Land prices rise by eight percent in later part of 2014 according to 2015 Land Markets Survey….

FOR IMMEDIATE RELEASE For additional information contact: Jessa Bertinetti 800-441-5263 jbertinetti@realtors.org

New Land Markets Survey Shows Expected Land Sales Growth in 2015

April 13, 2015 (Chicago, Ill.) – Land prices rose steadily by eight percent in the last part of 2014, with individuals and families accounting for sixty-one percent of all buyers/investors in land sales transactions, according to the 2015 Land Markets Survey, conducted jointly by the REALTORS® Land Institute and National Association of REALTORS®. In addition, the survey revealed that fifteen percent of land purchasers were corporations/partnerships, twenty-three percent were investors, and nine percent were expansion farmers.

The 2015 Land Markets Survey is aimed at developing accurate information on current trends in the land markets and on the general state of land sales. The results are representative of over six hundred land professional respondents from across the United States and Canada.

According to the survey, forty-seven percent of the purchases where individuals/families bought, the land was purposed for farm and ranch (twenty percent agriculture and seventeen percent ranch) and thirty-one percent for recreation. Of those surveyed, expansion farmers purchased eighty-eight percent of land for farm and ranch use (seventy-one percent agriculture and seventeen percent ranch). Investors purchased a diversified portfolio of land including: thirty-three percent agriculture, fourteen percent timber, twenty-one percent development, and five percent commercial. Of the land purchased by corporations, development land accounted for twenty-eight percent, commercial land accounted for twenty-five percent, and timberland accounted for five percent.

Terri Jensen, ALC Advanced, 2015 Institute National President of REALTORS® Land Institute, stated “The outlook appears strong for several land types and locations. The demand from expansion farmers and investors exceeds supply—particularly in the Midwest states. Grassland/ranch land demand and prices continue to be strong.” Close to ninety percent of the respondents expect moderate to stronger sales growth in the first half of 2015, with prices rising at about three percent. The results appropriately correlate to the findings that responding land professionals across the United States primarily focus their practices in agriculture (sixty-three percent), recreation (fifty-five percent), and development (forty-eight percent).

The 2015 Land Markets Survey was based on data collected in March 2015. The survey was emailed to one-thousand REALTORS® Land Institute members and approximately nine thousand five hundred non-members and generated six hundred and nineteen usable responses. The Institute has made the full survey available for free online.

About the REALTORS® Land Institute
The REALTORS® Land Institute is the professional membership organization for real estate practitioners who specialize in land transactions. A 71-year-old affiliate organization of the National Association of REALTORS®, the Institute provides a wide range of programs and services that build knowledge, relationships, and business opportunities for the best in the land business. Through its best-in-class LANDU curriculum, the REALTORS® Land Institute confers its Accredited Land Consultant (ALC) designation to only those real estate practitioners who achieve the highest levels of education, experience, and professionalism. For more information, visit www.rliland.com.

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The best long-term real estate investment: Farmland

SOURCE: http://www.cnbc.com/id/101499945 Richard McGill Murphy, Special to CNBC.com

Investors continue to buy up farmland like this in Bulgaria as a long-term investment plan. Source: Black Sea Agriculture Investors continue to buy up farmland like this in Bulgaria as a long-term investment plan.

From his office on Broad Street in lower Manhattan, Jeff Notaro oversees a modest portfolio consisting mainly of dirt. Specifically, Notaro’s Black Sea Agriculture fund invests in farmland in northeastern Bulgaria, near the Black Sea. The $1.5 million fund buys prime agricultural land and leases it back to local farmers.

Notaro is riding a growth market. Since 2004, Bulgarian farmland has been appreciating at an average annual rate of 19 percent. Yet Bulgarian land is still cheap compared to the United States. The average price per acre for good-quality land is $1,850 in Bulgaria versus $5,000 an acre in Kansas.

Land along the Black Sea coast commands higher prices because it’s especially fertile and also close to deep-water ports. Black Sea wheat land costs $4,300 an acre on average but yields an average of 71 bushels of wheat an acre, compared with 42 bushels an acre in Kansas. “That’s about half the cost per acre on a yield basis,” Notaro said.

The rise in local land prices has been fueled mainly by a worldwide agricultural commodity boom that has driven food prices up by more than 100 percent since 2003, according to the Food and Agriculture Organization of the United Nations (FAO).

“More people need to get into farming; otherwise, we won’t have any food,” said commodity investor Jim Rogers, who launched the international Quantum Fund with George Soros in the early 1970s and went on to create the Rogers International Commodities Index, which tracks the performance of numerous commodities in global markets, ranging from agriculture to metals and energy products.

Rogers and Notaro belong to an increasingly active community of farmland investors hoping to profit from the world’s growing need for nourishment. “I’m still wildly optimistic about the future of agriculture worldwide,” said Rogers, who has served as an advisor and as a director to companies that hold farmland in Australia, Brazil and North America.

The outlines of the investing case for farmland are well known at this point. The global population is expected to peak at slightly more than 9 billion by 2050, up from 7 billion today. On a per capita basis, the FAO projects that the amount of arable land available will decline steadily over the next few decades, from 0.218 hectares per person today to 0.181 hectares per person in 2050.

On the demand side, much of the growth in population and food consumption will occur in the developing world. As income levels rise in developing countries, consumers there are consuming more meat. Livestock production consumes massive quantities of grain and water, spurring farmers to boost both crop yields and land under cultivation.

Soaring demand for biofuels is another significant demand factor. In the U.S., for example, ethanol production accounts for 23 percent of total corn utilization, according to the Renewable Fuels Association.

Average U.S. corn prices tripled between 2005 and 2012, from $2 a bushel in 2005 and 2006 to $6.22 a bushel in 2011 and 2012. The price surge was partly caused by a rising demand for ethanol, along with other factors, including flooding and drought, higher prices for inputs like fuel and fertilizer, rising demand for meat, and upward movement in commodity markets.

In turn, rising agricultural commodity prices have driven a 128 percent rise in average Midwest farmland values over the past decade, from $1,270 an acre in 2003 to $2,900 an acre in 2013, according to USDA figures.

(Read more: America in 25 years: Here’s what to expect)

The world’s insatiable appetite On the supply side, crop yields have been leveling off since the dramatic advances of the last few decades, starting with the Green Revolution that transformed agriculture in China, India and elsewhere in the developing world from the 1960s onward. Today 40 percent of global wheat land is experiencing either flat or declining yields, according to a 2012 article in the journal Nature Communications.

In China, local scientists recently warned that smog levels around the country have risen so high that they are blocking natural light, potentially impeding photosynthesis and creating conditions that resemble nuclear winter.

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Future of farming is leasing not ownership. Source: Beyond Agronomy News Publisher & Editor Steve Larocque / Executive Editor Vanessa Larocque

What is your farm’s value proposition?

There was a time when purchasing land was part of a farm’s growth strategy. That strategy is quickly changing as land values increase and demographics shift. Today, land is trading well above its capacity to provide a return on investment through agriculture. At the same time, we’re now seeing the first generation of children removed from the farm who now own the land assets. In addition, we now have more corporate ownership of lands, those who have no ties to the land or our country.

First, the reason land leasing makes more sense here is simple economics. Land values in my area are roughly $2,600 acre and rising. I could lease that land for $70.00 an acre or 2.7% of its value. To buy 1,000 acres of land with 25% down at 5% on a 25-year mortgage it would cost me $146.00 an acre to cash flow before I put a seed in the ground. That’s twice the value of land rent plus the capital tied up in the $520,000 down payment.

Secondly, we have started to see a shift in land ownership where parents in their 70-80’s are passing down the family farm to be managed by the children. The children may or may not know who is farming their land and may not even live near the farm they now own and manage. The tenants go from a strong relationship with the owners to none in a heartbeat and it’s a very uneasy feeling. In the case where the land is sold, we are starting to see more outside investment in farmland, so once again, the relationship starts at ground zero.

We know that leasing more land than you own is the new model, so how do you reduce the risk of losing that land with new ownership? How do you attract those owners as someone they would like to lease land to? Simple, you offer a better value proposition than your competitor. Competing on cash rent alone is a losing, short-term strategy so it’s time to find out what corporate farms and the younger generation wants from a tenant.

When you look at the mission statements of corporate or large family owned farms with international footprints, they focus on three things:

1) Social 2) Economic 3) Environmental

The first pillar is a social responsibility. What are you doing to make your community better? How do you treat your employees and the people you deal with? Are you just a farm who crops land around a community or do you engage that community with your brand by sponsoring sporting events and supporting local businesses? Ask yourself this. What would your employees or people in the community say about you and your farm? The answer should tell you if you need help in this area or not.

The second pillar is economic. Do you employ the best farming techniques available today? Is your farm team engaged and pushing efficiencies and productivity higher? Can you prove it? How do you compare against the area average? If you farm like everyone else, then what sets you apart?

The third pillar is a key driver in almost every farm mission statement and that is environment. Though we don’t talk about it much in Western Canada, farmers do many things that are environmentally positive like no-till farming, less cultivation, few equipment passes, less fuel, smaller carbon footprint, etc. Take it a step further and consider harnessing a wetlands project or creating a project by leasing a site to promote wildlife or biodiversity on your farm. It may sound odd to have this in place but if your new landlord is from outside North America, they are going to ask about your environmental stewardship plan or projects.

The reality is, demographics point to a more removed type of landowner. In order to remain competitive and reduce the risk of losing land to owners who don’t know you, you have to sell your story. The future is not about who can pay the highest cash rent. It’s about landowners partnering with the right farms who tick the right boxes. I suggest we all have a sit down and plan out how that looks on your farm. SL

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CPP, Canada Pension Plan investing in Saskatchewan Land…..

CPP buying company’s farmland portfolio in Saskatchewan Dec 12, 2013 6:14 PM – 0 comments TEXT SIZE By: Euan Rocha and Rod Nickel TORONTO/WINNIPEG | REUTERS Alberta, Crops, Markets The Canada Pension Plan Investment Board (CPPIB) said Thursday it had agreed to acquire the assets of Assiniboia Farmland, a fund that owns and manages a large portfolio of farmland in Saskatchewan, for about $128 million.

CPPIB, one of Canada’s top pension fund managers with more than $192.8 billion in assets under management, said Regina-based Assiniboia’s diversified portfolio consists of 115,000 acres of farmland that produce crops such as wheat, barley and canola.

The existing management team of the fund, which was created in 2005, will continue to manage the land portfolio, said CPPIB.

“We have always said that we would sell into a rising market and not wait until after the farmland market had peaked to create a liquidity opportunity for investors,” Doug Emsley, president of the Assiniboia Farmland partnership, said in a release Thursday. “The timing has culminated in an excellent selling opportunity for the partnership.”

Sovereign wealth funds and large pension funds like Canada’s CPPIB, seeking long-life revenue generating assets, are making a number of big bets in physical assets like farmland and forests, along with investments in ports, hydro-electric power projects and other such assets.

Last year, CPPIB launched its agriculture investment program which is initially focusing on farmland opportunities in Canada, the U.S., Australia, New Zealand and Brazil.

This is CPPIB’s second investment in farmland since setting up its agriculture investment program. Last year, CPPIB made its first foray in the sector, buying a large parcel of land that is spread across different parts of the U.S.

“Agricultural land is an important asset class for us,” Andre Bourbonnais, CPPIB head of private investments, said in a phone interview. “Such investments align well with CPPIB’s long-term investment strategy, while further diversifying our portfolio.”

Canadian farmland values have risen steadily over the past decade, with the average value jumping 10 per cent during the second half of 2012, according to the latest data from Farm Credit Canada (FCC), the country’s biggest agricultural lender.

The jump was the largest half-year increase measured by FCC since it began reporting on farmland values in 1985, coming the same year that U.S. corn prices rocketed to an all-time high.

Population growth in developing countries like China and India, and a move to higher-protein diets, have boosted demand prospects for grains and oilseeds.

Bourbonnais noted that farmland is an attractive asset class that has historically delivered stable, risk-adjusted returns. He also highlighted that the global outlook for agriculture in general is positive due to increasing demand for food products.

Western Canada this year produced the region’s biggest-ever wheat and canola crops, and Saskatchewan is the largest provincial grower of both. Canada is usually the world’s second- or third-largest wheat exporter and the biggest canola shipper.

Soaring land prices

Canada is not the only major crop producer where farmland prices have soared.

In the U.S., prices of Iowa farmland set a new record in 2013 for the fourth year in a row as farmers paid top dollar. But most land brokers and industry specialists there expect weakness ahead due to falling crop prices, an Iowa State University researcher said on Wednesday.

A study last year argued that the amount of land needed to grow crops worldwide is at a peak, and a geographical area more than twice the size of France will be able to return to its natural state by 2060 as a result of rising yields and slower population growth.

Bourbonnais, however, said CPPIB is comfortable with investing in the area, despite some such concerns in the market.

“The macro drivers, quite frankly, support our investment thesis,” he said. “We view this as a secular growth story.”

In 2009, investment firm Sprott Resource Corp. created One Earth Farms on land across Saskatchewan and Alberta that it leases from aboriginal bands and private landowners

Saskatoon-based One Earth now bills itself as one of Canada’s largest farms, growing grains and oilseeds and raising cattle.

The average Canadian farm grew to a record size in 2011, and the number of farms shrank to a record low, according Canada’s most recent census data.

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Farm Investment with 15% + possible annual return

Hog Farm Investment, barns are managed and leased to Contractor, Owners to provide management/ barns / Labor / Utilities good annual returns: It features: – quarter section land – decent house with garage – automatic power standby unit in heated shop, along with good skid-steer loader – three finisher barns, with capacity of 5760 hogs (Contractor numbers). These barn have been completely renovated and are in really good shape. – Contract – which pays between $237,600 to approximately $260,000 per year. (depends on performance bonuses) – ROI can be over 15% – immediate cash flow return – Contractor pays $19,800 monthly – there will likely be continued good interest in good finisher barns, as many larger producers are looking to bring weaners home from U.S. – Coop water, plus two wells supply good quality water – Qualified staff (husband-wife team) in place to continue operation of farm. All this for only $1,050,000-.

Please Note: Returns Calculated before depreciation on buildings

Ben Van Dyk Real Estate Centre 403.393.4040 Lethbridge and District Association of REALTORS® Canadian Commercial Council of REALTORS®. RLI – Realtors Land Instituut CIPS – Certified International Property Specialist benvandyk.com Realestatecentre.ca Farmrealestate.com Farmfinders.com Rentland.com ben@realestatecentre.ca

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Rural Housing Project cash returns 11% +

Rural Housing project showing 11% + returns with property management in place, great cash flow project for investors. Total of 25 rental units. These units were all built between the years 2008 – 2012. This investment is essentially an inactive investment, as full-time rental management is in place. The rental market has proven very strong within the past 2 years in Nobleford, as occupancy rate of completed units to date has been well over 90%. Ben Van Dyk Real Estate Centre 403.393.4040 Lethbridge and District Association of REALTORS® Canadian Commercial Council of REALTORS®. RLI – Realtors Land Instituut CIPS – Certified International Property Specialist benvandyk.com Realestatecentre.ca Farmrealestate.com Farmfinders.com Rentland.com ben@realestatecentre.ca

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Invest in Land

Several Investment parcels with 4% + Cash returns in addition to land appreciation values in over 40 year averages 7 % annual average increase. Parcels starting at $385,000 – $1,375,000 in various locations. Managed ownership/farm & land lease is available.

Ben Van Dyk Real Estate Centre 403.393.4040 Lethbridge and District Association of REALTORS® Canadian Commercial Council of REALTORS®. RLI – Realtors Land Instituut CIPS – Certified International Property Specialist benvandyk.com Realestatecentre.ca Farmrealestate.com Farmfinders.com Rentland.com ben@realestatecentre.ca

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Paydirt: Investing in land

Paydirt: Investing in land, Published by http://www.moneysense.ca/invest/paydirt-investing-in-land by Romana King

Canadian cities are growing fast. If you invest in the right land before the developers do, you could make millions.

Twenty years ago, Anne Schmidt thought the 50 acres of land she lived on wasn’t good for much. Her scrubby plot mainly served as a buffer between her quaint farmhouse and the rapidly-growing suburbs of nearby Barrie, Ont. Zoned for rural development, she and her then-husband knew the plot wasn’t even good farmland. But there was enough room for their two Ford pick-up trucks and plenty of time to consider how one day they might make the most of it by building their dream home.

So you can’t blame Anne for being caught off-guard when a housing developer came knocking 15 years ago offering her an astounding $600,000 for 40 acres of her land. Almost as suddenly as he appeared, the deal fell through. But Anne realized that her land wasn’t good for nothing after all: Barrie had become one of Canada’s fastest-growing cities and it was only a matter of time before the developers came knocking again. The only barrier? That her land wasn’t zoned for housing development.

Today, in her mid-50s, Anne has almost completed the long, complicated task of rezoning and selling off 40 acres of her land. She didn’t expect that it would take more than a decade to accomplish, but she has no regrets. After all, she’s right on the verge of every land investor’s dream payoff. When she completes the sale in a couple of years she expects to clear more than $3 million before costs.

For many people, land is the ultimate investment. As the saying goes, they’re not making any more of it. Even before the last spike was driven home in Canada’s transcontinental railroad in 1885, savvy speculators were trying to hit paydirt by purchasing cheap land with lots of potential, then selling it for a tidy profit when demand grew.

But investing in land isn’t always a walk in the park. As anyone who’s been tempted by swampland in Florida can tell you, for every legitimate potential investment, there are dozens of unwise gambles and outright scams. The key to making money is to know exactly what to look for when you’re choosing your investment, as well as the steps you need to take to turn a worthless piece of land into a gold mine (sometimes literally).

If you’ve ever wondered about whether you too could make money investing in land, read on. We’ll tell you about five key strategies for making it work: flipping land, developing it yourself, buying an infill property, renting it out, and exploiting its natural resources. Just as importantly, we’ll tell you everything you need to know to avoid getting suckered into a bad deal.

Read Paydirt: Make money while you wait

A plot gone wrong

In the late 1980s Toronto was in the midst of a housing boom and three local businessmen figured they had a surefire scheme to make millions. The trio of investors paid $2.2 million for a plot of land at 31A and 33 Parliament St., on the east side of the city’s downtown core. The property market was white-hot and their intention was to cash in by immediately flipping the land to a housing developer, who would then go through the process of rezoning the property from industrial to residential development. Advertisement

But what Michael Kilbride, Norman Rothberg and Hollace Wong didn’t realize was that their plot was badly contaminated. An auto wrecker had once operated on the property and empty oil drums and other hazardous waste were still scattered about. Quickly, the syndicate of investors learned that the environmental hazards contained in their property made it virtually unsellable. Worse, as they considered their options, the local real estate market peaked and by 1992 it was in free fall. By that point, they couldn’t even give the land away. They spent the next eight years and tens of thousands of dollars in a legal battle. In the end each walked away with a massive loss.

The maneuver Kilbride, Rothberg and Wong attempted was the classic land flip. You buy up a piece of raw, undeveloped or under-developed land, then flip it fairly quickly to a developer for profit. But while it sounds simple, land flipping is fraught with risks and complications.

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Farmland boom doesn’t look like a bubble

A current news story on the website from St. Louis Post-Dispatch

BY DAVID NICKLAUS • dnicklaus@post-dispatch.com > 314-340-8213

Even as homeowners and commercial landlords count their losses from the great real-estate bust, Midwestern farmers are experiencing the biggest property boom in a generation.

The rapid run-up in land values is bound to make some people nervous, especially older farmers who remember how property values collapsed during the farm crisis of the 1980s. Farm economists, though, don’t yet see signs of a land-price bubble.

Even by, say, Miami-condo-market standards, last year’s farmland appreciation was eye-popping. The Kansas City Federal Reserve Bank said recently that land prices jumped 25 percent across the Great Plains, while the Chicago Fed reported a 22 percent increase in the heart of the corn belt.

Economists at both banks said the increase was the biggest since the 1970s. Jason Henderson, a vice president at the Kansas City Fed, said land values were driven up by two things: low interest rates and high crop prices.

Corn brings almost 90 percent more than it did three years ago, while soybeans have risen 45 percent, boosting the income that farmers expect to earn from their land. Low interest rates let them borrow cheaply to expand, while also dimming the appeal of alternative investments, such as bonds or bank CDs.

If commodity prices stay where they are, or even decline a bit, today’s land values aren’t hard to justify. “Some call it a new era,” said David Oppedahl, a business economist at the Chicago Fed. “It’s not that we will always be at today’s prices, but the thinking is that the volatility is moving around a higher average, to a higher plateau. That changes things for farmers.”

The U.S. Agriculture Department projects that corn prices will average $4.50 a bushel over the next decade, down from $6.40 now but well above the $2-to-$2.50 range that was common for much of the 1990s and early 2000s.

Pat Westhoff, co-director of the University of Missouri’s Food and Agricultural Policy Institute, also predicts that crop prices will retreat a little from the record levels of 2010 and 2011. “I don’t think it’s enough to cause a collapse, but it should be enough to slow down the surge in farmland values that we’ve seen,” he said.

Today’s farmland boom differs from the housing bubble in a couple of important ways: It’s not fueled by debt, and farmland hasn’t yet attracted many speculators.

“Investors don’t seem to be purchasing much, because farmers have been able to outbid most of them at the auctions,” Oppedahl said. “There has been some investor interest in the sector, but it’s not a real big phenomenon.”

As for debt, both farmers and bankers seem to remember the harsh lesson of the 1980s, when overleveraged landowners lost their farms to foreclosure. Henderson says debt levels, as a percentage of farm assets, are at a record low.

“As long as farmers don’t have a lot of debt on their books, they should be able to withstand a correction in farmland values,” he added.

Not that anyone expects that correction. Certainly the supply of rich Midwestern soil isn’t getting any larger, and in fact the economists say that relatively little land changes hand each year. Meanwhile, demand for the crops grown on that land continues to grow, driven by the U.S. biofuels industry and by increased consumption in places like China.

The land-price boom of 2011 may not be repeated anytime soon, but as long as those fundamentals of supply and demand remain in place, you won’t hear farmers calling it a bubble.

Read more from David Nicklaus, who is the business columnist for the Post-Dispatch. On Twitter, follow him @dnickbiz and the Business section @postdispatchbiz.

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Farm & Land Investment

SOLD

Farm/land investment 2- 1/4 sections southern alberta with surface revenue, total income annual approximately $95,000 (lease/rental/surface revenue) asking $1,850,000 good soil, close to town. Great investment property with solid tenants, can be leased long term, more land available.

Contact:

Ben Van Dyk
Real Estate Centre
403.393.4040
Lethbridge and District Association of REALTORS®
Canadian Commercial Council of REALTORS®.
RLI – Realtors Land Instituut
CIPS – Certified International Property Specialist
benvandyk.com
Realestatecentre.ca Farmrealestate.com Farmfinders.com Rentland.com
ben@realestatecentre.ca

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