AcreTrader Realizes Value-Add on 4th Completed Investment Cycle
We are excited to share that AcreTrader recently added its fourth farm disposition to a growing roster of successfully completed investment cycles. This exit comes on the heels of three previous fully completed investments in the past year with higher-than-expected returns.
The sale of this Tunica County, Mississippi rice farm, funded on the AcreTrader platform in June of 2020, resulted in a preliminary IRR of 13.7%, exceeding our projected target return of 8.3%.
This farm is a 160 acre soybean and rice farm located about an hour south of Memphis, Tennessee.
In its role as farm manager, Acretrader Management, LLC oversaw two major capital improvement projects that came in slightly below budget. These projects, the installation of two irrigation wells and leveling of the property, served to make the farm more conducive to growing rice and may help mitigate potential extreme weather events. Acreage suited to rice production typically commands a rent premium in this region, and we were able to negotiate rental rates that exceeded our estimates at the outset of funding.
Our team received multiple offers for the farm over the course of the past year. We accepted the latest and most competitive offer from an institutional investor active in Tunica County, seizing the opportunity to capture a meaningful return for investors slightly ahead of the projected target hold period of 3-5 years.
In this case, we were excited to be able to join with investors to make a lasting impact on farm quality.
“Especially in a time of volatile market conditions, it is great to see investors experience consistent, productive returns with farmland.”
Michael Iseman, Director of Operations
“As we continue to seek advantageous exits for our investors, we’re proud to announce the fourth completed investment cycle this year, all of which have outperformed original expectations.”
*Supplemental Information: 1) The calculations for the preliminary IRR reported above assume that the start date of the investment was on the closing date for the land acquisition and the end date was the date the distribution of net proceeds from the real estate sale was initiated to Members. 2) A portion of the total sale proceeds have been withheld to pay taxes and fees required to dissolve the Company. If any funds remain in the Company’s bank account after all taxes and fees have been paid, each investor in the Company will receive his/her/its pro rata portion in a final distribution. 3) Final IRR calculations will be made after the Company has been dissolved and all outstanding fees and taxes have been paid. A distribution notice to Members will accompany any final distribution. 4) Note that the above IRR was calculated solely at the entity level and may not be reflective of any individual's investment specific IRR which may differ based on factors specific to such investor's situation. 5) Note that the information above is not intended as investment advice. Past performance is no guarantee of future results. For additional risk disclosures regarding farmland investing and the risks of investing on AcreTrader, please see individual farm offering pages as well as our terms of use.
