What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2022-02-22 compared with 2021-02-24 · 318 added, 349 removed, 456 unchanged (59% of the section changed)

16 unchanged sentences

• the weighted-average term to maturity of our notes and bonds payable was 9.8 years, and the weighted-average remaining fixed-price term of our borrowings was 5.6 years, with an expected weighted-average effective interest rate of 3.36% over that term.

Portfolio Diversity

Portfolio Diversification

Since our initial public offering in January 2013 (the “IPO”), we have expanded our portfolio from 12 farms leased to 7 different, unrelated third-party tenants to a current portfolio of 164 farms leased to 85 different, unrelated third-party tenants who grow over 60 different types of crops on our farms.

While our focus remains in farmland suitable for growing fresh produce annual row crops, we have also diversified our portfolio into farmland suitable for other crop types, including permanent crops (e.g., almonds, blueberries, pistachios, and wine grapes) and, to a lesser extent, certain commodity crops (e.g., beans and corn).

Our focus remains in farmland suitable for growing either fresh produce annual row crops (e.g., certain berries and vegetables) or certain permanent crops (e.g., almonds, blueberries, pistachios, and wine grapes), with an ancillary focus on farmland growing certain commodity crops (e.g., beans and corn).

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

7 unchanged sentences

Florida 26 22,591 20.1% 13,675 18.2% 23 20,770 20.5% 13,342 23.4%

Arizona 6 6,280 6.2% 4,739 8.3% 6 6,280 7.3% 2,219 5.5%

Colorado 12 32,773 29.1% 2,675 3.6% 12 32,773 32.4% 3,264 5.7%

Washington 3 1,384 1.2% 2,384 3.2% 3 1,384 1.4% 531 1.0%

Arizona 6 6,280 5.6% 1,951 2.6% 6 6,280 6.2% 4,739 8.3%

Nebraska 9 7,782 6.9% 1,588 2.1% 9 7,782 7.7% 1,556 2.7%

Michigan 23 1,892 1.7% 1,040 1.4% 15 962 1.0% 723 1.3%

Washington 3 1,384 1.4% 531 1.0% 1 746 0.9% 506 1.2%

Oregon 5 726 0.6% 854 1.1% 3 418 0.4% 528 0.9%

Texas 1 3,667 3.6% 450 0.8% 1 3,667 4.2% 527 1.3%

North Carolina 2 310 0.3% 153 0.3% 2 310 0.4% 158 0.4%

Maryland 6 987 0.9% 476 0.6% 4 759 0.8% 135 0.2%

Texas 1 3,667 3.3% 450 0.6% 1 3,667 3.6% 450 0.8%

South Carolina 3 597 0.5% 244 0.3% 3 597 0.6% 47 0.1%

North Carolina 2 310 0.3% 150 0.2% 2 310 0.3% 153 0.3%

Delaware 1 180 0.2% 81 0.1% 1 180 0.2% 27 —%

New Jersey 3 116 0.1% 75 0.1% — — —% — —%

Georgia 2 230 0.2% 31 —% — — —% — —%

TOTALS 164 112,542 100.0% $ 75,318 100.0% 137 101,079 100.0% $ 57,031 100.0%

22 unchanged sentences

(1) Certain lease agreements encompass multiple farms.

(2) Includes three leases that were renewed subsequent to December 31, 2020 (see “ Recent Developments—Portfolio Activity—Existing Properties—Leasing Activity ” below for a summary of these and other recent leasing activities).

(2) Includes one lease that was renewed subsequent to December 31, 2021 (see “ Recent Developments—Portfolio Activity—Existing Properties—Leasing Activity ” below for a summary of this and certain other recent leasing activities).

(3) 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 one agricultural lease scheduled to expire within the next six months on a farm in California.

We are currently in negotiations with the existing tenant on the farm, as well as other potential tenants, and we anticipate being able to renew the lease at its current market rental rate without incurring any downtime on the farm.

We currently anticipate the rental rate on this lease renewal to be relatively flat compared to that of the existing lease.

We currently anticipate the rental rates on this lease renewal to be relatively flat compared to that of the existing lease.

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.

6 unchanged sentences

Farms Primary

Crop(s) Lease

Crop(s) / Use Lease

Options Total

1 unchanged sentence

Straight-line

County Road 18 Phillips, CO 1/15/2020 1,325 2 Sugar beets, edible beans, potatoes, & corn 6.0 years None $ 7,500 $ 39 $ 416

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

Driver Road (3)

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

Hermon Wicomico & Caroline, MD, and Sussex, DE 8/31/2020 939 5 Sod & vegetables 10.0 years 2 (5 years) 7,347 226 432

Firestone Avenue (4)(5)(6)

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

organic & conventional vegetables 1.2 years 2 (5 years) 31,833 131 1,734

West Lost Hills Road (4)(7)(8)

Fresno, CA 10/1/2020 801 1 Pistachios 1.1 years 4 (3 years) 31,827 77 1,752

Tractor Road Bamberg & Orangeburg, SC 10/23/2020 597 3 Sod 9.5 years None 3,765 72 244

American Ave Fresno, CA 12/11/2020 236 1 Current:

Table grapes;

Almonds 19.9 years 1 (5 years) 3,600 50 241

Round Mountain Ventura, CA 12/15/2020 368 3 Misc.

vegetables 1.6 years None 20,750 64 949

West Sierra Tulare, CA 12/17/2020 4,642 1 Almonds, pomegranates (conventional & organic), pistachios, and oats 9.9 years 1 (10 years) 61,500 107 3,886

Eight Mile Road (9)

San Joaquin, CA 12/24/2020 1,036 2 Conventional & organic blueberries 10.0 years 3 (5 years) 34,300 81 2,030

Rock Road (9)

Whatcom, WA 12/24/2020 638 2 Blueberries 10.0 years 3 (5 years) 31,700 74 1,885

Fountain Springs (4)

Tulare, CA 12/31/2020 160 1 Citrus (mandarins & lemons) 7.8 years 2 (5 years) 4,200 50 252

Palmer Mill Road Dorchester, MD 3/3/2021 228 2 Sod 10.0 years 2 (5 years) $ 1,600 $ 56 $ 89

Eight Mile Road – Port Facility San Joaquin, CA 3/11/2021 5 — Cooling facility and storage 9.8 years 3 (5 years) 3,977 50 189

South Avenue Tehama, CA 4/5/2021 2,285 1 Olives for olive oil 14.7 years 1 (5 years) 37,800 149 2,555

Richards Avenue Atlantic, NJ 6/3/2021 116 3 Blueberries 14.9 years 2 (5 years) 2,150 63 129

Lerdo Highway (Phase I) (3)(4)

Kern, CA 6/4/2021 639 1 Conventional & organic almonds and banked water 10.4 years 3 (10 years) 26,492 111 974

Almena Drive Van Buren

& Eaton, MI 6/9/2021 930 8 Blueberries 14.7 years 2 (5 years) 13,300 51 785

Maricopa Highway Kern, CA 8/11/2021 277 1 Organic blueberries 14.9 years 3 (5 years) 30,000 63 2,262

Wallace Road Yamhill, OR 8/11/2021 143 1 Organic blueberries 10.1 years 3 (5 years) 12,320 39 768

West Orange St.

Lucie, FL 8/18/2021 617 2 Lemons and oranges 12.0 years None 5,241 184 367

Lerdo Highway (Phase II) (3)(5)

Kern, CA 8/20/2021 479 1 Conventional & organic almonds and banked water 10.2 years 3 (10 years) 14,772 53 735

Lerdo Highway (Phase III) (3)(6)

Kern, CA 10/8/2021 1,291 1 Conventional & organic almonds, conventional & organic pistachios, and banked water 10.1 years 3 (10 years) 42,959 90 1,981

Raymond Road (3)

Madera, CA 10/21/2021 219 1 Almonds 10.0 years 1 (5 years) 3,300 78 183

Cogdell Highway Atkinson, GA 11/12/2021 230 2 Blueberries 14.8 years None 2,850 45 224

Chuckhole Lane (7)

Umatilla, OR 11/23/2021 165 1 Wine grapes 9.9 years 2 (10 years) 2,383 117 139

West Lerdo Highway (3)(8)

Kern, CA 12/3/2021 2,635 1 Pistachios 2.9 years None 88,000 97 4,395

Farm Road Charlotte, FL 12/16/2021 1,204 1 Sod, watermelons, and cattle 5.0 years 1 (5 years) 7,350 94 388

11,463 27 $ 294,494 $ 1,340 $ 16,163

(1) Includes approximately $75,000 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 respective leases, as required under GAAP, and excludes contingent rental payments, such as participation rents.

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

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

(1) Includes approximately $78,000 of external legal fees associated with negotiating and originating the leases associated with these acquisitions, which were expensed in the period incurred.

(2) Based on the minimum cash rental payments guaranteed under the respective leases, as required under GAAP, and excludes contingent rental payments, such as participation rents.

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

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

(5) Lease provides for an initial term of 8.2 years but also includes an annual tenant termination option should the tenant become physically unable to continue farming operations on the property, effective as of the end of the then-current lease year (as defined within the lease).

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

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

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

(7) Lease provides for an initial term of 3.1 years but also includes an annual tenant termination option should the tenant become physically unable to continue farming operations on the property, effective as of the end of the then-current lease year (as defined within the lease).

(4) As part of the acquisition of this property, we acquired a contract to purchase 20,330 acre-feet of water stored with Semitropic Water Storage District, located in Kern County, California, at a fixed price.

We executed this contract on June 25, 2021, at an additional cost of approximately $1.2 million, which is included in the total purchase price for this property in the table above.

Income is not currently being earned on the value attributable to the water.

See Note 3, “ Real Estate and Intangible Assets — Investments in Water Assets ,” within the accompanying notes to our consolidated financial statements for additional information on this water.

(5) As part of the acquisition of this property, we acquired a contract to purchase 5,000 acre-feet of water stored with Semitropic Water Storage District, located in Kern County, California, at a fixed price.

We executed this contract on August 23, 2021, at an additional cost of approximately $306,000, which is included in the total purchase price for this property in the table above.

Income is not currently being earned on the value attributable to the water.

See Note 3, “ Real Estate and Intangible Assets — Investments in Water Assets ,” within the accompanying notes to our consolidated financial statements for additional information on this water.

(6) As part of the acquisition of this property, we acquired a contract to purchase 19,670 acre-feet of water stored with Semitropic Water Storage District, located in Kern County, California, at a fixed price.

We executed this contract on October 11, 2021, at an additional cost of approximately $1.2 million, which is included in the total purchase price for this property in the table above.

Income is not currently being earned on the value attributable to the water.

See Note 3, “ Real Estate and Intangible Assets — Investments in Water Assets ,” within the accompanying notes to our consolidated financial statements for additional information on this water.

(7) 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 an irrigation system providing water to this and other neighboring properties.

Our acquired ownership, which equated to a 9.1% interest in the LLC, was valued at approximately $2.1 million at the time of acquisition and is included within Other assets, net on the accompanying Consolidated Balance Sheets.

See Note 2, “ Summary of Significant Accounting Policies — Investments in Unconsolidated Entities ,” within the accompanying notes to our consolidated financial statements for further information for our aggregate ownership interest in this and other LLCs.

(8) Lease provides for an initial term of 9.9 years but also includes an annual tenant termination option, effective as of the end of the lease year (as defined within the lease) following the exercise of such termination option.

(8) 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 $294,000 at the time of acquisition and is included within Other assets, net on the accompanying Consolidated Balance Sheets.

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

(9) These two properties were acquired as part of a single transaction.

In addition, in connection with the acquisition of these properties, we committed to provide up to $3.0 million as additional compensation for a cold storage facility subject to a ground lease, contingent upon the approval by local municipal entity.

We are currently unable to estimate when or if this approval will be obtained.

Existing Properties

Property Add-on

In connection with the acquisition of a 366-acre vineyard located in Napa, California (“Withers Road”), in August 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 the leasing activity that has occurred on our existing properties since January 1, 2020, through the date of this filing (dollars in thousands):

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)

NEW LEASES (2)

Locations Number

6 unchanged sentences

/ NN / N) (4)

AZ, CA, CO, FL, NC, & NE 20 30,555 $ 9,508 3 13 / 5 / 2 $ 8,819 4.9 6 14 / 6 / 0

(1) 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.

AZ, CA, CO, FL, GA, MI, & NE 22 27,002 $ 8,299 5 15 / 7 / 0 $ 7,794 4.6 1 15 / 7 / 0

(1) Prior leases include certain leases that were terminated early during year ended December 31, 2021.

In connection with these early terminations, during the year ended December 31, 2021, we wrote off aggregate deferred rent and rent receivable balances of approximately $127,000 against lease revenue.

Upon termination of these leases, we entered into new leases with new tenants, effective immediately, which are included in the above table.

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

See Note 7, “ Commitments and Contingencies—Operating Obligations ,” within the accompanying notes to our consolidated financial statements for additional information on these and other commitments.

(3) 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.

(4) “NNN” refers to leases under triple-net lease arrangements, “NN” refers to leases under partial-net lease arrangements, and “N” refers to leases under single-net lease arrangements, in each case, as described above under “ Leases—General .”

Lease Termination

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

As part of the termination agreement, the outgoing tenant made a one-time termination payment to us of approximately $3.0 million, which we recognized as additional lease revenue during the year ended December 31, 2020.

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

In connection with the early termination of these leases, during the year ended December 31, 2020, we recognized approximately $89,000 of prepaid rent as additional lease revenue and wrote off an aggregate net deferred rent balance of approximately $254,000 against lease revenue.

In addition, approximately $470,000 of unamortized lease intangible assets related to the terminated leases were written off and charged to amortization expense during the year ended December 31, 2020.

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

These leases are included in the Leasing Activity table above.

(5) Total annualized straight-line rent for new leases is net of a one-time fixed payment of $560,000 we agreed to pay in connection with one lease to cover the majority of the operating expenses on the farm in exchange for adding a significant participation rent component into the lease.

Financing Activity

Debt Activity

Since January 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 consolidated financial statements):

Lender Date of

Issuance Principal

Amount Maturity

From January 1, 2021, through the date of this filing, we entered into the following loan agreements (dollars in thousands):

Lender Date of Issuance Amount Maturity

Date Principal

2 unchanged sentences

Interest Rate Terms

Farmer Mac (2)

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

(interest only) 2.66% 2.66% 2.66%;

Fixed throughout term

Premier Farm Credit, FLCA 5/14/2020 4,500 1/1/2045 24.6 years 4.00% 2.92% Fixed through December 31, 2029 (variable thereafter)

Conterra Agricultural Capital, LLC 6/8/2020 2,100 7/1/2027 30.0 years 3.40% 3.40% Fixed throughout term

Farm Credit West, FLCA 6/24/2020 600 5/1/2044 24.2 years 3.00% 1.99% Fixed through July 31, 2026 (variable thereafter)

Farm Credit West, FLCA 6/24/2020 600 5/1/2044 24.2 years 3.00% 1.99% Fixed through August 31, 2026 (variable thereafter)

Farm Credit West, FLCA 6/25/2020 8,500 11/1/2045 25.0 years 3.75% 2.72% Fixed through June 30, 2030 (variable thereafter)

Farm Credit of the Virginias, ACA 8/31/2020 4,481 9/1/2030 25.0 years 3.99% 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 (3)

12/10/2020 2,160 11/1/2045 24.5 years 3.70% 2.67% Fixed through January 31, 2031 (variable thereafter)

Farmer Mac (2)

12/11/2020 3,180 7/31/2023 None

(interest only) 2.13% 2.13% Fixed throughout term

Farm Credit West, FLCA 1/28/2021 $ 2,073 11/1/2045 24.5 years 3.23% 2.20% Fixed through 12/31/2027 (variable thereafter)

Farmer Mac (2)

12/11/2020 10,673 10/31/2028 None

(interest only) 3.25% 3.25% Fixed throughout term

PGIM Real Estate Finance, LLC 12/15/2020 12,450 7/1/2028 None

(interest only) 2.98% 2.98% Fixed throughout term

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 (3)

3 unchanged sentences

(interest only) 2.44% 2.44% Fixed throughout term

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

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

GreenStone Farm Credit Services, FLCA 8/17/2021 7,980 8/1/2046 25.5 years 4.00% 2.74% Fixed through 7/31/2031 (variable thereafter)

Golden State Farm Credit, FLCA 9/28/2021 15,960 7/1/2051 30.0 years 3.75% 2.75% Fixed through 9/30/2031 (variable thereafter)

Golden State Farm Credit, FLCA 9/28/2021 6,840 7/1/2046 25.0 years 3.75% 2.75% Fixed through 9/30/2031 (variable thereafter)

Farmer Mac (2)

11/10/2021 1,290 12/30/2030 25.0 years 3.32% 3.32% Fixed throughout term

Rabo AgriFinance, LLC (3)

11/10/2021 22,620 12/1/2030 25.0 years 3.42% 3.42% Fixed throughout term

Farm Credit Florida, ACA 12/13/2021 3,174 1/1/2047 25.0 years 4.13% 3.45% Fixed through 12/31/2031 (variable thereafter)

Farmer Mac (2)

1/11/2022 1,980 12/30/2030 20.0 years 3.31% 3.31% Fixed throughout term

Northwest Farm Credit Services, FLCA 2/1/2022 1,442 2/1/2032 20.1 years 4.65% 3.40% Fixed throughout term

Total / Weighted-averages $ 71,189 3.62% 3.06%

2 unchanged sentences

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) Represent amendments to bonds previously issued under the Farmer Mac Facility.

(3) Loans were issued as variable-rate loans but were fixed subsequent to their issuance.

Certain of these loans were effectively fixed through our entry into interest rate swap agreements with the lender (as counterparty).

(2) Bond issued under our facility with Federal Agricultural Mortgage Corporation (“Farmer Mac”).

(3) 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 4, “ Borrowings—Interest Rate Swap Agreements ,” in the accompanying notes to our consolidated financial statements for further discussion on these agreements.

(4) Loan disbursed under the New MetLife Facility.

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 $270,000 in connection with securing these financings.

New MetLife Facility

As of December 31, 2019, our facility with Metropolitan Life Insurance Company (“MetLife”) consisted of a total of $200.0 million of term notes (the “Prior MetLife Term Notes”) and $75.0 million of revolving equity lines of credit (the “MetLife Lines of Credit,” and together with the Prior MetLife Term Notes, the “Prior MetLife Facility”).

The draw period for the Prior MetLife Term Notes expired on December 31, 2019, with approximately $21.5 million being left undrawn, and MetLife had no obligation to disburse the remaining funds under those notes.

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

For information on the pertinent terms of the issuances under the new MetLife Facility, refer to Note 4, “ Borrowings—New MetLife Facility ,” within the accompanying notes to our condensed consolidated financial statements.

In connection with securing the above borrowings, Gladstone Securities LLC (“Gladstone Securities”), an affiliate of ours, earned total financing fees of $114,000.

MetLife Facility

On February 3, 2022, we amended our credit facility with Metropolitan Life Insurance Company (“MetLife”), which previously consisted of a $75.0 million long-term note payable (the “2020 MetLife Term Note”) and $75.0 million of revolving equity lines of credit (the “MetLife Lines of Credit,” and together with the 2020 MetLife Term Note, the “2020 MetLife Facility”).

Pursuant to the amendment, our credit facility with MetLife now consists of the 2020 MetLife Term Note, the MetLife Lines of Credit, and a new $100.0 million long-term note payable (the “2022 MetLife Term Note,” and together with the 2020 MetLife Term Note and the MetLife Lines of Credit, the “2022 MetLife Facility”).

The 2022 MetLife Term Note is scheduled to mature on January 5, 2032, and the interest rates on future disbursements under the 2022 MetLife Term Note will be based on the 10-year U.S.

Treasury at the time of such disbursements, with the initial disbursement priced based on the 10-year U.S.

Treasury plus a spread to be determined by the lender.

In addition, through December 31, 2024, the 2022 MetLife Term Note is also subject to an unused fee ranging from 0.10% to 0.20% on undrawn amounts (based on the balance drawn under the 2022 MetLife Term Note).

If the full commitment of $100.0 million is not utilized by December 31, 2024, MetLife has no obligation to disburse the remaining funds under the 2022 MetLife Term Note.

All other material items of the MetLife Facility remained unchanged.

As part of this amendment, we paid an origination fee of $250,000 to MetLife and a financing fee of $80,000 to Gladstone Securities.

For information on the pertinent terms of the issuances under the 2020 MetLife Facility, refer to Note 4, “ Borrowings—MetLife Facility ,” within the accompanying notes to our condensed consolidated financial statements.

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

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

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

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 (approximately 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.

Farmer Mac Facility

On December 5, 2014, we, through certain subsidiaries of our Operating Partnership, entered into a bond purchase agreement (the “Bond Purchase Agreement”) with Federal Agricultural Mortgage Corporation (“Farmer Mac”) and Farmer Mac Mortgage Securities Corporation (the “Bond Purchaser”), for a secured note purchase facility.

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

On December 10, 2020, we entered into an amended and restated bond purchase agreement (the “Amended and Restated Bond Purchase Agreement”) with Farmer Mac and the Bond Purchaser, increasing the secured note purchase facility to provide for bond issuances up to an aggregate principal amount of $225.0 million (the “New Farmer Mac Facility”).

In addition, the Amended and Restated Bond Purchase Agreement extended the date up to which we can issue new bonds to May 31, 2023 and final maturity date for bonds issued under the Farmer Mac Facility to December 31, 2030.

Series D Term Preferred Stock

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Redemption of Series A Term Preferred Stock

On February 12, 2021, we redeemed all of our outstanding shares of our 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.

On February 12, 2021, we redeemed all of our outstanding shares of our 6.375% Series A Cumulative Term Preferred Stock, par value $0.01 per share (the “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 ending March 31, 2021, we anticipate writing off approximately $127,000 of unamortized issuance costs related to the issuance of the Series A Term Preferred Stock.

In connection with this early redemption, during the three months ending 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 B Preferred Stock

On May 31, 2018, we filed a prospectus supplement with the SEC for a continuous public offering of up to 6,000,000 shares (the “Series B Offering”) of our 6.00% Series B Cumulative Redeemable Preferred Stock (the “Series B Preferred Stock”) at an offering price of $25.00 per share for gross proceeds of up to $150.0 million.

The Series B Preferred Stock was offered on a continuous, “reasonable best efforts” basis by Gladstone Securities, the dealer-manager for the Series B Offering.

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

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

Shares Sold Weighted-average

Offering Price

per Share Gross Proceeds Net Proceeds (1)

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

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

Aggregate selling commissions and dealer-manager fees paid to Gladstone Securities as a result of these sales was approximately $2.5 million (of which approximately $2.3 million was remitted by Gladstone Securities to unrelated third-parties involved in the offering, such as participating broker-dealers and wholesalers).

The Series B Offering was completed on March 9, 2020 (the “Series B Termination Date”), with the full 6,000,000 allotted shares being sold, and, exclusive of redemptions, resulted in total gross proceeds of approximately $147.5 million and net proceeds, after deducting Series B Selling Commissions, Series B Dealer-Manager Fees, and offering expenses payable by us, of approximately $133.4 million.

During the course of the Series B Offering, we paid aggregate selling commissions and dealer-manager fees to Gladstone Securities of approximately $12.5 million, of which approximately $11.7 million, or 93.7%, were remitted by Gladstone Securities to unrelated third-parties involved in the offering, including participating broker-dealers and wholesalers.

Excluding Series B Selling Commissions and Series B Dealer-Manager Fees, we incurred approximately $1.6 million of total costs related to the Series B Offering.

During the year ended December 31, 2020, we listed the Series B Preferred Stock on Nasdaq under the ticker symbol “LANDO.” Trading of the Series B Preferred Stock on Nasdaq commenced on October 19, 2020.

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 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.

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

See Note 6, “ Related-Party Transactions—Gladstone Securities—Dealer-Manager Agreements ,” within the accompanying notes to our 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):

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From January 1, 2021, through the date of this filing, we redeemed 10,920 shares and issued approximately 11,021 shares of the Series C Preferred Stock pursuant to the DRIP.

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

Aggregate selling commissions and dealer-manager fees paid to Gladstone Securities as a result of these sales was approximately $2.9 million (of which approximately $2.7 million was remitted by Gladstone Securities to unrelated third-parties involved in the offering, such as participating broker-dealers and wholesalers).

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

Aggregate selling commissions and dealer-manager fees paid to Gladstone Securities as a result of these sales was approximately $6.4 million.

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

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

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 with 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.

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 consolidated financial statements) and entered into new equity distribution agreements with Virtu Americas, LLC, and Ladenburg Thalmann & Co., Inc.

(each a “Sales Agent”), under which we may issue and sell, from time to time and through the 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”).

Common Stock—At-the-Market Program

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

(each a “Sales Agent”), under which we may issue and sell, from time to time and through the Sales Agents, shares of our common stock having an aggregate offering price of up to $100.0 million (the “ATM Program”).

On May 18, 2021, we entered into separate amendments to the existing equity distribution agreements to allow us to sell up to $160.0 million of additional shares of our common stock, expanding the aggregate offering price to up to $260.0 million.

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

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7,990,994 $ 21.70 $ 173,428 $ 171,693

(1) Net of underwriter commissions and discounts.

The extent to which the 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 be able to predict at this time, including the duration and long-term scope of the pandemic;

the adequate production and distribution of vaccinations;

(1) Net of underwriter commissions.

While we have not been materially adversely impacted by COVID-19 to date, the extent to which the ongoing pandemic may, in the future, 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 spread and effect of COVID-19 variants;

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 impact on economic activity from the pandemic, including due to inflation and constraints on global supply chains, and actions taken in response;

increased unemployment and underemployment levels and labor shortages in some industries;

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;

any disruptions 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 strict government-mandated lockdowns in the state of Michigan in response to COVID-19.

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 COVID-19;

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 or early 2022.

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 being phased out and is anticipated to be 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.

SOFR was formally adopted by the Alternative Reference Rates Committee in July 2021.

The current intent is to adjust the SOFR to minimize the differences between the interest that a borrower would be paying using LIBOR versus what it will be paying SOFR.

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

Our lines of credit with MetLife and three term loans with Rabo (which are effectively fixed through our entry into interest swap agreements) are currently based upon one-month LIBOR.

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

Our lines of credit with 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.

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We are externally managed pursuant to contractual arrangements with our Adviser and our Administrator (both affiliates of ours), which collectively employ all of our personnel and pay their salaries, benefits, and general expenses directly.

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 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.

The investment advisory agreement with our Adviser that was in effect from January 1, 2020, through June 30, 2021 (the “Prior Advisory Agreement”), was amended and restated effective July 1, 2021 (as amended, the “Current Advisory Agreement,” and together with the Prior Advisory Agreement, the “Advisory Agreements”).

The Current Advisory Agreement revised the calculation of the base management fee beginning with the three months ended September 30, 2021, while all other terms of the Prior Advisory Agreement remained the same.

Each of the Advisory Agreements and the current administration agreement with our Administrator (the “Administration Agreement”) were approved unanimously by our board of directors, including, specifically, our independent directors.

A summary of certain compensation terms within the Advisory Agreements and a summary of 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.

Pursuant to each of the Advisory Agreements, 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.

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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, permanent plantings, 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 year ended December 31, 2020, the hypothetical base management fee would have been approximately $3.5 million, as compared to the actual base management fee calculated under the 2020 Advisory Agreement of approximately $4.3 million.

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 year ended December 31, 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 year ended December 31, 2020.

Pursuant to the Prior Advisory Agreement, through June 30, 2021, a base management fee was paid quarterly and was 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.

Pursuant to the Current Advisory Agreement, beginning with the three months ended September 30, 2021, a base management fee is paid quarterly and is calculated at an annual rate of 0.60% (0.15% per quarter) of the prior calendar quarter’s Gross Tangible Real Estate.

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 exceeded a hurdle rate of 1.75% (7.0% annualized) of the prior calendar quarter’s Total Adjusted Common Equity.

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

For purposes of this calculation, Pre-Incentive Fee FFO is 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 are 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.

We pay our Adviser an incentive fee with respect to our Pre-Incentive Fee FFO quarterly, as follows:

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Pre-Incentive Fee FFO

( expressed as a percentage of Total Adjusted Equity or Total Adjusted Common Equity, as applicable )

( expressed as a percentage of Total Adjusted Common Equity )

Percentage of Pre-Incentive Fee FFO allocated to Incentive Fee

Capital Gains Fee

Pursuant to each of the Advisory Agreements, a capital gains-based incentive fee is calculated and payable in arrears at the end of each fiscal year (or upon termination of the agreement with our Adviser).

The capital gains fee shall equal:

(i) 15% of the cumulative aggregate realized capital gains minus the cumulative aggregate realized capital losses, minus (ii) any aggregate capital gains fees paid in prior periods.

For purposes of this calculation, realized capital gains and losses will be calculated as (x) the sales price of the property, minus (y) any costs to sell the property and the then-current gross value of the property (which includes the property’s original acquisition price plus any subsequent, non-reimbursed capital improvements).

At the end of each fiscal year, if this figure is negative, no capital gains fee shall be paid.

Termination Fee

Pursuant to each of the Advisory Agreements, in the event of our termination of the agreement for any reason (with 120 days’ prior written notice and the vote of at least two-thirds of our independent directors), a termination fee would be payable to our Adviser equal to three times the sum of the average annual base management fee and incentive fee earned by the Adviser during the 24-month period prior to such termination.

Administration Agreement

Pursuant to the Administration Agreement, we pay for our allocable portion of the Administrator’s expenses incurred while performing services 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.

As approved by our Board of Directors, effective July 1, 2014, 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.

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 December 31, 2020, we qualified 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.

However, we qualified as a smaller reporting company under an alternate threshold 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.

As of December 31, 2018, and through December 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 may take advantage of reduced disclosure requirements for our public filings.

Critical Accounting Policies

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From January 1, 2020, through December 31, 2021, we acquired 53 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 had two farms that were vacant for a portion of the year December 31, 2019.

A comparison of our operating results for the years ended December 31, 2020 and 2019 is below (dollars in thousands):

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

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

For the Years Ended December 31,

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2,536 1,848 688 37.2%

Base management and incentive fees, net of credits

Base management and incentive fees

10,230 7,327 2,903 39.6%

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2,139 2,102 37 1.8%

Total operating expenses, net of credits

Total operating expenses

43,614 29,380 14,234 48.4%

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$ 31,704 $ 27,651 $ 4,053 14.7%

Other income (expense)

1,872 938 934 99.6%

Interest expense

(20,621) (16,331) (4,290) 26.3%

Dividends declared on Series A Term Preferred Stock

(1,833) (1,833) — —%

Loss on dispositions of real estate assets, net

(2,180) (328) (1,852) 564.6%

Property and casualty recovery, net

70 10 60 600.0%

Loss from investments in unconsolidated entities

Total other expense, net

(22,696) (17,544) (5,152) 29.4%

4,955 1,762 3,193 181.2%

Net income attributable to non-controlling interests

(29) (21) (8) 38.1%

Net income attributable to the Company

4,926 1,741 3,185 182.9%

Aggregated dividends declared on and charges related to Series B and Series C Preferred Stock

(9,322) (4,240) (5,082) 119.9%

Net loss attributable to common stockholders

$ (4,396) $ (2,499) $ (1,897) 75.9%

NM = Not Meaningful

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Properties acquired or disposed of:

Fixed lease payments 20,935 2,496 18,439 738.7%

Participation rents 715 — 715 —%

Properties acquired or disposed of:

21,650 2,496 19,154 767.4%

Vacant or self-operated properties 261 247 14 5.7%

Tenant reimbursements (1)

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Same-property Basis – 2021 compared to 2020

Lease revenues from fixed lease payments increased for the year ended December 31, 2020, primarily due to recent 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 in a participation rent component to the lease structure.

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

Lease revenues from participation rents increased slightly for year ended December 31, 2020, primarily due to the participation rent component of one additional farm becoming active during 2020, partially offset by lease amendments on two other farms during the year, in which we decreased the participation rent component in exchange for higher fixed base cash rents.

Lease revenues from fixed lease payments increased for the year ended December 31, 2021, primarily due to additional rents earned on capital improvements completed on certain of our farms, largely offset by certain lease renewals and amendments executed, in which we decreased the fixed base rent component in exchange for adding a participation rent component to the lease structure.

Lease revenues from participation rents increased for the year ended December 31, 2021, primarily due to more farms having scheduled rent payments due during 2021 compared to 2020.

During the year ended December 31, 2021, 39 of our farms, consisting of 34,477 farm acres, were subject to leases with active participation rent components, as compared to 19 farms consisting of 4,844 farm acres in the prior year.

During the year ended December 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.

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

During the year ended December 31, 2020, we received an early lease termination payment of approximately $3.0 million from an outgoing tenant on a property, 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 the year ended December 31, 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 year ended December 31, 2020, primarily due to additional revenues earned during 2020 on farms that were vacant for a portion of 2019.

Tenant reimbursement revenue increased for the year ended December 31, 2020, primarily due to additional payments made by certain tenants on our behalf (pursuant to the lease agreements) to an unconsolidated entity of ours that conveys water to the respective properties.

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

Tenant reimbursement revenue decreased for the year ended December 31, 2021, primarily due to additional payments made during the prior year 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

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Properties acquired or disposed of 12,138 959 11,179 1,165.7%

Vacant or self-operated properties 134 146 (12) (8.2)%

Total Depreciation and amortization expense $ 27,183 $ 16,655 $ 10,528 63.2%

Depreciation and amortization expense on a same-property basis increased for year ended December 31, 2020, as compared to the prior year, 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 a same-property basis decreased for the year ended December 31, 2021, as compared to the prior year, primarily due to the expiration of certain lease intangible amortization periods subsequent to December 31, 2019, partially offset by an increase in depreciation associated with additional capital expenditures on certain of our farms.

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

Depreciation and amortization expense from vacant or self-operated properties decreased slightly for the year ended December 31, 2020, as compared to the prior year, primarily due to certain tangible assets on two farms that were vacant during a portion of the prior year reaching the end of their useful lives during the year ended December 31, 2020.

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 years ended December 31, 2021 and 2020 (dollars in thousands):

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Properties acquired or disposed of 337 86 251 291.9%

Vacant or self-operated properties 16 18 (2) (11.1)%

Tenant-reimbursed property operating expenses (1)

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Same-property Basis – 2021 compared to 2020

Property operating expenses decreased for the year ended December 31, 2020, primarily due to additional costs incurred during the prior year for the above-referenced generator rentals and for obtaining certain permits on one of our California properties.

Property operating expenses increased for the year ended December 31, 2021, primarily due to an increase in our obligation to reimburse one of our tenants for water usage over a specific cost threshold in accordance with the lease.

We currently do not expect such elevated costs to continue beyond 2021.

In addition, during the year ended December 31, 2021, we incurred additional legal fees in connection with protecting water rights on certain farms in California and higher property tax expenses due to certain of the lease renewals executed during the year converting the leases from a triple-net structure to a partial-net structure, with us, as landlord, now responsible for the property taxes on these properties.

These increases were partially offset by lower costs incurred related to repairs and maintenance of certain properties compared to the prior year.

Other – 2021 compared to 2020

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

Property operating expenses on vacant or self-operated properties remained flat for the year ended December 31, 2020.

Tenant reimbursement expense increased for the year ended December 31, 2020, primarily due to additional property taxes paid by us on certain of our properties and increased miscellaneous operating costs incurred by us in connection with our ownership interest in an unconsolidated entity.

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

Tenant reimbursement expense decreased for the year ended December 31, 2021, primarily due to a decrease in miscellaneous property-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, and the administration fee due to our Administrator for the years ended December 31, 2020 and 2019 (dollars in thousands):

For the Years Ended December 31,

2020 2019 $ Change % Change

Base management fee, gross (1)

The following table provides the calculations of the base management and incentive fees due to our Advisor pursuant to the Prior Advisory Agreement (which was in effect from January 1, 2020, through June 30, 2021) and the Current Advisory Agreement (which has been in effect since July 1, 2021) for the years ended December 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):

Quarters Ended Year to Date

March 31 June 30 September 30 December 31

FY 2021 Fee Calculations:

Base Management Fee:

Gross Tangible Real Estate (1)(2)

$ 1,095,439 $ 1,101,071 $ 1,165,366 $1,223,935

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

Quarterly rate 0.125 % 0.125 % 0.150 % 0.150 %

Base management fee (3)

$ 1,370 $ 1,376 $ 1,748 $ 1,835 $ 6,329

Base management fee, net 4,289 2,080 2,209 106.2%

Incentive fee, gross (1)

Incentive Fee:

Total Adjusted Common Equity (1)(2)

$ 228,161 $ 248,501 $ 304,164 $ 334,912

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

Incentive fee, net 3,038 847 2,191 258.7%

Capital gains fee, gross (1)

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

Capital gains fee, net — — — —%

Total fees to Adviser, gross 7,327 4,470 2,857 63.9%

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

First hurdle quarterly rate 1.750 % 1.750 % 1.750 % 1.750 %

First hurdle threshold $ 3,993 $ 4,349 $ 5,323 $ 5,861

Second hurdle quarterly rate 2.1875 % 2.1875 % 2.1875 % 2.1875 %

Second hurdle threshold $ 4,991 $ 5,436 $ 6,654 $ 7,326

Pre-Incentive Fee FFO (1)

$ 5,810 $ 3,867 $ 6,268 $ 8,968

Total fees to Adviser, net $ 7,327 $ 2,927 $ 4,400 150.3%

Administration fee to Administrator (1)

100% of Pre-Incentive Fee FFO in excess of first hurdle threshold, up to second hurdle threshold $ 998 $ — $ 945 $ 1,466

20% of Pre-Incentive Fee FFO in excess of second hurdle threshold 164 — — 328

Total Incentive fee (3)

$ 1,162 $ — $ 945 $ 1,794 $ 3,901

Total fees due to Adviser, net $ 2,532 $ 1,376 $ 2,693 $ 3,629 $ 10,230

FY 2020 Fee Calculations:

Base Management Fee:

Gross Tangible Real Estate (1)(2)

$ 827,256 $ 837,603 $ 862,329 $ 903,812

Quarterly rate 0.125 % 0.125 % 0.125 % 0.125 %

Base management fee (3)

$ 1,034 $ 1,047 $ 1,078 $ 1,130 $ 4,289

Incentive Fee:

Total Adjusted Common Equity (1)(2)

$ 173,358 $ 176,768 $ 172,490 $ 177,093

First hurdle quarterly rate 1.750 % 1.750 % 1.750 % 1.750 %

First hurdle threshold $ 3,034 $ 3,093 $ 3,019 $ 3,099

Second hurdle quarterly rate 2.1875 % 2.1875 % 2.1875 % 2.1875 %

Second hurdle threshold $ 3,792 $ 3,867 $ 3,773 $ 3,874

Pre-Incentive Fee FFO (1)

$ 6,670 $ 2,334 $ 4,106 $ 4,414

100% of Pre-Incentive Fee FFO in excess of first hurdle threshold, up to second hurdle threshold $ 758 $ — $ 754 $ 775

20% of Pre-Incentive Fee FFO in excess of second hurdle threshold 576 — 67 108

Total Incentive fee (3)

$ 1,334 $ — $ 821 $ 883 $ 3,038

Total fees due to Adviser, net $ 2,368 $ 1,047 $ 1,899 $ 2,013 $ 7,327

(1) As defined in the Advisory Agreements.

(2) As of the end of the respective prior quarters.

(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 the year ended December 31, 2020, as compared to the prior year, primarily due to a change in the calculation of the base management fee.

For the year ended December 31, 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 and 2020, whereas the base management fee for the year ended December 31, 2019, was calculated as 0.5% (2.0% per annum) of either the Total Adjusted Equity (through June 30, 2019) or the Total Adjusted Common Equity (from July 1, 2019, through December 31, 2019) 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 year ended December 31, 2019.

Our Adviser earned incentive fees during each of the years ended December 31, 2020 and 2019 due to our Pre-Incentive Fee FFO (as defined in the respective agreements with our Adviser) exceeding the required hurdle rate of the equity base applicable to each period.

Incentive fees were earned during the first, third, and fourth quarters of fiscal year 2020, as compared to just the fourth quarter of fiscal year 2019.

The base management fee increased during the year ended December 31, 2021, as compared to the prior year, primarily due to additional assets acquired since December 31, 2019, and an increase in the annual rate applied to the prior calendar quarter’s

Gross Tangible Real Estate Assets (from 0.50% pursuant to the Prior Advisory Agreement to 0.60% pursuant to the Current Advisory Agreement), effective July 1, 2021.

Our Adviser earned incentive fees during each of the years ended December 31, 2021 and 2020 due to our Pre-Incentive Fee FFO (as defined in the Advisory Agreements) exceeding the required hurdle rate of the applicable equity base during each of the first, third, and fourth quarters of fiscal years 2021 and 2020.

Our Adviser did not earn a capital gains fee during the year ended December 31, 2021 or 2020, as we did not sell any of our properties during either period.

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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.

General and administrative expenses increased during the year ended December 31, 2020, as compared to the prior year, primarily due to increases in certain professional fees and stockholder-related expenses.

During the year ended December 31, 2020, we incurred additional legal fees related to an offering that was subsequently aborted, at which time the costs were expensed, and stockholder-related expenses were higher due to a one-time listing fee paid to Nasdaq for the listing of our Series B Preferred Stock.

General and administrative expenses increased slightly during the year ended December 31, 2021, as compared to the prior year, primarily due to an increase in due diligence costs associated with potential acquisitions that were subsequently aborted, at which time the costs were expensed, and higher professional fees related to additional appraisal costs.

These increases were largely offset by a decrease in stockholder-related expenses due to a one-time listing fee paid to Nasdaq in the prior year for the listing of our Series B Preferred Stock.

A comparison of results of other components contributing to net loss attributable to common stockholders for the years ended December 31, 2021 and 2020 is below (dollars in thousands):

For the Years Ended December 31,

2021 2020 $ Change

Operating income

$31,704 $27,651 $4,053 14.7%

Other income (expense)

2,291 1,872 419 22.4%

Interest expense

(24,883) (20,621) (4,262) 20.7%

Dividends declared on Series A and Series D Term Preferred Stock

(3,068) (1,833) (1,235) 67.4%

Loss on dispositions of real estate assets, net

(2,537) (2,180) (357) 16.4%

Property and casualty recovery, net

68 70 (2) (2.9)%

Loss from investments in unconsolidated entities

(61) (4) (57) NM

Total other expense, net

(28,190) (22,696) (5,494) 24.2%

3,514 4,955 (1,441) (29.1)%

Net income attributable to non-controlling interests

(19) (29) 10 (34.5)%

Net income attributable to the Company

3,495 4,926 (1,431) (29.0)%

Aggregate dividends declared on and charges related to Series B and Series C Preferred Stock

(12,258) (9,322) (2,936) 31.5%

Net loss attributable to common stockholders

$ (8,763) $ (4,396) $ (4,367) 99.3%

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 consolidated financial statements) and interest earned on short-term investments, increased for the year ended December 31, 2021, as compared to the prior year, primarily driven by additional interest patronage received from Farm Credit (due to increased borrowings from Farm Credit).

During the year ended December 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 prior year.

The interest patronage received from Farm Credit during 2020 that related to 2019 interest expense 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 year ended December 31, 2020, we also received approximately $306,000 of additional interest patronage from Farm Credit, as certain Farm Credit associations prepaid a portion of the 2020 interest patronage (which relates to interest accrued during 2020 but is typically received in 2021).

In addition, Other income for the year ended December 31, 2020, also includes $200,000 of income as a result of a commission rebate received in connection with a property acquired during the period.

Other income for the year ended December 31, 2019, also includes an aggregate of approximately $208,000 of additional income as a result of accumulated deferred revenue related to a sale agreement for one of our farms that was later terminated and a commission rebate received in connection with a property acquired during the period.

During the year ended December 31, 2021, we recorded approximately $2.2 million of interest patronage from Farm Credit related to interest accrued during 2020, compared to approximately $1.6 million of interest patronage recorded during the prior year.

Interest expense increased for the year ended December 31, 2021, as compared to the prior year, 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 year ended December 31, 2020, was approximately $502.4 million, as compared to approximately $397.9 million for the prior year.

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 3.95% for each of the years ended December 31, 2020 and 2019.

During each of the years ended December 31, 2020 and 2019, we paid aggregate distributions on our Series A Term Preferred Stock (which distributions are treated similar to interest expense) of approximately $1.8 million.

During the year ended December 31, 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 during the year ended December 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 years ended December 31, 2020 and 2019 related to insurance recoveries received for certain irrigation improvements that were damaged due to natural disasters.

During the year ended December 31, 2020, we recognized a loss in an unconsolidated entity of approximately $4,000.

We first acquired an interest in this entity during the three months ended September 30, 2019;

there was no material gain or loss recognized during the year ended December 31, 2019.

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 year ended December 31, 2021, was approximately

$637.6 million, as compared to approximately $502.4 million for the prior year.

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 3.72% and 3.95% for the years ended December 31, 2021 and 2020, respectively.

During the year ended December 31, 2021, we paid aggregate distributions on our Series A Term Preferred Stock and Series D Term Preferred Stock of approximately $3.1 million.

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

During the year ended December 31, 2020, we paid distributions on our Series A Term Preferred Stock of approximately $1.8 million.

During both years ended December 31, 2021 and 2020, we recorded net losses on dispositions of real estate assets primarily due to the disposal of certain irrigation and other improvements on certain of our farms.

The net property and casualty recovery recorded during the years ended December 31, 2021 and 2020 related to insurance recoveries received for certain improvements that were damaged due to natural disasters.

During the years ended December 31, 2021 and 2020, we recognized a loss from investments in an unconsolidated entity of approximately $61,000 and $4,000, respectively.

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

In addition, during the year ended December 31, 2020, we also wrote off approximately $44,000 of offering costs related to redemptions of our Series B Preferred Stock.

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 $75.3 million, consisting of approximately $51.2 million in cash on hand and, based on the current level of collateral pledged, approximately $24.2 million of availability under the New 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 the 2022 MetLife Facility), and issuances of additional equity securities.

Our current available liquidity is approximately $138.1 million, consisting of approximately $24.1 million in cash on hand and, based on the current level of collateral pledged, approximately $114.0 million of availability under the 2022 MetLife Facility (subject to compliance with covenants) and other undrawn notes or bonds.

In addition, we currently have certain properties valued at a total of approximately $37.2 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 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 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 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, if any), 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.

Notwithstanding the ongoing COVID-19 pandemic, including surges in certain variants of COVID-19, 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.

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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 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.

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 several months.

We also have many other properties that are in various other stages of our due diligence process.

However, all potential acquisitions will be subject to our due diligence investigation of such properties, and there can be no assurance that we will be successful in identifying or acquiring any properties in the future.

Operating Obligations

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

Location Farm

Acreage Total

Commitment Obligated

Amount Expended

or Accrued as of

December 31, 2021

Lucie, FL 549 $ 230 Q3 2022 $ 111

Santa Barbara, CA 271 4,000 (2)

Q3 2022 2,427

Manatee, FL 590 280 Q4 2022 —

Manatee, FL 271 280 Q4 2022 —

Hillsborough, FL 55 2,250 (2)

Q4 2022 1,554

Charlotte, FL 975 3,000 (2)

Napa, CA 270 1,548 (2)

Q3 2023 1,019

Columbia, OR 157 1,800 (2)

Q3 2024 1,146

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

Wicomico & Caroline, MD, and Sussex, DE 833 115 Q3 2030 49

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

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

Cash Flow Resources

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

For the Years Ended December 31,

2021 2020 $ Change % Change

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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 increased for the year ended December 31, 2020, as compared to the prior year, primarily due to additional rental payments received from recent acquisitions and an early lease termination payment of approximately $3.0 million received from the outgoing tenant on four of our farms in Arizona, partially offset by increases in the amount of fees paid to our Adviser and interest payments made.

Cash provided by operating activities increased for the year ended December 31, 2021, as compared to the prior year, 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 increase in cash used in investing activities for the year ended December 31, 2020, as compared to the prior-year period, was primarily due to an increase in aggregate cash paid for acquisitions of new farms and capital improvements on existing farms during the year ended December 31, 2020, which was approximately $10.2 million more than the prior year.

The increase in cash used in investing activities for the year ended December 31, 2021, as compared to the prior year, was primarily due to an increase in aggregate cash paid for acquisitions of new farms, partially offset by a decrease in the amount of cash paid for capital improvements on existing farms during the year ended December 31, 2021.

Financing Activities

The increase in cash provided by financing activities during the year ended December 31, 2020, as compared to the prior-year period, was primarily due to an increase in aggregate net cash proceeds from equity issuances (including the Series B Preferred Stock, the Series C Preferred Stock, and our common stock) of approximately $14.6 million, partially offset by an increase in distributions of approximately $6.8 million and a decrease in net borrowings of approximately $4.2 million for the year ended December 31, 2020, as compared to that of the prior year.

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

While $113.0 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 year ended December 31, 2021, as compared to the prior year, was primarily due to an increase in aggregate net cash proceeds from equity issuances (including on our common stock and Series C Preferred Stock) of approximately $103.0 million and the issuance of our Series D Term Preferred Stock (which, after voluntarily redeeming our Series A Term Preferred Stock in full, resulted in net cash proceeds of approximately $31.6 million), partially offset by decrease in net borrowings of approximately $98.7 million and an increase in total distributions of approximately $8.2 million.

MetLife Facility

As amended, the 2022 MetLife Facility currently consists of an aggregate of $175.0 million of term notes and $75.0 million of revolving equity lines of credit.

We currently have $36.9 million outstanding on the term notes and $100,000 outstanding under the lines of credit.

While $213.0 million of the full commitment amount under the 2022 MetLife Facility remains undrawn, based on the current level of collateral pledged, we currently have approximately $110.3 million of availability under the 2022 MetLife Facility.

The draw period for the 2020 MetLife Term Note expires on December 31, 2022, and the draw period for the 2022 MetLife Term Note expires on December 31, 2024.

After these dates, MetLife has no obligation to disburse any additional undrawn funds under the term notes.

Farmer Mac Facility

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

As amended on December 10, 2020, our agreement with Farmer Mac Facility provides for bond issuances up to an aggregate amount of $225.0 million by May 31, 2023, after which, Farmer Mac has no obligation to purchase additional bonds under this facility.

To date, we have issued aggregate bonds of approximately $98.4 million under the Farmer Mac Facility.

Farm Credit and Other Lenders

Since September 2014, we have closed on 41 separate loans with 11 different Farm Credit associations (for additional information on these associations, see Note 4, “ Borrowings ,” within the accompanying notes to our consolidated financial statements).

We also currently have borrowing relationships with three 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.

We currently have one farm worth approximately $1.6 million that is unencumbered and eligible to be pledged as collateral.

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 consolidated financial statements).

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

In addition, we expect to enter into additional borrowing agreements with existing and new lenders in connection with certain potential new acquisitions in the future.

Equity Capital

The following table provides information on equity sales that have occurred since January 1, 2020, through the date of this filing (dollars in thousands, except per-share amounts):

The following table provides information on equity sales that have occurred since January 1, 2021 (dollars in thousands, except per-share amounts):

Type of Issuance Number of

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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)

3,070,535 $ 24.83 $ 76,228 $ 69,855

Series D Term Preferred Stock (4)

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

Common Stock – Follow-on (4)

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

Common Stock – ATM Program 7,990,994 21.70 173,428 171,693

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(3) Excludes approximately 11,021 shares issued pursuant to the DRIP.

(4) Includes the underwriters’ exercise in full of the 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 consolidated financial statements) permits us to issue up to an aggregate of $1.0 billion in securities (including approximately $650.0 million originally 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 $34.8 million of Series C Preferred Stock, $60.4 million of Series D Term Preferred Stock, and $75.3 million of common stock (including approximately $48.0 million through our ATM Program) respectively, under the 2020 Registration Statement.

Our Registration Statement (as defined in Note 8, “ Equity—Registration Statement ,” within the accompanying notes to our 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 $103.4 million of Series C Preferred Stock (including approximately $257,000 issued pursuant to the DRIP), $60.4 million of Series D Term Preferred Stock, and $245.6 million of common stock (including approximately $4.4 million of 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.

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Funds from Operations, Core Funds from Operations, and Adjusted Funds from Operations

The National Association of Real Estate Investment Trusts (“NAREIT”) developed funds from operations (“FFO”) as a relative non-GAAP supplemental measure of operating performance of an equity REIT to recognize that income-producing real estate

historically has not depreciated on the same basis as determined under GAAP.

FFO, as defined by NAREIT, is net income (computed in accordance with GAAP), excluding gains or losses from sales of property and impairment losses on property, plus depreciation and amortization of real estate assets, and after adjustments for unconsolidated partnerships and joint ventures.

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 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 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.

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We believe the foregoing adjustments aid our investors’ understanding of our ongoing operational performance.

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.

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.

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(12,258) (9,322)

Net loss available to common stockholders and non-controlling OP Unitholders (4,367) (2,478)

Net loss attributable to common stockholders and non-controlling OP Unitholders (8,744) (4,367)

Real estate and intangible depreciation and amortization 27,183 16,655

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Acquisition- and disposition-related expenses 355 210

Other nonrecurring charges (receipts), net (3)

Other nonrecurring (receipts) charges, net (3)

CFFO available to common stockholders and non-controlling OP Unitholders 21,355 14,855

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AFFO available to common stockholders and non-controlling OP Unitholders $ 20,402 $ 14,346

Weighted average common stock outstanding—basic & diluted 22,258,121 19,602,533

Weighted-average common OP Units outstanding 131,745 235,613

Weighted-average common stock outstanding—basic and diluted 30,357,268 22,258,121

Weighted-average common non-controlling OP Units outstanding 166,067 131,745

Weighted-average total common shares outstanding 30,523,335 22,389,866

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Diluted AFFO per weighted-average total common share $ 0.67 $ 0.64

(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 and Series C Preferred Stock that were redeemed, and (iii) 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 costs related to an aborted offering and a one-time listing application fee that were charged to expense during the year ended December 31, 2020, partially offset by 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.

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

Distributions declared per total common share $ 0.54 $ 0.54

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

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

(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 improvements by natural disasters on certain of our farms, (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, in 2020 only, costs expensed during the year related to an aborted offering, 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), (ii) the pro-rata write-off of offering costs related to shares of the Series B Preferred Stock and Series C Preferred Stock that were redeemed, which were noncash charges, and (iii) our remaining pro-rata share of income (loss) recorded from investments in unconsolidated entities during the respective periods.

Net Asset Value

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Purchase Price 27 11,458 9,985 $ 288,781 $ 290,518 19.8%

Internal Valuation 3 6,194 4,730 24,978 42,300 2.9%

Third-party Appraisal (2)

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

Appraisal Assumptions Internal Valuation Assumptions

Average Range

Land Value (per farmable acre) $678 – $128,781 $34,305 $5,504 – $5,504 $5,504

Market Rent (per farmable acre) $421 – $3,759 $ 1,991

Market NOI (per farmable acre) $158 – $3,543 $1,482 $214 – $214 $214

Market Capitalization Rate 3.00% – 10.50% 5.49% 4.00% – 4.00% 4.00%

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Total portfolio fair value as of September 30, 2021 $ 1,314,670

Acquisition of 14 new farms during the three months ended December 31, 2020 191,643

Plus (less) net value appreciation (depreciation) during the three months ended December 31, 2020:

Acquisition of seven new farms during the three months ended December 31, 2021 146,842 (1)

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

One cooling facility valued internally $ 2,323

24 farms valued via third-party appraisals (184)

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Total portfolio fair value as of December 31, 2021 $ 1,463,651

(1) Includes approximately $1.2 million paid to exercise a water purchase option that was acquired in connection with one of the farms that was acquired during the three months ended December 31, 2021.

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 December 31, 2021, was approximately $663.8 million, as compared to a carrying value (excluding unamortized related debt issuance costs) of approximately $671.6 million.

In addition, due to the short-term maturity of our Series A Term Preferred Stock (which had a mandatory redemption date of September 30, 2021, and was redeemed on February 12, 2021), its carrying value (exclusive of unamortized offering costs) of approximately $28.8 million was deemed to approximate its fair value as of December 31, 2020.

The fair value of our Series B Preferred Stock was determined using the closing stock price as of December 31, 2020, of $25.05 per share.

The fair values of our Series B Preferred Stock and Series D Term Preferred Stock were determined using the closing stock prices as of December 31, 2021, of $26.50 per share and $25.64 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 December 31, 2021 (see Exhibit 99.1 to this Form 10-K).

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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).

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 cost 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).

The fair values presented above and their usage in the calculation of net asset value per share presented below have been prepared by and is the responsibility of management.

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Estimated NAV available to common stockholders and non-controlling OP Unitholders $ 492,507

Total common shares and OP Units outstanding (6)

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

Estimated NAV per common share and non-controlling OP Unit $ 14.31

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(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 at its liquidation value.

(5) The Series B Preferred Stock was valued based on its closing stock price as of December 31, 2020, while the Series C Preferred Stock was valued at its liquidation values, as discussed above.

(6) Includes 26,219,019 shares of common stock and zero OP Units held by non-controlling OP Unitholders.

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

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

(6) Includes 34,210,013 shares of common stock and 204,778 OP Units held by non-controlling OP Unitholders.

A quarterly rollforward in the estimated NAV per common share and OP Unit for the three months ended December 31, 2021, is provided below:

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

(i) no change due to the farms that were valued during the three months ended December 31, 2020, (ii) an increase of $0.19 per share due to the aggregate depreciation and amortization expense recorded during the three months ended December 31, 2020, and (iii) a decrease of $0.04 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.

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.

(i) an increase of $0.06 per share due to the farms that were valued during the three months ended December 31, 2021, (ii) an increase of $0.23 per share due to the aggregate depreciation and amortization expense recorded during the three months ended December 31, 2021, and (iii) a decrease of $0.11 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.

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 $12.23 as of December 31, 2020, based on the calculation above, the closing price of our common stock on December 31, 2020, was $14.64.

For example, while we estimated our NAV per common share to be $14.31 as

of December 31, 2021, based on the calculation above, the closing price of our common stock on December 31, 2021, was $33.76 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.

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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-K

Item 7. Management’s Discussion and Analysis