AcreTrader Management Exceeds Target Returns in Arkansas Row Crop Farm Disposition
(Fayetteville, Ark.)— AcreTrader, the platform offering investors access to the farmland asset class, exited a Monroe County, Arkansas corn and soybean row crop farm to provide an internal rate of return (IRR) of 9.4% to investors upon exit. This offering was funded on the AcreTrader platform in 2019 and was sold in December 2023.
The existing tenant and farming partner on the property brought an unsolicited offer to purchase the farm to the AcreTrader team. After agreeing on pricing and terms the AcreTrader team was able to deliver a strong return to investors while ensuring the arable land would remain in agricultural production and allowing the farmer to secure the property as a part of their operation in perpetuity. Receiving an attractive offer from the current tenant is further confirmation of the quality of the asset and demonstrates AcreTrader’s ability to serve as a partner for operators looking to expand both their owned and operated acres.
This exit yielded a return that surpassed the anticipated target for AcreTrader investors, attributable to a conservative initial underwrite, attractive entry price, and favorable market conditions for farmland investments. This exited offering was not conducted by AcreTrader Financial, LLC, registered broker-dealer, member of FINRA|SIPC.
"Farmland asset class investment returns are supported by the diminishing availability of what AcreTrader considers to be high-quality farmland opportunities, coupled with the escalating demands placed on this resource to meet the needs of a progressively affluent and expanding global population,” remarks Drew Lipke, Director of Investments. “By integrating the informational edge provided by the Acres platform with our local acquisition network and the experience and rigorous diligence of our underwriting team, we believe we can provide investors with novel access to this asset class.”
Farmland investments have demonstrated resilience in the face of market volatility, delivering historically consistent returns during recent decades' economic downturns such as the Dotcom Crash, the Great Financial Crisis, and the Covid-19 pandemic. In addition to its historical correlation with inflation and its low volatility, farmland as an asset class’s performance has garnered increasing interest as an alternative investment.*
Note that Investors in Acretrader 113, LLC purchased shares in an entity that purchased the farm but did not purchase actual acreage of the farm directly.
Alternative investments are considered speculative, involve a high degree of risk, including complete loss of principal and are not suitable for all investors. Learn more about the risks of investing in farmland and the nature of the asset class by looking at our general risk factors. Investments are illiquid, not listed on an exchange, and not a short-term investment. Past performance does not guarantee future results. The above content is not intended to be a comparison between products, but is intended for general, educational and informational purposes only. Investment decisions should be made based on an investor’s objectives and circumstances and in consultation with your financial or tax professional. Farmland investments are also subject to additional risks including volatility in commodity prices, weather events or disease that could damage crops and many other operational factors.
These exited offerings were not conducted by AcreTrader Financial, LLC, registered broker-dealer, member of FINRA|SIPC. The IRR calculations displayed above assume the start date of the investment was on the closing date for the land acquisition and all other cash flows were recognized on the date Acretrader Management, LLC made the distributions to members. These calculations were i) made after the SPV was dissolved and all outstanding fees and taxes were paid; and ii) made solely at the entity level and may not be reflective of any investor's specific IRR which may differ based on factors specific to each such investor. Any hold period generally represents the time between the closing date for the land acquisition and the date the land was sold. Note that the information above is not intended as investment advice, nor is it a guarantee of any future performance or results. Source: NCREIF Farmland Index 1990-2022. Past performance does not guarantee future results and there is no guarantee this trend will continue. You cannot invest directly in an index.