case study >>
KNOW YOUR TENANTS
THE RIVER FARM
After months of negotiations a settlement was reached which resulted in a new short term lease, at a 23% increase in rent to their client.
The River Farm was originally acquired in 2006 from a pension fund through a sale-leaseback. The farm later came to Scythe & Spade’s attention as a farm with great potential but much to be desired from a deferred maintenance perspective and current bankruptcy. Through Scythe & Spade’s expertise and vision the farm was acquired at a significant discount to its market value for the benefit of its client.
Over time, the challenges that were previously being managed and kept at bay by Scythe & Spade were now growing to levels that would require drastic measures. In spite of the countless efforts made by Scythe & Spade as the property manager and it’s kind hearted lenient landowner and over the course of dealing with deferred maintenance issues and late lease payments time and again it became evidently clear that a change in operator was the only viable solution to prevent the continued decline of a farm that had the potential to be great. After every effort was made to maintain the existing tenant’s lease, they had come to the end of their rope and their lease was not to be renewed and notice of termination was given. Weeks later in the early month of January, the tenant filed a lawsuit to holdover possession of the farm for the upcoming season.
Scythe and Spade company quickly went to work on behalf of its client by engaging their attorneys for a counter claim to assert their client’s rights to the farm, hiring third parties to provide reports of negligence or non-performance and making multiple visits to inspect the farm and monitor/police any potential neglect or damage that may be committed by a resentful tenant. After months of negotiations and again through the expertise and diligence of Scythe & Spade, a settlement was reached which resulted in a new short term lease, at a 23% increase in rent to their client.
Following the end of the lease term, Scythe & Spade went to work again, this time transitioning the farm a new operator that shared in the long range vision of bringing the farm to the level of quality it inherently possessed. Through Scythe & Spade’s network of strategic partners an aggresive capital improvement plan was implemented that included tenant improvements to the farm that will result in added value to the client’s asset.
Anyone contemplating ownership in farmland would be well advised to consult with experts in the field before attempting to go it alone. There are many challenges and pitfalls that are unique to each farmland investment but when you employ the help of a competent and experienced team like Scythe & Spade you can rest assured your odds of success will turn in your favor.