The US farmland real estate investment trust (REIT) American Farmland Company has acquired more than 2,000 acres of permanent crop land in California. The REIT has also hired Andreas Spitzer to become chief financial officer in 2016.
The $65 million purchase increases American Farmland’s total farmland assets by more than 30 percent in value, according to the company. The acquisition comprises 2,186 acres spread across seven properties, with 1,729 acres suitable for planting.
The farms produce almonds, prunes, lemons and other citrus fruit, in keeping with American Farmland’s strategy of focusing on permanent crops, which tend to bring higher returns, along with higher risk.
American Farmland chief executive Thomas Gimbel told Agri Investor the company balances the risk of carrying a targeted 35-55 percent of its portfolio in permanent crops by diversifying within the space in the variety of crops it produces and the geography of its farm acquisitions.
The farms were acquired from Sun Dial Farms and a group of unnamed affiliates through a combination of debt financing and cash. Gimbel would not comment on the ratio of cash to debt used to finance the acquisition. The former owners will continue to operate the farms following the close of the deal, expected in January 2016 after conclusion of due diligence. Leases for the land include annually escalated base rents and production-based revenue sharing regimes.
“This is a portfolio of gems, and it is rare to have such an extraordinary opportunity to acquire a diversified portfolio of almonds and fresh citrus of this scale and quality at one time,” said American Farmland president Robert Cowan in a statement.
Andreas Spitzer will join the REIT as executive vice-president of finance in January 2016. Spitzer will transition to the role of chief financial officer some time next year. American Farmland’s current chief financial officer, Geoffrey Lewis, will continue as an executive and director. Gimbel said the trust has been looking for a financial officer with experience working with a public REIT since American Farmland went public in October.
“We had always contemplated that we would bring in a senior financial officer with publicly traded REIT experience. It didn’t make sense for us to have that individual as a private company, but once we went public it became essential,” said Gimbel. “We’ve hired Andreas Spitzer who we think is an ideal fit for the company and its needs, and that his skillset is strong, broad and deep.”
Spitzer currently serves as the vice-president of finance for Equity One, a publicly traded REIT focused on shopping centres. Previously, he was chief financial officer for the New York City Housing Authority, the largest public housing authority in the US.
American Farmland owns 18 farms in the US comprising 16,136 acres of farmland on the Pacific and Atlantic coasts of the US, as well as in the Midwest and Mississippi Delta regions. The company went public in October through a $48 million IPO.