Gladstone Land Buys a Farm

Since the term preferred shares of REIT Gladstone Land (NASDAQ:LAND) is one of my favorites I thought I would post this news item.

The company has bought a new farm in western Nebraska–primarily used to raise potatoes and edible beans.

The company paid $2.4 million for the 695 acre farm (600 tillable acres) which they have leased back to the seller on a long term basis.

The company press release can be found here.

The 6.375% term preferreds (NADSAQ:LANDP), which have a mandatory redemption on 9/2021, have been trading very strongly during recent turbulence.

15 thoughts on “Gladstone Land Buys a Farm”

  1. Depends on how west you are in Nebraska which can get very sandy in the panhandle. I am not surprised its a potato farm if its sandy soil as corn would not do as well as it would more towards the central part of the state.

    1. LAND avoids the big commodity crops like corn, wheat and soybeans and focuses their purchases on farmland which produce higher margin products such as fruit, berries, nuts, vegetables etc. So not surprising that they bought a potato farm vice land in the corn belt.

  2. Yeah but are they non-GMO potato chips? lol Seriously, the premium here approaches 3%. Spread out over 3 years that’s about a 1% loss of yield or did I miss something.

  3. LANDP has behaved well during the recent downturn, that was a touch of comfort compared to several of my other holdings that suffered dramatic drops, and to this date have yet to recover.

    Years ago a poster named Lord Xot stated that during interest rate scares, the worst performers would be high quality, low yielding preferred issues – and he has been proven correct several times, including this latest one.

    On the opposite tack, he postulated that the best performers would be low quality, high yielders – and this was also correct.

    Back to LANDP, I like the fail-to-redeem mandatory rate hike; this almost guarantees the redemption. I am contemplating adding more shares to my already full position, as I find a paucity of bargains in the market at this time.

    1. Inspb, interesting. Thanks for sharing. I also became aware of similar tendencies (when interest rates drop) from Tim’s postings here. Tim also reflected keying on termed pfds when interest rates drop, as well as pointing to this site’s listing of termed pfds.
      If I am not mistaken, note that GAINM and GAINL have also a similar 3% kicker if not redeemed. In fact, reading through Tim’s postings led me to GAINM – my only BDC holding – since it matures earlier than GAINL. I also appreciate all the posts here from many of the savvy investors, including yourself. My thanks to all.

    2. Hmmmm. I’m not seeing that at all. My illiquid preferreds are holding up superbly, so high in fact that I don’t feel comfortable adding to them.

      1. Camroc, you are absolutely correct in that our “sock drawer” illiquids tend not to behave as the herd; our AILLL CNLPL etc are extremely stable notwithstanding bouts of roller coaster dips and rises.

        The Lord Xot effect I mentioned above tends to be most evident in REIT, MREIT and Financial preferreds, FWIW

        1. Well, my financial pfds are holding up fine, too. But then I don’t own anything Xot owns. 🙂

      2. Camroc, I guess its time to just keep adding to your latest seducing preferred lady, MTB-…If she charges you a suitable price of course. 🙂

          1. I thought that was you buying, Camroc. This is a rare bird preferred. It originated as an institutional preferred from the TARP days. The big boys mostly hold and occassionally trade it. Peons like me just sneak in the cracks and buy a few crumbs.

            1. Grid, what would you guess as the reason for such a huge dump of MTB- just days before the xd date? As you have mentioned, we seem to be good for this dividend and the next one based on the wording of their recent dividend declaration.

              1. Inspubudget I dont view this as a dump. This is an institutional preferred. MTB doesnt issue retail preferreds. Just 2 days ago there was two 10,000 block transactions also. Today was the same. Many times people (entities) looking to sell would rather just avoid paying a short term cap gain on a dividend recieved and just sell out prior to exD. MTB preferreds are largely illiquid shares that trade volume wise mostly in tracts of 1000 to 10,000 shares. In between those trades are the dribs and drabs trades. A couple weeks ago I wanted to get some of mine out of my Roth and lock in the cap gain tax free so I was able to successfully blindly sell 15 shares to myself in another account inbetween the huge bid ask spread.

                1. Well, we should be real happy with our investment in MTB-. Bid is now $1,018 and ask $1,034.

                  You did well buying at $1,013. Congrats !!

  4. That’s about $3,450 per acre for the property. However, I’m not sure of farmland prices in Nebraska. In my area of PA, farmland can go for much higher prices. The Gladstone companies are pretty well run, so I’m sure they did good research before purchasing at this price. Hopefully they can turn some of those potatoes into potato chips!

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