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Flex leases gaining interest

An official working in farm real estate says he’s seeing a steady increase of flex leases.

Dave Englund, senior vice president of farm and ranch management for Farmers National Company, tells Brownfield flex rent arrangements have gained in popularity over the past three to five years.

“There’s a lot of different formulas out there that people use, so I can’t say that there’s one favorite.  But a lot of farm operators and landowners are looking at flex leases.”

He says landlords and tenants can use flex leases to protect themselves against market volatility.

“Especially on the landowner side.  If we have a large rise in commodity prices, they will be compensated a little bit over their base rent if yields and prices go up.”

Englund says it’s pretty early in the 2018 planning season to think about what rents are going to do, and commodity prices will have the most influence.

 

 

 

 

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