October 5, 2020

By Lynda Kiernan, Global AgInvesting Media

Reminiscent of a deal only a month ago, Gladstone Land announced that it has acquired 801 acres of farmland in Fresno County, California, of which 757 acres are planted in pistachio trees, for approximately $31.8 million. 

It was only on September 8 that GAI News shared that Gladstone acquired 2,515 gross acres in the same county, planted in 619 acres of mature pistachio orchards, and an additional 1,896 acres of open farmland of which 1,273 are certified organic. 

Gladstone made its first pistachio acquisition in 2016 when it acquired a 453-acre property in Fresno, California, planted in trees ranging from five to 19 years of age, for $15.5 million. However, this deal follows major pistachio land deals completed by the company last year.  

In August 2019 the company acquired nearly 1,000 gross acres of farmland in Coalinga, California, for $33 million of which 911 acres were planted in mature pistachio trees. The second part of the deal was completed in November when Gladstone spent another $37 million to acquire 1,100 gross acres of farmland consisting of 1,040 acres of mature pistachio trees. In connection with both deals, RTS Agri Business and Canoas Creek Pistachios were contracted to run the operations.

In connection with this latest pistachio deal, Gladstone has entered into a three-year, triple-net leaseback agreement with the seller.

“We are very pleased to add to our existing farmland holdings near Coalinga, California, and these mature pistachio trees are a great addition to our portfolio,” said Tony Marci, managing director, Gladstone Land.

“This acquisition allows us to develop a new relationship with a long-time farmer in the business and also helps the seller with its goals with this sale-leaseback transaction. We are particularly excited about this farm because of its historically high production.”

A Time of Renewal

The company also announced the renewal of two of its leases that were set to expire toward the end of this year.

Collectively, the new leases are expected to increase annual operating income by 11.4 percent, or $171,000 over the previous lease structures. Furthermore, Gladstone has two additional leases that are scheduled to expire in December of this year that together account for less than 2 percent of total annual revenues. Currently, the company is conducting discussions with the tenants in place on each farm with expectations that both leases will be renewed at current market rents prior to their expiration. 

This latest pistachio land deal in Fresno brings Gladstone’s portfolio to 125 farms consisting of 93,000 acres across 12 U.S. states, carrying a value of $983 million.

Over the years Gladstone has diversified its portfolio to include fresh produce annual row crops, such as berries and vegetables; and permanent crops such as almonds, apples, figs, olives, pistachios, (and now pecans) as well as vineyards, and blueberry groves.

These farms, the company announced, are all currently safe from damage from the wildfires raging across California and other Western states, and that the company continues to examine potential farmland deals as we approach Q4.

“We are excited to add another highly-productive pistachio orchard to our farmland holdings and to form yet another new relationship with another strong grower,” said David Gladstone, president and CEO, Gladstone Land.

“We are also pleased to be able to announce that all of our farms remain safe from the wildfires occurring in California and other states out west. In addition, we believe that our continued success on the re-leasing front underscores the continued high demand for prime quality farmland, such as ours. We are continuing to evaluate a good list of potential farms to buy, as we work towards a strong end to 2020 after a record year of acquisitions in 2019.”

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