Royalty Farms is focused solely on the purchase and lease of industrial real estate assets to licensed farming producers in the North American regulated markets. We will leverage our partners’ existing advisory business for licensed producers to identify high quality, asset-backed financing opportunities in emerging US and Canadian regulated farming markets.
Royalty Farms portfolios are set up to provide an opportunity to participate in this rapidly growing segment of the North American market.
Royalty Farms’s team leverages direct experience in the agricultural industry with a team of commercial real estate underwriters having over $150M in transactions, and a team of natural resource investors and operators.
Companies typically earn a higher return in their core business vs investing capital in owned real estate.
A sale lease-back acts as an alternative financing option, especially when commercial banks will not lend.
Building upkeep and management is time-consuming; operators benefit from focusing their time on running the core business.
The gain realized from a sale lease-back can be amortized on the corporation’s income statement, increasing reported earnings.
A business owner can write off the cost of rent as an operating expense, thereby reducing their tax obligations.
Provides a steady, consistent and predictable rate of return for investors.
Lease-backs offer rent escalations of >3-5% p.a., allowing investors to generate higher returns.
Once a lease-back is executed, investment risk is reduced as it’s backed by the ownership of the facility. Potential capital gains on the future sale of the facility.
Lease agreement is drafted as a triple net deal, meaning the tenant is responsible for all expenses related to the operation and maintenance of the facility. This offsets any inflation and capital risk.
Cash injection the tenant receives from the sale of the facility improves their balance sheet and can help drive growth.
