Vertical farming firm Lots has entered right into a strategic alliance with REIT Realty Earnings to fund Lots’s vertical farm growth. Beneath the settlement, Realty Earnings will purchase and supply growth funding for properties that may home Lots’s indoor farms, which shall be leased to Lots beneath long-term web leases. The settlement offers for as much as $1 billion of growth alternatives.
Because the preliminary transaction of the alliance, Realty Earnings will purchase the land and supply growth funding for the primary farm of Lots’s indoor vertical farm campus close to Richmond, Virginia, which was introduced final yr. Lots expects the longer term multi-farm campus to ship greater than 20 million kilos of produce throughout a number of crops yearly. The primary farm to be developed on the campus will develop strawberries with Lots associate Driscoll’s and initially serve the Northeast market.
If this sale and leaseback sort of transaction sounds acquainted, maybe it’s since you learn yesterday a few comparable type of deal getting used to fund sidewalk supply robotic startup Kiwibot. Nevertheless, not like the meals robotics market, sale & leaseback transactions are fairly frequent with actual property belongings. Farmers have been utilizing most of these preparations for many years, so it’s not all that shocking to see REITS begin to take an curiosity in additional tech-forward farming gamers like Lots.
It’s additionally not shocking for a capital-hungry vertical farming enterprise like Lots to look to such a financing to fund its development. AppHarvest and Kalera entered into sale and leaseback offers final yr after working into monetary troubles and largely exhausting entry to extra conventional development capital within the enterprise market. Lots has already raised an enormous $914 million in funding as of final yr and had began to run into monetary difficulties early this yr, asserting they’d shut their San Francisco facility.
Now, with its new funding facility by way of Actuality, the corporate has entry to a big – however essentially extra dangerous – pool of development capital.
