Offering Details

SPV Hot Lakes Organics, LLLP

Union County, Oregon

CROPS / Organic carrot seed, garlic, & row crops

MINIMUM INVESTMENT / $5,000

TARGET IRR / 8.38%

OFFERING SIZE / $911,000

TARGET HOLD PERIOD / 10 Years

Fully Funded

Asset Summary

THE FARM IS irrigated AND ELIGIBLE TO GROW organically certified CROPS.

In May of 2021, SPV Hot Lakes Organics acquired the Farm via an off-market sale. The Farm consists of 200.05 acre m/l located in the heart of Oregon’s Grande Ronde Valley in the Columbia River Plateau. The Farm is approximately 3 miles northwest of Union, Oregon (population 2,180) on Miller Lane. Access to the Farm is provided by a field drive located in the southwest corner off Miller Lane, as well as an easement through the neighboring property adjacent on the north side of the Farm providing access to Highway 203.

The property includes 177.5 irrigated acres m/l suitable for crop production, with Catherine Silt Loam and La Grande Silty Clay Loam as the primary soil types. Of the tillable acres, 46 acres are currently certified organic, while the remaining acres are in the process of completing the three-year transition to organic production. The Farm possesses two surface water rights and one ground water right that provide an ample supply of water. The water rights provide for the irrigation of approximately 180.9 acres and a maximum annual use of 542.7 acre-feet. The surface water rights authorize diversion from Catherine Creek, which borders the east side of the property. The ground water right authorizes diversion from a well located in the center of the Farm with a depth of 430 feet. The well is rated for 900 GPM for a center pivot only, and 1,130 GPM for both a center pivot and wheel line irrigation. An eight-tower Reinke Electrogator pivot in the center of the property provides the primary irrigation source. Supplementary irrigation is provided by four wheel lines.

The Farm’s ample water and fertile soils are unique to the region, which features numerous hot springs and allows the Farm to grow high-value crops such as organic carrot seed, garlic, and red clover seed, as well as traditional row crops.

Located in Union County, Oregon, SPV Hot Lakes Organics is strategically positioned in the Grande Ronde Valley between two mountain ranges at an elevation of approximately 2,791 feet. The Farm receives an average of eighteen inches of rain per year. In Union County, approximately 44,279 acres are operated annually for row crop production, creating over $40,000,000 in annual market value through crop sales. As reported by the USDA National Agricultural Statistics Service, the 2021 average cash rent in Union County was $215 per acre.

ORGANIC PRODUCTION AND SUSTAINABLE FARM MANAGEMENT PRACTICES AIM TO OPTIMIZE ANNUAL INCOME AS WELL AS MAXIMIZE CAPITAL APPRECIATION ON THE FARM.

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Investment Highlights

  • +177.5 tillable and fully irrigated acres
  • +Located in strong agricultural production region of Oregon
  • +Farm purchase price is below average market comps on a $ per tillable acre basis
  • +Managed by Peoples Company, a partner of mAgma and leading farmland manager
  • +Leased to a strong local farmer for production of organic carrot seed, garlic, and row crops
  • +Operated according to Leading Harvest sustainability standards
  • +Long-term low cost bank financing of $487,000 in place to increase investor returns
  • +Target average annual cash yield 3.27%
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Risk Factors + Disclosures

mAgma, LLC and its affiliates, including its members, managers, employees, and authorized agents, are not Registered Investment Advisors, Broker/Dealers, Financial Analysts, Financial Banks, Securities Brokers or Financial Planners. Information and services are provided for information purposes only and are not intended to be and do not constitute financial advice, nor a recommendation to purchase, sell or hold any security, or otherwise to be investment, tax, financial, accounting, legal, regulatory or compliance advice.

Private Placement Offerings are being made pursuant to an exemption from registration pursuant to Rule 506 of Regulation D promulgated pursuant to the Securities Act of 1933 (the “Act”) and various state exemptions from registration. The Limited Partnership Units (“Limited Units”) will be offered to accredited investors who meet certain qualifications, as defined by the Securities and Exchange Commission (“SEC”) in Rule 501 of Regulation D of the Act. These qualifications are defined as an individual with either $1 million in net worth (all assets, excluding primary residence, less all liabilities); or net income for the last two years of $200,000 or greater ($300,000 if spouse has income) with a reasonable expectation of such earnings in the current year.

Neither the SEC nor any state securities commission has passed upon the accuracy or adequacy of the information contained in the Private Place Memorandum (the “PPM”). These securities have not been approved or disapproved by the Securities and Exchange Commission or any State securities commission. Any representation to the contrary is a criminal offense.

The Limited Units have not been registered under the Securities Act or any state securities laws, and may not be offered or sold, except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. Further, a transferor of Limited Units must comply with the transfer restrictions set forth in Section 10.1 of the Partnership Agreement, which include but are not limited to the following restrictions: (a) the transferee of the Units cannot be: (i) a shareholder in an authorized farm corporation as described in Iowa Code Chapter 9H; (ii) a beneficiary of an authorized trust as described in Iowa Code Chapter 9H; or (iii) a limited partner in another limited partnership owning or leasing Iowa farm land; (b) the transfer cannot cause the Company to be in violation of Iowa Code Chapter 9I; (c) the transfer cannot cause the Partnership to be treated as a “publicly traded partnership”; and (d) the transfer cannot cause the Company to be an “Investment Company” under the Investment Company Act of 1940.

Investors should carefully read the PPM, the Subscription Agreement, and the Partnership Agreement before purchasing units.

Investors should fully read all risks related to the business and real estate investments as detailed in the Subscription Agreement and PPM. The risks of the investment include the risk of loss of the Investor’s entire investment and the lack of liquidity of the Limited Units. Investors should understand that the transfer of the Limited Units is restricted by federal and state law, that there will be no public market for the Limited Units, and that it may not be possible to sell or dispose of the Limited Units. Investors should be prepared to hold the Limited Units until the earlier of the sale of all or the vast majority of the Company's assets or dissolution of the Company. Investors should further understand that transfer of the Limited Units is restricted by the Partnership Agreement and that the transfer of the Limited Units must comply with the transfer restrictions set forth in Section 10.1 of the Partnership Agreement.

Each investor should consult his/her personal legal, investment and tax advisors with respect to the risks associated with an investment in the Company. Each investor must warrant that the subscriber meets various investment requirements as set forth in the Subscription Agreement and PPM and must follow the certification process incorporated into the mAgma platform.