MCLEAN, VA – Gladstone Land Corp. is at it again – the company said that it has acquired 6,190 acres of farmland in Saguache County, Colorado.
The real estate investment trust acquired the property for approximately $19.3 million in cash, or $3,117 per acre of farmland, and 745,879 common units of limited partnership interest in Gladstone’s operating partnership, OP Units. The OP Units issued were valued at $8.85 per share, resulting in a deal worth $25.9 million total.
The property consists of 39 pivot-irrigated fields, the majority of which is either existing organic ground or currently undergoing organic conversion, as well as a potato packing and storage facility and other farm-related buildings, according to a press release.
“We are very excited to enter into a new growing market in a new state for us. And we are delighted to have a new lease with such a well-respected farmer. We like the organic crops this farmer is growing and know the organic potatoes will be in high demand,” said David Gladstone, President and CEO. “This farm is located in an excellent farming area with plenty of water for irrigation. There are many active farmers in this area. Because this farm is organic it will be in high demand by farmers.”
At closing, Gladstone entered into a sale-leaseback agreement with Mountain Valley Produce, LLC, a vertically-integrated organic potato grower, for a 5-year, triple-net lease that provides for annual rent escalations and includes one, 5-year extension options. In addition, the company will issue two, 7-year bonds under its facility with Federal Agricultural Mortgage Corporation (“Farmer Mac”) for an aggregate amount of approximately $15.5 million. The bonds will bear interest at a fixed, weighted-average interest rate of 3.05% over their terms.
“We have only one farm and farmer here but an excellent farm and farmer,” Gladstone continued. “Some people would count this transaction as 39 farms because there are 39 separate fields. But we have no reason to run up the number of farms we have. We have more farms we are working on to consider adding to our assets this year so stay tuned and eat more potatoes!”
Gladstone now currently owns 46 farms, comprised of 23,000 acres in 7 different states across the U.S., valued at approximately $311 million. A full list of the company’s farmland portfolio can be found by clicking here.
