Farmland Partners (FPI) Capitalizes on High Demand for Farmland
Farmland Partners Inc. FPI, an internally managed real estate company that owns and seeks to acquire high-quality North American farmland, has made significant strides in farmland sales this year. The company has successfully completed sales of farmland across multiple states, realizing impressive gains more than the net book value.
Recently, FPI announced that it sold 1,370 acres of farmland stretching across Arkansas, Georgia, Illinois and South Carolina, totaling $8.9 million. Sales resulted in a cumulative gain of $3.7 million, around 73% higher than the net book value.
Earlier, Farmland Partners finalized another sale of 2,426 acres of farmland in Nebraska and South Carolina. These transactions, totaling $16.2 million, represented a total gain on the sale of more than $3.1 million, or roughly 24% more than the net book value.
FPI's president and CEO, Luca Fabbri, noted that “Asset appreciation is a major factor in farmland investment returns, and good farmland is still in high demand.” Earlier, he highlighted that these transactions underscore the appreciation power of farmland and the health of the farm economy in general. He also stated that the proceeds from these sales are being used to generate value for shareholders, lowering indebtedness and buying back stock.
As of now, Farmland Partners has completed $32.5 million in farmland sales in 2023, representing a total gain on sale of nearly $8.7 million. The company completed two property dispositions for $7.1 million and a total gain on sale of $1.8 million in the first quarter of 2023.
These positive results reflect FPI's commitment to maximizing shareholder value through strategic asset management. As the company continues to capitalize on the demand for good farmland, investors can look forward to further profitable outcomes.
Currently, Farmland Partners carries a Zacks Rank #3 (Hold). Over the past three months, shares of the company have rallied 24.9% against the industry’s decline of 0.7%.
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Stocks to Consider
Some better-ranked stocks from the REIT sector are Rexford Industrial Realty REXR and EastGroup Properties EGP, each carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Rexford Industrial Realty’s current-year FFO per share has been revised 1.4% north over the past two months to $2.19. This indicates an 11.7% increase year over year.
The Zacks Consensus Estimate for EastGroup Properties’ 2023 FFO per share has been revised marginally upward over the past month to $7.56. This implies an 8% increase year over year.
Note: Anything related to earnings presented in this write-up represents FFO — a widely used metric to gauge the performance of REITs.
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