Angelina Agriculture, an entity reportedly connected to Microsoft founder Bill Gates, has purchased a 14,500-acre farmland property in southern Washington for $171 million from John Hancock Life Insurance, according to media reports.
The local Tri-City Herald newspaper was the first to report the sale last week.
The property is located in the Horse Heaven Hill region of southwestern Benton County and was previously purchased by John Hancock Life Insurance for $75 million in 2010. The report cited R. Clay Powell, chief council for Oak River Farms, as saying that firm would manage the property and planned no change from its current focus on sweetcorn and wheat.
According to a subsequent story published in The Land Report, the corporate mailing address for Angelina is the same as that for Cottonwood Ag Management, an agriculture asset management team for BMGI / Cascade Investment, the private holding company for Bill and Melinda Gates.
In November, multiple sources told Agri Investor that an entity related to Bill Gates was widely believed to have been the buyer of a group of farmland assets sold by the C$366.3 billion ($258 billion; €221 billion) Canada Pension Plan Investment Board for $520 million.
A recent analysis of subsequent National Council for Real Estate Investment Fiduciaries farmland index reports, to which Cottonwood contributes data, suggested the portfolio may have been a diversified one with a concentration in the Corn Belt and Delta States and only a single property in the Pacific Northwest region containing Washington and Oregon.
‘Interested in everything’
A source familiar with US farmland markets told Agri Investor they believed Angelina Ag to contain a 26,000-acre property in Monterey, Louisiana formerly owned by Bernard Ebbers, a co-founder of failed communications company WorldCom, and reportedly sold for $31 million in 2006.
According to her LinkedIn profile, Caroline Orlowski, who currently serves as an asset manager at Cottonwood, previously worked as an assistant general manager for farm and grain at Oak River Farms, a role described as managing a 25,000-acre farming operation in Monterey, Louisiana.
Acknowledging that a great degree of uncertainty surrounds the corporate structure behind Gates’s farmland investments and stressing their view was based on second-hand information, the source said the 2006 purchase had been among the first significant agriculture investments by the Microsoft founder. The source said they believed Cottonwood to be a broader management company currently overseen by former MetLife managing director Peter Headley, under which subsidiaries like Angelina have been established around specific regions or portfolios of acquired properties.
“Bill Gates is interested in everything,” the source said when asked if they had already been familiar with the fact that entities related to Gates were interested in Washington State farmland. “He’s just buying a bunch of land.”
A second source who said they had met with Cottonwood portfolio managers recently told Agri Investor that, while there was no way to be certain, they did not think there is any relationship between the firm’s farmland purchases and agriculture-related initiatives of the Gates Foundation.
“I believe it’s a separate entity deputized to make smart plays to buy assets that will produce income in the ag realm,” the second source said. “They’ve [Bill and Melinda Gates] got to park that money somewhere and my sense is they see this as a long-term, stable money-making investment at 6 or 8 percent and it’s just a good play.”
A third source said Angelina has also recently made purchases in the Mississippi River Delta region.
“I’ve heard that he’s buying in multiple places,” that source added.
Alan Busacca, a wine industry consultant who was formerly a professor of soil science and agriculture at Washington State University, told Agri Investor that the Horse Heaven Hills region where Angelina reportedly made its purchase is among the most productive in Washington for irrigated agriculture. Among the crops grown in the region, according to Busacca, are apples, cherries, carrots and potatoes, though the land purchased by Angelina is best suited to irrigated row and field crops.
“It [the property acquired by Angelina] does not have the rolling-hill character and the higher elevations that are commonly needed for permanent crops like tree-fruit and wine grapes,” he explained.
Investor interest in the region has grown significantly in recent years, said Busacca, who added that land prices in the area have been heavily influenced by water access. People began converting what had previously been cattle-grazing land near the Columbia River during the 1960s and 1970s, said Busacca. Because the elevation increases to the north of the river, he added, as the water table has dropped over recent decades, farmland buyers have increasingly prioritized reliable access to water.
Busacca said the property purchased by Angelina sits within what today constitutes a growing nexus of processing plants, transportation infrastructure and low-cost hydropower and wind electricity that is facilitating a regional transition from irrigated wheat and field corn to higher-value crops such as carrots, onions and tree-fruit.
“Having lived in Washington State for 35 years, every time I drive through the area of Horse Haven Hills, I’m stunned by the continued intensification of development, going from lower-value crops to higher-value crops,” said Busacca. “They’re [Cottonwood / Angelina] making a very smart play for those being reliable money makers.”
He added that, similarly to how access to water has helped determine land values for farmland in the region surrounding the Columbia River, he is also aware of growing interest in large properties drawing from southern Idaho’s Snake River, a tributary of the Columbia.
“I do think – based on my gut and the little bit of scuttlebutt I hear now and again – that there is an increased in Washington State and Idaho ag.”
Cottonwood declined to comment. Angelina referred media requests to an Oak River Farms-affiliated email address, the owner of which did not reply to a message seeking further detail by the time of publication.