What's Happening?
FarmTogether has introduced its first avocado-focused investment, the Riviera Avocado Grove, located in the coastal foothills of Santa Barbara County, California. This region is renowned for its ideal growing conditions for avocados, supported by a multi-source
water system. The investment is structured as a 10-year hold, aiming for a 10.5% net internal rate of return and a 9.3% net cash yield. It is available as both a crowdfunded investment and a tenancy-in-common structure, potentially eligible for 1031 exchanges. The launch is timely, given the rising U.S. avocado consumption and the constraints on domestic supply due to geographic and water limitations. FarmTogether's investment is managed by a local operator with expertise in California's permanent crops.
Why It's Important?
The introduction of the Riviera Avocado Grove investment by FarmTogether highlights the growing demand for avocados in the U.S. and the challenges faced by domestic producers. With limited scalable acreage in California and increasing reliance on imports, this investment represents a strategic move to capitalize on the high demand and constrained supply. The focus on high-quality avocado assets in coastal California is expected to generate significant income and long-term value, benefiting investors and supporting local agricultural infrastructure. This development underscores the importance of innovative investment strategies in addressing supply chain challenges in the agricultural sector.
What's Next?
FarmTogether plans to continue expanding its farmland investment platform across various crop types and geographies, with a focus on high-value permanent crops in key U.S. growing regions. The firm's approach emphasizes disciplined underwriting, operational partnerships, and long-term asset management. As the demand for avocados continues to rise, FarmTogether's investment strategy may influence other agricultural investment firms to explore similar opportunities, potentially leading to increased domestic production and reduced reliance on imports.
