Real Estate Investment Trust (REIT) Gladstone Land announced that it has expanded its permanent crop portfolio through the acquisition of a 761-acre almond farm in Merced County, California, for $8.2 million.
The property includes 742 planted acres of almond trees that are irrigated through five on-site wells. Upon completion of the deal, Gladstone has made provisions through a long-term agreement to lease the operation to an international agriculture company that currently leases two of its existing almond orchards.
“This almond orchard is immediately adjacent to another almond orchard we own, and both farms will be rented to the same tenant,” said Bill Reiman, managing director of Gladstone Land. “This is especially advantageous to the tenant because both farms can be operated as one.”
Under the terms of the agreement, Gladstone will initially acquire the land, while the tenant retains ownership of the improvements until the end of the leasing period. At that point, all improvements will be transferred to Gladstone’s ownership.
“We believe this is a low-risk acquisition that will yield a strong cash return,” said Reiman.
Autumn Acquisitions
This is the third deal announced by Gladstone since the beginning of November. The first days of that month saw the company announcing a significant deal that not only expanded its permanent crop holdings, but diversified its portfolio into a new crop category, when it acquired a 951-acre farm in Madera County, California, that includes 715 acres of mature fig orchards, and 224 acres of mature pistachio orchards for $23 million.
As part of the deal, Gladstone also has entered into an eight-year, triple-net lease with The Specialty Crop Company, Inc., the largest grower of fresh and dried figs in the world.
Then, during the last week of November, the company announced its purchase of a potato farm in Hartley County, Texas, for $8.5 million.
“We have been seeking farms in Texas for some time now, and the right opportunity finally presented itself,” said Bill Hughes, managing director of Gladstone Land.
Prior to these deals, Gladstone announced three deals in September: the acquisition of a 547-acre farm in northern Florida growing peanuts and melons for $2.6 million, followed days later by the additional acquisition of two more permanent crop farms totaling 194 acres of cherry orchards in Kings County, California, for approximately $6.9 million.
Like these acquisitions before it, Gladstone’s latest deal for the Merced County almond orchards aligns with the company’s strategy of leasing out its properties to high-quality and experienced tenants.
It also brings Gladstone’s portfolio to 85 farms, comprised of 73,205 acres situated across 10 different U.S. states, and valued at $618 million.
“This is another farm acquisition that will be operated by a premier tenant whom we know well,” said David Gladstone, President and CEO of Gladstone Land. “This almond orchard is our third acquisition of the quarter, and we continue to have a long list of potential farms to purchase. We look forward to 2019 and believe it will be another good year for us.”
-Lynda Kiernan