Gladstone Land (LAND) to Acquire Colorado Farmland in $6.5M Deal
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Gladstone Land Corporation (Nasdaq: LAND) announced that it has entered into agreements to acquire approximately 7,384 acres of farmland in Colorado for approximately $4.9 million in cash and 125,677 common units of limited partnership interest in the Company’s operating partnership (“OP Units”). Subject to closing, the OP Units to be issued will be valued at $12.93 per unit, resulting in a total consideration of approximately $6.5 million.
The potential transaction also includes a lease agreement with an initial term running through 2020 that provides for annual escalations and one, 5-year extension option. The acquisition is expected to close by the end of September 2016, subject to satisfactory completion of the Company’s due diligence process.
“Our potential tenant has farmed in Southeast Colorado for decades with an operation that specializes in providing a high-fiber, low-protein hay blend for the cattle feed-lot industry,” said Bill Hughes, Gladstone Land’s Midwest Marketing Director. “Completing this purchase in a new region and crop specialty will expand our geographic footprint and further diversify the crop types on our farmland holdings.”
"This purchase is particularly attractive to us because of its diversification benefits, as well as the strength and income of the tenant," said David Gladstone, President and CEO of Gladstone Land. "We are also excited about expanding our UPREIT program, where we exchange OP Units for farmland, which offers sellers numerous tax advantages.”
We can provide no assurance that acquisitions under contract will close within the timeline we anticipate, or at all.
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