Oct 14, 2021Gladstone Land acquires nut orchard, option to purchase stored water
McLean, Virgina-based Gladstone Land Corp. announced Oct. 12 that it has acquired 1,284 gross acres of farmland, including over 1,200 planted acres of pistachios and almonds (a portion of which is organic), located in Kern County, California, and 19,670 acre-feet of stored water (equal to approximately 6.4 billion gallons) located within the Semitropic Water Storage District water bank for a total of approximately $43.0 million.
In connection with the acquisition, Gladstone Land entered into a 10-year, triple-net lease agreement for the farmland. This is the third and final closing of a previously announced three-part acquisition that will result in total consideration of approximately $84.2 million.
“We are happy to announce the closing of the third and final phase of this transaction in Kern County,” Bill Reiman, executive vice president of Gladstone Land, said in a news release. “We are looking forward to a successful future with this property and new tenant. From the day we closed the first phase of this deal, we realized benefits to our overall business, and we are excited about where this will lead us in the future.”
“We are pleased to be expanding our relationship with a very fine tenant who has a long history of farming in the area,” said David Gladstone, President and CEO of Gladstone Land. “All of our farms continue to have adequate water. We believe the additional water we’re buying in this transaction will help the production on this farm continue at good levels for many years, while also providing additional security to other farms in the area if there is ever a need for additional water.”
Founded in 1997, Gladstone Land is a publicly traded real estate investment trust that acquires and owns farmland and farm-related properties located in major agricultural markets in the U.S. and leases its properties to unrelated third-party farmers. The company, which reports the aggregate fair value of its farmland holdings on a quarterly basis, currently owns 159 farms, comprised of over 108,000 acres in 14 different states and 45,000 acre-feet of banked water in California, valued at approximately $1.4 billion.
Gladstone Land’s farms are predominantly located in regions where its tenants are able to grow fresh produce annual row crops, such as berries and vegetables, which are generally planted and harvested annually. The company also owns farms growing permanent crops, such as almonds, apples, cherries, figs, lemons, olives, pistachios, and other orchards, as well as blueberry groves and vineyards, which are generally planted every 10 to 20-plus years and harvested annually.
The company may also acquire property related to farming, such as cooling facilities, processing buildings, packaging facilities, and distribution centers. Gladstone Land pays monthly distributions to its stockholders and has paid 104 consecutive monthly cash distributions on its common stock since its initial public offering in January 2013.
The company has increased its common distributions 23 times over the prior 27 quarters, and the current per-share distribution on its common stock is $0.0451 per month, or $0.5412 per year.
Additional information, including detailed information about each of the company’s farms, can be found here.