A Successful Structure
The Agricultural REIT (Real Estate Investment Trust) is a tax-efficient structure that allows a diverse group of investors to undertake a common agricultural project with maximum security for all involved. Ownership of the land is held by a trustee and is separated from the management company, safeguarding the investment at all times.
Every acre of the orchard is registered, identified, and measured in the orchard’s land survey.
When an investor forms part of Chandler Orchards, we assign them a plot number that they will take title to in the future. However, during the life of the Real Estate Investment Trust we operate each trust as a single operating unit. An investor that participates with 1 acre in a trust with 100 acres will pay 1% of the expenses and receive 1% of the harvest, without regard to how much their acre performed individually.
While the orchard is growing, there are acres that may produce more or less than others, but through this system, each investor receives the trust’s average production. At the end of the 20 year period, all acres will have matured and should be producing equally at the maximum projected production.
The structure is extremely liquid, since investors are free to transfer their participation in the trust at any time through a contract and by simply notifying the trustee of the change in ownership. This allows ownership to change hands without the need to pay land registry taxes or public notary expenses.