Farmland: Illinois Auction Fetches $55.3 Million – A Single Buyer

    Soybean harvest. ©Debra L Ferguson

    Farmland Partners Inc. (FPI), a major investor in ag land, announced today that it is the the winning bidder on 8,638 acres of row crop farms in Illinois that were auctioned earlier this week for $55.3 million.

    FPI, a real estate investment trust (REIT), said it will fund the deal with cash from its recent public offering of common stock and new secured debt.

    The land — part of the extensive Wilder Farms holdings — was offered in 46 tracts, ranging from 15 acres to 597 acres, but it soon became clear that the most interested parties would be the large investors, according to R.D. Schrader, president of the auction company that handled the bidding.

    FPI intends to negotiate new lease agreements with multiple tenants, its press release stated. The acquisition is expected to close in the first quarter of 2017, subject to customary closing conditions.

    “These two farms of approximately 3,800 and 4,900 acres represent a truly unique investment opportunity in the Midwest,” said FPI CEO Paul Pittman. “We expect significant long term appreciation on these properties due to their size and the incredibly efficient operating environment we expect to provide to our tenants.”

    “The operators were in the room, but the investors won out. It was just a question of whether we had one buyer or a few,” said Schrader. The auction attracted 64 registered bidders, who packed the Union Grand Ballroom at Western Illinois University in Macomb.

    The auction included approximately 4,869 acres in Mercer County and more than 3,769 acres in Fulton County.

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    “I felt that this would be an interesting test of the market for this type of land, because there had not been an offering on this scale in quite some time. The price per acre of just over $6,400 exceeded the expectations of many of the observers for the predominantly levee-assessed river bottom land. It’s evident that major investors continue to regard midwestern farmland as a sound long-term investment,” said Schrader.

    “We’re continuing to see good demand for cropland as operators and investors alike look ahead to the 2017 crop year,” added Schrader, whose Schrader Real Estate and Auction Company is based in Columbia City, Indiana.

    FPI has holdings in Arkansas, Colorado, Florida, Georgia, Illinois, Kansas, Louisiana, Michigan, Mississippi, Nebraska, North Carolina, South Carolina, Texas and Virginia.

    SEE RELATED ARTICLE: Farmland Trends: Land Value, Water, Cashflow, Expansion – DTN

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