Hidden Oaks Vineyard in Clements, Calif., was recently purchased for $3.2 million by FarmTogether Inc. The 102-acre organic cabernet sauvignon vineyard will continue its operations with the new owners overseeing the business management and production of the vineyard.
The Land Advisors Organization's agriculture specialists Quinn Mulrooney and Jonathan Kendall represented the seller Hidden Oaks Vineyard LLC in the transaction. The buyer, FarmTogether, also obtained the property's 2023 crops and well water for future farming needs in the transaction.
"With the value of farmland as an asset class continuing to perform well, we're seeing more investors looking for opportunities in the sector and the newer trend of crowdfunding of farmland investors has really been taking off," said Mulrooney. "In this case, a surge in demand for premium organic grapes and the fertile San Joaquin Valley farm drove pricing and interest from numerous interested buyers."
As the amount of farmland in the U.S. continues to shrink, the farming sector is seeing increased interest from institutional investors. According to the U.S. Department of Agriculture's most recent survey, there were two million U.S. farms in 2022, down from 2.20 million in 2007. Similarly, the acres of land in farms continue its downward trend with 893 million acres in 2022, down from 915 million acres ten years earlier. With the world's population growth increasing food demand, farmland is appealing to institutional investors and family offices seeking to diversify their portfolios.
In a press release announcing the purchase, FarmTogether is described as "a crowdfunding platform." FarmTogether hardly meets our definition of "Crowdfunding" or that of Ivestopedia, which defines crowdfunding as "the use of small amounts of capital from large number of individuals to finance a new business venture.
"Crowdfunding makes use of the easy accessibility of vast networks of people through social media and crowdfunding websites to bring investors and entrepreneurs together, with the potential to increase entrepreneurship by expanding the pool of investors beyond the traditional circle of owners, relatives, and venture capitalists," Investopedia says.
FarmTogether seeks to raise capital for acquisitions from "accredited investors," who must earn at least $200, 000l have a net worth greater than $1 million, excluding the value of a primary residence. Minimum investment on at least one deal, a hickory pecan orchard, is $15,000.