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AppHarvest Completes Leaseback Deal For Kentucky Farm

AppHarvest

AppHarvest has finalized the sale-leaseback of its indoor leafy greens farm in Berea, Kentucky, for more than $127 million and has opened its 60-acre high-tech indoor farm in Richmond, Kentucky.

AppHarvest has entered an agreement with Mastronardi Berea, a joint venture between Mastronardi Produce and COFRA Holding, for the sale-leaseback of its Berea indoor farm for about $127 million. This includes an initial lease rate of 7.5 percent over 10 years, with four renewal terms of five years each.

Mastronardi Produce is AppHarvest’s marketing and distribution partner, which has sold AppHarvest’s produce including tomatoes, leafy greens and strawberries into national grocery store chains, restaurants and foodservice outlets. Some of the proceeds of the sale-leaseback will be used to repay the previously announced $30 million bridge loan from Mastronardi Produce to AppHarvest and the first two years of prepaid rent at the Berea facility. 

Additional details on the sale-leaseback are available on the associated Form 8-K filed with the SEC.

“The AppHarvest team has worked relentlessly this year to get the four-farm network operational, and those efforts have paid off with the quadrupling of farms in our network and diversifying our crop set,” said Jonathan Webb, AppHarvest founder and CEO. “The team is now focused on operations to ramp up production and revenue from the four high-tech farms.”

AppHarvest also announced that its Richmond, Kentucky, farm is open and has begun growing Campari brand tomatoes. The first harvest at Richmond is anticipated in January. Half of the Richmond farm currently is planted, and the other half is expected to be planted in 2023.

The company has quadrupled the number of farms operating in its network in 2022. It has opened two other indoor farms – a 30-acre farm in Somerset for strawberries and cucumbers and a 15-acre farm in Berea for leafy greens.

AppHarvest is shipping strawberries under the “WOW Berries” brand and washed-and-ready-to-eat leafy greens under the “Queen of Greens” brand. In its third growing season, the Morehead farm has diversified its crop, adding snacking tomatoes sold under the Sunset brand as “Flavor Bombs” and “Sugar Bombs.”

According to USDA reports, the value of U.S. fruit and vegetable imports rose to a record level in 2021 and has been projected to keep increasing in 2022. Changing weather patterns – ranging from mega-drought in the Southwest of the U.S. to flooding to catastrophic wind events – are making it harder for open-field farmers to predict the duration of their growing seasons and to have conditions that result in a quality harvest.

For more information, visit appharvest.com.

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