The properties total 847 gross acres and include 327 acres of pistachio trees and 318 acres of almond trees. All trees on the farms were planted between 2002 and 2009.
“This acquisition allows us to continue to grow our portfolio of farmland focused on growing healthy products, such as fresh produce and nuts,” Gladstone president and chief executive David Gladstone said in a statement. Bill Reiman, managing director for the western US, called the sale-leaseback deal the hallmark of the company’s investment approach and said that he hoped to enter into similar agreements with farmers throughout the region.
Gladstone’s deal includes a 10-year triple net leaseback agreement with the seller, described only as a leading almond and pistachio grower, harvester and processor. The agreement also contains a five-year extension option and a profit-sharing agreement.
In an Agri Investor commentary published last month, former MetLife director of research Hugues Rinfret wrote that tree nuts like almonds and pistachios are among the protein-based foods that stand to benefit most from increasing global middle class consumption. Citing statistics from the UN’s Food and Agriculture Organization (FAO), Rinfret wrote that tree nuts’ 3.5 percent annual demand growth rate over the past 20 years led all protein categories including meat, eggs and fish.
“Considering the evolving consumer preferences towards protein-based foods, companies that operate in tree nuts, fish/seafood, eggs and dairy products are likely to outperform their peers in the cereal category,” Rinfret wrote.
In its recent annual report released in mid-June, Canada’s PSP Investments announced that it had purchased 10,000 acres of almond orchards in California. PSP said the investment marked its first in permanent crops and would be leveraged to create a platform devoted, in part, to California almonds.
The acquisition continues a series of a deals the Virginia-headquartered REIT has completed in 2017. In January, Gladstone paid $12.1 million for a Colorado hay farm and $54 million for an organic farm that marked the company’s largest-ever transaction. Last month, the company paid a total of about $30 million for six farmland properties located in Arizona and North Carolina.
In total, Gladstone’s portfolio now contains 69 farms spread across eight states valued at approximately $504 million.