September 8, 2020

By Lynda Kiernan, Global AgInvesting  Media

For the second time within weeks Gladstone Land announced a major farmland deal – sharing that it has acquired 2,515 gross acres of farmland in Fresno County, California for approximately $31.8 million.

Less than 10 days earlier, Gladstone announced a deal on the opposite coast when it acquired  939 gross acres of vegetable and sod farmland in Maryland’s Eastern Shore and Delaware for approximately $7.4 million. 

Of the entire Fresno, California, parcel, 619 acres are planted in mature pistachio orchards, and another 1,896 acres are open farmland, of which 1,273 are certified organic.

“The acquisition of this pistachio orchard and open farmland adds to our existing permanent crop farmland and organic ground growing vegetables and should result in another good, long-term investment for us,” said David Gladstone, president and CEO, Gladstone Land.

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 the later months of the year, Gladstone completed a two-part, $70 million  pistachio orchard acquisition. 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.

The same strategy is being taken with the latest acquisition, with Gladstone announcing it has entered into an eight-year, triple-net leaseback agreement with the seller – a seasoned pistachio and vegetable grower.

“We are very pleased to add more quality farmland and mature pistachio trees near Coalinga, California, 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 and the high percentage of organic land.”

Organic production and organic produce have become key concerns for consumers. Going hand-in-hand with organic production is an ever greater focus on regenerative agricultural production and carbon sequestration.

The role of organic farming in environmental initiatives was reinforced in September 2017 when a new breakthrough study, directed by Northeastern University in collaboration with The Organic Center, found that soils on organic farms stored significantly larger amounts of carbon for longer periods of time compared to soils on traditional farms. On average, soils from organic farms were found to have 44 percent higher levels of humic acid – the soil component that stores carbon in the long term.

This deal not only adds high-value permanent crop acreage, but brings additional value – both through the value attached to organic farmland as a real asset, higher premiums for the organic crops harvested, and as a sizable regenerative carbon sink. 

With this deal, Gladstone’s portfolio now consists of 121 farms totaling 93,000 acres across 12 U.S. states with a value approaching $1 billion at $951 million

“…we are forming a new relationship with a very seasoned grower who has been in the pistachio and vegetable business for many years,” said Gladstone. “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.