January 13, 2017

At the beginning of January, Gladstone Land President and CEO David Gladstone stated that the company had a large-scale deal in the pipeline that would be announced before the end of the month – and so it has.

The real estate investment trust (REIT) announced that it has acquired 3,750 acres of organic farmland in southern Florida for a total consideration of $54 million. Under the terms of the deal, Gladstone agreed to a seven-year lease agreement with a leading regional vegetable grower and marketer that includes clauses for annual rent escalations and options for three, five-year extensions.

“We are privileged to acquire more organic farmland in Florida with a highly-regarded vegetable grower as our tenant-partner,” said Bill Frisbie, the company’s managing director for the Eastern United States.

This acquisition significantly adds to Gladstone’s organic holdings. The deal brings the company’s total portfolio to 59 farms encompassing 54,340 acres across seven U.S. states, and lifts the portfolio value to $452 million.

“We now own 59 farms across the U.S., and we seek to continue building and diversifying our high-value agricultural portfolio,” said Frisbie. “We have built our farmland portfolio on the thesis that the continued growing demand for fresh fruits and vegetables and nuts will make the finite supply of farms that produce these crops more valuable over time.”

This acquisition follows the company’s previous acquisition by less than a month. At the turn of the year Gladstone announced it had agreed on December 28, 2016 to acquire 16,595 contiguous acres of farmland in Colorado for $9.1 million in cash and 233,952 common shares of limited liability partnership interest in its operating partnership for a total consideration of $12.1 million. The operation has been farmed in Southeast Colorado for decades producing high-fiber hay for the cattle industry.

Other acquisitions announced by the company last year include 7,384 acres of high-fiber hay producing farmland in Colorado, a 70-acre strawberry farm in Florida for $1.7 million, and the acquisition of 401 acres of farmland in St. Lucie County, Florida, producing green beans and bell peppers for $5.1 million.

In April 2016, the firm acquired 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.

“Our first acquisition of 2017 represents the largest acquisition in our company’s history and begins what we believe will be our strongest year,” said Gladstone. “This new farm is a great property with a strong tenant, and we expect this acquisition will provide us with a significant amount additional earnings, which we hope to be able to pass on to our stockholders in the form of increased distributions.”

After building an extensive portfolio of farmland focused on fresh produce annual row crops including berries and vegetables, permanent crops such as almonds, blueberries, and pistachios, and high-fiber, low-protein hay, the company remains open to the possibility of also expanding its acquisitions to include ancillary properties related to agriculture including cooling facilities, processing and packaging facilities, and distribution centers.

-Lynda Kiernan

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