Getting to Know Gladstone Land Corporation's David Gladstone
MCLEAN, VA - In the world of agriculture, land is lifeblood. And, in these times, the industry landscape is changing, both literally and figuratively. With fewer younger generations entering the trade to take over family farms, and shifting demand, the concept of what to do with land can be challenging for farmers.
Enter Gladstone Land Corporation, the real estate investment trust providing options to farmers looking for a leg up. I connected with David Gladstone, CEO and President, to discuss the options and benefits that the company offers to farmers.
“We just want to buy a good farm, lease it to a good farmer, and hope the farm is leased to the same farmer for the next 20 years,” David tells me. “We are striving to build the premier farmland real estate company focused on the ownership of high-quality farms and farm-related properties. We are not farmers, so we are not in competition with farmers. We want to lease the farms on a triple-net basis to farmer tenants with a strong operating history and deep farming resources. All our farms have abundant water sources and are currently 100% occupied.”
Since David founded Gladstone Land Corporation in 2003, it has been popping up on the industry’s radar through the purchase of millions of dollars in farmland across the nation. With a focus on fresh produce and nut orchards, the company purchases land—giving farmers a cash injection from the sale—then leases it so that the farmer can free up capital.
So what does Gladstone Land Corporation offer to farmers?
- A long-term sale leaseback transaction, allowing farmers to free up capital they have in their farmland to use to improve farming operations with new equipment or buildings.
- Outright buying land that farmers would like to farm, but not own.
- A cash purchase while retaining the existing tenant or finding a new one if needed.
The company is focused on building lasting relationships with tenant farmers. David tells me the goal is to establish tenants who will continue farming the land for a long time, and that the capital from these transactions affords them many opportunities, including the ability to:
- Buy new farms, buildings, and land.
- Purchase new equipment.
- Pay off debts and mortgages.
- Pass an existing farm to the next generation.
- Put the equity value to other uses.
Gladstone’s business model hinges on being able to borrow money at lower rates than it is being leased so that its shareholders get the difference between what they get in from the farmer’s rent and what the company has to pay the lending institution in interest for helping them buy the land. David also mentions that the company can buy farms for stock in a tax-free exchange for those who want to keep the income coming in and not have to pay taxes immediately on any capital gains from selling the farm to Gladstone Land.
“We have built strong relationships with our tenants, sellers, and land brokers,” David tells me. “Many farmers are worried that if they do not own the land they will not be able to farm it, but we want the same farmer to lease our land for very long periods and farm the land as long as they wish. Our acquisitions process is very straightforward, and farmers continue to partner with us for their real estate needs.”
David’s roots are in agriculture, having been the former Chairman of Coastal Berry Company, producing strawberries out of Watsonville, CA. Since launching the company 14 years ago, the company has acquired farms in California, Oregon, Arizona, Colorado, Nebraska, Michigan, and Florida—using a strategic slow-and-steady approach.
What’s on the horizon? The company has its eyes on Georgia, South Carolina, North Carolina, Virginia, Washington, and New Jersey as it continues to expand across the nation.
Continue to check in with AndNowUKnow as we cover farmland acquisitions across the country.