May 25, 2018

Cranberry Company Gets a Taste for Real Estate

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Cranberry Company Gets a Taste for Real Estate

A.D. Makepeace Co., the world’s largest cranberry grower, has a bigger taste for real estate. The company, which farms about 2,100 acres of cranberries for Ocean Spray, has broken ground on a Redbrook village, a mixed-use development in Plymouth, Mass. The development will offer 1,200 new homes by the end of the year, and it will also include a town square and 60,000 square feet of commercial space. It will share space with about 75 acres of cranberry bogs.

It's one of four major projects that Makepeace has planned in eastern Massachusetts, The Wall Street Journal reports. The company also is moving forward on a 150,000-square-foot technology office park as well as a 300,000-square-foot development with hotels, offices, retail, and medical space. A nearly 200,000-square-foot retail development is slated for Rochester.

Makepeace’s move into real estate comes at a time when the price for cranberries is falling. An oversupply of cranberries has caused prices to tumble from $47 a barrel in 2012 to $31.60 today.

However, the value of the farmland is still high, and farmers are finding that they can convert some to residential use to net more profits. Some farmers are selling any excess land they own to developers — sometimes for triple its value — according to Brad Hunter, chief economist at Metrostudy, a residential real estate research firm.

"Our strategy is to have a series of businesses that support each other," says Makepeace CEO Michael Hogan. The company, he says, is not leaving the farming business with its latest move into real estate. In fact, Hogan says the company is also adding 140 new acres of cranberry bogs.

For Makepeace’s Redbrook village residential development, home prices are to range from the high-$300,000s to mid-$400,000s. Single-family homes will not be spread out across large areas of land like a typical residential setup. The entirety of the development, including a mixture of commercial development, will concentrate on 400 acres, while the rest of the property will be preserved for cranberry bogs.

Walter Foley, a local real estate professional with Coldwell Banker Residential Brokerage, says living near cranberry bogs will "certainly be a value-added" to these homes. In the summer, cranberry farms are covered in white flowers. Those white flowers eventually turn to red berries in the early fall as the harvest season approaches.

Source: “Cranberry Giant Adds Real Estate to the Mix,” The Wall Street Journal (Aug. 12, 2014)