March 15, 2018

Gladstone Land announced it has acquired a 176-acre blueberry farm in Van Buren County, Michigan, for a total consideration of $2.1 million.

At the point of purchase, the operation consists of 100 fully irrigated acres of planted blueberries and includes multiple water sources. Once finalized, under the terms of the deal, Gladstone Land will enter into a 10-year, triple net lease with True Blue Farms, one of the U.S.’s leading blueberry growers and marketers.

“We are pleased to announce the acquisition of another excellent blueberry farm and to expand our relationship with True Blue Farms,” said Joseph Van Wingerden, senior associate of Gladstone Land. “Western Michigan offers fertile growing conditions due to the lake-effect climate and highly-productive soils. We hope to continue expanding our holdings in the region.”

Capital at Pace

This is the first deal announced by Gladstone since the company filed a prospectus summary with the U.S. Securities and Exchange Commission (SEC) in January of this year for a continuous public offering of six million shares of its Series B Cumulative Redeemable Preferred Stock at an offering price of $25 per share. The filing allowed for up to $150 million in gross proceeds, or $131.3 million in net proceeds after the payment of fees, commissions, and expenses.

“We believe this is a nice way to raise capital at a pace to allow for it to be invested in a more timely manner,” said David Gladstone, president and CEO of the company, in January. “Over the next five years, we intend to sell some or all of the $150 million allotted for in this offering. We believe this offering will provide the Company with access to the additional capital needed to grow our Company in a way that is not as dilutive to existing common stockholders.”

Permanent Crop Run

This acquisition of the latest in a string of permanent farm deals for Gladstone over the past six months.

In July of last year the company announced its acquisition of four contiguous farms located in Fresno, California, for approximately $13.6 million.

The four properties, which brought Gladstone into a new geography for the company, encompass a total 847 acres, of which 327 acres are planted in pistachio trees, and another 318 acres are planted in almond trees. All plantings were completed between 2002 and 2009.

“This is our second large acquisition of 2017, and we are excited to enter into a new growing region,” Gladstone said at the time.

Two months later, in September of last year, Gladstone acquired White Hawk Vineyard – a 361-acre wine grape vineyard located in Santa Barbara County, California, for $5.4 million.

“We have targeted this area for a number of years in order to continue to diversify our farmland holdings both geographically and by crop type,” said Gladstone at the time.

That same month, amidst an undeniable acquisitive streak, Gladstone announced the acquisition of a 746-acre organic permanent crop farm in Walla Walla, Washington, for $9.5 million. The addition of this property, which produces apples, wine grapes, and cherries, represents the first permanent crop holding for the company in Washington State.

Most recently, in December 2017, Gladstone announced the acquisition of a California organic almond orchard for $5.9 million. At the same time, the company announced that it has successfully expanded its current credit facility arranged with Metropolitan Life Insurance Company from $200 million to $275 million.

These sales reflect not only Gladstone’s focus on permanent crops but organic crops as well.

Organic sales on the U.S. market reached $47 billion last year, according to the 2017 Organic Industry Survey conducted by the Organic Trade Association. Of all organic categories, organic food sales saw the greatest increase – jumping by $3.3 billion or 8.4 percent over the previous year.

Furthermore, Food Dive reports that TechSci Research expects the global organic food market will see a compounded annual growth rate (CAGR) of 14 percent between now and 2021. Additionally, a report issued by the Organic Trade Association in March of this year found that organic food sales in the U.S. topped $40 billion per year in 2016, and that more than 80 percent of U.S. kitchens now contain organic food items.

Armed with these numbers and data, Gladstone is able to gain exposure to the organic segment by acquiring established organic fruit and vegetable operations with multi-year leases, without having to invest the multiple years and capital associated with transitioning mainstream farmland to organic production.

Gladstone’s Standing

Upon the addition of the company’s latest blueberry farm, Gladstone now owns 75 farms totalling 63,351 acres in nine different U.S. states, at a value of $538 million.

“This acquisition adds another top-tier farm growing healthy produce to our portfolio,” said Gladstone. “We look forward to continuing to build on our existing tenant-farmer partnerships during 2018. Our current acquisition backlog remains healthy, and we hope to be able to acquire several additional farms that grow a variety of crop types throughout the year.”

-Lynda Kiernan