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There are lots of inflation hedges, and stock market volatility doesn't matter much to someone who can ride it out.
There are tax strategies around real estate, and I'd guess that one goal may be leveraging that. Like, IIRC historically farms got certain tax-advantaged status as regards estate taxes, because there were lots of small farmers and farmers thus had a lot of votes. Some of that law is, no doubt, still on the books, and the wealthy will have tax and estate planners who can exploit that. I can't name specifics off-the-cuff, but I bet you that they're there.
searches
https://www.mossadams.com/articles/2024/12/estate-tax-exemption-for-farmers-and-ranchers
Yeah.
So, let's say you have, oh, $500 million in assets sitting around. You're getting old and gonna die. Theoretically, when you die, estate tax kicks in. You can hand down maybe $14 million without smacking into estate tax, the lifetime gift tax exemption. But then you're gonna pay 40% tax on the rest. That's not the end of the world
if you put the stuff in an S&P 500 index fund, that'd be made up in about 8 years of market-rate returns, on average. But it'll definitely slow things down. You gotta pay that each generation, and a generation averages a bit over 30 years.
So what I bet the estate planners these guys have are doing is making them legally farmers, and defer their estate taxes. They gotta pay the IRS something, according to this page, but it's effectively getting to borrow from the IRS at a really low rate. Then their heirs can use those assets that would have gone to the government in tax to make money in the meantime.
Plus, there are other tax games that you can play with real estate. Instead of selling it, borrow against it, and no capital gains tax.
Have income from some source and don't want to pay income tax? Use depreciation on the farm as a deduction to offset that income, make it non-taxable.
How much is that real estate worth? Well, now, that's a complicated question. If you can get the tax authorities to buy an argument that it's worth a lot less than fair market value, then you're only paying estate tax on whatever the government will agree the value of the real estate is.
According to the link I posted above, in Washington state, farms are completely exempt from state-level estate tax.
So, say someone buys a lot of farmland before they die on the guidance of their estate planner. Now Washington state gets no estate tax from them. They can pass hundreds of millions or whatever in assets to their heirs, whereas someone else would have Washington state take a 20% cut.
I've got no experience with buying farmland. But I strongly suspect that the reason that specifically very wealthy, elderly people would buy farmland is for tax purposes. Aiming to avoid taxes, especially estate tax. It's not because farms are some sort of remarkable, amazing investment absent that.