What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2020-11-04 compared with 2020-08-05 · 503 added, 331 removed, 553 unchanged (60% of the section changed)

3 unchanged sentences

(In thousands, except share and per-share data)

June 30, 2020

December 31, 2019

September 30, 2020 December 31, 2019

Investments in real estate, net $ 858,753 $ 792,081

2 unchanged sentences

Other assets, net 9,543 6,191

TOTAL ASSETS $ 878,377 $ 816,787

LIABILITIES AND EQUITY

2 unchanged sentences

Series A cumulative term preferred stock, $ 0.001 par value, $ 25.00 per share liquidation preference;

2,000,000 shares authorized, 1,150,000 shares issued and outstanding as of June 30, 2020, and December 31, 2019, net

2,000,000 shares authorized, 1,150,000 shares issued and outstanding as of September 30, 2020, and December 31, 2019, net

28,535 28,359

Accounts payable and accrued expenses 11,997 10,132

5 unchanged sentences

Series B cumulative redeemable preferred stock, $ 0.001 par value, $ 25.00 per share liquidation preference;

6,472,482 shares authorized 5,972,482 shares issued and outstanding as of June 30, 2020;

6,456,065 shares authorized 5,956,065 shares issued and outstanding as of September 30, 2020;

6,485,400 shares authorized, 4,755,869 shares issued and outstanding as of December 31, 2019

Series C cumulative redeemable preferred stock, $ 0.001 par value, $ 25.00 per share liquidation preference;

26,000,000 shares authorized, 130,702 shares issued and outstanding as of June 30, 2020;

26,000,000 shares authorized, 420,230 shares issued and outstanding as of September 30, 2020;

no shares authorized, issued, or outstanding as of December 31, 2019

Common stock, $ 0.001 par value;

65,527,518 shares authorized 21,534,739 shares issued and outstanding as of June 30, 2020;

65,543,935 shares authorized 22,204,906 shares issued and outstanding as of September 30, 2020;

91,514,600 shares authorized, 20,936,658 shares issued and outstanding as of December 31, 2019

4 unchanged sentences

Non-controlling interests in Operating Partnership — 2,349

Total equity 317,315 278,970

TOTAL LIABILITIES AND EQUITY $ 878,377 $ 816,787

3 unchanged sentences

(In thousands, except share and per-share data)

For the Three Months Ended June 30,

For the Six Months Ended June 30,

For the Three Months Ended September 30, For the Nine Months Ended September 30,

2020 2019 2020 2019

OPERATING REVENUES:

12 unchanged sentences

OTHER INCOME (EXPENSE):

Other income 323 62 1,668 937

Interest expense ( 5,202 ) ( 4,401 ) ( 15,155 ) ( 11,396 )

Dividends declared on Series A cumulative term preferred stock

(Loss) gain on dispositions of real estate assets, net

Property and casualty (loss) recovery

( 458 ) ( 458 ) ( 1,375 ) ( 1,375 )

Loss on dispositions of real estate assets, net ( 195 ) ( 134 ) ( 861 ) ( 154 )

Property and casualty recovery, net 1 17 68 10

(Loss) income from investments in unconsolidated entities

Total other expense, net ( 5,550 ) ( 4,914 ) ( 15,648 ) ( 11,978 )

NET INCOME 1,581 523 4,864 804

Net loss (income) attributable to non-controlling interests

( 13 ) ( 6 ) ( 52 ) ( 9 )

NET INCOME ATTRIBUTABLE TO THE COMPANY 1,568 517 4,812 795

Dividends declared on Series B cumulative redeemable preferred stock

( 2,238 ) ( 1,161 ) ( 6,604 ) ( 2,655 )

Other charges related to Series B cumulative redeemable

preferred stock

( 44 ) — ( 44 ) —

Dividends declared on Series C cumulative redeemable preferred stock

( 123 ) — ( 145 ) —

NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS

$ ( 837 ) $ ( 644 ) $ ( 1,981 ) $ ( 1,860 )

LOSS PER COMMON SHARE:

7 unchanged sentences

(In thousands, except share and per-share data)

For the Three Months Ended June 30,

For the Six Months Ended June 30,

For the Three Months Ended September 30, For the Nine Months Ended September 30,

2020 2019 2020 2019

COMPREHENSIVE INCOME:

Net income attributable to the Company

$ 1,568 $ 517 $ 4,812 $ 795

Change in fair value related to interest rate hedging instruments

95 ( 347 ) ( 1,331 ) ( 347 )

COMPREHENSIVE INCOME ATTRIBUTABLE TO THE COMPANY

$ 1,663 $ 170 $ 3,481 $ 448

The accompanying notes are an integral part of these condensed consolidated financial statements.

2 unchanged sentences

(In thousands, except share data)

Three months ended June 30, 2020

Series B Preferred Stock

Series C Preferred Stock

Three months ended September 30, 2020

Series B Preferred Stock Series C Preferred Stock Common Stock Additional

Capital Accumulated

Comprehensive

Distributions

Loss Distributions

Earnings Total

Stockholders’

Balance at March 31, 2020

Issuance of Series B Preferred Stock, net

Interests Total

of Shares Par

Balance at June 30, 2020 5,972,482 $ 6 130,702 $ — 21,534,739 $ 22 $ 352,677 $ ( 1,816 ) $ ( 45,653 ) $ 305,236 $ 1,147 $ 306,383

Redemptions of Series B Preferred Stock

( 16,417 ) 0 — — — — ( 327 ) — ( 44 ) ( 371 ) — ( 371 )

Issuance of Series C Preferred Stock, net

— — 289,528 0 — — 6,563 — — 6,563 — 6,563

Redemption of OP Units

— — — — 144,151 0 2,291 — — 2,291 ( 2,291 ) —

Issuance of common stock, net

Comprehensive loss attributable to the Company

Dividends—Series B Preferred Stock

Dividends—Series C Preferred Stock

— — — — 526,016 0 8,392 — — 8,392 — 8,392

— — — — — — — — 1,568 1,568 13 1,581

Dividends—Series B Preferred Stock and Series C Preferred Stock — — — — — — — — ( 2,361 ) ( 2,361 ) — ( 2,361 )

Distributions—OP Units and common stock

— — — — — — — — ( 2,967 ) ( 2,967 ) ( 2,967 )

Comprehensive income attributable to the Company — — — — — — — 95 — 95 — 95

Adjustment to non-controlling interests resulting from changes in ownership of the Operating Partnership

Balance at June 30, 2020

Six months ended June 30, 2020

Series B Preferred Stock

Series C Preferred Stock

— — — — — — ( 1,131 ) — — ( 1,131 ) 1,131 —

Balance at September 30, 2020 5,956,065 $ 6 420,230 $ — 22,204,906 $ 22 $ 368,465 $ ( 1,721 ) $ ( 49,457 ) $ 317,315 $ — $ 317,315

Nine months ended September 30, 2020

Series B Preferred Stock Series C Preferred Stock Common Stock Additional

Capital Accumulated

Comprehensive

Distributions

Loss Distributions

Earnings Total

Stockholders’

Interests Total

of Shares Par

Balance at December 31, 2019 4,755,869 $ 5 — $ — 20,936,658 $ 21 $ 315,770 $ ( 390 ) $ ( 38,785 ) $ 276,621 $ 2,349 $ 278,970

1 unchanged sentence

Redemptions of Series B Preferred Stock

( 29,335 ) 0 — — — — ( 636 ) — ( 44 ) ( 680 ) — ( 680 )

Issuance of Series C Preferred Stock, net — — 420,230 0 — — 9,526 — — 9,526 — 9,526

Redemptions of OP Units

— — — — 288,303 0 4,383 — — 4,383 ( 4,383 ) —

Issuance of common stock, net — — — — 979,945 1 14,423 — — 14,424 — 14,424

Comprehensive loss attributable to the Company

Dividends—Series B Preferred Stock

Dividends—Series C Preferred Stock

Net income — — — — — — — — 4,812 4,812 52 4,864

Dividends—Series B Preferred Stock and Series C Preferred Stock — — — — — — — — ( 6,749 ) ( 6,749 ) — ( 6,749 )

Distributions—OP Units and common stock

— — — — — — — — ( 8,691 ) ( 8,691 ) ( 68 ) ( 8,759 )

Comprehensive loss attributable to the Company — — — — — — — ( 1,331 ) — ( 1,331 ) — ( 1,331 )

Adjustment to non-controlling interests resulting from changes in ownership of the Operating Partnership

Balance at June 30, 2020

— — — — — — ( 2,050 ) — — ( 2,050 ) 2,050 —

Balance at September 30, 2020 5,956,065 $ 6 420,230 $ — 22,204,906 $ 22 $ 368,465 $ ( 1,721 ) $ ( 49,457 ) $ 317,315 $ — $ 317,315

The accompanying notes are an integral part of these condensed consolidated financial statements.

Three Months Ended June 30, 2019

Series B Preferred Stock

Series C Preferred Stock

Three Months Ended September 30, 2019

Series B Preferred Stock Series C Preferred Stock Common Stock Additional

Capital Accumulated

Comprehensive

Distributions

Loss Distributions

Earnings Total

Stockholders’

Balance at March 31, 2019

Interests Total

of Shares Par

Balance at June 30, 2019 2,636,068 $ 3 — — 20,532,770 $ 21 $ 263,249 $ — $ ( 31,919 ) $ 231,354 $ — $ 231,354

Issuance of Series B Preferred Stock, net 831,579 0 — — — — 18,517 — — 18,517 — 18,517

Redemptions of Series B Preferred Stock

( 2,120 ) 0 — — — — ( 48 ) — — ( 48 ) — ( 48 )

Issuance of OP Units as consideration in real estate acquisitions, net

— — — — — — — — — — 3,276 3,276

Issuance of common stock, net

Dividends—Series B Preferred Stock

— — — — 355,305 0 3,996 — — 3,996 — 3,996

— — — — — — — — 517 517 6 523

Dividends—Series B Preferred Stock and Series C Preferred Stock — — — — — — — — ( 1,161 ) ( 1,161 ) — ( 1,161 )

Distributions—OP Units and common stock

Balance at June 30, 2019

Six Months Ended June 30, 2019

Series B Preferred Stock

Series C Preferred Stock

— — — — — — — — ( 2,781 ) ( 2,781 ) ( 39 ) ( 2,820 )

Comprehensive loss attributable to the Company ( 347 ) — ( 347 ) ( 347 )

Adjustment to non-controlling interests resulting from changes in ownership of the Operating Partnership

— — — — — — 848 — — 848 ( 848 ) —

Balance at September 30, 2019 3,465,527 $ 3 — $ — 20,888,075 $ 21 $ 286,562 $ ( 347 ) $ ( 35,344 ) $ 250,895 $ 2,395 $ 253,290

Nine Months Ended September 30, 2019

Series B Preferred Stock Series C Preferred Stock Common Stock Additional

Capital Accumulated

Comprehensive

Distributions

Loss Distributions

Earnings Total

Stockholders’

Interests Total

of Shares Par

Balance at December 31, 2018 1,144,393 $ 1 — — 17,891,340 $ 18 $ 202,053 $ — $ ( 25,826 ) $ 176,246 $ 4,807 $ 181,053

Issuance of Series B Preferred Stock, net

2,330,654 2 — — — — 51,975 — — 51,977 — 51,977

Redemptions of Series B Preferred Stock

( 9,520 ) 0 — — — — ( 214 ) — — ( 214 ) — ( 214 )

Issuance of OP Units as consideration in real estate acquisitions, net

— — — — — — — — — — — 3,276 3,276

Redemption of OP Units — — — — 570,879 1 4,714 — — 4,715 ( 4,715 ) —

Issuance of common stock, net — — — — 2,425,856 2 27,143 — — 27,145 — 27,145

Dividends—Series B Preferred Stock

Net income — — — — — — — — 795 795 9 804

Dividends—Series B Preferred Stock and Series C Preferred Stock — — — — — — — — ( 2,655 ) ( 2,655 ) — ( 2,655 )

Distributions—OP Units and common stock — — — — — — — — ( 7,658 ) ( 7,658 ) ( 91 ) ( 7,749 )

Comprehensive loss attributable to the Company ( 347 ) — ( 347 ) — ( 347 )

Adjustment to non-controlling interests resulting from changes in ownership of the Operating Partnership

Balance at June 30, 2019

— — — — — — 891 — — 891 ( 891 ) —

Balance at September 30, 2019 3,465,527 $ 3 — $ — 20,888,075 $ 21 $ 286,562 $ ( 347 ) $ ( 35,344 ) $ 250,895 $ 2,395 $ 253,290

The accompanying notes are an integral part of these condensed consolidated financial statements.

2 unchanged sentences

(In thousands)

For the Six Months Ended June 30,

For the Nine Months Ended September 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income $ 4,864 $ 804

Adjustments to reconcile net income to net cash provided by operating activities:

2 unchanged sentences

Amortization of deferred rent assets and liabilities, net ( 212 ) ( 226 )

Amortization of of right-of-use asset from operating leases and operating lease liabilities, net

Amortization of right-of-use asset from operating leases and operating lease liabilities, net ( 12 ) ( 18 )

Income from investments in unconsolidated entities ( 7 ) —

12 unchanged sentences

Change in deposits on real estate acquisitions, net ( 550 ) ( 300 )

Insurance proceeds received capitalized as real estate additions 66 —

Net cash used in investing activities ( 75,620 ) ( 209,950 )

11 unchanged sentences

Distributions paid to non-controlling interests in Operating Partnership ( 68 ) ( 91 )

Payment of contingent consideration — —

Net cash provided by financing activities 56,794 185,310

NET INCREASE IN CASH AND CASH EQUIVALENTS

NET DECREASE IN CASH AND CASH EQUIVALENTS ( 7,233 ) ( 10,738 )

CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 13,688 14,730

4 unchanged sentences

(In thousands)

For the Six Months Ended June 30,

For the Nine Months Ended September 30,

NON-CASH OPERATING, INVESTING, AND FINANCING INFORMATION:

Issuance of non-controlling interests in Operating Partnership in conjunction with acquisitions

Operating lease right-of-use assets — 188

1 unchanged sentence

Real estate additions included in Accounts payable and accrued expenses and Due to related parties, net

Loss on dispositions of real estate assets, net included in Accounts payable and accrued expenses and Due to related parties, net

Stock offering and OP Unit issuance costs included in Accounts payable and accrued expenses and Due to related parties, net

Financing fees included in Accounts payable and accrued expenses and Due to related parties, net

Lender holdback on loan issuance — 498

Unrealized loss related to interest rate hedging instrument ( 1,721 ) ( 347 )

7 unchanged sentences

As we currently control the sole general partner of the Operating Partnership and own, directly or indirectly, a majority of the common units of limited partnership interest in the Operating Partnership (“OP Units”), the financial position and results of operations of the Operating Partnership are consolidated within our financial statements.

As of June 30, 2020 , and December 31, 2019 , the Company owned approximately 99.3 % and 98.6 % , respectively, of the outstanding OP Units (see Note 8, “ Equity ,” for additional discussion regarding OP Units).

As of September 30, 2020, and December 31, 2019, the Company owned 100.0 % and approximately 98.6 %, respectively, of the outstanding OP Units (see Note 8, “ Equity ,” for additional discussion regarding OP Units).

Gladstone Land Advisers, Inc.

13 unchanged sentences

Securities and Exchange Commission (the “SEC”) on February 19, 2020 (the “Form 10-K”).

The results of operations for the three and six months ended June 30, 2020 , are not necessarily indicative of the results that may be expected for other interim periods or for the full fiscal year.

The results of operations for the three and nine months ended September 30, 2020, are not necessarily indicative of the results that may be expected for other interim periods or for the full fiscal year.

Use of Estimates

7 unchanged sentences

We evaluate our entire portfolio each quarter for any impairment indicators and perform an impairment analysis on those select properties that have an indication of impairment.

As of June 30, 2020 , and December 31, 2019 , we concluded that none of our properties were impaired.

As of September 30, 2020, and December 31, 2019, we concluded that none of our properties were impaired.

There have been no impairments recognized on our real estate assets since our inception.

2 unchanged sentences

As such, in general, as long as we qualify as a REIT, no provision for federal income taxes will be necessary, except for taxes on undistributed REIT taxable income and taxes on the income generated by a TRS (such as Land Advisers), if any.

For the tax year ended December 31, 2019 and for the six months ended June 30, 2020 , we did not have any undistributed REIT taxable income, nor was there any taxable income or loss from Land Advisers.

For the tax year ended December 31, 2019 and for the nine months ended September 30, 2020, we did not have any undistributed REIT taxable income, nor was there any taxable income or loss from Land Advisers.

Should we have any taxable income or loss in the future, we will account for any income taxes in accordance with the provisions of ASC 740, “Income Taxes,” using the asset and liability method.

8 unchanged sentences

Pursuant to ASU 2016-13, we are required to measure all expected credit losses based upon historical experience, current conditions, and reasonable (and supportable) forecasts that affect the collectability of the financial asset.

We adopted ASU 2016-13 beginning with the three months ended March 31, 2020, which has not had a material impact on our consolidated financial statements.

We adopted ASU 2016-13 on January 1, 2020, and its adoption has not had a material impact on our consolidated financial statements.

In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848)” (“ASU 2020-04”).

1 unchanged sentence

ASU 2020-04 is effective for all entities as of March 12, 2020.

We adopted ASU 2020-04 beginning with the three months ended March 31, 2020, which has not resulted in a material impact to our consolidated financial statements, as ASU 2020-04 allows for prospective application of any changes in the effective interest rate for LIBOR-based debt and also provides for practical expedients that will allow us to continue to treat our derivative instruments designed as cash flow hedges consistent to how they are accounted for now.

We adopted ASU 2020-04 on January 1, 2020, and its adoption has not resulted in a material impact to our consolidated financial statements, as ASU 2020-04 allows for prospective application of any changes in the effective interest rate for LIBOR-based debt and also provides for practical expedients that will allow us to continue to treat our derivative instruments designed as cash flow hedges consistent to how they are accounted for now.

In April 2020, the FASB issued a staff question-and-answer document, “Topic 842 and Topic 840:

1 unchanged sentence

Existing lease guidance requires entities to determine if a lease concession was a result of a new arrangement reached with the tenant (which would be addressed under the lease modification accounting framework) or if a lease concession was under the enforceable rights and obligations within the existing lease agreement (which would not fall under the lease modification accounting framework).

The COVID-19 Q&A clarifies that entities may elect to not evaluate whether lease-related relief granted in light of the effects of COVID-19 is a lease modification, provided that the concession does not result in a substantial increase in rights of the lessor

or obligations of the lessee.

This election is available for concessions that result in the total payments required by the modified contract being substantially the same as or less than the total payments required by the original contract.

1 unchanged sentence

The agreements with these tenants provide for extensions of up to 123 days, extending the new due dates for these rental payments to be on or before November 1, 2020.

We anticipate electing to not evaluate these lease amendments under the lease modification accounting framework.

These rental payments were collected in full subsequent to September 30, 2020.

We did not elect to evaluate these lease amendments under the lease modification accounting framework.

REAL ESTATE AND INTANGIBLE ASSETS

All of our properties are wholly-owned on a fee-simple basis, except where noted.

The following table provides certain summary information about the 115 farms we owned as of June 30, 2020 (dollars in thousands, except for footnotes):

Net Cost Basis (1)

The following table provides certain summary information about the 123 farms we owned as of September 30, 2020 (dollars in thousands, except for footnotes):

of Farms Total

Acres Farm Acres Net Cost Basis (1)

Encumbrances (2)

California (3)

46 17,954 16,660 $ 467,464 $ 275,844

Florida 23 20,770 16,256 210,427 130,667

6 6,280 5,228 59,216 22,097

Colorado 12 32,773 25,577 48,583 31,406

Nebraska 9 7,782 7,050 30,744 19,331

Michigan 15 962 682 12,105 7,619

Texas 1 3,667 2,219 8,346 5,173

Washington 1 746 417 7,895 4,909

Maryland 4 759 693 6,316 3,728

Oregon 3 418 363 6,163 3,999

North Carolina 2 310 295 2,255 1,206

Delaware 1 180 140 1,276 753

123 92,601 75,580 $ 860,790 $ 506,732

(1) Consists of the initial acquisition price (including the costs allocated to both tangible and intangible assets acquired and liabilities assumed), plus subsequent improvements and other capitalized costs associated with the properties, and adjusted for accumulated depreciation and amortization.

5 unchanged sentences

(3) Includes ownership in a special-purpose LLC that owns a pipeline conveying water to one of our properties.

As of June 30, 2020 , this investment had a net carrying value of approximately $ 613,000 and is included within Other assets, net on the accompanying Condensed Consolidated Balance Sheet.

As of September 30, 2020, this investment had a net carrying value of approximately $ 874,000 and is included within Other assets, net on the accompanying Condensed Consolidated Balance Sheet.

(4) Includes two farms in which we own a leasehold interest via ground leases with the State of Arizona that expire in February 2022 and February 2025, respectively.

In total, these two farms consist of 1,368 total acres and 1,221 farm acres and had an aggregate net cost basis of approximately $ 1.9 million as of June 30, 2020 (included in Lease intangibles, net on the accompanying Condensed Consolidated Balance Sheet).

The following table sets forth the components of our investments in tangible real estate assets as of June 30, 2020 , and December 31, 2019 (dollars in thousands):

June 30, 2020

December 31, 2019

In total, these two farms consist of 1,368 total acres and 1,221 farm acres and had an aggregate net cost basis of approximately $ 1.7 million as of September 30, 2020 (included in Lease intangibles, net on the accompanying Condensed Consolidated Balance Sheet).

The following table sets forth the components of our investments in tangible real estate assets as of September 30, 2020, and December 31, 2019 (dollars in thousands):

September 30, 2020 December 31, 2019

Land and land improvements $ 632,178 $ 583,247

Irrigation and drainage systems 121,826 108,222

Horticulture 120,684 107,941

Farm-related facilities 21,879 20,665

3 unchanged sentences

Real estate, net $ 858,753 $ 792,081

Real estate depreciation expense on these tangible assets was approximately $ 3.5 million and $ 7.0 million for the three and six months ended June 30, 2020 , respectively, and approximately $ 2.6 million and $ 4.9 million for the three and six months ended June 30, 2019 , respectively.

Real estate depreciation expense on these tangible assets was approximately $ 3.6 million and $ 10.6 million for the three and nine months ended September 30, 2020, respectively, and approximately $ 3.0 million and $ 7.8 million for the three and nine months ended September 30, 2019, respectively.

Included in the figures above are amounts related to improvements made on certain of our properties paid for by our tenants but owned by us, or tenant improvements.

As of June 30, 2020 , and December 31, 2019 , we recorded tenant improvements, net of accumulated depreciation, of approximately $ 2.1 million and $ 2.2 million , respectively.

We recorded both depreciation expense and additional lease revenue related to these tenant improvements of approximately $ 76,000 and $ 152,000 for the three and six months ended June 30, 2020 , respectively, and approximately $ 72,000 and $ 146,000 for the three and six months ended June 30, 2019 , respectively.

As of September 30, 2020, and December 31, 2019, we recorded tenant improvements, net of accumulated depreciation, of approximately $ 2.0 million and $ 2.2 million, respectively.

We recorded both depreciation expense and additional lease revenue related to these tenant improvements of approximately $ 76,000 and $ 228,000 for the three and nine months ended September 30, 2020, respectively, and approximately $ 72,000 and $ 218,000 for the three and nine months ended September 30, 2019, respectively.

Intangible Assets and Liabilities

The following table summarizes the carrying values of certain lease intangible assets and the related accumulated amortization as of June 30, 2020 , and December 31, 2019 (dollars in thousands):

June 30, 2020

December 31, 2019

The following table summarizes the carrying values of certain lease intangible assets and the related accumulated amortization as of September 30, 2020, and December 31, 2019 (dollars in thousands):

September 30, 2020 December 31, 2019

Lease intangibles:

6 unchanged sentences

Lease intangibles, net $ 3,626 $ 4,827

Total amortization expense related to these lease intangible assets, including amounts charged to amortization expense due to early lease terminations, was approximately $ 321,000 and $ 1.1 million for the three and six months ended June 30, 2020 , respectively, and approximately $ 326,000 and $ 650,000 for the three and six months ended June 30 2019, respectively.

Total amortization expense related to these lease intangible assets, including amounts charged to amortization expense due to early lease terminations, was approximately $ 294,000 and $ 1.4 million for the three and nine months ended September 30, 2020, respectively, and approximately $ 460,000 and $ 1.1 million for the three and nine months ended September 30, 2019, respectively.

See below, under “ Significant Existing Real Estate Activity—Leasing Activity—Lease Termination ” for further discussion of this lease termination.

The following table summarizes the carrying values of certain lease intangible assets or liabilities included in Other assets, net or Other liabilities, net, respectively, on the accompanying Condensed Consolidated Balance Sheets and the related accumulated amortization or accretion, respectively, as of June 30, 2020 , and December 31, 2019 (dollars in thousands):

June 30, 2020

December 31, 2019

Intangible Asset or Liability

The following table summarizes the carrying values of certain lease intangible assets or liabilities included in Other assets, net or Other liabilities, net, respectively, on the accompanying Condensed Consolidated Balance Sheets and the related accumulated amortization or accretion, respectively, as of September 30, 2020, and December 31, 2019 (dollars in thousands):

September 30, 2020 December 31, 2019

Intangible Asset or Liability Deferred

(Liability) Accumulated

(Amortization)

Accretion Deferred

(Liability) Accumulated

(Amortization)

Above-market lease values and lease incentives (1)

$ 255 $ ( 135 ) $ 111 $ ( 41 )

Below-market lease values and other deferred revenue (2)

( 943 ) 335 ( 886 ) 257

$ ( 688 ) $ 200 $ ( 775 ) $ 216

(1) Net above-market lease values and lease incentives are included as part of Other assets, net on the accompanying Condensed Consolidated Balance Sheets, and the related amortization is recorded as a reduction of Lease revenue on the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income.

(2) Net below-market lease values and other deferred revenue are included as a part of Other liabilities, net on the accompanying Condensed Consolidated Balance Sheets, and the related accretion is recorded as an increase to Lease revenue on the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income.

Total amortization related to above-market lease values and lease incentives was approximately $ 31,000 and $ 62,000 for the three and six months ended June 30, 2020 , respectively, and approximately $ 33,000 and $ 66,000 for the three and six months ended June 30, 2019 , respectively.

Total accretion related to below-market lease values and other deferred revenue was approximately $ 25,000 and $ 50,000 for the three and six months ended June 30, 2020 , respectively, and approximately $ 39,000 and $ 77,000 for the three and six months ended June 30, 2019 , respectively.

Total amortization related to above-market lease values and lease incentives was approximately $ 32,000 and $ 94,000 for the three and nine months ended September 30, 2020, respectively, and approximately $ 31,000 and $ 97,000 for the three and nine months ended September 30, 2019, respectively.

Total accretion related to below-market lease values and other deferred revenue was approximately $ 28,000 and $ 78,000 for the three and nine months ended September 30, 2020, respectively, and approximately $ 46,000 and $ 123,000 for the three and nine months ended September 30, 2019, respectively.

2020 Acquisitions

During the six months ended June 30, 2020 , we acquired four new farms, which are summarized in the table below (dollars in thousands, except for footnotes):

During the nine months ended September 30, 2020, we acquired 12 new farms, which are summarized in the table below (dollars in thousands, except for footnotes):

Name Property

Location Acquisition

Farms Primary

Crop(s) Lease

Options Total

Price Acquisition

Straight-line

County Road 18

Sugar beets, edible beans, potatoes, & corn

Potatoes, edible beans, & corn

County Road 18 Phillips, CO 1/15/2020 1,325 2 Sugar beets, edible beans, potatoes, & corn 6.0 years None $ 7,500 $ 39 $ 417 $ 4,500

Lamar Valley Chase, NE 5/7/2020 678 1 Potatoes, edible beans, & corn 6.7 years 2 (5 years) 3,500 42 204 2,100

Driver Road (3)

Kern, CA 6/5/2020 590 1 Pecans 4.7 years 2 (10 years) 14,169 52 784 8,500

Hermon Wicomico & Caroline, MD, and Sussex, DE 8/31/2020 939 5 Sod & vegetables 10.0 years 2 (5 years) 7,346 211 432 4,481

Firestone Avenue (4)(5)(6)

Fresno, CA 9/3/2020 2,534 3 Pistachios and misc.

organic & conventional vegetables 1.2 years 2 (5 years) 31,833 74 1,734 —

6,066 12 $ 64,348 $ 418 $ 3,571 $ 19,581

(1) Includes approximately $ 38,000 of aggregate external legal fees associated with negotiating and originating the leases associated with these acquisitions, which costs were expensed in the period incurred.

1 unchanged sentence

(3) The lease provides for an initial term of 14.7 years and includes six tenant termination options throughout the initial term.

The lease term stated above represents the term through the first available termination option, and the annualized straight-line rent amount represents the rent guaranteed through the noncancelable term of the lease.

During the three and six months ended June 30, 2020 , we recognized lease revenue of approximately $ 191,000 and $ 280,000 , respectively, and net income of approximately $ 125,000 and $ 196,000 , respectively, related to the above acquisition.

(4) Lease provides for a participation rent component based on the gross crop revenues earned on the farm.

The rent figure above represents only the minimum cash guaranteed under the lease.

(5) Lease provides for an initial term of 8.2 years but also includes an annual tenant termination option, effective as of the end of the then-current lease year (as defined within the lease).

(6) In connection with the acquisition of this property, we also acquired an ownership interest in a related LLC, the sole purpose of which is to own and maintain a pipeline conveying water to this and other neighboring properties.

Our acquired ownership, which equated to a 12.5 % interest in the LLC, was valued at approximately $ 280,000 at the time of acquisition and is included within Other assets, net on the accompanying Condensed Consolidated Balance Sheets.

See “ Investments in Unconsolidated Entities ” below for further information on our aggregate ownership interest in this LLC.

During the three and nine months ended September 30, 2020, we recognized lease revenue of approximately $ 527,000 and $ 808,000 , respectively, and net income of approximately $ 253,000 and $ 448,000 , respectively, related to the above acquisitions.

2019 Acquisitions

During the six months ended June 30, 2019 , we acquired 13 new farms, which are summarized in the table below (dollars in thousands, except for footnotes):

During the nine months ended September 30, 2019, we acquired 20 new farms, which are summarized in the table below (dollars in thousands, except for footnotes):

Name Property

Location Acquisition

Farms Primary

Crop(s) / Use Lease

Options Total

Price Acquisition

Straight-line

Somerset Road

Popcorn & edible beans

Somerset Road Lincoln, NE 1/22/2019 695 1 Popcorn & edible beans 4.9 years 1 (5 years) $ 2,400 $ 33 $ 126 $ 1,440

Greenhills Boulevard (3)

Van Buren Trail

Van Buren, MI

Blueberries & cranberries

Blue Star Highway

Allegran & Van Buren, MI

Yolo County Line Road

Olives for olive oil

Madera, CA 4/9/2019 928 1 Pistachios 10.6 years 2 (5 years) 28,550 141 1,721 17,130

Van Buren Trail Van Buren, MI 5/29/2019 159 2 Blueberries & cranberries 10.6 years 2 (5 years) 2,682 26 206 1,609

Blue Star Highway Allegran & Van Buren, MI 6/4/2019 357 8 Blueberries 10.6 years 2 (5 years) 5,100 30 390 3,060

Yolo County Line Road Yolo, CA 6/13/2019 542 1 Olives for olive oil 14.6 years 1 (5 years) 9,190 68 624 5,514

San Juan Grade Road (4)

Monterey, CA 7/11/2019 324 1 Strawberries & vegetables 0.3 years None 9,000 68 632 5,400

West Citrus Boulevard (5)

Martin, FL 7/22/2019 3,586 1 Water retention 8.4 years 2 (10 years) 57,790 516 3,696 37,700

Sutter Avenue (Phase I) (3)(6)

Fresno, CA 8/16/2019 1,011 1 Pistachios 8.2 years 2 (5 years) 33,000 146 2,106 16,500

Las Posas Road (7)

Ventura, CA 8/28/2019 413 3 Sod & vegetables 3.3 years 1 (2 years) 21,320 111 1,283 12,792

Withers Road (8)

Napa, CA 8/29/2019 366 1 Wine grapes 10.3 years 2 (10 years) 32,000 84 2,256 19,254

8,381 20 $ 201,032 $ 1,223 $ 13,040 $ 120,399

(1) Includes approximately $ 63,000 of external legal fees associated with negotiating and originating the lease associated with this acquisition, which cost was expensed in the period incurred.

2 unchanged sentences

The rent figure above represents only the minimum cash guaranteed under the lease.

During the three and six months ended June 30, 2019 , we recognized operating revenues of approximately $ 503,000 and $ 527,000 , respectively, and net income of approximately $ 218,000 and $ 220,000 , respectively, related to the above acquisitions.

(4) In connection with the acquisition of this property, we executed a six -year, follow-on lease with a new tenant that will commence upon the expiration of the four-month lease executed on the date of acquisition.

The follow-on lease includes one , four -year extension option and provides for minimum annualized straight-line rents of approximately $ 606,000 .

In connection with the follow-on lease, we committed to provide up to $ 100,000 for certain irrigation improvements on the property.

(5) As partial consideration for the acquisition of this property, we issued 288,303 OP Units, constituting an aggregate fair value of approximately $ 3.3 million as of the acquisition date.

(6) In connection with the acquisition of this property, we also acquired an ownership in a related LLC, the sole purpose of which is to own and maintain a pipeline conveying water to this and other neighboring properties.

Our acquired ownership, which equated to an 11.75 % interest in the LLC, was valued at approximately $ 280,000 at the time of acquisition and is included within Other assets, net on the accompanying Condensed Consolidated Balance Sheets.

(7) In connection with this acquisition, we executed two separate lease agreements with two different, unrelated third-party tenants.

The lease term of 3.3 years represents the weighted-average term of the two leases.

In addition, pursuant to one of these lease agreements, we committed to provide up to $ 1.0 million for certain irrigation improvements on the property.

(8) In connection with the acquisition of this property, we committed to provide up to approximately $ 4.0 million as additional compensation, contingent upon the County of Napa approving the planting of additional vineyards on up to 47 acres of the property.

Subject to such approval, we also committed to contribute up to $ 40,000 per approved acre for the development of such vineyards.

As provided for in the lease, we will earn additional rent on all of the aforementioned costs, if any, incurred by us.

See below, under “ Significant Existing Real Estate Activity—Property Add-on ” for additional information on the subsequent approval of additional vineyard plantings.

During the three and nine months ended September 30, 2019, we recognized operating revenues of approximately $ 2.2 million and $ 2.8 million, respectively, and net income of approximately $ 574,000 and $ 793,000 , respectively, related to the above acquisitions.

Purchase Price Allocations

The allocation of the aggregate purchase price for the farms acquired during each of the six months ended June 30, 2020 and 2019 is as follows (dollars in thousands):

Acquisition Period

Land and Land

Drainage Systems

Total Purchase

2020 Acquisitions

2019 Acquisitions

The allocation of the aggregate purchase price for the farms acquired during each of the nine months ended September 30, 2020 and 2019 is as follows (dollars in thousands):

Assets (Liabilities) Acquired 2020 Acquisitions 2019 Acquisitions

Land and Land Improvements $ 44,154 $ 138,253

Irrigation & Drainage Systems 7,250 17,789

Horticulture 12,245 41,746

Farm-related Facilities 189 2,013

Other Site Improvements — 358

In-Place Leases 101 560

Leasing Costs 133 118

Above-market Lease Values (1)

Below-market Lease Values (2)

( 58 ) ( 85 )

Investment in LLC (1)

Total Purchase Price $ 64,348 201,032

(1) Included within Other assets, net on the accompanying Condensed Consolidated Balance Sheets.

(2) Included within Other liabilities, net on the accompanying Condensed Consolidated Balance Sheets.

Significant Existing Real Estate Activity

Property Add-on

In connection with the acquisition of a 366 -acre vineyard located in Napa, California (“Withers Road”), on August 28, 2019, we committed to provide up to approximately $ 4.0 million as additional compensation, contingent upon the County of Napa approving the planting of additional vineyards on up to 47 acres of the property by February 25, 2020 (the “Permit Deadline”).

In connection with the acquisition of Withers Road, we committed to provide up to approximately $ 4.0 million as additional compensation, contingent upon the County of Napa approving the planting of additional vineyards on up to 47 acres of the property by February 25, 2020 (the “Permit Deadline”).

In addition, if approval was obtained, we also committed to contribute up to $ 40,000 per approved acre for the development of such vineyards.

5 unchanged sentences

Leasing Activity

The following table summarizes certain leasing activity that occurred on our existing properties during the six months ended June 30, 2020 (dollars in thousands):

NEW LEASES (1)(2)

The following table summarizes certain leasing activity that occurred on our existing properties during the nine months ended September 30, 2020 (dollars in thousands):

PRIOR LEASES NEW LEASES (1)

Locations Number

Straight-line

2 unchanged sentences

Straight-line

(Years) # of Leases

Participation

/ NN / N) (3)

AZ, CA, FL, & NE 14 7,141 $ 6,420 3 8 / 4 / 2 $ 6,554 6 4 9 / 5 / 0

(1) In connection with certain of these leases, we committed to provide capital for certain improvements on these farms.

See Note 7, “ Commitments and Contingencies—Operating Obligations ,” for additional information on these commitments.

Two of the prior leases encompassing four of our farms were renewed under a single lease encompassing the same four farms.

(2) Annualized straight-line rent is based on the minimum cash rental payments guaranteed under the leases (presented on an annualized basis), as required under GAAP, and excludes contingent rental payments, such as participation rents.

4 unchanged sentences

On February 10, 2020, we reached an agreement with a tenant occupying four of our farms in Arizona to terminate the existing leases encompassing those four farms effective February 10, 2020.

As part of the termination agreement, the outgoing tenant made a one-time termination payment to us of approximately $ 3.0 million , which we recognized as additional lease revenue during the six months ended June 30, 2020 .

As part of the termination agreement, the outgoing tenant made a one-time termination payment to us of approximately $ 3.0 million, which we recognized as additional lease revenue during the nine months ended September 30, 2020.

The prior leases were scheduled to expire on September 15, 2026 (with two of the farms subject to the renewal of certain state leases currently scheduled to expire on February 14, 2022, and February 14, 2025).

In connection with the early termination of these leases, during the six months ended June 30, 2020 , we recognized approximately $ 89,000 of prepaid rent as additional lease revenue and wrote off an aggregate net deferred rent balance of approximately $ 254,000 against lease revenue.

In addition, approximately $ 470,000 of unamortized lease intangible assets related to the terminated leases were written off and charged to amortization expense during the six months ended June 30, 2020 .

In connection with the early termination of these leases, during the nine months ended September 30, 2020, we recognized approximately $ 89,000 of prepaid rent as additional lease revenue and wrote off an aggregate net deferred rent balance of approximately $ 254,000 against lease revenue.

In addition, approximately $ 470,000 of unamortized lease intangible assets related to the terminated leases were written off and charged to amortization expense during the nine months ended September 30, 2020.

Upon termination of these leases, we entered into a new, seven -year lease with a new tenant effective immediately.

1 unchanged sentence

Investments in Unconsolidated Entities

In connection with the acquisition of 2,110 gross acres of farmland located in Fresno County, California (“Sutter Avenue”), which occurred in two phases during the year ended December 31, 2019, we also acquired an ownership in a related LLC, the sole purpose of which is to own and maintain a pipeline conveying water to this and other neighboring properties.

On August 16, 2019, we acquired an 11.75 % ownership interest in the LLC that was valued at approximately $ 280,000 at the time of acquisition.

On November 1, 2019, we acquired an additional 13.25 % interest in the LLC that was valued at approximately $ 307,000 at the time of acquisition.

In connection with the acquisition of certain farmland located in Fresno County, California, we also acquired an ownership in a related LLC, the sole purpose of which is to own and maintain a pipeline conveying water to our and other neighboring properties.

As of September 30, 2020, our aggregate ownership interest in the LLC was 37.5 %.

As our investment in the LLC is deemed to constitute “significant influence,” we have accounted for this investment under the equity method.

During the three and six months ended June 30, 2020 , we recorded (loss) income of approximately $( 8,000 ) and $ 26,000 , respectively (included on our Condensed Consolidated Statements of Operations and Comprehensive Income as Income from investments in unconsolidated entities), which represents our pro-rata share of the (loss) income recognized by the LLC.

During the three and nine months ended September 30, 2020, we recorded (loss) income of approximately $( 19,000 ) and $ 7,000 , respectively (included on our Condensed Consolidated Statements of Operations and Comprehensive Income as Income from investments in unconsolidated entities), which represents our pro-rata share of the (loss) income recognized by the LLC.

Prior to fiscal year 2020, we had not recorded any material income or loss related to our ownership interest in the LLC.

Our combined ownership interest in the LLC, which had an aggregate carrying value of approximately $ 613,000 and $ 587,000 , as

of June 30, 2020 , and December 31, 2019, respectively, is included within Other assets, net on the accompanying Condensed Consolidated Balance Sheets.

Our combined ownership interest in the LLC, which had an aggregate carrying value of approximately $ 874,000 and $ 587,000 , as of September 30, 2020, and December 31, 2019, respectively, is included within Other assets, net on the accompanying Condensed Consolidated Balance Sheets.

Portfolio Diversification and Concentrations

Diversification

The following table summarizes the geographic locations (by state) of our farms owned and with leases in place as of the six months ended June 30, 2020 and 2019 (dollars in thousands):

As of and For the six months ended June 30, 2020

As of and For the six months ended June 30, 2019

The following table summarizes the geographic locations (by state) of our farms owned and with leases in place as of the nine months ended September 30, 2020 and 2019 (dollars in thousands):

As of and For the nine months ended September 30, 2020 As of and For the nine months ended September 30, 2019

Revenue % of Total

Revenue Number

Revenue % of Total

California (1)

46 17,954 19.4 % $ 22,153 52.9 % 41 13,731 16.8 % $ 13,872 51.0 %

Florida 23 20,770 22.4 % 10,006 23.9 % 23 20,770 25.5 % 7,785 28.6 %

Arizona 6 6,280 6.8 % 4,272 10.2 % 6 6,280 7.7 % 1,609 5.9 %

Colorado 12 32,773 35.4 % 2,501 6.0 % 10 31,448 38.5 % 2,126 7.8 %

Nebraska 9 7,782 8.4 % 1,159 2.7 % 3 3,254 4.0 % 264 1.0 %

Michigan 15 962 1.0 % 554 1.3 % 15 962 1.2 % 259 1.0 %

Oregon 3 418 0.5 % 395 0.9 % 3 418 0.5 % 386 1.4 %

Washington 1 746 0.8 % 368 0.9 % 1 746 0.9 % 383 1.4 %

Texas 1 3,667 4.0 % 337 0.8 % 1 3,667 4.5 % 394 1.4 %

North Carolina 2 310 0.3 % 120 0.3 % 2 310 0.4 % 125 0.5 %

Maryland 4 759 0.8 % 35 0.1 % — — — % — — %

Delaware 1 180 0.2 % 7 — % — — — % — — %

TOTALS 123 92,601 100.0 % $ 41,907 100.0 % 105 81,586 100.0 % $ 27,203 100.0 %

(1) According to the California Chapter of the American Society of Farm Managers and Rural Appraisers, there are eight distinct growing regions within California;

1 unchanged sentence

Concentrations

As of June 30, 2020 , our farms were leased to 72 different, unrelated third-party tenants, with certain tenants leasing more than one farm.

Due primarily to an early lease termination payment of approximately $ 3.0 million received from an outgoing tenant (“Tenant A”) during the six months ended June 30, 2020 (see “ —Lease Termination ” above), aggregate lease revenue attributable to Tenant A accounted for approximately $ 3.0 million , or 10.1 % , of the total lease revenue recorded during the six months ended June 30, 2020 .

As of June 30, 2020 , we are no longer a party to any contractual agreements with Tenant A.

No other individual tenant represented greater than 10.0% of the total lease revenue recorded during the six months ended June 30, 2020 .

As of September 30, 2020, our farms were leased to 73 different, unrelated third-party tenants, with certain tenants leasing more than one farm.

No individual tenant represented greater than 10.0% of the total lease revenue recorded during the nine months ended September 30, 2020.

Geographic Risk

Farms located in California, Florida, and Arizona accounted for approximately $ 13.8 million ( 49.5 % ), $ 6.7 million ( 23.9 % ) and $ 3.8 million ( 13.6 % ), respectively, of the total lease revenue recorded during the six months ended June 30, 2020 .

Though we seek to continue to further diversify geographically, as may be desirable or feasible, should an unexpected natural disaster occur where our properties are located, there could be a material adverse effect on our financial performance and ability to continue operations.

No other single state accounted for more than 10.0% of our total lease revenue recorded during the six months ended June 30, 2020 .

Our borrowings as of June 30, 2020 , and December 31, 2019 , are summarized below (dollars in thousands):

Carrying Value as of

As of June 30, 2020

June 30, 2020

December 31, 2019

Stated Interest

Farms located in California, Florida, and Arizona accounted for approximately $ 22.2 million ( 52.9 %), $ 10.0 million ( 23.9 %) and $ 4.3 million ( 10.2 %), respectively, of the total lease revenue recorded during the nine months ended September 30, 2020.

Though we seek to continue to further diversify geographically, as may be desirable or feasible, should an unexpected natural disaster (such as an earthquake, wildfire, or flood) occur or climactic change impact the regions where our properties are located, there could be a material adverse effect on our financial performance and ability to continue operations.

None of our farms in California or Florida have been materially impacted by the recent wildfires or hurricanes that occurred in those respective regions.

No other single state accounted for more than 10.0% of our total lease revenue recorded during the nine months ended September 30, 2020.

Our borrowings as of September 30, 2020, and December 31, 2019, are summarized below (dollars in thousands):

Carrying Value as of As of September 30, 2020

September 30, 2020 December 31, 2019 Stated Interest

Maturity Dates

5 unchanged sentences

Total notes and bonds payable 495,132 484,949

Debt issuance costs – notes and bonds payable

Debt issuance costs – notes and bonds payable ( 3,211 ) ( 3,120 ) N/A N/A

Notes and bonds payable, net $ 491,921 $ 481,829

2 unchanged sentences

(1) Where applicable, stated interest rates are before interest patronage (as described below).

As of June 30, 2020 , the above borrowings were collateralized by certain of our farms with an aggregate net book value of approximately $ 821.3 million .

The weighted-average interest rate charged on the above borrowings (excluding the impact of debt issuance costs and before any interest patronage, or refunded interest) was 3.98 % for each of the three and six months ended June 30, 2020 , respectively, as compared to 3.93 % for each of the three and six months ended June 30, 2019 .

As of September 30, 2020, the above borrowings were collateralized by certain of our farms with an aggregate net book value of approximately $ 827.7 million.

The weighted-average interest rate charged on the above borrowings (excluding the impact of debt issuance costs and before any interest patronage, or refunded interest) was 4.03 % and 3.99 % for the three and nine months ended September 30, 2020, respectively, as compared to 4.03 % and 3.97 % for the three and nine months ended September 30, 2019.

In addition, 2019 interest patronage from our Farm Credit Notes Payable (as defined below), which we recorded during the three months ended March 31, 2020, resulted in a 20.4 % reduction (approximately 98 basis points) to the stated interest rates on such borrowings.

We are unable to estimate the amount of interest patronage to be received, if any, related to interest accrued during 2020 on our Farm Credit Notes Payable.

As of June 30, 2020 , we were in compliance with all covenants applicable to the above borrowings.

We are unable to estimate the total amount of interest patronage to be received related to interest accrued during 2020 on our Farm Credit Notes Payable.

See below under “ —Farm Credit Notes Payable “ for further discussion on interest patronage.

As of September 30, 2020, we were in compliance with all covenants applicable to the above borrowings.

New MetLife Facility

2 unchanged sentences

On February 20, 2020, we entered into an agreement with MetLife to remove the MetLife Lines of Credit from the Prior MetLife Facility and create a new credit facility consisting of a new $ 75.0 million long-term note payable (the “New MetLife Term Note”) and the MetLife Lines of Credit (collectively, the “New MetLife Facility”).

The following table summarizes the pertinent terms of the New MetLife Facility as of June 30, 2020 (dollars in thousands, except for footnotes):

Interest Rate Terms

The following table summarizes the pertinent terms of the New MetLife Facility as of September 30, 2020 (dollars in thousands, except for footnotes):

Issuance Aggregate

Commitment Maturity

Dates Principal

Outstanding Interest Rate Terms Undrawn

New MetLife Term Note $ 75,000 (1)

MetLife Lines of Credit

3-month LIBOR + 2.00%

1/5/2030 $ — N/A (2)

MetLife Lines of Credit 75,000 4/5/2024 11,600 3-month LIBOR + 2.00 %

Total principal outstanding $ 11,600

2 unchanged sentences

In addition, through December 31, 2022, the New MetLife Term Note is also subject to an unused fee ranging from 0.10 % to 0.20 % on undrawn amounts (based on the balance drawn under the New MetLife Term Note).

Based on the properties that were pledged as collateral under the New MetLife Facility, as of June 30, 2020 , the maximum additional amount we could draw under the facility was approximately $ 24.2 million .

(3) Based on the properties that were pledged as collateral under the New MetLife Facility, as of September 30, 2020, the maximum additional amount we could draw under the facility was approximately $ 12.7 million.

(4) The interest rate on the MetLife Lines of Credit is subject to a minimum annualized rate of 2.50 %, plus an unused fee ranging from 0.10 % to 0.20 % on undrawn amounts (based on the balance drawn under each line of credit).

1 unchanged sentence

From time to time since September 2014, we, through certain subsidiaries of our Operating Partnership, have entered into various loan agreements (collectively, the “Farm Credit Notes Payable”) with 10 different Farm Credit associations (collectively, “Farm Credit”).

During the six months ended June 30, 2020 , we entered into the following loan agreements with Farm Credit (dollars in thousands):

During the nine months ended September 30, 2020, we entered into the following loan agreements with Farm Credit (dollars in thousands):

Issuer Date of

Issuance Amount Maturity

Date Principal

Amortization Stated Interest Rate (1)

Interest Rate Terms

Premier Farm Credit, FLCA

4.00%, fixed through December 31, 2029 (variable thereafter)

Farm Credit West, FLCA

3.00%, fixed through July 31, 2026 (variable thereafter)

Farm Credit West, FLCA

3.00%, fixed through August 31, 2026 (variable thereafter)

Farm Credit West, FLCA

3.75%, fixed through June 30, 2030 (variable thereafter)

Premier Farm Credit, FLCA 5/14/2020 $ 4,500 1/1/2045 24.6 years 4.00 % Fixed through December 31, 2029 (variable thereafter)

Farm Credit West, FLCA 6/24/2020 600 5/1/2044 24.2 years 3.00 % Fixed through July 31, 2026 (variable thereafter)

Farm Credit West, FLCA 6/24/2020 600 5/1/2044 24.2 years 3.00 % Fixed through August 31, 2026 (variable thereafter)

Farm Credit West, FLCA 6/25/2020 8,500 11/1/2045 25.0 years 3.75 % Fixed through June 30, 2030 (variable thereafter)

Farm Credit of the Virginias, ACA 8/31/2020 4,481 9/1/2030 25.0 years 3.99 % Fixed throughout term

(1) Stated rate is before interest patronage, as described below.

2 unchanged sentences

During the three months ended March 31, 2020, we recorded interest patronage of approximately $ 1.3 million related to interest accrued on the Farm Credit Notes Payable during the year ended December 31, 2019, which resulted in a 20.4 % reduction (approximately 98 basis points) to the stated interest rates on such borrowings.

In addition, during the three months ended September 30, 2020, we received approximately $ 306,000 of interest patronage related to our Farm Credit Notes Payable, as certain Farm Credit associations paid a portion of the 2021 interest patronage (which relates to interest accrued during 2020) early.

Conterra Note Payable

During the six months ended June 30, 2020 , we entered into a loan agreement with Conterra Agricultural Capital, LLC (“Conterra”), the terms of which are summarized in the following table (dollars in thousands):

Date of Issuance

Maturity Date

Principal Amortization

Interest Rate Terms

3.40%, fixed throughout term

During the nine months ended September 30, 2020, we entered into a loan agreement with Conterra Agricultural Capital, LLC (“Conterra”), the terms of which are summarized in the following table (dollars in thousands):

Date of Issuance Amount Maturity Date Principal Amortization Stated Interest Rate Interest Rate Terms

6/8/2020 $ 2,100 7/1/2027 30.0 years 3.40 % Fixed throughout term

Farmer Mac Facility

1 unchanged sentence

As subsequently amended, the Bond Purchase Agreement provided for bond issuances up to an aggregate amount of $ 125.0 million (the “Farmer Mac Facility”) through December 11, 2018, after which date the Bond Purchaser had the option to continue buying new bonds issued under the Farmer Mac Facility.

During the six months ended June 30, 2020 , we amended and restated one bond for $ 8.1 million that was previously issued under the Farmer Mac Facility and was originally scheduled to mature on January 10, 2020.

During the nine months ended September 30, 2020, we amended and restated one bond for $ 8.1 million that was previously issued under the Farmer Mac Facility and was originally scheduled to mature on January 10, 2020.

The pertinent terms of the amended and restated bond are summarized in the table below (dollars in thousands):

Date of Issuance

Maturity Date

Principal Amortization

Interest Rate Terms

(interest only)

2.66%, fixed throughout term

Date of Issuance Amount Maturity Date Principal Amortization Stated

Interest Rate Interest Rate Terms

1/10/2020 $ 8,100 1/12/2024 None

(interest only) 2.66 % Fixed throughout term

No prepayment penalty was incurred in connection with this amendment, and all other material items of the amended and restated bond remained unchanged.

Debt Service – Aggregate Maturities

Scheduled principal payments of our aggregate notes and bonds payable as of June 30, 2020 , for the succeeding years are as follows (dollars in thousands):

Scheduled principal payments of our aggregate notes and bonds payable as of September 30, 2020, for the succeeding years are as follows (dollars in thousands):

Period Scheduled

Principal Payments

For the remaining six months ending December 31:

For the remaining three months ending December 31:

2020 $ 15,368

For the fiscal years ending December 31:

Thereafter 312,988

ASC 820 provides a definition of fair value that focuses on the exchange (exit) price of an asset or liability in the principal, or most advantageous, market and prioritizes the use of market-based inputs to the valuation.

5 unchanged sentences

These unobservable inputs are generally supported by little or no market activity and are based upon management’s estimates of assumptions that market participants would use in pricing the asset or liability.

As of June 30, 2020 , the aggregate fair value of our long-term notes and bonds payable was approximately $ 496.5 million , as compared to an aggregate carrying value (excluding unamortized related debt issuance costs) of approximately $ 494.7 million .

As of September 30, 2020, the aggregate fair value of our long-term notes and bonds payable was approximately $ 497.4 million, as compared to an aggregate carrying value (excluding unamortized related debt issuance costs) of approximately $ 495.1 million.

The fair value of our long-term notes and bonds payable is valued using Level 3 inputs under the hierarchy established by ASC 820-10 and is calculated based on a discounted cash flow analysis, using discount rates based on management’s estimates of market interest rates on long-term debt with comparable terms.

Further, due to the revolving nature and variable interest rates applicable to the MetLife Lines of Credit, their aggregate fair value as of June 30, 2020 , is deemed to approximate their aggregate carrying value of $ 100,000 .

Further, due to the revolving nature and variable interest rates applicable to the MetLife Lines of Credit, their aggregate fair value as of September 30, 2020, is deemed to approximate their aggregate carrying value of $ 11.6 million.

Interest Rate Swap Agreement

3 unchanged sentences

Generally, in the absence of observable market data, we will estimate the fair value of our interest rate swaps using estimates of certain data points, including estimated remaining life, counterparty credit risk, current market yield, and interest rate spreads of similar securities as of the measurement date.

As of June 30, 2020 , our interest rate swaps were valued using Level 2 inputs.

As of September 30, 2020, our interest rate swaps were valued using Level 2 inputs.

In addition, we have designated our interest rate swaps as cash flow hedges, and we record changes in the fair values of the interest rate swap agreements to accumulated other comprehensive income on the Condensed Consolidated Balance Sheets.

We record changes in fair value on a quarterly basis, using current market valuations at quarter end.

The following table summarizes our interest rate swap as of June 30, 2020 , and December 31, 2019 (dollars in thousands):

June 30, 2020

December 31, 2019

Aggregate Notional Amount

Aggregate Fair Value Asset

Aggregate Fair Value Liability

Aggregate Notional Amount

Aggregate Fair Value Asset

Aggregate Fair Value Liability

The following table presents the amount of loss recognized in comprehensive income within our condensed consolidated financial statements for the three and six months ended June 30, 2020 (dollars in thousands):

Three Months Ended June 30, 2020

Six Months Ended June 30, 2020

The following table summarizes our interest rate swap as of September 30, 2020, and December 31, 2019 (dollars in thousands):

September 30, 2020 December 31, 2019

Aggregate Notional Amount Aggregate Fair Value Asset Aggregate Fair Value Liability Aggregate Notional Amount Aggregate Fair Value Asset Aggregate Fair Value Liability

$ 14,077 $ — $ 1,721 $ 14,298 $ — $ 390

The following table presents the amount of income (loss) recognized in comprehensive income within our condensed consolidated financial statements for the three and nine months ended September 30, 2020 (dollars in thousands):

Three Months Ended September 30, 2020 Nine Months Ended September 30, 2020

Derivative in cash flow hedging relationship:

Interest rate swaps $ 95 $ ( 1,331 )

We were not party to any interest rate swap agreements during the three or six months ended June 30, 2019 .

The following table summarizes certain information regarding our derivative instruments as of June 30, 2020 , and December 31, 2019 (dollars in thousands):

Total $ 95 $ ( 1,331 )

We were not party to any interest rate swap agreements during the three or nine months ended September 30, 2019.

The following table summarizes certain information regarding our derivative instruments as of September 30, 2020, and December 31, 2019 (dollars in thousands):

Derivative Liability Fair Value

Derivative Type

Balance Sheet Location

June 30, 2020

December 31, 2019

Derivative Type Balance Sheet Location September 30, 2020 December 31, 2019

Derivatives Designated as Hedging Instruments:

Interest rate swaps

Other liabilities, net

Interest rate swaps Other liabilities, net $ 1,721 $ 390

Total $ 1,721 $ 390

MANDATORILY-REDEEMABLE PREFERRED STOCK

5 unchanged sentences

The shares of the Series A Term Preferred Stock have a mandatory redemption date of September 30, 2021, and are not convertible into our common stock or any other securities.

As of June 30, 2020 , no shares of Series A Term Preferred Stock have been redeemed.

As of September 30, 2020, no shares of Series A Term Preferred Stock have been redeemed.

We incurred approximately $ 1.2 million in total offering costs related to this issuance, which have been recorded net of the Series A Term Preferred Stock as presented on the accompanying Condensed Consolidated Balance Sheets and are being amortized over the mandatory redemption period as a component of interest expense on the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income.

1 unchanged sentence

In addition, the related dividend payments are treated similarly to interest expense on the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income.

As of June 30, 2020 , the fair value of our Series A Term Preferred Stock was approximately $ 30.2 million , as compared to the carrying value (exclusive of unamortized offering costs) of approximately $ 28.8 million .

The fair value of our Series A Term Preferred Stock is valued using Level 1 inputs under the hierarchy established by ASC 820-10, “Fair Value Measurements and Disclosures,” and is calculated based on the closing per-share price as of June 30, 2020 , of $ 26.27 .

For information on the dividends declared by our Board of Directors and paid by us on the Series A Term Preferred Stock during the six months ended June 30, 2020 and 2019 , see Note 8, “ Equity—Distributions .”

Due to the short-term maturity of our Series A Term Preferred Stock, its carrying value (exclusive of unamortized offering costs) of approximately $ 28.8 million was deemed to approximate its fair value as of September 30, 2020.

For information on the dividends declared by our Board of Directors and paid by us on the Series A Term Preferred Stock during the nine months ended September 30, 2020 and 2019, see Note 8, “ Equity—Distributions .”

RELATED-PARTY TRANSACTIONS

3 unchanged sentences

In addition, two of our executive officers, Mr.

Gladstone and Terry Brubaker (our vice chairman and chief operating officer), serve as directors and executive officers of each of our Adviser and Administrator, and Michael

LiCalsi, our general counsel and secretary (who also serves as our Administrator’s president, general counsel, and secretary), is also executive vice president of administration of our Adviser.

Gladstone and Terry Brubaker (our vice chairman and chief operating officer), serve as directors and executive officers of each of our Adviser and Administrator, and Michael LiCalsi, our general counsel and secretary (who also serves as our Administrator’s president, general counsel, and secretary), is also executive vice president of administration of our Adviser.

We have entered into an investment advisory agreement with our Adviser and an administration agreement with our Administrator (the “Administration Agreement”).

2 unchanged sentences

The Administration Agreement and each of the Advisory Agreements were approved unanimously by our board of directors, including our independent directors.

A summary of the 2019 Advisory Agreement is provided in Note 6 to our consolidated financial statements included in our Form 10-K.

A summary of the compensation terms for each of the Prior Advisory Agreement, the 2020 Advisory Agreement, and the Administration Agreement is below.

A summary of the compensation terms for each of the Advisory Agreements and the Administration Agreement is below.

Advisory Agreements

2 unchanged sentences

The 2019 Advisory Agreement modified the calculation of the base management and incentive fees to exclude preferred equity from such calculations, while the capital gains and termination fees remained unchanged.

The 2020 Advisory Agreement revised and replaced the previous calculation of the base management fee, which was previously based on equity, with a calculation based on gross real estate assets (in each case, as further described below), while all other fees remained unchanged.

Each of the base management, incentive, capital gains, and termination fees is described below.

1 unchanged sentence

Pursuant to the Prior Advisory Agreement, a base management fee was paid quarterly and was calculated as 2.0 % per annum ( 0.50 % per quarter) of the calendar quarter’s total adjusted equity, which was defined as total equity plus total mezzanine equity, if any (each as reported on our balance sheet), adjusted to exclude unrealized gains and losses and certain other one-time events and non-cash items (“Total Adjusted Equity”).

Pursuant to the 2019 Advisory Agreement, a base management fee was paid quarterly and was calculated as 2.0 % per annum ( 0.50 % per quarter) of the prior calendar quarter’s total adjusted common equity, which was defined as common stockholders’ equity plus non-controlling common interests in the Operating Partnership, if any (each as reported on our balance sheet), adjusted to exclude unrealized gains and losses and certain other one-time events and non-cash items (“Total Adjusted Common Equity”).

Under the 2020 Advisory Agreement, a base management fee is paid quarterly and is calculated at an annual rate of 0.50 % ( 0.125 % per quarter) of the prior calendar quarter’s “Gross Tangible Real Estate,” defined as the gross cost of tangible real estate owned by us (including land and land improvements, irrigation and drainage systems, horticulture, farm-related facilities, and other tangible site improvements), prior to any accumulated depreciation, and as shown on our balance sheet or the notes thereto for the applicable quarter.

During the three and six months ended June 30, 2019 , our Adviser granted us certain non-contractual, unconditional, and irrevocable waivers, which were applied as credits against the base management fee for the period, as detailed in the table below under “ —Related-Party Fees .” We did not have any such waivers for the three and six months ended June 30, 2020 .

During the three and nine months ended September 30, 2019, our Adviser granted us certain non-contractual, unconditional, and irrevocable waivers, which were applied as credits against the base management fee for the period, as detailed in the table below under “ —Related-Party Fees .” We did not have any such waivers for the three and nine months ended September 30, 2020.

Incentive Fee

Pursuant to the Prior Advisory Agreement, an incentive fee was calculated and payable quarterly in arrears if the Pre-Incentive Fee FFO for a particular quarter exceeded a hurdle rate of 1.75 % ( 7.0 % annualized) of the prior calendar quarter’s Total Adjusted Equity.

Under the 2020 Advisory Agreement, an incentive fee is calculated and payable quarterly in arrears if the Pre-Incentive Fee FFO for a particular quarter exceeds a hurdle rate of 1.75 % ( 7.0 % annualized) of the prior calendar quarter’s “Total Adjusted Common Equity,” defined as common stockholders’ equity plus non-controlling common interests in the Operating Partnership, if any (each as reported on our balance sheet), adjusted to exclude unrealized gains and losses and certain other one-time events and non-cash items.

Under each of the 2019 Advisory Agreement and the 2020 Advisory Agreement, an incentive fee was and is calculated and payable quarterly in arrears if the Pre-Incentive Fee FFO for a particular quarter exceeds a hurdle rate of 1.75 % ( 7.0 % annualized) of the prior calendar quarter’s Total Adjusted Common Equity.

For purposes of the calculation of the Incentive Fee, Pre-Incentive Fee FFO was defined in each of the Advisory Agreements as FFO (also as defined in each of the Advisory Agreements) accrued by the Company during the current calendar quarter (prior to any incentive fee calculation for the current calendar quarter), less any dividends paid on preferred stock securities that were not treated as a liability for GAAP purposes.

24 unchanged sentences

The amount of the financing fee may be reduced or eliminated as determined by us and Gladstone Securities after taking into consideration various factors, including, but not limited to, the involvement of any unrelated third-party brokers and general market conditions.

We paid total financing fees to Gladstone Securities of approximately $ 28,000 during each of the three and six months ended June 30, 2020 , and approximately $ 26,000 and $ 28,000 during the three and six months ended June 30, 2019 , respectively.

Through June 30, 2020 , the total amount of financing fees paid to Gladstone Securities represented approximately 0.12 % of the total financings secured since the Financing Arrangement Agreement has been in place.

We paid total financing fees to Gladstone Securities of approximately $ 7,000 and $ 35,000 during each of the three and nine months ended September 30, 2020, and approximately $ 160,000 and $ 188,000 during the three and nine months ended September 30, 2019, respectively.

Through September 30, 2020, the total amount of financing fees paid to Gladstone Securities represented approximately 0.13 % of the total financings secured since the Financing Arrangement Agreement has been in place.

Series B Dealer-Manager Agreement

5 unchanged sentences

The terms of the Series B Dealer-Manager Agreement were approved by our board of directors, including all of its independent directors.

In connection with the sales of the Series B Preferred Stock, we paid total Series B Selling Commissions and Series B Dealer-Manager Fees to Gladstone Securities of approximately $ 0 and $ 2.5 million during the three and six months ended June 30, 2020 , respectively, and approximately $ 1.7 million and $ 3.3 million during the three and six months ended June 30, 2019 , respectively.

In connection with the sales of the Series B Preferred Stock, we paid total Series B Selling Commissions and Series B Dealer-Manager Fees to Gladstone Securities of approximately $ 0 and $ 2.5 million during the three and nine months ended September 30, 2020, respectively, and approximately $ 1.8 million and $ 5.1 million during the three and nine months ended September 30, 2019, respectively.

The majority of these amounts were then remitted by Gladstone Securities to unrelated third-parties involved in the offering, including participating broker-dealers and wholesalers.

7 unchanged sentences

The terms of the Series C Dealer-Manager Agreement were approved by our board of directors, including all of our independent directors.

During both the three and six months ended June 30, 2020 , we paid approximately $ 286,000 of Series C Selling Commissions and Series C Dealer-Manager Fees to Gladstone Securities in connection with sales of the Series C Preferred Stock.

During the three and nine months ended September 30, 2020, we paid approximately $ 598,000 and $ 885,000 , respectively, of Series C Selling Commissions and Series C Dealer-Manager Fees to Gladstone Securities in connection with sales of the Series C Preferred Stock.

The majority of these amounts were then remitted by Gladstone Securities to unrelated third-parties involved in the offering, including participating broker-dealers and wholesalers.

2 unchanged sentences

The following table summarizes related-party fees paid or accrued for and reflected in our accompanying condensed consolidated financial statements (dollars in thousands):

For the Three Months Ended June 30,

For the Six Months Ended June 30,

For the Three Months Ended September 30, For the Nine Months Ended September 30,

2020 2019 2020 2019

Base management fee (1)(2)

$ 1,078 $ 862 $ 3,159 $ 2,741

Incentive fee (1)(2)

821 — 2,155 —

Credits from non-contractual, unconditional, and irrevocable waiver granted by Adviser’s board of directors (2)

— — — ( 1,542 )

Total fees to our Adviser, net $ 1,899 $ 862 $ 5,314 $ 1,199

Administration fee (1)(2)

$ 344 $ 311 $ 1,084 $ 866

Selling Commissions and Dealer-Manager Fees (1)(3)

$ 598 $ 1,777 $ 3,368 $ 5,089

Financing fees (1)(4)

6 unchanged sentences

Related-Party Fees Due

Amounts due to related parties on our accompanying Condensed Consolidated Balance Sheets as of June 30, 2020 , and December 31, 2019 , were as follows (dollars in thousands):

June 30, 2020

December 31, 2019

Amounts due to related parties on our accompanying Condensed Consolidated Balance Sheets as of September 30, 2020, and December 31, 2019, were as follows (dollars in thousands):

September 30, 2020 December 31, 2019

Base management fee $ 1,078 $ 881

5 unchanged sentences

Total due to related parties (3)

$ 2,266 $ 2,169

(1) Other amounts due to or from our Adviser primarily relate to miscellaneous general and administrative expenses either paid by our Adviser on our behalf or by us on our Adviser’s behalf.

Represents the cumulative accrued but unpaid portion of prior Administration fees that are scheduled to be paid during the three months ending September 30, 2020, which is the quarter following our Administrator’s fiscal year end.

(2) Represents the cumulative accrued but unpaid portion of prior Administration fees that are scheduled to be paid during the three months ending September 30 of each year, which is the quarter following our Administrator’s fiscal year end.

(3) Reflected as a line item on our accompanying Condensed Consolidated Balance Sheet.

2 unchanged sentences

In connection with the execution of certain lease agreements, we have committed to provide capital improvements on certain of our farms, which are summarized in the table below (dollars in thousands):

Location Farm

Acreage Total

Commitment Obligated

Amount Expended

or Accrued as of

June 30, 2020

September 30, 2020

Hillsborough, FL 55 $ 2,250 (2)

Van Buren, MI

Q2 2021 $ 989

Wicomico & Caroline, MD, and Sussex, DE 833 505 Q3 2021 36

Van Buren, MI 89 150 Q4 2021 126

Napa, CA 270 1,548 (2)

Santa Barbara, CA 271 4,000 (2)

Q3 2024 2,267

Columbia, OR 157 1,800 (2)

Q3 2024 1,146

Collier & Hendry, FL 3,612 2,000 (2)

Monterey, CA 304 1,248 Q4 2025 880

(1) Our obligation to provide capital to fund these improvements does not extend beyond these respective dates.

(2) Pursuant to contractual agreements, we will earn additional rent on the cost of these capital improvements as the funds are disbursed by us.

Pursuant to the agreement, we will only earn additional rent if the total amount of capital improvements exceeds $ 1.3 million .

Pursuant to the agreement, we will only earn additional rent if the total amount of capital improvements exceeds $ 860,000 .

In the ordinary course of business, we may be involved in legal proceedings from time to time.

1 unchanged sentence

Amendment to Articles of Incorporation

On February 20, 2020, we filed with the Maryland Department of Assessments and Taxation an Articles Supplementary (i) setting forth the rights, preferences, and terms of the Series C Preferred Stock and (ii) reclassifying and designating 26,000,000 shares of our authorized and unissued shares of common stock as shares of Series C Preferred Stock.

26,000,000 shares of our authorized and unissued shares of common stock as shares of Series C Preferred Stock.

The reclassification decreased the number of shares classified as common stock from approximately 91.5 million shares immediately prior to the reclassification to 65.5 million shares immediately after the reclassification.

5 unchanged sentences

We consolidate our Operating Partnership, which is a majority-owned partnership.

As of June 30, 2020 , and December 31, 2019 , we owned approximately 99.3 % and 98.6 % , respectively, of the outstanding OP Units.

As of June 30, 2020 , and December 31, 2019 , there were 144,151 and 288,303 OP Units held by non-controlling OP Unitholders.

As of September 30, 2020, and December 31, 2019, we owned 100.0 % and approximately 98.6 %, respectively, of the outstanding OP Units.

As of September 30, 2020, and December 31, 2019, there were 0 and 288,303 OP Units held by non-controlling OP Unitholders.

On or after 12 months after becoming a holder of OP Units, each limited partner, other than the Company, has the right, subject to the terms and conditions set forth in the partnership agreement of the Operating Partnership, to require the Operating Partnership to redeem all or a portion of such units in exchange for cash or, at the Company’s option, shares of our common stock on a one-for-one basis.

1 unchanged sentence

A limited partner will not be entitled to exercise redemption rights if the delivery of common stock to the redeeming limited partner would breach restrictions on the ownership of common stock imposed under our charter and other limitations thereof.

We did not issue any new OP Units to non-controlling OP Unitholders during the three or six months ended June 30, 2020 or 2019.

Information related to OP Units tendered for redemption during the three and six months ended June 30, 2020 and 2019 is provided in the table below:

OP Units Tendered for Redemption

Shares of Common Stock Issued

Three months ended June 30, 2020

Six months ended June 30, 2020

Three months ended June 30, 2019

Six months ended June 30, 2019

We did not issue any OP Units to noncontrolling OP Unitholders during the three or nine months ended September 30, 2020.

Information regarding OP Units issued to noncontrolling OP Unitholders during the three and nine months ended September 30, 2019, is provided in the following table (dollars in thousands, except per-unit amounts):

Number of OP Units Issued Weighted Average

Issuance Price per OP Unit Aggregate Value (1)

288,303 $ 11.41 $ 3,290

(1) Based on the closing stock price of the Company’s common stock on the date of issuance.

Information related to OP Units tendered for redemption during the three and nine months ended September 30, 2020 and 2019 is provided in the table below:

Period OP Units Tendered for Redemption Shares of Common Stock Issued

Three months ended September 30, 2020 144,151 144,151

Nine months ended September 30, 2020 288,303 288,303

Three months ended September 30, 2019 — —

Nine months ended September 30, 2019 570,879 570,879

Regardless of the rights described above, the Operating Partnership will not have an obligation to issue cash to a unitholder upon a redemption request if the Company elects to redeem the OP Units for shares of its common stock.

4 unchanged sentences

333-217042) with the SEC (the “2017 Registration Statement”) to replace our previous registration statement.

The 2017 Registration Statement, which was declared

effective by the SEC on April 12, 2017, permitted us to issue up to an aggregate of $ 300.0 million in securities, consisting of common stock, preferred stock, warrants, debt securities, depository shares, subscription rights, and units, including through separate, concurrent offerings of two or more of such securities.

The 2017 Registration Statement, which was declared effective by the SEC on April 12, 2017, permitted us to issue up to an aggregate of $ 300.0 million in securities, consisting of common stock, preferred stock, warrants, debt securities, depository shares, subscription rights, and units, including through separate, concurrent offerings of two or more of such securities.

Under the 2017 Registration Statement, we issued a total of 9,495,834 shares of common stock (excluding 1,215,565 shares of common stock issued in exchange for certain OP Units that were tendered for redemption) for gross proceeds of approximately $ 117.4 million and 6,000,000 shares of Series B Preferred Stock for gross proceeds of approximately $ 147.5 million.

2 unchanged sentences

The 2020 Registration Statement, which was declared effective by the SEC on April 1, 2020, permits us to issue up to an aggregate of $ 1.0 billion in securities, consisting of common stock, preferred stock, warrants, debt securities, depository shares, subscription rights, and units, including through separate, concurrent offerings of two or more of such securities.

Through June 30, 2020 , we had issued a total of 44,129 shares of common stock (excluding 144,152 shares of common stock issued in exchange for certain OP Units that were tendered for redemption) for gross proceeds of approximately $ 714,000 and 130,702 shares of Series C Preferred Stock for gross proceeds of approximately $ 3.3 million under the 2020 Registration Statement.

Through September 30, 2020, we had issued a total of 570,145 shares of common stock (excluding 288,303 shares of common stock issued in exchange for certain OP Units that were tendered for redemption) for gross proceeds of approximately $ 9.2 million and 420,196 shares of Series C Preferred Stock for gross proceeds of approximately $ 10.4 million under the 2020 Registration Statement.

In conjunction with the filing of the 2020 Registration Statement, we wrote off approximately $ 29 ,000 of unallocated costs associated with the initial filing of the 2017 Registration Statement.

These costs were written off to professional fees, which is included within General and administrative expenses on our accompanying Condensed Consolidated Statements of Operations and Comprehensive Income, during the six months ended June 30, 2020 .

Equity Issuances

3 unchanged sentences

See Note 6, “ Related-Party Transactions—Gladstone Securities—Series B Dealer-Manager Agreement ,” for a discussion of the fees and commissions to be paid to Gladstone Securities in connection with the Series B Offering.

The following table provides information on sales of the Series B Preferred Stock that occurred during the three and six months ended June 30, 2020 and 2019 (dollars in thousands, except per-share amounts):

Weighted-average

Offering Price per Share

Gross Proceeds

Net Proceeds (1)

Six months ended June 30, 2020

Three months ended June 30, 2019

Six months ended June 30, 2019

The following table provides information on sales of the Series B Preferred Stock that occurred during the three and nine months ended September 30, 2020 and 2019 (dollars in thousands, except per-share amounts):

Period Number of

Shares Sold Weighted-average

Offering Price per Share Gross Proceeds Net Proceeds (1)

Nine months ended September 30, 2020 1,229,531 $ 24.52 $ 30,148 $ 27,664

Three months ended September 30, 2019 831,579 $ 24.64 $ 20,487 $ 18,711

Nine months ended September 30, 2019 2,330,654 24.68 57,529 52,440

(1) Net of Series B Selling Commissions and Series B Dealer-Manager Fees borne by us.

(2) The Series B Offering was completed during the three months ended March 31, 2020.

The following table provides information on redemptions of the Series B Preferred Stock that occurred during the three and six months ended June 30, 2020 and 2019 (dollars in thousands, except per-share amounts):

Shares Redeemed

Weighted-average

Redemption Price per Share

Three months ended June 30, 2020

Six months ended June 30, 2020

Three months ended June 30, 2019

Six months ended June 30, 2019

The following table provides information on redemptions of the Series B Preferred Stock that occurred during the three and nine months ended September 30, 2020 and 2019 (dollars in thousands, except per-share amounts):

Period Number of

Shares Redeemed Weighted-average

Redemption Price per Share Cash

Three months ended September 30, 2020 16,417 $ 22.68 $ 372

Nine months ended September 30, 2020 29,335 23.22 681

Three months ended September 30, 2019 2,120 $ 22.50 $ 48

Nine months ended September 30, 2019 9,520 22.50 214

The Series B Offering was completed on March 5, 2020 (the “Series B Termination Date”), with the full 6,000,000 allotted shares being sold, and, exclusive of redemptions, resulted in total gross proceeds of approximately $ 147.5 million and net proceeds, after deducting Series B Selling Commissions, Series B Dealer-Manager Fees, and offering expenses payable by us, of approximately $ 133.4 million.

Excluding Series B Selling Commissions and Series B Dealer-Manager Fees, we incurred approximately $ 1.6 million of total costs related to the Series B Offering, which were initially recorded as deferred offering costs (included within Other assets, net on the accompanying Condensed Consolidated Balance Sheets) and were applied against the gross proceeds received from the offering through additional paid-in capital as shares of the Series B Preferred Stock were sold.

There is currently no public market for shares of the Series B Preferred Stock;

however, we intend to apply to list the Series B Preferred Stock on Nasdaq or another national securities exchange within one calendar year after the Series B Termination Date, though there can be no assurance that a listing will be achieved in such timeframe, or at all.

As of September 30, 2020, there was no public market for shares of the Series B Preferred Stock;

however, subsequent to September 30, 2020, we successfully listed the Series B Preferred Stock on Nasdaq under the ticker “LANDO.” See Note 11, “ Subsequent Events ,” for a discussion of the listing of the Series B Preferred Stock.

Series C Preferred Stock

4 unchanged sentences

See Note 6, “ Related-Party Transactions—Gladstone Securities—Series C Dealer-Manager Agreement ,” for a discussion of the commissions and fees to be paid to Gladstone Securities in connection with the Series C Offering.

The following table provides information on equity sales that have occurred during the three and six months ended June 30, 2020 (dollars in thousands, except per-share amounts):

The following table provides information on equity sales that have occurred during the three and nine months ended September 30, 2020 (dollars in thousands, except per-share amounts):

Period Number of

Shares Sold (1)

Weighted Average

Offering Price

Gross Proceeds

Net Proceeds (1)

Three and Six months ended June 30, 2020 (2)

Per Share Gross Proceeds Net Proceeds (2)

Three months ended September 30, 2020 289,494 $ 24.82 $ 7,184 $ 6,586

Nine months ended September 30, 2020 420,196 24.86 10,444 9,559

(1) Excludes shares issued pursuant to the DRIP.

During each of the three and nine months ended September 30, 2020, we issued approximately 34 shares of the Series C Preferred Stock pursuant to the DRIP.

(2) Net of Series C Selling Commissions and Series C Dealer-Manager Fees.

The Series C Offering commenced during the three months ended June 30, 2020.

As of June 30, 2020 , excluding Series C Selling Commissions and Series C Dealer-Manager Fees, we have incurred approximately $ 302,000 of costs related to the Series C Offering, which are initially recorded as deferred offering costs (included within Other assets, net on the accompanying Condensed Consolidated Balance Sheets) and are applied against gross proceeds received from the offering through additional paid-in capital as shares of the Series C Preferred Stock are sold.

See Note 11, “ Subsequent Events—Equity Activity—Series C Preferred Stock ,” for sales of Series C Preferred Stock completed subsequent to June 30, 2020 .

The Series C Offering will terminate on the date (the “Series C Termination Date”) that is the earlier of either June 1, 2025 (unless terminated earlier or extended by our Board of Directors), or the date on which all 20,000,000 shares in the Primary Series C Offering are sold.

As of September 30, 2020, excluding Series C Selling Commissions and Series C Dealer-Manager Fees, we have incurred approximately $ 225,000 of costs related to the Series C Offering, which are initially recorded as deferred offering costs (included within Other assets, net on the accompanying Condensed Consolidated Balance Sheets) and are applied against gross proceeds received from the offering through additional paid-in capital as shares of the Series C Preferred Stock are sold.

See Note 11, “ Subsequent Events—Equity Activity—Series C Preferred Stock ,” for sales of Series C Preferred Stock completed subsequent to September 30, 2020.

Series C Offering are sold.

There is currently no public market for shares of the Series C Preferred Stock;

2 unchanged sentences

On August 7, 2015, we entered into equity distribution agreements (commonly referred to as “at-the-market agreements”), as amended from time to time, with Cantor Fitzgerald & Co., Ladenburg Thalmann & Co., Inc., and Virtu Americas, LLC (each a “Sales Agent”), under which we were permitted to issue and sell, from time to time and through the Sales Agents, shares of our common stock having an aggregate offering price of up to $ 30.0 million (the “Prior ATM Program”).

our common stock having an aggregate offering price of up to $ 100.0 million (the “Current ATM Program,” and collectively with the Prior ATM Program, the “ATM Programs”).

The following table provides information on shares of common stock sold by the Sales Agents under the ATM Programs during the three and six months ended June 30, 2020 and 2019 (dollars in thousands, except per-share amounts):

Weighted-average

Offering Price Per Share

Gross Proceeds

Net Proceeds (1)

Three months ended June 30, 2020

Six months ended June 30, 2020

Three months ended June 30, 2019

Six months ended June 30, 2019

On May 12, 2020, we terminated the Prior ATM Program and entered into new equity distribution agreements with Virtu Americas, LLC, and Ladenburg & Co., Inc., under which we may issue and sell, from time to time and through the current Sales Agents, shares of our common stock having an aggregate offering price of up to $ 100.0 million (the “Current ATM Program,” and collectively with the Prior ATM Program, the “ATM Programs”).

The following table provides information on shares of common stock sold by the Sales Agents under the ATM Programs during the three and nine months ended September 30, 2020 and 2019 (dollars in thousands, except per-share amounts):

Period Number of

Shares Sold Weighted-average

Offering Price Per Share Gross Proceeds Net Proceeds (1)

Three months ended September 30, 2020 526,016 $ 16.13 $ 8,483 $ 8,398

Nine months ended September 30, 2020 979,945 14.94 14,638 14,491

Three months ended September 30, 2019 78,008 $ 12.01 $ 937 $ 923

Nine months ended September 30, 2019 148,559 12.32 1,830 1,802

(1) Net of underwriting commissions and discounts.

Distributions

The per-share distributions to preferred and common stockholders declared by our Board of Directors and paid by us (except as noted) during the three and six months ended June 30, 2020 and 2019 are reflected in the table below.

For the Three Months Ended June 30,

For the Six Months Ended June 30,

The per-share distributions to preferred and common stockholders declared by our Board of Directors and paid by us (except as noted) during the three and nine months ended September 30, 2020 and 2019 are reflected in the table below.

Three months ended September 30, Nine months ended September 30,

Issuance 2020 2019 2020 2019

Series A Term Preferred Stock (1)

$ 0.3984375 $ 0.3984375 $ 1.1953125 $ 1.1953125

Series B Preferred Stock (2)

0.375 0.375 1.125 1.125

Series C Preferred Stock (2)

0.375 — 0.750 —

Common Stock (3)

0.13440 0.13365 0.40245 0.40050

(1) Treated similar to interest expense on the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income.

Of the aggregate dividends declared on the Series B Preferred Stock and Series C Preferred Stock by our Board of Directors on April 14, 2020, and April 9, 2019, approximately $ 763,000 and $ 333,000 , respectively, was paid (as scheduled) by us on July 3, 2020, and July 5, 2019, respectively.

(2) Of the aggregate dividends declared on the Series B Preferred Stock and Series C Preferred Stock by our Board of Directors on July 14, 2020, and July 9, 2019, approximately $ 797 ,000 and $ 433,000 , respectively, was paid (as scheduled) by us on October 7, 2020, and October 3, 2019, respectively.

(3) The same amounts were paid as distributions on each OP Unit held by non-controlling OP Unitholders.

LEASE REVENUES

The following table sets forth the components of our lease revenues for the three and six months ended June 30, 2020 and 2019 (dollars in thousands, except for footnotes):

For the Three Months Ended June 30,

For the Six Months Ended June 30,

The following table sets forth the components of our lease revenues for the three and nine months ended September 30, 2020 and 2019 (dollars in thousands, except for footnotes):

Three months ended September 30, Nine months ended September 30,

2020 2019 2020 2019

Fixed lease payments (1)

$ 12,838 $ 10,131 $ 37,450 $ 26,236

Variable lease payments (2)

1,151 881 4,457 967

Lease revenues, net (3)

$ 13,989 $ 11,012 $ 41,907 $ 27,203

(1) Fixed lease payments include contractual rents under lease agreements with tenants recognized on a straight-line basis over the respective lease terms and includes the amortization of above-market lease values and lease incentives and the accretion of below-market lease values and other deferred revenue.

1 unchanged sentence

Participation rents are generally recognized when all contingencies have been resolved and when actual results become known or estimable, enabling us to estimate and/or measure our share of such gross revenues.

During the three and six months ended June 30, 2020 , we recorded participation rents of approximately $ 44,000 and $ 74,000 , respectively, and reimbursements of certain property operating expenses by tenants of approximately $ 244,000 and $ 422,000 , respectively.

During the three and six months ended June 30, 2019 , we recorded participation rents of approximately $ 0 and $ 27,000 , respectively, and reimbursements of certain property operating expenses by tenants of approximately $ 30,000 and $ 60,000 , respectively.

In addition, during the six months ended June 30, 2020 , we received a lease termination payment of approximately $ 3.0 million .

During the three and nine months ended September 30, 2020, we recorded participation rents of approximately $ 1.1 million and $ 1.2 million, respectively, and reimbursements of certain property operating expenses by tenants of approximately $ 19 ,000 and $ 441 ,000, respectively.

During the three and nine months ended September 30, 2019, we recorded participation rents of approximately $ 848 ,000 and $ 874 ,000, respectively, and reimbursements of certain property operating expenses by tenants of approximately $ 33 ,000 and $ 93 ,000, respectively.

In addition, during the nine months ended September 30, 2020, we received a lease termination payment of approximately $ 3.0 million.

(3) Reflected as a line item on our accompanying Condensed Consolidated Statements of Operations and Comprehensive Income.

EARNINGS PER SHARE OF COMMON STOCK

The following table sets forth the computation of basic and diluted net loss per common share for the three and six months ended June 30, 2020 and 2019 , computed using the weighted average number of shares outstanding during the respective

The following table sets forth the computation of basic and diluted net loss per common share for the three and nine months ended September 30, 2020 and 2019, computed using the weighted average number of shares outstanding during the respective periods.

Net loss figures are presented net of non-controlling interests in the earnings per share calculations.

The non-controlling limited partners’ outstanding OP Units (which may be redeemed for shares of common stock) have been excluded from the diluted per-share calculation, as there would be no effect on the amounts since the non-controlling OP Unitholders’ share of earnings would also be added back to net loss.

Three months ended June 30,

Six months ended June 30,

(Dollars in thousands, except per-share amounts)

Three months ended September 30, Nine months ended September 30,

2020 2019 2020 2019

(Dollars in thousands, except per-share amounts) (Dollars in thousands, except per-share amounts)

Net loss attributable to common stockholders $ ( 837 ) $ ( 644 ) $ ( 1,981 ) $ ( 1,860 )

Weighted average shares of common stock outstanding – basic and diluted

21,991,291 20,763,615 21,558,859 19,154,744

Loss per common share – basic and diluted

The weighted-average number of OP Units held by non-controlling OP Unitholders was 224,940 and 256,621 for the three and six months ended June 30, 2020 , respectively, and 0 and 215,499 for the three and six months ended June 30, 2019 , respectively.

$ ( 0.04 ) $ ( 0.03 ) $ ( 0.09 ) $ ( 0.10 )

The weighted-average number of OP Units held by non-controlling OP Unitholders was 16,452 and 175,981 for the three and nine months ended September 30, 2020, respectively, and 222,494 and 217,857 for the three and nine months ended September 30, 2019, respectively.

SUBSEQUENT EVENTS

Portfolio Activity

Leasing Activity

The following table summarizes the leasing activity that occurred on our existing properties subsequent to June 30, 2020 , through the date of this filing (dollars in thousands):

Straight-line

Participation

/ NN / N) (2)

Acquisition Activity

Subsequent to September 30, 2020, we acquired four new farms, which are summarized in the table below (dollars in thousands, except for footnotes):

Name Property

Location Acquisition

Farms Primary

Crop(s) Lease

Options Total

Price Acquisition

Straight-line

Participation

/ NN / N) (2)

Annualized straight-line rent is based on the minimum cash rental payments guaranteed under the leases (presented on an annualized basis), as required under GAAP, and excludes contingent rental payments, such as participation rents.

“NNN” refers to leases under triple-net lease arrangements, “NN” refers to leases under partial-net lease arrangements, and “N” refers to leases under single-net lease arrangements.

For a description of each of these types of lease arrangements, see “ Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview—Leases—General .”

West Lost Hills Road (3)(4)(5)

Fresno, CA 10/1/2020 801 1 Pistachios 1.1 years 4 (3 years) $ 31,828 $ 52 $ 1,560

Tractor Road Bamberg & Orangeburg, SC 10/23/2020 597 3 Sod 9.5 years None 3,765 48 244

1,398 4 $ 35,593 $ 100 $ 1,804

(1) Acquisitions will be accounted for as asset acquisitions in accordance with ASC 360.

The figures above represent only costs paid or accrued for as of the date of this filing.

(2) Annualized straight-line rent is based on the minimum cash rental payments guaranteed under the applicable leases, as required under GAAP, and excludes contingent rental payments, such as participation rents.

(3) Lease provides for a participation rent component based on the gross crop revenues earned on the farm.

The rent figure above represents only the minimum cash guaranteed under the lease.

(4) Lease provides for an initial term of 3.1 years but also includes an annual tenant termination option, effective as of the end of the then-current lease year (as defined within the lease).

(5) In connection with the acquisition of this property, we also acquired a 12.5 % ownership interest in a related LLC, the sole purpose of which is to own and maintain a pipeline conveying water to this and other neighboring properties.

Financing Activity

Borrowing Activity

Subsequent to September 30, 2020, through the date of this filing, we have entered into the following loan agreements (dollars in thousands):

Lender Date of

Issuance Principal

Amount Maturity

Date Principal

Amortization Stated

Rate Interest Rate Terms

PGIM Real Estate Finance, LLC 10/1/2020 $ 19,042 7/1/2028 25.0 years 2.47 % Fixed throughout term

PGIM Real Estate Finance, LLC 10/1/2020 19,096 7/1/2028 25.0 years 2.45 % Fixed throughout term

AgAmerica Lending, LLC 10/23/2020 2,259 1/1/2028 30.0 years 3.50 % Fixed throughout term

Equity Activity

Equity Issuances

The following table provides information on equity sales that have occurred subsequent to June 30, 2020 (dollars in thousands, except per-share amounts):

Type of Issuance

Weighted Average Offering Price

Gross Proceeds

Net Proceeds (1)

The following table provides information on equity sales that have occurred subsequent to September 30, 2020 (dollars in thousands, except per-share amounts):

Type of Issuance Number of

Shares Sold Weighted Average Offering Price

Per Share Gross Proceeds Net Proceeds (1)

Series C Preferred Stock 203,861 $ 24.92 $ 5,081 $ 4,638

Common Stock – ATM Program

Common Stock – Follow-on Offering (2)

1,897,500 14.40 27,324 26,094

(1) Net of Series C Selling Commissions and Series C Dealer-Manager Fees or underwriting commissions and discounts (in each case, as applicable).

Equity Redemptions

Subsequent to June 30, 2020 , 1,297 shares of the Series B Preferred Stock were tendered for redemption at a cash redemption price of $ 22.50 per share.

As a result, we paid a total redemption cost of approximately $ 29,000 to redeem and retire these shares.

In addition, subsequent to June 30, 2020 , 144,151 OP Units held by non-controlling OP Unitholders were tendered for redemption, and we issued 144,151 shares of common stock in exchange for such OP Units.

(2) Includes the underwriters’ exercise of the full over-allotment option in connection with the offering.

Equity Listing

Subsequent to September 30, 2020, we listed the Series B Preferred Stock on Nasdaq under the ticker symbol “LANDO.” Trading of the Series B Preferred Stock on Nasdaq commenced on October 19, 2020.

Distributions

On July 14, 2020 , our Board of Directors authorized and we declared the following monthly cash distributions to holders of our preferred and common stock:

Distribution per Share

On October 13, 2020, our Board of Directors authorized and we declared the following monthly cash distributions to holders of our preferred and common stock:

Issuance Record Date Payment Date Distribution per Share

Series A Term Preferred Stock:

July 24, 2020

July 31, 2020

August 24, 2020

August 31, 2020

September 23, 2020

September 30, 2020

October 23, 2020 October 30, 2020 $ 0.1328125

November 20, 2020 November 30, 2020 0.1328125

December 23, 2020 December 31, 2020 0.1328125

Total Series A Term Preferred Stock Distributions:

Series B Preferred Stock:

July 29, 2020

August 5, 2020

August 26, 2020

September 4, 2020

September 30, 2020

October 7, 2020

October 27, 2020 November 5, 2020 $ 0.125

November 25, 2020 December 4, 2020 0.125

December 24, 2020 January 5, 2021 0.125

Total Series B Preferred Stock Distributions:

Series C Preferred Stock:

July 29, 2020

August 5, 2020

August 26, 2020

September 4, 2020

September 30, 2020

October 7, 2020

October 27, 2020 November 5, 2020 $ 0.125

November 25, 2020 December 4, 2020 0.125

December 24, 2020 January 5, 2021 0.125

Total Series C Preferred Stock Distributions:

Common Stock:

July 24, 2020

July 31, 2020

August 24, 2020

August 31, 2020

September 23, 2020

September 30, 2020

October 23, 2020 October 30, 2020 $ 0.0449

November 20, 2020 November 30, 2020 0.0449

December 23, 2020 December 31, 2020 0.0449

Total Common Stock Distributions:

2 unchanged sentences

These payments were originally scheduled to be paid on July 1, 2020, and the rent deferrals we granted to these tenants extend the new due dates to be on or before November 1, 2020, with all other terms of the existing lease agreements remaining unchanged.

Additional time was granted to these tenants due to delays in payments owed to them from their respective processors, which were primarily caused by the strict government-mandated lockdowns in the state of Michigan in response to COVID-19.

In addition, we are currently awaiting payment from one other tenant who owed an annual rental payment of approximately $ 53,000 in July 2020.

The delay in this payment is primarily due to a delay in our farmer’s receipt of certain insurance payouts, which are expected to be settled during August 2020, at which time we expect to collect the rent owed to us.

Based on the payment histories and current operational statuses of each of the respective tenants, we currently anticipate being able to collect these amounts in full within the aforementioned timeframes.

We have not received any other requests from tenants seeking relief as a result of COVID-19, and all other tenants are current in their rental payments to us;

These rental payments were collected in full subsequent to September 30, 2020.

We have not received any other requests from tenants seeking relief as a result of COVID-19;

however, no assurances can be made that we will not receive additional rent deferral or modification requests in the future.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements