June 14, 2019

by Lynda Kiernan

Gladstone Land has announced its second deal in a week’s time (and fourth for the year) that brings the investor into a new U.S. region and adds a new permanent crop to its portfolio.

The company paid $9.2 million to acquire 542 acres of farmland in Yolo County, California, that includes 482 acres of high-density olive orchards.

“We are very pleased to enter into a new region in California, the Sacramento Valley,” said Tony Marci, managing director of Gladstone Land. “This purchase of a high-quality olive orchard with a history of strong yields is an excellent addition to our portfolio.”

In connection with the deal, Gladstone also entered into a 15-year triple-net lease with the seller, California Olive Ranch, the largest producer of extra virgin olive oil in the country.

Olive oil production in the U.S. has been booming, and California accounts for 74.6 percent of that total production, according to IBISWorld. Over the past 10 years, the volume of olive oil being produced in the state has doubled every two years, reflecting an annualized rate of growth for the industry of 4.5 percent over the past five years, to reach a value of $89.2 million in 2018.

“Our tenant, California Olive Ranch, is a leader in the industry of premium olive oil,” said David Gladstone, president and CEO, Gladstone Land. “You can buy their olive oil in your favorite grocery store by looking for the green bottle with the words ‘California Olive Ranch’ on it.  We think they are an ideal partner for us as we continue to add new crop types to our diversified farmland portfolio.”

This deal follows only days after Gladstone announced its agreement to buy two Michigan farms totaling 516 acres for approximately $7.8 million.

The two farms consist of a combined total of 383 acres of blueberry bushes, and six acres of cranberry bogs, including farm-related assets of two blueberry processing facilities, and a fresh packing and cooling facility.

This consistent growth of its farming portfolio continues at a time of market uncertainty due to recent tariffs and international trade tensions. However, Gladstone assured that it does not anticipate that these conditions will have any adverse impacts on its farming revenue streams, explains David Gladstone.

“The recent tariffs placed on certain Mexican goods are not expected to impact the Company, as we do not own any farms in Mexico, and the tariffs are also unlikely to hurt most of our farmers,” said Gladstone in early June.

With the addition of the Yolo County olive property, Gladstone’s portfolio now stands at 90 farms, comprised of 75,886 acres across 10 different U.S. states, valued at approximately $666 million. Its holdings are concentrated in fresh produce annual row crops, and permanent crops including almonds, pistachios, blueberries, figs, cranberries, and olives.

– 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.