Business Overview: Farmland Partners Inc. (NYSE: FPI)

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Executive Summary

Farmland Partners Inc. is an internally managed real estate investment trust (REIT) that owns and leases farmland across North America, having elected REIT tax treatment since 2014. Structured as a Maryland corporation operating through its Operating Partnership (a 97.5% ownership interest), FPI is one of only a small handful of publicly traded, pure-play farmland owners in the U.S.

As of year-end 2025, FPI owned and/or managed roughly 71,600 acres across 11 states — down meaningfully from the approximately 141,824 acres (93,500 owned, 48,300 managed across 12 states) it reported at year-end 2024. The reduction reflects an active 2025 portfolio simplification that included selling 60 properties, redeeming preferred units with land, and divesting its Murray Wise Associates brokerage business. FPI matters because farmland is a scarce, historically inflation-correlated real asset class with almost no other scaled, liquid public-market access point for investors.

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1. Core Business Model & How They Work

[ Acquire Farmland ] ➡️ [ Lease to Farm Operators (1-3 yr, advance rent collected pre-planting) ] ➡️ [ Collect Fixed/Variable Rent ] ➡️ [ Layer in Renewable Energy Leases & Ag Loans ] ➡️ [ Recycle Capital via Selective Dispositions ]

FPI's core business is leasing owned farmland to tenant farm operators, generally under one-to-three-year leases with fixed rent (and in some cases variable rent tied to tenant revenue). Critically, most leases require 50-100% of annual fixed rent paid in advance of spring planting, which meaningfully reduces FPI's credit exposure to its tenants. On top of straight rental income, FPI layers in a loan program (secured lending to farmers/landowners), renewable-energy ground leases (solar/wind) on a subset of its land, and limited direct farming of high-value California permanent-crop acreage.

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2. Business Segments

• Farmland ownership & leasing — the core business; rental income from owned acreage across 11 states.
• FPI Loan Program — loans to farmers/landowners secured by farmland, related property, crops, or equipment.
• Renewable energy & non-farm leases — solar/wind ground leases; as of FY2024, 11 farms (about 8,050 acres) had operating or under-construction energy leases, with roughly 207 MW of associated capacity, plus 10 more farms under development options.
• FPI Agribusiness — a taxable REIT subsidiary that directly farms a small amount of high-value California permanent-crop acreage (about 2,100 acres) and provides volume input purchasing for tenants.
• (Formerly) Murray Wise Associates — a farm brokerage/auction business acquired in 2021 and divested in November 2025 for $5.3 million as part of FPI's portfolio simplification.

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3. Portfolio

Crop mix has historically run roughly 60% primary row crops (corn, soybeans, wheat, rice, cotton) and 40% specialty/permanent crops (almonds, pistachios, citrus, avocados, strawberries, edible beans), giving FPI exposure to both commodity-cycle and higher-value specialty-crop economics.

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4. Competitive Landscape

FPI competes for farmland acquisitions against:

• Individual and family farmers — historically the most active class of farmland buyers.
• Institutional investors and funds, including Nuveen Natural Capital, Manulife Investment Management, International Farming Corporation, Ceres Partners, UBS Agrivest, AgIS Capital, and Homestead Capital.
• Other farmland REITs/investors, most notably Gladstone Land Corporation, FPI's closest direct public peer.

                Patient / Below-Market Return <-----------------> Market-Rate Return Required
Private/Illiquid      [Family farmers, family offices]---[Institutional funds]
Public/Liquid                                  [Gladstone Land]------[FPI]

FPI's relative advantage is public-market liquidity and scale combined with farmland-specific underwriting expertise; its disadvantage is that many competitors (particularly family farmers and patient institutional capital) do not require market-rate returns, which caps the cap-rate compression FPI can capture on new acquisitions.

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5. Strategic Strengths & Risks

Strengths

• Advance-rent collection (50-100% of fixed rent before planting) meaningfully de-risks FPI's tenant credit exposure versus a typical commercial landlord.
• Diversified income streams beyond rent — ag lending, renewable-energy leases, and direct farming of high-value CA permanent crops.
• One of very few scaled, liquid public vehicles for farmland exposure, giving it access to public equity and debt capital that most farmland owners lack.
• 2025 simplification (Murray Wise sale, debt paydown from $204.6M to $161.6M, share buybacks) sharpened the focus back to core farmland ownership.

Risks

• Commodity-price and farm-economy cyclicality directly affects tenant profitability and, ultimately, FPI's rent collection and renewal economics.
• Interest-rate sensitivity, given FPI's use of leverage against real property.
• Shrinking scale — acreage fell roughly in half year-over-year through 2025 dispositions, and FY2025 total revenue fell 10.4% to $52.2 million and net income fell 47.6% to $32.2 million, even as AFFO rose.
• Competition from non-return-driven buyers (family farmers, patient capital) limits FPI's ability to acquire new farmland at attractive cap rates.
• History of activist short-seller allegations (2018) that, while ultimately resolved in FPI's favor with a public retraction and settlement, illustrates the governance scrutiny smaller REITs with related-party transactions can attract.

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6. Financial Overview

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7. Summary Conclusion

Farmland Partners offers public-market investors rare, liquid exposure to U.S. farmland — a scarce real asset with structurally advance-collected rent that limits tenant credit risk — but 2025 marked a deliberate contraction: roughly half its acreage was sold or redeemed away, its brokerage subsidiary was divested, and debt was cut sharply, even as AFFO per share improved. The business's durability rests on farmland's long-run scarcity and inflation linkage rather than any operating moat in the traditional sense; the biggest forward risk is that FPI, now meaningfully smaller, must prove it can redeploy capital into new farmland or ag-lending opportunities at returns that justify public-company overhead, in a market still dominated by family farmers and patient capital who don't need market-rate returns.