DST Farms, a new Delaware Statutory Trust sponsor focused on investment in U.S. farmland, has launched its first offering, Delta Organic Ag Properties DST, comprised of 1,102 USDA certified organic acres in Mississippi River Delta Region of Southeast Arkansas that grow corn, rice, soybeans and rice.
According to a recent filing with the Securities and Exchange Commission, the offering seeks to raise $26.5 million in investor equity and has a minimum investment of $100,000.
“Unlike commercial real estate and multifamily DST property offerings, farmland DSTs can take advantage of federal crop insurance that provides a minimum annual revenue guarantee, tenant rent for the year is paid in advance, and limited capital investment is needed to maintain the investment,” the company said in a statement. “In addition, the opportunity for grain prices to increase over time allows for investors’ returns to grow even higher.”
The company claims that before its launch, the $3 billion Section 1031 exchange market lacked farmland investment opportunities.
“In examining the Delaware Statutory Trust marketplace, DST Farms saw a gaping hole in the lack of farmland assets for investors to consider. The reality is that farmland investments have traditionally out-performed the stock market and their value has exceeded other property types over the past eighty years,” said Steve Bruere, co-founder of DST Farms.
DST Farms indicated that it will partner with Peoples Company, a land transaction and advisory firm, to source and acquire farmland; provide diligence and investment analysis; develop and execute data strategies; and manage farmland in a sustainable manner.
DST Farms is cofounded by Steve Bruere, Bruce Eisen, and David Muth. Bruere also serves as president of Peoples Company, and Eisen is the founder of Green Energy Advisors LLC.
The company indicated that they are planning additional farmland offerings in the coming months.