California REIT raising $15m as it eyes IPO – exclusive

A listing would see PIA join REITs Farmland Partners and Gladstone Land, while a third vehicle, American Farmland Company, recently filed for an IPO.

California-based Real Estate Investment Trust (REIT) PIA Farmland is raising $15 million in equity as it prepares to go public next year, PIA Farmland chief executive Steve Koomar told Agri Investor.

Koomar said PIA will use the capital raised to expand the company’s business outside the Midwest, where it currently owns farm property in Illinois and Nebraska. The firm has raised $4 million since its inception in early 2013, Kommar said, mostly from high net worth individuals, who are also the target of this round.

PIA will look to list on a national exchange, Koomar said, but explained “the timing of being listed depends on when PIA has $15 million or more in common equity”. There are currently two listed REITs, Farmland Partners on the New York Stock Exchange, and Gladstone Land on the Nasdaq. A third REIT, American Farmland Company, filed for an IPO in June.

PIA is currently evaluating some properties in Arizona, an area not that well known for farmland investing, but the properties it is eyeing have abundant water supply. “If you are growing crops in the desert, it doesn’t sound so good, but it’s great if you have an unlimited amount of water because you can control your [irrigation] conditions really well and get consistently returns,” Koomar explained.

The company acquires and leases out farmland through investment advisor and portfolio manager Pacific Income Advisers, an independent investment advisory firm managing approximately $11 billion for institutional and private clients worldwide. Pacific Income Advisers is no stranger to the REIT sector, having been active in it since 1997, when it launched Anworth Mortgage Corporation. PIA Farmland is an affiliate of Anworth Mortgage with assets of $7 billion.

Investing in income-producing farmland, PIA currently owns an 80-acre corn and soybean farm in Illinois, a 480-acre farm property in Nebraska, which also grows corn, and a 313-acre alfalfa farm in Nebraska, according to its website. It generates income through buying and leasing farmland to independent small and medium-sized farm operators with “sufficient experience and capital to operate the farms without PIA Farmland’s financial assistance”. It is currently focusing on corn, soybeans and wheat farms.