AcreTrader's Private Farmland REIT
Tim Hammerich
News Reporter
Farmland has produced strong returns historically as a non-correlated asset to Wall Street, but it also comes with some big challenges for investors. AcreTrader’s Rob Moore says the top three complaints he hears are a lack of ability to diversify, tax filing can be very complicated for fractional ownership, and there’s often a lack of investor control or communication regarding selling farmland assets. For those reasons the company recently formed a private farmland Real Estate Investment Trust or REIT.
Moore… “ The REIT allows an immense amount of diversification. It's investing in the same product. So it invests fractionally. We still allow fractional investors to come in on the same farms, but the fund picks up a large bucket of assets. We expect over the next several years to put 30, 50, 60 farms into that fund. So it gives you a ton of diversification with a single investment, a single tax document, and then after a 24-month lockup, there's a path to liquidity on a quarterly basis. So it ultimately allows the investor to have a little bit more control and timing, right? Timing matters a lot, particularly for your longer-term investments. So we really built the fund product to allow the investor to have a little bit more say in where that liquidity event occurred.”
Moore says the fact that it’s a private REIT and not publicly traded is important to try to keep uncorrelated with other investment classes.
