2023 Auction Deal of Year Fall Line Capital Wisconsin Portfolio

2023 Auction Deal of Year Fall Line Capital Wisconsin Portfolio

By Cary Estes


NORTHERN EXPOSURE More than 230 bidders from eight states vied for 103 farmland tracts in six North Central Wisconsin counties.

Published On: June 20, 20242.1 min read
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 Fall Line Capital spent years assembling a ­7,428-acre Wisconsin portfolio, 103 farmland tracts nestled between Wausau, Wisconsin, and the ­Minnesota state line. It took Schrader Real Estate and Auction ­Company less than 48 hours last August to sell it in a spirited showdown that pitted institutional investors against local farmers.

When the gavel came down on the two-day event, 103 farmland tracts in six North Central Wisconsin counties had sold for more than $46 million. Most of the tracts averaged more than $6,000 per acre, with one three-tract grouping ­topping the $10,000 mark.

According to Fall Line Capital co-founder Clay Mitchell, the Wisconsin portfolio was a textbook example of the strategic approach that Fall Line takes to its farmland investments. Mitchell says the company, which focuses on large-scale crop operations nationwide, looks specifically at investment opportunities where output levels can be increased through technological advancements.

“For us, buying and selling have ­nothing to do with market timing. It’s all about the cycle of improvements that we want to bring,” Mitchell says. “Our thesis is, if we improve the efficiency and productivity of the farmland, the value will go up.”

Auction Manager Luke Schrader was not counting on such spirited bidding. For more than a year, interest rates had been steadily rising, which limits potential buyer pools at ­auctions. Plus, in a land where milk is money, milk prices had been dropping, reducing the amount of ­revenue available for local operators to make additional land purchases.

“The headwinds were a hot topic,” Schrader says. “Not only interest rates, but milk prices are down significantly, which is important in this part of the country. So the cost of borrowing money was up, and incomes were projected to be down a little because of lower milk commodities.

“But even with these headwinds – and trust me, we heard about them – we still saw some prices that we didn’t expect and were fairly unprecedented for that area. Since there are not a whole lot of ­portfolios like that hitting the public market around here, this part of the country had not seen the crazy-high prices that some others have.”

The Land Report 2023 Auction Deal of the Year recognizes these ­innovative approaches to generating value and, in particular, to monetizing it.

Published in The Land Report Spring 2024.

AT THE EDGE Farmland gives way to timber tracts just north of the auctioned acreage.

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