DENVER, Sept. 22, 2017 /PRNewswire/ -- Farmland Partners Inc. (NYSE: FPI) ("FPI") announced today that it has entered into agreements to acquire from Olam International Limited ("Olam") approximately 5,100 acres of permanent crop farmland in California for a purchase price of $110 million.
The properties are located in California's Central Valley and are dedicated to the production of almonds, pistachios and walnuts. At closing of the acquisition, FPI will enter into 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. Closing is subject to customary conditions.
Olam is a leading global agribusiness company with operations in 70 countries and nearly 70,000 employees. FPI is the largest publicly-traded farmland real estate investment trust in the U.S. FPI's portfolio is broadly diversified across crops and regions, spanning more than 154,000 acres.
Commenting on the transaction, Paul Pittman, FPI Chairman and CEO, said, "We are excited to work with Olam and look forward to building upon this relationship. We have a high degree of respect for Olam's team of exceptionally talented operators. Further, we look forward to bringing these properties into our portfolio. They are unique, high-quality farms in the heart of California's tree nut industry. The properties and associated agreements 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. On an unlevered NOI basis, we expect these leases in 2018 to be accretive to our portfolio relative to the cost of our recently issued preferred security."
Olam's Managing Director and CEO of Edible Nuts, Ashok Krishen noted: "As part of our Edible Nuts strategy, we intend to further invest in growing almonds, pistachios and walnuts in California. We have built a sizable portfolio of prime orchards and have adopted sustainable and industry leading agricultural practices in managing these orchards. We had been looking for the right partner who sees the long-term value of farming, while we are 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."
About Farmland Partners Inc.
Farmland Partners Inc. is an internally managed real estate investment trust that owns and seeks to acquire high-quality North American farmland and makes loans to farmers secured by farm real estate. The Company's portfolio is comprised of more than 300 farms covering nearly 154,000 acres across seventeen states. The Company elected to be taxed as a real estate investment trust, or REIT, for U.S. federal income tax purposes, commencing with the taxable year ended December 31, 2014.
SOURCE Farmland Partners Inc.