The United States has $2.7 trillion of farmland, the same economic value as all of the apartment buildings in the country, or all of the office buildings, and yet only 2 percent of that farmland is institutionally owned.
In an article published on Real Assets Adviser, Farmland LP Founder Craig Wichner uses this eye-opening comparison to lay the foundation for farmland to be viewed as a large and attractive asset class currently untapped by institutional real estate investors—but it’s not just any farmland that yields the highest returns.
“There is an important distinction between conventional farmland and organic, regenerative farmland,” Wichner writes. “The latter is where you want to be.”
He continues, “Regenerative farming, as explored in detail in the full-length documentary, Kiss the Ground, narrated by Woody Harrelson, may even be the key to combatting climate change (or better yet, reversing it). With a selling point like that and intrigue from top farmers seeking higher profits through healthier harvesting, investors in regenerative agriculture access lease premiums from quality commercial tenants poised for growth.”
Wichner likens Farmland LP’s process of developing, leasing and managing regenerative farmland to Prologis’ breakthrough with modern, high-tech warehouses. “The Prologis model transformed a mundane asset class into cutting-edge real estate,” he says. “The proven financial model for regenerative agriculture is similar in that it turns lower-value, commodity farmland into high-value, organic and sustainable farmland.”
Read the full article in Real Assets Adviser to learn more about the double-your-revenue formula and the future of farmland as a key component of your real estate portfolio.
