Farmland Investments

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Farm Land, Institutional Investors, Real Estate Value, USDA

As demand for food increases farmland has become increasingly attractive to both US and overseas investors. While new buildings can built, land cannot be created and is proving to be a stable long-term investment.

USDA reported farm real estate value (land and structures) was $2.38 trillion in 2014.  Farm land is often rented to local farmers. Owning a number of farms in various locations can increase the variety of crops grown, insuring against one crop experiencing a lower yield.

Investor farms typically grow corn, soybeans, wheat and cotton. Specialty crops are becoming attractive as an investment and specifically blueberry farms are being acquired in Michigan.

According to USDA Land Values Summary (August 2015), farm real estate value (land and buildings) in Michigan has increased 4.3%.

Source: DesMoines Register

Source: USDA

Source: Economic Research Service USDA

Source: CNBC

 

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Commercial Real Estate Outlook and Portfolio Asset

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Commercial Real Estate, Commercial Real Estate Market Outlook, Institutional Investors

According to the NAR’s Commercial Connection, Research Report, the Commercial Real Estate market is looking positive for the rest of the year. Net absorption is expected to increase for all property types with the exception of apartment markets where there is an increased supply. New commercial construction will also grow albeit at a slower rate.

Institutional investment companies once considered Commercial Real Estate an alternative investment, not anymore. It is now the fourth institutional asset along with the traditional three asset classes of stocks, bonds and cash.

Development Magazine of the NAIOP explores this in their Spring 2015 issue. They state that Commercial Real Estate represents nearly 10 percent of a portfolio for institutional investors.

Real Estate provides portfolio diversification and can be an inflation hedge and offer competitive returns.