Tag Archives: gold
Unit and Apartment for sale in Brisbane by Elliot Dean of RE/MAX Property Centre Toowong
1/29 Brisbane Street St Lucia Marketed by Elliott Dean 0401 762 655 Dream is now over with this luxurious style of living! You can have this apartment for sa… Continue reading
Farmland — Gold You Can Eat
by Chris Bennett in Farm Press Blog Will investors continue to park their money on farmland? Speculation on a farmland crash hasn’t put a dent in the market. Talk of bubbles or crashes hasn’t put a dent in the farmland market, and if the end is nigh — nobody is blinking. Farmland is “gold I can eat” to Steve Romick, a heavyweight investor and managing partner at FPA Funds. Farmland purchases have moved far beyond the agriculture industry, with insurance agencies, specialized investors, foreign firms and pension funds all throwing elbows in a bidding war. Romick, in an interview with Forbes , answered the “Why farmland now?” question by comparing it with the gold market: “I don’t know how to value gold. I don’t know if it should be a thousand dollars an ounce, the rough cost to pull it out of the ground, or $1,600 an ounce, where it is today, or whether it should be $2,000 or God forbid it’s $4,000 because government may take it away from you … “I look at farmland. Farmland has increased in price. But farmland, interestingly, will benefit from the same things that gold will benefit from. If there’s inflation, farmland will benefit. If there’s a decline in fiat currencies, particularly the U.S. dollar, farmland will benefit. Ag prices are denominated in dollars. So if the dollar drops by 50 percent versus the won, for example, in Korea they can buy twice as much or their economy can benefit by not having to spend as much for the same amount of food.” Traditional investments often have been anemic and the poor returns have helped carve a channel for new dollars to flow toward cropland; dollars that would typically have gone elsewhere. The rise in farmland prices and the pace of sales is brisk, with the Midwest leading the spike. Iowa, South Dakota and Nebraska have doubled their 2005 farmland values. Iowa acreage averages $8,296 per acre, reflecting the confidence in corn and commodity demand, and an Iowa farm recently went for $21,900 per acre. In 2012, a Swiss bank bought 9,800 acres of Wisconsin cropland for $67.5 million. UBS AgriVest Farmland Fund Inc., a Connecticut-based farm real estate fund, is expected to close on a $108-million bid for 29,000 farmland acres in Wisconsin and Texas, according to Farmland Investor Letter . The value of the purchases is dizzying and the number of investor players beyond ag is growing. Midwest farm values get the most attention, but coast-to-coast, the same cropland value pattern is evident. California is a prime example, where farmland values grew to $7,200 in 2012. Almond acreage in Tulare County can bring close to $20,000 per acre. Continue reading
Farmland Gold: 29,000 Acres Sells For $108 Million
Farmland Investor Letter A $108 million farmland purchase is unusual for its scale and reflects both the growing ranks of institutional investors aiming to boost their exposure to the buoyant agricultural real estate sector and a tight market in which few attractive properties are available for sale. UBS AgriVest Farmland Fund Inc., a Connecticut-based farm real estate fund has emerged as the winning bidder in two widely watched private land auctions in Texas and Wisconsin. The purchases are unusual for their scale and reflect both the growing ranks of institutional investors aiming to boost their exposure to the buoyant agricultural real estate sector and a tight market in which few attractive properties are available for sale. Through September, Midwest land values are up 13% from a year, according to a survey of agricultural bankers by the Federal Reserve Bank of Chicago. That pace is down from 14% and 22% annual gains in 2010 and 2011. Speaking at a conference hosted by the Chicago Fed last week, Murray Wise, founder of Westchester Group-a Champaign, Ill. farm asset manager now majority owned by New York retirement fund manager TIAA-CREF-speculated that as much as $10 billion in institutional capital is searching for a home in U.S. agricultural land. “Institutional investors are very frustrated at the moment,” says Mr. Wise. “They feel almost locked out of the Midwest marketplace as rent income yields continue to decline and the cash position of the operating farmer in most cases is too much for them to compete with.” Though farm rents are on the upswing, land prices are rising faster, pushing rent income yields from 5% in 2006-2007 to 3%-4% today. “Many institutional investors are having a hard time accepting a 4% cash-on-cash return, and in some cases less than 4%, when in fact they want 7% ideally,” says Mr. Wise. The tightening land market presents a growing hurdle for farm investment managers who are under pressure to put client cash to work. At mid-year, UBS AgriVest had $288.6 million of client funds awaiting investment in farmland. In a June meeting with the Alaska Retirement Management Board-which owns $640 million in U.S. farmland managed by UBS AgriVest and Hancock Agricultural Investment Group-James McCandless, president of UBS AgriVest, told Alaska officials he wouldn’t begin investing a September 2011 $100 million mandate from the Iowa Public Employees’ Retirement System until he had found property for $41.6 million of Alaska funds awaiting investment and $147 million queued up for the UBS AgriVest Farmland Fund. On November 13th, UBS AgriVest paid $67.5 million or about $6,922 per acre for 9,754 acres in southwest Wisconsin. The deal ranks among the biggest sales of Wisconsin cropland in recent memory and is unusual for the UBS fund since its average farm investment is $4.8 million. The purchase also marks UBS AgriVest’ s return to the Midwest after at least three years, while it sought more attractively priced farm properties in Georgia, Texas, Arizona, Idaho and Oregon. The fund acquired just one property in the first half of this year. Continue reading
