NASDAQ-listed farmland REIT Gladstone Land Corporation has acquired a 176-acre blueberry farm in Michigan for $2.1 million.
Gladstone also entered into a 10-year triple-net lease for the property with True Blue Farms, a family-owned regional blueberry producer. Located in Van Buren County of Southwestern Michigan, the fully irrigated property currently consists of 100 planted acres and has access to multiple water sources, Gladstone noted.
“Western Michigan offers fertile growing conditions due to the lake-effect climate and highly productive soils,” said Gladstone senior associate Joseph Van Wingerden. “We hope to continue expanding our holdings in the region.”
True Blue and Gladstone had not responded to queries seeking further detail at the time of publication.
A manager familiar with the market told Agri Investor that global consumers have shown increased demand for blueberries in recent years, thought to be the result of the crop’s healthiness, its increased use in a variety of both fresh and food-service contexts and an attractive slate of investment opportunities in the market.
“We have seen a large amount of investor capital, both domestically, but especially internationally, go into blueberry plantings,” the manager said, adding that returns for the crop have been in the mid to high teens over the past 10 to 20 years.
Given that plantings tend to take between two and five years to reach full maturity (depending on geography and variety), the manager said that talk within the blueberry industry is currently focused on a coming “blue wave” of supply.
“There are a lot of acres that have been planted over the past decade that are just coming online, or will be coming online in the next five years, where supply is going to grow rather dramatically. It’s unclear what that does to the marketplace, unclear what that does to returns, but that’s the situation that we now see.”
Gladstone chief executive David Gladstone said the company plans to continue building on its existing tenant relationships this year, characterizing its deal pipeline as “healthy.” Virginia-headquartered Gladstone’s total farmland portfolio currently stands at 75 farms across nine US states, valued at approximately $538 million.