AcreTrader Portfolio Performance Snapshot 2022
Farmland is gaining increasing recognition as an alternative investment, and one with the potential to stabilize investment portfolios amid the persistent economic turbulence facing investors. We at AcreTrader are excited to see and contribute to the growth in this industry and to continue connecting our clients to meaningful investment opportunities in land.
AcreTrader envisions a fully modernized market in which buying and selling land is common, transparent, and easy. This snapshot shares recent developments in our pursuit of that vision, including salient data points in the company’s performance over the past year.
This snapshot is intended to enhance your understanding of farmland’s potential role in a balanced investment portfolio, as well as to highlight a few ways we are working to make the benefits of land more broadly accessible.
Last December, investors earned millions in annual distributions from farm and timberland investments on the AcreTrader platform.
*Net cash yield excludes farms sold and partial dispositions and includes return of capital in some cases, i.e., excess syndication or capital improvement funds. Past performance does not guarantee future results.
These distributions comprise annual rent payments made by farmland tenants in the case of row crop farms and by cash flow generated by permanent crop entities. (Total returns on farmland properties are realized upon sale, capturing appreciation in asset value in addition to annual income over the life of the investment.)
AcreTrader exited 4 investments in 2022, selling farms in Mississippi, Illinois, and California. These bring the company’s total exits to 5, each of which had returns greater than was initially estimated.
We were proud this year to begin offering investors access to timberland investments, another asset class historically dominated by institutional investment.
In a September 2022 publication, Kristin Kallergis Rowland, Global Head of Alternative Investments at J.P. Morgan Private Bank, said,
“Timber’s historically moderate returns and low volatility make a compelling argument for a strategic allocation…It also need not be balanced by fixed income holdings, as other risks assets often are. As high volatility and recession risk may define the second half of 2022 and prompt portfolio rebalancing, adding the diversification opportunity timber offers may be a healthy move.”
Mark Foley joined the company as Director of Timber Acquisitions, bringing two decades of experience in timber asset management to our investments team. (Learn more about Mark and see some of his work here.)
To date, 8 timber properties have appeared on the platform, and as of December 2022, 485 investors had added timber to their portfolios with us.
In addition to timber, 2022 was a year of diverse offering opportunities, including the first wine grape vineyard on the platform, as well as farms producing citrus, almonds, pistachios, and at least 11 row crop types.
This year, our investment portfolio grew to 128 farms in 18 states as well as Australia.
We are incredibly proud to see investors using the AcreTrader platform to build their own robust land portfolios. Of all investors on the platform, 58% have made 3 or more investments. The chart below shows repeat investment trends over time.
What’s Next for AcreTrader
One major development for the business is our recent approval to be a registered broker-dealer.
We believe registering as a broker-dealer will enable us to offer farmers an alternative to traditional financing and be better partners when advising them on the types of investments and deal structures investors are seeking. Our farm sponsor model will provide entrepreneurial farmers with more autonomy to scale operations while having a co-investment stake in their offering.
For investors, this will extend opportunities to partner directly with expert growers and industry leaders as we continue broadening exposure across the asset class of land to more and different types of investments. Our investments team will continue to govern the process of carefully evaluating and selecting offerings.
In 2022, we publicly launched Acres, a geospatial land analysis tool, to help investors, landowners, and land professionals evaluate land quickly and confidently. This tool brings together dozens of data points on millions of U.S. parcels to ease a process that has historically been costly in both time and money. Acres is a wholly owned subsidiary of AcreTrader, Inc.
The launch included a mobile app for multiple operating systems that allows users to answer questions when in the field. In just a few months, Acres has had almost 100,000 sign-ups and downloads.
Since Acres’ launch, our team has layered in thousands of listings in the Land for Sale view, launched Premium and Enterprise plans with specialized tools for land professionals, and acquired a collateral valuation tool called AgValuation.
By facilitating swifter, more comprehensive and accurate land analysis, Acres plays a major role in our mission to empower our customers to buy and sell land smarter through advanced data, technology, and expertise.
Hear the AcreTrader executive team discuss these updates in more depth in the business update webinar below, which aired February 1, 2023.
Distributions paid are not solely based upon performance and are not guaranteed in frequency or amount. Distributions will be paid from net investment income, offering proceeds, borrowings, or reimbursable expense support, subject to certain conditions being met. The above content is not intended to be a comparison between products, but is intended for general, educational and informational purposes only. Any performance noted is historical and there is no guarantee any trends will continue. All investing involves risks, including the loss of principal. Diversification does not guarantee a profit or protect against loss in a declining market. It is important for each investor to review their investment objectives, risk tolerance, tax liability and liquidity needs before investing. Investment vehicles have differences in fee structure, risk factors and objectives. Investing in alternatives may be considered speculative, and involves a high degree of risk and therefore is not suitable for all investors.
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