DENVER, CO - Farmland Partners Inc. has announced a new purchase agreement to acquire a 7,400 acre farm in Louisiana for $31.8 million in cash. The acquisition is expected to close in the first quarter of next year, according to a press release, but is still subject to customary closing conditions.
"Our third largest acquisition agreement to date is comprised of roughly 7,400 contiguous, irrigated acres, nearly all of which have been precision leveled,” said Paul Pittman, CEO of Farmland Partners. "This agreement, which was enabled in part by the structure of our recently announced $197 million Paris, Illinois pending acquisition, demonstrates our ability to consistently put capital to work at good cap rates.”
Concurrently with the land acquisition, Farmland Partners entered into a three-year lease agreement with the seller of the Louisiana farm. The press release explains that the lease agreement will have rental payments based on a percentage of gross farm proceeds, including a minimum cash payment for the use of improvements on the farm. Using conservative assumptions of commodity prices and crop yields, the company explains that it believes the return will be approximately 5.0% annually.
This acquisition comes less than one month after the company acquired 22,300 acres in Illinois for $197 million. In total, Farmland Partners owns or has under contract 253 farms with an aggregate of 104,742 acres (including 130 farms totaling 32,319 acres under contract) in Arkansas, Colorado, Georgia, Illinois, Kansas, Louisiana, Michigan, Mississippi, Nebraska, North Carolina, South Carolina and Virginia.
