Farmland Partners has entered into a ground lease agreement with an affiliate of ESA Renewables for approximately 50 acres to be converted into a solar facility.
The 50 acres are currently leased to a local farmer for an annual rental rate of approximately $280 per acre.
Under the terms of the new agreement, the initial annual rental rate will be $750 per acre, subject to annual increases of 1%.
The agreement will initially run for 15-years but has the potential to be extended. However, it also contains certain conditions, including a one-year due diligence period during which the potential tenant may terminate the lease.
The rent payments will start at the onset of construction, which is estimated to be in approximately six months.
Farmland Partners now has three farms with solar leases in North and South Carolina.
Farmland Partners chief executive officer Paul Pittman said: “This North Carolina solar lease further demonstrates the additional upside rent potential we have on our farms.
“We continue to focus on developing supplemental revenue streams for the farms we own in order to increase returns for our stockholders.”
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