MCLEAN, VA - Gladstone Land Corp. is closing out one of its most active quarters to date, with thousands of acres acquired and new categories added.
"We had a very strong quarter in terms of both portfolio growth and operating results. From a portfolio standpoint, we had our most active quarter to date, adding over 10,000 acres of new farmland to our portfolio for approximately $40.4 million,” Chief Executive Officer, David Gladstone, commented in the report. “These new farms are spread across three different states and grow a variety of crops, adding to the overall diversity of our portfolio and increasing our tenant base to 40 different tenants, all of whom are unrelated parties.”
Among the acquisitions was an almond orchard in California, consisting of 197 acres, for $6.5 million. According to the company, the farm was acquired at an initial capitalization rate of 5.0% but is expected to yield between 7.0% and 10.0% when including the revenue-sharing portion of the lease.
Additional highlights from the quarter, ended September 30, 2016, include:
- 9 new farms total acquired, consisting of 10,344 acres together for approximately $40.4 million.
- Renewed its final 2016 lease expiration (a property in Salinas, CA) with the existing tenant at a net increase in annualized income of 9.0% compared to that of the previous lease.
- Obtained $4.1 million in new, long-term borrowings at an expected, weighted-average effective interest rate of 3.10%, which is fixed for seven years.
- In connection with certain acquisitions during the quarter, issued 469,427 units of limited partnership interests in Gladstone’s operating partnership (OP Units) at a weighted-average price of $11.31 per OP Unit, constituting an aggregate fair value of approximately $5.3 million as of the acquisition date.
Gladstone explained that, from an operational standpoint, the company had its strongest quarter to date, further increasing its AFFO per share and fully covering its distributions for the fourth consecutive quarter.
"This growth also allowed us to increase the distribution rate to our shareholders for the fourth time in the past 22 months, and as we continue to grow our AFFO per share through additional acquisitions and re-leasing existing farms at increased rental rates, we expect the coverage ability provided by AFFO to increase, as well. We believe that investing in our stock is both an income investment, as well as an asset appreciation investment, as we expect that the value of the farmland we own will increase at a rate that outpaces that of inflation," Gladstone said.
With such strides made, can we expect more farm-fueled buyouts from the company in its final 2016 quarter?
Stay tuned to AndNowUKnow as we continue to keep you in the loop.
