Athletes Buy Iowa Farm Ground
Investment Firm for Top Pro Athletes Sees Asset Potential in Farmland
OMAHA (DTN) -- Beyond the billionaires who like to own land, farmers now could find themselves competing with investment firms for pro athletes for land as well.
Roughly two dozen professional athletes -- including Cincinnati Bengals quarterback Joe Burrow and Milwaukee Bucks guard Khris Middleton -- joined together through an investment firm to invest $5 million in buying farmland. Their first acquisition was a 104-acre corn and soybean farm in northern Iowa, according to Sports Business Journal.
The investment comes from the New York-based firm Patricof Co., which started in 2018 and has nearly 200 athletes as clients and reports more than $125 million in investments. On its website, Patricof Co. reports the company, "Has begun investing in farmland across the Corn Belt, the Pacific Northwest, and Northern Minnesota. The farms have high soil quality, strong crop yield, and grow row crops which are planted annually, minimizing risk. Farmland has historically provided attractive risk-adjusted returns, stable annual income, and a solid hedge against inflation."
Patricof lists a mix of investments, including SpaceX, Bombas clothing, Kodiak breakfast foods, Virgin cruise lines and condominiums in Florida, among others.
Other athletes involved in the farmland purchase include Charlotte Hornets guard Kemba Walker, Boston Celtics forward Blake Griffin and Arizona Cardinals tight end Zach Ertz.
The group is expected to buy at least four other farms within the next few years in other parts of the country, the website frontofficesports.com also reported. Patricof did not report the value of the land purchase in Iowa.
"I think of it as a really smart recession hedge for people who are learning to invest for the long term," Mark Patricof, the firm's founder and CEO, said to Sports Business Journal. "It provides really significant downside protection and the opportunity to create a long-term investment strategy that fits the profile of somebody who's young and can continue to make a lot of money and wants to be conservative with their investment strategy."
Farmland values keep moving higher despite rising interest rates. The 2022 Iowa State University Land Value Survey pegged the average price for Iowa farmland at $11,411 an acre, up 17% from 2021.
As DTN has reported, farmland auctions in 2022 also shattered records for prices. A number of experts that spoke to DTN anticipate farmland prices will climb 10% to 15% in 2023. High input prices are likely to catch up with farmers in the year ahead, weighing on profits. Recession could cut demand, and interest rates will continue to rise.
See "Farmland Values Smash Records in 2022, Undeterred by Interest Rate Hikes" here: https://www.dtnpf.com/….
Also see "Farmers Won 75% of Farmland Auctions in 2022, but Investors Helped Push Prices to Records" here: https://www.dtnpf.com/….
Chris Clayton can be reached at Chris.Clayton@dtn.com
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