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Become a Farmland Owner with mAgma

February 1, 2022 - Peoples Company

By Molli Hagge, Project Manager

American farmland is a one-of-a-kind asset class that creates an opportunity for investors to fortify their portfolios and position them for long-term, sustainable growth. Although farmland has historically been an attractive long-term investment, it simply featured too many barriers to entry for most investors. However, the ongoing financialization of the asset class has made farmland more accessible than ever to retail investors. Farmland can be managed through market volatility to consistently yield strong annual returns from crop income and enables investors to capitalize on the appreciation in the value of land, which has historically outperformed other asset classes over time. Due to the ongoing coalescence of these factors, there has never been a better time to be a farmland owner!

Traditional public equity investors expend vast resources to remain at the forefront of consumer trends, find avenues to guard against inflation, and identify sustainable companies and ventures. One way to achieve all three outcomes simultaneously is by investing in farmland. This underutilized asset class provides exposure to an industry aggressively leading on sustainability measures, including carbon capture, organic food production, and regenerative practices. Farmland investors also benefit from capital appreciation supported by consumers ever growing demand for locally sourced, high-quality food. Finally, the farmland asset class can serve as a bulwark against inflation by providing investors a real asset safe haven to the depreciating value of money while allowing them to benefit from rising commodity and food prices.

In recent years, capital allocations into farmland by affluent investors such as family offices, high-net-worth individuals, and private equity firms have increased significantly. The same opportunity now exists for accredited retail investors to take advantage of the benefits of farmland investing on behalf of their clients. One way to do this is by partnering with a farmland asset manager like mAgma. mAgma is a farmland investment affiliate of Peoples Company and is enabled by a digital platform that allows accredited investors to purchase units of farmland at low entry points.

Furthering its mission to bring unique, high-quality agricultural assets to the public, mAgma, LLC recently launched SPV Hot Lakes Organics, LLLP as its latest offering, and its first public offering located in the Pacific Northwest. SPV Hot Lakes Organics, LLLP took advantage of the opportunity to acquire a 200-acre m/l premium asset in Union County, Oregon. The Farm includes 177.5 tillable acres suitable for crop production, with timely irrigation delivered to the crops via pivot and wheel line infrastructure. Of the tillable acres, 46 acres are currently certified organic, while the remaining tillable acres are completing the three-year transition to organic production. The Farm’s ample water and its fertile soils are characteristic of the local region that features numerous hot springs and allow the Farm to grow high-value crops such as organic carrot seed, garlic, and red clover seed as well as traditional row crops. The Farm will be operated by an experienced local organic operator through a cash rent agreement that features a bonus rent provision for additional upside potential. To help guide the Farm to its maximum production and resale potential, the Farm will be professionally managed by Peoples Company.

Investment Highlights

  • - 177.5 tillable and fully irrigated acres
  • - Located in strong agricultural production region of Oregon
  • - Farm purchase price is below average market comps on a $ per tillable acre basis
  • - Managed by Peoples Company, a partner of mAgma and leading farmland manager
  • - Leased to a strong local farmer for production of organic carrot seed, garlic, and row crops
  • - Operated according to Leading Harvest sustainability standards
  • - Long-term, non-recourse financing of $487,000 in place to increase investor returns
  • - Depreciation opportunities that provide tax advantages
  • - Target average annual cash yield 3.27%

SPV Hot Lakes Organics is offering accredited investors the opportunity to purchase limited units in the partnership at a price of $1,000 per limited unit. The minimum purchase requirement is 5 limited units, or a $5,000 minimum investment. A maximum of 911 limited units are being offered for purchase for a total offering size of $911,000. To invest, individuals must complete the following steps: 1. set up a registered account on mAgma’s secure transaction platform; 2. submit documentation that proves they meet the SEC’s suitability requirements to be an accredited investor; 3. acknowledge and electronically sign all offering documents; and 4. set up payment method. To learn more about mAgma’s digital platform and SPV Hot Lakes Organics, LLLP visit mAgmaland.com.

Published in: Land Management