LandFund Partners lands $10m in acquisitions in Q2

Managing director Chris Morris says after accumulating Mid-South farmland properties since 2012, the firm’s portfolio has reached the $100m range typically of interest to institutional investors.

During the second quarter, LandFund Partners entered into contract for $10 million in farmland acquisitions, according to a managing director at the firm.

Chris Morris told Agri Investor capital for the investments will be drawn from LandFund Partners IV, investors in which are mostly endowments and family offices. Last May, the firm reached a first close on $12 million for the vehicle, which has a target of $30 million that the firm expects to reach by the end of 2019, Morris said.

The four properties LandFund is under contract to purchase, Morris said, are located in eastern Arkansas and total 2,400 acres suitable for growing corn, cotton, rice or peanuts. The properties are currently about 50 percent irrigated and, in keeping with the firm’s focus on distressed and opportunistic farmland, LandFund plans to invest in irrigating the remaining acreage, Morris said.

Nashville, Tennessee-headquartered LandFund focuses on farmland in the lower Mississippi Valley states of Arkansas, Louisiana and Mississippi, a region that Morris said continues to attract growing levels of interest from institutional buyers.

“With equities and bond yields appearing to be going down, farmland is becoming more and more attractive for liability-driven investors; pension funds, insurance companies and others,” Morris said.

Echoing a theme highlighted in a recent ASFMRA report on the Mid-South farmland markets, Morris said that after several single transactions of $100 million or more during the past decade, recent market activity has concentrated more on smaller transactions in the $1 million-$15 million range.

“Our own portfolio is now getting close to $100 million in assets,” said Morris. “Part of what we’ve been aiming to do is create a top of the line, institutional, turnkey portfolio and we are going to continue executing on that strategy.”

While the Mid-South has historically been undervalued compared with Midwestern farmland, Morris said, prices in the two markets have started to converge recently. One factor driving that convergence, he said, is the Mid-South’s status as a center of cotton production at a time when a recovery in prices has inspired a 20 percent increase in acres planted in the crop.

“For the land in the Delta, while soybeans and corn and others are still big crops, the farmer has more tools in their toolbox to actually go out and make money,” said Morris. “We expect that will continue to be recognized by the market.”