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Farmland Partners (FPI) Adds 2 Farms to Boost Portfolio

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Farmland Partners Inc. (FPI - Free Report) is focusing on expansion and recently acquired two tracts of farmland in Edgar County, IL. Collectively, the corn and soybean farms encompass 270 acres. With both farms being leased, the tracts will produce rental income. In addition to the rental income, the assets are likely to experience continued appreciation.

Specifically, Farmland Partners shelled out $1.32 million to acquire 82 acres in the first transaction. With this move, a contiguous block of farmland will be created encompassing more than 1,200 acres on combining with other farms in the portfolio.

In another transaction, Farmland Partners shelled out $2.04 million for the acquisition of a 188-acre parcel. The tract is around seven miles away from the first tract but close to additional FPI properties.

The acquisition of land adjacent to the existing farms of Farmland Partners seems prudent. This is because, through such measures, efficiencies are created for tenants and the company as well, which helps FPI command top rental rates. Also, expansion in Eastern Illinois makes sense as this region has some of the highly productive, sought-after farmland in the country.

Moreover, per the most recent data from the U.S. Department of Agriculture, since 1970, agricultural land in Illinois has averaged 5.7% in annual appreciation, which is encouraging. Hence, this property is a strategic buy for Farmland Partners.

This farmland REIT also recently added the first Indiana farm to its portfolio for $2.1 million. These 161 acres of cropland in Benton County comprise a corn and soybean farm. The farm consists of two adjoining tracts and is leased through the end of the year.

Currently, Farmland Partners carries a Zacks Rank #3 (Hold). Over the past three months, shares of the company have declined 3.6%, narrower than the industry’s decline of 15.7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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Some key picks from the REIT sector include Extra Space Storage (EXR - Free Report) and Host Hotels & Resorts (HST - Free Report) .

The Zacks Consensus Estimate for Extra Space Storage’s third-quarter 2022 funds from operations (FFO) per share has been raised marginally over the past month to $2.18. EXR carries a Zacks Rank #2 (Buy).

The Zacks Consensus Estimate for Host Hotels & Resorts’ third-quarter 2022 FFO per share has moved a cent upward in the past two months to 40 cents. HST presently carries a Zacks Rank of 2.

Note: Anything related to earnings presented in this write-up represents funds from operations (FFO) — a widely used metric to gauge the performance of REITs.

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