Farmland Partners Announces Several Asset Dispositions at a 17% Gain, and a Farm Acquisition
Farmland Partners Inc. (NYSE:FPI) has recently completed a series of transactions that have strengthened its position in the farmland market. The company finalized the sale of over 13,500 acres of land in various states, including California, Colorado, Georgia, Illinois, Louisiana, and Kansas. These sales generated more than $70 million in total, resulting in a gain on sale of approximately 17%. In addition, Farmland Partners acquired a 1,523-acre farm in Morehouse Parish, Louisiana, for approximately $11 million.
The strategic sales of water-challenged farms allowed Farmland Partners to capture strong asset appreciation returns for its shareholders. Luca Fabbri, the President and CEO of FPI, expressed satisfaction with the sales, stating, “These sales show the continued strength of the farmland market and enabled us to create value for our shareholders through stock repurchases at a discount to their underlying value, and to redeploy capital on other priorities like debt repayment and new acquisitions in more sustainable locations.”
In total, Farmland Partners has disposed of over $120 million of farmland through September 2023, resulting in a gain on sale of approximately $23 million. The company is projected to reach $170 million in asset sales for the year, further strengthening its financial position.
Farmland Partners Inc. is an internally managed real estate company that focuses on acquiring high-quality North American farmland and providing loans to farmers secured by farm real estate. The company currently owns and/or manages more than 178,000 acres in 20 states, making it a significant player in the industry. It has a diverse portfolio, with approximately 26 crop types and over 100 tenants.
The company’s decision to operate as a real estate investment trust (REIT) for U.S. federal income tax purposes has provided tax advantages and benefits to both the company and its shareholders. This structure allows Farmland Partners to pass on a significant portion of its income to shareholders in the form of dividends.
Farmland Partners’ success in the farmland market can be attributed to its strategic approach to acquisitions and dispositions. By focusing on high-quality farmland and sustainable locations, the company ensures long-term value creation for its shareholders. The recent transactions highlight the company’s ability to identify opportunities and execute deals that generate favorable returns.
Moving forward, Farmland Partners remains optimistic about the farm economy and its outlook. The company continues to evaluate potential acquisitions and dispositions, considering factors such as crop yields, prices, and rental rates. With its strong financial position and extensive portfolio, Farmland Partners is well-positioned to capitalize on opportunities in the market.
In conclusion, Farmland Partners Inc. has successfully completed a series of transactions that have strengthened its position in the farmland market. The company’s strategic sales and acquisitions have generated significant returns for shareholders and allowed for the redeployment of capital. With a diverse portfolio and a focus on sustainable locations, Farmland Partners is poised for continued success in the industry.