An investment firm wants to buy farmland on the West Coast and elsewhere with more than $50 million raised through the initial public offering of its stock.
The Gladstone Land Corp., based in McLean, Va., is launching a real estate investment trust for farmland, a concept that has previously been applied to commercial buildings and timber properties.
The firm's "sweet spot" for acquisitions will be parcels in the $8 million-$10 million range, Gladstone said. A secondary stock offering is likely to raise funds for further takeovers after the IPO money is spent.
The company is also looking to hire more employees to oversee purchases in California, Oregon and Washington, he said. It's also looking at parcels in Georgia, New Jersey, Michigan and North Carolina.
The company plans to buy land and then lease it back to farmers who want cash but don't want to take out mortgages, he said. It will pursue such deals with large independent growers and "corporate farms" that already have access to national produce distribution channels.
Most leases will have to be renewed every two to five years, which makes some investors nervous but allows for quicker increases in rents, Gladstone said.