A Direct Investment in Water and the Food Supply
The world’s farmland is a finite resource, which must meet a vast and growing demand for food and other agricultural products. As a result, agricultural real estate has emerged as a compelling uncorrelated investment, offering the opportunity for stable income, long-term capital appreciation, and protection against inflation. Direct investment in permanent cropland—that is, properties that produce timber, wine, nuts, fruit and other commodities year after year from the same plantings, provides particularly compelling benefits including:
Agricultural land provides a competitive return that is not correlated with financial assets such as stocks, bonds and other types of real estate. Since the value of land tends to increase with overall prices, agricultural investments also provide an inflation hedge, as well as capital preservation. And unlike many alternative strategies, such as hedge funds, cryptocurrency and derivatives, agricultural land is a concrete, real world investment that’s easy to understand.
In good markets and bad, farmland has generated stable, consistent returns over time, delivering value to investors even during periods of economic turmoil. Agricultural real estate outperformed financial assets during the dot.com crash of the early 2000s and the global financial crisis of 2008 and 2009 and it continues to do so during the coronavirus pandemic of 2020.
TRANSPARENCY AND ACCOUNTABILITY
These are direct investments in specific agricultural properties, a hands-on strategy that enables investors to understand in what they are investing, where it is located and who is managing the property.
Being a long-term investor means acquiring underpriced assets. We create value by the development of properties with a low cost basis per acre. The farms are efficient and low cost to operate. We use the newest varieties and high tech irrigation and farming methods. This can reduce annual operating costs. Over the long term, this gives us a margin of safety when it comes to adverse conditions due to changes in price and yields. This long-term view is the basis of our investment decisions knowing that they will pay off in the future. - Mark F. Crawford, Managing Member of Crawford Park Farming Ag
Almond Tree Orchard at Sunrise Courtesy of California Almonds, The Almond Board of California
Why Invest Now?
Supply and demand factors are driving farm prices up.
Expanding cities and suburbs are fast encroaching on prime agricultural land. California loses over 200,000 acres a year to urbanization.
Water is becoming more scarce and highly regulated by government. That has driven values up for properties that have access to water, particularly in water-stressed regions like California.
INCREASING CONSUMER DEMAND
As the world middle class continues to grow, the demand for nuts and fruits will grow with it. The rising trend of consumers seeking a healthy diet will increase consumer demand for nut and plant-based proteins and fresh fruit at over 5% per year.
A BUYING OPPORTUNITY
Lower commodity prices—particularly for almonds—have created buying opportunities for agricultural real estate investors in the California region. An aging farmer population is faced with larger capital requirements in an ever-challenging regulatory environment. This will continue the transition of farmland from individuals to institutions.
Why Invest With Us?
We are investing in farmland that we believe is mispriced, often because of misperceptions about water availability and quality. Water is typically the number one input cost for the farms we invest in, and assumptions about water access are often inaccurate. Our investment process analyzes both the property and its water resources. We validate the value of water rights property by property.
Farming is a very localized business, in which most properties are family-owned and concentrated in local communities. As a result, most owner-operators have no idea how properties are priced outside their immediate area. By contrast, Crawford operates throughout California, comparing water access and property values state-wide to find value. As a result, we attempt to buy properties with abundant water at a lower cost.
We also add value by developing properties, for instance, planting new varieties of trees, upgrading irrigation systems and implementing high tech farming methods that can enhance production and cost-efficiency. Through the Farm Credit cooperative system, we have access to cheap financing (currently around 3.5%) which makes it easier to weather the changes in crop prices and yields.
Our investment process analyzes hundreds of properties all over California to find the best opportunities while local farmers typically look in their respective local areas.
We look for farmland with water access—at least two functioning wells and location within an irrigation district with a sustainable aquifer.
We improve the value of farmland by applying state of the art technology that drives down operating costs and increases productivity. These enhancements include:
- Selecting the newest, most advanced varieties for disease resistance which will out perform existing orchards and increase annual yields.
- Choosing the best root stock for the local properties soil type and weather conditions
- Installing high tech irrigation systems to reduce and prioritize water usage and increase the efficiency of water and fertilizer deliveries
This operational cost efficacy reduction is critical to mitigating the financial impact and price and yield volatility.
Crawford Park AG is a Permanent Crops focused farmland manager. We purchase existing permanent crops or land that can be developed into permanent crops. Permanent crops include almonds, pistachios, wine grapes, citrus, stone fruit, and olives.
DAVIS 190 LLC
190 acres of almond trees near Davis, CA planted 2012. 50% Nonpareil, 25% Carmel and 25% Wood Colony.
Avg Cash Yield:
78 acres of almond trees in Lindsay, CA planted 2016-18. 50% Nonpareil and 50% Monterey.
Avg Cash Yield:
MIDDLE RIVER ALMOND RANCH, LLC
160 acres of flat farmland near Stockton, CA. Almond trees will be planted in Spring of 2021.
Avg Cash Yield:
ROBERTS ISLAND ALMONDS, LLC
157 acres of flat farmland near Stockton, CA. Almond trees will be planted in Fall of 2021.
Avg Cash Yield:
Crawford Park manages:
of farmland assets
acres of land
We care for:
MARK F. CRAWFORD
Mark has 40 years of experience in Asset-based Investments: Real Estate Brokerage, Construction, Entitlements, Property Valuations, Lending and Ownership. In 2017, four Real Estate LLCs formed by Mark were sold.
The average returns were in excess of 20% IRR to the investors. Mark sources the investments, performs the due diligence, evaluates the upside profit potential, and hires the appropriate local managerial staff upon purchase. Mark currently manages $10 million in agricultural properties.
As an Agricultural Business Major, Mark attended California Polytechnic University at San Luis Obispo and Pomona. Mark is a licensed Real Estate broker in California and holds an NMLS license. He lives with his wife, Joanna, in Beverly Hills and on a Cattle and Citrus Ranch near Visalia, CA.
MANAGER / CONTROLLER
Joanna manages the Operations, Finance, and Compliance functions of Crawford Park and the Investment LLCs. From 2011 to 2017, she managed hundreds of multifamily units with a staff of 35 employees and annual cash flow of $5 million. Those assets were remodeled and retrofitted with cash outlays of $10 million. In 2016, she coordinated the $40 million refinancing of these assets with both bank and government- sponsored entries. Joanna manages the Accounting, tax and daily operations for Investors and the Agricultural & Real Estate Assets.
Prior to 2008, Joanna was an SVP/Compliance with Countrywide Home Loans. During her 14-year tenure, her roles included: HMDA, Fair Lending, and Internal Audit. After college, she practiced public accounting at Price Waterhouse. Joanna has a BBA in Accounting from the University of Texas at Austin and is a CPA. She lives with her husband, Mark, in Beverly Hills and on a cattle and citrus ranch near Visalia, CA.
Jake Cutler is a consultant to Crawford Park Farming. He aids in the research and sourcing of appropriate properties. Jake will assist during the purchase, due diligence, and continuing management of agricultural properties.
Jake worked for 8 years for Prudential Agricultural Investments and was responsible for agricultural mortgage lending in California and Arizona. He currently works for CBRE, a global real estate company.
Jake is the third generation of his family to be involved in California agriculture and is actively involved in multiple family farming operations, specializing in the production of almonds, citrus, olives, kiwi, grapes, and cattle in Fresno, Tulare, and San Mateo Counties, California. He holds BS and MS degrees in Agricultural Economics from the University of California at Davis.
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