Report: Florida Agriculture Property Values Remain Firm

The Lay Of The Land Market Report has become an anticipated document for property owners to get a benchmark of Florida land values. In early April, Coldwell Banker Commercial Saunders Real Estate hosted its annual Lay Of The Land Conference in Orlando and presented its market data for 2014.

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“Now in its fourth year, the Lay Of The Land Market Report continues to be the single source that compiles and verifies Florida sales data to evaluate market trends throughout the year,” says Dean Saunders, owner of Lakeland-based Saunders Real Estate.

Central Ridge

Sales activities in this region of Polk, Highlands, and Lake counties remained similar in 2014 than in past years. The sizes of citrus sales ranged from about 14 acres to 387 acres, with an average of about 60 acres. The net-citrus acres values ranged from $5,300 to more than $17,000 per acre. This value was very similar to the previous year, but it is worth noting that most verified sales in 2013 broke the $10,000 per acre threshold. In 2014, more than half of the sales were under that level.

Peace River And Gulf Citrus Regions

Sales activities in the Flatwoods region remained consistent with the previous two years. There were three large citrus land sales in 2014, including the blockbuster Alico deal which involved 22,000 acres of land, including more than 20,000 acres of groves. Values for average quality and production groves ranged from $8,000 to $10,000 per acre, with a large percentage being closer to the $10,000 figure.

The trend observed in the report for the region is that smaller growers have begun to limit their caretaking as yields decline and production expenses rise. On the other side, larger growers with more consolidated blocks are expressing more confidence that a solution to HLB will be found and are willing to continue battling the disease.

East Coast

Increasing market demand on the Treasure Coast is driving a gradual, but healthy improvement. On smaller tracts, growers are beginning to take the chance to borrow money and buy citrus land before values get out of reach. In addition, there has been significant buying activities from larger agricultural funds and institutional buyers. These lands are generally larger than 1,000 acres and are being cleared, leveled, and converted to farm lands for lease or direct use by owners.

The value of agricultural land in this region is in the $3,000 to $5,000 per acre range. The significant trend appears to show many land owners are grappling with the best uses for former citrus lands.

“Ultimately, we are transitioning from an almost pure citrus agricultural community to a healthy, much more diverse community with many forms of agriculture including cattle, vegetables, corn, sugarcane, tropical fruits, and yes, citrus,” the report states.

Cropland Southwest And Central Florida

Good quality farmland with irrigation located in Immokalee, Palmetto, and Ruskin growing areas continue to have market values between $7,000 to $8,500 per acre. The cropland in interior counties of Polk, Hardee, DeSoto, Highlands, and Okeechobee have lower values ranging from $4,500 to $6,000 per acre.

In this region, there continues to be interest in farm purchases by equity fund groups, which target properties that can be leased to growers for 5% to 6% capitalization rate back to the investor.

Cropland North Florida

While the volume of large irrigated land purchases in St. Johns, Putnam, and Flagler counties was low, the transactions that did occur show strong prices in the $7,000 to $8,000 per acre range. In the western and panhandle part of the state, irrigated land ranged from about $4,500 to $6,300 per acre. As in many parts of the state, the availability of quality irrigation water is the name of the game in the region.

Big Picture

Saunders says that in recent years there has been a great deal of interest of interest among large institutional investors. This has marked some blockbuster deals like the Northwest Florida purchase of 380,000 acres of rural/timber lands for $562 million, which Saunders helped broker.

“There is a lot of capital out there in search of a home, so investors are looking for land and that will increase prices,” Saunders says. “The big unknown (for ag land values) is what happens with the citrus industry. Some people see challenges for the industry, while others see opportunity. That’s why we’ve seen a few large institutional investors make some big plays for land.”

While activity has been driven by large investors in recent years, Saunders says the environment might be evolving.

“I don’t have a lot of data to back this up, but anecdotally I am sensing more interest from buyers other than those looking to make large deals,” he says. “As the overall economy improves, there starts to be more interest in smaller tracts, so that has been encouraging.”