Realty REIT in $1B Vertical Farming Partnership with Plenty

Realty Income Corp. has formed a strategic partnership with South San Francisco-based vertical farming startup Plenty Unlimited to develop up to $1B of properties in the rapidly expanding indoor farming sector.

Vertical farming facilities are usually two- to three-story buildings that feature floor-to-ceiling racks holding leafy vegetables or fruits grown in climate-controlled settings with intense lighting in 24/7 operations (think data centers with radicchio instead of servers).

The emerging indoor agriculture industry is positioning itself as a direct-to-market produce supplier—facilities will be developed to service consumers within a 50-mile radius—that can deliver fresh produce from “farm” to table within a day of harvesting, while generating far greater yields per acre than traditional outdoor agriculture.

Realty, a publicly traded REIT will acquire sites and develop them to be leased back to Plenty, the companies announced this week.

Realty is acquiring the land and funding the development of the venture’s first project, Plenty’s Richmond, VA facility, which is expected to be the world’s largest vertical farming complex to date.

The $300M, 120-acre facility in Richmond will grow crops including strawberries, tomatoes and leafy greens, with a capacity to grow up to 20M pounds of produce annually—an output the company says can generate up to 350 times the yield per acre of traditional outdoor farming.

The crops at the Richmond complex will grow on 30-foot climate-controlled towers, “irrigated” by the municipal water supply and tended by robotic arms. The towers are designed for maximized light exposure in an indoor facility that eliminates any need to use pesticides.

“Scale is a critical component of advancing indoor farming’s role as a core contributor to our global food supply,” Plenty CEO Arama Kukutai said, in a statement.

“Teaming up with Realty Income is a significant step forward in accelerating the deployment of our farms with vertical farm facilities that are purpose-built to support Plenty’s proprietary growing technology,” Kukutai said.

More than 2000 vertical farms currently are operating in the US. While vertical farms use much less land and water than conventional outdoor farms they are large consumers of electricity.

At is pilot plant in San Francisco, which produces kale, mizuna and arugula for Whole Foods and Instacart, Plenty uses 100% renewable energy.

The Richmond project was announced in September, shortly after Plenty closed a $400M Series E funding round that drew backers including Walmart. A New York-based vertical farming competitor, Gotham Greens, raised more than $310M in a funding round last fall.