2%, and an $8.1 million, 11-month amortizing loan set at an interest rate of one month LIBOR plus 1.8%.

Despite expecting U.S. farmland values to remain generally flat in the near term, Farmland Partners intends to use this added buying power to continue its acquisition activity, believing that the long-term drivers of population growth, the increasing demand for meat in emerging global populations lifting demand for grain, and land and water scarcity will drive up appreciation rates in the coming years.