What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-05-07 compared with 2023-11-07 · 214 added, 280 removed, 427 unchanged (54% of the section changed)

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We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, after the date of this Quarterly Report on Form 10-Q (the “Quarterly Report”), except as required by law.

This Quarterly Report includes statistical and other industry and market data that we obtained from industry publications and research, surveys, and studies conducted by third parties.

Industry publications and third-party research, surveys, and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information.

We have not independently verified the information contained in such sources

All references to “we,” “our,” “us” and the “Company” in this Quarterly Report mean Gladstone Land Corporation and its consolidated subsidiaries, except where it is made clear that the term refers only to Gladstone Land Corporation.

We are an externally-managed, agricultural real estate investment trust (“REIT”) that is engaged in the business of owning and leasing farmland.

With the exception of 1 farm in California and 11 farms in Michigan which are currently self-operated (on a temporary basis and via management agreements with unrelated third-parties), we are not a grower of crops, nor do we typically farm the properties we own.

We are not a grower of crops, nor do we typically farm the properties we own.

We currently own 168 farms comprised of 111,836 acres located across 15 states in the U.S.

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Our investment focus is 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 following table summarizes the different geographic locations (by state) of our farms owned as of and during the nine months ended September 30, 2023 and 2022 (dollars in thousands):

As of and For the Nine Months Ended September 30, 2023 As of and For the Nine Months Ended September 30, 2022

The following table summarizes the different geographic locations (by state) of our farms owned as of and during the three months ended March 31, 2024 and 2023 (dollars in thousands):

As of and For the Three Months Ended March 31, 2024 As of and For the Three Months Ended March 31, 2023

Revenue % of Total

Revenue Number

Revenue % of Total

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Oregon 6 898 0.8% 566 2.8% 6 898 0.8% 518 2.4%

Nebraska 9 7,782 6.7% 1,018 1.5% 9 7,782 6.7% 855 1.3%

Michigan 23 1,892 1.7% 240 1.2% 23 1,892 1.6% 246 1.2%

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Georgia 2 230 0.2% 56 0.3% 2 230 0.2% 56 0.3%

New Jersey 3 116 0.1% 97 0.1% 3 116 0.1% 97 0.1%

North Carolina 2 310 0.3% 42 0.2% 2 310 0.3% 33 0.2%

New Jersey 3 116 0.1% 32 0.2% 3 116 0.1% 32 0.1%

Nebraska 9 7,782 7.0% 25 0.1% 9 7,782 6.7% 369 1.7%

Delaware 1 180 0.2% 19 0.1% 1 180 0.2% 19 0.1%

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

Currently, 105 of our farms are leased on a pure, triple-net basis, 46 farms are leased on a partial-net basis (with us, as landlord, responsible for all or a portion of the related property taxes), 3 farms are leased on a single-net basis (with us, as landlord, responsible for the related property taxes, as well as certain maintenance, repairs, or insurance costs), 12 farms are self-operated, and 3 farms are vacant.

Currently, 105 of our farms are leased on a pure, triple-net basis, 45 farms are leased on a partial-net basis (with us, as landlord, responsible for all or a portion of the related property taxes), 3 farms are leased on a single-net basis (with us, as landlord, responsible for the related property taxes, as well as certain maintenance, repairs, or insurance costs), 11 farms are direct-operated, and 4 farms are vacant.

Additionally, 27 of our farms are leased under agreements that include a variable rent component, called “participation rents,” that are based on the gross revenues earned on the respective farms (though such leases generally include a guarantee of a minimum amount of rental income).

Lease Expirations

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

The following table summarizes the lease expirations by year for the farms owned and with leases in place as of September 30, 2023 (dollars in thousands):

The following table summarizes the lease expirations by year for the farms owned and with leases in place as of March 31, 2024 (dollars in thousands):

Year Number of

Acreage % of Total

Acreage Lease Revenues for the

Nine Months Ended September 30, 2023

Acreage Lease Revenue for the

Three Months Ended March 31, 2024

2024 7 7,891 7.1% $ 1,782 9.0%

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2028 14 5,198 4.6% 1,395 7.0%

2029 7 2,052 1.8% 1,336 6.7%

Thereafter 42 54,298 48.6% 9,871 49.8%

14 773 0.7% 126 0.6%

Terminated/expired leases

— 786 0.7% — —%

Totals 113 111,836 100.0% $ 19,826 100.0%

(1) Certain lease agreements encompass multiple farms.

(2) Includes one lease with a tenant termination option that expired subsequent to September 30, 2023, without being exercised.

Also includes four leases on properties in Michigan (encompassing 14 total farms) that expired subsequent to September 30, 2023.

(2) Primarily consists of ancillary leases (e.g., renewable energy leases;

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etc.) with varying expirations on certain of our farms.

Also includes one farm that was self-operated as of September 30, 2023, for which we recorded approximately $77,000 of lease revenues attributable to the former tenant during the three months ended March 31, 2023.

We currently have three agricultural leases scheduled to expire within the next six months.

We are currently exploring a variety of options with the underlying properties, including negotiating lease terms with existing and potential new tenants, discussing sale options with prospective buyers, and considering operating the properties ourselves via third-party management agreements.

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.

We currently have five agricultural leases scheduled to expire within the next six months.

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

Regarding all vacancies and 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.

Recent Developments

Portfolio Activity—Existing Properties

Property Sale

On January 11, 2024, we completed the sale of a 3,748-acre farm in Martin County, Florida, for approximately $65.7 million.

Including closing costs, we recognized a net gain on the sale of approximately $10.4 million.

During the three months ended March 31, 2024 and 2023, we recorded lease revenue related to this farm of approximately $0 and $732,000, respectively.

Leasing Activity

The following table summarizes certain leasing activity that has occurred on our existing properties since July 1, 2023, through the date of this filing (dollars in thousands, except for footnotes):

PRIOR LEASES (1)

NEW LEASES (2)

The following table summarizes certain leasing activity that has occurred on our existing properties since January 1, 2024, through the date of this filing (dollars in thousands, except for footnotes):

PRIOR LEASES NEW LEASES (1)

Locations Number

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CA & CO 4 6,344 $ 5,444 1 3 / 1 / 0 $ 4,645 6.1 1 3 / 1 / 0

(1) Prior leases include one lease that was terminated early during the three months ended September 30, 2023.

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

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

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(3) “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 .”

Water Acquisition

On October 9, 2023, we entered into a water transfer agreement with Byron-Bethany Irrigation District (“BBID”), a multi-county water district located in Contra Costa County, California.

Pursuant to the agreement, which expires on February 28, 2031, we may elect to purchase up to 15,000 acre-feet of water per water year during years in which BBID has a surplus supply of water.

Initial consideration consisted of $750,000, plus incremental costs based on the number of acre-feet we elected to purchase for the 2023 water year.

As such, on October 12, 2023, we paid approximately $1.2 million (including the initial payment of $750,000) to purchase 7,000 acre-feet of water for the 2023 water year.

Our ability to purchase water under this contract in future years will be subject to BBID having surplus water available in such water years, and prices will be determined based on water transfer rates established by certain Federal and state governing agencies.

To the extent surplus water supplies are available, water purchases in future years are at our sole option (up to a maximum of 15,000 acre-feet of water per water year), and we are not obligated to purchase water in any water year in which BBID has surplus water supplies.

In addition, all water transfers are subject to approval by the U.S.

Department of Interior, Bureau of Reclamation.

We plan to store this water in a groundwater recharge facility recently constructed on one of our farms, and we currently intend to hold this water for the long-term for future use on our farms.

Self-operated, Non-accrual, and Vacant Properties

During a portion of the nine months ended September 30, 2023, we had 18 farms (4 in California and 14 in Michigan) that were either self-operated or on which lease revenues were recognized on a cash basis (due to credit issues with three tenants causing us to determine that the full collectibility of the remaining rental payments under the respective leases were not deemed to be probable).

Currently, 1 farm in California and 11 farms in Michigan are self-operated (on a temporary basis via management agreements with unrelated third-parties).

One California farm was fully re-leased during the three months ended September 30, 2023, and the other two California farms are currently expected to return to full accrual status later in the year pending, among other factors, continued on-time rental payments made by the tenant.

Additionally, three farms in Michigan are currently vacant.

Regarding self-operated and vacant farms, we are in discussions with potential tenants to lease these farms and currently expect to come to agreements within the next three months;

however, there can be no guarantee that we will be able to reach lease agreements with tenants at favorable terms to us, or at all.

During the three and nine months ended September 30, 2023, we recorded aggregate lease revenues related to the aforementioned farms of approximately $156,000 and $782,000, respectively, as compared to approximately $525,000 and $1.6 million during the respective prior-year periods.

Vacant, Direct-operated, and Non-accrual Properties

During a portion of the three months ended March 31, 2024, we had 20 farms (5 in California, 14 in Michigan, and 1 in Washington) that were either vacant or on which lease revenues were recognized on a cash basis (due to credit issues with two tenants causing us to determine that the full collectability of the remaining rental payments under the respective leases were not deemed to be probable).

During the three months ended March 31, 2024, we recorded lease revenue related to the aforementioned farms of approximately $293,000 (including no participation rents), as compared to approximately $1.0 million (including approximately $72,000 of participation rents) during the prior-year period.

During the three months ended March 31, 2024, we entered into a lease agreement with a new tenant on one of the California farms, and subsequent to March 31, 2024, we entered into a short-term management agreement with an unrelated third-party to operate 11 farms in Michigan.

As such, currently, 4 farms (3 in Michigan and 1 in Washington) are vacant, 11 farms in Michigan are direct-operated, and 4 farms in California remain on non-accrual status.

Regarding vacant and direct-operated farms, we are exploring both leasing and selling options, and we are in discussions with both potential tenants and potential buyers for these farms.

We currently expect to come to agreements within the next six months on these farms;

however, there can be no guarantee that we will be able to reach lease or sale agreements with tenants or buyers at favorable terms, or at all.

Regarding the properties currently on non-accrual status, the tenant on two of the four farms is current with their rental payments to us.

We are continuing to work with the tenant leasing the other two farms and will seek to come to an agreement for the remaining rental payments, if possible.

Such agreement, if one can be reached, may include placing the tenant on a payment plan, deferring a portion of the rent owed to us, or agreeing to terminate the lease.

In the event of a termination, we estimate that we would be able to find new tenants to lease each of these properties to at market rental rates within 1 to 12 months.

Water Asset Acquisitions

In addition, from March 2023 through March 2024, we elected to participate in a groundwater recharge program established by Westlands Water District (“WWD”), a water district located in Fresno County, California.

Under the program, WWD paid for surplus surface water to be delivered to individual landowners’ properties with district-approved groundwater recharge facilities, also known as “water banks.” The landowner was allowed to keep 50% of the net amount of groundwater credits generated under the program (after allowing for certain leave-behind and evaporative losses), and the remaining 50% would be used to recharge the aquifer and retained by WWD.

Delivery of water under this program was subject to surplus water availability at WWD’s discretion.

WWD terminated the program for the 2024 water year effective March 5, 2024.

To date, we have obtained 2,524 acre-feet of water credits, which represents 50% of the total net water credits generated and confirmed by WWD under the program thus far, at a total carrying value of approximately $716,000.

In addition, as a result of being granted these water credits in exchange for transferring and storing this surplus water on behalf of WWD, we recorded approximately $426,000 of non-cash revenue during the three months ended March 31, 2024, which represents the estimated fair value of the water credits obtained during the period.

During 2023, we also entered into various other agreements with certain third parties (including local water districts and private individuals) to either buy water directly, buy a portion of other water districts’ surface water allocations in future years in which allocations are granted, or to store surface water on others’ behalf in one of our groundwater recharge facilities in exchange for a portion of the net groundwater credits produced and recognized by the respective water district.

To date, we have obtained 549 acre-feet of water credits as a result of these agreements at a total carrying value of approximately $166,000.

We currently own a total of 49,076 acre-feet of long-term water assets, and our investments in these long-term water assets have an aggregate carrying value of approximately $35.4 million.

To date, we have invested approximately $1.5 million to construct groundwater recharge facilities on two of our farms, and we have invested an additional $2.3 million in the aggregate in connection with these agreements that are expected to result in additional groundwater credits in the future;

however, the amount and timing of these credits, if any, is currently unknown and is dependent upon and subject to the recognition of such credits by the respective water districts, in their sole discretion.

Financing Activity

Debt Activity

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, 2024, we recorded interest patronage of approximately $1.9 million related to interest accrued on the Farm Credit Notes Payable during the year ended December 31, 2023, and during th e three months ended September 30, 2023 , we received approximately $111,000 of interest patronage, as certain Farm Credit associations paid a portion of the 2023 interest patronage (which relates to interest accrued during 2023 but is typically paid during the first half of 2024) early.

In total, 2023 interest patronage resulted in a 22.0% reduction (approximately 101 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 condensed consolidated financial statements.

Loan Repayments

From July 1, 2023, through the date of this filing, we repaid approximately $6.9 million of maturing loans.

On a weighted-average basis, these borrowings bore interest at a stated rate of 3.39% and an effective interest rate (after interest patronage, where applicable) of 3.00%.

From January 1, 2024, through the date of this filing, we repaid approximately $16.2 million of maturing bonds.

On a weighted-average basis, these borrowings bore interest at an annual rate of 3.15%.

Equity Activity

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On November 9, 2022, we filed a prospectus supplement with the SEC for a continuous public offering (the “Series E Offering”) of up to 8,000,000 shares of our newly-designated 5.00% Series E Cumulative Redeemable Preferred Stock, par value $0.001 per share (the “Series E Preferred Stock”), on a “reasonable best efforts” basis through Gladstone Securities at an offering price of $25.00 per share.

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

The following table summarizes the sales of our Series E Preferred Stock that occurred from July 1, 2023, through the date of this filing (dollars in thousands):

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

The following table summarizes the sales of our Series E Preferred Stock that occurred from January 1, 2024, through the date of this filing (dollars in thousands):

Shares Sold Weighted-average

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however, there can be no assurance that a listing will be achieved in such timeframe, or at all.

Common Stock—At-the-Market Program

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

(each a “Sales Agent”), that, as subsequently amended, permitted us to issue and sell, from time to time and through the Sales Agents, shares of our common stock having an aggregate offering price of up to $260.0 million (the “ATM Program”).

On April 13, 2023, we entered into separate amended and restated equity distribution agreements with the Sales Agents to allow us to sell shares of our common stock having an aggregate offering price of up to $500.0 million.

The following table summarizes the activity under the ATM Program from July 1, 2023, through the date of this filing (dollars in thousands):

Number of Shares Sold Weighted-average

Offering Price

Per Share Gross Proceeds Net Proceeds (1)

58,360 $ 17.34 $ 1,012 $ 1,002

(1) Net of underwriting commissions.

Impact of Inflation and Rising Interest Rates

Impact of Inflation and Interest Rates

According to the U.S.

Bureau of Labor Statistics, the consumer price index (“CPI”) grew at an annual rate of 3.7% through September 30, 2023, as overall inflation continued to ease from the peak levels experienced in the summer of 2022, when it reached the highest rates seen in over 40 years.

The increase in food prices has also slowed but still continues to keep pace with the rate of inflation, with the overall food segment also increasing at an annual rate of 3.7% through September 30, 2023.

In addition, according to the NCREIF Farmland Index, which, as of September 30, 2023, consisted of approximately $16.4 billion of farms across the U.S., the total return on U.S.

farmland (including appreciation and income) was 5.8% for the 12 months ended September 30, 2023.

If the increases in food prices continue to outpace or at least keep pace with inflation, we believe this will help mitigate any increase in input costs experienced by our farm operators.

To combat inflation, the Federal Reserve has raised its benchmark funds rate 11 times since March 2022, resulting in the highest target rate seen since January 2001.

While slowing down significantly from its peak levels, overall inflation, and particularly “core inflation” (which excludes transitory costs, such as food and energy), remains above the Federal Reserve’s target long-term rate of 2.0%, leading many to believe another rate increase remains possible in the near-term future.

As such, interest rates remain volatile in response to competing concerns regarding inflationary pressures, coupled with the continued threat of a near-term recession.

The yield on the 10-year U.S.

Treasury Note has increased substantially since reaching a historic low in 2020 and recently surpassed 5% for the first time since 2007, which adversely affects interest rates on long-term financing.

In addition, while the U.S.

economy has proven to be resilient and its outlook has improved somewhat in recent months, fears of global recessionary conditions continue to persist, caused in part by stubborn inflation, rising borrowing costs, and geopolitical conditions (including instability arising from armed conflict), although the actual timeline, impact, and duration, if any such conditions materialize, are unknown.

Bureau of Labor Statistics, the consumer price index (“CPI”) grew at an annual rate of 3.5% through March 31, 2024, as overall inflation continued to ease from the peak levels experienced in the summer of 2022, when it reached the highest rates seen in over 40 years.

The increase in food prices has also slowed but has generally kept pace with the rate of inflation until the past few months, as the overall food segment increased at an annual rate of 2.2% through March 31, 2024.

In addition, according to the NCREIF Farmland Index, which, as of March 31, 2024, consisted of approximately $15.8 billion of farms across the U.S., the total return on U.S.

farmland (including appreciation and income) was 3.6% for the 12 months ended March 31, 2024.

Despite the slowdown in food prices in recent months, prices remain high, as the overall food segment has increased by 10.9%% over the past two years, outpacing overall inflation of 8.6% over the same time period.

Although our farm operators have experienced increases in input costs, we believe such increases will be somewhat mitigated to the extent that food price increases continue to outpace or keep pace with inflation.

To combat inflation, the Federal Reserve raised its benchmark funds rate 11 times between March 2022 and July 2023, resulting in the highest target rate seen since January 2001.

Since that time, it has held rates flat, and many now expect the Federal Reserve to begin cutting rates later this year, though the timing of such rate cuts, if any, remains uncertain.

Despite evidence that economic growth is beginning to slow, including a first-quarter economic growth report that was the weakest in nearly two years, inflation continues to be higher than desired, and the labor market remains strong.

As such, the Federal Reserve has stated its desire to see more evidence of inflation being on a sustainable path to its target rate of 2.0%, indicating a “higher-for-longer” stance.

As a result of this uncertainty, interest rates remain somewhat volatile.

The yield on the 10-year US Treasury Note has withdrawn from the 16-year high it achieved in October 2023 but still remains well above 4.0%.

As such, interest rates on long-term financing continue to be high, limiting our ability to finance new acquisitions at favorable terms.

Over 99.9% of our borrowings are currently at fixed rates, and on a weighted-average basis, these rates are fixed at an effective interest rate of 3.39% for another 4.2 years.

As such, with respect to our current borrowings, we have experienced minimal impact from the recent increases in interest rates, and we believe we are well-protected against further interest rate increases, which seem likely to continue in the near term.

LIBOR Transition

The majority of our debt is at fixed rates, and we currently have very limited exposure to variable-rate debt.

Previously, our variable-rate debt was based upon the London Interbank Offered Rate (“LIBOR”), which was phased out in June 2023.

LIBOR has since transitioned to a new standard rate, the Secured Overnight Financing Rate (“SOFR”), which was formally adopted by the Alternative Reference Rates Committee in July 2021 as a benchmark interest rate that incorporates certain overnight repo market data collected from multiple data sets.

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

Our lines of credit with MetLife and four term loans with Rabo AgriFinance LLC (which are effectively fixed through our entry into interest swap agreements) were previously indexed based on LIBOR, and all have since transitioned to SOFR, resulting in a minimal impact to our overall operations.

As such, with respect to our current borrowings, we have experienced minimal impact from the recent increases in interest rates, and we believe we are well-protected against any further interest rate increases, which remain a possibility.

Our Adviser and Administrator

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

There were no material changes to our critical accounting policies during the nine months ended September 30, 2023.

There were no material changes to our critical accounting policies during the three months ended March 31, 2024.

RESULTS OF OPERATIONS

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

• With regard to the comparison between the three months ended September 30, 2023 and 2022:

◦ Same-property basis represents farms owned as of June 30, 2022, which were not vacant at any point during either period presented and full collectability of future rental payments under the respective leases was deemed probable during the entirety of both periods;

◦ Properties acquired or disposed of are farms that were either acquired or disposed of at any point subsequent to June 30, 2022.

From July 1, 2022, through September 30, 2023, we acquired four new farms and had one partial farm disposition;

◦ Vacant, self-operated, or non-accrual properties are:

* Farms that were vacant (either wholly or partially) at any point during either period presented.

We did not have any vacant farms during either of the three months ended September 30, 2023 or 2022;

* Farms that were self-operated at any point during either period presented.

One of our farms was self-operated (via a management agreement with an unrelated third-party) during the three months ended September 30, 2023;

* Farms with leases where revenue was recognized on a cash basis during either period presented (rather than a straight-line basis) due to full collectability of future rental payments under the respective leases deemed not to be probable as a result of tenant credit issues.

During a portion of the three months ended September 30, 2023, we recognized revenue from two different leases with one tenant (encompassing two different farms) on a cash basis.

• With regard to the comparison between the nine months ended September 30, 2023 and 2022:

◦ Same-property basis represents farms owned as of December 31, 2021, which were not vacant at any point during either period presented and full collectability of future rental payments under the respective leases was deemed probable during the entirety of both periods;

For the purposes of the following discussions on certain operating revenues and expenses with regard to the comparison between the three months ended March 31, 2024 and 2023:

• Same-property basis represents farms owned as of December 31, 2022, which were not vacant or direct-operated at any point during either period presented and full collectability of future rental payments under the respective leases was deemed probable during the entirety of both periods;

• Properties acquired or disposed of are farms that were either acquired or disposed of at any point subsequent to December 31, 2022.

From January 1, 2022, through September 30, 2023, we acquired four new farms and had one partial farm disposition;

◦ Vacant, self-operated, or non-accrual properties are:

From January 1, 2023, through March 31, 2024, we did not acquire any new farms and had one farm disposition;

• Vacant, direct-operated, or non-accrual properties are:

◦ Farms that were vacant (either wholly or partially) at any point during either period presented.

We did not have any vacant farms during either of the nine months ended September 30, 2023 or 2022;

◦ Farms that were self-operated at any point during either period presented.

One of our farms was self-operated (via a management agreement with an unrelated third-party) during a portion of the nine months ended September 30, 2023;

16 of our farms were vacant during a portion of either of the three months ended March 31, 2024 or 2023;

◦ Farms that were direct-operated at any point during either period presented.

None of our farms were direct-operated during either of the three months ended March 31, 2024 or 2023;

◦ Farms with leases where revenue was recognized on a cash basis during either period presented (rather than a straight-line basis) due to full collectability of future rental payments under the respective leases deemed not to be probable as a result of tenant credit issues.

During a portion of the nine months ended September 30, 2023, we recognized revenue from seven different leases with three separate tenants (encompassing 17 different farms) on a cash basis.

A comparison of results of components comprising our operating income for the three and nine months ended September 30, 2023 and 2022 is below (dollars in thousands):

For the Three Months Ended September 30,

We recognized revenue from four different leases with three separate

tenants (encompassing six different farms) on a cash basis during a portion of either of the three months ended March 31, 2024 or 2023.

A comparison of results of components comprising our operating income for the three months ended March 31, 2024 and 2023 is below (dollars in thousands):

For the Three Months Ended March 31,

2024 2023 $ Change % Change

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Variable lease payments – tenant reimbursements and other 233 47 186 395.7%

Total operating revenues 23,534 24,209 (675) (2.8) %

Operating expenses:

Depreciation and amortization 9,244 9,146 98 1.1 %

Property operating expenses 729 706 23 3.3 %

Base management and incentive fees 2,939 2,591 348 13.4 %

Administration fee 619 543 76 14.0 %

General and administrative expenses 605 729 (124) (17.0) %

Write-off of costs associated with Series C cumulative redeemable preferred stock — 851 (851) (100.0) %

Total operating expenses 14,136 14,566 (430) (3.0) %

Operating income $ 9,398 $ 9,643 $ (245) (2.5) %

For the Nine Months Ended September 30,

2023 2022 $ Change % Change

Operating revenues:

Lease revenues:

Fixed lease payments $ 63,180 $ 61,387 $ 1,793 2.9 %

Variable lease payments – participation rents 2,580 3,024 (444) (14.7) %

Variable lease payments – tenant reimbursements 186 34 152 447.1 %

Total lease revenue 19,826 21,202 (1,376) (6.5) %

Other operating revenue 426 — 426 NM

Total operating revenues 20,252 21,202 (950) (4.5) %

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General and administrative expenses 566 786 (220) (28.0) %

Write-off of costs associated with Series C cumulative redeemable preferred stock — 851 (851) (100.0) %

Total operating expenses 12,991 13,757 (766) (5.6) %

Operating income $ 7,261 $ 7,445 $ (184) (2.5) %

NM = Not Meaningful

Operating Revenues

Lease revenues

The following table provides a summary of our lease revenues during the three and nine months ended September 30, 2023 and 2022 (dollars in thousands):

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

2023 2022 $ Change % Change 2023 2022 $ Change % Change

Lease revenue

The following table provides a summary of our lease revenues during the three months ended March 31, 2024 and 2023 (dollars in thousands):

For the Three Months Ended March 31,

2024 2023 $ Change % Change

Same-property basis:

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Fixed lease payments — 732 (732) (100.0)%

Participation rents — — — NM — — — NM

Total – Properties acquired or disposed of — 732 (732) (100.0)%

Vacant, self-operated, or non-accrual, properties:

Vacant, direct-operated, or non-accrual, properties:

Fixed lease payments 176 853 (677) (79.4)%

Participation rents — — — NM 72 31 41 132.3%

Total – Vacant, self-operated, or non-accrual properties 81 264 (183) (69.3)% 754 1,559 (805) (51.6)%

Participation rents — 72 (72) (100.0)%

Total – Vacant, direct-operated, or non-accrual properties 176 925 (749) (81.0)%

Tenant reimbursements and other (1)

1 unchanged sentence

Total Lease revenues $ 19,826 $ 21,202 $ (1,376) (6.5)%

NM = Not Meaningful

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

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

Similar amounts are also recorded as property operating expenses during the respective periods.

2023 amounts also include late fees received from certain tenants.

Same-property Basis – 2024 compared to 2023

Lease revenues from fixed lease payments remained relatively flat for the three months ended September 30, 2023, and increased during the nine months ended September 30, 2023.

The increase during the nine months ended September 30, 2023, was primarily due to additional rents earned on capital improvements completed on certain of our farms and two one-time payments received for easement access across portions of two of our farms.

Both periods were negatively impacted by the

execution of one lease agreement in the fourth quarter of 2022, pursuant to which we agreed to reduce the fixed base rent amount in exchange for increasing the participation rent components in the lease, the result of which will not be known until later in 2023.

The amount of lease revenues from participation rents is largely dependent upon when certain information is made available to allow us to determine such amounts to be reasonably estimable and thus recorded.

Based on the participation rents recorded thus far, the decrease was primarily driven by lower production (i.e., pounds per acre) on certain almond and pistachio farms (partly due to the alternate-bearing nature of such tree crops but also due to the harvest of such crops coming at the end of a multi-year drought), coupled with weaker crop prices, particularly in the almond market, which continued to be hampered with oversupply exacerbated by supply chain disruptions that occurred during the height of the COVID-19 pandemic.

Lease revenues from fixed lease payments remained relatively flat for the three months ended March 31, 2024 as compared to the prior-year period.

Lease revenues from participation rents decreased for the three months ended March 31, 2024, due to insufficient information available to us as of March 31, 2024, to allow certain amounts to be reasonably determinable.

Other – 2024 compared to 2023

Lease revenue from properties acquired or disposed of increased primarily due to additional revenues earned on new farms acquired subsequent to December 31, 2021.

Fixed lease payments from vacant, self-operated, or non-accrual properties decreased primarily due to revenue from certain of our leases being recognized on a cash basis during a portion of the three and nine months ended September 30, 2023 (rather than a straight-line basis), due to full collectability of future rental payments under the respective leases deemed not to be probable as a result of tenant credit issues.

In addition, one of our farms was self-operated (via a management agreement with an unrelated third-party) for the three months ended September 30, 2023, and a portion of the nine months ended September 30, 2023.

The decrease in lease revenues from vacant, self-operated, or non-accrual properties was partially offset by cash collections (in part or in whole) from tenants occupying certain of these properties during the three and nine months ended September 30, 2023.

No revenue has been recognized as a result of operations at farms that were self-operated during any period presented.

Lease revenue from properties acquired or disposed of decreased due to the sale of a 3,748-acre farm in Florida on January 11, 2024.

Fixed lease payments from vacant, direct-operated, or non-accrual properties decreased primarily due to revenue from certain of our leases being recognized on a cash basis during a portion of the three months ended March 31, 2024 (rather than a straight-line basis), due to full collectability of future rental payments under the respective leases deemed not to be probable as a result of tenant credit issues.

In addition, 16 of our farms were vacant for portions of each of the three months ended March 31, 2024 and 2023.

The decrease in lease revenue from vacant, direct-operated, or non-accrual properties was partially offset by cash collections (in part or in whole) from tenants occupying certain of these properties during the three months ended March 31, 2024.

The fluctuations in tenant reimbursement revenue are primarily driven by payments made by certain tenants on our behalf (pursuant to the lease agreements) to unconsolidated entities of ours that convey water to the respective properties.

As such, the timing of revenue fluctuates as payments are made by our tenants.

Amounts recorded during the three and nine months ended September 30, 2023, also include late fees received from certain tenants.

As such, the timing of tenant reimbursement revenue fluctuates as payments are made by our tenants.

Amounts recorded during the current-year period include increased reimbursements from certain tenants for costs to deliver water to their farms via a pipeline owned by an unconsolidated entity of ours.

Other Operating Revenue

Other operating revenue consists of non-lease revenue generated as a result of activities performed on certain of our properties.

During the three months ended March 31, 2024, we recognized approximately $426,000 of non-cash revenue associated with the transfer and storing of surplus water on behalf of a government municipality using a groundwater recharge facility constructed on one of our farms.

See above under “ Recent Developments—Portfolio Activity–Existing Properties—Water Asset Acquisitions ” for further discussion.

Operating Expenses

Depreciation and amortization

Depreciation and amortization expense increased primarily due to additional depreciation and amortization expense incurred on new farms acquired subsequent to December 31, 2021, as well as an increase in depreciation associated with additional capital expenditures on certain of our farms.

This increase was partially offset by a decrease attributable to certain assets reaching the end of their useful lives.

Depreciation and amortization expense decreased primarily due to the disposition of certain assets, including the sale of a 3,748-acre farm in Florida, and certain other assets reaching the end of their useful lives.

This decrease was partially offset by additional depreciation expense associated with new capital improvements made on certain of our farms.

Property operating expenses

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

The following table provides a summary of the property-operating expenses recorded during the three and nine months ended September 30, 2023 and 2022 (dollars in thousands):

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

2023 2022 $ Change % Change 2023 2022 $ Change % Change

The following table provides a summary of the property-operating expenses recorded during the three months ended March 31, 2024 and 2023 (dollars in thousands):

For the Three Months Ended March 31,

2024 2023 $ Change % Change

Same-property basis $ 481 $ 793 $ (312) (39.3)%

Properties acquired or disposed of — 53 (53) (100.0)%

Vacant, self-operated, or non-accrual properties 22 2 20 NM 398 175 223 127.4%

Vacant, direct-operated, or non-accrual properties 158 240 (82) (34.2)%

Tenant-reimbursed property operating expenses (1)

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Total Property operating expenses $ 877 $ 1,128 $ (251) (22.3)%

NM = Not Meaningful

(1) Represents certain operating expenses (property taxes, insurance premiums, and other property-related expenses) paid by us that, per the respective leases, are required to be reimbursed to us by the tenant.

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Same-property Basis – 2024 compared to 2023

Property operating expenses increased primarily due to additional property management and consulting fees incurred across our portfolio, as well as higher legal fees related to drafting new lease agreements.

We also recorded additional repairs and

maintenance expense as a result of minor damage caused by natural disasters at certain of our farms.

This increase was partially offset by a decrease in real estate tax expense.

Property operating expenses decreased primarily due to a decrease in legal fees and other costs incurred in connection with protecting water rights on certain farms in California, as well as a decrease in repairs and maintenance expense incurred during the prior-year period as a result of minor damage cause by natural disasters at certain farms.

Other – 2024 compared to 2023

Property operating expenses on properties acquired or disposed of decreased, primarily due to additional legal fees incurred in the prior-year periods on certain farms acquired subsequent to December 31, 2021.

Property operating expenses attributable to vacant, self-operated, or non-accrual properties increased primarily due to additional legal fees incurred in connection with rent collection, lease termination, or re-leasing efforts on such farms.

Property operating expenses on properties acquired or disposed of decreased due to the sale of one farm in Florida, as discussed elsewhere.

Property operating expenses attributable to vacant, direct-operated, or non-accrual properties decreased primarily due to a decrease in legal fees incurred in connection with rent collection or lease termination efforts for those tenants on farms that were placed on non-accrual status and a decrease in third-party property management expenses.

This decrease was partially offset by an increase in property tax expense.

The fluctuations in tenant-reimbursed property operating expenses are primarily driven by miscellaneous property operating costs incurred by us in connection with our ownership interests in certain unconsolidated entities, for which our tenants are contractually obligated to reimburse us under the terms of the respective leases.

Such expenses will fluctuate commensurate with the timing and amount of miscellaneous operating costs incurred by the underlying entities.

Amounts recorded during the current-year period include additional costs to deliver water to certain of our farms via a pipeline owned by an unconsolidated entity of ours, which costs were reimbursed to us by our tenants.

Related-Party Fees

The following table provides the calculations of the base management and incentive fees due to our Adviser pursuant to the Advisory Agreement for the three and nine months ended September 30, 2023 and 2022 (dollars in thousands;

The following table provides the calculations of the base management and incentive fees due to our Adviser pursuant to the Advisory Agreement for the three months ended March 31, 2024 and 2023 (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):

Quarter Ended Year to Date

March 31 June 30 September 30

FY 2023 Fee Calculations:

Quarter Ended

2024 Fee Calculations:

Base Management Fee:

Gross Tangible Real Estate (1)(2)

$ 1,432,394 $ 1,431,761 $ 1,433,713

Quarterly rate 0.150 %

Base management fee (3)

$ 2,149 $ 2,148 $ 2,150 $ 6,447

Incentive Fee:

Total Adjusted Common Equity (1)(2)

$ 358,689 $ 362,411 $ 360,339

First hurdle quarterly rate 1.750 %

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Pre-Incentive Fee FFO (1)

$ 5,303 $ 4,400 $ 7,095

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

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Total Incentive fee (3)

$ — $ — $ 789 $ 789

Total fees due to Adviser $ 2,156

FY 2022 Fee Calculations:

2023 Fee Calculations:

Base Management Fee:

Gross Tangible Real Estate (1)(2)

$ 1,357,800 $ 1,361,757 $ 1,390,645

Quarterly rate 0.150 %

Base management fee (3)

$ 2,036 $ 2,043 $ 2,086 $ 6,165

Incentive Fee:

Total Adjusted Common Equity (1)(2)

$ 378,299 $ 381,201 $ 364,955

First hurdle quarterly rate 1.750 %

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Pre-Incentive Fee FFO (1)

$ 7,751 $ 4,819 $ 6,892

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

1 unchanged sentence

Total Incentive fee (3)

$ 1,131 $ — $ 505 $ 1,636

Total fees due to Adviser $ 2,149

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The base management fee increased primarily due to additional assets acquired and improvements made on certain of our farms since December 31, 2022.

Our Adviser earned an incentive fee during each of the three and nine months ended September 30, 2023 and 2022 due to our Pre-Incentive Fee FFO (as defined in the Advisory Agreement) exceeding the required hurdle rate of the applicable equity base during the third quarter of 2023 and during the first and third quarters of 2022, respectively.

The administration fee paid to our Administrator increased primarily due to hiring additional personnel and us using a higher overall share of our Administrator’s resources in relation to those used by other funds and affiliated companies serviced by our Administrator.

No incentive fee was earned by our Adviser during either of the three months ended March 31, 2024 or 2023, as our Pre-Incentive Fee FFO did not surpass the required hurdle rate in either period.

The administration fee paid to our Administrator increased primarily due to us using a higher overall share of our Administrator’s resources in relation to those used by other funds and affiliated companies serviced by our Administrator.

Other Operating Expenses

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

General and administrative expenses decreased during the three months ended September 30, 2023, primarily due to a decrease in acquisition-related costs for investments no longer being pursued.

The increase during the nine months ended September 30, 2023, was primarily due to additional legal and stockholder-related expenses incurred related to the listing of the Series C Preferred Stock.

During each of the three and nine months ended September 30, 2022, we wrote off $851,000 of costs (including approximately $798,000 of unamortized deferred offering costs) related to the Series C Offering due to an amendment that reduced the number of shares of Series C Preferred Stock to be offered.

A comparison of results of other components contributing to net loss attributable to common stockholders for the three and nine months ended September 30, 2023 and 2022 is below (dollars in thousands):

For the Three Months Ended September 30,

2023 2022 $ Change % Change

Operating income $ 9,398 $ 9,643 $ (245) (2.5)%

Other income (expense):

Other income 382 237 145 61.2%

Interest expense (5,856) (6,476) 620 (9.6)%

Dividends declared on cumulative term preferred stock (755) (755) — —%

Loss on dispositions of real estate assets, net (4) (819) 815 (99.5)%

Loss from investments in unconsolidated entities (24) (24) — —%

Total other income (expense), net (6,257) (7,837) 1,580 (20.2)%

Net income 3,141 1,806 1,335 73.9%

Net loss attributable to non-controlling interests — (2) 2 (100.0)%

Net income attributable to the Company 3,141 1,804 1,337 74.1%

Aggregate dividends declared on and charges related to extinguishment of cumulative redeemable preferred stock (6,105) (5,398) (707) 13.1%

Net loss attributable to common stockholders $ (2,964) $ (3,594) $ 630 (17.5)%

For the Nine Months Ended September 30,

General and administrative expenses decreased during the current-year period, primarily due to a decrease in stockholder-related expenses related to the annual stockholders’ meeting and the listing of the Series C Preferred Stock on Nasdaq in the first half of 2023.

The decrease was also attributable to a decrease in professional fees, particularly lower legal and accounting costs.

A comparison of results of other components contributing to net loss attributable to common stockholders for the three months ended March 31, 2024 and 2023 is below (dollars in thousands):

For the Three Months Ended March 31,

2024 2023 $ Change % Change

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Gain (loss) on dispositions of real estate assets, net 10,273 (481) 10,754 (2,235.8)%

Property and casualty (loss) recovery, net (1,016) 49 (1,065) (2,173.5)%

Property and casualty loss, net — (1,016) 1,016 (100.0)%

Loss from investments in unconsolidated entities (85) (27) (58) 214.8%

Total other expense, net (11,924) (20,748) 8,824 (42.5)%

Total other income (expense), net 6,306 (5,695) 12,001 (210.7)%

Net income 13,567 1,750 11,817 675.3%

Net income attributable to non-controlling interests — (9) 9 (100.0)%

Net income attributable to non-controlling interests — — — NM

Net income attributable to the Company 13,567 1,750 11,817 675.3%

Aggregate dividends declared on and charges related to extinguishment of cumulative redeemable preferred stock (6,118) (6,070) (48) 0.8%

Net loss attributable to common stockholders $ (5,557) $ (10,204) $ 4,647 (45.5)%

Net income (loss) attributable to common stockholders $ 7,449 $ (4,320) $ 11,769 (272.4)%

NM = Not Meaningful

Other Income (Expense)

Other income, which generally consists of interest patronage received from Farm Credit (as defined in Note 4, “ Borrowings ,” in the accompanying notes to our condensed consolidated financial statements) and interest earned on short-term investments, increased primarily due to additional income earned on short-term investments due to higher interest rates, partially offset by less interest patronage received from Farm Credit (primarily due to decreased borrowings from Farm Credit).

Other income, which generally consists of interest patronage received from Farm Credit (as defined in Note 4, “ Borrowings ,” in the accompanying notes to our condensed consolidated financial statements) and interest earned on short-term investments, decreased primarily due to less interest patronage received from Farm Credit (primarily due to decreased borrowings from Farm Credit).

During the three months ended March 31, 2024, we recorded approximately $1.9 million of interest patronage from Farm Credit related to interest accrued during 2023, as compared to approximately $2.3 million of interest patronage recorded during the prior-year period that related to interest accrued during 2022.

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Interest expense decreased, primarily due to a decrease in overall borrowings.

The weighted-average principal balance of our aggregate borrowings (excluding our cumulative term preferred stock) outstanding for the three and nine months ended September 30, 2023, was approximately $589.5 million and $600.5 million, respectively, as compared to approximately $649.2 million and $660.1 million for the respective prior-year periods.

Excluding interest patronage received on certain of our Farm Credit borrowings and the impact of debt issuance costs, the weighted-average interest rate charged on our aggregate borrowings for the three and nine months ended September 30, 2023, was 3.81% and 3.79%, respectively, as compared to 3.82% and 3.76% for the respective prior-year periods.

During the nine months ended September 30, 2023, we recorded a net capital gain, driven by the sale of a 138-acre parcel of unfarmed land in Florida for $9.6 million, which, after accounting for closing costs, resulted in a net gain of approximately $6.4 million.

The net losses recorded during each of the three and nine months ended September 30, 2022, related to the disposals of certain irrigation and other improvements on certain of our farms.

The net property and casualty (loss) recovery related to net expenses incurred and insurance recoveries received for certain improvements that were damaged due to natural disasters.

The property and casualty loss recorded during the nine months ended September 30, 2023, was the result of the heavy rainfall that occurred in California in early 2023 and the resulting flooding, which damaged certain structures located on one of our farms in the Central Valley.

We continue to work with our tenant on this farm to assess the damage and come to a solution regarding the repairs.

The aggregate dividends paid on our cumulative redeemable preferred stock increased due to additional shares of the Series C Preferred Stock and Series E Preferred Stock issued and outstanding during each of the current-year periods.

The weighted-average principal balance of our aggregate borrowings (excluding our cumulative term preferred stock) outstanding for the three months ended March 31, 2024, was approximately $557.6 million, as compared to approximately $612.2 million for the prior-year period.

Excluding interest patronage received on certain of our Farm Credit borrowings and the impact of debt issuance costs, the weighted-average interest rate charged on our aggregate borrowings for the three months ended March 31, 2024, was 3.81%, as compared to 3.77% for the prior-year period.

During the three months ended March 31, 2024, we recorded a net capital gain, driven by the sale of a 3,748-acre farm in Martin County, Florida for approximately $65.7 million, which after accounting for closing costs, resulted in a net gain of

approximately $10.4 million.

The net loss recorded during the three months ended March 31, 2023, related to the disposals of certain irrigation and other improvements on certain of our farms.

The net property and casualty loss relates to net expenses incurred and insurance recoveries received for certain improvements that were damaged due to natural disasters.

The property and casualty loss recorded during the three months ended March 31, 2023, was primarily due to the heavy rainfall that occurred in California in early 2023 and the resulting flooding, which damaged certain structures located on one of our farms in the Central Valley.

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 our credit facility with Metropolitan Life Insurance Company (“MetLife”)), and issuances of additional equity securities.

Our current available liquidity is approximately $174.4 million, consisting of approximately $24.7 million in cash on hand and, based on the current level of collateral pledged, approximately $149.7 million of availability under our credit facility with MetLife (subject to compliance with covenants) and other undrawn notes or bonds.

Our current available liquidity is approximately $203.5 million , consisting of approximately $57.0 million in cash on hand and, based on the current level of collateral pledged, approximately $146.5 million of availability under our credit facility with MetLife (subject to compliance with covenants) and other undrawn lines of credit, notes, or bonds.

In addition, we currently have certain properties valued at a total of approximately $130.1 million that are unencumbered and eligible to be pledged as collateral.

1 unchanged sentence

In addition, the weighted-average remaining term of our notes and bonds payable is approximately 8.7 years.

Despite ongoing volatility in the markets, based on discussions with our lenders, we do not believe there will be a credit freeze on agricultural lending in the near term.

As such, with respect to our current borrowings, we have experienced minimal impact from increased interest rates over the past two years, and we believe we are well-protected against any future interest rate increases.

Despite ongoing uncertainty in the markets, based on discussions with our lenders, we do not believe there will be a credit freeze on agricultural lending in the near term.

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

2 unchanged sentences

funding our general operating costs;

making dividend payments on our cumulative term preferred stock and cumulative redeemable preferred stock;

making distributions to stockholders (including non-controlling OP Unitholders, if any) to maintain our qualification as a REIT;

making dividend payments on our currently-designated preferred securities;

making distributions to common stockholders (including non-controlling OP Unitholders, if any) to maintain our qualification as a REIT;

and, as capital is available, funding capital improvements on existing farms and new farmland and farm-related acquisitions consistent with our investment strategy.

1 unchanged sentence

fund our current operating costs;

pay dividends on our cumulative term preferred stock and cumulative redeemable preferred stock;

and fund our distributions to stockholders (including non-controlling OP Unitholders).

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

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

pay dividends on our currently-designated preferred securities;

and fund our distributions to common stockholders (including non-controlling OP Unitholders).

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

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

We continue to actively seek and evaluate acquisitions of additional farms and farm-related facilities that satisfy our investment criteria, and we have several properties that are in various stages of our due diligence process.

3 unchanged sentences

In connection with the execution of certain lease agreements, we have committed to provide capital improvements on certain of our farms.

Below is a summary of certain of those projects for which we have incurred or accrued costs as September 30, 2023 (dollars in thousands):

Below is a summary of certain of those projects for which we have incurred or accrued costs as March 31, 2024 (dollars in thousands):

Location(s) Farm

3 unchanged sentences

or Accrued as of

September 30, 2023

Umatilla, OR 135 $ 2,750 (2) Q4 2023 $ 2,308

March 31, 2024

Columbia, OR 157 $ 1,800 (2) Q3 2024 $ 1,146

Lucie, FL 549 230 Q3 2025 185

Ventura, CA 402 1,000 (2) Q4 2025 448

1 unchanged sentence

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

Yuma, AZ 3,033 941 (2) Q4 2031 896

Franklin & Grant, WA, & Umatilla, OR 1,126 2,169 (2) Q4 2032 2,007

3 unchanged sentences

In connection with certain farms acquired through a leasehold interest, we assumed certain ground lease arrangements under which we are the lessee.

Future minimum lease payments due under the remaining non-cancelable terms of these leases as of September 30, 2023, is as follows (dollars in thousands):

Future minimum lease payments due under the remaining non-cancelable terms of these leases as of March 31, 2024, are as follows (dollars in thousands):

Period Future Lease Payments (1)

For the remaining three months ending December 31:

For the remaining nine months ending December 31:

For the fiscal years ending December 31:

5 unchanged sentences

The amounts shown above represent estimated amounts based on the lease rates currently in place.

As a result of these ground leases, we recorded lease expense (included within Property operating expenses on the accompanying Condensed Consolidated Statement of Operations and Comprehensive Income) of approximately $26,000 and $77,000 during the three and nine months ended September 30, 2023, respectively, and approximately $23,000 and $69,000 during the three and nine months ended September 30, 2022 , respectively.

As a result of these ground leases, we recorded lease expense of approximately $26,000 and $25,000 during the three months ended March 31, 2024 and 2023 , respectively.

Cash Flow Resources

The following table summarizes total net cash flows from operating, investing, and financing activities for the nine months ended September 30, 2023 and 2022 (dollars in thousands):

For the Nine Months Ended September 30,

The following table summarizes total net cash flows from operating, investing, and financing activities for the three months ended March 31, 2024 and 2023 (dollars in thousands):

For the Three Months Ended March 31,

2024 2023 $ Change % Change

6 unchanged sentences

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

Cash provided by operating activities decreased slightly, primarily due to the timing of certain interest payments made during the nine months ended September 30, 2023, as compared to the prior-year period.

This was partially offset by a decrease in aggregate fees paid to our Advisor during the nine months ended September 30, 2023.

Cash provided by operating activities decreased, largely due to a decrease in fixed lease cash payments received (primarily due to the disposition of one farm in Florida, as well as due to the timing of when certain cash rental payments were received), partially offset by a decrease in interest payments made and aggregate fees paid to our Advisor during the current-year period.

Investing Activities

The change in cash from investing activities was primarily due to a decrease in aggregate cash paid for acquisitions of new farms and capital improvements on existing farms during the current-year period, partially offset by the proceeds received from the sale of a 138-acre parcel of unfarmed land in Florida for $9.6 million during the nine months ended September 30, 2023, which resulted in a net gain of approximately $6.4 million.

The change in cash from investing activities was primarily due to proceeds received from the sale of a 3,748-acre farm in Florida for approximately $65.7 million during the three months ended March 31, 2024, which resulted in a net gain of approximately $10.4 million, and a decrease in the amount of cash paid for capital improvements on existing farms during the current-year period.

Financing Activities

1 unchanged sentence

MetLife Facility

As amended in February 2022, our facility with MetLife currently consists of $75.0 million of revolving equity lines of credit and an aggregate of $175.0 million of term notes (the “MetLife Facility”).

As amended, our credit facility with MetLife currently consists of $75.0 million of revolving equity lines of credit and an aggregate of $175.0 million of term notes (the “MetLife Facility”).

We currently have $200,000 outstanding under the lines of credit and $36.9 million outstanding on the term notes.

While $212.9 million of the full commitment amount under the MetLife Facility remains undrawn, based on the level of collateral pledged, we currently have approximately $110.2 million of availability under the MetLife Facility.

The revolving equity lines of credit mature on April 5, 2024, and the draw period for the term notes expires on December 31, 2024, after which MetLife has no obligation to disburse any additional undrawn funds under the term notes.

We have been in discussions with MetLife regarding extending the maturity dates of the lines of credit and currently expect to have an agreement finalized by the end of 2023.

The revolving equity lines of credit mature on December 15, 2033, and the draw period for both term notes expires on December 31, 2024, after which MetLife has no obligation to disburse any additional undrawn funds under the term notes.

Farmer Mac Facility

As amended in June 2023, the Farmer Mac Facility provides for bond issuances up to an aggregate amount of $225.0 million by December 31, 2026, after which Farmer Mac has no obligation to purchase additional bonds under this facility.

As amended, our agreement with Federal Agricultural Mortgage Corporation (“Farmer Mac”) currently provides for bond issuances up to an aggregate amount of $225.0 million (the “Farmer Mac Facility”) by December 31, 2026, after which Farmer Mac has no obligation to purchase additional bonds under this facility.

To date, we have issued aggregate bonds of approximately $100.1 million under the Farmer Mac Facility.

5 unchanged sentences

The following table provides information on equity sales that have occurred since January 1, 2024 (dollars in thousands, except per-share amounts):

excludes shares of Series C Preferred Stock issued pursuant to the DRIP):

Type of Issuance Number of

3 unchanged sentences

Series E Preferred Stock 11,340 $ 25.00 $ 284 $ 255

Common Stock – ATM Program 788,045 19.34 15,240 15,087

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

3 unchanged sentences

Off-Balance Sheet Arrangements

As of September 30, 2023, we did not have any material off-balance sheet arrangements.

As of March 31, 2024, we did not have any material off-balance sheet arrangements.

NON-GAAP FINANCIAL INFORMATION

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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.

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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• Rent adjustments.

This adjustment removes the effects of straight-lining rental income, as well as the amortization related to above-market lease values and lease incentives and accretion related to below-market lease values, other deferred revenue, and tenant improvements, resulting in rental income reflected on a modified accrual cash basis.

This adjustment removes the effects of straight-lining rental income, as well as the amortization related to above-market lease values and certain non-cash lease incentives and accretion related to below-market lease values, certain other deferred revenue, and tenant improvements, resulting in rental income reflected on a modified accrual cash basis.

In addition to these adjustments, we also modify the calculation of cash rents within our definition of AFFO to provide greater consistency and comparability due to the period-to-period volatility in which cash rents are received.

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Therefore, we further adjust AFFO to normalize the cash rent received pertaining to a lease year over that respective lease year on a straight-line basis, resulting in cash rent being recognized ratably over the period in which the cash rent is earned.

During the three months ended December 31, 2023, we adjusted our definition of AFFO to exclude from this adjustment the removal of lease incentives that were a result of previous cash disbursements made by us to or on behalf of our tenants.

The results of all periods presented, including those of the prior year, have been adjusted in the table below to conform with this new definition.

• Amortization of debt issuance costs .

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

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

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

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

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

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

The following table provides a reconciliation of our FFO, CFFO, and AFFO for the three and nine months ended September 30, 2023 and 2022 to the most directly-comparable GAAP measure, net income, and a computation of diluted FFO, CFFO, and AFFO per share, using the weighted-average number of total shares (including shares of our common stock and OP Units held by non-controlling OP Unitholders) outstanding during the respective periods (dollars in thousands, except per-share amounts):

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

2023 2022 2023 2022

The following table provides a reconciliation of our FFO, CFFO, and AFFO for the three months ended March 31, 2024 and 2023 to the most directly-comparable GAAP measure, net income, and a computation of diluted FFO, CFFO, and AFFO per share, using the weighted-average number of total shares (including shares of our common stock and OP Units held by non-controlling OP Unitholders) outstanding during the respective periods (dollars in thousands, except per-share amounts):

For the Three Months Ended March 31,

Net income $ 13,567 $ 1,750

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(6,118) (6,070)

Net loss attributable to common stockholders and non-controlling OP Unitholders (2,964) (3,592) (5,557) (10,195)

Net income (loss) attributable to common stockholders and non-controlling OP Unitholders 7,449 (4,320)

Real estate and intangible depreciation and amortization 8,789 9,119

Losses (gains) on dispositions of real estate assets, net 4 819 (5,910) 2,100

(Gains) losses on dispositions of real estate assets, net (10,273) 481

Adjustments for unconsolidated entities (2)

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Other nonrecurring charges, net (3)

50 851 1,328 803

CFFO available to common stockholders and non-controlling OP Unitholders 5,999 6,458

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Other non-cash (receipts) charges, net (4)

1 264 279 606

AFFO available to common stockholders and non-controlling OP Unitholders 5,130 5,899

Weighted-average common stock outstanding—basic and diluted 35,822,123 34,607,440 35,698,458 34,472,018

Weighted-average shares of common stock outstanding 35,838,442 35,547,397

Weighted-average common non-controlling OP Units outstanding — —

Weighted-average total common shares outstanding 35,822,123 34,607,440 35,698,458 34,554,529

Diluted FFO per weighted-average total common share $ 0.18 $ 0.18 $ 0.45 $ 0.52

Diluted CFFO per weighted-average total common share $ 0.18 $ 0.21 $ 0.49 $ 0.54

Diluted AFFO per weighted-average total common share $ 0.15 $ 0.21 $ 0.43 $ 0.52

Distributions declared per total common share $ 0.14 $ 0.14 $ 0.41 $ 0.41

(1) Includes (i) cash dividends paid on our Series B Preferred Stock, Series C Preferred Stock, and Series E 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 C Preferred Stock and Series E Preferred Stock that were redeemed during the respective periods.

Weighted-average shares of common shares outstanding, fully diluted 35,838,442 35,547,397

Diluted FFO per weighted-average common share $ 0.17 $ 0.15

Diluted CFFO per weighted-average common share $ 0.17 $ 0.18

Diluted AFFO per weighted-average common share $ 0.14 $ 0.17

Distributions declared per common share $ 0.14 $ 0.14

(1) Includes (i) cash dividends paid on our cumulative redeemable 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 cumulative redeemable 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 losses (recoveries) recorded and 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) costs related to the amendment, termination, and listing of shares from the Series C Offering that were expensed, and (iii) the write-off of certain unallocated costs related to a prior universal registration statement.

(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 Series C Preferred Stock and Series E 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.

(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 cumulative redeemable preferred stock that were redeemed, which were non-cash charges, (iii) our remaining pro-rata share of (income) loss recorded from investments in unconsolidated entities during the respective periods, and (iv) less non-cash income recorded as a result of additional water assets received as consideration in certain transactions.

Net Asset Value

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

A breakdown of the methodologies used to value our properties and the aggregate value as of September 30, 2023, determined by each method is shown in the table below (dollars in thousands, except in footnotes):

Valuation Method Number of

A breakdown of the methodologies used to value our properties and the aggregate value as of March 31, 2024, determined by each method is shown in the table below (dollars in thousands, except in footnotes):

Valuation Method Number

of Farms Total

Acres Acre-feet

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

(2) Appraisals performed between December 2022 and October 2023.

Some of the significant assumptions used by appraisers and the Valuation Team in valuing our portfolio as of September 30, 2023, include land values per farmable acre, market rental rates per farmable acre and the resulting net operating income (“NOI”) at the property level, and capitalization rates, among others.

(2) Appraisals performed between June 2023 and March 2024.

Some of the significant assumptions used by appraisers and the Valuation Team in valuing our portfolio as of March 31, 2024, include land values per farmable acre, market rental rates per farmable acre and the resulting net operating income (“NOI”) at the property level, and capitalization rates, among others.

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

A summary of these significant assumptions as of September 30, 2023, is provided in the following table:

A summary of these significant assumptions as of March 31, 2024, is provided in the following table:

Appraisal Assumptions Internal Valuation Assumptions

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

Management believes that the purchase prices of the farms acquired during the previous 12 months and the most recent appraisals available for the farms acquired prior to the previous 12 months fairly represent the current market values of the properties as of September 30, 2023, and, accordingly, did not make any adjustment to these values.

A quarterly roll-forward of the change in our portfolio value for the three months ended September 30, 2023, from the prior value basis as of June 30, 2023, is provided in the table below (dollars in thousands):

Total portfolio fair value as of June 30, 2023 $ 1,578,166

Acquisition of water credits during the three months ended September 30, 2023 18

Change in value of farms during the three months ended September 30, 2023

Management believes that the purchase prices of the farms acquired during the previous 12 months and the most recent appraisals available for the farms acquired prior to the previous 12 months fairly represent the current market values of the properties as of March 31, 2024, and, accordingly, did not make any adjustment to these values.

A quarterly roll-forward of the change in our portfolio value for the three months ended March 31, 2024, from the prior value basis as of December 31, 2023, is provided in the table below (dollars in thousands):

Total portfolio fair value as of December 31, 2023 $ 1,566,474

Acquisition of water assets during the three months ended March 31, 2024 771

Sale of one farm during the three months ended March 31, 2024 (65,651)

Change in value of farms during the three months ended March 31, 2024

Farms valued via third-party appraisals $ (3,675)

Net change in value of farms during the three months ended September 30, 2023 1,147

Total portfolio fair value as of September 30, 2023 $ 1,579,331

Net change in value of farms during the three months ended March 31, 2024 (3,675)

Total portfolio fair value as of March 31, 2024 $ 1,497,919

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 September 30, 2023, was approximately $527.1 million, as compared to a carrying value (excluding unamortized related debt issuance costs) of approximately $587.2 million.

The fair values of our Series B Preferred Stock, Series C Preferred Stock, and Series D Term Preferred Stock were determined using the closing stock prices as of September 30, 2023, of $18.10 per share, $18.07 per share, and $23.75 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 E Preferred Stock to be $25.00 per share as of September 30, 2023 (see Exhibit 99.1 to this Form 10-Q).

Using a discounted cash flow analysis, management determined that the fair value of all long-term encumbrances on our properties as of March 31, 2024, was approximately $506.8 million, as compared to a carrying value (excluding unamortized related debt issuance costs) of approximately $554.8 million.

The fair values of our Series B Preferred Stock, Series C Preferred Stock, and Series D Term Preferred Stock were determined using the closing stock prices as of March 31, 2024, of $20.04 per share, $20.02 per share, and $23.96 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 E Preferred Stock to be $25.00 per share as of March 31, 2024 (see Exhibit 99.1 to this Form 10-Q).

Calculation of Estimated Net Asset Value

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

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

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 are the responsibility of management.

PricewaterhouseCoopers LLP has neither examined, compiled, nor

performed any procedures with respect to the fair values or the calculation of net asset value per common share, which utilizes information that is not disclosed within the financial statements, and, accordingly, does not express an opinion or any other form of assurance with respect thereto.

As of September 30, 2023, we estimate the NAV per common share to be $20.33.

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

As of March 31, 2024, we estimate the NAV per common share to be $18.50.

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

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

The Series D Term Preferred Stock was valued based on its closing stock price as of September 30, 2023.

(5) The Series B Preferred Stock and Series C Preferred Stock were valued based on their respective closing stock prices as of September 30, 2023, while the Series E Preferred Stock was valued at its liquidation value, as discussed above.

A quarterly roll-forward in the estimated NAV per common share for the three months ended September 30, 2023, is provided below:

Estimated NAV per common share and non-controlling OP Unit as of June 30, 2023 $ 19.15

The Series D Term Preferred Stock was valued based on its closing stock price as of March 31, 2024.

(5) The Series B Preferred Stock and Series C Preferred Stock were valued based on their respective closing stock prices as of March 31, 2024, while the Series E Preferred Stock was valued at its liquidation value, as discussed above.

A quarterly roll-forward in the estimated NAV per common share for the three months ended March 31, 2024, is provided below:

Estimated NAV per common share and non-controlling OP Unit as of December 31, 2023 $ 19.06

Plus net income attributable to common stockholders and non-controlling OP Unitholders 0.21

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Less net dilutive effect of equity issuances and redemptions, net —

Estimated NAV per common share and non-controlling OP Unit as of September 30, 2023 $ 20.33

Estimated NAV per common share and non-controlling OP Unit as of March 31, 2024 $ 18.50

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

(i) an increase of $0.03 per share due to the net appreciation in value of the farms that were valued during the three months ended September 30, 2023, (ii) an increase of $0.26 per share due to the decrease in net book value of our real estate holdings as a result of the aggregate depreciation and amortization expense recorded during the three months ended September 30, 2023, and (iii) a decrease of $0.10 per share due to net capital improvements made on certain farms that have not yet been considered in the determination of the respective farms’ estimated fair values.

(i) a decrease of $0.10 per share due to the net depreciation in value of the farms that were valued during the three months ended March 31, 2024, (ii) an increase of $0.25 per share due to the decrease in net book value of our real estate holdings as a result of the aggregate depreciation and amortization expense recorded during the three months ended March 31, 2024, and (iii) a decrease of $0.38 per share due to net asset dispositions or capital improvements made on certain farms that have not yet been considered in the determination of the respective farms’ estimated fair values.

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

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

For example, while we estimated our NAV per common share to be $20.33 as of September 30, 2023, based on the calculation above, the closing price of our common stock on September 30, 2023, was $14.23 per share.

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 $18.50 as of March 31, 2024, based on the calculation above, the closing price of our common stock on March 31, 2024, was $13.34 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.

In addition, many of the assumptions used are sensitive to market conditions and can change frequently.

Changes in the market

environment and other events that may occur during our ownership of these properties may cause the values reported above to vary from the actual fair value that may be obtained in the open market.

Changes in the market environment and other events that may occur during our ownership of these properties may cause the values reported above to vary from the actual fair value that may be obtained in the open market.

Further, while management believes the values presented reflect current market conditions, the ultimate amount realized on any asset will be based on the timing of such dispositions and the then-current market conditions.

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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-Q

Item 2. Management’s Discussion and Analysis