What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2021-05-12 compared with 2020-11-04 · 276 added, 373 removed, 347 unchanged (65% of the section changed)

13 unchanged sentences

We conduct substantially all of our activities through, and all of our properties are held, directly or indirectly, by, Gladstone Land Limited Partnership (the “Operating Partnership”).

Gladstone Land Corporation controls the sole general partner of the Operating Partnership and currently owns, directly or indirectly, 100.0% of the units of limited partnership interest in the Operating Partnership (“OP Units”).

Gladstone Land Corporation controls the sole general partner of the Operating Partnership and currently owns, directly or indirectly, approximately 99.3% of the units of limited partnership interest in the Operating Partnership (“OP Units”).

In addition, we have elected for Gladstone Land Advisers, Inc.

2 unchanged sentences

Our Adviser and our Administrator collectively employ all of our personnel and directly pay their salaries, benefits, and general expenses.

Impact of COVID-19 on our Business and Operations

The novel coronavirus (“COVID-19”) pandemic continues to evolve and is currently impacting most countries, communities, and markets.

Global recessionary conditions are currently expected for the remainder of 2020 as a direct result of the COVID-19 pandemic, although the actual impact and duration are unknown.

Much of the United States economy continues to slowly re-open, but at the same time, the COVID-19 pandemic is intensifying in many areas of the country.

As a result, some jurisdictions have rolled back reopening plans, and more widespread reinstatement of directives and mandates requiring businesses to again curtail or cease normal operations remains a possibility.

The extent to which the COVID-19 pandemic may impact and may further impact our business, financial condition, liquidity, results of operations, or prospects depends on numerous evolving factors that are out of our control and that we are not able to predict at this time, including, but not limited to:

(i) the nature, duration, and scope of the pandemic;

(ii) governmental, business, and individuals’ actions that have been and continue to be taken in response to the pandemic;

(iii) the impact on economic activity from the pandemic (including the effect on market rental rates and farmland values, if any) and actions taken in response;

(iv) the effect on our tenants and their farming operations, including any disruptions that would impact their ability to make rental payments to us (including, but not limited to, labor shortages and supply chain disruptions);

and (v) the impact on credit markets and our ability to continue to secure debt financing.

We do not believe that the ongoing COVID-19 pandemic has materially affected our operations or those of our tenants at this point in time.

Most of our farmers initially experienced increased sales volumes and higher-than-average prices because the pandemic led the public to stockpile food and other necessities.

However, such volumes and prices have recently returned to more normalized levels, though overall demand and pricing remains above that of the prior year.

In July 2020, we granted extensions of up to 123 days to two tenants who owed semi-annual rental payments totaling approximately $343,000.

These payments were originally scheduled to be paid on July 1, 2020, and the rent deferrals we granted to these tenants extended 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.

These rental payments were collected in full in October 2020, and we have not received any further requests from tenants seeking relief as a result of COVID-19.

While we do not currently anticipate any additional requests from tenants for rent deferrals, if we do receive additional rent relief requests in the future from tenants that have directly been materially and adversely impacted by the ongoing COVID-19 pandemic, as assessed by us, in exchange for granting any such relief, we intend to seek certain terms in exchange for granting such relief, if any, including, but not limited to, extended lease terms, increased rent, and near-term rent deferral repayments.

In addition, if we were to grant any rent deferrals or modifications, we anticipate that any such agreements would include partial payments in exchange for rent deferrals of varying terms, with all deferred amounts to be paid back to us over a specified, short-term period.

At this time, we are unable to quantify the success of any tenant’s financial prospects, the amount of any future relief requests from tenants, or the outcome of any future relief package negotiations, if such relief is granted.

In addition, while public equity markets have experienced significant volatility lately, we do not believe there will be a credit freeze in agricultural lending in the near term that will have a material adverse impact on us.

Further, we are in compliance with all of our debt covenants, and we believe we currently have adequate liquidity to cover all near-term debt obligations and operating expenses.

We currently expect values of our farmland portfolio to remain stable, and with the exception of the rent deferrals granted to the two aforementioned tenants in July 2020, we expect rental payments to continue to be paid on time for at least the foreseeable future.

However, we will continue to monitor the overall situation and our portfolio and may take actions that alter our business operations as may be required by federal, state, or local authorities or that we determine are in the best interests of our personnel, tenants, or stockholders.

There can be no assurance that our business and financial and operational results will not be impacted by the COVID-19 pandemic or that we will be able to pay distributions to our stockholders in the future at the same rate, or at all.

Portfolio Diversity

2 unchanged sentences

The acquisition of additional farms since our IPO has also allowed us to further diversify our portfolio geographically.

The following table summarizes the different geographic locations (by state) of our farms owned and with leases in place as of and for 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

The following table summarizes the different geographic locations (by state) of our farms owned and with leases in place as of and for the three months ended March 31, 2021 and 2020 (dollars in thousands):

As of and For the three months ended March 31, 2021 As of and For the three months ended March 31, 2020

Revenue % of Total

4 unchanged sentences

Florida 23 20,770 20.5% 3,358 20.9% 23 20,770 23.6% 3,335 21.8%

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

Colorado 12 32,773 32.3% 731 4.6% 12 32,773 37.3% 823 5.4%

Washington 3 1,384 1.4% 594 3.7% 1 746 0.8% 123 0.8%

Arizona 6 6,280 6.2% 467 2.9% 6 6,280 7.1% 3,331 21.8%

Nebraska 9 7,782 7.7% 397 2.5% 8 7,104 8.1% 385 2.5%

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

Oregon 3 418 0.4% 133 0.8% 3 418 0.5% 130 0.9%

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

Texas 1 3,667 3.6% 112 0.7% 1 3,667 4.2% 112 0.7%

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

Maryland 6 987 1.0% 108 0.7% — — —% — —%

Michigan 15 962 0.9% 93 0.6% 15 962 1.1% 170 1.1%

South Carolina 3 597 0.6% 61 0.4% — — —% — —%

North Carolina 2 310 0.3% 33 0.2% 2 310 0.4% 55 0.4%

Delaware 1 180 0.2% 20 0.1% — — —% — —%

2 unchanged sentences

our farms are spread across six of these growing regions.

We believe that our geographic diversity mitigates our exposure to certain economic issues (including those as a result of COVID-19) in any one geographic market or area.

Most of our leases are on a triple-net basis, an arrangement under which, in addition to rent, the tenant is required to pay the related taxes, insurance costs, maintenance, and other operating costs.

Our leases generally have original terms ranging from 3 to 10 years for farms growing row crops and 7 to 15 years for farms growing permanent crops (in each case, often with options to extend the lease further).

Rent is generally payable to us in advance on either an annual or semi-annual basis, with such rent typically subject to periodic escalation clauses included within the lease.

Rent is generally payable to us in advance on either an annual or semi-annual basis, with such rent typically subject to periodic escalation clauses provided for within the lease.

Currently, 103 of our farms are leased on a pure, triple-net basis, 35 farms are leased on a partial-net basis (with us, as landlord, responsible for all or a portion of the related property taxes), and 3 farms are leased on a single-net basis (with us, as landlord, responsible for the related property taxes, as well as certain maintenance, repairs, and insurance costs).

2 unchanged sentences

Agricultural leases are often shorter term in nature (relative to leases of other types of real estate assets), so in any given year, we may have multiple leases up for extension or renewal.

The following table summarizes the lease expirations by year for the farms owned and with leases in place as of September 30, 2020 (dollars in thousands):

The following table summarizes the lease expirations by year for the farms owned and with leases in place as of March 31, 2021 (dollars in thousands):

Year Number of

1 unchanged sentence

Acreage Lease Revenues for the

Nine Months Ended

September 30, 2020 % of Total

Three Months Ended

March 31, 2021 % of Total

2021 7 11,238 11.1% $ 1,358 8.5%

8 unchanged sentences

(2) Consists of ancillary leases (e.g., oil, gas, and mineral leases, telecommunications leases, etc.) with varying expirations on certain of our farms.

In addition, includes a net amount of approximately $2.8 million of lease revenue recorded as a result of an early lease termination on one of our properties (see below, under “ Recent Developments—Portfolio Activity—Existing Properties—Leasing Activity—Lease Termination ” for additional information).

We currently have three agricultural leases scheduled to expire within the next six months (all located in Colorado).

We are currently in negotiations with the existing tenants on each of the farms, as well as other potential tenants, and we anticipate being able to renew each of the leases at their respective current market rental rates without incurring any downtime on any of the farms.

Overall, we currently anticipate the rental rates on these lease renewals to remain relatively flat compared to the respective existing leases.

We currently have two agricultural leases scheduled to expire within the next six months (one in California and one in Michigan).

We are currently in negotiations with the existing tenants on each of these farms, as well as other potential tenants, and we anticipate being able to renew each of the leases at their respective current market rental rates without incurring any downtime on any of the farms.

Overall, we currently anticipate the lease renewals on these farms to be at rental rates that are equal to or slightly higher than those of the current leases.

Regarding all upcoming lease expirations, there can be no assurance that we will be able to renew the existing leases or execute new leases at rental rates favorable to us, if at all, or be able to find replacement tenants, if necessary.

2 unchanged sentences

Property Acquisitions

Since July 1, 2020, through the date of this filing, we have acquired 12 farms, which are summarized in the table below (dollars in thousands, except for footnotes):

Since January 1, 2021, through the date of this filing, we have acquired four farms, which are summarized in the table below (dollars in thousands, except for footnotes):

Name Property

1 unchanged sentence

Farms Primary

Crop(s) Lease

Crop(s) / Use Lease

Options Total

1 unchanged sentence

Straight-line

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

Firestone Avenue (3)(4)(5)

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

West Lost Hills Road (3)(6)(7)

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

Palmer Mill Road Dorchester, MD 3/3/2021 228 2 Sod 10.0 years 2 (5 years) $ 1,600 $ 48 $ 89

Eight Mile Road - Port Facility San Joaquin, CA 3/11/2021 5 1 Cooling Facility & Storage 9.8 years 3 (5 years) 3,977 30 189

South Avenue Corning Tehama, CA 4/5/2021 2,285 1 Olives for Olive Oil 14.7 years 1 (5 years) 37,800 83 2,541

2,518 4 $ 43,377 $ 161 $ 2,819

(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.

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

(1) Includes approximately $10,000 of aggregate external legal fees associated with negotiating and originating the leases associated with these acquisitions, which were expensed in the period incurred.

(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 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).

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 noncancellable term of the lease.

(5) 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 Note 3, “ Real Estate and Intangible Assets—Investments in Unconsolidated Entities ,” within the accompanying notes to our condensed consolidated financial statements for further information on our aggregate ownership interest in this LLC.

(6) 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).

(7) 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.

Existing Properties

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

While approval of the additional plantings was not received from the County of Napa by the Permit Deadline, in March 2020, we executed an agreement with the tenant on Withers Road to extend the Permit Deadline until August 24, 2020.

In April 2020, we received notification from the County of Napa informing us that it had approved of additional vineyard plantings on 38.7 acres of the property.

As such, in May 2020, we paid additional compensation related to this acquisition of

approximately $3.2 million.

As a result, and pursuant to a lease amendment, we will earn additional straight-line rental income of approximately $335,000 per year throughout the remaining term of the lease, which expires on December 31, 2029.

We will also earn additional rent on any of the aforementioned development costs as they are incurred by us.

Leasing Activity

The following table summarizes certain leasing activity that has occurred on our existing properties since July 1, 2020, through the date of this filing (dollars in thousands, except for footnotes):

PRIOR LEASES NEW LEASES

The following table summarizes certain leasing activity that has occurred on our existing properties since January 1, 2021, through the date of this filing (dollars in thousands, except for footnotes):

PRIOR LEASES (1)

Locations Number

6 unchanged sentences

/ NN / N) (3)

CA & FL 4 616 $ 1,759 — 2 / 2 / 0 $ 1,796 5.3 — 3 / 1 / 0

CA, CO, FL, & MI 5 7,217 $ 2,314 — 3 / 2 / 0 $ 2,259 2.3 — 3 / 2 / 0

(1) Prior Leases includes a lease that was terminated early in April 2021.

No lease revenue was recorded related to this lease during the three months ended March 31, 2021.

In addition, in connection with this early termination, during the three months ended March 31, 2021, we wrote off aggregate deferred rent and rent receivable balances of approximately $65,000 against lease revenue, and approximately $87,000 of unamortized lease intangible assets related to the terminated lease was written off and charged to amortization expense.

Upon termination of this lease, we entered into a new lease with a new tenant effective immediately, which new lease is included in the above table.

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

2 unchanged sentences

Debt Activity

Since July 1, 2020, through the date of this filing, we have incurred the following new, long-term borrowings (dollars in thousands, except for footnotes;

for further discussion on certain defined terms used below, refer to Note 4, “ Borrowings ,” within the accompanying notes to our condensed consolidated financial statements):

Since January 1, 2021, through the date of this filing, we have incurred the following new, long-term borrowings (dollars in thousands, except for footnotes;

for further discussion on certain defined terms used below, refer to Note 4, “ Borrowings ,”

within the accompanying notes to our condensed consolidated financial statements):

Lender Date of

5 unchanged sentences

Interest Rate Terms

Farm Credit of the Virginias, ACA 8/31/2020 $ 4,481 9/1/2030 25.0 years 3.99% 3.24% Fixed throughout term

PGIM Real Estate Finance, LLC 10/1/2020 19.042 7/1/2028 25.0 years 2.47% 2.47% Fixed throughout term

PGIM Real Estate Finance, LLC 10/1/2020 19.096 7/1/2028 25.0 years 2.45% 2.45% Fixed throughout term

AgAmerica Lending, LLC 10/23/2020 2.259 1/1/2028 30.0 years 3.50% 3.50% Fixed throughout term

Farm Credit West, FLCA (2)

1/28/2021 $ 2,073 11/1/2045 24.8 years 3.23% 2.20% Fixed through December 31, 2027 (variable thereafter)

Federal Agricultural Mortgage Corporation (“Farmer Mac”) (3)

2/4/2021 2,460 10/31/2028 25.0 years 3.13% 3.13% Fixed throughout term

Mid Atlantic Farm Credit, ACA 3/3/2021 960 6/1/2045 24.4 years 3.80% 3.31% Fixed through 1/31/2031 (variable thereafter)

Rabo AgriFinance, LLC (4)

3/11/2021 3,780 12/1/2030 25.0 years 3.27% 3.27% Fixed throughout term

Rabo AgriFinance, LLC (4)

3/11/2021 630 12/1/2022 None

(interest only) 2.44% 2.44% Fixed throughout term

Total / Weighted-averages $ 9,903 3.23% 2.96%

(1) On borrowings from the various Farm Credit associations, we receive interest patronage, or refunded interest, which is typically received in the calendar year following the year in which the related interest expense was accrued.

The expected effective interest rates reflected in the table above are the interest rates net of expected interest patronage, which is based on either historical patronage actually received (for pre-existing lenders whom we have received interest patronage from) or indications from the respective lenders of estimated patronage to be paid (for new lenders).

See Note 4, “ Borrowings ,” in the accompanying notes to our condensed consolidated financial statements for additional information on interest patronage received in current and prior years.

See Note 4, “ Borrowings—Farm Credit Notes Payable—Interest Patronage ,” in the accompanying notes to our consolidated financial statements for additional information on interest patronage.

(2) Loan proceeds used to repay a previously-issued loan with a balance of approximately $1.4 million and a stated interest rate of 4.99%.

(3) Bond issued under our facility with Farmer Mac.

(4) Loans were issued as variable-rate loans but were fixed subsequent to their issuance through our entry into interest rate swap agreements with the lender (as counterparty).

See Note 11, “ Subsequent Events—Financing Activity—Borrowing Activity—Interest Rate Swap Agreements ,” in the accompanying notes to our consolidated financial statements for further discussion on these agreements.

Proceeds from these financings were used to fund new acquisitions, repay existing indebtedness, and for general corporate purposes.

Gladstone Securities, an affiliate of ours, earned total financing fees of approximately $17,000 in connection with securing these financings.

Farm Credit Notes Payable—Interest Patronage

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 12 different Farm Credit associations (collectively, “Farm Credit”).

During the three months ended March 31, 2021, we recorded interest patronage of approximately $2.2 million related to interest accrued on the Farm Credit Notes Payable during the year ended December 31, 2020.

In addition, during the three months ended September 30, 2020, we recorded approximately $306,000 of 2020 interest patronage, as certain Farm Credit associations prepaid a portion of the 2020 interest patronage (which related to interest accrued during 2020 but is typically received in 2021).

In total, we recorded approximately $2.5 million of 2020 interest patronage related to our Farm Credit Notes Payable, which resulted in a 28.7% reduction (about 135 basis points) to the interest rates on such borrowings.

For further discussion on interest patronage, refer to Note 4, “ Borrowings—Farm Credit Notes Payable—Interest Patronage ,” in the accompanying notes to our consolidated financial statements.

Series D Term Preferred Stock

In January 2021, we completed a public offering of 5.00% Series D Cumulative Term Preferred Stock, par value $0.001 per share (the “Series D Term Preferred Stock”), at a public offering price of $25.00 per share.

As a result of this offering (including the underwriters’ exercise of their option to purchase additional shares to cover over-allotments), we issued a total of 2,415,000 shares of the Series D Term Preferred Stock for gross proceeds of approximately $60.4 million and net proceeds, after deducting underwriting discounts and offering expenses borne by us, of approximately $58.3 million.

The Series D Term Preferred Stock is traded under the ticker symbol “LANDM” on Nasdaq.

The shares of the Series D Term Preferred Stock have a mandatory redemption date of January 31, 2026, and are not convertible into our common stock or any other securities.

Generally, we are not permitted to redeem shares of the Series D Term Preferred Stock prior to January 31, 2023, except in limited circumstances to preserve our qualification as a REIT.

On or after January 31, 2023, we may redeem the shares at a redemption price of $25.00 per share, plus any accumulated and unpaid dividends up to, but excluding, the date of redemption.

Redemption of Series A Term Preferred Stock

On February 12, 2021, we redeemed all of our outstanding shares of Series A Term Preferred Stock at a cash redemption price of $25.00 per share plus all accrued and unpaid dividends up to, but excluding, the redemption date.

In total, we paid approximately $28.8 million for the redemption of the Series A Term Preferred Stock using proceeds from the offering of our Series D Term Preferred Stock.

Our Series A Term Preferred Stock was delisted from Nasdaq on the date we redeemed all outstanding shares.

In connection with this early redemption, during the three months ended March 31, 2021, we wrote off approximately $127,000 of unamortized issuance costs related to the issuance of the Series A Term Preferred Stock.

Equity Activity

Series C Preferred Stock

On April 3, 2020, we filed a new prospectus supplement (which superseded and replaced a previously-filed prospectus supplement) with the SEC for a continuous public offering (the “Series C Offering”) of up to 26,000,000 shares of our newly-designated 6.00% Series C Cumulative Redeemable Preferred Stock (the “Series C Preferred Stock”).

On April 3, 2020, we filed a prospectus supplement (which superseded and replaced a previously-filed prospectus supplement) with the SEC for a continuous public offering (the “Series C Offering”) of up to 26,000,000 shares of our newly-designated 6.00% Series C Cumulative Redeemable Preferred Stock (the “Series C Preferred Stock”).

Under the Series C Offering, we may sell up to 20,000,000 shares of our Series C Preferred Stock on a “reasonable best efforts” basis through Gladstone Securities at an offering price of $25.00 per share (the “Primary Series C Offering”) and up to 6,000,000 additional shares of our Series C Preferred Stock pursuant to our dividend reinvestment plan (the “DRIP”) to those holders of the Series C Preferred Stock who do not elect to opt-out of such plan.

Assuming all shares of the Series C Preferred Stock are sold in both the Primary Series C Offering and through the DRIP, we expect the Series C Offering to result in gross proceeds of up to $636.5 million and net proceeds, after deducting selling commissions, dealer-manager fees, and estimated expenses of the offering payable by us, of up to approximately $591.5 million.

We intend to use the net proceeds from the Series C Offering to repay existing indebtedness, to fund future acquisitions, and for other general corporate purposes.

See Note 6, “ Related-Party Transactions—Gladstone Securities—Series C Dealer-Manager Agreement ,” within the accompanying notes to our condensed consolidated financial statements for more details on the dealer-manager agreement entered into with Gladstone Securities in connection with the Series C Offering.

The following table summarizes the sales of our Series C Preferred Stock that occurred since July 1, 2020, through the date of this filing (dollars in thousands, except per-share amounts and footnotes):

See Note 6, “ Related-Party Transactions—Gladstone Securities—Dealer-Manager Agreements ,” within the accompanying notes to our condensed consolidated financial statements for more details on the dealer-manager agreement entered into with Gladstone Securities in connection with the Series C Offering.

The following table summarizes the sales of our Series C Preferred Stock that occurred since January 1, 2021, through the date of this filing (dollars in thousands, except per-share amounts and footnotes):

Shares Sold (1)

2 unchanged sentences

713,012 $ 24.86 $ 17,723 $ 16,221

(1) Excludes shares issued pursuant to the DRIP.

From July 1 through the date of this filing, we issued approximately 56 shares of the Series C Preferred Stock pursuant to the DRIP.

(1) Excludes share redemptions and shares issued pursuant to the DRIP.

From January 1, 2021, through the date of this filing, we issued approximately 1,486 shares of the Series C Preferred Stock pursuant to the DRIP.

(2) Net of selling commissions and dealer-manager fees borne by us.

4 unchanged sentences

At-the-Market Program

On May 12, 2020, we terminated the Prior ATM Program (as defined in Note 8, “ Equity—Equity Issuances—Common Stock—At-the-Market-Program ,” within the accompanying notes to our condensed consolidated financial statements) and entered into new equity distribution agreements with Virtu Americas, LLC, and Ladenburg & Co., Inc.

(each a “Sales Agent”), under which we may issue and sell, from time to time and through new 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 summarizes the activity under the Current ATM Program from July 1, 2020, through the date of this filing (dollars in thousands):

On May 12, 2020, we entered into new equity distribution agreements with Virtu Americas, LLC, and Ladenburg & Co., Inc.

The following table summarizes the activity under the ATM Program from January 1, 2021, through the date of this filing (dollars in thousands):

Shares Sold Weighted-average

2 unchanged sentences

(1) Net of underwriter commissions and discounts.

Follow-on Offering

In October 2020, we completed a public offering of our common stock.

The following table summarizes the details of the offering, including the underwriters’ full exercise of the over-allotment option in connection of the offering (dollars in thousands, except per-share amounts):

Shares Sold Weighted-average

Offering Price per Share Gross Proceeds Net Proceeds (1)

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

(1) Net of underwriter discounts and commissions.

We used the proceeds received from this offering to repay existing indebtedness, fund property acquisitions, and for other general corporate purposes.

The extent to which the novel coronavirus (“COVID-19”) pandemic may impact our business, financial condition, liquidity, results of operations, funds from operations, or prospects will depend on numerous evolving factors that we are not able to predict at this time, including the duration and long-term scope of the pandemic;

the adequate production, efficacy, and dissemination of vaccinations;

governmental, business, and individuals’ actions that have been and continue to be taken in response to the pandemic;

the impact on economic activity from the pandemic and actions taken in response;

the effect on our tenants and their farming operations;

the ability of our tenants to make their rental payments;

any closures of our tenants’ operations;

and our ability to secure debt financing, service future debt obligations, or pay distributions to our stockholders.

Any of these events could materially adversely impact our business, financial condition, liquidity, results of operations, funds from operations, or prospects.

During 2020, we granted short-term rent extensions to two tenants who owed semi-annual rental payments totaling approximately $340,000.

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 government-mandated lockdowns in the State of Michigan in response to the COVID-19 pandemic.

These rental payments were collected in full during the year ended December 31, 2020, and we have not received any further requests from tenants seeking relief as a result of the COVID-19 pandemic;

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

LIBOR Transition

The majority of our debt is at fixed rates, and we currently have very limited exposure to variable-rate debt based upon the London Interbank Offered Rate (“LIBOR”), which is anticipated to be phased out during late 2021.

The majority of our debt is at fixed rates, and we currently have very limited exposure to variable-rate debt based upon the London Interbank Offered Rate (“LIBOR”), which is currently anticipated to be partially phased out by the end of 2021 and completely phased out by June 2023.

LIBOR is currently expected to transition to a new standard rate, the Secured Overnight Financing Rate (“SOFR”), which will incorporate certain overnight repo market data collected from multiple data sets.

1 unchanged sentence

We are currently monitoring the transition and cannot yet assess whether SOFR will become a standard rate for variable-rate debt.

However, as our lines of credit with MetLife are currently based upon one-month LIBOR, we expect we will need to renegotiate this agreement in the future.

Assuming that SOFR replaces LIBOR and is appropriately adjusted, we expect the transition to result in a minimal impact to our overall operations.

Our lines of credit with Metropolitan Life Insurance Company (“MetLife”) and five term loans with Rabo AgriFinance, LLC, (which are effectively fixed through our entry into interest swap agreements) are currently based upon one-month LIBOR.

As such, we expect we will need to renegotiate these agreements in the future.

Assuming that SOFR replaces LIBOR and is appropriately adjusted, we currently expect the transition to result in a minimal impact to our overall operations.

Our Adviser and Administrator

1 unchanged sentence

The investment advisory agreement with our Adviser that was in effect through March 31, 2017, and the current administration agreement with our Administrator (the “Administration Agreement”) each became effective February 1, 2013.

The advisory agreement with our Adviser that was in effect through June 30, 2019 (the “Prior Advisory Agreement”), was amended and restated on July 9, 2019 (as amended, the “2019 Advisory Agreement”), and again amended and restated on January 14, 2020 (as amended, the “2020 Advisory Agreement,” and, together with the Prior Advisory Agreement and the 2019 Advisory Agreement, the “Advisory Agreements”).

The advisory agreement with our Adviser was amended and restated on each of July 9, 2019, and January 14, 2020 (as amended, the “Advisory Agreement”).

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

Advisory Agreements

Pursuant to each of the Prior Advisory Agreement (which was in effect from April 1, 2017, through June 30, 2019), the 2019 Advisory Agreement (which was in effect from July 1, 2019, through December 31, 2019), and the 2020 Advisory Agreement (which has been in effect since January 1, 2020), our Adviser is compensated in the form of a base management fee and, each as applicable, an incentive fee, a capital gains fee, and a termination fee.

A summary of certain compensation terms within the Advisory Agreement and a summary of the Administration Agreement is below.

Advisory Agreement

Pursuant to the Advisory Agreement, our Adviser is compensated in the form of a base management fee, an incentive fee, a capital gains fee, and a termination fee.

Our Adviser does not charge acquisition or disposition fees when we acquire or dispose of properties, as is common in other externally-managed REITs.

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.

The base management and incentive fees are described below.

For information on the capital gains and termination fees, refer to Note 6, “Related-Party Transactions—Our Adviser and Administrator—Advisory Agreements,” within the accompanying notes to our condensed consolidated financial statements.

For information on the capital gains and termination fees, refer to Note 6, “ Related-Party Transactions—Our Adviser and Administrator—Advisory Agreement ,” within the accompanying notes to our condensed consolidated financial statements.

Base Management Fee

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.

Relevant to prior agreements with our Adviser, which calculated the management fee based on an equity component, management believes the updated fee calculation pursuant to the 2020 Advisory Agreement provides for a more direct correlation between the fee paid to our Adviser and the assets our Adviser is responsible for managing.

The following table compares what the historical base management fee has been on an actual basis for the years ended December 31, 2019, 2018, and 2017, versus what it would have been had the 2020 Advisory Agreement been in place during each of those years (dollars in thousands):

For the Years Ended December 31,

2019 2018 2017

Actual gross base management fee (1)

$ 3,623 $ 2,837 $ 2,041

Hypothetical gross base management fee (2)

3,150 2,433 2,010

Hypothetical increase (decrease) in base management fee $ (473) $ (404) $ (31)

(1) Actual figures calculated pursuant to the agreements with our Adviser in place during the respective periods.

(2) Calculated as if the 2020 Advisory Agreement had been in place as of January 1, 2017.

In addition, had the 2019 Advisory Agreement been in place during the three and nine months ended September 30, 2020, the hypothetical base management fee would have been approximately $862,000 and $2.6 million, respectively, as compared to the

actual base management fee calculated under the 2020 Advisory Agreement of approximately $1.1 million and $3.2 million, respectively.

We are unable to project the impact of the 2020 Advisory Agreement on the base management fee going forward and how it might compare to that of the 2019 Advisory Agreement or the Prior Advisory Agreement, as we are unable to estimate the amount of equity to be issued or new tangible assets to be acquired in future periods.

During the three and nine months ended September 30, 2019, our Adviser granted us certain non-contractual, unconditional, and irrevocable waivers (as discussed further below, under “ —Results of Operations—Operating Expenses—Related-Party Fees ”), which were applied as credits against the base management fee for the period.

We did not have any such waivers for the three or nine months ended September 30, 2020.

Pursuant to the 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, permanent plantings, irrigation and drainage systems, 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.

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 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.

Pursuant to the Advisory Agreement, an incentive fee is 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 Common Equity.

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

In addition, Total Adjusted Common Equity is defined as common stockholders’ equity plus non-controlling

common interests in our 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.

Our Adviser would receive:

2 unchanged sentences

and (iii) 20% of the amount of the Pre-Incentive Fee FFO, if any, that exceeds 2.1875% in any calendar quarter (8.75% annualized).

Administration Agreement

Pursuant to the Administration Agreement, we pay for our allocable portion of the Administrator’s expenses incurred while performing its obligations to us, including, but not limited to, rent and the salaries and benefits expenses of our Administrator’s employees, including our chief financial officer, treasurer, chief compliance officer, general counsel and secretary (who also serves as our Administrator’s president, general counsel, and secretary), and their respective staffs.

Our allocable portion of the Administrator’s expenses is generally derived by multiplying our Administrator’s total expenses by the approximate percentage of time the Administrator’s employees perform services for us in relation to their time spent performing services for all companies serviced by our Administrator under similar contractual agreements.

Smaller Reporting Company Status

As of December 31, 2018, and through March 31, 2021, we qualified as a “smaller reporting company” under Rule 12b-2 of the Exchange Act because we had annual revenues of less than $100 million for the previous year and a public float of less than $700 million.

As a smaller reporting company, we have reduced disclosure requirements for our public filings, including the reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements.

Critical Accounting Policies

3 unchanged sentences

A summary of our significant accounting policies is provided in Note 2 to our consolidated financial statements in our Form 10-K.

There were no material changes to our critical accounting policies during the nine months ended September 30, 2020.

Smaller Reporting Company Status

We currently qualify as a “smaller reporting company” under Rule 12b-2 of the Exchange Act, which is defined as a company with a public equity float of less than $250 million or less than $100 million in annual revenues for the previous year and no public float.

Companies can also qualify as a smaller reporting company if they have annual revenues of less than $100 million for the previous year and a public float of less than $700 million.

There were no material changes to our critical accounting policies during the three months ended March 31, 2021.

RESULTS OF OPERATIONS

For the purposes of the following discussions on certain operating revenues and expenses:

• With regard to the comparison between the three months ended September 30, 2020 versus 2019:

◦ Same-property basis represents farms owned as of June 30, 2019, and were not vacant at any point during either period presented;

◦ Properties acquired or disposed of are farms that were either acquired or disposed of at any point subsequent to June 30, 2019.

From July 1, 2019, through September 30, 2020, we acquired 37 new farms and did not have any farm dispositions;

◦ Vacant or self-operated properties represent farms that were either vacant (either wholly or partially) or operated by a wholly-owned subsidiary of ours at any point during either period presented.

We did not have any vacant farms during either of the three months ended September 30, 2020 or 2019.

• With regard to the comparison between the nine months ended September 30, 2020 versus 2019:

For the purposes of the following discussions on certain operating revenues and expenses with regard to the comparison between the three months ended March 31, 2021 versus 2020:

◦ Same-property basis represents farms owned as of December 31, 2019, and were not vacant at any point during either period presented;

◦ Properties acquired or disposed of are farms that were either acquired or disposed of at any point subsequent to December 31, 2019.

From January 1, 2019, through September 30, 2020, we acquired 38 new farms and did not have any farm dispositions;

We had two farms that were vacant for a portion of the nine months ended September 30, 2019.

A comparison of our operating results for the three and nine months ended September 30, 2020 and 2019 is below (dollars in thousands):

For the Three Months Ended September 30,

2020 2019 $ Change % Change

Operating revenues:

Lease revenue:

Fixed lease payments $ 12,838 $ 10,131 $ 2,707 26.7%

Variable lease payments – participation rents 1,132 848 284 33.5%

Variable lease payments – tenant reimbursements 19 33 (14) (42.4)%

Total operating revenues 13,989 11,012 2,977 27.0%

Operating expenses:

Depreciation and amortization 3,909 3,419 490 14.3%

Property operating expenses 287 536 (249) (46.5)%

Base management and incentive fees, net of credits 1,899 862 1,037 120.3%

Administration fee 344 311 33 10.6%

General and administrative expenses 419 447 (28) (6.3)%

Total operating expenses, net of credits 6,858 5,575 1,283 23.0%

Operating income 7,131 5,437 1,694 31.2%

Other income (expense):

Other income 323 62 261 421.0%

Interest expense (5,202) (4,401) (801) 18.2%

Dividends declared on Series A Term Preferred Stock (458) (458) — —%

Loss on dispositions of real estate assets, net (195) (134) (61) 45.5%

Property and casualty recovery, net 1 17 (16) (94.1)%

Loss from investments in unconsolidated entities (19) — (19) NM

Total other expense, net (5,550) (4,914) (636) 12.9%

Net income 1,581 523 1,058 202.3%

Net income attributable to non-controlling interests (13) (6) (7) 116.7%

Net income attributable to the Company 1,568 517 1,051 203.3%

Aggregate dividends declared on and charges related to

Series B and Series C Preferred Stock

(2,405) (1,161) (1,244) 107.1%

Net loss attributable to common stockholders $ (837) $ (644) $ (193) 30.0%

NM = Not Meaningful

For the Nine Months Ended September 30,

From January 1, 2020, through March 31, 2021, we acquired 29 new farms and did not have any farm dispositions.

We did not have any vacant or self-operated farms during either of the three months ended March 31, 2021 or 2020.

A comparison of results of components comprising our operating income for the three months ended March 31, 2021 and 2020 is below (dollars in thousands):

For the Three Months Ended March 31,

2021 2020 $ Change % Change

Operating revenues:

Lease revenue:

Lease revenues:

Fixed lease payments $ 15,979 $ 12,262 $ 3,717 30.3%

2 unchanged sentences

Lease termination income, net — 2,810 (2,810) NM

Total lease revenues 16,034 15,280 754 4.9%

Other operating revenues — — — NM

Total operating revenues 16,034 15,280 754 4.9%

2 unchanged sentences

Property operating expenses 429 521 (92) (17.7)%

Base management and incentive fees, net of credits 5,314 1,199 4,115 343.2%

Base management and incentive fees 2,531 2,368 163 6.9%

Administration fee 357 384 (27) (7.0)%

General and administrative expenses 539 553 (14) (2.5)%

Total operating expenses, net of credits 21,395 14,421 6,974 48.4%

Other operating expenses — — — NM

Total operating expenses 9,907 8,083 1,824 22.6%

Operating income $ 6,127 $ 7,197 $ (1,070) (14.9)%

Other income (expense):

Other income 1,668 937 731 78.0%

Interest expense (15,155) (11,396) (3,759) 33.0%

Dividends declared on Series A Term Preferred Stock (1,375) (1,375) — —%

Loss on dispositions of real estate assets, net (861) (154) (707) 459.1%

Property and casualty recovery, net 68 10 58 580.0%

Income from investments in unconsolidated entities 7 — 7 NM

Total other expense, net (15,648) (11,978) (3,670) 30.6%

Net income 4,864 804 4,060 505.0%

Net income attributable to non-controlling interests (52) (9) (43) 477.8%

Net income attributable to the Company 4,812 795 4,017 505.3%

Aggregate dividends declared on and charges related to

Series B and Series C Preferred Stock

(6,793) (2,655) (4,138) 155.9%

Net loss attributable to common stockholders $ (1,981) $ (1,860) $ (121) 6.5%

NM = Not Meaningful

Operating Revenues

Lease Revenue

The following table provides a summary of our lease revenues during the three and nine months ended September 30, 2020 and 2019 (dollars in thousands):

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

2020 2019 $ Change % Change 2020 2019 $ Change % Change

Lease Revenues

The following table provides a summary of our lease revenues during the three months ended March 31, 2021 and 2020 (dollars in thousands):

For the Three Months Ended March 31,

2021 2020 $ Change % Change

Same-property basis:

4 unchanged sentences

Properties acquired or disposed of 3,796 88 3,708 4,213.6%

Vacant or self-operated properties — — — —% 197 176 21 11.9%

Tenant reimbursements (1)

29 178 (149) (83.7)%

Total Lease revenue $ 13,989 $ 11,012 $ 2,977 27.0% $ 41,907 $ 27,203 $ 14,704 54.1%

Total Lease revenues $ 16,034 $ 15,280 $ 754 4.9%

(1) Tenant reimbursements generally represent tenant-reimbursed property operating expenses on certain of our farms, including property taxes, insurance premiums, and other property-related expenses.

1 unchanged sentence

Same-property Basis – 2021 compared to 2020

Lease revenue from fixed lease payments increased for each of the three and nine months ended September 30, 2020, primarily due to recent lease renewals and amendments at net higher rental rates, as well as additional rents earned on recent capital improvements completed on certain of our farms.

These increases were partially offset by the renewals of certain other leases, in which we decreased the fixed base rent component in exchange for adding a participation rent component into the lease structure.

Lease revenue from participation rents increased for each of the three and nine months ended September 30, 2020.

During the three months ended September 30, 2020, we recognized participation rents from three farms totaling 1,286 farm acres, as compared to six farms totaling 3,701 farm acres in the prior-year period.

During the nine months ended September 30, 2020, we recognized participation rents on eight farms totaling 3,865 farm acres, as compared to eight farms totaling 3,996 acres in the prior-year period.

During the nine months ended September 30, 2020, we received an early lease termination payment from an outgoing tenant on a property of approximately $3.0 million, which we recognized as additional lease revenue upon receipt, less a net balance of approximately $165,000 of aggregate prepaid rent and deferred rent assets balances that were written off against this amount.

For further discussion on this lease termination, see above, under “ Overview—Recent Developments—Portfolio Activity—Existing Properties—Leasing Activity—Lease Termination .”

Lease revenues from fixed lease payments remained relatively flat for the three months ended March 31, 2021, as recent lease renewals and amendments executed at higher rental rates and additional rents earned on capital improvements completed on certain of our farms were largely offset by the renewals of certain other leases, in which we decreased the fixed base rent component in exchange for adding in a participation rent component to the lease structure.

Participation rents related to these leases, if any, are expected to be recorded during the second half of the year ending December 31, 2021.

Lease revenues from participation rents remained relatively flat for the three months ended March 31, 2021.

During the three months ended March 31, 2020, we received an early lease termination payment from an outgoing tenant on a property of approximately $3.0 million, which we recognized as additional lease revenue upon receipt, less a net balance of approximately $165,000 of aggregate prepaid rent and deferred rent assets balances that were written off against this amount.

Other – 2021 compared to 2020

Lease revenue from properties acquired or disposed of increased for each of the three and nine months ended September 30, 2020, primarily due to additional revenues earned on new farms acquired subsequent to December 31, 2018.

Lease revenue for vacant or self-operated properties increased for the nine months ended September 30, 2020, primarily due to additional revenues earned during 2020 on farms that were vacant for a portion of 2019.

As compared to the respective prior-year periods, tenant reimbursement income decreased slightly for the three months ended September 30, 2020, and increased for the nine months ended September 30, 2020.

The increase for the nine months ended September 30, 2020, was due to additional contractual reimbursements of property taxes and other operating costs.

Tenant reimbursements during the nine months ended September 30, 2020, also included payments made by a tenant on our behalf (pursuant to the lease agreement) to an unconsolidated entity of ours that conveys water to the respective property.

Lease revenue from properties acquired or disposed of increased for the three months ended March 31, 2021, primarily due to additional revenues earned on new farms acquired subsequent to December 31, 2019.

Tenant reimbursements decreased for the three months ended March 31, 2021, primarily due to additional payments made during the prior-year period by certain tenants on our behalf (pursuant to the lease agreements) to an unconsolidated entity of ours that conveys water to the respective properties.

Operating Expenses

Depreciation and Amortization

The following table provides a summary of the depreciation and amortization expense recorded during the three and nine months ended September 30, 2020 and 2019 (dollars in thousands):

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

2020 2019 $ Change % Change 2020 2019 $ Change % Change

The following table provides a summary of the depreciation and amortization expense recorded during the three months ended March 31, 2021 and 2020 (dollars in thousands):

For the Three Months Ended March 31,

2021 2020 $ Change % Change

Same-property basis $ 3,867 $ 4,243 $ (376) (8.9)%

Properties acquired or disposed of 2,184 14 2,170 15,500.0%

Vacant or self-operated properties — — — —% 106 109 (3) (2.8)%

Total depreciation and amortization $ 6,051 $ 4,257 $ 1,794 42.1%

Depreciation and amortization expense on a same-property basis decreased for the three months ended September 30, 2020, as compared to the prior-year period, primarily due to the expiration of certain lease intangible amortization periods or tangible depreciation periods subsequent to June 30, 2019, partially offset by additional depreciation on site improvements completed on certain properties subsequent to June 30, 2019.

Depreciation and amortization expense on a same-property basis increased for the nine months ended September 30, 2020, as compared to the prior-year period, primarily due to accelerated amortization expense recognized due to an early lease termination (see above, under “ Overview—Recent Developments—Portfolio Activity—Existing Properties—Leasing Activity—Lease Termination ”), as well as additional depreciation on site improvements completed on certain properties subsequent to December 31, 2018, and partially offset by the expiration of certain lease intangible amortization periods subsequent to December 31, 2018.

Depreciation and amortization expense on properties acquired or disposed of increased for each of the three and nine months ended September 30, 2020, as compared to the respective prior-year periods, primarily due to the additional depreciation and amortization expense incurred on the new farms acquired subsequent to December 31, 2018.

Depreciation and amortization expense on vacant or self-operated properties for the nine months ended September 30, 2020, remained flat when compared to the prior-year period.

Depreciation and amortization expense on a same-property basis decreased for the three months ended March 31, 2021, as compared to the prior-year period, primarily due to the expiration of certain lease intangible amortization periods subsequent to December 31, 2019.

Depreciation and amortization expense on properties acquired or disposed of increased for the three months ended March 31, 2021, as compared to the prior-year period, primarily due to the additional depreciation and amortization expense incurred on the new farms acquired subsequent to December 31, 2019.

Property-operating Expenses

Property operating expenses consist primarily of real estate taxes, repair and maintenance expense, insurance premiums, and other miscellaneous operating expenses paid for certain of our properties.

In addition, from approximately July 2018 through June 2019, we incurred additional expenses related to temporary generator rental costs to power newly-drilled wells on one of our properties.

During the second half of 2019, these wells were connected to permanent power sources, and the generators were no longer needed.

The following table provides a summary of the property-operating expenses recorded during the three and nine months ended September 30, 2020 and 2019 (dollars in thousands):

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

2020 2019 $ Change % Change 2020 2019 $ Change % Change

The following table provides a summary of the property-operating expenses recorded during the three months ended March 31, 2021 and 2020 (dollars in thousands):

For the Three Months Ended March 31,

2021 2020 $ Change % Change

Same-property basis $ 374 $ 338 $ 36 10.7%

Properties acquired or disposed of 27 5 22 440.0%

Vacant or self-operated properties — — — —% 16 17 (1) (5.9)%

Tenant-reimbursed property operating expenses (1)

4 unchanged sentences

Same-property Basis – 2021 compared to 2020

Property operating expenses decreased for each of the three and nine months ended September 30, 2020, primarily due to additional costs incurred during the prior-year period for the above-referenced generator rentals and for obtaining certain permits on one of our California properties.

Property operating expenses increased for the three months ended March 31, 2021, primarily due to an increase in real estate tax obligations on certain properties.

Other – 2021 compared to 2020

Property operating expenses on properties acquired or disposed of decreased for the three months ended September 30, 2020, and remained relatively flat for the nine months ended September 30, 2020.

The decrease for the three months ended September 30, 2020, was primarily due to additional legal fees incurred during the prior-year period related to negotiating and originating leases on new acquisitions.

Property operating expenses on vacant or self-operated properties remained flat for the nine months ended September 30, 2020, as compared to the prior-year period.

As compared to the respective prior-year periods, tenant reimbursement expense decreased slightly for the three months ended September 30, 2020, and increased for the nine months ended September 30, 2020.

The increase for the nine months ended September 30, 2020, was due to additional property taxes paid by us on certain of our properties and miscellaneous operating

costs incurred by us in connection with our ownership interest in an unconsolidated entity.

In both situations, the respective tenants are contractually obligated to reimburse us under the terms of the respective leases.

Property operating expenses on properties acquired or disposed of increased for the three months ended March 31, 2021, primarily due to additional miscellaneous property-operating expenses incurred on certain of the new farms we acquired subsequent to December 31, 2019.

Tenant reimbursement expense decreased for the three months ended March 31, 2021, primarily due to a decrease in miscellaneous operating costs incurred by us in connection with our ownership interest in an unconsolidated entity.

Our tenants are contractually obligated to reimburse us for these costs under the terms of the respective leases.

Related-Party Fees

Certain fee calculations changed pursuant to amendments to the agreements with our Adviser that were approved on July 9, 2019, and January 14, 2020.

For a discussion of the changes to these fees, see above, under “ Overview—Our Adviser and Administrator—Advisory Agreements .” The following table summarizes the base management, incentive, and capital gains fees due to our Adviser, in each case, as applicable, net of the respective credits, for the three and nine months ended September 30, 2020 and 2019 (dollars in thousands):

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

2020 2019 $ Change % Change 2020 2019 $ Change % Change

Base management fee, gross (1)

$ 1,078 $ 862 $ 216 25.1% $ 3,159 $ 2,741 $ 418 15.2%

Credits granted by Adviser’s board of directors applied against the base management fee (2)

— — — —% — (1,542) 1,542 (100.0)%

Base management fee, net 1,078 862 216 25.1% 3,159 1,199 1,960 163.5%

Incentive fee, gross (1)

The following table provides the calculations of the base management and incentive fees due to our Adviser pursuant to the Advisory Agreement for the three months ended March 31, 2021 and 2020 (dollars in thousands;

for further discussion on

certain defined terms used below, refer to Note 6, “ Related-Party Transactions ,” within the accompanying notes to our condensed consolidated financial statements):

For the Three Months Ended March 31,

Inputs Calculations Inputs Calculations

Calculation of Base Management Fee:

Gross Tangible Real Estate (1)(2)

$ 1,095,439 $ 827,255

Credits granted by Adviser’s board of directors applied against the incentive fee (2)

Quarterly rate 0.125 % 0.125 %

Base management fee (3)

$ 1,369 $ 1,034

Incentive fee, net 821 — 821 —% 2,155 — 2,155 —%

Capital gains fee, gross (1)

Calculation of Incentive Fee:

Total Adjusted Common Equity (1)(2)

$ 228,161 $ 173,358

Credits granted by Adviser’s board of directors applied against the capital gains fee (2)

First hurdle quarterly rate 1.750 % 1.750 %

First hurdle threshold $ 3,993 $ 3,034

Second hurdle quarterly rate 2.1875 % 2.1875 %

Second hurdle threshold $ 4,991 $ 3,792

Pre-Incentive Fee FFO (1)

$ 5,810 $ 6,670

Capital gains fee, net — — — —% — — — —%

Total fees to Adviser, gross 1,899 862 1,037 120.3% 5,314 2,741 2,573 93.9%

Total credits granted by Adviser’s board of directors (1)

100% of Pre-Incentive Fee FFO in excess of first hurdle threshold, up to second hurdle threshold $ 998 $ 758

20% of Pre-Incentive Fee FFO in excess of second hurdle threshold 164 576

Total Incentive fee (3)

$ 1,162 $ 1,334

Total fees to Adviser, net $ 1,899 $ 862 $ 1,037 120.3% $ 5,314 $ 1,199 $ 4,115 343.2%

Total fees due to Adviser $ 2,531 $ 2,368

(1) As defined in the Advisory Agreement.

(2) As of the end of the respective prior quarters (as of December 31, 2020, and December 31, 2019, respectively).

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

(2) Represent non-contractual, unconditional, and irrevocable waivers granted to us by our Adviser.

The base management fee increased during each of the three and nine months ended September 30, 2020, as compared to the respective prior-year periods, primarily due to a change in the calculation of the base management fee.

For each of the three and nine months ended September 30, 2020, the base management fee was calculated as 0.125% (0.5% per annum) of the respective prior calendar quarter’s Gross Tangible Real Estate, which base was increased due to a large volume of acquisitions during 2019, whereas the base management fee for each of the three and nine months ended September 30, 2019, was calculated as 0.5% (2.0% per annum) of the Total Adjusted Equity as of the end of the respective prior calendar quarters.

See above, under “ Overview—Our Adviser and Administrator—Advisory Agreements—Base Management Fee ,” for further discussion on the calculation of the base management fee for each period.

In addition, our Adviser granted us a non-contractual, unconditional, and irrevocable waiver to be applied against the base management fee during the nine months ended September 30, 2019.

Our Adviser earned an incentive fee during each of the three and nine months ended September 30, 2020, due to our Pre-Incentive Fee FFO (as defined in the respective agreement with our Adviser) exceeding the required hurdle rate of the applicable base during each of the first and third quarters of fiscal year 2020.

No incentive fee was earned by our Adviser during either of the three or nine months ended months ended September 30, 2019.

Our Adviser did not earn a capital gains fee during either of the three or nine months ended September 30, 2020 or 2019, as we did not sell any of our properties during any period presented.

The administration fee paid to our Administrator increased for each of the three and nine months ended September 30, 2020, as compared to the respective prior-year periods, primarily due to hiring additional personnel and us using a higher overall share of our Administrator’s resources in relation to those used by other funds and affiliated companies serviced by our Administrator.

The base management fee increased during the three months ended March 31, 2021, as compared to the prior-year period, primarily due to additional assets acquired since December 31, 2019.

In addition, our Adviser earned incentive fees during each of the three months ended March 31, 2021 and 2020 due to our Pre-Incentive Fee FFO (as defined in the Advisory Agreement) exceeding the required hurdle rate of the applicable equity base.

The administration fee paid to our Administrator decreased for the three months ended March 31, 2021, as compared to the prior-year period, primarily due to us using a lower overall share of our Administrator’s resources in relation to those used by other funds and affiliated companies serviced by our Administrator.

Other Operating Expenses

General and administrative expenses consist primarily of professional fees, director fees, stockholder-related expenses, overhead insurance, acquisition-related costs for investments no longer being pursued, and other miscellaneous expenses.

Compared to the respective prior-year periods, general and administrative expenses decreased for the three months ended September 30, 2020, and remained relatively flat for the nine months ended September 30, 2020.

The decrease for the three

months ended September 30, 2020, was primarily due to lower professional fees, partially offset by increased stockholder-related expenses.

General and administrative expenses decreased for the three months ended March 31, 2021, as compared to the prior-year period, primarily due to lower advertising and marketing costs incurred during the current-year period.

A comparison of results of components comprising other income (expense) for the three months ended March 31, 2021 and 2020 is below (dollars in thousands):

For the Three Months Ended March 31,

2021 2020 $ Change % Change

Operating income $ 6,127 $ 7,197 $ (1,070) (14.9)%

Other income (expense):

Other income, which generally consists of interest patronage received from Farm Credit (as defined in Note 4, “ Borrowings ,” in the accompanying notes to our condensed consolidated financial statements) and interest earned on short-term investments, increased for each of the three and nine months ended September 30, 2020, as compared to the respective prior-year periods, primarily driven by additional interest patronage received from Farm Credit (due to increased borrowings from Farm Credit).

During the three months ended March 31, 2020, we recorded approximately $1.3 million of interest patronage from Farm Credit related to interest accrued during 2019, compared to approximately $700,000 of interest patronage recorded during the three months ended March 31, 2019.

The receipt of interest patronage received from Farm Credit during 2020 resulted in a 20.4% decrease (approximately 98 basis points) to our effective interest rate on our aggregate borrowings from Farm Credit during the year ended December 31, 2019.

During the three months ended September 30, 2020, we also received approximately $306,000 of interest patronage from Farm Credit, as certain Farm Credit associations paid a portion of the 2021 interest patronage (which relates to interest accrued during 2020) early.

In addition, during the three and nine months ended September 30, 2019, we recognized approximately $53,000 and $208,000, respectively, of additional income as a result of accumulated deferred revenue related to a sale agreement for one of our farms that was terminated and a commission rebate received in connection with a property acquired during the period.

Interest expense increased for each of the three and nine months ended September 30, 2020, as compared to the respective prior-year periods, primarily due to increased overall borrowings.

The weighted-average principal balance of our aggregate borrowings (excluding our Series A Term Preferred Stock) outstanding for the three and nine months ended September 30, 2020, was approximately $496.9 million and $487.2 million, respectively, as compared to approximately $420.9 million and $367.7 million for the respective prior-year periods.

Excluding interest patronage received on certain of our Farm Credit borrowings and the impact of debt issuance costs, the overall effective interest rate charged on our aggregate borrowings 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 respective prior-year periods.

During each of the three and nine months ended September 30, 2020, we paid aggregate distributions on our Series A Term Preferred Stock (which distributions are treated similar to interest expense) of approximately $458,000 and $1.4 million, respectively.

The same amounts were paid in each of the respective prior-year periods.

During each of the three and nine months ended September 30, 2020 and 2019, we recorded net losses on dispositions of real estate assets primarily due to the disposal of certain irrigation improvements on certain of our farms, partially offset by net gains recognized on the sale of irrigation pivots on two of our farms that were replaced.

The net property and casualty recovery recorded during the nine months ended September 30, 2020, and each of the three and nine months ended September 30, 2019, related to insurance recoveries received for certain irrigation improvements that were damaged due to natural disasters during 2019.

During the three and nine months ended September 30, 2020, we recognized (loss) income in an unconsolidated entity of approximately $(19,000) and $7,000, respectively.

We acquired an interest in this entity during the three months ended September 30, 2019, during which period no income or loss was recognized.

During the three and nine months ended September 30, 2020, the aggregate dividends paid on our Series B Preferred Stock and Series C Preferred Stock increased over that of the respective prior-year periods due to additional shares issued and outstanding during each of the current-year periods.

In addition, during the three and nine months ended September 30, 2020, we also wrote off approximately $44,000 of offering costs related to redemptions of our Series B Preferred Stock.

Other income 2,235 1,324 911 68.8%

Interest expense (6,193) (4,963) (1,230) 24.8%

Aggregate dividends declared on Series A and Series D Term Preferred Stock (804) (458) (346) 75.5%

Loss on dispositions of real estate assets, net (798) (99) (699) 706.1%

Property and casualty recovery, net — 66 (66) (100.0)%

(Loss) income from investments in unconsolidated entities (13) 34 (47) NM

Total other expense, net (5,573) (4,096) (1,477) 36.1%

Net income 554 3,101 (2,547) (82.1)%

Net income attributable to non-controlling interests (1) (42) 41 (97.6)%

Net income attributable to the Company 553 3,059 (2,506) (81.9)%

Aggregate dividends declared on Series B and Series C Preferred Stock (2,764) (2,125) (639) 30.1%

Net (loss) income attributable to common stockholders $ (2,211) $ 934 $ (3,145) (336.7)%

NM = Not Meaningful

Other Income (Expense)

Other income, which generally consists of interest patronage received from Farm Credit (as defined in Note 4, “ Borrowings ,” in the accompanying notes to our condensed consolidated financial statements) and interest earned on short-term investments, increased for the three months ended March 31, 2021, as compared to the prior-year period, primarily driven by additional interest patronage received from Farm Credit (partially due to increased borrowings from Farm Credit).

During the three months ended March 31, 2021, we recorded approximately $2.2 million of interest patronage from Farm Credit related to interest accrued during 2020, compared to approximately $1.3 million of interest patronage recorded during the prior-year period.

Coupled with approximately $306,000 of 2020 interest patronage that was received during the three months ended September 30, 2020, we recorded a total of approximately $2.5 million of 2020 interest patronage from Farm Credit, which resulted in a 28.7% reduction (approximately 135 basis points) to the interest rates on such borrowings.

Interest expense increased for the three months ended March 31, 2021, as compared to the prior-year period, primarily due to increased overall borrowings.

The weighted-average principal balance of our aggregate borrowings (excluding our Series A Term Preferred Stock and Series D Term Preferred Stock) outstanding for the three months ended March 31, 2021, was approximately $628.0 million, as compared to approximately $481.3 million for the prior-year period.

Excluding interest patronage received on certain of our Farm Credit borrowings and the impact of debt issuance costs, the overall effective interest rate charged on our aggregate borrowings was 3.70% and 3.98% for the three months ended March 31, 2021 and 2020, respectively.

During the three months ended March 31, 2021, we paid distributions on our Series A Term Preferred Stock and Series D Term Preferred Stock of approximately $209,000 and $595,000, respectively.

The Series D Term Preferred Stock was issued in January 2021, and the Series A Term Preferred Stock was redeemed in February 2021.

During the three months ended March 31, 2020, we paid approximately $458,000 of distributions on our Series A Term Preferred Stock.

During each of the three months ended March 31, 2021 and 2020, we recorded net losses on dispositions of real estate assets primarily due to the disposal of certain irrigation improvements on certain of our farms, partially offset during the three months ended March 31, 2020, by net gains recognized on the sale of irrigation pivots on two of our farms that were replaced.

The net property and casualty recovery recorded during the three months ended March 31, 2020, related to insurance recoveries received for certain irrigation improvements that were damaged due to natural disasters.

During the three months ended March 31, 2021, we recognized a loss in an unconsolidated entity of approximately $13,000, as compared to income of approximately $34,000 in the prior-year period.

During the three months ended March 31, 2021, the aggregate dividends paid on our Series B Preferred Stock and Series C Preferred Stock increased over that of the prior-year period due to additional shares issued and outstanding during the current-year period.

LIQUIDITY AND CAPITAL RESOURCES

Our current short- and long-term sources of funds include cash and cash equivalents, cash flows from operations, borrowings (including the undrawn commitments available under the New MetLife Facility), and issuances of additional equity securities.

Our current available liquidity is approximately $57.9 million, consisting of approximately $33.7 million in cash on hand and, based on the current level of collateral pledged, approximately $24.2 million of availability under the MetLife Facility (subject to compliance with covenants).

Our current short- and long-term sources of funds include cash and cash equivalents, cash flows from operations, borrowings (including the undrawn commitments available under our facility with MetLife), and issuances of additional equity securities.

Our current available liquidity is approximately $102.2 million, consisting of approximately $78.0 million in cash on hand and, based on the current level of collateral pledged, approximately $24.2 million of availability under our facility with MetLife (subject to compliance with covenants).

In addition, we currently have two farms appraised at approximately $39.5 million that are unencumbered and eligible to be pledged as collateral.

Future Capital Needs

Our short- and long-term liquidity requirements consist primarily of making distributions to stockholders (including to non-controlling OP Unitholders, if any) to maintain our qualification as a REIT, funding our general operating costs, making principal and interest payments on outstanding borrowings, making dividend payments on our Series A Term Preferred Stock, Series B Preferred Stock, and Series C Preferred Stock, and, as capital is available, funding new farmland and farm-related acquisitions consistent with our investment strategy.

Notwithstanding the current COVID-19 pandemic, we believe that our current and short-term cash resources will be sufficient to fund our distributions to stockholders (including non-controlling OP Unitholders), service our debt, pay dividends on our Series A Term Preferred Stock, Series B Preferred Stock, and Series C Preferred Stock, and fund our current operating costs in the near term.

Our short- and long-term liquidity requirements consist primarily of making distributions to stockholders (including to non-controlling OP Unitholders) to maintain our qualification as a REIT, funding our general operating costs, making principal and interest payments on outstanding borrowings, making dividend payments on our Series B Preferred Stock, Series C Preferred Stock, and Series D Term Preferred Stock, and, as capital is available, funding new farmland and farm-related acquisitions consistent with our investment strategy.

Notwithstanding the ongoing COVID-19 pandemic, we believe that our current and short-term cash resources will be sufficient to fund our distributions to stockholders (including non-controlling OP Unitholders), service our debt, pay dividends on our Series B Preferred Stock, Series C Preferred Stock, and Series D Term Preferred Stock, and fund our current operating costs in the near term.

We expect to meet our long-term liquidity requirements through various sources of capital, including future equity issuances (including, but not limited to, shares of common stock through our ATM Program, OP Units through our Operating Partnership as consideration for future acquisitions, and shares of our Series C Preferred Stock), long-term mortgage indebtedness and bond issuances, and other secured and unsecured borrowings.

While public equity markets have experienced significant volatility lately, based on discussions with our lenders, we do not believe there will be a credit freeze in the near term.

We are in compliance with all of our debt covenants under our respective credit facilities, and we believe we currently have adequate liquidity to cover all near-term debt obligations and operating expenses.

We are in compliance with all of our debt covenants under our respective credit facilities and borrowings, and we believe we currently have adequate liquidity to cover all near-term debt obligations and operating expenses.

We intend to use a significant portion of any current and future available liquidity to purchase additional farms and farm-related facilities.

We continue to actively seek and evaluate acquisitions of additional farms and farm-related facilities that satisfy our investment criteria, and despite the current COVID-19 pandemic, our pipeline of potential acquisitions remains healthy.

We continue to actively seek and evaluate acquisitions of additional farms and farm-related facilities that satisfy our investment criteria, and despite the ongoing COVID-19 pandemic, our pipeline of potential acquisitions remains healthy.

We have several properties under signed purchase and sale agreements or non-binding letters of intent that we hope to consummate over the next six months.

2 unchanged sentences

Cash Flow Resources

The following table summarizes total net cash flows from operating, investing, and financing activities for the nine months ended September 30, 2020 and 2019 (dollars in thousands):

For the Nine Months Ended September 30,

The following table summarizes total net cash flows from operating, investing, and financing activities for the three months ended March 31, 2021 and 2020 (dollars in thousands):

For the Three Months Ended March 31,

2021 2020 $ Change % Change

6 unchanged sentences

The majority of cash from operating activities is generated from the rental payments we receive from our tenants, which is first used to fund our property-level operating expenses, with any excess cash being primarily used for principal and interest payments on our borrowings, management fees to our Adviser, administrative fees to our Administrator, and other corporate-level expenses.

Cash provided by operating activities decreased for the nine months ended September 30, 2020, as compared to the prior-year period, primarily due to increases in the amounts of fees paid to our Adviser and interest payments made, partially offset by an early lease termination payment of approximately $3.0 million received from the outgoing tenant on four of our farms in Arizona and additional rental payments received from recent acquisitions during the nine months ended September 30, 2020.

As of the date of this filing, with the exception of the aforementioned requests for short-term rent deferrals (both of which have since been paid), we have not received any additional requests from tenants seeking rent relief as a result of COVID-19.

Further, we currently expect rental payments to generally continue to be paid on time for at least the foreseeable future.

However, there can be no assurance that our business and financial and operational results will not be impacted by the COVID-19 pandemic or that we will be able to pay distributions to our stockholders in the future at the same rate, or at all.

Cash provided by operating activities increased for the three months ended March 31, 2021, as compared to the prior-year period, primarily due to additional rental payments received from recent acquisitions and interest patronage received from Farm Credit, partially offset by increases in the amount of interest payments made.

Investing Activities

The decrease in cash used in investing activities during the nine months ended September 30, 2020, as compared to the prior-year period, was primarily due to a decrease in aggregate cash paid for acquisitions of new farms and capital improvements on

existing farms during the nine months ended September 30, 2020, which was approximately $134.3 million less than the prior-year period.

The decrease in cash used in investing activities during the three months ended March 31, 2021, as compared to the prior-year period, was primarily due to a decrease in aggregate cash paid for acquisitions of new farms and capital improvements on existing farms during the three months ended March 31, 2021, which was approximately $5.5 million less than the prior-year period.

Financing Activities

The decrease in cash provided by financing activities during the nine months ended September 30, 2020, as compared to the prior-year period, was primarily due to a decrease in net borrowings of approximately $95.0 million and less net cash proceeds from equity issuances (including the Series B Preferred Stock, the Series C Preferred Stock, and our common stock) of approximately $27.9 million for the nine months ended September 30, 2020, as compared to that of the prior-year period.

New MetLife Facility

As amended on February 20, 2020, the New MetLife Facility currently consists of the $75.0 million New MetLife Term Note and the $75.0 million MetLife Lines of Credit.

We currently have no outstanding balance on the New MetLife Term Note and $100,000 outstanding under the MetLife Lines of Credit.

While $149.9 million of the full commitment amount under the New MetLife Facility remains undrawn, based on the current level of collateral pledged, we currently have approximately $24.2 million of availability under the New MetLife Facility.

The draw period for the New MetLife Term Note expires on December 31, 2022, after which time MetLife has the option to be relieved of its obligation to disburse any additional undrawn funds under the New MetLife Term Note.

The increase in cash provided by financing activities during the three months ended March 31, 2021, as compared to the prior-year period, was primarily due to the issuance of our Series D Term Preferred Stock (which, after redeeming our Series A Term Preferred Stock, resulted in net cash proceeds of approximately $31.6 million) and an increase in net borrowings of approximately $9.3 million.

MetLife Facility

As amended, our facility with MetLife currently consists of a $75.0 million long-term note payable (the “MetLife Term Note”) and $75.0 million of revolving equity lines of credit (the “MetLife Lines of Credit,” and together with the MetLife Term Note, the “MetLife Facility”).

We currently have $36.9 million outstanding on the MetLife Term Note and $100,000 outstanding under the MetLife Lines of Credit.

While $113.0 million of the full commitment amount under the MetLife Facility remains undrawn, based on the current level of collateral pledged, we currently have approximately $24.2 million of availability under the MetLife Facility.

The draw period for the MetLife Term Note expires on December 31, 2022, after which time MetLife has the option to be relieved of its obligation to disburse any additional undrawn funds under the MetLife Term Note.

Farmer Mac Facility

As amended on June 16, 2016, our agreement with Federal Agricultural Mortgage Corporation (“Farmer Mac”) provided for bond issuances up to an aggregate amount of $125.0 million (the “Farmer Mac Facility”) by December 11, 2018, after which Farmer Mac had the option to be relieved of its obligation to purchase additional bonds under this facility.

As of December 11, 2018, we had issued aggregate bonds of approximately $108.7 million under the Farmer Mac Facility, and Farmer Mac is not obligated to purchase the remaining unissued bonds.

However, since December 11, 2018, we have refinanced three bonds previously issued under the Farmer Mac Facility for total proceeds of approximately $22.0 million, which equaled the aggregate value of the previously-issued bonds.

We expect to continue to be able to refinance existing bonds under the facility as they mature (so long as we remain in compliance with the applicable covenants, as we currently are), though Farmer Mac is under no obligation to do so.

We are also continuing discussions with Farmer Mac for other borrowing opportunities, including expanding the size of the existing facility and extending its borrowing period;

however, there is no guarantee that we will be able to reach terms favorable to us, if at all.

As amended on December 10, 2020, our agreement with Farmer Mac provides for bond issuances up to an aggregate amount of $225.0 million (the “Farmer Mac Facility”) by May 31, 2023, after which Farmer Mac had the option to be relieved of its obligation to purchase additional bonds under this facility.

To date, we have issued aggregate bonds of approximately $95.2 million under the Farmer Mac Facility.

Farm Credit and Other Lenders

Since September 2014, we have closed on 39 separate loans with 11 different Farm Credit associations (for additional information on these associations, see Note 4, “ Borrowings ,” within the accompanying notes to our condensed consolidated financial statements).

Since September 2014, we have closed on multiple loans with various different Farm Credit associations (for additional information on these associations, see Note 4, “ Borrowings ,” within the accompanying notes to our condensed consolidated financial statements).

We also currently have borrowing relationships with several other agricultural lenders and are continuously reaching out to other lenders to establish prospective new relationships.

While we do not have any additional availability under any of these programs based on the properties currently pledged as collateral, we expect to enter into additional borrowing agreements with existing and new lenders in connection with certain potential new acquisitions in the future.

In addition, we currently have one farm appraised at approximately $1.6 million that is unencumbered and eligible to be pledged as collateral.

Equity Capital

4 unchanged sentences

Per Share Gross Proceeds Net Proceeds (1)

Series B Preferred Stock (2)

1,229,531 $ 24.52 $ 30,148 $ 27,664

Series C Preferred Stock (2)(3)

Common Stock – Follow-on Offering (3)

713,012 $ 24.86 $ 17,723 $ 16,221

Series D Term Preferred Stock (4)

2,415,000 25.00 60,375 58,488

Common Stock – ATM Program (5)

3,138,384 18.98 59,557 58,961

(1) Net of selling commissions and dealer-manager fees or underwriting discounts and commissions (in each case, as applicable).

(2) Excludes share redemptions during the applicable time period.

(3) Excludes approximately 1,486 shares issued pursuant to the DRIP.

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

Our 2020 Registration Statement (as defined in Note 8, “ Equity—Registration Statement ,” within the accompanying notes to our condensed consolidated financial statements) permits us to issue up to an aggregate of $1.0 billion in securities (including up to $650.0 million reserved for issuance of shares of the Series C Preferred Stock), 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.

To date, we have issued approximately $15.5 million of Series C Preferred Stock and approximately $40.9 million of common stock (including common stock issued to redeem OP Units) under the 2020 Registration Statement.

(5) We currently have $0 remaining under the ATM Program.

Our Registration Statement (as defined in Note 8, “ Equity—Registration Statement ,” within the accompanying notes to our condensed consolidated financial statements) permits us to issue up to an aggregate of $1.0 billion in securities (including up to

$650.0 million reserved for issuance of shares of the Series C Preferred Stock), 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.

To date, we have issued approximately $44.7 million of Series C Preferred Stock, approximately $60.4 million of Series D Term Preferred Stock, and approximately $127.3 million of common stock (excluding common stock issued to redeem OP Units) under the Registration Statement.

In addition, we have the ability to, and expect to in the future, issue additional OP Units to third parties as consideration in future property acquisitions.

Off-Balance Sheet Arrangements

As of September 30, 2020, we did not have any material off-balance sheet arrangements.

As of March 31, 2021, we did not have any material off-balance sheet arrangements.

NON-GAAP FINANCIAL INFORMATION

3 unchanged sentences

We further present core FFO (“CFFO”) and adjusted FFO (“AFFO”) as additional non-GAAP financial measures of our operational performance, as we believe both CFFO and AFFO improve comparability on a period-over-period basis and are more useful supplemental metrics for investors to use in assessing our operational performance on a more sustainable basis than FFO.

We believe that these additional performance metrics, along with the most directly-comparable GAAP measures, provide investors with helpful insight regarding how management measures our ongoing performance, as each of CFFO and AFFO (and their respective per-share amounts) are used by management and our board of directors, as appropriate, in assessing overall performance, as well as in certain decision-making analysis, including, but not limited to, the timing of acquisitions and potential equity raises (and the type of securities to offer in any such equity raises), the determination of any fee credits, and declarations of distributions on our common stock.

We believe that these additional performance metrics, along with the most directly-comparable GAAP measure, provide investors with helpful insight regarding how management measures our ongoing performance, as each of CFFO and AFFO (and their respective per-share amounts) are used by management and our board of directors, as appropriate, in assessing overall performance, as well as in certain decision-making analysis, including, but not limited to, the timing of acquisitions and potential equity raises (and the type of securities to offer in any such equity raises), the determination of any fee credits, and declarations of distributions on our common stock.

The non-GAAP financial measures presented herein have limitations as analytical tools and should not be considered in isolation or as a substitute for an analysis of our results calculated in accordance with GAAP.

10 unchanged sentences

We will adjust for certain non-recurring charges and receipts and will explain such adjustments accordingly.

We believe the exclusion of such non-recurring amounts improves comparability of our operating results

on a period-to-period basis and will apply consistent definitions of CFFO for all prior-year periods presented to provide consistency and better comparability.

We believe the exclusion of these amounts improves comparability of our operating results on a period-to-period basis and will apply consistent definitions of CFFO for all prior-year periods presented to provide consistency and better comparability.

Further, we calculate AFFO by adjusting CFFO for the following items:

12 unchanged sentences

FFO, CFFO and AFFO do not represent cash flows from operating activities in accordance with GAAP, which, unlike FFO, CFFO, and AFFO, generally reflects all cash effects of transactions and other events in the determination of net income, and should not be considered an alternative to net income as an indication of our performance or to cash flows from operations as a measure of liquidity or ability to make distributions.

Comparisons of FFO, CFFO, and AFFO, using the NAREIT definition for

FFO and the definitions above for CFFO and AFFO, to similarly-titled measures for other REITs may not necessarily be meaningful due to possible differences in the definitions used by such REITs.

Comparisons of FFO, CFFO, and AFFO, using the NAREIT definition for FFO and the definitions above for CFFO and AFFO, to similarly-titled measures for other REITs may not necessarily be meaningful due to possible differences in the definitions used by such REITs.

Diluted funds from operations (“Diluted FFO”), diluted core funds from operations (“Diluted CFFO”), and diluted adjusted funds from operations (“Diluted AFFO”) per share are FFO, CFFO, and AFFO, respectively, divided by the weighted-average number of total shares (including shares of our common stock and OP Units held by non-controlling limited partners) outstanding on a fully-diluted basis during a period.

2 unchanged sentences

We believe that FFO, CFFO, and AFFO and Diluted FFO, CFFO, and AFFO per share are useful to investors because they provide investors with a further context for evaluating our FFO, CFFO, and AFFO results in the same manner that investors use net income and EPS in evaluating net income.

The following table provides a reconciliation of our FFO, CFFO, and AFFO for the three and nine months ended September 30, 2020 and 2019 to the most directly-comparable GAAP measure, net income, and a computation of diluted FFO, CFFO, and AFFO per share, using the weighted-average number of total shares (including shares of our common stock and OP Units held by non-controlling OP Unitholders) outstanding during the respective periods (dollars in thousands, except per-share amounts):

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

2020 2019 2020 2019

The following table provides a reconciliation of our FFO, CFFO, and AFFO for the three months ended March 31, 2021 and 2020 to the most directly-comparable GAAP measure, net income, and a computation of diluted FFO, CFFO, and AFFO per share, using the weighted-average number of total shares (including shares of our common stock and OP Units held by non-

controlling OP Unitholders) outstanding during the respective periods (dollars in thousands, except per-share amounts):

For the Three Months Ended March 31,

Net income $ 554 $ 3,101

1 unchanged sentence

(2,764) (2,125)

Net loss available to common stockholders and non-controlling OP

(824) (638) (1,929) (1,851)

Net (loss) income available to common stockholders and non-controlling OP Unitholders (2,210) 976

Real estate and intangible depreciation and amortization 6,051 4,257

1 unchanged sentence

Adjustments for unconsolidated entities (2)

FFO available to common stockholders and non-controlling OP

3,285 2,915 10,955 7,255

FFO available to common stockholders and non-controlling OP Unitholders 4,648 5,336

Acquisition- and disposition-related expenses 70 10

Other receipts, net (3)

— (11) (37) (2)

CFFO available to common stockholders and non-controlling OP

3,328 3,023 11,028 7,525

Other nonrecurring charges (receipts), net (3)

CFFO available to common stockholders and non-controlling OP Unitholders 4,761 5,301

Net rent adjustment (491) (4)

Amortization of debt issuance costs 388 179

Other noncash charges (4)

AFFO available to common stockholders and non-controlling OP

3,148 2,958 10,773 7,721

Other non-cash receipts (4)

AFFO available to common stockholders and non-controlling OP Unitholders 4,683 5,442

Weighted-average common stock outstanding—basic and diluted 26,874,630 21,262,080

4 unchanged sentences

Diluted AFFO per weighted-average total common share $ 0.17 $ 0.25

(1) Includes (i) cash dividends paid on our Series B Preferred Stock and Series C Preferred Stock, (ii) the pro-rata write-off of offering costs related to shares of Series B Preferred Stock that were redeemed, and (iii) the value of additional shares of Series C Preferred Stock issued pursuant to the DRIP.

(1) Includes (i) cash dividends paid on our Series B Preferred Stock and Series C Preferred Stock and (ii) the value of additional shares of Series C Preferred Stock issued pursuant to the DRIP.

(2) Represents our pro-rata share of depreciation expense recorded in unconsolidated entities during the period.

(3) Consists primarily of property and casualty recoveries recorded, net of the cost of related repairs expensed, as a result of the damage caused to certain irrigation improvements by natural disasters on certain of our properties.

(4) Consists of (i) the pro-rata write-off of offering costs related to shares of the Series B Preferred Stock that were redeemed, which was a noncash expense, (ii) the amount of dividends on the Series C Preferred Stock paid via issuing new shares (pursuant to the DRIP), and (iii) our pro-rata share of income (loss) recorded from investments in unconsolidated entities during the period.

(3) Consists primarily of (i) net property and casualty recoveries recorded, net of the cost of related repairs expensed, as a result of the damage caused to certain irrigation improvements by natural disasters on certain of our properties, (ii) one-time listing fees related to our Series D Term Preferred Stock, (iii) the write-off of certain unallocated costs related to a prior universal registration statement, and (iv) certain one-time costs related to the early redemption of our Series A Term Preferred Stock.

(4) Consists of (i) the amount of dividends on the Series C Preferred Stock paid via issuing new shares (pursuant to the DRIP) and (ii) our remaining pro-rata share of income (loss) recorded from investments in unconsolidated entities during the period.

Net Asset Value

10 unchanged sentences

• For properties acquired within 12 months prior to the date of valuation, the purchase price of the property will generally be used as the current fair value unless overriding factors apply.

In situations where OP Units are issued as partial or whole consideration in connection with the acquisition of a property, the fair value of the property will generally be the lower of:

In situations where OP Units are issued as partial or whole consideration in connection with the acquisition of a property, the fair value of the property will generally be the

(i) the agreed-upon purchase price between the seller and the buyer (as shown in the purchase and sale agreement or contribution agreement and using the agreed-upon pricing of the OP Units, if applicable), or (ii) the value as determined by an independent, third-party appraiser.

8 unchanged sentences

Sources of this data may come from market inputs from recent acquisitions of our own portfolio of real estate, recent appraisals of properties we own that are similar in nature and in the same region (as applicable) as the property being valued, market conditions and trends we observe in our due diligence process, and conversations with appraisers, brokers, and farmers.

A breakdown of the methodologies used to value our properties and the aggregate value as of September 30, 2020, determined by each method is shown in the table below (dollars in thousands, except in footnotes):

A breakdown of the methodologies used to value our properties and the aggregate value as of March 31, 2021, determined by each method is shown in the table below (dollars in thousands, except in footnotes):

Valuation Method Number of

6 unchanged sentences

(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 paid for by us that were associated with the properties, and adjusted for accumulated depreciation and amortization.

(2) Appraisals performed between December 2019 and October 2020.

Some of the significant assumptions used by appraisers and the Valuation Team in valuing our portfolio as of September 30, 2020, include land values per farmable acre, market rental rates per farmable acre and the resulting net operating income (“NOI”) at the property level, and capitalization rates, among others.

(2) Appraisals performed between June 2020 and April 2021.

Some of the significant assumptions used by appraisers and the Valuation Team in valuing our portfolio as of March 31, 2021, include land values per farmable acre, market rental rates per farmable acre and the resulting net operating income (“NOI”) at the property level, and capitalization rates, among others.

These assumptions were applied on a farm-by-farm basis and were selected based on several factors, including comparable land sales, surveys of both existing and current market rates, discussions with other brokers and farmers, soil quality, size, location, and other factors deemed appropriate.

A summary of these significant assumptions is provided in the following table:

Land Value (per farm acre) $678 – $127,436 $ 36,461

Market NOI (per farm acre) $421 – $3,759 $ 1,993

Land Value (per farmable acre) $678 – $127,436 $ 35,572

Market NOI (per farmable acre) $421 – $3,546 $ 1,824

Market Capitalization Rate 3.00% – 10.06% 5.05%

2 unchanged sentences

Developments considered that may have an impact on the fair value of our real estate include, but are not limited to, changes in tenant credit profiles, changes in lease terms (such as expirations and notices of non-renewals or to vacate), and potential asset sales (particularly those at prices different from the appraised values of our properties).

Management believes that the purchase prices of the farms acquired during the previous 12 months and the most recent appraisals available for the farms acquired prior to the previous 12 months fairly represent the current market values of the properties as of September 30, 2020, and, accordingly, did not make any adjustment to these values.

A quarterly roll-forward of the change in our portfolio value for the three months ended September 30, 2020, from the prior value basis as of June 30, 2020, is provided in the table below (dollars in thousands):

Total portfolio fair value as of June 30, 2020 $ 911,770

Acquisition of eight new farms during the three months ended September 30, 2020 39,179

Plus net value depreciation during the three months ended September 30, 2020:

Management believes that the purchase prices of the farms acquired during the previous 12 months and the most recent appraisals available for the farms acquired prior to the previous 12 months fairly represent the current market values of the properties as of March 31, 2021, and, accordingly, did not make any adjustment to these values.

A quarterly roll-forward of the change in our portfolio value for the three months ended March 31, 2021, from the prior value basis as of December 31, 2020, is provided in the table below (dollars in thousands):

Total portfolio fair value as of December 31, 2020 $ 1,162,524

Acquisition of three new farms during the three months ended March 31, 2021 5,577

Plus net value appreciation during the three months ended March 31, 2021:

32 farms valued via third-party appraisals $ 2,191

Total net appreciation for the three months ended September 30, 2020 19,932

Total portfolio fair value as of September 30, 2020 $ 970,881

Management also determined fair values of all long-term borrowings and preferred stock.

Using a discounted cash flow analysis, management determined that the fair value of all long-term encumbrances on our properties as of September 30, 2020, was approximately $497.4 million, as compared to a carrying value (excluding unamortized related debt issuance costs) of approximately $495.1 million.

In addition, due to the short-term maturity of our Series A Term Preferred Stock (which has a mandatory redemption date of September 30, 2021), 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.

Finally, pursuant to Financial Industry Regulatory Authority Rule 2310(b)(5), with the assistance of a third-party valuation expert, we determined the estimated value of our Series B Preferred Stock and Series C Preferred Stock to each be $25.00 per share as of September 30, 2020 (see Exhibits 99.1 and 99.2 to this Form 10-Q).

Total net appreciation for the three months ended March 31, 2021 2,191

Total portfolio fair value as of March 31, 2021 $ 1,170,292

Management also determined fair values of all of its long-term borrowings and preferred stock.

Using a discounted cash flow analysis, management determined that the fair value of all long-term encumbrances on our properties as of March 31, 2021, was approximately $626.2 million, as compared to a carrying value (excluding unamortized related debt issuance costs) of approximately $632.5 million.

The fair values of our Series B Preferred Stock and Series D Term Preferred Stock were determined using the closing stock prices as of March 31, 2021, of $25.56 per share and $25.54 per share, respectively.

Finally, pursuant to Financial Industry Regulatory Authority Rule 2310(b)(5), with the assistance of a third-party valuation expert, we determined the estimated value of our Series C Preferred Stock to be $25.00 per share as of March 31, 2021 (see Exhibit 99.1 to this Form 10-Q).

Calculation of Estimated Net Asset Value

To provide our stockholders with an estimate of the fair value of our real estate assets, we intend to estimate the fair value of our farms and farm-related properties and provide an estimated net asset value (“NAV”) on a quarterly basis.

NAV is a non-GAAP, supplemental measure of financial position of an equity REIT and is calculated as total equity, adjusted for the increase or decrease in fair value of our real estate assets and long-term borrowings (including any preferred stock required to be treated as debt for GAAP purposes) relative to their respective costs bases.

Further, we calculate NAV per common share by dividing NAV by our total common shares outstanding (consisting of our common stock and OP Units held by non-controlling limited partners).

1 unchanged sentence

PricewaterhouseCoopers LLP has neither examined, compiled, nor performed any procedures with respect to the fair values or the calculation of net asset value per common share, which utilizes information that is not disclosed within the financial statements, and, accordingly, does not express an opinion or any other form of assurance with respect thereto.

As of September 30, 2020, we estimate the NAV per common share to be $11.97.

As of March 31, 2021, we estimate the NAV per common share to be $12.69.

A reconciliation of NAV to total equity, which we believe is the most directly-comparable GAAP measure, is provided below (dollars in thousands, except per-share data) :

2 unchanged sentences

net cost basis of tangible and intangible real estate holdings (1)

$ (1,048,165)

estimated fair value of real estate holdings (2)

7 unchanged sentences

Estimated NAV available to common stockholders and non-controlling OP Unitholders $ 351,935

Total common shares and OP Units outstanding (6)

Total common shares and non-controlling OP Units outstanding (6)

Estimated NAV per common share and OP Unit $ 12.69

1 unchanged sentence

(2) Per Current Fair Value as presented in the table above.

(3) Includes the principal balances outstanding of all long-term borrowings (consisting of notes and bonds payable) and the Series A Term Preferred Stock.

(3) Includes the principal balances outstanding of all long-term borrowings (consisting of notes and bonds payable) and the Series D Term Preferred Stock.

(4) Long-term notes and bonds payable were valued using a discounted cash flow model.

The Series A Term Preferred Stock was valued based on its closing stock price as of September 30, 2020.

(5) Valued at the securities’ respective liquidation values, as discussed above.

(6) Includes 22,204,906 shares of common stock and zero OP Units held by non-controlling OP Unitholders.

A quarterly roll-forward in the estimated NAV per common share for the three months ended September 30, 2020, is provided below:

Estimated NAV per common share and non-controlling OP Unit as of June 30, 2020 $ 11.06

Less net loss available to common stockholders and non-controlling OP Unitholders (0.04)

Plus net change in valuations:

The Series D Term Preferred Stock was valued based on its closing stock price as of March 31, 2021.

(5) The Series B Preferred Stock was valued based on its closing stock price as of March 31, 2021, while the Series C Preferred Stock was valued at its liquidation value, as discussed above.

(6) Includes 27,531,951 shares of common stock and 204,778 OP Units held by non-controlling OP Unitholders.

A quarterly roll-forward in the estimated NAV per common share for the three months ended March 31, 2021, is provided below:

Estimated NAV per common share and non-controlling OP Unit as of December 31, 2020 $ 12.23

Less net loss attributable to common stockholders and non-controlling OP Unitholders (0.08)

Adjustments for net change in valuations:

Net change in unrealized fair value of farmland portfolio (1)

3 unchanged sentences

Plus net accretive effect of equity issuances 0.15

Estimated NAV per common share and non-controlling OP Unit as of September 30, 2020 $ 11.97

Estimated NAV per common share and non-controlling OP Unit as of March 31, 2021 $ 12.69

(1) The net change in unrealized fair value of our farmland portfolio consists of three components:

(i) an increase of $0.91 per share due to the net appreciation in value of the farms that were valued during the three months ended September 30, 2020, (ii) an increase of $0.18 per share due to the aggregate depreciation and amortization expense recorded during the three months ended September 30, 2020, and (iii) a decrease of $0.14 per share due to capital improvements made on certain farms that have not yet been considered in the determination of the respective farms’ estimated fair values.

(i) an increase of $0.08 per share due to the net appreciation in value of the farms that were valued during the three months ended March 31, 2021, (ii) an increase of $0.23 per share due to the aggregate depreciation and amortization expense recorded during the three months ended March 31, 2021, and (iii) no change due to net asset dispositions or capital improvements made on certain farms that have not yet been considered in the determination of the respective farms’ estimated fair values.

Comparison of estimated NAV and estimated NAV per common share, using the definitions above, to similarly-titled measures for other REITs may not necessarily be meaningful due to possible differences in the calculation or application of the definition of NAV used by such REITs.

In addition, the trading price of our common shares may differ significantly from our most recent estimated NAV per common share calculation.

For example, while we estimated our NAV per common share to be $11.97 as of September 30, 2020, based on the calculation above, the closing price of our common stock on September 30, 2020, was $15.02 per share.

For example, while we estimated our NAV per common share to be $12.69 as of March 31, 2021, based on the calculation above, the closing price of our common stock on March 31, 2021, was $18.30 per share.

The determination of estimated NAV is subjective and involves a number of assumptions, judgments, and estimates, and minor adjustments to these assumptions, judgments, or estimates may have a material impact on our overall portfolio valuation.

6 unchanged sentences

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 2. Management’s Discussion and Analysis