June 3, 2017

Gladstone Land has announced that it has acquired four farms in southwest Arizona totaling 3,253 gross acres with 3,032 irrigated, of which a portion is certified organic for a total consideration of $27.5 million.

This transaction brings Gladstone’s portfolio to 63 properties totaling 57,593 acres across seven U.S. states with a value of approximately $488 million.

Of the irrigated acreage, 1,221 are subject to leases with the state of Arizona, and once the deal is closed, Gladstone will assume lease agreements with all existing tenants that will include escalations throughout their remaining terms which range from two to nine years.

“While we already own several thousand acres in Arizona, this is a new growing region for us and one we have been targeting for years,” said Bill Reiman, managing director for the Western United States for Gladstone.

This marks the second acquisition for Gladstone this year following a January deal that was the largest in the company’s history. Before mid-January the company announced that it had acquired 3,750 acres of organic farmland in southern Florida for $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.

“This is our second large acquisition of 2017, and we are excited to enter into a new growing region,” said David Gladstone, president and CEO of Gladstone Land. “These farms have a total of 19 wells onsite, giving them access to plenty of water, and this transaction allowed us to partner with yet another top grower. This is another acquisition that continues to improve the overall diversification within our farmland portfolio, which provides additional security to our shareholders in the form of increased distributions.”

Geographically, the addition is a smart strategic addition to Gladstone’s portfolio. Southwestern Arizona is a key winter production region for fresh produce and one of the top production regions for early summer melons.

“Leafy greens and melons will be two of the primary crops grown on these farms,” noted Reiman.

The bulk of Gladstone Land’s acreage is concentrated in regions where tenant farmers are able to grow fresh produce and annual crops including berries and vegetables. The balance of its portfolio is in permanent crops including almonds, blueberries, and pistachios and in high fiber, low-protein hay.

After building such an extensive and diversified portfolio, the company stated that it is 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.

This Arizona acquisition is the latest for Gladstone in a year that the company feels will be significant for the company.

“We believe that 2017 will be the best year in our company’s history,” said Gladstone in January, “and we plan on increasing our dividend if earnings continue to increase.”

-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.