DST Farmland Sponsors the Launch of a Farmland Delaware Statutory Trust Investment Opportunity Through Broker Dealer, AcreTrader

DST Farmland has formally launched Central Washington Farms DST through the AcreTrader platform. DST Farmland enables Section 1031 exchange investors to engage in farmland investment opportunities that have the potential to deliver above market returns and long-term capital appreciation, while simultaneously mitigating investment risk and implementing sustainable land management and farming practices. Before DST Farmlands’ launch, the $9 billion Section 1031 exchange market entirely lacked farmland investment opportunities.

Farmland DSTs are lower-risk with potentially high upside in terms of annual returns. Unlike commercial real estate and multi-family 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 additional capital investment is needed to maintain the investment. In addition, the opportunity for grain prices and yields to increase over time allows for investors’ return potential to increase.

“In examining the Delaware Statutory Trust marketplace, DST Farmland 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,” Dave Muth, Managing Director of DST Farmland said. “With DST Farmland, Section 1031 investors will find something quite rare in the DST marketplace: an asset with historically consistent long-term appreciation, high potential upside for annual return with crop price and yield increases, limited downside risk with crop insurance revenue guarantees, low to negative correlation with public equities, and high correlation with inflation.”

A Delaware Statutory Trust (DST) is a single purpose entity that is qualified for Section 1031 real estate exchanges. DST investment vehicles provide investors with an opportunity to:

  • 1031 exchange into replacement properties while deferring eligible gains on the sale of previously owned assets;
  • own high-quality farmland assets that are professionally managed; and
  • generate annual income and premium appreciation.

As part of Section 1031 exchanges, individual investors receive shares in the DST Trust. The property is owned and professionally managed by the DST Trust and is leased triple net to a single Master Tenant. Income can be distributed monthly, quarterly or annually. When the farmland property is sold, any capital distributions to investors are expected to remain eligible for subsequent Section 1031 exchanges.

DST Farmland has launched Central Washington Farms DST, located in Grant and Adams Counties, Washington. Central Washington Farms DST boasts 2,207 acres located in the Columbia River Basin of Washington State. The Farms include approximately 2,115 tillable acres m/l that are sub leased on a cash rent basis to experienced local row crop farm operators. This portfolio offers diversification between dryland and irrigated cropland as well as crop production systems. The Central Washington Farms DST is available for investment through DST Farmland’s broker dealer, AcreTrader Financial, LLC. Investors interested in learning more about the offering can visit AcreTrader for more information.

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