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Gladstone buys 850 acres in California to plant almond orchard

Gladstone has plans to transform the 850 acre land, which is currently used to grow wine grapes, into an almond orchard.

Gladstone Land, the Nasdaq-listed real estate investment trust (REIT), has acquired three California farms spread across approximately 850 acres, in a deal valued at $19 million.

The REIT has plans to transform the land, which is currently used to grow wine grapes, into an almond orchard. The replacement of grapes with almonds will cost the firm an additional $8 million. The acquisition has been funded through a disbursement on the long-term note payable under Gladstone’s borrowing facility with MetLife Insurance Co.

The deal is structured as a 15-year, triple-net lease that will provide a fixed return for the first four year. Then the rent will be converted to a revenue-sharing structure that includes a rental floor.

“Today’s announcement marks our most significant foray into permanent crops to date, especially almonds,” Bill Reiman, managing director of Gladstone’s western division, said in the statement. Reiman said the acquisition “adds to our presence in southeastern Kern Country, which is an area of high-value agriculture.” Kern County is located in central California.

Gladstone also announced the refinancing of its existing credit facility with MetLife, where the blended interest rate on all previously-disbursed amounts under the long-term note payable was reduced by 26 basis points.

In June Gladstone purchased five irrigated farms in California and Florida totalling 3,519 acres.

Gladstone Land owns 41 farms comprised of 14,876 acres in six states, valued at about $261 million.