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Hebei Lansheng Biotech Co., Ltd. ShangHai Yuelian Biotech Co., Ltd.

Farmland partners to acquire 2,400 acre Florida farmqrcode

Jul. 11, 2016

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Jul. 11, 2016
Farmland Partners Inc. recently announced that it has entered into a purchase agreement to acquire approximately 2,400 acres of land in Florida. The Company plans to convert the land from its current use as a timber plantation and quail preserve into a row crop farm that will produce forage for a major dairy operation. At closing, the Company will enter into a 10-year lease that has options for three five-year extensions.

During approximately 18 months of the initial lease term, the property will be under redevelopment. Using conservative assumptions of commodity prices and crop yields, the Company expects the return on total investment during redevelopment will be between 4.0% and 4.5%, including the conversion costs. Once the conversion is complete, the Company expects the return on total investment to increase to approximately 5.75%. In years six through 10, the rental rate will increase each year based on percent changes in the consumer price index.

The total purchase price for the land is approximately $9.4 million, and the total conversion costs are expected to be approximately $6.5 million. The conversion process will consist primarily of timber removal and the installation of irrigation improvements. The Company believes the conversion will substantially increase the value of the land.

The acquisition is expected to close during the third quarter of 2016, and is subject to customary closing conditions.

"This transaction demonstrates our ability to source and creatively structure deals that help grow our portfolio and achieve attractive rates of return. Moreover, having a successful dairy as a long-term tenant provides security and diversification to our portfolio," said Paul Pittman, CEO of the Company.

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