The United States has long seen itself as an open-for-investment free-market bastion. But concerns about national security–and some political grandstanding– could close the doors to foreign buyers, particularly when it comes to farmland.
By Kelly Phillips Erb, Forbes Staff
The action last week by Arkansas Attorney General Tim Griffin affected a mere 160 acres of agricultural land in a state with 14 million acres devoted to farms. But it was an opening shot in a battle that states across the U.S. have been suiting up for recently.
Griffin ordered Northrup King Seed Co. to sell those acres in Craighead County within two years while slapping it with a $280,000 penalty for failing to timely disclose its foreign ownership. Northrup, he noted, is a subsidiary of Syngenta Seeds, LLC, which is ultimately owned by China National Chemical Co., a state-owned enterprise.
The land ownership, Griffin, alleges, violates Act 636, signed by Republican Governor Sarah Huckabee Sanders in April, that bars a “prohibited” foreign-party-controlled business from acquiring or holding public or private land in the state directly or through affiliated parties. Prohibited includes companies connected to a country subject to the federal International Traffic in Arms Regulations (ITAR)—like China. Sanders herself staged a full court press conference to announce the enforcement action. “We simply cannot trust those who pledge allegiance to a hostile foreign power,” she said.
“Our people in Arkansas are Americans led by Americans who care deeply about serving Arkansas farmers,” Saswato Das, the Chief Communications Officer for Syngenta GroupDas responded in a lengthy statement emailed to Forbes. “This action hurts Arkansas farmers more than anyone else.’’
According to Syngenta, it owns approximately 1,500 acres of agricultural land in the U.S., (about the size of four average Iowa farms), which it uses for research, development and production to meet the needs of American farmers and to fulfill regulations that require it to test products it sells in the U.S. domestically on U.S. soil. Only 200 of those acres have been purchased since Syngenta, originally a Swiss company, came under Chinese control in 2017. The Arkansas acreage has been owned since 1988. “No one from China has ever directed any Syngenta executive to buy, lease, or otherwise engage in land acquisition in the United States,” Das states.
Despite Sanders’ unusually fiery rhetoric, Arkansas’ law isn’t an outlier. Two dozen states now prohibit or restrict foreign ownership and investments in certain types of real property and another dozen are considering bills that would do so.
Considering all the recent political hubbub, foreign ownership of U.S. land is small and China is just a bit player. Still, foreign ownership is growing and at an accelerated pace.
As of December 31, 2021 (the last date for which data is currently available), foreign persons reported holding an interest in over 40 million acres, or 3.1%, of all privately held U.S. agricultural land, up from 37.6 million acres and 2.9% in 2020. On average, foreign holdings of U.S. agricultural land grew by just .8 million acres per year from 2009 through 2015. However, since 2015, they’ve increased nearly three times faster—at an average clip of 2.2 million acres annually. That’s all according to the U.S. Department of Agriculture, which is required to monitor ownership under the Agricultural Foreign Investment Disclosure Act of 1978, or AFIDA. Under the same law, foreign persons who acquire or transfer an interest in agricultural land must report the transactions within 90 days. Some states also have land reporting requirements.
China? Its investors own just 383,935 acres, representing less than 1% of foreign-held acres. Notably, those from countries we consider our friends–Canada, the Netherlands, Italy, the United Kingdom, and Germany–are the biggest foreign holders.
While there’s no federal law that currently restricts foreign persons, entities, or governments from acquiring or holding farmland, and most recent action has been in the states, some in Congress are also taking up the issue. This year, Texas Republican Congressman Ronny Jackson re-introduced the Foreign Adversary Risk Management Act—called the FARM Act—which would designate the agriculture supply chain as critical infrastructure and limit the ability of foreign persons to obtain significant U.S. farmland. The measure currently sits in committee.
Meanwhile, in the Senate, a bipartisan measure from Senators Michael Bennet (D-CO), James Lankford (R-Okla.), Jim Risch (R-Idaho), and Thom Tillis (R-N.C.) would subject certain land purchases by foreign entities to additional review, though not an outright ban. Predictably, it has a similarly clever name: the SOIL (Security and Oversight of International Landholdings) Act. That measure too is sitting in committee.
Even without new legislation, the federal government is already moving to further limit foreign land ownership when national security is possibly at stake. That was the explanation delivered by the Committee on Foreign Investment in the United States (CFIUS) when it proposed rules earlier this year related to real estate ownership near military bases. The rules would add eight military installations in North Dakota, South Dakota, California, Iowa, and Texas to the current list and revise the meaning of “military installation.”
CFIUS has the authority to review, renegotiate, enforce, and impose conditions to transactions, including real estate acquisitions, that could impact U.S. national security. That also includes investments and acquisitions of infrastructure, such as transportation, telecommunication, public health, and energy. Lawmakers have sought to expand CFIUS’ authority as foreign investors from some countries—like China—buy up land.
Concern about foreign ownership of land, and particularly farmland, has been around for decades. In fact, it was the driving force behind the 1980 Foreign Investment in Real Property Tax Act (FIRPTA), which uses taxes to put some brakes on foreign purchases.
Under U.S. tax law, non-U.S. persons are typically taxed on certain kinds of U.S. sourced income—such as compensation from a U.S. company—but not capital gains. Before FIRPTA, foreign taxpayers could avoid paying capital gains tax when they sold real estate, which gave them a perceived unfair tax advantage over U.S. taxpayers.
FIRPTA added section 897 to the tax code, which makes disposition of an interest in U.S. real property subject to tax. And, to ensure that Uncle Sam gets paid, in 2015 Congress required U.S. buyers to withhold a percentage—typically 15%—of the property sales price they pay foreign sellers and remit those funds to the IRS. If that turns out to be more tax than the foreign seller owes, the seller can file a tax return and request a refund.
Additional foreign reporting requirements have followed suit. In 2018, the Foreign Investment Risk Review Modernization Act of 2018, or FIRRMA, was signed into law. It is intended to “strengthen and modernize” how CFIUS reviews the effects of foreign investment transactions on our national security. FIRRMA broadened the authority for the agency to, among other things, review certain real estate transactions in close proximity to a military installation or U.S. government facility or property with national security sensitivities, as well as any non-controlling investment in U.S. businesses involved in critical technology, critical infrastructure, or collecting sensitive personal data on U.S. citizens. In 2020, Treasury issued final rules related to FIRRMA, including reporting requirements and carve outs for Australia, Canada, and the United Kingdom—unlike related rules, FIRRMA didn’t initially target specific countries, instead relying on broadened jurisdiction. The carve outs mean that qualifying investors from those countries aren’t subject to certain rules and restrictions.
Despite all the recent action, no states ban foreign ownership of all land. But two dozen do forbid some foreign ownership of farmland. (Those states are Alabama, Arkansas, Florida, Idaho, Indiana, Iowa, Kansas, Kentucky, Louisiana, Minnesota, Mississippi, Missouri, Montana, Nebraska, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Tennessee, Utah, Virginia, and Wisconsin.)
Remarkably, 10 of those laws are new this year, according to Micah Brown, a lawyer and point person on foreign ownership issues at The National Agricultural Law Center, a unit of the University of Arkansas System Division of Agriculture.
Politicians in other states, including Arizona and California, are pushing their own measures. Earlier this year, the Texas Senate passed a bill that would limit foreign ownership of land by citizens or entities from China, Iran, North Korea, and Russia, including restrictions on purchasing agricultural land, standing timber, and oil and gas rights. The measure, which died in the Texas House, was viewed as a direct response to the purchase of 130,000 acres of land near Laughlin Air Force Base in Val Verde County, Texas. A Chinese-owned company bought the land, stirring suspicion. Forbes previously covered the sale in 2021, noting that the company is owned by a Xinjiang-based real estate billionaire, Sun Guangxin, who is estimated to have spent more than $100 million buying land in the Lone Star State.
Florida’s law, signed by Gov. Ron DeSantis in May, gives another taste of how much of the recent activity is aimed at China. The law, which took effect on July 1, 2023, prohibits people who are not U.S. citizens or permanent residents and whose “domicile” is in China, Cuba, Venezuela, Syria, Iran, Russia, or North Korea from purchasing certain agricultural land and other land within ten miles of restricted areas, including military bases and infrastructure like airports and wastewater treatment plants. The law imposes criminal penalties on any person or real estate company that knowingly sells real estate in the Sunshine State to anyone impacted by the ban. Tellingly, the harshest penalty, a potential felony, applies only to those involved in transactions with a Chinese connection. The penalty for transactions involving the other covered countries is a misdemeanor.
The law does not require Chinese persons or investors (including partnerships or other entities) with existing ties to Florida real estate to divest themselves of the properties, but they will be required to register those interests with the state by January 2024 unless a de minimis exception applies—that exception covers interests of less than 5% in a publicly traded U.S. company that owns Florida land.
In May, Chinese citizens living and working in Florida sued the state in the U.S. District Court of Northern Florida, claiming that the new law is unconstitutional and creates disproportionate punishments based on race, ethnicity, alienage, and national origin. The plaintiffs unsuccessfully sought an injunction to prevent the new law from being enforced. But they aren’t done yet. Ashley Gorski, senior staff attorney with the American Civil Liberties Union, which is among those representing the plaintiffs, says the law is “wreaking havoc on the lives of plaintiffs and countless other immigrants in Florida who seek to buy a home. This discriminatory law is unfair, unjustified, and unconstitutional, and we look forward to making our case to the court of appeals.”
As of now, reports Brown, the Florida lawsuit is the only pending challenge to a foreign ownership law, and Arkansas is the only state with a pending enforcement action against a prohibited foreign investor. But don’t expect that to be the case for long. “Keep in mind that many of these newly enacted foreign ownership laws just recently went into effect over the last couple of months or weeks,’’ Brown says.
MORE FROM FORBES
By Miles Dilworth In Val Verde County, Texas, For Dailymail.Com
Updated: 14:48 03 Sep 2023
- David Frankens, of Lufkin, East Texas, has sparked fury among local ranchers after he sold swathes of land to Sun Guangxin, a former Chinese military captain
- Local realtors claim Frankens made ‘millions of dollars’ in profit from the trades, in which he would buy the land before selling it on to Sun within the same day
- The Texan businessman has since been accused by one of his former ranch managers of cornering him in his office and punching him in the head
A Texan real estate mogul allegedly made ‘millions of dollars’ by selling vast swathes of local farmland to a Chinese billionaire with close ties to Beijing.
David Frankens, from Lufkin, East Texas, scored the ‘deals of the century’ when flipping the land at around twice its market value to Sun Guangxin, a former captain in the Chinese military, local realtors told DailyMail.com.
The trades have sparked fury among ranchers in Val Verde County, where Sun bought more than 130,000 acres of farmland for an estimated $110million between 2016 and 2018.
A report written by former CIA officials, seen by DailyMail.com, suggested the Chinese billionaire could be considered a national security risk by US authorities due to his extensive links to the Chinese Communist Party (CCP).
One local landowner described the Frankens’ actions as ‘treacherous’.
DailyMail.com can also reveal that the Texan businessman has since been accused of assault by a former ranch manager.
Coincidentally, the alleged incident occurred around the time it had been announced a Chinese firm was taking over the ranch.
Frankens’ relationship with Sun has put him at the center of an ongoing controversy over the billionaire’s Texan land grab, which saw the Xinjiang-born businessman claim 7 percent of all land in Val Verde County between 2016 and 2018.
The former People’s Liberation Army (PLA) captain hit the headlines when he tabled plans for a 46-turbine wind farm on a 15,000-acre ranch he bought from Frankens in 2018.
Opponents said the project would provide Sun – and by extension the Chinese state – access to the state electric grid.
It prompted Governor Greg Abbott to pass the Lone Star Infrastructure Act in 2021, which banned businesses from ‘hostile nations’, including China, from accessing state infrastructure.
Locals left baffled at how a Chinese billionaire had come to own such a vast portion of land in a county known for its wild and desolate landscapes soon found their answer in the larger-than-life Frankens.
Land deeds show the realtor bought properties from existing landholders and then ‘flipped’ them to GH America, a subsidiary of Sun’s Guanghui Group, on the same day.
In one instance, he bought one parcel of land at 11am and had sold it to GH America at 2pm that afternoon.
Local realtor and ranch owner James King told DailyMail.com that Frankens flogged the land to the Chinese at twice the market rate, raking in millions of dollars in profit.
King suggested Frankens had taken advantage of the foreign investors’ naivety.
‘The Chinese weren’t smart,’ he said. ‘But it’s buyer beware. That’s how Texas real estate is.’
King said he watched on in amazement as Frankens sold one parcel after another to the Beijing-backed group.
‘You could call it the deals of the century,’ he said. ‘I would go “wow”, he got that deal done and then it was just one after another after another.
King, who founded the Lower Pecos Landowners Group in opposition to the proposed wind farm, suggested Frankens likely used money he made from his initial deals with GH America to buy more land to sell on to the company, while ‘hiding’ his profits.
‘I wouldn’t say it’s a very honorable way to make a living, because it’s sneaky,’ he added. ‘But people do it.’
A source familiar with the relationship between Frankens and Sun said it was the Texan who pitched the idea of a wind farm in Val Verde County.
Frankens had in fact been touting the idea of such a project on his Rocksprings property as early as in the 1990s, the source claimed.
Sun’s close ties to the CCP are documented in the book Eurasian Crossings: A History of Xinjiang, by Georgetown University professor James Millward.
The book claims Sun opened a branch of the CCP within his own company during the 1990s and poached a party secretary away from a state-owned firm to lead it.
His political connections helped him acquire state-owned enterprises, but have also triggered warnings over his potential threat to national security, including by Texas Senator Ted Cruz.
King said locals had reacted angrily to Frankens’ role in bringing a potentially hostile foreign actor into the heart of their community.
‘It’s, you know, “how dare you bring this man into our neighborhood of really solid landowners who care about the land and where some families have spent six generations out here”,’ he said.
Kyle Bass, a businessman and Val Verde County ranch owner, said Frankens’ dealings with Sun were ‘treacherous’.
Frankens, who comes from a Pentecostal background and brings a religious advisor to all important business meetings, flaunts his wealth on social media.
His Facebook is littered with photographs of his Blue Hole cabin in the Piney Woods of East Texas.
He is also an avid Donald Trump supporter and has held rallies supporting the former President on his sprawling estate.
King, who has met Frankens on several occasions, described him as an ‘intimidating’ figure.
‘He is huge, one of the biggest men you’ll ever meet.
‘He doesn’t come across mean or angry or anything. It’s just you are a little intimidated by the mere size of the guy and the bigness of him.
‘He is an East Texas country, good ol’ boy and he sounds like it, he looks like it.’
Frankens now finds himself in hot water after one of his former ranch workers filed a lawsuit claiming that he was cornered in his office by Frankens and two colleagues and ‘beaten about the head with fists causing serious bodily injury’ in September 2021.
The rancher, Eric White, claims to have suffered a traumatic brain injury and was ‘forcibly removed from his job’, The Kerrville Daily Times reported.
Frankens filed a response denying the accusations and asserting ‘the affirmative defense of self defense’.
He did not respond to a request for comment by DailyMail.com, but he has previously told Forbes that his first deal with GH American came by accident as he sold the property via a broker and did not know who the buyer was until the contract came through.
He declined to comment on the subsequent deals, or how much money he had from them, citing non-disclosure agreements.
Frankens did, however, deny allegations of treachery, describing them as ‘based on fear’. He added: ‘In my dealings with [Sun Guangxin], he has always done exactly what he said he would do and has shown himself to be a generous, hospitable man.
‘I have visited the property on several occasions and have never seen any indication of any nefarious or questionable activities. I consider him a friend.’
Hoytsville • After four generations of milking cows, members of the venerable Brown family are closing down the last commercial dairy operating in eastern Summit County and selling much of the land to developers.
Their ancestral property is the largest chunk of about 1,000 contiguous acres of farmland going the same way in the bosom of tiny Hoytsville, a mountain town of some 700 residents along the Weber River south of Coalville — with the potential to add thousands more in the coming decades.
Mike Brown is 51 and the latest in his clan to manage Brown Dairy over the family’s 70-plus years in the business, and now he’s closing a crucial chapter.
As he drove his pickup recently along Creamery Lane, Brown joked of two unmistakable signs that the decline of traditional farming has reached your household: a spouse works in town and the increasing number of turns in the irrigation pipes.
(Trent Nelson | The Salt Lake Tribune) Mike Brown tours land in Hoytsville that is part of a village overlay development plan. His family is closing down the last commercial dairy operating in eastern Summit County and selling much of the land to developers.
(Trent Nelson | The Salt Lake Tribune) Brown said he hopes to buy another farm with the sale proceeds to keep that heritage in his family, but he’ll do that elsewhere.
Brown, his family, farm hands and a few neighbors watched a couple of weeks ago as hauling trucks loaded up and carted 250 or so prized head of Holstein cattle and 50 others along Hoytsville Road and out of the valley, the last of nearly 650 he has sold.
It was a revelatory moment, he said. Some of those farm animals, bred through the years from the dairy’s original stocks, were akin to loved ones.
“I’ve had people tell me, ‘You’re just doing this all for money and greed,’” Brown said. “Well, if that’s what money and greed feel like, I would have been real disappointed. That felt more like a death to me.”
It’s also evident, the former county planning commissioner said, that Summit County is not serious about supporting what little full-scale farming is left. Brown said he hopes to buy another farm with the sale proceeds to keep that heritage in his family, but he’ll do that elsewhere.
“They sit and bawl about it and it sounds good,” he said, “but agriculture is irrelevant in Summit County — and that’s really one of the main things driving all of this.”
With farms dwindling in size for decades or giving way to development all along the Interstate 80 corridor from Kimball Junction northward, residents of Hoytsville, Coalville, Wanship and half-dozen other small towns have long seen residential growth rolling toward them.
Now, said Mike Crittenden, another Hoytsville resident among those poised to sell, that prospect is no longer in the distance.
“It’s really funny. You could have gone 50 years and never had a stick of ground come available,” Crittenden said. “And now, all of a sudden, the whole town is for sale, you know, the heart of it, because all these families just hit the end of the line agriculturally.”
How to stay a village
If Crittenden, the Browns and two dozen or so of the rural community’s largest legacy landowners get their dream, this won’t be another of the numberless stories about disappearing ways of life or open spaces vanishing under housing subdivisions across Utah’s Wasatch Back.
These multigenerational clans with their names on Hoytsville’s oldest barns and country lanes have collaborated quietly for years — and against many odds — to enshrine a plan to keep their land as a village even as it adds homes and residents.
(Ivory Homes / Larry H. Miller Real Estate) A draft map of the Cedar Crest Village overlay would preserve up to 60% of the land as open space.
(Ivory Homes / Larry H. Miller Real Estate) The plan hopes to bring in possibly thousands of units of various types of affordable housing and restoring old-time amenities like the corner grocery store or gas station.
Using a section of Summit County code created to bolster its waning smaller communities, the landowners have worked steadily since 2018 — and arguably long before that — on a formal application to enact a kind of master plan for their acreage that waives typical agricultural zoning.
Backers of the idea recently brought in some of the state’s most influential real estate developers — Ivory Homes, the largest homebuilder, and Larry H. Miller Communities, owner of master-planned Daybreak in South Jordan — for clout in making their vision real, long after many of them are gone.
The county’s existing land use rules have had a corrosive effect in some ways on rural farm life. Requiring 40 acres per residential lot and homes fronted on the road, Crittenden said, creates the equivalent of cramped house tunnels along key arterials over time — while also making housing unaffordable.
“I tend to believe that leads to a really poor build-out pattern,” said Crittenden. “And the people at the county do, too. So there had to be a revision.”
Generations of farmers have also grown deeply weary, he and many others said, of watching their kids and grandkids have to move away.
The Cedar Crest Village overlay instead allows for carefully planned growth patterns driven by community needs and collaboration, according to code. It enables more density and mixed uses, and calls for cohesive design standards to cluster homes and commercial nodes and provide for gradual expansion while keeping a small-town feel.
The draft plan, if ultimately approved by the Summit County Council, would also preserve up to 60% of the land as open space, while bringing in possibly thousands of units of various types of much-needed affordable housing and restoring old-time amenities like the corner grocery store or gas station.
Residents have only needed to look south and west at decades of patchwork development, lost rural character and chronic land use clashes in Park City and across the Snyderville Basin to see other dark futures for the agrarian lifestyles they cherish.
“We would love to have it stay the way it is forever. But that’s not reality,” said Brown, who, with Crittenden, has been pivotal in fostering the village plan.
Rapidly developed population centers elsewhere in Summit County, he said, have become transient communities primarily for the wealthy — and that doesn’t match what he and immediate neighbors see as Hoytsville’s core values.
“We’re trying to restore and maintain the birth and death concept,” Brown said. “You can be born here, live here, die here and be buried here.”
Is it a smaller Daybreak?
(Trent Nelson | The Salt Lake Tribune) Some wary neighbors who live outside the proposed village’s boundaries are looking on with trepidation.
The landowners’ desire to emphasize that master plan approach with open spaces, strategic placement of density and ready access to outdoor recreation is partly why they have brought on Larry H. Miller Communities. And Daybreak, the popular community in southwestern Salt Lake County, is offering a template.
“You take something like Daybreak, which is obviously a whole different deal,” Crittenden said, “but you take that conceptually and you just place it in this setting and you adapt it.”
As the village concept inches toward county review, Brown’s livestock and property on Browns Lane have sold in recent weeks, a visible and resonant domino to tumble for such a close-knit town, where many see one another at church every Sunday.
Rough estimates are that 80% of the 1,000 acres already have changed hands. Some wary neighbors who live outside the proposed village’s boundaries are looking on with trepidation.
Kent Pace, a longtimer along East Spring Canyon Road who grew up in Hoytsville, relishes that the town has no stoplight. In fact, he vows to move when the first one goes up.
“I don’t like this one bit,” he said of the village plans. “This has been a little farming community forever and what Ivory’s going to do here is going to completely change everything about it. It makes me sick to think about what it’s going to do.”
Robin Reed, a Hoytsville resident for 12 years, said Ivory Homes and Larry H. Miller Communities need to hear a plain message: “We don’t want a whole bunch of density. That is what is scaring residents here.”
Chris Gamvroulas, president of Ivory Development, urged them not to focus on density numbers to the extent they miss Hoytsville’s bigger picture. The overlay process has been in the works for nearly 15 years, he said, and was initiated out of the aspirations of the 20-plus property owners themselves and not developers.
“These landowners did their homework,” Gamvroulas said, “and we are really quite honored that they want to work with us.”
To concerned Hoytsville residents, he said, “these are your neighbors. Your kids go to school with their kids. We take very seriously the faith they have placed in us.”
The homebuilder also has embraced the village overlay concept, Gamvroulas said. “It provides a framework for a planning outcome that is holistic as opposed to a checkerboard.”
Meandering road ahead for the plan
The village idea still has a lot of fences to jump, but the overlay could get a formal hearing before the Eastern Summit County planning commission as early as mid-June. The commission’s recommendation would then be forwarded to the County Council for a final review.
Depending how this goes for Hoytsville, the county’s ordinance is written with the prospect of applying the overlay approach to other hamlets in the region: Echo, Marion, Peoa, Upton, Wanship and Woodland.
Planners with Larry H. Miller Communities are fleshing out a community structure plan for Hoytsville while doing outreach in small groups aimed at inviting more adjacent residents to opt in — or, in the alternative, incorporate their needs and input into the overlay’s contours.
The company, in conjunction with Ivory Homes, has set up a website — www.cedarcresthoytsville.com — to push out information on the overlay and draw public feedback.
Stephen James, executive vice president of planning and community design at Larry H. Miller Real Estate, who is leading the planning effort, said that creating a shared community vision that everyone understands is important.
(Trent Nelson | The Salt Lake Tribune) Some residents insist change is inevitable and that Hoytsville’s future is more a question of how that growth should be shaped.
That vision, he said, will center on growing the community incrementally, improving walkability, saving views of the mountains and farmlands, keeping some agricultural presence and preserving key elements of Hoytsville’s old architecture and what James called its “social ecosystem.”
“Our goal is to create a framework in which everyone can benefit,” James told the panel guiding the overlay in April, “and work together to make something great. That’s what community building is all about.”
Bill Wilde, chairman of the Eastern Summit County planning commission, has assured Hoytsville residents that their views remain integral to the process and how the overlay will emerge.
In that sense, Wilde said, “this is definitely not a done deal.”
Added Patrick Putt, the county’s community development director: “Ultimately, this is about place making, a cradle-to-grave community, with people having a choice to be there throughout their lifetimes.
“They don’t want a big subdivision,” Putt said. “They want to create a place.”
Neighbors are divided but respectful
Hoytsville residents have voted twice against formally incorporating as a township, and Pace said he and other residents who don’t like the plan feel the village overlay bypasses that public sentiment.
Adjacent residents whose lands aren’t already in the village area, meanwhile, are being gently encouraged to learn more or join. Some of them first took in details of the overlay at a December public hearing, followed by an open house at Judd Barn in Hoytsville in April.
Casey Stoner, a resident since 1975, echoed a common sentiment: Many people moved to Hoystville for its existing qualities, and they want to keep their community as it is.
“I don’t understand how you can come in and change the whole structure and character of an area so dramatically,” Stoner said in December. “It doesn’t seem like there are any trade-offs as far as saving some areas to allow this.”
Others voiced concern that new amenities drawn to Hoytsville in coming years might detract from Coalville’s Main Street.
So far, public discussions on the village have been mostly cordial and respectful, with only wisps of the sort of bitterness or rancor among neighbors that development issues can sometimes bring to small towns.
Few dispute the legacy owners have a right to pursue the overlay.
“These people and their families for generations have worked their guts out 24-7 and provided a lot to this community,” resident Dan Blonquist told one public gathering. “I believe that they have earned the right to do whatever they want to do with their property at this time, and we should support that.”
Said Pace: “I don’t hold anything against the people that are selling their ground. I’ve been friends with them my whole life.
“But,” he added, “it’s going to change everything.”
Others insist change is inevitable and that Hoytsville’s future is more a question of how that growth should be shaped.
“It’s coming this way,” said Crittenden, “and you can put your head in the sand and say, ‘Well, I don’t want it to happen.’ Or you can accept that it’s coming.”
Editor’s note • This story is available to Salt Lake Tribune subscribers only. Thank you for supporting local journalism.
The family that operates one of Surrey, B.C.’s longstanding farms is fighting to save hundreds of acres of land from industrial development at a hearing Monday night.
The Heppell family has been farming the 220-acre parcel of land at 192 Street and 36 Avenue for five decades.
The family has long leased the property from the federal government, which originally bought it for a Second World War radar station. In recent years, Ottawa put the land on a list of properties it plans to sell off, raising fears it could end up being developed.
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“That really kicked us into gear,” production manager Tyler Heppell told Global News.
“Why would we develop our best farmland when there is other marginal land out there that could suit putting a building on it?”
The land is used to grow potatoes, squash, carrots, parsnips and beets.
Because of its sandy soil that allows heavy farm equipment to operate there during the wet early season, crops from the land are among the first vegetables to be harvested anywhere in Canada every year.
“There’s a possibility this land can get lost, and it’s zoned at the municipal level as basically industrial land,” said Tristan Bouwman, the farm’s crop manager.
“If the federal government were to sell it off they could cash in and make good money from selling some of our most prime farmland in all of the province.”
On Monday, the farm is making its case to the Agricultural Land Commission that the property should be added to the Agricultural Land Reserve (ALR), a designation that would bar industrial development.
Supporters have gathered more than 75,000 signatures and were hoping for a large turnout at the Monday hearing.
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The farm has also won the support of several Surrey city councillors.
“We have received hundreds of emails and letters from residents throughout B.C. and Canada indicating their full support for it,” Coun. Linda Annis told Global News.
“This land is hugely important to our food security, not only in the Greater Vancouver area, but throughout British Columbia and Canada … quite frankly it provides most of our early vegetables we buy at the supermarket in early spring.”
Heppell said getting the land into the ALR would be a good first step in its protection, but long-term he’s hoping a covenant can be applied to the property to bar any future use other than farming.
“Will there even be any land to farm, if we are developing our most productive farmland?” he asked.
“You get a lot of purpose from farming and I’ve fallen in love with it. I’m going to be a farmer for the rest of my life.”
© 2023 Global News, a division of Corus Entertainment Inc.
Rising rates have hit the real estate investment trust sector particularly hard over the past year. Several leading advisors and contributors to MoneyShow.com, however, have taken a contrary view on the REIT space and see long-term value for investors seeking both growth and income.
Jimmy Mengel, The Profit Sector
Farmland prices have been going ballistic over the past few years. But buying and maintaining your own farm as an investment is completely out of reach for most of us. That’s why 30% of all farmland in the U.S. is owned by landlords who don’t farm themselves.
With a farmland, it’s as simple as buying stock to gain exposure and safety to the farmland market. Buying into a REIT is much like becoming a landlord. Farmland REITs are rather simple. In one case, the company will acquire the land necessary for farming and lease it to the farmer in a long-term lease.
Farmland Partners (FPI) is a lesser-known REIT that owns nearly 200,000 acres of farmland that it leases to over 100 tenants that grow 26 different crops in 18 states. It collects rent from these projects and earns management fees for 25,000 acres for other farmers.
Over the last three years, Farmland Partners has provided a nearly 32% annualized return. That’s over three times the S&P 500 during that same period and is around four times more than today’s inflation rate. That’s a 110% total return, which doesn’t include the dividend, hovering near a 2% yield.
FPI is a great way to diversify your dividend portfolio with a sector that is known for being resilient against inflation, market dips, and even recessions. Just this month, the world hit a record population of 8 billion. You’d be wise to gain exposure from this very underrated sector.
Marty Fridson, Fridson-Forbes Income Securities Investor
Highwoods Properties (HIW) is an office property REIT that owns, develops, and leases properties in the upscale business districts of Atlanta, Charlotte, Raleigh, Nashville, Richmond, Orlando, Tampa, and Pittsburgh. The company entered the Dallas market in July 2022.
HIW owns and/or manages almost 27 million square feet of property space with more than 1500 customers. Although the company remains growth-oriented, it has maintained a solid balance sheet with ample financial flexibility. More than 60% of the REIT’s net operating income is derived from Raleigh (24%), Nashville (22%), and Atlanta (16%).
The REIT’s solid balance sheet is evidenced by secured debt accounting for only 7.3% of gross assets. HIW reported 3Q 2022 funds from operations (FFO) of $111.6 million or $1.04 per share, up 8.6% from a year ago. FFO topped analysts’ $0.96 estimates, while total revenue of $207.0 million was slightly better than expectations and up 5.9% year-over-year.
This REIT common stock investment is suitable for low- to medium-risk tax-deferred portfolios. Dividends are taxed as ordinary income and have remained stable with steady growth. Buy at $39.00 or lower for a 5.13% annualized yield.
John Buckingham, The Prudent Speculator
Physicians Realty (DOC) is a small-cap health care REIT that acquires, owns and manages properties leased to physicians, hospitals, health care delivery systems and other health care providers. Its properties are typically on a campus with a hospital or strategically located and affiliated with a hospital or physician organization.
The pandemic undoubtedly impacted tenants, but trends remain in the REIT’s favor as the population ages, health providers are consolidating, and the delivery of care is transitioning to the outpatient venue, while nearly 75% of new medical office building construction is off hospital campuses.
And, management says rising construction costs have allowed the company to capture leasing spreads beyond the historical 2% to 3% range without sacrificing quality.
Indeed, 256,000 square feet of DOC’s portfolio was recently renewed at an aggregate re-leasing spread of 8.0%, the highest quarterly mark in the company’s history. Rising rates have impact- ed the share performance of most REITs in 2022, but the 19% slide year-to-date affords a favorable entry point. The dividend yield is a robust 6.2%.
Tim Plaehn, The Dividend Hunter
Starwood Property Trust (STWD) has been one of our portfolio stocks since our very first June 2014 issue; over the years, it has become our largest position. The company has been a tremendously stable dividend payer, and it has been an outstanding stock to add shares during stock market corrections.
A finance REIT whose primary business is the origination of commercial property mortgages, Starwood is one of the largest players in the field, focused on making large loans with specialized terms. The scale gives the company a competitive advantage over banks and smaller commercial finance REITs.
In recent years, Starwood has acquired what is now the largest commercial mortgage servicing firm. Over the last few years, it has also acquired select real estate properties, including apartments, regular office buildings, and medical office campuses. Starwood also has invested in residential mortgage and infrastructure lending.
I view the Starwood dividend as one of the most secure in the high-yield stock space. Starwood Capital, a real estate-focused private equity company with over $60 billion of assets under management, manages the REIT.
Starwood Capital is a 2,200 person global organization, and Starwood Property Trust taps into that reach and expertise to find high-value commercial mortgage prospects and other investments.
Billionaire Barry Sternlicht, as CEO of both Starwood Capital and Starwood Property Trust, has often repeated his commitment to building STWD to sustain its dividend. Sternlicht and the upper management team own more than $100 million worth of STWD shares.
Historically, STWD has been priced to yield between 7.5% and 8.5%. An 8% yield equates to a $24.00 share price. Accumulating shares for less than $20 makes an attractive long-term investment.
Over the last almost-seven years, I have been buying STWD during market corrections and share price pullbacks. My average cost is under $17.00 per share. In addition to our model portfolio, I have a personal long position in the REIT.
I hope you think of STWD as a long-term investment — one with which you will be able to take advantage of opportunities to average down your cost and increase your dividend income stream.
The bear market has created some deals. Stocks overvalued for years are now undervalued. Moreover, dividend yields have risen to the highest in a decade for some stocks. One undervalued stock with a 4%+ yield is Realty Income
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The company develops or purchases commercial real estate and rents to retail chains. Under the net lease agreement, the lease is responsible for the monthly base rent and real estate taxes, property insurance, and maintenance. The average lease duration is about nine years and includes rent escalators. Total revenue was $2,788 million in the trailing twelve months. The current CEO is Sumit Roy.
The REIT is one of the five largest global REITs with properties in the U.S., U.K., and Spain. The company owns about 11,427 commercial properties and leases to ~1,125 clients. Realty Income’s occupancy rate median is 98.2%, much higher than its peers.
The top 10 clients are Walgreens
WBA
DG
DLTR
FDX
Realty Income is infamous as one of the monthly dividend stocks. The firm is also a Dividend Aristocrat with 29 years of consecutive increases. The forward dividend yield is 5.19% above the 5-year average of 4.35%. The REIT has one of the most robust balance sheets compared to its peers at an A3/A- upper-medium investment grade credit rating. Realty Income is undervalued, trading at a price-to-AFFO ratio of approximately 14.7X. This value is below its historical 10-year range.
National Storage Affiliates Trust (NSA) is a self-managed REIT, which was founded in 2013 and specializes in the operation and acquisition of self-storage properties within the top 100 metropolitan areas in the U.S. and Puerto Rico.
The trust owns 915 consolidated self- storage properties in 39 states and Puerto Rico, with 58.1 million square feet. It also manages an additional portfolio of 185 properties owned by its joint ventures. NSA owns a 25% stake in each of its joint ventures.
In the third quarter, NSA grew its revenues 37% over the prior year’s quarter thanks to strong growth in rental rates and a boost from acquisitions. Same-store revenues grew 10.7% thanks to a 13.6% increase in average rental revenue per occupied square foot, partly offset by a decrease in occupancy by 240 basis points.
The REIT grew its FFO per share 26% and narrowed its guidance for its FFO per share in the full year from $2.80- $2.85 to $2.80-$2.82. At the midpoint, this guidance implies 24% growth vs. 2021.
As one of the largest self-storage operators, NSA seems to have unlocked significant competitive advantages. During the last five years, it has achieved growth of same-store net operating income of 9.2%. This compares to 7.4%, 9.0%, 9.0%, and 5.6% of CubeSmart
CUBE
EXR
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Also given its multi-year contracts and its robust performance throughout the pandemic, NSA should perform well during a recession. Nevertheless, due to its short history, the REIT has yet to prove its resilience.
NSA has grown its dividend aggressively throughout its short history, from $0.54 in 2015 to $2.20 this year. It is currently offering a historic high dividend yield of 5.8%. Its payout ratio is elevated, at 78%, but it’s in line with the REIT’s historical average. Also given its decent balance sheet and its reliable growth trajectory, NSA is likely to continue raising its dividend significantly for many more years.
During its brief history, NSA has swiftly grown its financials thanks to strong growth of rental rates and acquisitions of new properties. We expect future growth to continue to be driven by these two factors, with the REIT claiming an acquisition pipeline of 307 properties. We forecast 8.0% growth of FFO per share over the next five years.
Based on expected 2022 FFO per share of $2.81, the stock trades for a price-to-FFO ratio (P/FFO) of 13.5. This is a historic low for the stock, mostly due to higher interest expense amid rising interest rates. However, our fair value estimate for this REIT is a P/FFO of 16.5.
An expanding P/FFO multiple could boost shareholder returns by 4.1% per year. We also expect annual FFO per share growth of 8.0%, while the stock has a 5.8% dividend yield. We expect total returns of 16.9% per year over the next five years.
Agriculture and forestry are South Carolina’s number one industry, having an estimated $46 billion impact on the state every year, according to the South Carolina Department of Agriculture. But what happens when hundreds of thousands of farmers are priced out of the land they need to grow crops? Left unchecked, land conservation non-profit Upstate Forever says it could mean higher food prices and the state’s agricultural economy withering on the vine. Greenville County’s population has more than doubled since the Sandlin family bought Calico Vineyard 50 years ago. The land has been farmed for generations and has both economic and historical significance to the region. “We’ve always wanted to keep this property like it is. Or like it was when we bought it,” said owner Steve Sandlin.But as the years changed the landscape of Travelers Rest, land prices soured as more apartments, houses, and businesses moved to the region and bought up swaths of farmland. “Farmlands are nice big chunks of land that can easily be purchased by developers – they’re already predominantly cleared,” Upstate Forever’s Richard Carr said.And as commercial and residential builds moved in, farmers began getting priced out of expanding their businesses, sometimes forced to make impossible decisions. “Basically, development is putting the squeeze on farmers right now, and even some families are having to make a decision,” said Carr. “Do they pass up significant generational wealth to sell to developers, versus staying in farming in general?”It’s an issue Agriculture Commissioner Hugh Weathers has tried to counter, working with land conservation non-profits like Upstate Forever to protect land for local farmers, legally binding future owners to only use that land to farm. “We have great economies, urban economies, but we are still a rural state for the most part. It is that line where we divide urban and rural that we really need to manage,” said Weathers.”Conservation easements would basically take the development opportunity off that property and keep it affordable. So that farmers could continue to no only work with the land they had but even grow as their operation grows,” said Carr.With the help of funding from the South Carolina Conservation Bank, the Sandlins permanently protected their land with a conservation easement held by Upstate Forever, ensuring their 115 acres will always be used to feed the community.
GREENVILLE COUNTY, S.C. —
Agriculture and forestry are South Carolina’s number one industry, having an estimated $46 billion impact on the state every year, according to the South Carolina Department of Agriculture.
But what happens when hundreds of thousands of farmers are priced out of the land they need to grow crops? Left unchecked, land conservation non-profit Upstate Forever says it could mean higher food prices and the state’s agricultural economy withering on the vine.
Greenville County’s population has more than doubled since the Sandlin family bought Calico Vineyard 50 years ago. The land has been farmed for generations and has both economic and historical significance to the region.
“We’ve always wanted to keep this property like it is. Or like it was when we bought it,” said owner Steve Sandlin.
But as the years changed the landscape of Travelers Rest, land prices soured as more apartments, houses, and businesses moved to the region and bought up swaths of farmland.
“Farmlands are nice big chunks of land that can easily be purchased by developers – they’re already predominantly cleared,” Upstate Forever’s Richard Carr said.
And as commercial and residential builds moved in, farmers began getting priced out of expanding their businesses, sometimes forced to make impossible decisions.
“Basically, development is putting the squeeze on farmers right now, and even some families are having to make a decision,” said Carr. “Do they pass up significant generational wealth to sell to developers, versus staying in farming in general?”
It’s an issue Agriculture Commissioner Hugh Weathers has tried to counter, working with land conservation non-profits like Upstate Forever to protect land for local farmers, legally binding future owners to only use that land to farm.
“We have great economies, urban economies, but we are still a rural state for the most part. It is that line where we divide urban and rural that we really need to manage,” said Weathers.
“Conservation easements would basically take the development opportunity off that property and keep it affordable. So that farmers could continue to no only work with the land they had but even grow as their operation grows,” said Carr.
With the help of funding from the South Carolina Conservation Bank, the Sandlins permanently protected their land with a conservation easement held by Upstate Forever, ensuring their 115 acres will always be used to feed the community.