Gladstone Land Announces Gain on Sale of Florida Farm

Rhea-AI Summary

Gladstone Land Corporation (NASDAQ: LAND) announced the completion of the sale of a farm in Florida for $65.7 million, providing a 60% return on equity. The sale price reflected a 22% increase over the original purchase price. The company plans to use a portion of the proceeds to retire $16 million of debt and for other general corporate purposes.

Insights

Financial Analyst

The sale of the farm by Gladstone Land Corporation represents a significant liquidity event that can have material effects on the company's balance sheet. The 60% return on equity indicates strong capital appreciation, which is noteworthy in the context of agricultural real estate. The 22% increase over the original purchase price suggests that the company has a robust strategy for asset selection and timing of sales. The decision to retire $16 million of debt with the proceeds will likely improve the company's debt-to-equity ratio, potentially leading to a more favorable credit rating and reduced interest expenses. However, it's important to consider whether these proceeds could have been reinvested for a higher return within the company's portfolio, as the sale reduces the asset base that generates rental income.

Market Research Analyst

The transaction underscores the broader trend in the agricultural sector where farmland values have been appreciating. Investors might interpret this sale as a positive market signal, demonstrating the liquidity and value appreciation potential of farmland investments. Gladstone's strategy to hold a significant acreage of land contiguous to the sold property indicates confidence in the long-term value proposition of agricultural real estate. This could reassure investors about the stability and growth prospects of Gladstone's remaining portfolio. However, the concentration of assets in a specific geographic area could also introduce regional risks, such as exposure to local climate or economic conditions.

Real Estate Investment Analyst

The sale-leaseback arrangement that originally brought the farm into Gladstone's portfolio is a strategic move often used in real estate to free up capital for the lessee while providing investment opportunities for the lessor. The successful exit from this investment demonstrates Gladstone's ability to execute its investment thesis and navigate the real estate market effectively. The use of proceeds for debt retirement and general corporate purposes suggests a balanced approach to capital allocation. Potential investors and stakeholders should consider how the divestment aligns with Gladstone's long-term investment strategy and whether it signals a shift in focus or simply an opportunistic transaction.

MCLEAN, VA / ACCESSWIRE / January 16, 2024 / Gladstone Land Corporation (NASDAQ:LAND) ("Gladstone Land" or the "Company") announced that it has completed the sale of a farm in Florida for approximately $65.7 million. The investment in this farm provided a 60% return on equity, and the sale price reflected a 22% increase over the original purchase price.

"We acquired this property seven years ago through a sale-leaseback with a large vegetable operation. In 2023, we received an offer to purchase the property at a compelling valuation and elected to proceed with the sale. We still own nearly 3,500 acres of farmland that is contiguous to this property being sold, and we plan to hold that property for years to come," said Bill Frisbie, Executive Vice President of Gladstone Land.

"Our strategy is generally to buy and hold for the long term, but occasionally we receive an offer that warrants serious consideration. We intend to use a portion of these proceeds to retire $16 million of debt, as well as for other general corporate purposes. Overall, prices of farmland continue to grow over long-term holding periods, and we believe this is yet another transaction that demonstrates this thesis," said David Gladstone, President and CEO of Gladstone Land.

About Gladstone Land Corporation:
Founded in 1997, Gladstone Land is a publicly traded real estate investment trust that acquires and owns farmland and farm-related properties located in major agricultural markets in the U.S. The Company currently owns 168 farms, comprised of approximately 112,000 acres in 15 different states and over 45,000 acre-feet of banked water in California, valued at a total of over $1.5 billion. Gladstone Land's farms are predominantly located in regions where its tenants are able to grow fresh produce annual row crops, such as berries and vegetables, which are generally planted and harvested annually. The Company also owns farms growing permanent crops, such as almonds, apples, cherries, figs, lemons, olives, pistachios, and other orchards, as well as blueberry groves and vineyards, which are generally planted every 20-plus years and harvested annually. Approximately 40% of the Company's fresh produce acreage is either organic or in transition to become organic, and over 10% of its permanent crop acreage falls into this category. The Company may also acquire property related to farming, such as cooling facilities, processing buildings, packaging facilities, and distribution centers. Gladstone Land pays monthly distributions to its stockholders and has paid 131 consecutive monthly cash distributions on its common stock since its initial public offering in January 2013. The Company has increased its common distributions 33 times over the prior 36 quarters, and the current per-share distribution on its common stock is $0.0465 per month, or $0.558 per year. Additional information, including detailed information about each of the Company's farms, can be found at www.GladstoneLand.com.

Owners or brokers who have farmland for sale in the U.S. should contact:

• Southeastern U.S. - Bill Frisbie at (703) 287-5839 or Bill.F@GladstoneLand.com.
• Western U.S. - Bill Reiman at (805) 263-4778 or Bill.R@GladstoneLand.com;
• Mid-Atlantic and Midwest U.S. - Joey Van Wingerden at (703) 287-5914 or Joe.V@GladstoneLand.com; or

Lenders who are interested in providing Gladstone Land with long-term financing on farmland should contact Jay Beckhorn at (703) 587-5823 or Jay.Beckhorn@GladstoneCompanies.com.

For stockholder information on Gladstone Land, call (703) 287-5893. For Investor Relations inquiries related to any of the monthly dividend-paying Gladstone funds, please visit www.GladstoneCompanies.com.

CAUTION CONCERNING FORWARD-LOOKING STATEMENTS:
All statements contained in this press release, other than historical facts, may constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Words such as "anticipates," "expects," "intends," "plans," "believes," "seeks," "estimates" and variations of the foregoing words and similar expressions are intended to identify forward-looking statements. Readers should not rely upon forward-looking statements because the matters they describe are subject to known and unknown risks and uncertainties that could cause Gladstone Land's business, financial condition, liquidity, results of operations, funds from operations or prospects to differ materially from those expressed in or implied by such statements. Such risks and uncertainties are disclosed under the caption "Risk Factors" of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022 (the "Form 10-K"), as filed with the SEC on February 21, 2023, and certain other documents filed with the SEC from time to time. Gladstone Land cautions readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.

For a definition of net asset value and a reconciliation to the most directly comparable GAAP measure, please see the Company's Form 10-K.

For further information: Gladstone Land, (703) 287-5893

SOURCE: Gladstone Land Corporation

View the original press release on accesswire.com

FAQ

What did Gladstone Land announce regarding the farm in Florida?

Gladstone Land announced the completion of the sale of a farm in Florida for approximately $65.7 million.

What was the return on equity for the investment in the farm?

The investment in the farm provided a 60% return on equity.

How much was the sale price compared to the original purchase price?

The sale price reflected a 22% increase over the original purchase price.

What does the company plan to do with a portion of the proceeds from the sale?

The company plans to use a portion of the proceeds to retire $16 million of debt and for other general corporate purposes.

Who are the key executives mentioned in the press release?

Bill Frisbie, Executive Vice President of Gladstone Land, and David Gladstone, President and CEO of Gladstone Land, were mentioned in the press release.