The farm consists of 3.75K acres of organic farmland in southern Florida. Upon closing, Gladstone (NASDAQ:LAND) began a seven-year lease with a grower and marketer of fresh vegetables which provides for annual rent boosts and three five-year extension options.
It's the largest acquisition in company history, and it's hoped the earnings will allow Gladstone to keep up its streak of boosting dividends.
The 197-acre Fresno County sale-leaseback deal was made for $6.5M, and LAND has entered into a 10-year triple-net lease with the seller, one of the globe's largest organic almond growers.
The company figures the annual cap rate will average between 8% and 10% over the life of the lease.
Western Managing Director Bill Reiman notes the orchard is just heading into its peak production years, and expects to earn significant returns from the participating rent component of the lease starting with next year's crop.
The size of LAND's existing credit facility with MetLife has been boosted to $200M from $125M. The modification also comes with a cut in rates - the blended interest rate falls to 3.16% from 3.35%, which should result in annual savings of more than $160K.
The fixed-rate term of the term note borrowings is extended to January 2027, and the overall LTV on the underlying properties pledged as collateral is boosted 200 basis points to 60%.
The two (one in Stanislaus County, the other in Merced County) total 2,485 acres and were purchased for $23.4M in cash and 343.75K partnership units valued at $12 each for total consideration of $27.5M.
Alongside the purchase, LAND assumed two long-term, triple-net leases that include annual CPI increases and upward market rent adjustments every five years.
The trees on both farms are about nine years old, so just beginning peak production. Both properties have strong access to water, says CEO David Gladstone. "Please eat more almonds!"
The company has acquired 7,384 acres of farmland across five farms in Baca County, CO for about $4.9M in cash and 125.7K operating partnership units valued at $12.93 each - total consideration of $6.5M.
Gladstone (NASDAQ:LAND) has also entered into a triple-net-lease agreement with the existing operator on the property for an initial term running through 2020, with one five-year extension option. The straight-line cap rate is 5.91%.
Gladstone Land (NASDAQ:LAND) has agreed to buy 7.4K acres of farmland in Southeast Colorado for $4.9M in cash and 125.7K units in the company's operating partnership to be valued at $12.93 each. Total consideration is about $6.5M.
The deal also includes a lease agreement with an initial term through 2020. The potential tenant has farmed the area for decades, specializing in a high-fiber, low-protein hay blend for the cattle feed-lot industry.
The 70 acres primarily farmed for strawberries is in Hillsborough County and was purchased for $1.7M. Alongside, Gladstone (LAND +1.4%) assumed a lease with a global berry operator that runs through 2021 with a five-year extension option.
Gladstone now owns 49 farms totaling 23.9K acres across seven states.
Net asset value of $13.68 per share as of June 30 compares to the current stock price of $11.44.
Q2 adjusted FFO of $1.46M or $0.136 per share vs. $1.258M and $0.123 on Q1.
Cash flow from operations of $2.03M -52% Q/Q. Farms owned of 47 vs. 46. Acres owned of 23.456 up 2%. Occupancy flat at 100%.
Net asset value per share of $13.68 down from $13.87 three months earlier thanks to $3.7M in capital improvements which haven't yet been considered in determining fair values. Today's close was $11.33.
The 401 acres of farmland in St. Lucie County was purchased for $5.1M. Upon closing, Gladstone (NASDAQ:LAND) entered a lease with a grower and marketer of fresh vegetables for a seven-year lease with annual rent escalations and two, seven-year extension options.
It's Gladstone's first Southeast Florida purchase and brings the portfolio up to 48 farms across the country.
Company NAV as of March 31 of $13.87 per share compares to Friday's close of $11.30.