12/07/2016 | by
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Farmland Partners CEO Says Merger on Schedule for January Close

Paul Pittman, chairman and CEO of Farmland Partners Inc. (NYSE: FPI), joined REIT.com for a CEO Spotlight video interview at REITWorld 2016: NAREIT’s Annual Convention for All Things REIT at the JW Marriott Phoenix Desert Ridge.

Pittman said the planned merger with American Farmland Co. (NYSE: AFCO), announced in September, will probably close in the first half of January. One of the immediate benefits of the deal is diversification, Pittman said. Farmland Partners will own more than $850 million of farmland assets spanning 133,000 acres once the merger is complete.

In the first year, the deal will be about 10 percent accretive to adjusted funds from operations, according to Pittman, and 20 percent accretive in the following year, he said.

Pittman also commented on the overall state of the farming industry.

The farm economy is having a “somewhat challenging time,” he said, as commodity prices are down but crop yields are up. “Family farmers are a little nervous,” he said.

As a capital provider, Farmland Partners can “provide liquidity in a system where others won’t right now,” Pittman said.

Pittman underscored, however, that he is not seeing signs of significant distress in the market. In fact, the opportunity to buy land at deep discounts will probably never arise, he added.

“This market is driven by that ever-increasing global food demand in the face of land scarcity. Nothing about the long-term outlook for food demand has changed,” Pittman said.

Meanwhile, Pittman commented that the biggest difference between farmland REITs and REITs in other property segments is the efficiency of the business model. Farmland Partners currently has a staff of about 15 employees. The company could increase the size of its portfolio by up to 50 percent without adding any additional employees, he said.