Investment Opportunity: Stockton Farm

Location: Central Missouri

Transaction Size: $142,663

Target net IRR: 12%

Asset: 191 acres; pasture land

THE OPPORTUNITY

Farmland Capital by FBN is offering accredited investors a portfolio diversification opportunity to invest in high quality pasture land, alongside a farmer committed to utilizing regenerative agriculture practices.

This $142,663 investment is in a family-operated dairy farm in south central Missouri, with above-average pasture land (and optionality for crop production). Your investment supports an experienced operator invested in sustainability practices, while entering at a discounted value to market value given deal structure and timing.

HIGHLIGHTS

Projected returns based on average appreciation of land in MO from 1940 to 2022 (inclusive of all USDA land valuation data)

THE FARM

This 191 acre Missouri farm is located in the south central part of Missouri, a rural area with both row crop and livestock production. The property has a higher than average proportion of Class 2 and 3 soil types than most pasture land, with 93% of all acres in these classes (as classified by USGS).

Stockton Farm also gives sustainability-minded investors exposure to the regenerative investment thesis. The farmer employs multiple practices to promote long-term soil health and carbon sequestration, including using no-till, cover crops, manure/compost fertilization, and variable rate fertilizer application. We believe over time these practices will improve the quality of the soil and the overall value of the farmland.

The quality of Stockton Farm’s pasture land is above average for livestock operations. It is this type of high quality asset that investors in Farmland Capital by FBN gain access to in partnership with FBN, and in a structure where incentives are aligned: the farmer is invested in improving and maintaining this acreage for the long term. While the farmer intends to continue operating the farm as a dairy through the hold period, row crops have been successfully planted on a portion of the acreage in the past, providing optionality.

THE STRUCTURE

The investment is structured as an option on the change in farmland values and does not

participate in annual farm cash flows, shielding investors from any short term changes in commodity prices, or weather and/or operational risks. At the same time, Farmland Capital investors participate more in the appreciation of the farm. In our structure, investing 19% of the land value entitles the investor to a 62% share of the change in farmland value over time.

Farmland Capital investments are therefore a straightforward bet on the long-term appreciation of farmland in this country. We expect the availability of extremely high quality farmland such as what exists on Stockton Farm to decline over time, therefore increasing its value.

KEY DEAL METRICS

VALUATION

Historical farmland annual appreciation since 1940 in Missouri has been 6.1%, above the national average. The entry value reflects a valuation comparable to farms of comparatively worse productivity in the area, offering investors potential upside on the exit. This co-investment was closed in 2021. The farm was appraised 18 months ago for 11% more than the entry value. Since then the market has experienced historically high appreciation.

*Avg. Land Appreciation for row crops: https://quickstats.nass.usda.gov/

**Net IRR and MOIC. Fees include closing fees, annual operating expenses, structuring and management fees, and carried interest. All annual investment expenses are paid up front. Five years of management fees are paid up front (on a discounted basis), with the remainder paid out through distributions at the end of the term

+ Total Gross IRR is capped at inflation + 15% during the first 4 years to incentivize a structure that shares value across owner and investors

This investment opportunity is open to accredited investors with a minimum investment amount of $11,204.

Fill out the form below to get started with the investment process today.

*Target IRR represents an annual estimated target net internal rate of return (IRR) and may differ from actual returns. Target IRR is based on historical USDA appreciation of 5.9% since 1940 and investment offering due diligence conducted by FBN Finance, LLC