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04.30.2012News

Coachella date grower’s deal shows land selling

Kirkjan Farms pays $635,000 for 39 acres in Coachella

Longtime family-owned date producer Kirkjan Farms recently paid about $16,282 per acre for 39 acres — $635,000 — for prime agricultural land off Avenue 53 near Van Buren in Coachella as it gears up for expansion.It’s one example of the still slow, but gradually growing, demand for land after a steady drop in prices in recent years, said Dwight Capitani, who with fellow NAI Capital commercial real estate agent Kate Rust represented the seller in the land purchase.

“Growers, developers, investors — I believe they’re realizing that prices have bottomed out and are probably on their way up,” Capitani said. “There are some great bargains out there, and people want to capitalize on them. We’re seeing more and more of that.”

Capitani and Rust have sold or closed more than 200 acres for client AP Properties since the year began.

Stone James, marketing consultant with Land Advisors Organization in Palm Desert, recently sold two parcels immediately south and southwest of the 39 acres at Avenue 53 for agricultural use.

In recent months, as commodity prices have increased, farmers in the valley and neighboring Imperial Valley have sought more land, James said.

“We’re not at the point yet where people are saying, ‘I just want to buy raw land,’” he aid. “It’s what you can do with the land that drives value.”

At the height of the housing boom, James recalls buyers paying $275,000 an acre with plans to build four units per acre. It wasn’t that long ago — 2007 — when vacant land in unincorporated Riverside County was selling for $50,000 to $150,000 an acre, said Dick Baxley, president of Baxley Properties.

Residential land in Indio was going for $200,000 an acre, and land for homes in some parts of Rancho Mirage, Palm Desert and La Quinta sold for $500,000 or more an acre in 2007.

Last year, however, there was little demand for residential acreage in those cities, so improved lots often sold for less than thecost of site improvements, Baxley said.

James said investors are looking for finished lots — properties with entitlements because that’s a difficult and risky facet to buying land.Agricultural companies and farmers want bargains.

Such land purchases for date growers aren’t unusual, said Lorrie Cooper, manager of the Indio-based nine-member California Date Administrative Committee, which represents producers.

“Date growers have been expanding their acreage for awhile,” Cooper said.

In 2010, the most recent figure available, 9,328 acres of dates were planted, according to the 2010 Riverside County Agricultural Production Report.
In 2009, some 8,974 acres were planted, up from 7,373 in 2007, officials reported.

Cooper said date farmers who once sold their land during the valley’s building boom have purchased cheaper land farther east as they gear up for increased production.Part of what’s fueling production is growing consumer awareness of the health benefits associated with dates.

The valley produces roughly 95 percent of the world’s annual date crop, which in 2010 was valued at $36.5 million for the county.

Mike Perrault | The Desert Sun