San Joaquin CountyCA

Stockton Farm

San Joaquin CountyCA

Stockton Farm

Description

Please review the Memorandum of Lease and Purchase Option in the documents tab

Stockton Farm is a 241 acre alfalfa, wheat, and tomato farm in San Joaquin County, California. This is an opportunity to invest in a short term, yield focused project in a historically water-secure area to enable an existing AcreTrader farm sponsor to secure an attractive property for future development.

This property is an off-market opportunity identified by Delta Farm Management, LLC, (DFM) a farm sponsor with whom AcreTrader has worked on a previous almond development in this region. DFM is a team with significant prior experience in direct farm operations, developing successful almond orchards, and ag financing.

In the case of Stockton Farm, AcreTrader worked with DFM to find a solution that would allow them to secure the property at an attractive price, while providing time for them to arrange the long-term financing needed to complete a full scale almond development.

The property will be leased to DFM at a rate well above market rent in the area. The lease agreement includes a Lease Purchase Option allowing Delta Farm Management to purchase this property from the Company (i.e., the Acretrader entity into which Stockton Farm will be placed and in which investors will purchase shares) following a minimum 6-month hold period at a purchase price equal to the Company’s acquisition price.

This investment has an intended short term hold of 6-12 months and a higher annual net yield of 7%, with no member participation in any price appreciation in the land. Distributions are expected to be made every 6 months, with the first expected in June 2023.

Stockton Farm is located in the Delta of California’s Central Valley, a region that accounts for 8% of total U.S. agricultural production and supplies approximately a quarter of our country’s food.

Historically, Stockton Farm has grown a rotation of alfalfa, wheat, tomatoes, and corn. During the hold period, it will be planted to winter wheat. It is the tenant’s intention to purchase the property following a minimum 6 month hold period to develop the ground to almonds.

Stockton Farm enjoys historically highly secure water rights, as assessed by a water rights report. The property is located on Roberts Island within the Sacramento River Delta, where two of California’s largest rivers converge. Stockton Farm lies in the Central Delta Water Agency abutting Burns Cutoff, a distributary to the San Joaquin River.

This farm has riparian water rights off the San Joaquin River. There is presently no quantity limit associated with these riparian rights. A riparian right holder is allowed to divert that amount of water which can be beneficially used on the property.

In addition to riparian rights, two parcels also contain an appropriative right through Water License 1345, which was issued in 1926 and allows for the diversion of an additional 4.7 cubic feet per second each year.

Water is often the mitigating factor for permanent crop developments in California’s Central Valley. The Sacramento Delta’s unique geology allows almond orchard developments with highly secure water. Please see AcreTrader’s recent Almond Market Update to understand our view of the outlook for water-secure almond orchards.

Investment Highlights

  • 6-12 month target hold period with 7% net yield and no land appreciation.

  • Invest in a hard asset with little or no correlation to other major asset classes.

  • The property will be managed by Acretrader Management LLC, an affiliate of AcreTrader, Inc.

  • The property will be leased to Delta Farm Management, an existing AcreTrader Farm Sponsor Partner. Delta Farm Management intends to purchase the property through the exercise of a Lease Purchase Option after a 6 month minimum hold period to develop into an almond orchard.

  • AcreTrader management fee of 0.50% applies annually.

  • An upfront 2% acquisition fee will be paid on behalf of the company to AcreTrader, Inc. Please see the Financials tab and the Investment and LLC Agreement for additional information.

  • Cash distributions are expected to begin in June 2023.

Additional Details

Minimum Subscription Requirement: $3,874,312.80 Maximimum Subscription Amount: $4,304,792 Termination Date: March 1, 2023 Please refer to the Investment Agreement in the Documents tab for more information on these terms.

Risk Factors and Disclosures

Please see additional risk factors here  and in the Issuer Document Package for a discussion of additional risks. The above presentation is based upon information supplied by the seller and others, and some images shown may be used for representative purposes and may not have been taken on location at the subject property. While AcreTrader performs extensive due diligence on the offerings on our Site, certain of the information presented in each offering may have been provided by third party sources. Therefore, AcreTrader and its respective affiliates, officers, directors or representatives (the "AT Parties") hereby advise you that while all such third party information contained herein has been provided by to us from sources deemed reliable, we cannot guarantee its accuracy. The AT Parties further make no representations as to the accuracy or completeness of any such information and undertake no obligation now or in the future to update or correct this presentation or any information contained herein.

Please see Additional Disclosures regarding our offerings and use of our Site here.