Two pensions put $300m into US Farm Trust REIT – exclusive

The REIT will acquire row crop farmland in the US' Pacific Northwest region.

US Farm Trust, a Texas-based privately-held real estate investment trust (REIT), revealed it has garnered $300 million in pension fund commitments.

The funding came from two pension funds that were not willing to be disclosed at this point, president Tommy Funk told Agri Investor.

The REIT will acquire row crop farmland throughout the US, excluding the eight states with corporate investment restrictions, which are Iowa, Kansas, North and South Dakota, Missouri, Minnesota, Oklahoma and Wisconsin, the statement says.

“We have a few farms in our pipeline that we are in due diligence on but we have not closed the [transactions] yet,” Funk said.

The REIT is talks with “more than a handful of farms” in the Pacific Northwest region, specifically in Idaho and eastern Oregon where the water accessibility is good and the soil is good for growing a variety of crops, Funk told Agri Investor.

“Our research-driven model has been focused on areas that have chances of productivity gain. If you look at Idaho, you have strong state rivers for irrigation and because of the climate and the type of soils that are there, you can do potatoes, corn, hay and onions. The variety [of crops] give the farmers the opportunities to plant to high market every year.”

Fund said the REIT plans to deploy the capital raised in the next 30 to 40 months, and the pension fund investors had indicated that “once the $300 million has been fully invested, they are willing to continue with US Farm Trust and to invest more”.

A separate entity, the US Farm Trust Advisors, will focus exclusively on managing the REIT.

The REIT works with sellers and farmers to create sale and leaseback structures and “will be able to purchase even the largest farms on an expedited basis without a financing contingency,” the statement said.

“We are offering farmers the ability to sell their farms without having to leave their land,” Steven Feldman, US Farm Trust Advisors’ chairman, said in a statement.  “The advisors for this REIT have decades of experience investing in farmland, and we understand the importance of building long-term ‘win-win’ relationships with farmers.”