Farmland Partners Inc. (NYSE: FPI) announced today the sale of a portfolio of 46 farms, totaling 41,554 acres, to Farmland Reserve, Inc. for $289 million in an all-cash transaction. The deal, which has been finalized, is expected to close on October 16, 2024, pending the satisfaction of all closing conditions.
The portfolio spans multiple states, including Arkansas, Florida, Louisiana, Mississippi, Nebraska, Oklahoma, and the Carolinas. However, the sale does not include any of the company’s farmland in Illinois, which is among its most valuable holdings. Farmland Partners anticipates a gain of approximately $50 million from the sale, representing a 21% increase over the net book value of the properties. In 2023, FPI sold an additional $200 million worth of assets, achieving gains of over 20%.
Luca Fabbri, President and CEO of FPI, highlighted the strategic benefits of the sale, stating, “Farmland is a ‘total return’ investment, where asset appreciation plays a major role in returns. This transaction once again demonstrates our total return thesis, showcasing the intrinsic value in our stock. We plan to use the proceeds to reduce debt by approximately $140 million, repurchase stock, pursue acquisitions, and support other corporate initiatives. Additionally, we anticipate being in a position to make a significant special distribution to shareholders at the end of the year.”
Fabbri also expressed enthusiasm about collaborating with Farmland Reserve. “We are pleased to transition our tenant relationships to an institutional investor that shares our commitment to ethical and honest dealings. Farmland Reserve is a highly respected leader in the farmland community, and we believe our tenants will benefit from this partnership.”
Doug Rose, CEO of Farmland Reserve, expressed his gratitude for the opportunity, saying, “We are excited to acquire this portfolio of high-quality farmland and appreciate the confidence Farmland Partners has placed in us. As long-term investors, we look forward to leasing these productive farms to local farmers for many years to come.”
