July 26, 2022

By Lynda Kiernan-Stone, Global AgInvesting Media

Gladstone Land has diversified its portfolio by both crop type and geography through its latest acquisition of 1,317 gross acres of farmland in Washington and Oregon for approximately $37.3 million from Horizon Vineyards, an affiliate of Resource Land Holdings (RLH). 

In connection with the deal, Gladstone has assumed multiple long-term, triple-net leases with an industry-leading grower of premium wine grapes.

These vineyards will build upon a land acquisition announced by Gladstone in November 2021, when the REIT acquired 165 gross acres of farmland located near Milton-Freewater, Oregon, on which the company said it planned to establish a vineyard. 

Despite accounting for only 1.2 percent of the wine produced in the U.S., and 0.15 percent of the wine sold globally, Oregon ranks as the fourth largest wine producing state, making wines that punch above their weight, representing 5 percent of the top 100 Global Wines List issued by Wine Spectator.

Likewise, Washington is a bit surprising, ranking as the second-largest wine production state in the U.S. after California, counting more than 1,000 wineries, 400+ grape growers, and more than 60,000 acres under cultivation, producing in excess of 17 million cases of wine each year, driving an economic impact of more than $8 billion for the state.

“We are very pleased to acquire these vineyards with strong water resources,” said Tony Marci, managing director, Gladstone Land. “The vineyards are managed by an outstanding tenant who produces premium wine grapes for their extensive list of customers. It was great to work with RLH throughout this transaction, as we were able to achieve the goals of all parties involved.”

Pursuing land acquisitions that bring access to water has been a priority for Gladstone. This deal brings the company’s overall portfolio to 169 farms totaling more than 115,000 acres across 15 different U.S. states, including 45,000 acre-feet of banked water in California, valued at more than $1.5 billion.

Another priority has been a focus on organic production. The majority of Gladstone’s farms are located in regions where tenants are able to grow fresh produce and annual row crops such as berries and vegetables, or permanent crops, including almonds, apples, cherries, figs, lemons, olives, pistachios, blueberries, and vineyards. Of these holdings, approximately 40 percent of the fresh produce acreage is either organic, or being transitioned to organic production, and more than 10 percent of its permanent crop acreage is certified organic.

“Purchasing vineyards in Washington and Oregon adds diversification to our farmland holdings by both crop type and geographic region,” said David Gladstone, president and CEO, Gladstone Land.

“We are impressed by the quality of these vineyards, as they are well maintained, and the gradual replanting plan implemented by the tenant keeps the varieties in line with customer demand. We continue to evaluate additional farms to acquire as we work towards another successful year.”

Denver, Colorado-based RLH stated that it has worked with Gladstone Land at multiple points over the past year, and is optimistic for the future of the vineyards.

 “RLH has greatly valued its partnership with the team managing these vineyards, and we look forward to watching them continue to expand their brand and further reinforce their reputation as a leader within the industry,” said Joe Leininger, founding partner, RLH.

“We have had the pleasure of working with Gladstone Land on multiple occasions within the past year and know that they will be an exceptional long-term partner for the existing operator for many years to come.”

~ 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 Unconventional Ag. She can be reached at lkiernan-stone@globalaginvesting.com.

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