Strategic alliance with Realty Income provides up to US$1bn for development of properties for indoor farms
Plenty has entered a strategic alliance with property investor Realty Income to support the development of Plenty’s indoor vertical farms.
Under the terms of the agreement, Realty Income will acquire and provide development funding for properties that will house Plenty’s indoor farms. These properties will be leased to Plenty under long-term net leases. The agreement provides for up to US$1bn of development opportunities.
As the initial transaction of the alliance, Realty Income has agreed to acquire the land and provide development funding for the first farm of Plenty’s indoor vertical farm campus near Richmond in the US state of Virginia, which was announced last year.
Plenty expects the future multi-farm campus to deliver more than 20m pounds of produce across multiple crops annually. The first farm to be developed on the campus will grow strawberries with Plenty partner Driscoll’s and initially serve the northeast US market.
Plenty already supplies leading grocers on the West Coast and will further expand its California footprint to include Walmart, which is also an equity investor in the company, when it launches its Compton farm in Los Angeles County.
“Scale is a critical component of advancing indoor farming’s role as a core contributor to our global food supply. Teaming up with Realty Income is a significant step forward in accelerating the deployment of our farms with vertical farm facilities that are purpose-built to support Plenty’s proprietary growing technology,” said Arama Kukutai, Plenty’s chief executive Officer.
“The predictability and positive unit economics of Plenty’s farms make it possible for us to utilise more traditional forms of funding, such as this strategic alliance with Realty Income. This represents an advancement in the way indoor farming assets are capitalized and paves the way for their development as an asset class.”
Sumit Roy, Realty Income’s president and chief executive, said Plenty’s sustainable business practices align with Realty Income’s values.
“Our entry into agriculture technology provides another potential growth opportunity for our company. Over time, we aspire to expand our collaboration with Plenty internationally in markets of mutual interest,” said Roy.