The Land Investment Monthly is a round-up of articles and headlines published by the farm press, business media and financial publications with insights into buying, selling or investing in farmland, recreational ground or development ground. Follow Steve Bruere @SBruere on Twitter and find Peoples Company on Facebook for the latest land listings, auction results, upcoming events and real estate news. Subscribe to my monthly updates or request access to a hard copy of my Land Investor newsletter by sending an email to Steve@PeoplesCompany.com and including “Land Investment Monthly” in the subject line.
Real Estate Magnate Donald J. Trump will headline 2015 Land Investment Expo, January 23, 2015, at the Sheraton West Des Moines Hotel. Farm producers and agricultural real estate professionals will hear from one of the best known real estate entrepreneurs on earth. Register here. Mr. Trump, as been called the archetypal businessman and a dealmaker without peer. He is expected to remark on his personal experiences in the real estate industry, the current state of the real estate market, and how to get ahead of the competition. Mr. Trump is chairman and president of The Trump Organization, New York, which bills itself as “the world’s only global luxury real estate super-brand.” His many books include the best-selling business book of all time, “The Art of the Deal,” “Trump: The Best Real Estate Advice I Ever Received,” and a string of instructive best-selling titles such as, “How to Get Rich,” “The Way to the Top,” and “Think Like a Billionaire.”
A guest post with presentation slides by Paul Neiffer of CliftonLarsonAllen LLP reflects the CPA’s perspective on choices surrounding the new farm bill. Neiffer, who spoke in front of a full house at Peoples Company’s “Big Questions” seminar on November 3, said “What should I do?” is typically among the first questions he is asked on the subject.
Farmland Investment Center reported that a deal to purchase seven farms totaling 6,819 acres in South Carolina has been struck by Farmland Partners Inc., according to the Farmland Investment Center. Farmland Partners entered into an agreement to pay $28 million for the row crops farms, intending to lever the purchase with debt representing approximately 60 percent of the purchase price and sign multi-year leases with the seller and other third-party tenants. Eight purchase agreements to acquire farms in Colorado, Arkansas and Nebraska for about $18 million in cash were also announced.
The addition of no fewer than 4,500 acres of farmland in an unincorporated Florida community were recently added to the real estate investment empire of legendary tech entrepreneur and Microsoft founder Bill Gates. Cascade Investments, the overseer of the Gates family fortune, is reportedly getting into agriculture and now owns more than 100,000 acres of farmland in multiple states. Gates’ net worth has been estimated by Forbes magazine at $80 billion, making him the richest man in the world.
Government bonds have returned $1 trillion in the form of price gains and interest for investors in the past six years, debunking the “fed naysayers” who have denounced Federal Reserve monetary policy since the financial crisis. Bloomberg reported in September on the resilience and performance of interest-bearing U.S. Treasuries, “a rebuke to the chorus of skeptics.” Buying and holding longer-dated U.S. bonds have this year alone rallied 14.2 percent, and beat the 10.2 percent return for the Standard & Poor’s 500 Index of American stocks.
The positive fundamentals of farmland are attracting lots of attention from Wall Street, and the market is showing signs of resilience even as commodities prices have leveled off. Jeff Caldwell with Successful Farming magazine published my remarks and the comments of Peoples Company’s Ron Beach in an article about rising investor interest in a highly productive asset class.
Long-time Peoples Company client Scott Oakes contrasts the farmland market of the 1980s with variables of today, including continued low interest rates, corn prices that are nearly double that of 1988, and the fact that China is no longer competing with us for corn exports. “These are the main reasons that I am confident in saying, ‘This isn’t your father’s land market.’