At The Cash: Monetizing Dust with Brandon Zick, Ceres Fund (October 29, 2025)
Land is greater than only a place to construct a home, industrial constructing, or farm. Actual property could be monetized by means of Mineral and fuel rights, photo voltaic and wind, recreation, and even AI.
Full transcript under.
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About this week’s visitor:
Brandon Zick is Chief Funding Officer of Ceres Farmland Fund (now a part of Knowledge Tree); the fund owns and manages about $2 billion in agricultural land property
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TRANSCRIPT:
Have you ever ever considered what makes land worthwhile? It’s far more than only a place to construct a home or industrial constructing or place a farm. Actual property have change into more and more in style, with entry by means of options akin to personal fairness funds.
I’m Barry Ritholtz, and on at present’s version of At The Cash, I’m going to debate different land-rights investing.
To assist us unpack all of this and what it’d imply on your portfolio, let’s herald Brandon Zick. He’s the Chief Funding Officer at Ceres Farmland Fund. Managing about $2 billion in Ag property. Ceres not solely appears at farmland, however a slew of extra rights that may assist monetize dust, as Brandon likes to say. Ceres was not too long ago bought by WisdomTree Investments. And full disclosure, I’m additionally an investor in Ceres by means of my very own private investing.
Brandon, you’ve been investing in and round farmland for many years. You grew up on a farm. What makes this kinda land a compelling actual asset?
Brandon Zick: Nicely, thanks Barry. I feel whenever you have a look at farmland, one of many issues that’s so attention-grabbing is simply what, what are the optionality buckets that include land?
Once we purchase farms, usually we’re considering of that is going to be a farm for the long run. However, whenever you personal the actual property, whenever you personal the dust, you’ve gotten a whole lot of optionality beginning with mineral rights.
That’s one thing that on the household farm, I grew up at Northeastern Pennsylvania, nobody knew what Marcellus Shale was. However over time, there’s been an incredible quantity of worth created by means of these mineral rights, properly above the farmland worth. And when you concentrate on different issues that whenever you purchase a farm, in lots of circumstances there’s, there’s timber on the property that could possibly be harvested selectively over time. Alternatives to lease out land for looking and different kinds of recreation to generate income. And you then begin fascinated about different optionality that may come too.
Barry Ritholtz: Nicely, earlier than we go to different optionality, let’s. Let’s spend somewhat time with every of these. So whenever you say mineral rights and you might be referring to Marcellus shale, which is pure fuel made accessible by fracking, you’re not giving up the farm due to the fracking know-how.
Pure fuel corporations and oil corporations can entry that from a single level within the nook of the farm with out. Disrupting the farmland they usually might go actually miles right down to entry how, how important, how worthwhile. Are these pure fuel leases?
Brandon Zick: It relies on, on the realm particularly, however yeah, the good factor is that you simply’re not strip mining a property. To your level, you possibly can entry it from a nook of the property and even lease it with none service intrusion in your property. They will even entry it from a neighbor’s property who would permit that.
And within the Marcellus shale area, you had land that. Most likely was, would’ve transacted nearly any acre for 1500 to $2,000 an acre. After which it was producing 4 or $5,000 per acre in income per 12 months.
In order that’s fully modified. Even inside our portfolio, you don’t see any farms bought in. Pennsylvania due to the Marcellus and Utica Shale, there’s a lot money flowing round that land simply isn’t out there at a pretty worth from a farmland funding standpoint.
Barry Ritholtz: Let me ask you a naive query about this. How do I as a farmer preserve my mineral rights if the adjoining farm? Is sucking the pure fuel out of the bottom. Doesn’t my pure fuel then circulate into that vacuum? How do you handle round that?
Brandon Zick: They attempt to put them collectively into models in order that that doesn’t occur. And there are guidelines round what you possibly can and might’t do, particularly with these, versus vertical wells that might be on one property and relying on the place it was on the property, you may really be extracting from the neighbors with out paying them. With these horizontal wells to go beneath, there are necessities that it’s important to be paid.
You do see an attention-grabbing dynamic in Pennsylvania and New York the place it’s not allowed in New York State, however should you personal a farm on the Pennsylvania facet of the freeway there, you’re positively producing a whole lot of income. And there could possibly be an argument that possibly a few of that’s coming from throughout the best way, however that’s the place regulation in all probability doesn’t actually meet up with the truth.
Barry Ritholtz: Let’s discuss another kinds of leases. That farmland can generate income from. You talked about looking. What do you set up a gate and cost individuals on the best way in how do you cost charges for hunters and different leisure customers should you personal a pair hundred or a few thousand acres of prime land?
Brandon Zick: Usually it’s within the off season when the crops are off the sector, however looking within the Northeast and the Midwest is one thing that I didn’t develop up doing, however. , it’s a lifestyle for lots of people and everybody desires to have a selected place that they’ll go to to hunt their very own land, A personal place to hunt.
And should you don’t personal land that comes by means of the rental market, and there’s a sturdy rental market. While you drive by means of, rural areas, you’ll see posted indicators on bushes saying that is like, you’re not allowed, no trespassing. Usually it’s landowners or hunters who’re paying for these rights who’re posting that.
We undergo third events that may require insurance coverage. There’s a lease being paid and as soon as somebody’s paying – and paying for the insurance coverage – they’re implementing the boundaries, proper? Such that we don’t should, which is nice.
Barry Ritholtz: Let’s discuss different leases. Renewable power. I do know you guys are huge with wind generators. The president could not love these, however farmers positive heck appear to love it. What, what are the economics of placing up a wind turbine on a farm?
Brandon Zick: Wind has been round now for fairly some time. You’ve seen 30 years value of wind farm building, and it’s very incremental in nature to the farm. It might add anyplace from 20 to 40 or 50 foundation factors of revenue, relying on the property, which, and it takes up a really small footprint.
Barry Ritholtz: So that you’re nonetheless farming, you simply have a few huge generators within the nook?
Brandon Zick: That’s precisely true. So, , I feel when individuals began doing it, they thought, properly, that is basically free cash, so long as you’re superb with wind generators, which some individuals like, some individuals don’t. But it surely was incremental. And it was significant sufficient to farmers as a result of they had been nonetheless farming these properties. The thought course of round that has modified somewhat bit. They’re far more tough to allow now as a result of not solely do they take up an enormous footprint, a big wind farm might take up a really massive footprint.
So anyplace from 20 to 30,000 acres, there’s a whole lot of neighbors concerned there. And there’s additionally individuals who battle these wind farms on behalf of migratory birds. So, uh, the, I feel they’re far more tough to allow now.
What you are inclined to see on the photo voltaic facet, which is considerably totally different, is way larger affect on the land. They’re taking on nearly all of the footprint, so that you’re not persevering with to farm. The income must be not simply incremental, it has to interchange the farm revenue and be transformational. What you are inclined to see on the photo voltaic facet is, income that could possibly be anyplace from three to 5 occasions the whole return of farmland plus wind. It’s far more significant. And you too can do it on a a lot smaller footprint. Whereas you may want these 20 or 30,000 acres for wind, for photo voltaic, you are able to do it on 1500 to 2,500 acres. So many fewer neighbors. Perhaps only one landowner.
Barry Ritholtz: One other naive query. Migratory birds and wind generators. How arduous would it not be to embed . . . you’re producing electrical energy to embed some type of mild, even one thing in a spread that’s particular to birds that possibly doesn’t disturb people or planes, and even simply put somewhat high-frequency sound cue. , you’re spinning these blades by means of the air. It must be simple to generate some form of noise. And I do know there are many frequencies that don’t disturb people. The canines aren’t gonna prefer it, however is it that actually that tough of an issue to unravel?
Brandon Zick: It looks like it hasn’t been solved but, so somebody is perhaps on it, however this could possibly be an concept for you.
Barry Ritholtz: That’s my reward to the wind farming and land proudly owning neighborhood. Simply put a few reflectors up on the sting of the blades and the birds might be in a position to have the ability to see it.
We’ve talked about photo voltaic, we’ve talked about winds. What about tasks like biogas? Is {that a} important supply of potential income?
Brandon Zick: As a landowner, possibly not as a lot, however we now have farm tenants that personal dairy farms, that they’ve anaerobic digesters which might be , nice for them. They will use a few of the waste-product from the cows and switch it into inexperienced power. In order that’s some, and promote it again into the grid. In order that’s one thing we’ve seen a whole lot of in states like Wisconsin,
Ohio, Michigan, New York State. I feel that’ll proceed to develop as a result of it looks like the dairy trade’s persevering with to develop, which suggests extra alternative to try this.
Barry Ritholtz: This can be a very, uh, heavy protein cycle of how persons are consuming meals, much less sugar and carbs, an entire lot extra protein, or at the very least that’s what it looks like.
You talked about timber. I do know that there’s a really particular type of agricultural husbandry with harvesting bushes, planting, it’s a really long run course of. You’re considering in cycles of 10, 15, 20 years. How important is timber?
Brandon Zick: Timber’s an enormous asset class particularly, , in components of Canada, Northern Michigan, after which within the southeast. It’s enormous when it comes to, hardwoods and pulp woods that’s been enormous in an institutional asset class or an funding class for a very long time now. And also you are inclined to see these actually massive house owners proudly owning a whole lot and a whole lot of 1000’s of acres promoting to these very massive finish customers. So that could be a little little bit of a distinct beast.
It’s a really properly developed funding construction the place you are inclined to see possibly somewhat extra nuances round a few of the very excessive worth hardwoods, so black walnuts and issues like that. However that’s one thing that I don’t suppose is basically scalable. The way in which that a few of the massive timber investments presently are.
Barry Ritholtz: What about numerous conservation applications and issues like carbon credit? How important are these?
Brandon Zick: There was a whole lot of noise round carbon sequestration and credit related to that. Perhaps two or three years in the past, and we took a tough have a look at it as a result of we personal a lot actual property and the thought of regenerative ag being nice for the land and with the ability to profit from that with a cost cycle was very attention-grabbing to us.
What we discovered was he strings hooked up – and in lots of circumstances, farmers had been already doing a whole lot of these practices. The those who we labored with, they had been already utilizing cowl crops. The query is, are you able to receives a commission for that in a approach that doesn’t connect strings, that jeopardize issues afterward.
Barry Ritholtz: What, what are cowl crops?
Brandon Zick: Cowl crops can be, so as soon as your, uh, crop is harvested, you’re planting a second crop there to stop erosion. To take care of vitamins within the soil. So winter wheat, when individuals plant wheat genera, that could be a cowl crop. That they’re deciding within the spring, did it winter over properly sufficient that they’re gonna harvest it, or are they gonna simply go away it there after which ultimately kill it and plant one other crop into it?
It helps forestall erosion. Soil erosion helps preserve vitamins and moisture within the soil. So cover-cropping is a good type of regenerative ag or sustainable agriculture that’s been round for a very long time. And in the event that they don’t harvest it, and, and we talked earlier about a few of the exhibits I watch like Clarkson’s Farm and, and Harry’s Farm. They simply basically run the mix by means of it, shred it, after which, um, yeah, they’ll until it underneath plant, simply put it proper in there. And that turns into a useful resource for the subsequent crop when it is available in.
Brandon Zick: Yeah, precisely. Extra vitamins within the soil. So once we checked out these carbon credit, we thought, properly, the land is the one technique of manufacturing for producing this credit score.
The landowner and the farmer ought to in all probability get an even bigger portion of the credit score than the one who’s transacting. And in a typical Wall Avenue approach, that’s not the way it works. So we now have not been a giant mover on the carbon sequestration facet as a result of we don’t suppose it’s an actual profit to landowners financially.
Perhaps from an agronomy standpoint, but when they’re doing it anyway, you don’t have to signal a contract. In order we take into consideration that, , conservation when it comes to funds. You want a particular construction to essentially profit from that. There are of us that promote conservation easements. That’s not one thing we do, however there’s a, a bunch round that.
One of many issues that we’ve taken a tougher have a look at is wetlands banking as a result of, uh, when there’s growth occurring, particularly within the Midwest, a whole lot of industrial growth. As departments of transportation develop highways, there are at all times wetlands to mitigate. There are a selection of developed markets for making a wetlands financial institution after which promoting credit into that for growth. And that’s one thing we’ve been taking a tough have a look at in states like Michigan and Wisconsin.
Barry Ritholtz: Let, let’s speak in regards to the use case for farmland that’s the single largest shocker to me. Synthetic intelligence! What’s occurring with these huge information facilities that appear to be popping up in all places?
Brandon Zick: They appear to essentially be concentrating on areas with nice energy, sources and capability on the grid, on the electrical facet, pure fuel traces or pure gas-fired energy vegetation shut by, fiber optic networks which might be shut by, after which entry to water for cooling, whether or not it’s groundwater or in any other case.
It looks like within the Midwest there’s been an enormous push into this. So the outdated Rust Belt is finished and there’s new manufacturing coming in, and information facilities appear to be the very best worth that’s being constructed and it’s being constructed at scale by numerous totally different gamers on the market now. It simply appears as if land that you simply may need stated 10 years in the past, “Nicely, that was not one of the best land as a result of it has a transmission line working by means of it now. That’s like being proper subsequent to the exit on the interstate. It’s a, an enormous bonus for that land.
Barry Ritholtz: While you say huge gamers, I’m considering Microsoft, Google, Amazon, who’re the massive gamers on this house?
Brandon Zick: Yeah, these are the teams, in addition to Meta that they’re, they’ve a looks like an actual thirst for these single-user information facilities and, uh, they have a tendency to focus on the locations these teams have a tendency to focus on the locations which might be essentially the most enticing they usually’re essentially the most aggressive in attempting to place them underneath contract.
Even the place we’re primarily based in South Bend, Indiana, there’s two very massive information heart tasks occurring now. One by Amazon, one by Microsoft which might be remodeling the realm, and I don’t suppose they’ll be the final ones.
Barry Ritholtz: There are a number of various land use choices that may both generate income or drive appreciation. Did I overlook any? Did we miss something? These are a whole lot of various things.
Brandon Zick: These are the massive ones. In conventional manufacturing distribution facilities, these are issues which were occurring, at the very least within the Midwest now for generations, and it simply continues.
The extra the financial system continues to develop. That’s one space the place possibly farmland is a bit more levered to the financial system for a few of these non-farm makes use of due to that. And these are usually multiples of anyplace from 5 to 10 to 20X farmland worth. So it may be very significant out there.
Barry Ritholtz: To wrap up, there are a variety of issues that make land worthwhile. Positive. It’s a spot to construct a home or a industrial constructing or to farm to develop crops. However actual property have change into more and more worthwhile attributable to issues like water rights, photo voltaic, wind, mineral rights, and now synthetic intelligence information facilities. It’s a captivating growth they usually ain’t making any extra land, so that is more likely to preserve staying in style, sooner or later.
I’m Barry Ritholtz. You’ve been listening to on the Cash On Bloomberg Radio.
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