Farmland Partners acquires 7,400 acres of Louisiana farmland

The $32m deal widens the REIT's crop and geography exposure.

The US real estate investment trust (REIT) Farmland Partners has acquired 7,400 acres of Louisiana Farmland, according to a press release.

In addition to the $31.8 million purchase agreement, Farmland Partners has reached a 3-year lease agreement for the seller of the property to continue operating the farm. The REIT will receive variable lease payments, based on gross farm proceeds. Farmland Partners expects the agreement to yield 5 percent annual returns, according to the release.

The acquisition comes less than a month after the publicly traded farmland REIT announced that it had acquired 22,300 acres of Illinois farmland. Farmland Partners chief executive, Paul Pittman, told Agri Investor earlier this month that the acquired land would be used as collateral to debt-finance future acquisitions in the US Southeast and Mississippi Delta regions. This new deal appears to be the first of a number of acquisitions, which Pittman said had already been identified at the time.

“This agreement was enabled in part by the structure of our recently announced $197 million Paris, Illinois pending acquisition,” said Pittman in a statement regarding the company’s acquisition in Louisiana.

A significant portion of the land will be dedicated to rice production, according to the company. The move into Louisiana rice production represents a slight departure from Farmland Partners’ core strategy of investing in Midwestern US farmland producing primary row crops, wheat, corn and soy. Both acquisitions are expected to close in early 2016, pending the completion of due diligence and other closing conditions.

“This transaction will further diversify our portfolio by not only geography, but also crop type,” said Pittman.

As previously reported by Agri Investor, Farmland Partners has diversified its investment portfolio over the past year, purchasing a 125-acre blueberry farm in Michigan, leasing out land in North Carolina for a windfarm operation, and launching an agricultural lending programme to provide farmers with working capital.

Since going public in an April 2014 IPO, Farmland Partners has increased its farmland holdings to more than 104,000 acres spread across 253 farms, from roughly 7,300 acres on 38 farms.