ENVER — Farmland Partners Inc. (NYSE: FPI) (the “Company”) today announced that it has entered into two additional ground lease agreements (the “Agreements”) for photovoltaic solar power generation facilities on two of its South Carolina farms.
The Agreements offer the right to lease up to an aggregate of approximately 979 acres that may be converted, at the tenant’s cost, from farming operations to energy generation. The two farms are currently leased to local farmers for a blended annual rental rate of approximately $210 per acre for the 2,579 tillable acres of the farms. Under the terms of the Agreements, the initial average annual rental rate will be $822 per acre for the 979 acres subject to solar development, with annual rent increases of 1.5% beginning in the fifth year of the lease terms.
The Agreements have initial 20-year terms with potential for extensions.
Rent payments under the Agreements will begin upon the onset of construction of the solar energy generation systems on the respective farms. Should all of the 979 acres be converted to solar, the farm-wide cap rate on the 2,579 tillable acres will increase to 10.6%, a 105% improvement over the current cap rate. With these Agreements, Farmland Partners will have three solar leases in place, on a total of 1,179 acres, and a wind lease on a farm, on approximately 28 acres, all located in North and South Carolina.
“These South Carolina solar leases further demonstrate the additional upside rent potential for non-ag uses we have on our farms,” said Paul Pittman, CEO of the Company. “We continue to focus on developing supplemental revenue streams for the farms we own in order to increase returns for our stockholders.”
The Agreements contain certain conditions, including a one-year due diligence period during which the potential tenant may terminate either of the leases.
About Farmland Partners Inc.
Farmland Partners Inc. is an internally managed real estate company that owns and seeks to acquire high-quality North American farmland and makes loans to farmers secured by farm real estate. The Company’s portfolio is comprised of 257 farms with an aggregate of 107,838 acres (including 126 farms totaling 32,963 acres under contract) in Arkansas, Colorado, Georgia, Illinois, Kansas, Louisiana, Michigan, Mississippi, Nebraska, North Carolina, South Carolina, Texas, and Virginia.