The NYSE-listed real estate investment trust (REIT) Farmland Partners has announced the purchase agreement of a 125-acre blueberry farm in Michigan for $1.2 million in cash. The acquisition is expected to close in the third quarter of the year, according to a press release.
The new farm is expected to have an annual rental income of 8 to 10 percent of the purchase price, and it is the first permanent crop farm the REIT has acquired.
The REIT has historically focused on commodity crop farmland, predominantly in the Midwest region of the US. Paul Pittman, Farmland’s chief executive, said on an earnings call in February that the company is expanding its acquisition strategy to include fruit and vegetable crops.
The company currently owns two other farms with substantial annual specialty vegetable crop production, Agri Investor learned.
“Having built a 70,000 acres-plus portfolio of row crop farms in 10 states, we are comfortable gradually adding higher return and higher risk speciality crop properties,” Pittman said in a statement. “When [the new properties are] blended into our portfolio, should enhance returns without materially increasing volatility.”
The company’s portfolio is comprises 120 farms with an aggregate of 71,188 acres, including three farms with an aggregate of 2,638 acres under contract.
In April, Farmland Partners issued a $14.9 million bond under its $150 million secured note purchase facility with Farmer Mac, from whom the REIT first raised $20.7 million in debt in August 2014.