Gladstone land acquires additional Colorado farmland
Sep. 16, 2016
In addition, Gladstone Land entered into a triple-net lease agreement with the existing operator on the property for an initial term that runs through 2020 and includes one, 5-year extension option. The initial term of the lease provides for annual rent escalations and an overall, straight-line capitalization rate of 5.91%.
"Gladstone Land is fortunate to team up with one of the top-tiered operators in the area. Our tenant has farmed in Southeast Colorado for decades with an operation that specializes in providing a high-fiber hay blend for the cattle feed-lot industry," said Bill Hughes, Gladstone Land's Midwest Managing Director.
"This dryland farm acquisition is a great example of how we can add profitable assets to the portfolio while conserving water resources. Completing this purchase in a new region and of a new crop specialty will expand our geographic footprint and further diversify the crop types on our farmland holdings."
"We have added another great property to the portfolio of farms we own, and these new farms should yield strong returns for us, while also expanding the types of crops grown on our farms, as diversification is a key part of our strategy," said David Gladstone, President and CEO of the Company. "The soil on these farms is ideally suited to grow a high-quality hay crop to serve the feed-lot industry.
While this acquisition may appear to be outside of our typical focus, these farms are able to grow other types of crops, as well, and the alfalfa crop on the property is a type of permanent crop that will produce for several years without the need for new plantings, thus meeting our criteria for yield sustainability. Our acquisition backlog remains robust, and there are several other farms we are seeking to purchase during the remainder of 2016, which is shaping up to be another good year for the Company."