Page through each issue of The Land Report in 2012, and three trends stand out:
1) Legacy properties continue to command a premium. Witness Larry Ellison’s mega-million-dollar purchase of the island of Lanai.
2) The market continues to crave income-producing properties, especially productive farmland.
3) America’s leading landowners view stewardship as a critical element of their trust. Witness Louis Moore Bacon’s remarkable conservation gift, which led to the creation of the Sangre de Cristo Conservation Area.
One transaction encompassed all three of these elements: the sale of Montana’s historic Broken O Ranch. The history of the Broken O predates statehood. Its legacy is peerless. And its capacity to produce cattle and prodigious amounts of grain is matchless. When these 124,000 acres changed hands in November, one passionate, innovative business- man assumed an imposing mantle that had been meticulously crafted by a peer from an earlier era. For these and so many other reasons, the Magazine of the American Landowner is proud to designate the sale of the Broken O as the 2012 Deal of the Year.
Located along a 20-mile stretch of the Sun River, the roots of the Broken O reach deep — to the days of the Montana Territory. Its current incarnation was masterminded by Bill Moore, founder of the country’s largest privately owned paint company, Kelly-Moore. What began in the 1980s with Moore’s acquisition of a single ranch property along the Sun River evolved into what Forbes described as “one of the largest agricultural operations in the Rocky Mountain West.”
The Broken O’s new owner — Stan Kroenke — is no stranger to the land either. Kroenke ranked No. 10 on the 2012 Land Report 100; among his other ranch holdings is the largest contiguous ranch in the Rocky Mountains, the 540,000-acre Q Creek Ranch.
“Stan looks for quality,” says Kroenke’s broker, Joel Leadbetter of Hall and Hall. “The Broken O is so diversified with agricultural and recreational opportunities, and it’s such a large continuous landscape. That’s rare these days. The Broken O also complements and enhances the attributes of Stan’s other ranches and their operations.”
The rich and alluring history of the Broken O Ranch dates back to the 1800s, a time when cattlemen of the Lonesome Dove era ventured west to tame vast sprawling landscapes. One of those intrepid hopefuls was Daniel Flowerree, a Missourian who made his fortune in Montana’s gold fields. After settling in the Sun River Valley, his Flowerree and Lowry Cattle Company boomed, running as many as 40,000 head. Then a series of brutal winters took a bitter toll.
Shortly after the turn of the twentieth century, Flowerree’s ranch was acquired by the Teton Land Company. In the decades that followed, the operation eventually grew into one of the largest cattle operations in the West. In 1945, John Hamilton of Hamilton Beach appliances purchased it.
Bill and Desiree Moore bought the Hamilton Ranch in 1988. One of Moore’s next acquisitions was a neighboring tract, the Freeman Ranch. He would forge a deep, long-lasting bond with the family. Dan Freeman became a close friend and Bill’s right-hand man.
Over the ensuing two-decade span, Bill Moore and Dan Freeman worked in concert, assembling more than 20 blocks of land and building the enormously successful ranching and agricultural enterprise that is in place today.
“As his ranch manager for more than 20 years, Dan brought Bill’s dreams and his passions to fruition. It was a rare combination,” says Mike Swan, the seller’s broker. Swan, who was affiliated with the leading firm of Bates Sanders Swan Land Company throughout the marketing and sale of the Broken O, announced the formation of Swan Land Company in February 2013.
The Broken O is its own hedge fund,” Swan says. “Production is at such a massive scale that any one of the individual entities could make a tremendous agricultural operation independently.”
In addition, the Broken O features a matchless recreational component. Twenty miles of Sun River create an immense resource not only for fish but also for waterfowl, upland birds, mule deer, and elk. Thanks to the Sun River and other historic rights that date back more than a century, the Broken O is the largest private water rights owner in the State of Montana.
The ranch also enjoys close proximity to “the Bob.” At more than 1.5 million acres, the renowned Bob Marshall Wilderness is one of the largest wilderness areas in the Lower 48.
Along with building an agricultural empire, Moore also built a reputation as a steward of the land. He improved the ranch’s extensive pastures by planting native grasses. Moore placed three conservation easements on approximately 9,700 acres along the Sun River corridor. The Moores eventually became a mainstay of the community, employing a large number of locals, funding a community center in nearby Augusta, and donating to local schools and charities.
Kroenke is also no stranger to land stewardship. “Stan bought his first ranch in 1997, and balance has always been important to him,” Leadbetter says. “He looks at everything: the business, ecosystem, fishery, wildlife, and landscape. He always strives to be a very good steward while running sustainable ag operations.”
A deal of this size requires a tremendous amount of preparation. Swan spent months working with Freeman and the seller’s legal team to prepare volumes of due diligence material, including inventory lists, equipment and cattle documentation, background information on 27 houses, soil reports, land title commitments in three counties, information about water rights, state and federal land leases, grazing permits, gravel permits, DEQ permits, conservation easements, and hunting leases, to name a few.
“The preparation was instrumental to the successful transaction,” Swan says. “Our goal was to package the ranch to the point that when the buyer came through the door, everything they needed to know about the Broken O was at their fingertips.”
And interested buyers did come knocking, including private investors and investment funds as well as corporate entities.
As luck would have it, Leadbetter and Swan are both based out of Bozeman; the two know each other quite well. “We both grew up on ranches in Southwest Montana and have ag backgrounds,” Swan says. “We were working with a buyer and a team that understood the materials we provided and spoke the same language. That was paramount to the transaction.”
Of equal importance was that Leadbetter’s client instantly recognized the sterling qualities of the Broken O. “Stan looked it over, and he knew he wanted it,” Leadbetter says. “He’s that kind of guy — very bright — and wants to continue that legacy of innovative agriculture and enjoy the wildlife and fishing and all that the Broken O has to offer.”
An especially rewarding aspect only became apparent after the closing. The central character was not present, but his legacy continues. “It is a blessing we were able to sell the ranch to an individual of Stan Kroenke’s commitment to agriculture and land stewardship. My sense is that this transition will not only see a continued commitment to the current agricultural operation that William Moore established, but a continual enhancement and improvement of the ranch overall. I’m sure if Bill Moore were alive today, he would be pleased.” Swan says.
Enjoy the entire issue HERE.
The Magazine of the American Landowner has hit the Big Apple!
The spring issue of The Land Report – which features America’s Best Brokerages as well as the 2011 Deal of the Year – debuted in Times Square on Friday.
“An important part of our mission is to broaden the reach of this key asset class,” says Publisher Eddie Lee Rider. Rider, who founded the magazine with Editor Eric O’Keefe, notes that “more and more investors are looking at land and land-based assets as an essential element of a diversified portfolio. And that’s the rationale behind determining America’s Best Brokerages. These real-estate professionals are the best of the best.”
In addition to identifying America’s Best Brokerages, the spring issue of The Land Report also takes an in-depth look at the 2011 Deal of the Year: the $28.5 million sale of Camp Cooley Ranch by Australian deal maker Bernie Uechtritz. Hedge fund manager Louis Moore Bacon, whose holdings include Colorado’s Trinchera Ranch, is recognized as one of the country’s leading stewards of the land. There is also a breakdown of the most recent numbers from the Kansas City Fed documenting the continued rise of farmland prices. And, for fun, the issue also offers an intriguing look at the Academy Award-winning film The Descendants, which stars George Clooney as one of many heirs to a priceless Hawaiian ranch.
Read the digital issue HERE.
March 1, 2012 by Land Report Editors
Filed under Agriculture, Auctions, Bankruptcy, Cattle, Conservation, Developers, Dogs, Energy, Equestrian, Equities, Farming, Federal Policy, Field Reporters, Great Lakes, Great Plains, Hunting, International, Midwest, Minerals, Newsletter, Northeast, Pacific, Public Land, Recreation, South, Southwest, Timber, Topics, Water, West
The Spring issue of The Land Report has arrived!
Right now it’s en route to bookstores such as Barnes & Noble and subscribers’ offices around the world, but thanks to the miracles of modern technology you can read right now right HERE.
Learn the stories of America’s Best Brokerages in our second annual survey. More than 70 are profiled from coast to coast. Read how Bernie Uechtritz pulled off 2011′s Deal of the Year by selling Camp Cooley Ranch in just 45 days. Find out why George Clooney has such strong ties to the land in the Academy Award-winning movie The Descendants.
For more up to the minute reports on listings, auctions, sales, and breaking news pertaining to land and landowners, be sure to follow The Magazine of the American Landowner on Facebook and Twitter. Better yet, Land Report is now on Pinterest.
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A successful hedge fund manager and dedicated conservationist, Bacon’s 202,000± acres earned him No. 40 on the 2010 Land Report 100. Earlier this year he increased land portfolio when he acquired the historic Orton Plantation in North Carolina. Bacon is a direct descendant of Roger Moore, who built the original Orton residence in 1725 and the plantation home in 1735. Bacon also owns the sprawling 171,000-acre Trinchera Ranch in Colorado and Robins Island and Cow Neck Farm in New York.
Download the 2010 Land Report 100 HERE.
The Forbes family has sold the ranch. In the largest transaction involving The Land Report 100 in 2007, the four sons and one daughter of Malcolm Forbes signed off on the sale of their 171,400-acre Trinchera Ranch in Southern Colorado to hedge fund manager Louis Bacon of Moore Capital for $175 million on November 15, 2007. Bacon, who runs Moore Capital Management and was estimated to be worth $1.8 billion by Forbes, ranked No. 262 on the magazine’s list of the wealthiest Americans this year.
Land Report Editor Eric O’Keefe discusses this sale HERE.
So what did Bacon get for $175 million? For starters, the largest remaining undeveloped tract within the historic Sangre de Cristo land grant, an enormous swath of snow-capped peaks, grassland valleys, and vast expanses of conifer forest. The original 1843 land grant encompassed more than 1 million acres and extended from Northern New Mexico above Taos into Colorado’s San Luis Valley. The Sangre de Cristo was subsequently carved up, parceled off, and the subject of countless legal shenanigans.
More than a century later, Malcolm Forbes bought the Trinchera Ranch, which is located in Costilla County 160 miles southwest of Denver near Fort Garland. Forbes later acquired an adjacent parcel called the Blanca Ranch to create the present property.
Land Report Editor Eric O’Keefe discusses this sale HERE.
What didn’t Bacon get for $175 million? For one thing, he doesn’t have the right to develop the 267-square-mile tract. Those rights were given away in 2004 when the Forbes family donated the largest conservation easement in the state’s history to Colorado Open Lands, a non-profit land trust. In return for this gift, the family received a substantial tax break.
According to The Pueblo Chieftain, Bacon has long been a proponent of groups that support conservation and set up the Moore Charitable Foundation in 1992 to aid their efforts. He himself has given conservation easements on two Long Island properties. I asked Dan Pike, the president of Colorado Open Lands, about Louis Bacon, and he said, “He’s probably as good a buyer as we could have hoped for.”
A closing note. Most published reports indicate that Malcolm Forbes paid $50 an acre to purchase the ranch in 1969. In 2007, his heirs sold it for more than $1,000 an acre. And that was after they had donated their record-setting conservation easement. As anyone familiar with easements knows, they limit land use and therefore lower land value. Yet the Forbes family was still able to sell the Trinchera Ranch for more than 20 times what Malcolm Forbes paid almost 40 years earlier.
Land Report Editor Eric O’Keefe discusses this sale HERE.