Does a higher appraisal mean investors have earned a cash return?

No. It means the property is estimated to be worth more on paper. Cash arrives only when the property is sold or refinanced and the proceeds are distributed, after selling costs, debt repayment and fees. Farmland LP's deck reports Fund I's two farms, bought for $32.6 million, appraised at $95.5 million in 2025; AltStreet's review notes that the fund's historical return figure is partly based on appraised rather than realized values.

Why can sale prices differ from appraisals?

Appraisals use past comparable sales and the appraiser's judgment; actual buyers respond to current conditions, financing costs and the specific property. In a falling market appraisals tend to lag down; in a rising one they lag up. Selling costs and time on market also separate appraised value from net proceeds.

Who decides valuations on farmland platforms?

It varies. Amber Farmland's board sets its share price twice a year from farm appraisals plus a premium for organic certification, minus what the company owes. AltStreet's AcreTrader review found manager-determined property valuations without a certified appraiser. Farmland Partners estimates land values using third-party appraisals, its own analysis and comparable sales.

What evidence shows realized value?

Completed sales. Farmland Partners sold 60 properties in 2025 for $90.2 million and recognized a $34.9 million net gain. AcreTrader's verified exits show realized IRRs by cohort, including a 2026 cohort averaging 7.0%, below earlier years. Realized results are the test of whether past appraisals were right.

Appraisal vs Sale Value

Real Assets & Fractional Structures

Definition

An appraisal is a professional opinion of a property's market value as of a stated date, usually derived from comparable sales, the property's income capitalized at a market rate, and the cost of replacing improvements. A sale value is the price a buyer actually paid in a completed transaction. The two can differ substantially. Appraisals rely on past sales that may be few, dated or not truly comparable, so they lag turning markets and smooth volatility; they reflect the assumptions of the appraiser and the purpose of the engagement; and they ignore selling costs and the time it takes to find a buyer. An increase in a property's appraised value is an unrealized gain: it raises reported NAV or equity, but investors have earned cash only when the property is sold or refinanced and the proceeds are distributed.

Why it matters

Private property and farmland funds report returns mostly from appraisals, because their assets rarely trade. That makes the appraisal process the foundation of every reported NAV, every 'since inception' return and every redemption price. When appraisals are independent, frequent and tested by sales, they are a reasonable proxy. When they are ordered by the manager, infrequent, or based on few comparables, they can overstate value for years and then correct sharply when assets are sold. Investors who buy or redeem at an appraisal-based price are transacting at that opinion, not at market. AltStreet compares appraisal-based figures with realized sales wherever a platform has completed them, and labels returns that rest on unrealized values as such.

Common misconceptions

•An appraised gain is not cash. It is realized only on sale or refinancing.
•An appraisal is not a price someone has agreed to pay. It is an opinion as of a date.
•Appraisals do not move with markets day to day. They lag and smooth, especially in turning markets.
•A manager's valuation is not an independent appraisal. Who orders and pays for it matters.
•Gross appraised value is not net proceeds. Selling costs and debt come off before investors are paid.

Technical details

How appraisals are built

Sales comparison: recent sales of similar properties, adjusted for differences; for farmland, soil quality, water and improvements per acre.

Income approach: NOI divided by a market cap rate, or discounted projected cash flows.

Cost approach: land value plus the depreciated cost of replacing improvements.

Reconciliation: the appraiser weighs the approaches into a single opinion as of the valuation date.

Valuation practices in AltStreet's reviews

Amber Farmland: board-set price twice a year; at June 30, 2026, farmland of $124.9 million comprised appraised value of $119.9 million plus an organic premium of $5.0 million.

Farmland LP: Fund I bought for $32.6 million and appraised at $95.5 million in 2025 per the deck; its historical return figure is partly based on appraised rather than realized values.

AcreTrader: manager-determined property valuations without a certified appraiser.

Lofty: listings with an appraisal in their data room in 2024 or 2025 were priced at exactly 105% of the appraisal's as-is market value.

Farmland Partners: land values estimated from third-party appraisals, its own analysis and comparable sales; 2025 sales of $90.2 million produced a $34.9 million gain.

Checks before relying on an appraised value

Who ordered the appraisal, who paid, and whether the appraiser is independent and certified.

The valuation date, and how many comparable sales support it.

Whether the appraised value has been tested by any sale.

How the platform's prices for buying, selling or redeeming relate to the appraisal.

Realized exit results against earlier appraised marks.

How investors apply the term

Investors usually apply this term by tying the definition back to the controlling documents and then asking which cash flows, rights, restrictions, or valuation assumptions it changes. A useful review looks at the term alongside fees, leverage, liquidity, reporting frequency, and manager discretion rather than treating it as a standalone concept.

The practical diligence test is simple: identify who benefits if the assumption is wrong, who has control when conditions change, and what evidence the investor receives after closing. Terms that cannot be reconciled to documents, cash movements, and monitoring data should be treated as marketing shorthand until proven otherwise.

Frequently asked questions

Does a higher appraisal mean investors have earned a cash return?: No. It means the property is estimated to be worth more on paper. Cash arrives only when the property is sold or refinanced and the proceeds are distributed, after selling costs, debt repayment and fees. Farmland LP's deck reports Fund I's two farms, bought for $32.6 million, appraised at $95.5 million in 2025; AltStreet's review notes that the fund's historical return figure is partly based on appraised rather than realized values.
Why can sale prices differ from appraisals?: Appraisals use past comparable sales and the appraiser's judgment; actual buyers respond to current conditions, financing costs and the specific property. In a falling market appraisals tend to lag down; in a rising one they lag up. Selling costs and time on market also separate appraised value from net proceeds.
Who decides valuations on farmland platforms?: It varies. Amber Farmland's board sets its share price twice a year from farm appraisals plus a premium for organic certification, minus what the company owes. AltStreet's AcreTrader review found manager-determined property valuations without a certified appraiser. Farmland Partners estimates land values using third-party appraisals, its own analysis and comparable sales.
What evidence shows realized value?: Completed sales. Farmland Partners sold 60 properties in 2025 for $90.2 million and recognized a $34.9 million net gain. AcreTrader's verified exits show realized IRRs by cohort, including a 2026 cohort averaging 7.0%, below earlier years. Realized results are the test of whether past appraisals were right.