Gladstone purchases Colorado pastureland

The acquisition of a 16,595-acre farm in southeast Colorado expands the REIT’s presence in hay production following purchase of its first such property last year.

After making its first foray into the crop last summer, Gladstone Land Corporation has paid $12.1 million in a combination of cash and stocks to add an additional hay farm to its portfolio.

The farmland REIT has acquired 16,595 acres of farmland for $9.1 million in cash and $3 million in stock. The land is located on a continuous farm in southeastern Baca County, Colorado.

Gladstone entered into a triple-net lease agreement through 2020 with the existing operator to continue growing a high-fiber hay blend for the cattle industry, with an additional five-year extension option, according to a company statement, which said the deal provides for annual rent escalations and an overall capitalization rate of 5.9 percent.

“The soil on this farm is ideally suited to grow high-quality crops to serve the cattle industry,” said Gladstone chief operating officer David Gladstone. “This acquisition was another opportunity to partner with a very strong tenant, diversify our portfolio and add additional farm owners as investor.”

Gladstone managing director Bill Hughes added that the purchase reflected a commitment both to a new region and a new crop specialty. While much of Gladstone’s 58-farm portfolio is concentrated on horticultural crop production — in Florida, California and five other states — this transaction marks just its second investment in hay production. In August, Gladstone paid $11.4 million in a combination of cash and company stock for 7,384 acres of Colorado farmland devoted to alfalfa and native grass hay.