![]() “Farmland is not a silver bullet,” Malloy clarified. Sharing a slide depicting the ways various asset classes respond to varying markets, Malloy pointed out that farmland typically falls in or near the upper quartile for top returns when compared with other investment classes. ![]() With many economists predicting a US recession in 2023, land investment could offer a way to hedge against potential upcoming market disruptions, Malloy further explained. “So, you can understand why many investors often look to farmland for its relative stability,” Malloy said. In very rare down markets, land values typically only lost 5 percent of their value - a modest loss when compared with other asset classes such as gold or S&P, which saw declines of 40 to 50 percent some years. Malloy went on to share some historic land value data to illustrate that US farmland values have increased by an average rate of roughly 6 percent annually since the 1960s. “What’s fascinating is just to see these types of returns during a time when many other asset classes are meaningfully underperforming.” Thus, AcreTrader’s recent returns are “well above target,” Malloy said. However, AcreTrader’s website explains that this asset class has historically had an unlevered yield of 3 to 5 percent for lower-risk properties. To date, AcreTrader’s by-farm exits have yielded a weighted average return of 14.1 percent to its investors, Malloy reported in the webinar. Then, at the end of the year, AcreTrader pays out cash distributions to investors based on each farm’s excess annual income. Each entity is divided into shares equivalent to one-tenth of an acre (so, for example, 20 shares would be the equivalent of two acres of land). “We strive to offer our investors plenty of opportunities to do that within this diverse asset class.” How It WorksĪcreTrader’s online platform lets investors purchase shares in an entity that owns a farm. “Diversification within an asset class like land can help spread risk and boost returns,” Malloy said. Increased its land offerings in the US and Australia. ![]() Diversified with 11 different row crop investment options, plus citrus and nuts.Incorporated its first vineyard offering.Added timberland as a new option in their portfolio.Funded more than $100 million in equity.Grew its land under management to more than 40,000 acres.“We are seeing growth here at AcreTrader, both in the scale of our business and our farming partners’ businesses, growth in our industry, and importantly, growth in the opportunities for investments for our customers,” McClintock said. Last year, the company raised more than $300 million in funds, made 6,200 distributions to investors, and saw more than 90 percent of its active investment properties generate a distribution greater than or equal to the returns projected by AcreTrader’s internal models. Since launching its online investment platform in 2019, AcreTrader has grown quickly. “We believe buying and selling land should become common, transparent, and easy for farmers, for investors, for landowners, and for everyone else interested in land,” said CEO Carter Malloy.ĭuring a recent AcreTrader Annual Business Update Webinar from their offices in Fayetteville, Arkansas, Malloy and COO Garrott McClintock shared insights on the company’s growth and key successes to date - and why they feel their new approach to land investment is a win-win for farmers and investors. Founded in 2018, AcreTrader is an online platform that offers innovative pathways to invest in farmland. ![]()
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