SANTA PAULA, CA - The Limoneira Company is acquiring 157 acres of citrus orchards in the San Joaquin Valley for about $3.3 million, about $21,000 per acre, expecting that the transaction will be closed and finished within the next 60 days.
According to a press release, Limoneira purchased 157 acres of orange, lemon, and specialty citrus orchards, pursuant to “purchase options contained in certain operating leases the Company has had since 2012 for approximately 1,000 acres of lemon, orange, specialty citrus and other crops,” referred to as the Sheldon Ranch leases.
The company announced previously that it had sold the 52 acre Wilson Ranch, expected to close next month, which is being put towards the purchase of this latest property. The company stated that an estimated $2.8 million from the sale will go towards the total $3.3 million.
The total rent expense for the fiscal 2015 year for the recent property purchase is reportedly estimated at $100,000 on the expected closing date, having previously been $131,000 more for the fiscal 2014 year. The agreement, per the release, for the lease includes a base rent of $500 per acre and a contingent rent of 50 percent of the operating profit of the leased property (as defined in the lease agreements.)
Limoneira stated that the sale of Wilson Ranch and purchase of the citrus orchards qualifies as a “like-kind exchange,” and allows it to defer about one million dollars of gain for tax purposes.
