August 19, 2019

By Lynda Kiernan

Real Estate Investment Trust (REIT) Gladstone Land announced it has acquired nearly 1,000 gross acres of farmland in Coalinga, California, for $33 million. This deal is the first part of a two-part acquisition, with the second part, which is larger than the first, set to close in the fourth quarter of this year. 

The parcel consists of a 911-acre orchard planted in mature pistachio trees, and as part of the deal, Gladstone has entered into an eight-year, triple-net lease with RTS Agri Business and Canoas Creek Pistachios to run the operation.

“We are excited to be adding another large pistachio orchard in the San Joaquin Valley,” said Bill Reiman, managing director, Gladstone Land. “More than just adding another property to our farmland holdings, we are also adding another high-quality grower-tenant.”

“Rod and Paul farmed this property prior to its development as a pistachio orchard, and they are excited to continue their operations on the property into the foreseeable future.”

This deal follows less than a month after Gladstone’s last acquisition in July, when the REIT announced it had added to its Florida holdings with the acquisition of 3,586 acres of farmland and facilities in South Florida for a total consideration of approximately $58 million. 

Historically, the property had been used to grow vegetables and as a citrus farm, however, is currently being used for diversified agriculture and primarily for water retention. As is standard, Gladstone entered into an eight-year, triple-net lease with Caulkins Citrus Company Ltd. to manage the farm, which eventually has the potential to be converted into organic production.

“This is our second large acquisition of the quarter,” said David Gladstone, president and CEO of Gladstone Land. “We continue to build our diverse portfolio of farmland focused primarily on healthy foods, such as fresh produce and nuts, and we are very encouraged by the number of large, high-quality farms we have been able to acquire recently.”

This deal is also a continuation for Gladstone in the building out of its pistachio holdings. The company made its first pistachio acquisition in 2016, when it acquired a 453-acre property in Fresno, California, planted in trees ranging from five to 19 years of age, for $15.5 million. 

The following year, Gladstone acquired four contiguous farms, again in Fresno, for $13.6 million. Of the total 847 acres planted between 2002 and 2009, 327 were planted in pistachio trees, while another 318 were planted in almonds. 

Then, in November of last year, the company closed another significant deal, with the acquisition of a 951-acre farm in Madera County, California, that included 715 acres of mature fig orchards, and 224 acres of mature pistachio orchards for $23 million. 

“Pistachios have been a focus of ours for a while, and we felt this was a great opportunity to add another specialty crop to the mix with figs,” said Gladstone at the time. 

The  addition of the orchard in Coalinga not only expands Gladstone’s permanent crop portfolio and its pistachio holdings, but brings with it infrastructure that will add value for shareholders, explains Reiman.

“This is a large holding with its own solar facilities to help reduce energy costs,” he said, “…and the farm has added value due to the water infrastructure that allows the grower to deliver surface water to the orchard.”

The Coalinga orchard brings Gladstone’s portfolio to 93 farms, totaling 81,000 acres spread across 10 U.S. states, with a value of approximately $768 million. Most farms are located in regions suitable for the production of fresh produce and annual row crops such as berries, however, the company also has extensive and growing holdings in permanent crops, including almonds, apples, figs, olives, pistachios, blueberries, and vineyards.

– Lynda Kiernan is Editor with GAI Media and daily contributor to GAI News. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.com.