AcreTrader’s Completed Investment Cycles Demonstrate Historical Strength of Alt Asset Class Amidst Economic Downturn
/EIN News/ — Fayetteville, Ark., Sept. 21, 2022 (GLOBE NEWSWIRE) — AcreTrader, the technology company revolutionizing the land market, recently added another successful farm disposition with the sale of a Tunica County, Mississippi rice farm. Funded on the AcreTrader platform in June of 2020 and sold in September 2022, the investment resulted in a preliminary IRR of 13.7%*, exceeding the projected return of 8.3%*. This exit comes on the heels of three previous fully completed investments in the past year with higher-than-expected returns attributing farmland appreciation as the largest driver.
Farmland’s historically consistent returns and outperformance during volatile market conditions are well demonstrated by the NCREIF Farmland Index. Research from Nuveen, the $1.3 trillion investment manager of TIAA (Teachers Insurance and Annuity Association), has shown that adding 2-5% of a portfolio to farmland and/or timberland can improve a portfolio’s overall returns and at the same time reduce risk.
“We are pleased that investors on the AcreTrader platform have realized above targeted returns in our first four full cycle investments. This outperformance at a time when stocks and bonds are both down over 18% and 17% respectively year to date demonstrates the potential benefits of including this attractive asset class in a diversified portfolio,” said AcreTrader CEO Carter Malloy.
“We are also extremely proud to have partnered with investors to make a positive impact on the properties themselves. Investments on our platform are actively managed by agricultural experts and often undergo significant capital improvements, further developing the productivity of the farms and leaving them in better condition than when they came to us.”
About the Farm
In its role as farm manager, Acretrader Management, LLC, oversaw two major capital improvement projects on the Mississippi farm that came in below budget. These projects, the installation of two irrigation wells and leveling of the property, served to make the farm more conducive to growing rice and may help mitigate potential extreme weather events. Acreage suited to rice production typically commands a rent premium in this region, and the team behind AcreTrader was able to negotiate rental rates that exceeded estimates at the outset of funding. The AcreTrader team received multiple offers for the farm and accepted the latest and most competitive offer, seizing the opportunity to capture a meaningful return for investors slightly ahead of the projected target hold period of three to five years.
About AcreTrader
AcreTrader empowers its customers to buy and sell land smarter through advanced technology, data, and expertise. Since its founding in 2018, AcreTrader has broadened access to buy, sell, and invest in land for thousands of investors, farmers, and landowners across the U.S. Find out more by visiting www.acretrader.com and explore current offerings at www.acretrader.com/explore.
*Supplemental Information: 1) The calculations for the preliminary IRR reported above assume that the start date of the investment was on the closing date for the land acquisition and the end date was the date the distribution of net proceeds from the real estate sale was initiated to Members. 2) A portion of the total sale proceeds have been withheld to pay taxes and fees required to dissolve the Company. If any funds remain in the Company’s bank account after all taxes and fees have been paid, each investor in the Company will receive his/her/its pro rata portion in a final distribution. 3) Final IRR calculations will be made after the Company has been dissolved and all outstanding fees and taxes have been paid. 4) Note that the above IRR was calculated solely at the entity level and may not be reflective of an investor’s specific IRR which may differ based on factors specific to each such investor. 5) Note that the information above is not intended as investment advice. Past performance is no guarantee of future results. For additional risk disclosures regarding farmland investing and the risks of investing on AcreTrader, please see individual farm offering pages as well as our [terms of use](https://acretrader.com/company/terms).
###
Mary Mickel
AcreTrader
(479) 202-8316
mary.mickel@acretrader.com
