Farmland Reserve paid Farmland Partners $289 million for 41,554 acres of farmland across eight states. The all-cash transaction, which closed on October 16, consisted of 46 farms in Arkansas, Florida, Louisiana, Mississippi, Nebraska, North Carolina, Oklahoma, and South Carolina.

Unique Portfolio of High-Quality Farmland

“We are grateful for the opportunity to work with Farmland Partners to acquire this unique portfolio of high-quality farmland,” said Farmland Reserve CEO Doug Rose in a news release. “We’re also gratified they saw us as the right buyer for these properties and the farmer-tenant relationships that come with them. As an investor with a long-term vision, we look forward to leasing these productive farms to local farmers for many years to come.”

Farmland Reserve is an integrated investment auxiliary of The Church of Jesus Christ of Latter-day Saints that has operated for almost a century. Farmland Partners (FPI) is the nation’s largest farmland real estate investment trust (REIT) by acreage. The Denver-based REIT currently owns and/or manages 136,000 acres of farmland in 15 states, including Arkansas, California, Colorado, Illinois, Indiana, Iowa, Kansas, Louisiana, Mississippi, Missouri, Nebraska, North Carolina, Ohio, South Carolina, and Texas.

FPI to Reduce Debt, Buy Back Stock, and Invest

Farmland Partners stated that the purchase price is approximately $50 million more than the aggregate net book value of the farms. CEO Luca Fabbri indicated that Farmland Partners will use the capital to reduce debt by approximately $140 million, buy back stock, and pursue future acquisitions.

“We have consistently advised shareholders that our company is undervalued due to lack of recognition by the market of the appreciation in our asset base,” Fabbri said in a statement. “As we did last year, we have once again proven our total return thesis and highlighted the unrealized intrinsic value in our stock by delivering a sizable gain on a representative segment of our overall portfolio.

“We are pleased to transition our long-standing tenant relationships to a high-quality institutional investor that values relationships as we do. Farmland Reserve is highly respected in the farmland community as a best-in-class owner that manages farms expertly and deals honestly and ethically with its farmer tenants. We strongly believe that our farmer tenants will have an excellent partner moving forward.”