Allocations to farmland investments have grown significantly in the past decade as wealthy individuals, fund managers and institutions are beginning to invest in land across the United States. Billionaire Bill Gates recently became the largest private landowner in the country with a portfolio of more than 269,000 acres of farmland accumulated through Cascade Investments, his family office. Gates is not alone, however, as a wide range of asset managers, from state pension funds to sovereign wealth funds, direct more capital to farmland through direct land purchases and investments in existing funds.
The U.S. farmland market is 2.2 times larger than other U.S. real estate asset classes. Yet, institutional farmland ownership represents less than 1 percent of the more than 300 million acres of land compared to 10 percent to 20 percent institutional ownership across other real estate property types.
Farmland is often priced at levels inconsistent with underlying asset profi