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Gladstone Land acquires pistachio orchards for $15.5m

The acquisition of a pistachio property adds diversity to the REIT’s portfolio, said its chief executive.

The NASDAQ-traded real estate investment trust (REIT) Gladstone Land has acquired 453 acres of California pistachio orchards for $15.5 million.

Gladstone has leased the land in Fresno County back to the seller for 10 years, with an option for a 5-year extension. The lease includes fixed-cash and variable revenue-based rent components.

“This farm allows us to further diversify our portfolio by crop type, which we believe will help reduce risks.  The orchard is already in strong production, so we will immediately be receiving rent payments in the form of both fixed cash rents and crop share cash payments based on the revenues earned on the farm,” chief executive David Gladstone said in a statement.

The acquisition is in keeping with the REIT’s investment strategy, focusing on a variety of annual and permanent speciality crops spread across different US geographies. In the past year, the company has added an organic potato operation in Colorado, a green beans and bell pepper farm in Florida and almond orchards in California to its holdings.

Fruit and tree nut prices have remained strong in recent years, falling slightly last year from 2014 highs. Prices for pistachios in 2014, the most recent year for which they are individually available, were higher than during any year before 2013, according to USDA data.

In 2013 Gladstone Land issued a $50 million IPO, making it the first publicly traded REIT focused exclusively on farmland. The company’s total assets have increased from $90 million in the first quarter of 2013 to $311 million. Gladstone now owns 47 farms, comprising 23,456 acres across seven US states valued at about $327 million.