On January 6, 2012, Limoneira Company (NASDAQ: LMNR), a leading agribusiness with prime agricultural land and operations, real estate and water rights in California, entered into a series of leases for the Sheldon Ranches, which consist of approximately 1,000 acres of productive agriculture property in the San Joaquin Valley of California. The orchards include approximately 800 acres of citrus and 200 acres of other crops.
The initial lease terms begin January 1, 2012 and are for ten years with options to extend each term for four consecutive five year terms. The leases include provisions for the potential purchase of the property by Limoneira in the future. Terms of the leases include base rent and participation in operating profits of the leased property.
“We are extremely pleased to become affiliated with the Sheldon Ranches,” commented Harold Edwards, President and Chief Executive Officer of Limoneira. “The Sheldon Ranches have grown and successfully operated for generations and Limoneira’s involvement provides an opportunity for the Sheldon Family operations to successfully continue for generations to come. Integrating the Sheldon Ranches into Limoneira’s portfolio of high quality agricultural properties represents another significant growth milestone for our 119 year old company. We are very excited to welcome the Sheldon Family to Limoneira.”
Due to the timing of the growing and harvesting seasons, and because the farming costs associated with the leased property were incurred by the lessor prior to lease commencement, Limoneira will not share in the citrus crop revenue in its fiscal year 2012 ending October 31, 2012. Fiscal year 2013 and forward operating results on the leased property are expected to be similar on a per acre basis as existing citrus orchard operating results.
“These leases represent an important component of our global growth strategy to acquire productive agriculture acreage and leverage our expertise and existing infrastructure to drive our top line growth and increase our profitability,” stated Alex Teague, Senior Vice President of Limoneira. “Quality citrus acreage such as the Sheldon properties will be an important addition to our portfolio and will greatly enhance our continued expansion strategy.”