Farmland is one of the oldest stores of value, and farmland REITs bring it into the public, passive-investing world. A farmland REIT owns agricultural land and leases it to farmers, earning lease income while the land itself appreciates over time. The appeal for many investors is twofold: farmland values have historically tracked inflation, and farmland returns have shown low correlation with stocks and bonds, making the sector a potential diversifier and inflation consideration. Within farmland, there's an important distinction between crop (annual row crops like corn and soybeans) and permanent cropland (orchards, vineyards, and nut trees), which differ in value, income, and time horizon. The sector also carries real risks tied to weather, water availability, and commodity prices. This guide explains what farmland REITs own, why land values track inflation, the crop-versus-permanent distinction, the weather and commodity risks, and how to evaluate the sector. Demand, return, and outlook statements here are general and non-promissory — past performance doesn't guarantee future results, and you should verify current conditions; this is educational information, not investment advice.
What Farmland REITs Own
A farmland REIT owns agricultural farmland and leases it to farmers who actually grow the crops. The REIT is the landowner, not the farmer — it doesn't plant, harvest, or sell crops itself; instead, it earns income by leasing its land to operating farmers under lease agreements. This separation is central to the model: the REIT collects rent (and, in some structures, a share of crop revenue) while the farming risk and operations sit with the tenant farmers. The REIT's return comes from that lease income plus appreciation in the land's value over time.
The portfolios farmland REITs assemble can span many farms, regions, and crop types, giving diversification across geography and agriculture. The lease structures vary: a cash lease provides a fixed rent regardless of the harvest (steadier income, less upside), while a crop-share lease ties the REIT's income to a portion of the crop's value (more variable, with upside in strong years). Water rights and land quality are integral to what the REIT owns — productive farmland with secure water is more valuable and more leasable than marginal land.
So a farmland REIT owns agricultural land and leases it to farmers, earning lease income plus land appreciation while farming operations and risk sit with the tenants. So understanding what it owns frames the sector. What farmland REITs own — agricultural land leased to operating farmers (not farmed by the REIT itself), earning lease income (via cash or crop-share leases) plus land appreciation, with land quality and water rights central to value — distinguishes the landowner model from farming itself. The REIT owns the land; farmers take the operating risk. Understanding what these REITs own frames everything else. A farmland REIT owns agricultural land leased to farmers, earning lease income plus land appreciation while farming operations and risk sit with the tenants — with land quality and water rights central to value.
Inflation-Linked Land Values
A central part of the farmland thesis is that land values have historically tracked inflation. Farmland is a real, scarce, productive asset, and over long periods its value has tended to rise with the broader price level — when the prices of the crops it produces and the inputs it requires rise, the income-generating capacity and replacement value of the land tend to rise too. This is why farmland is often discussed as a potential inflation consideration: a hard asset whose value and income have historically kept pace with rising prices.
Equally important to many investors is farmland's historically low correlation with stocks. Because farmland returns are driven by agricultural fundamentals — land productivity, crop demand, and lease income — rather than by the same forces that move equity markets, farmland has tended to move somewhat independently of stocks and bonds. That low correlation is what makes the sector a potential portfolio diversifier: an allocation whose ups and downs don't necessarily coincide with the rest of a portfolio. As always, these are historical tendencies, not guarantees — correlations and inflation relationships can shift, and conditions vary.
So inflation-linked land values and low correlation with stocks are the sector's defining appeals: farmland is a hard asset that has historically tracked inflation and diversified portfolios. So these drivers anchor the thesis. Inflation-linked land values — farmland being a real, scarce, productive asset whose value has historically tracked inflation, combined with returns historically showing low correlation with stocks and bonds (driven by agricultural rather than equity-market forces) — underpin the sector's inflation-consideration and diversification appeal, though these are historical tendencies, not guarantees. Inflation tracking and low correlation are the anchors. Understanding them explains the sector's role in a portfolio. Farmland values have historically tracked inflation and shown low correlation with stocks, making the sector a potential inflation consideration and diversifier — historical tendencies, not guarantees.
Farmland's appeal is quietly contrarian: a hard, scarce asset that has historically risen with inflation and marched to a different drummer than the stock market.
Crop vs. Permanent Cropland
Within farmland, a key distinction is between crop (annual) cropland and permanent cropland. Annual row-crop land grows crops that are planted and harvested each year — corn, soybeans, wheat, and similar staples. This land is flexible (the crop can change season to season), tends to have lower per-acre value and income, and carries the year-to-year variability of planting decisions and commodity prices. Row-crop farmland is the larger, more liquid, and more commoditized segment of the market.
Permanent cropland grows perennial crops on long-lived plantings — orchards (apples, citrus), vineyards (grapes), and nut trees (almonds, pistachios). These plantings take years to mature and then produce for many years, so permanent cropland tends to have higher per-acre value and income but a longer time horizon and less flexibility (you can't easily switch what a mature orchard produces). Permanent crops can command premium prices, but they also require more capital and carry crop-specific risks. So the two segments offer different value, income, and risk profiles, and many farmland REITs hold a mix of both.
So crop versus permanent cropland is a core distinction: annual row crops are flexible, lower-value, and commoditized, while permanent cropland is higher-value, higher-income, longer-horizon, and less flexible. So this distinction shapes the sector. Crop versus permanent cropland — annual row-crop land (corn, soybeans, wheat: flexible, lower per-acre value and income, more commoditized) versus permanent cropland (orchards, vineyards, nut trees: higher value and income, longer horizon, less flexible, more capital-intensive) — is a core distinction that shapes a farmland REIT's value, income, and risk profile. Row crops are flexible; permanent crops are premium but committed. Understanding this distinguishes farmland portfolios. Farmland splits into annual row crops (flexible, lower-value, commoditized) and permanent cropland (orchards, vineyards, nut trees — higher-value, longer-horizon, less flexible), each with a different profile.
Weather & Commodity Risk
Farmland's returns are tied to agriculture, so the sector carries weather and commodity-price risks that other real estate doesn't. Crop prices fluctuate with global supply and demand, and when commodity prices fall, farmer tenants earn less — which can pressure crop-share income directly and, over time, affect farmers' ability to pay cash rents and the value of the land itself. Conversely, strong commodity prices support farm incomes, rents, and land values. So the agricultural commodity cycle is a fundamental driver of, and risk to, farmland returns.
Weather and water are the other key risks. Drought, flood, frost, and other weather events can damage crops and reduce a season's output, affecting tenant income and, for crop-share leases, the REIT's income directly. Water availability is especially critical: in many regions, secure water rights and reliable irrigation are essential to farmland's productivity and value, and water scarcity is a growing concern in some areas. These risks are partly mitigated by diversification (across regions, crops, and lease types) and by cash leases that fix the rent regardless of the harvest, but they can't be eliminated. Conditions vary by region, so verify current factors.
So weather and commodity risk are the sector's defining hazards: crop prices, weather events, and water availability all affect farmer income, lease revenue, and land value. So weighing these risks is essential. Weather and commodity risk — fluctuating crop prices affecting farmer income, rents, and land values; weather events (drought, flood, frost) damaging crops and reducing output; and water availability being critical to productivity and value — are the agricultural hazards that distinguish farmland from other real estate, partly mitigated by diversification and cash leases but not eliminable. Commodities, weather, and water are the core risks. Understanding them is essential to weighing the sector. The key risks are weather and commodity: crop prices, weather events, and water availability affect farmer income, lease revenue, and land value, partly mitigated by diversification and cash leases but not eliminated.
- Farmland REITs own agricultural land leased to farmers, earning lease income plus land appreciation while farming risk sits with the tenants.
- Farmland values have historically tracked inflation and shown low correlation with stocks, making the sector a potential inflation consideration and diversifier.
- Crop (annual row crops) and permanent cropland (orchards, vineyards, nut trees) differ in value, income, time horizon, and flexibility.
- The key risks are weather, water availability, and commodity prices, which affect farmer income, lease revenue, and land value — partly mitigated by diversification.
Evaluating Farmland REITs
Evaluating a farmland REIT starts with land quality and water rights. Investors look at the productivity of the land (soil quality, growing conditions, and historical yields), the security and adequacy of water rights and irrigation, and the regions in which the land sits, since climate, water, and agricultural strength vary widely by area. Productive land with secure water is more valuable, more leasable, and more resilient to weather and water risk — so land and water quality are the foundation of the analysis.
From there, the analysis turns to the lease structure and tenants. Whether the REIT uses cash leases (steadier income) or crop-share leases (more variable, with upside), the creditworthiness and quality of the tenant farmers, and the crop mix (row crops versus permanent crops, and diversification across both) all shape the income profile and risk. Investors also weigh the standard REIT metrics — FFO, AFFO, and NAV — leverage, and the structure (traded versus non-traded), all within a suitability review for non-traded offerings, and consider how the land-appreciation component fits alongside lease income.
So evaluating farmland REITs means weighing land quality and water rights, lease structure, tenant farmers, region, and crop mix, alongside the usual REIT metrics and structure. So this framework guides analysis. Evaluating farmland REITs — assessing land quality and water rights (productivity, soil, irrigation security), lease structure (cash versus crop-share), tenant-farmer quality, region, and crop mix (row versus permanent and diversification), plus FFO/AFFO/NAV, leverage, and structure within a suitability review — frames a disciplined look at the sector, balancing lease income against land appreciation. Land, water, leases, and tenants are central. Understanding this framework guides analysis. Evaluate farmland REITs by land quality and water rights, lease structure (cash vs. crop-share), tenant farmers, region, and crop mix, alongside FFO/AFFO/NAV, leverage, and structure.
In farmland, two questions sit beneath everything else: how good is the dirt, and who controls the water — because productivity and water security drive both the income and the land value.
Return and Diversification Profile
Pulling the threads together, farmland REITs present a distinctive return-and-diversification profile. The return comes from two sources: lease income (the rent farmers pay, distributed as dividends) and land appreciation (the rise in farmland value over time). Combined with farmland's historical tendency to track inflation and its low correlation with stocks and bonds, this gives the sector a role as a potential portfolio diversifier and inflation consideration — a hard-asset allocation whose drivers differ from those of mainstream financial markets.
The qualifiers are important. Farmland income can be modest relative to other income-oriented REITs (much of the return may come from appreciation, which isn't paid out currently), and the sector carries real weather, water, and commodity risks that can affect both income and land value. Like all REITs, farmland REITs carry market, interest-rate, leverage, and distribution risks — distributions aren't guaranteed, and share prices or NAVs can fluctuate. The inflation-hedge and diversification characteristics are historical tendencies, not promises; correlations and inflation relationships can shift, and conditions vary by region and crop.
So the return-and-diversification profile combines lease income and land appreciation with inflation-tracking and low-correlation characteristics, tempered by agricultural risks and ordinary REIT risks. So this balanced view frames expectations. The return and diversification profile — lease income plus land appreciation, combined with farmland's historical inflation-tracking and low correlation with stocks (a potential diversifier and inflation consideration), tempered by modest current income, weather/water/commodity risks, and ordinary REIT risks — captures the sector's appeal and its qualifiers. It's a diversifier, not a guarantee. Understanding this sets realistic expectations. Farmland REITs combine lease income and land appreciation with inflation-tracking and low-correlation characteristics, tempered by agricultural and ordinary REIT risks; nothing here is guaranteed.
How Baker 1031 Helps You Evaluate Farmland REITs
Baker 1031 Investments helps investors understand the farmland REIT sector — what these agricultural-land REITs own, the inflation-linked nature of land values, the distinction between crop and permanent cropland, the weather and commodity risks, and how to evaluate land quality, water rights, lease structure, and tenant farmers — so you can decide whether the sector fits your goals and, if so, access suitable offerings.
REIT and non-traded-REIT interests and related securities are offered through the broker-dealer, Aurora Securities, Inc. (member FINRA/SIPC), and any recommendation follows a suitability review — non-traded and private REITs typically require accredited or otherwise suitable investors, while publicly traded REITs trade through ordinary brokerage accounts. We help you understand the sector's inflation and diversification thesis, the crop-versus-permanent distinction, and the agricultural risks, evaluate specific farmland REIT offerings (the land, water rights, lease structures, tenants, fees, and structure), and, if suitable, access them. Baker 1031 does not provide tax or legal advice; your CPA and attorney handle your specific situation, including how REIT dividends are taxed. We keep demand and outlook statements general and non-promissory — yields and returns are never promised, past performance does not guarantee future results, and you should verify current conditions. Our role is to help you evaluate the sector clearly and invest only when suitable for your goals and risk tolerance.
Frequently Asked Questions
What is a farmland REIT?
A farmland REIT is a Real Estate Investment Trust that owns agricultural farmland and leases it to farmers who actually grow the crops. The REIT is the landowner, not the farmer — it doesn't plant, harvest, or sell crops itself; instead, it earns income by leasing its land to operating farmers under lease agreements. This separation is central: the REIT collects rent (and, in some structures, a share of crop revenue) while the farming risk and operations sit with the tenant farmers. The REIT's return comes from that lease income plus appreciation in the land's value over time. Farmland REIT portfolios can span many farms, regions, and crop types, giving diversification across geography and agriculture. Like all REITs, a farmland REIT distributes most of its taxable income to shareholders as dividends. So a farmland REIT is a landowner that leases agricultural land to farmers, earning lease income plus land appreciation — a way to invest in farmland passively through a security rather than buying and operating a farm.
How do farmland REITs make money?
Farmland REITs make money in two main ways: lease income and land appreciation. The primary income source is the rent farmers pay to lease the REIT's land. This can come through a cash lease, which provides a fixed rent regardless of the harvest (steadier income, less upside), or a crop-share lease, which ties the REIT's income to a portion of the crop's value (more variable, with upside in strong years). The REIT distributes most of this income to shareholders as dividends, in keeping with the REIT rules. The second source of return is appreciation in the value of the farmland itself, which has historically tended to rise over time and track inflation — though this appreciation isn't paid out as current income; it accrues to the value of the REIT's assets. So farmland REITs earn money from lease income (cash or crop-share) and from land appreciation, passing the income through to investors as dividends while the land value compounds over time.
Why is farmland considered an inflation hedge?
Farmland is often considered a potential inflation consideration because its value has historically tended to track inflation. Farmland is a real, scarce, productive asset, and over long periods its value has tended to rise with the broader price level — when the prices of the crops it produces and the inputs it requires rise, the income-generating capacity and replacement value of the land tend to rise too. Because it's a hard asset whose value and income have historically kept pace with rising prices, farmland is discussed as an inflation consideration alongside other real assets. It's important to frame this carefully: this is a historical tendency, not a guarantee. Inflation relationships can shift, and farmland values are also affected by weather, water, commodity prices, and interest rates. So farmland is considered a potential inflation hedge because its value has historically risen with inflation as a scarce, productive real asset — but that's a historical tendency, not a promise, and you should verify current conditions before relying on it.
What is the difference between crop and permanent cropland?
The difference is between land used for annual crops and land used for perennial, long-lived plantings. Annual row-crop land grows crops that are planted and harvested each year — corn, soybeans, wheat, and similar staples. This land is flexible (the crop can change season to season), tends to have lower per-acre value and income, and carries the year-to-year variability of planting decisions and commodity prices; it's the larger, more liquid, more commoditized segment. Permanent cropland grows perennial crops on long-lived plantings — orchards (apples, citrus), vineyards (grapes), and nut trees (almonds, pistachios). These take years to mature and then produce for many years, so permanent cropland tends to have higher per-acre value and income but a longer time horizon and less flexibility, and it requires more capital. Many farmland REITs hold a mix of both. So crop (annual) land is flexible, lower-value, and commoditized, while permanent cropland is higher-value, higher-income, longer-horizon, and less flexible — different value, income, and risk profiles.
What are the main risks of farmland REITs?
The main risks are weather, water, and commodity prices. Crop prices fluctuate with global supply and demand; when they fall, farmer tenants earn less, which can pressure crop-share income directly and, over time, affect farmers' ability to pay cash rents and the value of the land. Weather events — drought, flood, frost — can damage crops and reduce a season's output, affecting tenant income and, for crop-share leases, the REIT's income. Water availability is especially critical: in many regions, secure water rights and reliable irrigation are essential to farmland's productivity and value, and water scarcity is a growing concern in some areas. These risks are partly mitigated by diversification (across regions, crops, and lease types) and by cash leases that fix the rent regardless of the harvest, but they can't be eliminated. Like all REITs, farmland REITs also carry market, interest-rate, leverage, and distribution risks. So the main risks are agricultural — weather, water, and commodity prices — alongside ordinary REIT risks, and conditions vary by region.
What is a crop-share lease?
A crop-share lease is a farmland lease structure in which the landowner's income is tied to a share of the crop the tenant farmer produces, rather than a fixed cash rent. Under a crop-share arrangement, the REIT (as landowner) receives a portion of the crop's value, so its income rises when harvests and commodity prices are strong and falls when they're weak. This contrasts with a cash lease, where the farmer pays a fixed rent regardless of the harvest, giving the REIT steadier but less upside-sensitive income. Crop-share leases share both the risk and the reward of farming between landowner and tenant: the REIT participates in good years but absorbs some of the downside in poor ones. The choice between cash and crop-share leases shapes a farmland REIT's income profile — cash leases for stability, crop-share leases for variability with upside. So a crop-share lease ties the REIT's income to a portion of the crop's value, offering upside in strong years but more variability than a fixed cash lease. Many REITs use a mix.
Why do water rights matter for farmland?
Water rights matter because water is essential to farmland's productivity and, therefore, its value and leasability. In many agricultural regions — especially arid and semi-arid areas that depend on irrigation — the security and adequacy of water rights can be as important as the soil itself. Farmland with secure, reliable water rights can be farmed productively and consistently, supporting strong crop yields, healthy tenant incomes, dependable lease payments, and resilient land value. Farmland without secure water, or in areas facing water scarcity, is more vulnerable: yields can suffer, tenants may struggle, and the land may be worth less and harder to lease. Water scarcity is a growing concern in some regions, which makes water rights an increasingly important factor in evaluating farmland. That's why investors examining a farmland REIT look closely at the water rights and irrigation security attached to its land. So water rights matter because productivity, income, and land value all depend on reliable water — secure water makes farmland resilient, while water scarcity is a real risk.
Is farmland correlated with the stock market?
Historically, farmland has shown low correlation with the stock market. Because farmland returns are driven by agricultural fundamentals — land productivity, crop demand, lease income, and land values — rather than by the same forces that move equity markets, farmland has tended to move somewhat independently of stocks and bonds. That low correlation is a key part of the sector's appeal: an allocation whose ups and downs don't necessarily coincide with the rest of a portfolio can improve diversification, smoothing overall returns. It's worth a careful caveat, though: a publicly traded farmland REIT's share price can still move with the broader stock market in the short term, even if the underlying farmland's value is more independent. And correlations are historical tendencies that can shift over time. So farmland itself has historically had low correlation with stocks, which supports its diversification appeal — but a traded farmland REIT's share price may track markets short-term, and past correlations don't guarantee future ones. Verify current conditions.
How do I evaluate a farmland REIT?
Start with land quality and water rights: the productivity of the land (soil quality, growing conditions, historical yields), the security and adequacy of water rights and irrigation, and the regions in which the land sits, since climate, water, and agricultural strength vary by area. Productive land with secure water is more valuable, more leasable, and more resilient. Then assess the lease structure and tenants: whether the REIT uses cash leases (steadier income) or crop-share leases (more variable, with upside), the creditworthiness and quality of the tenant farmers, and the crop mix (row crops versus permanent crops, and diversification across both). Consider how the land-appreciation component fits alongside lease income. As with any REIT, weigh the standard metrics (FFO, AFFO, and NAV), leverage, and structure (traded versus non-traded), within a suitability review for non-traded offerings. So evaluate a farmland REIT by land quality and water rights, lease structure, tenant farmers, region, and crop mix, alongside the usual REIT financial metrics and structure.
What are FFO, AFFO, and NAV?
FFO (funds from operations), AFFO (adjusted funds from operations), and NAV (net asset value) are the core metrics for evaluating REITs, including farmland REITs. FFO adjusts net income by adding back real estate depreciation (a large non-cash charge) and removing gains or losses on property sales, giving a clearer picture of the recurring cash a REIT's properties generate than standard earnings do. AFFO refines FFO further by subtracting recurring capital expenditures and other adjustments, approximating the cash actually available to support distributions — often considered the better gauge of distribution sustainability. NAV estimates the per-share value of the REIT's underlying real estate net of debt, useful for judging whether shares trade at a premium or discount to asset value (and the basis for pricing non-traded REITs); for farmland, NAV is closely tied to land values, which are a major part of the return. So FFO, AFFO, and NAV measure cash flow, distribution coverage, and asset value — the standard lens for any REIT, with NAV especially important for farmland given the land-appreciation component. Verify the specifics for any given REIT.
Is a farmland REIT an income or appreciation investment?
A farmland REIT offers both, but the balance often leans more toward appreciation than high current income. The income component comes from lease payments (cash or crop-share) that farmers pay to use the land, distributed as dividends — but farmland lease yields can be modest relative to other income-oriented REITs. The larger part of the long-term return may come from land appreciation, since farmland values have historically tended to rise over time and track inflation; this appreciation isn't paid out currently but accrues to the value of the REIT's assets (and its NAV). So an investor seeking a high current yield might find farmland's lease income modest, while an investor seeking inflation-linked appreciation and diversification may find the total-return-plus-hard-asset profile attractive. As always, both income and appreciation are tendencies, not promises — distributions aren't guaranteed, and land values can fluctuate. So a farmland REIT combines modest lease income with land appreciation, often leaning toward appreciation and diversification rather than high current yield.
Can I use a farmland REIT in a 1031 exchange?
No — REIT shares, including those of a farmland REIT, are not eligible for a 1031 exchange. A 1031 exchange requires the exchange of like-kind real property held for investment or business use, and REIT shares are securities (interests in a company), not real property, so they don't qualify. This means you can't sell investment real estate and 1031 directly into a farmland REIT to defer your capital-gains tax. There is an indirect path: you can 1031 into a Delaware Statutory Trust (DST), which is 1031-eligible like-kind real property, and the DST's property may later be acquired by a REIT through a 721 (UPREIT) exchange, converting your interest into operating-partnership units while maintaining deferral. Notably, farmland you own directly is 1031-eligible real property — it's the REIT share that isn't, so a farmer selling land could 1031 into other farmland or a DST. Baker 1031 does not provide tax advice, so confirm specifics with your tax advisor. So farmland REIT shares can't be used directly in a 1031 exchange, though directly owned farmland is 1031-eligible and a DST-then-721 path can bridge to REIT exposure with deferral preserved.
Are farmland REITs available to all investors?
It depends on the structure. Publicly traded farmland REITs are listed on stock exchanges and available to virtually any investor through an ordinary brokerage account — you can buy shares, or invest through a REIT fund or ETF that holds them, with no special qualification. Non-traded and private farmland REITs, by contrast, are offered through a broker-dealer, often have investment minimums, and typically require accredited or otherwise suitable investors. Before you invest in a non-traded offering, a suitability review considers your financial situation, goals, liquidity needs, and risk tolerance to determine whether an illiquid, longer-term investment is appropriate for you. This gatekeeping reflects the illiquidity and complexity of non-traded structures. So for liquid, broadly available exposure, publicly traded farmland REITs are the route, while non-traded offerings are gated and advisor-assisted. So availability depends on whether the REIT is traded (broadly accessible) or non-traded (offered through a broker-dealer to suitable investors after a suitability review).
What are permanent crops like almonds and grapes worth to a farmland REIT?
Permanent crops — orchards, vineyards, and nut trees like almonds, grapes, and pistachios — tend to be the higher-value, higher-income segment of a farmland REIT's portfolio, but they come with a different risk and time profile than annual row crops. Permanent cropland generally commands higher per-acre value and generates higher per-acre income than row-crop land, because the crops themselves are more valuable and the long-lived plantings produce for many years. The trade-off is a longer time horizon (the plantings take years to mature before producing) and less flexibility (you can't easily switch what a mature orchard or vineyard produces if market conditions change). Permanent crops also require more capital to establish and carry crop-specific risks, including sensitivity to weather, water, and the demand for that particular crop. So permanent crops can be a valuable, income-rich part of a farmland REIT's holdings, but their value depends on the specific crop, the maturity of the plantings, water security, and demand — they're premium but committed assets. Many REITs hold a mix of permanent and row-crop land to balance the profiles.
How does Baker 1031 help me evaluate farmland REITs?
We help investors understand the farmland REIT sector — what these agricultural-land REITs own, the inflation-linked nature of land values, the distinction between crop and permanent cropland, the weather and commodity risks, and how to evaluate land quality, water rights, lease structure, and tenant farmers — so you can decide whether the sector fits your goals and, if so, access suitable offerings. REIT and non-traded-REIT interests are offered through the broker-dealer, Aurora Securities, Inc. (member FINRA/SIPC), and any recommendation follows a suitability review; non-traded and private REITs typically require accredited or otherwise suitable investors, while publicly traded REITs trade through ordinary brokerage. We help you understand the inflation and diversification thesis, the crop-versus-permanent distinction, and the agricultural risks, evaluate specific offerings (land, water rights, lease structures, tenants, fees, and structure), and, if suitable, access them. Baker 1031 does not provide tax or legal advice — your CPA handles your specific situation. We keep demand and outlook statements general and non-promissory; yields and returns are never promised, past performance doesn't guarantee future results, and you should verify current conditions.
Glossary
- Farmland REIT
- A REIT that owns agricultural land leased to farmers.
- Cash Lease
- A fixed-rent farmland lease regardless of the harvest.
- Crop-Share Lease
- A lease tying income to a share of the crop's value.
- Row Crops
- Annual crops like corn, soybeans, and wheat.
- Permanent Cropland
- Long-lived plantings — orchards, vineyards, nut trees.
- Water Rights
- Legal rights to water essential to farmland productivity.
- Land Appreciation
- The rise in farmland value over time.
- Tenant Farmer
- The operating farmer who leases the REIT's land.
- Commodity Price
- The market price of crops, a key farmland risk driver.
- Inflation Hedge
- An asset whose value has historically tracked inflation.
- Low Correlation
- Returns that move independently of stocks and bonds.
- Soil Quality
- Land productivity, a core driver of farmland value.
- FFO
- Funds from operations — a REIT's recurring cash measure.
- AFFO
- Adjusted FFO — cash available to support distributions.
- NAV
- Net asset value — per-share value of the land and assets.
- Suitability Review
- Assessing whether a non-traded REIT fits the investor.
Sources & References
- U.S. Securities and Exchange Commission. Investor.gov — Real Estate Investment Trusts (REITs)
- Nareit. What's a REIT (Real Estate Investment Trust)?
- Cornell Legal Information Institute. 26 U.S. Code § 856 — Definition of real estate investment trust
- FINRA. Real Estate Investments
Disclosures
This article is published by Baker 1031 Investments, LLC for general educational purposes for accredited investors and is not an offer to sell or a solicitation of an offer to buy any security, nor is it tax, legal, accounting, or investment advice or a recommendation. Any securities offering is made solely through a sponsor’s private placement memorandum (PPM) following a suitability determination. Securities offered through Aurora Securities, Inc. (ASI), member FINRA / SIPC; Baker 1031 Investments is independent of ASI.
Oil & gas mineral and royalty interests and DST programs are speculative, illiquid securities sold only to verified accredited investors and involve substantial risk, including possible loss of principal, commodity-price and production-decline risk, lack of control, and the risk that an intended 1031 exchange fails to qualify for tax deferral. Whether a particular interest qualifies as like-kind real property is a fact-specific legal determination that varies by state and by the terms of the instrument. Tax results depend on your individual circumstances. Consult your own CPA and attorney before acting. Past performance does not guarantee future results.
