AcreTrader Exceeds Target Returns in Illinois Farm Aggregation
(Fayetteville, Ark.)— AcreTrader, the platform offering investors access to the farmland asset class, aggregated four Illinois row crop farm offerings into one sale transaction to provide an aggregated preliminary internal rate of return (IRR) of 12.75% to investors upon exit. These four offerings were funded individually on the AcreTrader platform in 2020 and 2022 and were sold as an aggregated group to one buyer to increase anticipated returns for investors. The initial targeted returns (IRR) of the four farm offerings ranged from 7.8-8.7%, while the preliminary IRR for the aggregated offerings at exit is well above target at an expected 12.75%.
The dispositions encompassed 473 acres of investment-grade soil predominantly cultivated for corn and soybeans in Illinois' Iroquois and Vermilion Counties. During the hold period, AcreTrader Management conducted what we believe were value-added farm improvements, including tile repairs, additional drainage infrastructure, and terracing modifications on certain parcels to enhance the value of the farmland. This exit yielded returns significantly surpassing anticipated targets for AcreTrader investors, attributable to a conservative initial underwrite, attractive entry price, a multi-year portfolio aggregation strategy, and favorable market conditions for farmland investments.
These upcoming exits bring a total of 10 full-cycle investments managed by AcreTrader Management, LLC, all of which generated realized returns above initial targets. To learn more about previous dispositions, please visit https://acretrader.com/investments/primary-offerings.
“Farmland investing returns are underpinned by the decreasing supply of what we believe to be high-quality farmland offerings and the increasing pressure on this land base to provide the food, fuel, and fiber to a wealthier and growing global population. When you combine the significant data advantage of using the Acres platform with, our robust local sourcing network, and the underwriting expertise of our farm team, we believe we can create truly unique access for investors,” says Director of Investments Drew Lipke.
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 investing's performance has garnered increasing interest as an alternative investment.*
Note that Investors purchased shares in an entity that purchased these farms but did not purchase actual acreage of the farms 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 preliminary 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 either made or plans to make the distributions to members. These preliminary calculations were i) made assuming the SPV will be dissolved and all outstanding fees and taxes will be 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. The preliminary IRR is subject to change. 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.