A New Opportunity For Investing In Productive Farmland
Creating value by improving the land
by Adam Taggart
Sunday, August 10, 2014, 1:13 PM
Tags:Craig Wichner, farmland, Farmland LP, Organic, real estate investment trust, REIT, soil
Over the past few years, we’ve tracked the success of Farmland LP, a fund created to increase the economic yield of farmland through sustainable farming practices.
Their approach is notable in a number of ways. It seeks to improves the quality of the underlying land. To avoid use of fossil inputs. To increase the yield per acre. To enable the production of vegetables, grains, and meats on acreage that before was monocrop. To employ more farmers per farm. To be more profitable than conventional farming. To improve the food resiliency of the local community. To reduce its dependency on liquid fuel transport by serving local markets. To generate annual returns for its shareholders, plus appreciation on their share of the underlying farmland.
The team believes there is an arbitrage in value that can be unlocked by reversing the damage modern farming has done to the land. After visiting their largest property this spring, I put together a detailed write up of how exactly they’re pursuing this, which can be read here.
Today’s big news is that, while the initial LP fund closed to new investors last year, the same management team has just launched a new fund, this time structured as a real estate investment trust (REIT).
This is notable for several reasons. It’s a larger fund, which should enjoy greater economies of scale than the original one. And, the new REIT structure will eventually enable the fund to become publicly-traded (likely in 5 years or so, depending on key milestones). Once this happens, much smaller investors will be able to purchase shares — finally making the dream of participating in productive farmland an option for all.
Those who would like to learn more about Farmland’s operations and/or new REIT can send a request for more information here. Note that their REIT is available to accredited investors only and that Peak Prosperity has an existing business relationship with Farmland (full details will be provided when opening an account with the Fund or at any time upon request.)
Click the play button below to listen to Chris’ interview with Craig Wichner (24m:50s):