Gladstone Land Corporation announced that it has acquired three farms comprised of approximately 850 gross acres of irrigated farmland in Kern County, California, for $19 million.

Currently, the property is mostly planted in wine grapes; however, the Company will finance the new tenant-farmer's development of the property into an almond orchard at an expected total cost of approximately $8 million. The Company entered into a lease agreement with an industry leader in almonds, tomatoes and frozen vegetables for a 15-year, triple-net lease that provides for a fixed return for the first four years, thereafter converting to a revenue-sharing rent structure that includes a rental floor. Subject to yield and crop prices, projected annual rents under this lease are expected to exceed 8% of the total costs invested. The Company funded this acquisition through a disbursement on the long-term note payable under its borrowing facility with Metropolitan Life Insurance Company ("MetLife").

The Company also announced the refinancing of its existing credit facility with MetLife. Among other changes from the prior facility, under the modified facility, the blended interest rate on all previously-disbursed amounts under the long-term note payable was reduced by 26 bps, and the fixed rate term of the note was extended by 44 months. In addition, the spread on the revolving line of credit under the facility was reduced by 25 bps.

"Today's announcement marks our most significant foray into permanent crops to date, specifically almonds," said Bill Reiman, Managing Director of the Company's western division. "We expect the entire property will be planted with almonds soon. This property is in a location of proven high-yield almond production and excellent groundwater resources. This acquisition adds to our presence in southeastern Kern County, which, like most of our properties' regions, is an area of high-value agriculture. And we are partnering with one of the most successful almond growers in California."

"This acquisition represents further diversification of our company, as we are adding another permanent crop to our portfolio, and we are partnering with a farming family well known in the area," said David Gladstone, President and CEO of the Company. "Diversification is extremely valuable in the farming industry in order to protect our asset base and our income to pay distributions. For the first time, we are also entering into a revenue-sharing arrangement that will go into effect in four years. The minimum base rent during the revenue-sharing period is still sufficient so as to not impair our ability to meet future distributions, and we believe the revenue-sharing component will add to our future profits, allowing us to increase our distributions.

In addition, we were able to refinance our agreement with our largest lender, MetLife, which should provide us with significant savings over the next several years that we hope to be able to pass to our shareholders."