Farmland Partners continues buying thousands of farmland acres
The first quarter of the year was a busy one for Farmland Partners Inc., a Denver-based agricultural real estate investment company, and it ended with the company announcing an agreement with Metropolitan Life Insurance Company (MetLife) for term loans of up to $127 million to continue financing farmland acquisitions in the U.S.
The new loan agreement provides favorable loan terms for Farmland Partners to repay existing debt on its rapid expansion but also to fuel more acquisitions. The Company's portfolio as of the beginning of April was comprised of 258 farms with an aggregate of 108,163 acres (including two farms totaling 487 acres under contract) in Arkansas, Colorado, Georgia, Illinois, Kansas, Louisiana, Michigan, Mississippi, Nebraska, North Carolina, South Carolina, Texas and Virginia.
"We are pleased to announce our new relationship with one of the nation's largest agricultural lenders," said Paul Pittman, CEO of Farmland Partners Inc. "After a busy first quarter in which we closed on acquisitions of over 32,700 acres for total consideration of nearly $240 million, our new relationship with MetLife will allow us to continue to put capital to work toward the numerous opportunities in our pipeline that we believe will offer attractive returns to our investors."
Included in the first quarter activity was the close on a previously announced acquisition of a 7,400 acre farm in Louisiana for a purchase price of $31.8 million in cash. A search of announcements by Farmland Partners only found this closing announcement by the company and no specifics to account for the additional approximate $208 million investments.
Farmland Partners has grown quickly since its initial public offering in April 2014. A website statement a year ago noted the focus of the company: "The substantial majority of the farms in our current portfolio are devoted to primary crops, such as corn, soybeans, wheat and rice, because we believe primary crop farmland is likely to provide attractive risk-adjusted returns over time through a combination of stable rental income generation and value appreciation." Today, the web site lists some diversification with investment in land that is "currently being farmed for a variety of crops including corn, soybeans, wheat, rice, sunflowers, milo, edible beans and blueberries."
It is obvious that the current depressed commodity crop prices have not deterred Farmland Partners. Its assessment that quality farmland will provide attractive risk-adjusted returns over time seems to hold true, but the assessment seems to be the same for diversification out of commodity crops farmland.