Gladstone enters cabbage market with Florida purchase

The farmland REIT paid nearly $10m for the property, which is to be operated under a six-year lease to an Ohio-headquartered grower.

Gladstone Land Corporation has acquired a 1,910-acre vegetable farm in Florida, its first property devoted to growing cabbage, for $9.7 million.

Gladstone said in a statement that it had entered into a six-year, triple-net lease agreement, with two extension options, for the property with Cabbage Inc, an Ohio-headquartered grower. In addition to green, red and savoy varieties of cabbage, Cabbage Inc also grows spinach, squash and cilantro on properties located in Ohio, Kentucky, Michigan and Georgia.

Bill Frisbie, Gladstone’s managing director, told Agri Investor that the purchase was part of the company’s ongoing effort to construct a diversified portfolio and was motivated, in part, by the opportunity to work with Cabbage Inc, which he called the largest cabbage grower outside California.

“We’re always looking to diversify, when we find a new crop type that’s exciting, or if we just want to build upon a crop type that’s already in the portfolio,” Frisbie said. “From our perspective, when you get a really strong operator that wants to partner with you on a long-term basis, it makes a ton of sense to move on it.”

Speaking Wednesday on the REIT’s second-quarter earnings call, David Gladstone, president and chief executive of Gladstone, said that Florida has “had its very best year in a long time,” specifically highlighting the strength of vegetable harvest and an 8 percent increase in rental rates in the state.

“We love Florida. It’s a good growing area,” he said.

Average cropland prices in Florida have remained steady at around $6,750 per acre over the past year, according to the USDA’s 2017 Land Values Survey released earlier this month. The $9.7 million purchase Gladstone announced suggests a per-acre price of $5,078.

The Okeechobee property is Gladstone’s second purchase in Florida this year and continues a string of recent acquisitions. In January, it paid $54 million for an organic farm in South Florida and $12.1 million in a combination of cash and stock for a hay farm in Colorado. That was followed in June by a deal that saw Gladstone pay $30 million for six properties in North Carolina and Arizona and in July by Gladstone’s purchase of pistachio and almond farms in California for $13.6 million.

Gladstone’s portfolio currently contains more than 60,000 acres, spread across eight US states, with a combined value of $516 million.