AcreTrader’s Latest Farmland Disposition Exceeds Target Returns
Farmland Investment Platform’s Recent Exited Investment Returns 15.8% to Agricultural Real Estate Investors
AcreTrader, the land investment platform at the intersection of agriculture, tech, and finance, recently added another successful farm disposition with the sale of a Quitman County, Mississippi farm. Funded on the AcreTrader platform in June 2020 and sold in June 2023, the investment resulted in a preliminary Internal Rate of Return (IRR) of 15.8%.
The 236-acre property is located within the Mississippi River Delta, known for its strong groundwater resources. The farm has Class A soils and was highly improved prior to its acquisition by AcreTrader. Precision leveling served to transition the ground from primarily soybean to primarily rice production. Properties suitable for growing rice, a higher-value crop, can command higher lease rates in the region. Additionally, two duck blinds were purchased by AcreTrader Management, LLC on behalf of investors for waterfowl hunting, which yielded additional income. This exit provided a return well beyond the expected targets to AcreTrader investors due to market conditions and demand in the area.
Farmland investments have shown resistance to market volatility, with returns remaining positive during economic downturns of recent decades, including the Dotcom Crash, the Great Financial Crisis, and the Covid-19 pandemic. Alongside a historical correlation with inflation* and lower volatility than commercial real estate, farmland’s performance has received growing attention as an alternative investment.
“It is encouraging to witness this kind of performance amid today’s uncertainty. Our hope is that farmland can continue to serve investors as the portfolio diversifier it’s historically been. It’s a powerful resource in more ways than one, and we work hard to steward land responsibly with our farming partners, as well as our investors’ interests in it,” said AcreTrader Founder and CEO Carter Malloy.
About AcreTrader AcreTrader empowers customers to analyze land and invest with advanced technology, data, and expertise. AcreTrader offers access to farmland investing to accredited investors through its platform. For more information, including our terms of use, privacy policy, and risk factors, find out more by visiting acretrader.com.
Note that Investors in Acretrader 122, 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.
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.
