Farmland Partners closes $197m Illinois farmland deal

Real estate investment trust (REIT) Farmland Partners has completed the 22,100-acre Illinois farmland acquisition first reported in November 2015.

The purchase of 118 farms near Paris, Illinois was made through a combination of $50 million in cash and $147 million in common and preferred company stock.

The company has entered lease agreements with 14 previous tenants as well as four new operators, according to the REIT.

The total acreage of the acquisition is 200 acres less than the total originally announced by the REIT in November. Farmland Partners chief financial officer Luca Fabbri told Agri Investor the difference was due in large part to rounding errors, which were corrected in the due diligence process. He said such adjustments are not unusual for purchases of multiple land parcels.

“This transformative transaction makes [Farmland Partners] one of the largest owners of farmland in the Midwestern United States,” said chief executive Paul Pittman. “The increased scale of our operations will be reflected on our balance sheet and in our revenue, and the substantial number of new operators will add value to our volume purchasing programme by increasing the total acreage operated by our tenants.”

The close comes at a time when US grain producers are faced with increased pressure from low-priced grain producers in Brazil and Argentina. Last month Iowa State University’s Dermot Hayes told Agri Investor that low commodity prices are likely to put downward pressure on rents and land values on US farms.

The acquisition brings the total acreage under Farmland Partners’ control to 107,888 acres across 257 farms.  At the time of its $53 million IPO in 2014, the REIT owned 7,300 acres on 38 farms.

The REIT’s strategy is to acquire and scale up US row-crop land. However, it has also made investments in rice and blueberry operations, has an agriculture lending programme and leases farmland for wind energy.