Farmland Partners Inc. (FPI) has never been one to shy away from making large purchases or pursuing aggressive growth. The company has announced its latest farm acquisition, totaling $110 million.
The purchase, announced Sept. 22, is for approximately 5,100 acres of permanent crop farmland in California’s Central Valley. Production includes almonds, pistachios and walnuts.
Farmland purchased the land from Olam International Limited and will enter into a 25-year “triple-net lease agreement” with Olam on a revenue share basis. (Note: In a triple-net lease agreement, the tenant agrees to pay real estate taxes, building insurance and property maintenance in addition to regular rent).
With more than 154,000 acres, FPI is the largest publicly traded farmland real estate investment trust in the United States. Chairman and CEO Paul Pittman says FPI is looking forward to building a strong relationship with Olam.
“We have a high degree of respect for Olam’s team of exceptionally talented operators,” he says. “Further, we look forward to bringing these properties into our portfolio. They are unique, high-quality farms in the heart of California's tree nut industry.”
Olam’s managing director and CEO of Edible Nuts, Ashok Krishen, says the acquisition is a strategic fit for his company’s business model.
“We had been looking for the right partner who sees the long-term value of farming, while we are looking for an asset light model to participate in the production economics of the tree crops,” he says.
Farmland Partners owns additional land in 16 additional states and is farmed by more than 110 tenants growing more than 30 major commercial crops. The company has made multiple large purchases over the past two years – most notably, buying 22,630 acres of Illinois farmland last fall for more than $55 million.