Farmland Partners Inc. (FPI), a major U.S. ag real estate investment trust (REIT), announced today that it will acquire approximately 5,100 acres of permanent crop farmland in California now owned by Olam International Limited. Purchase price: $110 million.
The price works out to $21,568 per acre.
Olam’s California operations are based in Fresno. The properties in the deal are located in California’s Central Valley and are planted in almonds, pistachios and walnuts.
When the purchase closes, FPI will commit to a 25-year triple-net lease agreement with Olam on a revenue-share basis. During the term of the agreement, Olam will operate and maintain the properties and improvements.
Olam’s California nut operations are based in Fresno. Overall, it has business units in 70 countries, with nearly 70,000 employees, according to a press release announcing the acquisition.
FPI is the largest publicly-traded farmland REIT in the U.S. and already has holdings in California. In 2016, it acquired competitor American Farmland Co., which had previously spent $65 million on ag properties in the state. That deal included nut acreage.
Paul Pittman, FPI Chairman and CEO, said that the purchase “will bring higher cap rate permanent crop production into our portfolio, furthering our goal of delivering a well-balanced portfolio of U.S. farmland to our stockholders.”
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Olam’s Managing Director and CEO of Edible Nuts, Ashok Krishen said that Olam “had been looking for the right partner who sees the long-term value of farming.” Olam, in turn, was “looking for an asset-light model to participate in the production economics of the tree crops. Farmland Partners, whose success is based on strong partnerships with farmers, is therefore a strategic fit for our business model.”
On its website, Olam says that it is “the second largest grower of almonds globally and the only supplier with origination in Australia and California…We currently maintain 30,000 acres of almond orchards in Australia…In California, we farm 7,000 acres of almond orchards.”
FPI’s assets include more than 300 farms covering nearly 154,000 acres across 17 states.