12/19/2019

Agricultural Land Trust Update

The Avenue Living Agricultural Land Trust is a closed end mutual fund trust that invests in Canadian farmland, leasing the land to farmers. Founded on its first purchase in 2017, the Land Trust continues to build its asset base and will surpass 40,000 acres in 2020.

“We’re slowly building the fund with a steady stream of opportunities coming to our attention,” says Leif Snethun, Chief Executive Officer of the Land Trust. “Acres are at about 36,300 right now and I’ve got another 800 closing in January.”

All the properties are in Saskatchewan, with a total value of more than $50 million.

For farmers in western Canada it has been a challenging year. This fall saw early snow, rain and then more snow, which has dragged the harvest into December. Many people had to combine their grain with a high moisture content. This grain had to be subsequently put through dryers adding another grain handling process and hence time, to the harvest.

Other challenges have included lower commodity prices, the CN rail strike and the federal carbon tax. The carbon tax is particularly galling to farmers as it is being applied to the fuel (natural gas or propane) used for drying grain.

What is it that Snethun looks for in a property when he goes searching to buy for the Land Trust?

“There are many factors other than sticker price. For instance, there’s a deal right now that I could step into, negotiated by the potential tenant. This tenant is willing to pay me the rent I need to make my target returns. However, the soil quality is at the lower end of the farming spectrum. I don’t believe that this quality of soil will appreciate over time as much as some of the available higher quality dirt, so I am going to pass” he says.”

Snethun says his primary target is land that is actively being used for cereal or oilseed growth, but pasture land also has potential.

“Every quarter section of land in Saskatchewan has been analyzed and that data is available. If pasture land comes up, I won’t immediately dismiss it I’ll take a more in-depth look at the soil reports and see if it has farming potential,” he says.

The Land Trust leases land to local farm operators for cash rent. It works with tenants to identify land improvement and reclamation projects. These projects increase farmable acres and concurrently improve farming efficiencies. Both positively impact achievable rents.

Without the intense capital requirements in managing real estate, farm operators can focus on what they do best – producing the global food supply. The Land Trust ensures that tenants use best practices in farming, to maintain productivity of the land for future generations.

The Land Trust purchases farmland under metrics that make sense in terms of achievable rent versus acquisition costs. Investor capital is leveraged through mortgage financing, which enhances returns. The use of leverage sets it apart from its peers.

Snethun says the Land Trust is open to buying farm land in other provinces. So far the higher cost of land outside of Saskatchewan relative to its revenue potential has not attracted any of the Trust investment dollars.

The Land Trust aims to drive long term capital growth to unitholders. Value growth will not just be passive appreciation. Improvements to the land and hence farming efficiencies will attract increasing rents.

Snethun says a significant portion of the farmers who are selling their properties to the Trust are those who are retiring. Many of them don’t have anyone to take over the family farm operation.

“Approximately one in four farmers have grown-up children working with them. These are the families that are expanding their farm operations and look to leasing land as a component of their farm footprint. Three out of four are looking to exit, because no family member wishes to take over the family farm.”



Terms & Conditions

By clicking "I Agree" and accessing this content, you acknowledge and agree to the following terms and conditions of use. The following constitutes a legal agreement governing your access to and use of the following webpages and is entered into between you and Avenue Living Asset Management Ltd. and (collectively, the “Company”):
  1. Restricted Access
The information contained on the following webpages is intended solely for use by individuals who are registered investment professionals in Canada, including those registered with a provincial securities commission, the Canadian Securities Administrators (CSA), or a recognized self-regulatory organization (e.g., CIRO). If you are not a registered investment professional in Canada, you are not authorized to access or use this information.
  1. Regulatory Compliance
By accessing this information, you represent, warrant and covenant that:
  • You are a registered investment professional in Canada and remain in good standing under applicable laws;
  • You are accessing the information solely in your professional capacity, and not as a retail investor or for general promotional or solicitation purposes; and
  • You will not use the information in any manner that would breach Canadian securities laws or regulations or applicable laws of any other jurisdiction.
  1. Company Status and Distribution Model
Avenue Living Asset Management Ltd. is a non-registered asset management firm and does not itself engage in the distribution of securities. Securities of Avenue Living Real Estate Core Trust, Mini Mall Storage Properties Trust, Tract Farmland Partners LP and any other issuer described in these materials are distributed exclusively through third-party investment dealers and exempt market dealers that are registered under applicable Canadian securities laws. Such distribution is conducted pursuant to available prospectus exemptions under National Instrument 45-106 – Prospectus Exemptions or other applicable local exemptions in the relevant offering jurisdictions. The Company does not provide investment advice or portfolio management services and is not registered as a dealer or adviser in any Canadian jurisdiction.
  1. Nature of Information
By proceeding, you acknowledge that the materials available behind this click-through agreement may include, but are not limited to:
  • Offering Memorandums (OMs) and other subscription-related documents;
  • Marketing presentations and fund fact sheets relating to potential investment opportunities;
  • Due diligence materials and supporting documentation;
  • Confidential information regarding investment strategies, fund structures, and/or management teams.
Such information is non-public, proprietary, and confidential, and is intended only to be accessed and reviewed through the Company’s website by qualified, registered investment professionals.
  1. Not an Offer or Solicitation
The materials accessed are provided on this website solely for informational purposes and do not constitute an offer to sell, or a solicitation to buy, any securities or investment products in any jurisdiction, nor do they constitute investment advice. Any such offer or solicitation, if made, would be pursuant to applicable securities laws and accompanied by appropriate offering documents. No offer or sale is being made to any U.S. Person (as defined in Regulation S under the U.S. Securities Act of 1933, as amended), nor to any person in the United States or subject to U.S. jurisdiction. The securities described hereinafter have not been and will not be registered under the U.S. Securities Act and may not be offered or sold in the United States or to U.S. Persons absent registration or an applicable exemption. The information contained on this website is not intended to constitute financial, investment, legal, accounting or tax advice or counsel and must not be relied upon in that regard. See Disclaimer - Avenue Living Asset Management and Forward Looking Statements - Avenue Living Asset Management for further information.
  1. Confidentiality & No Dissemination
You acknowledge that the information you are accessing is confidential and proprietary to the Company. You agree:
  • Not to copy, forward, share, or otherwise disseminate any of the materials;
  • Not to use the materials for any purpose other than your internal investment evaluation in a professional capacity;
  • To maintain the confidentiality of all information in accordance with applicable professional and legal standards.
You agree that the materials may not be copied, distributed, forwarded, or otherwise disseminated to any third party, including clients, prospective investors, or members of the public, without prior written consent of the Company. Unauthorized distribution, reproduction, or reliance by any third party is strictly prohibited.
  1. Intellectual Property Rights
All content provided is the intellectual property of the Company or its licensors and is protected under applicable copyright, trademark, and trade secret laws. You are granted a limited, non-transferable, non-sublicensable license to access and use the materials solely for professional due diligence purposes. You may not modify, reverse engineer, decompile, or create derivative works from any materials, nor remove any copyright or proprietary notices.
  1. Accuracy and Limitation of Liability
The information provided is believed to be accurate and reliable as of the date presented but is subject to change without notice. The Company makes no representation or warranty, express or implied, as to the accuracy, completeness, or currency of the content and disclaims all liability, to the extent possible under applicable securities laws, arising from any reliance on such information.
  1. Language
The parties hereto expressly request and require that this agreement be drawn up in English. Les parties aux présentes conviennent et exigent que cette entente soit rédigé en anglais.
  1. Acceptance of Terms
By clicking "I Agree," you confirm and agree that: If you do not agree to these terms, do not access or use the information.

Related Posts

It is a long established fact that a reader will be distracted by the readable content of a page when looking at its layout.


Tessa Bartlett 25 September, 2025

Avenue Living Closes Senior Unsecured Debenture Offering for $350 Million

Calgary, AB, Sept. 25, 2025 (GLOBE NEWSWIRE) -- Avenue Living (2014) LP (“Avenue Living”) announced…

Tessa Bartlett 25 September, 2025

Avenue Living Announces $350 Million Senior Unsecured Debenture Offering

Calgary, AB, Sept. 23, 2025 (GLOBE NEWSWIRE) -- Avenue Living (2014) LP (“Avenue Living”) announced…

Tessa Bartlett 25 September, 2025

Avenue Living Recognized as a Top Employer for Second Consecutive Year, Highlighting the Power of People Behind Record Growth

Calgary, AB, Sept. 16, 2025 (GLOBE NEWSWIRE) -- Avenue Living has once again been named one of…