Gladstone Land (LAND) said it has acquired three farms comprised of approximately 850 gross acres of irrigated farmland in Kern County, California, for $19 million.
The agricultural real estate investment trust said the property is mostly planted in wine grapes but Gladstone Land said it will finance the new tenant-farmer’s development of the property into an almond orchard at an expected total cost of approximately $8 million.
Gladstone Land has entered a lease agreement with a almonds, tomatoes and frozen vegetables farmer for a 15-year triple-net lease that provides for a fixed return for the first four years, thereafter converting to a revenue-sharing rent structure that includes a rental floor.
Subject to yield and crop prices, projected annual rents under this lease are expected to exceed 8% of the total costs invested, Gladstone said.
LAND closed near the bottom of the 52-week range between $8.89 and $13.87 on Friday. It was inactive in recent pre-market trade.
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