January 21, 2020

By Lynda Kiernan

Gladstone Land announced it has acquired a 1,324-acre farm, of which 1,064 acres are irrigated, in Holyoke, Colorado through a $7.5 million deal. The operation will grow a rotation of crops for use in the tenant’s feedlots – potatoes, corn, and sugar beets, a new crop among the REIT’s holdings. 

Under the terms of the deal, as is standard procedure for the firm, Gladstone also entered into a six-year, triple-net leaseback agreement with the seller.

“This property represents our first closing of 2020,” said Bill Hughes, managing director, Gladstone Land. “We’re excited to be in a new region of Colorado and even more excited to be partnering with one of the premier farmers and feedlot operators in the area. We look forward to doing more business with them in the future.”

This deal follows on the heels of a very busy end of 2019 for Gladstone. In October, the company closed on the second phase of a two-part pistachio acquisition in Coalinga, California for $37 million. 

The final part of the deal, which surpassed the first phase by $4 million, brought the total combined deal value to $70 million and was for 1,100 gross acres of farmland, consisting of 1,040 planted acres of mature pistachio trees. Connected with the acquisition, Gladstone entered into an eight-year, triple-net lease agreement with RTS Agri Business and Canoas Creek Pistachios.

The first phase was executed in mid-August of 2019, when Gladstone acquired nearly 1,000 gross acres of farmland in Coalinga for $33 million. This first parcel consisted of a 911-acre orchard planted in mature pistachio trees, and as with the second phase, the same two lessees – RTS Agri Business and Canoas Creek Pistachios – were contracted to run the operation. 

In October 2019, Gladstone announced it had expanded its portfolio into a new farming geography, having acquired 3,850 acres of farmland across two farms in Hayes and Hitchcock counties in Nebraska for $14.7 million. 

Both of these farms grow corn, soybeans, and edible beans, and one aspect setting this deal apart from Gladstone’s previous transactions, is that the company will be assisting their tenant farmers in transitioning each of the farms to organic grain production by 2021.

In September, GAI News shared that Gladstone closed on two California farmland deals in quick succession – the first, the acquisition of a large coastal farm on the Oxnard Plain of California for an undisclosed amount,  and the second, the accession of a 366-acre vineyard in Napa for $32 million.

However, it was in November 2019 when Gladstone announced it had raised more than $100 million through its continuous registered public offering of 6 million shares of its 6 percent Series B Cumulative Redeemable Preferred Stock, scheduled to end on June 1, 2023. 

“As noted before, 2019 was a record year of purchasing farms for Gladstone Land, and we are hoping to replicate that success in 2020,” said David Gladstone, president and CEO, Gladstone Land. “This acquisition increases the number of regions where we own farms and the number of different crop types grown on our farms, and it also adds a new operator to the number of tenants on our farms.”

This deal brings the Gladstone portfolio to 113 farms, totaling 88,000 acres across 10 U.S. states, with a value of $884 million. Most farms are located in regions suitable for the production of fresh produce and annual row crops such as berries, however, the company also has extensive and growing holdings in permanent crops, including almonds, apples, figs, olives, pistachios, blueberries, and vineyards. 

And like in the Coalinga deal, Gladstone is also open to the acquisition of infrastructure related to agricultural production, or assets such as cooling, processing, or packaging facilities, and distribution centers.

“We believe the increased diversification in our farmland holdings helps to provide a steady and secure source of income with which to pay dividends to our shareholders,” said Gladstone. “We look forward to continuing to add more farms to our already-existing portfolio of farmland primarily growing fresh fruits and vegetables.”

– Lynda Kiernan is Editor with GAI Media and daily contributor to the GAI News and Agtech Intel platforms. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.com.