August 16, 2016

Real Estate Investment Trust (REIT) Gladstone Land announced it has agreed to acquire 7,384 acres of farmland in Colorado for $4.9 million in cash and the issue of 125,677 common units of limited partnership interest in the company’s operating partnership, bringing the value of the deal to $6.5 million.

Under the terms of the transaction, Gladstone will also enter into a lease agreement with an initial term lasting through 2020 and including clauses for yearly escalations and a single option for a five-year extension.

The deal for the farmland will also serve to add a new crop to Gladstone’s portfolio.

“Our potential tenant has farmed in Southeast Colorado for decades with an operation that specializes in providing a high-fiber, low-protein hay blend for the cattle feed-lot industry,” said Bill Hughes, Gladstone Land’s Midwest Marketing Director. “Completing this purchase in a new region and crop specialty will expand our geographic footprint and further diversify the crop types on our farmland holdings.”

Colorado’s feedlots feed about 2.3 million head of cattle per year according to the Colorado Cattlemen’s Association. The state has 11,600 farms with cattle and calves, 206 feedlots, and 24 USDA-certified slaughterhouses, and is the fourth largest exporter of fresh and frozen beef in the country.

This deal will add to what has so far been a portfolio-building year for the company. This agreement follows directly on the heels of the company’s announcement of a $1.7 million acquisition of 70 acres of strawberry farmland in Florida.

In early July, Gladstone announced the acquisition of 401 acres of farmland in St. Lucie County, Florida producing green beans and bell peppers for $5.1 million. In April the firm acquires 453 acres in Fresno, California, of which 435 were planted in pistachio trees (another new crop for the company), for $15.5 million, and in March Gladstone acquired 6,190 acres of organic, and soon to be organic farmland in Colorado for a total deal consideration of $25.9 million.

Like the most recent deal announced in Colorado, all deals included a lease agreement with an experienced tenant.

“We like being real estate partners with top-tier farmers..,” said David Gladstone, president and CEO of Gladstone Land.

The most recent acquisition which is expected to close before the end of September of this year, brings Gladstone Land’s farmland portfolio to 49 farms, totaling 23,927 acres across seven U.S. states, valued at approximately $344 million.

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Lynda Kiernan