GLADSTONE LAND Corp 10-Q

ITEM 1. FINANCIAL STATEMENTS GLADSTONE LAND CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share and per-share data) (Unaudited) September 30, 2020 December 31, 2019 ASSETS Investments in real estate, net $ 858,753 $ 792,081 Lease intangibles, net 3,626 4,827 Cash and cash equivalents 6,455 13,688 Other assets, net 9,543 6,191 TOTAL ASSETS $ 878,377 $ 816,787 LIABILITIES AND EQUITY LIABILITIES: Borrowings under lines of credit $ 11,600 $ 100 Notes and bonds payable, net 491,921 481,829 Series A cumulative term preferred stock, $ 0.001 par value, $ 25.00 per share liquidation preference; 2,000,000 shares authorized, 1,150,000 shares issued and outstanding as of September 30, 2020, and December 31, 2019, net 28,535 28,359 Accounts payable and accrued expenses 11,997 10,132 Due to related parties, net 2,266 2,169 Other liabilities, net 14,743 15,228 Total liabilities 561,062 537,817 Commitments and contingencies (Note 7) EQUITY: Stockholders’ equity: Series B cumulative redeemable preferred stock, $ 0.001 par value, $ 25.00 per share liquidation preference; 6,456,065 shares authorized 5,956,065 shares issued and outstanding as of September 30, 2020; 6,485,400 shares authorized, 4,755,869 shares issued and outstanding as of December 31, 2019 6 5 Series C cumulative redeemable preferred stock, $ 0.001 par value, $ 25.00 per share liquidation preference; 26,000,000 shares authorized, 420,230 shares issued and outstanding as of September 30, 2020; no shares authorized, issued, or outstanding as of December 31, 2019 — — Common stock, $ 0.001 par value; 65,543,935 shares authorized 22,204,906 shares issued and outstanding as of September 30, 2020; 91,514,600 shares authorized, 20,936,658 shares issued and outstanding as of December 31, 2019 22 21 Additional paid-in capital 368,465 315,770 Accumulated other comprehensive loss ( 1,721 ) ( 390 ) Distributions in excess of accumulated earnings ( 49,457 ) ( 38,785 ) Total stockholders’ equity 317,315 276,621 Non-controlling interests in Operating Partnership — 2,349 Total equity 317,315 278,970 TOTAL LIABILITIES AND EQUITY $ 878,377 $ 816,787 The accompanying notes are an integral part of these condensed consolidated financial statements. 3 Table of Contents GLADSTONE LAND CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (In thousands, except share and per-share data) (Unaudited) For the Three Months Ended September 30, For the Nine Months Ended September 30, 2020 2019 2020 2019 OPERATING REVENUES: Lease revenue, net $ 13,989 $ 11,012 $ 41,907 $ 27,203 Total operating revenues 13,989 11,012 41,907 27,203 OPERATING EXPENSES: Depreciation and amortization 3,909 3,419 12,010 8,952 Property operating expenses 287 536 1,525 1,939 Base management fee 1,078 862 3,159 2,741 Incentive fee 821 — 2,155 — Administration fee 344 311 1,084 866 General and administrative expenses 419 447 1,462 1,465 Total operating expenses 6,858 5,575 21,395 15,963 Credits to fees from Adviser — — — ( 1,542 ) Total operating expenses, net of credits to fees 6,858 5,575 21,395 14,421 OTHER INCOME (EXPENSE): Other income 323 62 1,668 937 Interest expense ( 5,202 ) ( 4,401 ) ( 15,155 ) ( 11,396 ) Dividends declared on Series A cumulative term preferred stock ( 458 ) ( 458 ) ( 1,375 ) ( 1,375 ) Loss on dispositions of real estate assets, net ( 195 ) ( 134 ) ( 861 ) ( 154 ) Property and casualty recovery, net 1 17 68 10 (Loss) income from investments in unconsolidated entities ( 19 ) — 7 — Total other expense, net ( 5,550 ) ( 4,914 ) ( 15,648 ) ( 11,978 ) NET INCOME 1,581 523 4,864 804 Net loss (income) attributable to non-controlling interests ( 13 ) ( 6 ) ( 52 ) ( 9 ) NET INCOME ATTRIBUTABLE TO THE COMPANY 1,568 517 4,812 795 Dividends declared on Series B cumulative redeemable preferred stock ( 2,238 ) ( 1,161 ) ( 6,604 ) ( 2,655 ) Other charges related to Series B cumulative redeemable preferred stock ( 44 ) — ( 44 ) — Dividends declared on Series C cumulative redeemable preferred stock ( 123 ) — ( 145 ) — NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ ( 837 ) $ ( 644 ) $ ( 1,981 ) $ ( 1,860 ) LOSS PER COMMON SHARE: Basic and diluted $ ( 0.04 ) $ ( 0.03 ) $ ( 0.09 ) $ ( 0.10 ) WEIGHTED-AVERAGE SHARES OF COMMON STOCK OUTSTANDING: Basic and diluted 21,991,291 20,763,615 21,558,859 19,154,744 The accompanying notes are an integral part of these condensed consolidated financial statements. 4 Table of Contents GLADSTONE LAND CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Continued) (In thousands, except share and per-share data) (Unaudited) For the Three Months Ended September 30, For the Nine Months Ended September 30, 2020 2019 2020 2019 COMPREHENSIVE INCOME: Net income attributable to the Company $ 1,568 $ 517 $ 4,812 $ 795 Change in fair value related to interest rate hedging instruments 95 ( 347 ) ( 1,331 ) ( 347 ) COMPREHENSIVE INCOME ATTRIBUTABLE TO THE COMPANY $ 1,663 $ 170 $ 3,481 $ 448 The accompanying notes are an integral part of these condensed consolidated financial statements. 5 Table of Contents GLADSTONE LAND CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (In thousands, except share data) (Unaudited) Three months ended September 30, 2020 Series B Preferred Stock Series C Preferred Stock Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Distributions in Excess of Accumulated Earnings Total Stockholders’ Equity Non- Controlling Interests Total Equity Number of Shares Par Value Number of Shares Par Value Number of Shares Par Value Balance at June 30, 2020 5,972,482 $ 6 130,702 $ — 21,534,739 $ 22 $ 352,677 $ ( 1,816 ) $ ( 45,653 ) $ 305,236 $ 1,147 $ 306,383 Redemptions of Series B Preferred Stock ( 16,417 ) 0 — — — — ( 327 ) — ( 44 ) ( 371 ) — ( 371 ) Issuance of Series C Preferred Stock, net — — 289,528 0 — — 6,563 — — 6,563 — 6,563 Redemption of OP Units — — — — 144,151 0 2,291 — — 2,291 ( 2,291 ) — Issuance of common stock, net — — — — 526,016 0 8,392 — — 8,392 — 8,392 Net income — — — — — — — — 1,568 1,568 13 1,581 Dividends—Series B Preferred Stock and Series C Preferred Stock — — — — — — — — ( 2,361 ) ( 2,361 ) — ( 2,361 ) Distributions—OP Units and common stock — — — — — — — — ( 2,967 ) ( 2,967 ) ( 2,967 ) Comprehensive income attributable to the Company — — — — — — — 95 — 95 — 95 Adjustment to non-controlling interests resulting from changes in ownership of the Operating Partnership — — — — — — ( 1,131 ) — — ( 1,131 ) 1,131 — Balance at September 30, 2020 5,956,065 $ 6 420,230 $ — 22,204,906 $ 22 $ 368,465 $ ( 1,721 ) $ ( 49,457 ) $ 317,315 $ — $ 317,315 Nine months ended September 30, 2020 Series B Preferred Stock Series C Preferred Stock Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Distributions in Excess of Accumulated Earnings Total Stockholders’ Equity Non- Controlling Interests Total Equity Number of Shares Par Value Number of Shares Par Value Number of Shares Par Value Balance at December 31, 2019 4,755,869 $ 5 — $ — 20,936,658 $ 21 $ 315,770 $ ( 390 ) $ ( 38,785 ) $ 276,621 $ 2,349 $ 278,970 Issuance of Series B Preferred Stock, net 1,229,531 1 — — — — 27,049 — — 27,050 — 27,050 Redemptions of Series B Preferred Stock ( 29,335 ) 0 — — — — ( 636 ) — ( 44 ) ( 680 ) — ( 680 ) Issuance of Series C Preferred Stock, net — — 420,230 0 — — 9,526 — — 9,526 — 9,526 Redemptions of OP Units — — — — 288,303 0 4,383 — — 4,383 ( 4,383 ) — Issuance of common stock, net — — — — 979,945 1 14,423 — — 14,424 — 14,424 Net income — — — — — — — — 4,812 4,812 52 4,864 Dividends—Series B Preferred Stock and Series C Preferred Stock — — — — — — — — ( 6,749 ) ( 6,749 ) — ( 6,749 ) Distributions—OP Units and common stock — — — — — — — — ( 8,691 ) ( 8,691 ) ( 68 ) ( 8,759 ) Comprehensive loss attributable to the Company — — — — — — — ( 1,331 ) — ( 1,331 ) — ( 1,331 ) Adjustment to non-controlling interests resulting from changes in ownership of the Operating Partnership — — — — — — ( 2,050 ) — — ( 2,050 ) 2,050 — Balance at September 30, 2020 5,956,065 $ 6 420,230 $ — 22,204,906 $ 22 $ 368,465 $ ( 1,721 ) $ ( 49,457 ) $ 317,315 $ — $ 317,315 The accompanying notes are an integral part of these condensed consolidated financial statements. 6 Table of Contents Three Months Ended September 30, 2019 Series B Preferred Stock Series C Preferred Stock Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Distributions in Excess of Accumulated Earnings Total Stockholders’ Equity Non- Controlling Interests Total Equity Number of Shares Par Value Number of Shares Par Value Number of Shares Par Value Balance at June 30, 2019 2,636,068 $ 3 — — 20,532,770 $ 21 $ 263,249 $ — $ ( 31,919 ) $ 231,354 $ — $ 231,354 Issuance of Series B Preferred Stock, net 831,579 0 — — — — 18,517 — — 18,517 — 18,517 Redemptions of Series B Preferred Stock ( 2,120 ) 0 — — — — ( 48 ) — — ( 48 ) — ( 48 ) Issuance of OP Units as consideration in real estate acquisitions, net — — — — — — — — — — 3,276 3,276 Issuance of common stock, net — — — — 355,305 0 3,996 — — 3,996 — 3,996 Net income — — — — — — — — 517 517 6 523 Dividends—Series B Preferred Stock and Series C Preferred Stock — — — — — — — — ( 1,161 ) ( 1,161 ) — ( 1,161 ) Distributions—OP Units and common stock — — — — — — — — ( 2,781 ) ( 2,781 ) ( 39 ) ( 2,820 ) Comprehensive loss attributable to the Company ( 347 ) — ( 347 ) ( 347 ) Adjustment to non-controlling interests resulting from changes in ownership of the Operating Partnership — — — — — — 848 — — 848 ( 848 ) — Balance at September 30, 2019 3,465,527 $ 3 — $ — 20,888,075 $ 21 $ 286,562 $ ( 347 ) $ ( 35,344 ) $ 250,895 $ 2,395 $ 253,290 Nine Months Ended September 30, 2019 Series B Preferred Stock Series C Preferred Stock Common Stock Additional Paid-in Capital Accumulated Other Comprehensive Loss Distributions in Excess of Accumulated Earnings Total Stockholders’ Equity Non- Controlling Interests Total Equity Number of Shares Par Value Number of Shares Par Value Number of Shares Par Value Balance at December 31, 2018 1,144,393 $ 1 — — 17,891,340 $ 18 $ 202,053 $ — $ ( 25,826 ) $ 176,246 $ 4,807 $ 181,053 Issuance of Series B Preferred Stock, net 2,330,654 2 — — — — 51,975 — — 51,977 — 51,977 Redemptions of Series B Preferred Stock ( 9,520 ) 0 — — — — ( 214 ) — — ( 214 ) — ( 214 ) Issuance of OP Units as consideration in real estate acquisitions, net — — — — — — — — — — — 3,276 3,276 Redemption of OP Units — — — — 570,879 1 4,714 — — 4,715 ( 4,715 ) — Issuance of common stock, net — — — — 2,425,856 2 27,143 — — 27,145 — 27,145 Net income — — — — — — — — 795 795 9 804 Dividends—Series B Preferred Stock and Series C Preferred Stock — — — — — — — — ( 2,655 ) ( 2,655 ) — ( 2,655 ) Distributions—OP Units and common stock — — — — — — — — ( 7,658 ) ( 7,658 ) ( 91 ) ( 7,749 ) Comprehensive loss attributable to the Company ( 347 ) — ( 347 ) — ( 347 ) Adjustment to non-controlling interests resulting from changes in ownership of the Operating Partnership — — — — — — 891 — — 891 ( 891 ) — Balance at September 30, 2019 3,465,527 $ 3 — $ — 20,888,075 $ 21 $ 286,562 $ ( 347 ) $ ( 35,344 ) $ 250,895 $ 2,395 $ 253,290 The accompanying notes are an integral part of these condensed consolidated financial statements. 7 Table of Contents GLADSTONE LAND CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) For the Nine Months Ended September 30, 2020 2019 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 4,864 $ 804 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 12,010 8,952 Amortization of debt issuance costs 559 461 Amortization of deferred rent assets and liabilities, net ( 212 ) ( 226 ) Amortization of right-of-use asset from operating leases and operating lease liabilities, net ( 12 ) ( 18 ) Income from investments in unconsolidated entities ( 7 ) — Bad debt expense 12 24 Loss on dispositions of real estate assets, net 861 154 Property and casualty recovery, net ( 68 ) ( 10 ) Changes in operating assets and liabilities: Other assets, net ( 3,192 ) 281 Accounts payable and accrued expenses and Due to related parties, net ( 1,663 ) ( 1,586 ) Other liabilities, net ( 1,559 ) 5,066 Net cash provided by operating activities 11,593 13,902 CASH FLOWS FROM INVESTING ACTIVITIES: Acquisition of new real estate assets ( 64,658 ) ( 200,676 ) Capital expenditures on existing real estate assets ( 10,725 ) ( 8,974 ) Proceeds from dispositions of real estate assets 247 — Change in deposits on real estate acquisitions, net ( 550 ) ( 300 ) Insurance proceeds received capitalized as real estate additions 66 — Net cash used in investing activities ( 75,620 ) ( 209,950 ) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from issuance of preferred and common equity 55,231 86,070 Offering costs ( 3,636 ) ( 6,551 ) Redemption of Series B Preferred Stock ( 681 ) ( 213 ) Borrowings from mortgage notes and bonds payable 20,781 120,399 Repayments of mortgage notes and bonds payable ( 10,599 ) ( 7,686 ) Borrowings from lines of credit 19,000 22,900 Repayments of lines of credit ( 7,500 ) ( 18,900 ) Payments of financing fees ( 497 ) ( 738 ) Dividends paid on cumulative redeemable preferred stock (Series B and Series C) ( 6,546 ) ( 2,222 ) Distributions paid on common stock ( 8,691 ) ( 7,658 ) Distributions paid to non-controlling interests in Operating Partnership ( 68 ) ( 91 ) Payment of contingent consideration — — Net cash provided by financing activities 56,794 185,310 NET DECREASE IN CASH AND CASH EQUIVALENTS ( 7,233 ) ( 10,738 ) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 13,688 14,730 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 6,455 $ 3,992 The accompanying notes are an integral part of these condensed consolidated financial statements. 8 Table of Contents GLADSTONE LAND CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued) (In thousands) (Unaudited) For the Nine Months Ended September 30, 2020 2019 NON-CASH OPERATING, INVESTING, AND FINANCING INFORMATION: Issuance of non-controlling interests in Operating Partnership in conjunction with acquisitions $ — $ 3,290 Operating lease right-of-use assets — 188 Operating lease liabilities — 171 Real estate additions included in Accounts payable and accrued expenses and Due to related parties, net 5,363 1,397 Loss on dispositions of real estate assets, net included in Accounts payable and accrued expenses and Due to related parties, net — 119 Stock offering and OP Unit issuance costs included in Accounts payable and accrued expenses and Due to related parties, net — 35 Financing fees included in Accounts payable and accrued expenses and Due to related parties, net 16 14 Lender holdback on loan issuance — 498 Unrealized loss related to interest rate hedging instrument ( 1,721 ) ( 347 ) The accompanying notes are an integral part of these condensed consolidated financial statements. 9 Table of Contents GLADSTONE LAND CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 1. BUSINESS AND ORGANIZATION Business and Organization Gladstone Land Corporation (the “Company”) is an agricultural real estate investment trust (“REIT”) that was re-incorporated in Maryland on March 24, 2011, having been originally incorporated in California on June 14, 1997. Upon the pricing of our initial public offering on January 29, 2013, our shares of common stock began trading on the Nasdaq Stock Market, LLC (“Nasdaq”), under the symbol “LAND.” We are primarily in the business of owning and leasing farmland, and we conduct substantially all of our operations through a subsidiary, Gladstone Land Limited Partnership (the “Operating Partnership”), a Delaware limited partnership. As we currently control the sole general partner of the Operating Partnership and own, directly or indirectly, a majority of the common units of limited partnership interest in the Operating Partnership (“OP Units”), the financial position and results of operations of the Operating Partnership are consolidated within our financial statements. As of September 30, 2020, and December 31, 2019, the Company owned 100.0 % and approximately 98.6 %, respectively, of the outstanding OP Units (see Note 8, “ Equity ,” for additional discussion regarding OP Units). Gladstone Land Advisers, Inc. (“Land Advisers”), a Delaware corporation and a subsidiary of ours, was created to collect certain non-qualifying income related to our real estate portfolio and to perform certain small-scale farming business operations. We have elected for Land Advisers to be treated as a taxable REIT subsidiary (“TRS”) of ours. Since we currently own 100 % of the voting securities of Land Advisers, its financial position and results of operations are consolidated within our financial statements. Subject to certain restrictions and limitations, and pursuant to contractual agreements, our business is managed by Gladstone Management Corporation (the “Adviser”), a Delaware corporation, and administrative services are provided to us by Gladstone Administration, LLC (the “Administrator”), a Delaware limited liability company. Our Adviser and Administrator are both affiliates of ours (see Note 6, “ Related-Party Transactions ,” for additional discussion regarding our Adviser and Administrator). All further references herein to “we,” “us,” “our,” and the “Company” refer, collectively, to Gladstone Land Corporation and its consolidated subsidiaries, except where indicated otherwise. NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Interim Financial Information Our interim financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and pursuant to the requirements for reporting on Form 10-Q in accordance with Article 10 of Regulation S-X. Accordingly, certain disclosures accompanying annual financial statements prepared in accordance with GAAP are omitted. In the opinion of our management, all adjustments (consisting solely of normal recurring accruals) necessary for the fair statement of financial statements for the interim period have been included. The interim financial statements and accompanying notes should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2019, as filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 19, 2020 (the “Form 10-K”). The results of operations for the three and nine months ended September 30, 2020, are not necessarily indicative of the results that may be expected for other interim periods or for the full fiscal year. Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, including the impact of extraordinary events, such as the novel coronavirus (“COVID-19”) pandemic, the results of which form the basis for making certain judgments. Actual results may materially differ from these estimates. Impairment of Real Estate Assets 10 Table of Contents We account for the impairment of our tangible and identifiable intangible real estate assets in accordance with Accounting Standards Codification (“ASC”) 360, “Property, Plant, and Equipment” (“ASC 360”), which requires us to periodically review the carrying value of each property to determine whether indicators of impairment exist. If circumstances support the possibility of impairment, we prepare a projection of the total undiscounted future cash flows of the specific property (without interest charges), including proceeds from disposition, and compare them to the net book value of the property to determine whether the carrying value of the property is recoverable. If the carrying amount is more than the aggregate undiscounted future cash flows, we would recognize an impairment loss to the extent the carrying value exceeds the estimated fair value of the property. We evaluate our entire portfolio each quarter for any impairment indicators and perform an impairment analysis on those select properties that have an indication of impairment. As of September 30, 2020, and December 31, 2019, we concluded that none of our properties were impaired. There have been no impairments recognized on our real estate assets since our inception. Income Taxes We have operated and intend to continue to operate in a manner that will allow us to qualify as a REIT under the Sections 856-860 of the Internal Revenue Code of 1986, as amended (the “Code”). As a REIT, we generally are not subject to federal corporate income taxes on amounts that we distribute to our stockholders (except income from any foreclosure property), provided that, on an annual basis, we distribute at least 90% of our REIT taxable income (excluding net capital gains) to our stockholders and meet certain other conditions. As such, in general, as long as we qualify as a REIT, no provision for federal income taxes will be necessary, except for taxes on undistributed REIT taxable income and taxes on the income generated by a TRS (such as Land Advisers), if any. For the tax year ended December 31, 2019 and for the nine months ended September 30, 2020, we did not have any undistributed REIT taxable income, nor was there any taxable income or loss from Land Advisers. Should we have any taxable income or loss in the future, we will account for any income taxes in accordance with the provisions of ASC 740, “Income Taxes,” using the asset and liability method. Reclassifications Certain information on the accompanying Condensed Consolidated Balance Sheet as of December 31, 2019, has been reclassified to conform to the current period’s presentation. These reclassifications had no impact on previously-reported stockholders’ equity, net income, or net change in cash and cash equivalents. Recently-Issued Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”). ASU 2016-13 requires more timely recognition of credit losses on loans and other financial instruments that are not accounted for at fair market value through net income. The standard also requires that financial assets measured at amortized cost be presented at the net amount anticipated to be collected via an allowance for credit losses that is deducted from the amortized cost basis. Pursuant to ASU 2016-13, we are required to measure all expected credit losses based upon historical experience, current conditions, and reasonable (and supportable) forecasts that affect the collectability of the financial asset. We adopted ASU 2016-13 on January 1, 2020, and its adoption has not had a material impact on our consolidated financial statements. In March 2020, the FASB issued ASU 2020-04, “Reference Rate Reform (Topic 848)” (“ASU 2020-04”). The main provisions of this update provide optional expedients and exceptions for contracts, hedging relationships, and other transactions that reference the London Inter-bank Offered Rate (“LIBOR”) or another reference rate expected to be discontinued because of reference rate reform. ASU 2020-04 is effective for all entities as of March 12, 2020. We adopted ASU 2020-04 on January 1, 2020, and its adoption has not resulted in a material impact to our consolidated financial statements, as ASU 2020-04 allows for prospective application of any changes in the effective interest rate for LIBOR-based debt and also provides for practical expedients that will allow us to continue to treat our derivative instruments designed as cash flow hedges consistent to how they are accounted for now. In April 2020, the FASB issued a staff question-and-answer document, “Topic 842 and Topic 840: Accounting for Lease Concessions Related to the Effects of the COVID-19 Pandemic” (the “COVID-19 Q&A”), to address certain frequently-asked questions pertaining to lease concessions arising from the effects of the COVID-19 pandemic. Existing lease guidance requires entities to determine if a lease concession was a result of a new arrangement reached with the tenant (which would be addressed under the lease modification accounting framework) or if a lease concession was under the enforceable rights and obligations within the existing lease agreement (which would not fall under the lease modification accounting framework). The COVID-19 Q&A clarifies that entities may elect to not evaluate whether lease-related relief granted in light of the effects of COVID-19 is a lease modification, provided that the concession does not result in a substantial increase in rights of the lessor or obligations of 11 Table of Contents the lessee. This election is available for concessions that result in the total payments required by the modified contract being substantially the same as or less than the total payments required by the original contract. In July 2020, we granted rent deferrals to two tenants who owed aggregate rents of approximately $ 343,000 , which was originally scheduled to be paid on July 1, 2020. The agreements with these tenants provide for extensions of up to 123 days, extending the new due dates for these rental payments to be on or before November 1, 2020. These rental payments were collected in full subsequent to September 30, 2020. We did not elect to evaluate these lease amendments under the lease modification accounting framework. NOTE 3. REAL ESTATE AND INTANGIBLE ASSETS All of our properties are wholly-owned on a fee-simple basis, except where noted. The following table provides certain summary information about the 123 farms we owned as of September 30, 2020 (dollars in thousands, except for footnotes): Location No. of Farms Total Acres Farm Acres Net Cost Basis (1) Encumbrances (2) California (3) 46 17,954 16,660 $ 467,464 $ 275,844 Florida 23 20,770 16,256 210,427 130,667 Arizona (4) 6 6,280 5,228 59,216 22,097 Colorado 12 32,773 25,577 48,583 31,406 Nebraska 9 7,782 7,050 30,744 19,331 Michigan 15 962 682 12,105 7,619 Texas 1 3,667 2,219 8,346 5,173 Washington 1 746 417 7,895 4,909 Maryland 4 759 693 6,316 3,728 Oregon 3 418 363 6,163 3,999 North Carolina 2 310 295 2,255 1,206 Delaware 1 180 140 1,276 753 123 92,601 75,580 $ 860,790 $ 506,732 (1) Consists of the initial acquisition price (including the costs allocated to both tangible and intangible assets acquired and liabilities assumed), plus subsequent improvements and other capitalized costs associated with the properties, and adjusted for accumulated depreciation and amortization. Specifically, includes Investments in real estate, net (excluding improvements paid for by the tenant) and Lease intangibles, net; plus net above-market lease values, lease incentives, and investments in special-purpose LLCs included in Other assets, net; and less net below-market lease values and other deferred revenue included in Other liabilities, net; each as shown on the accompanying Condensed Consolidated Balance Sheets. (2) Excludes approximately $ 3.2 million of debt issuance costs related to notes and bonds payable, included in Notes and bonds payable, net on the accompanying Condensed Consolidated Balance Sheet. (3) Includes ownership in a special-purpose LLC that owns a pipeline conveying water to one of our properties. As of September 30, 2020, this investment had a net carrying value of approximately $ 874,000 and is included within Other assets, net on the accompanying Condensed Consolidated Balance Sheet. (4) Includes two farms in which we own a leasehold interest via ground leases with the State of Arizona that expire in February 2022 and February 2025, respectively. In total, these two farms consist of 1,368 total acres and 1,221 farm acres and had an aggregate net cost basis of approximately $ 1.7 million as of September 30, 2020 (included in Lease intangibles, net on the accompanying Condensed Consolidated Balance Sheet). Real Estate The following table sets forth the components of our investments in tangible real estate assets as of September 30, 2020, and December 31, 2019 (dollars in thousands): September 30, 2020 December 31, 2019 Real estate: Land and land improvements $ 632,178 $ 583,247 Irrigation and drainage systems 121,826 108,222 Horticulture 120,684 107,941 Farm-related facilities 21,879 20,665 Other site improvements 7,245 7,180 Real estate, at gross cost 903,812 827,255 Accumulated depreciation ( 45,059 ) ( 35,174 ) Real estate, net $ 858,753 $ 792,081 Real estate depreciation expense on these tangible assets was approximately $ 3.6 million and $ 10.6 million for the three and nine months ended September 30, 2020, respectively, and approximately $ 3.0 million and $ 7.8 million for the three and nine months ended September 30, 2019, respectively. 12 Table of Contents Included in the figures above are amounts related to improvements made on certain of our properties paid for by our tenants but owned by us, or tenant improvements. As of September 30, 2020, and December 31, 2019, we recorded tenant improvements, net of accumulated depreciation, of approximately $ 2.0 million and $ 2.2 million, respectively. We recorded both depreciation expense and additional lease revenue related to these tenant improvements of approximately $ 76,000 and $ 228,000 for the three and nine months ended September 30, 2020, respectively, and approximately $ 72,000 and $ 218,000 for the three and nine months ended September 30, 2019, respectively. Intangible Assets and Liabilities The following table summarizes the carrying values of certain lease intangible assets and the related accumulated amortization as of September 30, 2020, and December 31, 2019 (dollars in thousands): September 30, 2020 December 31, 2019 Lease intangibles: Leasehold interest – land $ 3,498 $ 3,498 In-place leases 1,881 2,293 Leasing costs 1,565 2,066 Tenant relationships 180 414 Lease intangibles, at cost 7,124 8,271 Accumulated amortization ( 3,498 ) ( 3,444 ) Lease intangibles, net $ 3,626 $ 4,827 Total amortization expense related to these lease intangible assets, including amounts charged to amortization expense due to early lease terminations, was approximately $ 294,000 and $ 1.4 million for the three and nine months ended September 30, 2020, respectively, and approximately $ 460,000 and $ 1.1 million for the three and nine months ended September 30, 2019, respectively. See below, under “ Significant Existing Real Estate Activity—Leasing Activity—Lease Termination ” for further discussion of this lease termination. The following table summarizes the carrying values of certain lease intangible assets or liabilities included in Other assets, net or Other liabilities, net, respectively, on the accompanying Condensed Consolidated Balance Sheets and the related accumulated amortization or accretion, respectively, as of September 30, 2020, and December 31, 2019 (dollars in thousands): September 30, 2020 December 31, 2019 Intangible Asset or Liability Deferred Rent Asset (Liability) Accumulated (Amortization) Accretion Deferred Rent Asset (Liability) Accumulated (Amortization) Accretion Above-market lease values and lease incentives (1) $ 255 $ ( 135 ) $ 111 $ ( 41 ) Below-market lease values and other deferred revenue (2) ( 943 ) 335 ( 886 ) 257 $ ( 688 ) $ 200 $ ( 775 ) $ 216 (1) Net above-market lease values and lease incentives are included as part of Other assets, net on the accompanying Condensed Consolidated Balance Sheets, and the related amortization is recorded as a reduction of Lease revenue on the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income. (2) Net below-market lease values and other deferred revenue are included as a part of Other liabilities, net on the accompanying Condensed Consolidated Balance Sheets, and the related accretion is recorded as an increase to Lease revenue on the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income. Total amortization related to above-market lease values and lease incentives was approximately $ 32,000 and $ 94,000 for the three and nine months ended September 30, 2020, respectively, and approximately $ 31,000 and $ 97,000 for the three and nine months ended September 30, 2019, respectively. Total accretion related to below-market lease values and other deferred revenue was approximately $ 28,000 and $ 78,000 for the three and nine months ended September 30, 2020, respectively, and approximately $ 46,000 and $ 123,000 for the three and nine months ended September 30, 2019, respectively. Acquisitions 2020 Acquisitions During the nine months ended September 30, 2020, we acquired 12 new farms, which are summarized in the table below (dollars in thousands, except for footnotes): 13 Table of Contents Property Name Property Location Acquisition Date Total Acres No. of Farms Primary Crop(s) Lease Term Renewal Options Total Purchase Price Acquisition Costs (1) Annualized Straight-line Rent (2) New Long-term Debt County Road 18 Phillips, CO 1/15/2020 1,325 2 Sugar beets, edible beans, potatoes, & corn 6.0 years None $ 7,500 $ 39 $ 417 $ 4,500 Lamar Valley Chase, NE 5/7/2020 678 1 Potatoes, edible beans, & corn 6.7 years 2 (5 years) 3,500 42 204 2,100 Driver Road (3) Kern, CA 6/5/2020 590 1 Pecans 4.7 years 2 (10 years) 14,169 52 784 8,500 Mt. Hermon Wicomico & Caroline, MD, and Sussex, DE 8/31/2020 939 5 Sod & vegetables 10.0 years 2 (5 years) 7,346 211 432 4,481 Firestone Avenue (4)(5)(6) Fresno, CA 9/3/2020 2,534 3 Pistachios and misc. organic & conventional vegetables 1.2 years 2 (5 years) 31,833 74 1,734 — 6,066 12 $ 64,348 $ 418 $ 3,571 $ 19,581 (1) Includes approximately $ 38,000 of aggregate external legal fees associated with negotiating and originating the leases associated with these acquisitions, which costs were expensed in the period incurred. (2) Annualized straight-line rent is based on the minimum cash rental payments guaranteed under the applicable leases, as required under GAAP, and excludes contingent rental payments, such as participation rents. (3) The lease provides for an initial term of 14.7 years and includes six tenant termination options throughout the initial term. The lease term stated above represents the term through the first available termination option, and the annualized straight-line rent amount represents the rent guaranteed through the noncancellable term of the lease. (4) Lease provides for a participation rent component based on the gross crop revenues earned on the farm. The rent figure above represents only the minimum cash guaranteed under the lease. (5) Lease provides for an initial term of 8.2 years but also includes an annual tenant termination option, effective as of the end of the then-current lease year (as defined within the lease). The lease term stated above represents the term through the first available termination option, and the annualized straight-line rent amount represents the rent guaranteed through the noncancellable term of the lease. (6) In connection with the acquisition of this property, we also acquired an ownership interest in a related LLC, the sole purpose of which is to own and maintain a pipeline conveying water to this and other neighboring properties. Our acquired ownership, which equated to a 12.5 % interest in the LLC, was valued at approximately $ 280,000 at the time of acquisition and is included within Other assets, net on the accompanying Condensed Consolidated Balance Sheets. See “ Investments in Unconsolidated Entities ” below for further information on our aggregate ownership interest in this LLC. During the three and nine months ended September 30, 2020, we recognized lease revenue of approximately $ 527,000 and $ 808,000 , respectively, and net income of approximately $ 253,000 and $ 448,000 , respectively, related to the above acquisitions. 2019 Acquisitions During the nine months ended September 30, 2019, we acquired 20 new farms, which are summarized in the table below (dollars in thousands, except for footnotes): Property Name Property Location Acquisition Date Total Acres No. of Farms Primary Crop(s) / Use Lease Term Renewal Options Total Purchase Price Acquisition Costs (1) Annualized Straight-line Rent (2) New Long-term Debt Somerset Road Lincoln, NE 1/22/2019 695 1 Popcorn & edible beans 4.9 years 1 (5 years) $ 2,400 $ 33 $ 126 $ 1,440 Greenhills Boulevard (3) Madera, CA 4/9/2019 928 1 Pistachios 10.6 years 2 (5 years) 28,550 141 1,721 17,130 Van Buren Trail Van Buren, MI 5/29/2019 159 2 Blueberries & cranberries 10.6 years 2 (5 years) 2,682 26 206 1,609 Blue Star Highway Allegran & Van Buren, MI 6/4/2019 357 8 Blueberries 10.6 years 2 (5 years) 5,100 30 390 3,060 Yolo County Line Road Yolo, CA 6/13/2019 542 1 Olives for olive oil 14.6 years 1 (5 years) 9,190 68 624 5,514 San Juan Grade Road (4) Monterey, CA 7/11/2019 324 1 Strawberries & vegetables 0.3 years None 9,000 68 632 5,400 West Citrus Boulevard (5) Martin, FL 7/22/2019 3,586 1 Water retention 8.4 years 2 (10 years) 57,790 516 3,696 37,700 Sutter Avenue (Phase I) (3)(6) Fresno, CA 8/16/2019 1,011 1 Pistachios 8.2 years 2 (5 years) 33,000 146 2,106 16,500 Las Posas Road (7) Ventura, CA 8/28/2019 413 3 Sod & vegetables 3.3 years 1 (2 years) 21,320 111 1,283 12,792 Withers Road (8) Napa, CA 8/29/2019 366 1 Wine grapes 10.3 years 2 (10 years) 32,000 84 2,256 19,254 8,381 20 $ 201,032 $ 1,223 $ 13,040 $ 120,399 (1) Includes approximately $ 63,000 of external legal fees associated with negotiating and originating the lease associated with this acquisition, which cost was expensed in the period incurred. (2) Annualized straight-line rent is based on the minimum cash rental payments guaranteed under the applicable leases, as required under GAAP, and excludes contingent rental payments, such as participation rents. (3) Lease provides for a participation rent component based on the gross crop revenues earned on the farm. The rent figure above represents only the minimum cash guaranteed under the lease. 14 Table of Contents (4) In connection with the acquisition of this property, we executed a six -year, follow-on lease with a new tenant that will commence upon the expiration of the four-month lease executed on the date of acquisition. The follow-on lease includes one , four -year extension option and provides for minimum annualized straight-line rents of approximately $ 606,000 . In connection with the follow-on lease, we committed to provide up to $ 100,000 for certain irrigation improvements on the property. (5) As partial consideration for the acquisition of this property, we issued 288,303 OP Units, constituting an aggregate fair value of approximately $ 3.3 million as of the acquisition date. (6) In connection with the acquisition of this property, we also acquired an ownership in a related LLC, the sole purpose of which is to own and maintain a pipeline conveying water to this and other neighboring properties. Our acquired ownership, which equated to an 11.75 % interest in the LLC, was valued at approximately $ 280,000 at the time of acquisition and is included within Other assets, net on the accompanying Condensed Consolidated Balance Sheets. (7) In connection with this acquisition, we executed two separate lease agreements with two different, unrelated third-party tenants. The lease term of 3.3 years represents the weighted-average term of the two leases. In addition, pursuant to one of these lease agreements, we committed to provide up to $ 1.0 million for certain irrigation improvements on the property. (8) In connection with the acquisition of this property, we committed to provide up to approximately $ 4.0 million as additional compensation, contingent upon the County of Napa approving the planting of additional vineyards on up to 47 acres of the property. Subject to such approval, we also committed to contribute up to $ 40,000 per approved acre for the development of such vineyards. As provided for in the lease, we will earn additional rent on all of the aforementioned costs, if any, incurred by us. See below, under “ Significant Existing Real Estate Activity—Property Add-on ” for additional information on the subsequent approval of additional vineyard plantings. During the three and nine months ended September 30, 2019, we recognized operating revenues of approximately $ 2.2 million and $ 2.8 million, respectively, and net income of approximately $ 574,000 and $ 793,000 , respectively, related to the above acquisitions. Purchase Price Allocations The allocation of the aggregate purchase price for the farms acquired during each of the nine months ended September 30, 2020 and 2019 is as follows (dollars in thousands): Assets (Liabilities) Acquired 2020 Acquisitions 2019 Acquisitions Land and Land Improvements $ 44,154 $ 138,253 Irrigation & Drainage Systems 7,250 17,789 Horticulture 12,245 41,746 Farm-related Facilities 189 2,013 Other Site Improvements — 358 In-Place Leases 101 560 Leasing Costs 133 118 Above-market Lease Values (1) 54 — Below-market Lease Values (2) ( 58 ) ( 85 ) Investment in LLC (1) 280 280 Total Purchase Price $ 64,348 201,032 (1) Included within Other assets, net on the accompanying Condensed Consolidated Balance Sheets. (2) Included within Other liabilities, net on the accompanying Condensed Consolidated Balance Sheets. Significant Existing Real Estate Activity Property Add-on In connection with the acquisition of Withers Road, we committed to provide up to approximately $ 4.0 million as additional compensation, contingent upon the County of Napa approving the planting of additional vineyards on up to 47 acres of the property by February 25, 2020 (the “Permit Deadline”). In addition, if approval was obtained, we also committed to contribute up to $ 40,000 per approved acre for the development of such vineyards. While approval of the additional plantings was not received from the County of Napa by the Permit Deadline, in March 2020, we executed an agreement with the tenant on Withers Road to extend the Permit Deadline until August 24, 2020. In April 2020, we received notification from the County of Napa informing us that it had approved of additional vineyard plantings on 38.7 acres of the property. As such, in May 2020, we paid additional compensation related to this acquisition of approximately $ 3.2 million. As a result, and pursuant to a lease amendment, we will earn additional straight-line rental income of approximately $ 335,000 per year throughout the remaining term of the lease, which expires on December 31, 2029. We will also earn additional rent on any of the aforementioned development costs as they are incurred by us. Leasing Activity 15 Table of Contents The following table summarizes certain leasing activity that occurred on our existing properties during the nine months ended September 30, 2020 (dollars in thousands): PRIOR LEASES NEW LEASES (1) Farm Locations Number of Leases Total Farm Acres Total Annualized Straight-line Rent (2) # of Leases with Participation Rents Lease Structures (# of NNN / NN / N) (3) Total Annualized Straight-line Rent (2) Wtd. Avg. Term (Years) # of Leases with Participation Rents Lease Structures (# of NNN / NN / N) (3) AZ, CA, FL, & NE 14 7,141 $ 6,420 3 8 / 4 / 2 $ 6,554 6 4 9 / 5 / 0 (1) In connection with certain of these leases, we committed to provide capital for certain improvements on these farms. See Note 7, “ Commitments and Contingencies—Operating Obligations ,” for additional information on these commitments. (2) Annualized straight-line rent is based on the minimum cash rental payments guaranteed under the leases (presented on an annualized basis), as required under GAAP, and excludes contingent rental payments, such as participation rents. (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. For a description of each of these types of lease arrangements, see “ Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview—Leases—General .” Lease Termination On February 10, 2020, we reached an agreement with a tenant occupying four of our farms in Arizona to terminate the existing leases encompassing those four farms effective February 10, 2020. As part of the termination agreement, the outgoing tenant made a one-time termination payment to us of approximately $ 3.0 million, which we recognized as additional lease revenue during the nine months ended September 30, 2020. The prior leases were scheduled to expire on September 15, 2026 (with two of the farms subject to the renewal of certain state leases currently scheduled to expire on February 14, 2022, and February 14, 2025). In connection with the early termination of these leases, during the nine months ended September 30, 2020, we recognized approximately $ 89,000 of prepaid rent as additional lease revenue and wrote off an aggregate net deferred rent balance of approximately $ 254,000 against lease revenue. In addition, approximately $ 470,000 of unamortized lease intangible assets related to the terminated leases were written off and charged to amortization expense during the nine months ended September 30, 2020. Upon termination of these leases, we entered into a new, seven -year lease with a new tenant effective immediately. These leases are included in the Leasing Activity table above. Investments in Unconsolidated Entities In connection with the acquisition of certain farmland located in Fresno County, California, we also acquired an ownership in a related LLC, the sole purpose of which is to own and maintain a pipeline conveying water to our and other neighboring properties. As of September 30, 2020, our aggregate ownership interest in the LLC was 37.5 %. As our investment in the LLC is deemed to constitute “significant influence,” we have accounted for this investment under the equity method. During the three and nine months ended September 30, 2020, we recorded (loss) income of approximately $( 19,000 ) and $ 7,000 , respectively (included on our Condensed Consolidated Statements of Operations and Comprehensive Income as Income from investments in unconsolidated entities), which represents our pro-rata share of the (loss) income recognized by the LLC. Prior to fiscal year 2020, we had not recorded any material income or loss related to our ownership interest in the LLC. Our combined ownership interest in the LLC, which had an aggregate carrying value of approximately $ 874,000 and $ 587,000 , as of September 30, 2020, and December 31, 2019, respectively, is included within Other assets, net on the accompanying Condensed Consolidated Balance Sheets. Portfolio Diversification and Concentrations Diversification The following table summarizes the geographic locations (by state) of our farms owned and with leases in place as of the nine months ended September 30, 2020 and 2019 (dollars in thousands): 16 Table of Contents As of and For the nine months ended September 30, 2020 As of and For the nine months ended September 30, 2019 State Number of Farms Total Acres % of Total Acres Lease Revenue % of Total Lease Revenue Number of Farms Total Acres % of Total Acres Lease Revenue % of Total Lease Revenue California (1) 46 17,954 19.4 % $ 22,153 52.9 % 41 13,731 16.8 % $ 13,872 51.0 % Florida 23 20,770 22.4 % 10,006 23.9 % 23 20,770 25.5 % 7,785 28.6 % Arizona 6 6,280 6.8 % 4,272 10.2 % 6 6,280 7.7 % 1,609 5.9 % Colorado 12 32,773 35.4 % 2,501 6.0 % 10 31,448 38.5 % 2,126 7.8 % Nebraska 9 7,782 8.4 % 1,159 2.7 % 3 3,254 4.0 % 264 1.0 % Michigan 15 962 1.0 % 554 1.3 % 15 962 1.2 % 259 1.0 % Oregon 3 418 0.5 % 395 0.9 % 3 418 0.5 % 386 1.4 % Washington 1 746 0.8 % 368 0.9 % 1 746 0.9 % 383 1.4 % Texas 1 3,667 4.0 % 337 0.8 % 1 3,667 4.5 % 394 1.4 % North Carolina 2 310 0.3 % 120 0.3 % 2 310 0.4 % 125 0.5 % Maryland 4 759 0.8 % 35 0.1 % — — — % — — % Delaware 1 180 0.2 % 7 — % — — — % — — % TOTALS 123 92,601 100.0 % $ 41,907 100.0 % 105 81,586 100.0 % $ 27,203 100.0 % (1) According to the California Chapter of the American Society of Farm Managers and Rural Appraisers, there are eight distinct growing regions within California; our farms are spread across six of these growing regions. Concentrations Credit Risk As of September 30, 2020, our farms were leased to 73 different, unrelated third-party tenants, with certain tenants leasing more than one farm. No individual tenant represented greater than 10.0% of the total lease revenue recorded during the nine months ended September 30, 2020. Geographic Risk Farms located in California, Florida, and Arizona accounted for approximately $ 22.2 million ( 52.9 %), $ 10.0 million ( 23.9 %) and $ 4.3 million ( 10.2 %), respectively, of the total lease revenue recorded during the nine months ended September 30, 2020. Though we seek to continue to further diversify geographically, as may be desirable or feasible, should an unexpected natural disaster (such as an earthquake, wildfire, or flood) occur or climactic change impact the regions where our properties are located, there could be a material adverse effect on our financial performance and ability to continue operations. None of our farms in California or Florida have been materially impacted by the recent wildfires or hurricanes that occurred in those respective regions. No other single state accounted for more than 10.0% of our total lease revenue recorded during the nine months ended September 30, 2020. NOTE 4. BORROWINGS Our borrowings as of September 30, 2020, and December 31, 2019, are summarized below (dollars in thousands): 17 Table of Contents Carrying Value as of As of September 30, 2020 September 30, 2020 December 31, 2019 Stated Interest Rates (1) (Range; Wtd. Avg) Maturity Dates (Range; Wtd. Avg) Notes and bonds payable: Fixed-rate notes payable $ 405,249 $ 394,569 3.00 %– 5.70 %; 4.03 % 2/14/2022–11/1/2045; March 2032 Fixed-rate bonds payable 89,883 90,380 2.61 %– 4.57 %; 3.44 % 12/11/2020–9/13/2028; May 2023 Total notes and bonds payable 495,132 484,949 Debt issuance costs – notes and bonds payable ( 3,211 ) ( 3,120 ) N/A N/A Notes and bonds payable, net $ 491,921 $ 481,829 Variable-rate revolving lines of credit $ 11,600 $ 100 2.50 % 4/5/2024 Total borrowings, net $ 503,521 $ 481,929 (1) Where applicable, stated interest rates are before interest patronage (as described below). As of September 30, 2020, the above borrowings were collateralized by certain of our farms with an aggregate net book value of approximately $ 827.7 million. The weighted-average interest rate charged on the above borrowings (excluding the impact of debt issuance costs and before any interest patronage, or refunded interest) was 4.03 % and 3.99 % for the three and nine months ended September 30, 2020, respectively, as compared to 4.03 % and 3.97 % for the three and nine months ended September 30, 2019. In addition, 2019 interest patronage from our Farm Credit Notes Payable (as defined below), which we recorded during the three months ended March 31, 2020, resulted in a 20.4 % reduction (approximately 98 basis points) to the stated interest rates on such borrowings. We are unable to estimate the total amount of interest patronage to be received related to interest accrued during 2020 on our Farm Credit Notes Payable. See below under “ —Farm Credit Notes Payable “ for further discussion on interest patronage. As of September 30, 2020, we were in compliance with all covenants applicable to the above borrowings. New MetLife Facility As of December 31, 2019, our facility with Metropolitan Life Insurance Company (“MetLife”) consisted of a total of $ 200.0 million of term notes (the “Prior MetLife Term Notes”) and $ 75.0 million of revolving equity lines of credit (the “MetLife Lines of Credit,” and together with the Prior MetLife Term Notes, the “Prior MetLife Facility”). The draw period for the Prior MetLife Term Notes expired on December 31, 2019, with approximately $ 21.5 million being left undrawn, and MetLife had no obligation to disburse the remaining funds under those notes. On February 20, 2020, we entered into an agreement with MetLife to remove the MetLife Lines of Credit from the Prior MetLife Facility and create a new credit facility consisting of a new $ 75.0 million long-term note payable (the “New MetLife Term Note”) and the MetLife Lines of Credit (collectively, the “New MetLife Facility”). The following table summarizes the pertinent terms of the New MetLife Facility as of September 30, 2020 (dollars in thousands, except for footnotes): Issuance Aggregate Commitment Maturity Dates Principal Outstanding Interest Rate Terms Undrawn Commitment New MetLife Term Note $ 75,000 (1) 1/5/2030 $ — N/A (2) 75,000 (3) MetLife Lines of Credit 75,000 4/5/2024 11,600 3-month LIBOR + 2.00 % (4) 63,400 (3) Total principal outstanding $ 11,600 (1) If the aggregate commitment under the New MetLife Term Note is not fully utilized by December 31, 2022, MetLife has the option to be relieved of its obligation to disburse the additional funds under the New MetLife Term Note. (2) Interest rates on any disbursements under the New MetLife Term Note will be based on prevailing market rates at the time of such disbursements. In addition, through December 31, 2022, the New MetLife Term Note is also subject to an unused fee ranging from 0.10 % to 0.20 % on undrawn amounts (based on the balance drawn under the New MetLife Term Note). (3) Based on the properties that were pledged as collateral under the New MetLife Facility, as of September 30, 2020, the maximum additional amount we could draw under the facility was approximately $ 12.7 million. (4) The interest rate on the MetLife Lines of Credit is subject to a minimum annualized rate of 2.50 %, plus an unused fee ranging from 0.10 % to 0.20 % on undrawn amounts (based on the balance drawn under each line of credit). 18 Table of Contents Farm Credit Notes Payable From time to time since September 2014, we, through certain subsidiaries of our Operating Partnership, have entered into various loan agreements (collectively, the “Farm Credit Notes Payable”) with 10 different Farm Credit associations (collectively, “Farm Credit”). During the nine months ended September 30, 2020, we entered into the following loan agreements with Farm Credit (dollars in thousands): Issuer Date of Issuance Amount Maturity Date Principal Amortization Stated Interest Rate (1) Interest Rate Terms Premier Farm Credit, FLCA 5/14/2020 $ 4,500 1/1/2045 24.6 years 4.00 % Fixed through December 31, 2029 (variable thereafter) Farm Credit West, FLCA 6/24/2020 600 5/1/2044 24.2 years 3.00 % Fixed through July 31, 2026 (variable thereafter) Farm Credit West, FLCA 6/24/2020 600 5/1/2044 24.2 years 3.00 % Fixed through August 31, 2026 (variable thereafter) Farm Credit West, FLCA 6/25/2020 8,500 11/1/2045 25.0 years 3.75 % Fixed through June 30, 2030 (variable thereafter) Farm Credit of the Virginias, ACA 8/31/2020 4,481 9/1/2030 25.0 years 3.99 % Fixed throughout term (1) Stated rate is before interest patronage, as described below. Interest patronage, or refunded interest, on our borrowings from Farm Credit is generally recorded upon receipt and is included within Other income on our Condensed Consolidated Statements of Operations and Comprehensive Income. Receipt of interest patronage typically occurs in the first half of the calendar year following the calendar year in which the respective interest expense is accrued. During the three months ended March 31, 2020, we recorded interest patronage of approximately $ 1.3 million related to interest accrued on the Farm Credit Notes Payable during the year ended December 31, 2019, which resulted in a 20.4 % reduction (approximately 98 basis points) to the stated interest rates on such borrowings. In addition, during the three months ended September 30, 2020, we received approximately $ 306,000 of interest patronage related to our Farm Credit Notes Payable, as certain Farm Credit associations paid a portion of the 2021 interest patronage (which relates to interest accrued during 2020) early. Conterra Note Payable During the nine months ended September 30, 2020, we entered into a loan agreement with Conterra Agricultural Capital, LLC (“Conterra”), the terms of which are summarized in the following table (dollars in thousands): Date of Issuance Amount Maturity Date Principal Amortization Stated Interest Rate Interest Rate Terms 6/8/2020 $ 2,100 7/1/2027 30.0 years 3.40 % Fixed throughout term Farmer Mac Facility On December 5, 2014, we, through certain subsidiaries of our Operating Partnership, entered into a bond purchase agreement (the “Bond Purchase Agreement”) with Federal Agricultural Mortgage Corporation (“Farmer Mac”) and Farmer Mac Mortgage Securities Corporation (the “Bond Purchaser”), for a secured note purchase facility. As subsequently amended, the Bond Purchase Agreement provided for bond issuances up to an aggregate amount of $ 125.0 million (the “Farmer Mac Facility”) through December 11, 2018, after which date the Bond Purchaser had the option to continue buying new bonds issued under the Farmer Mac Facility. During the nine months ended September 30, 2020, we amended and restated one bond for $ 8.1 million that was previously issued under the Farmer Mac Facility and was originally scheduled to mature on January 10, 2020. The pertinent terms of the amended and restated bond are summarized in the table below (dollars in thousands): Date of Issuance Amount Maturity Date Principal Amortization Stated Interest Rate Interest Rate Terms 1/10/2020 $ 8,100 1/12/2024 None (interest only) 2.66 % Fixed throughout term No prepayment penalty was incurred in connection with this amendment, and all other material items of the amended and restated bond remained unchanged. Debt Service – Aggregate Maturities Scheduled principal payments of our aggregate notes and bonds payable as of September 30, 2020, for the succeeding years are as follows (dollars in thousands): 19 Table of Contents Period Scheduled Principal Payments For the remaining three months ending December 31: 2020 $ 15,368 For the fiscal years ending December 31: 2021 19,269 2022 42,162 2023 36,568 2024 35,879 2025 32,898 Thereafter 312,988 $ 495,132 Fair Value ASC 820 provides a definition of fair value that focuses on the exchange (exit) price of an asset or liability in the principal, or most advantageous, market and prioritizes the use of market-based inputs to the valuation. ASC 820-10, “Fair Value Measurements and Disclosures,” establishes a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows: • Level 1 — inputs that are based upon quoted prices (unadjusted) for identical assets or liabilities in active markets; • Level 2 — inputs are based upon quoted prices for similar assets or liabilities in active or inactive markets or model-based valuation techniques, for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and • Level 3 — inputs are generally unobservable and significant to the fair value measurement. These unobservable inputs are generally supported by little or no market activity and are based upon management’s estimates of assumptions that market participants would use in pricing the asset or liability. As of September 30, 2020, the aggregate fair value of our long-term notes and bonds payable was approximately $ 497.4 million, as compared to an aggregate carrying value (excluding unamortized related debt issuance costs) of approximately $ 495.1 million. The fair value of our long-term notes and bonds payable is valued using Level 3 inputs under the hierarchy established by ASC 820-10 and is calculated based on a discounted cash flow analysis, using discount rates based on management’s estimates of market interest rates on long-term debt with comparable terms. Further, due to the revolving nature and variable interest rates applicable to the MetLife Lines of Credit, their aggregate fair value as of September 30, 2020, is deemed to approximate their aggregate carrying value of $ 11.6 million. Interest Rate Swap Agreement In order to hedge our exposure to variable interest rates, we have entered into various interest rate swap agreements in connection with certain of our mortgage financings. In accordance with these swap agreements, we will pay our counterparty a fixed interest rate on a quarterly basis and receive payments from our counterparty equal to the respective stipulated floating rates. We have adopted the fair value measurement provision for these financial instruments, and the aggregate fair value of our interest rate swap agreements is recorded in Other assets, net or Other liabilities, net, as appropriate, on our accompanying Condensed Consolidated Balance Sheets. Generally, in the absence of observable market data, we will estimate the fair value of our interest rate swaps using estimates of certain data points, including estimated remaining life, counterparty credit risk, current market yield, and interest rate spreads of similar securities as of the measurement date. As of September 30, 2020, our interest rate swaps were valued using Level 2 inputs. In addition, we have designated our interest rate swaps as cash flow hedges, and we record changes in the fair values of the interest rate swap agreements to accumulated other comprehensive income on the Condensed Consolidated Balance Sheets. We record changes in fair value on a quarterly basis, using current market valuations at quarter end. The following table summarizes our interest rate swap as of September 30, 2020, and December 31, 2019 (dollars in thousands): September 30, 2020 December 31, 2019 Aggregate Notional Amount Aggregate Fair Value Asset Aggregate Fair Value Liability Aggregate Notional Amount Aggregate Fair Value Asset Aggregate Fair Value Liability $ 14,077 $ — $ 1,721 $ 14,298 $ — $ 390 The following table presents the amount of income (loss) recognized in comprehensive income within our condensed consolidated financial statements for the three and nine months ended September 30, 2020 (dollars in thousands): 20 Table of Contents Three Months Ended September 30, 2020 Nine Months Ended September 30, 2020 Derivative in cash flow hedging relationship: Interest rate swaps $ 95 $ ( 1,331 ) Total $ 95 $ ( 1,331 ) We were not party to any interest rate swap agreements during the three or nine months ended September 30, 2019. The following table summarizes certain information regarding our derivative instruments as of September 30, 2020, and December 31, 2019 (dollars in thousands): Derivative Liability Fair Value Derivative Type Balance Sheet Location September 30, 2020 December 31, 2019 Derivatives Designated as Hedging Instruments: Interest rate swaps Other liabilities, net $ 1,721 $ 390 Total $ 1,721 $ 390 NOTE 5. MANDATORILY-REDEEMABLE PREFERRED STOCK In August 2016, we completed a public offering of 6.375 % Series A Cumulative Term Preferred Stock, par value $ 0.001 per share (the “Series A Term Preferred Stock”), at a public offering price of $ 25.00 per share. As a result of this offering (including the underwriters’ exercise of their option to purchase additional shares to cover over-allotments), we issued a total of 1,150,000 shares of the Series A Term Preferred Stock for gross proceeds of approximately $ 28.8 million and net proceeds, after deducting underwriting discounts and offering expenses borne by us, of approximately $ 27.6 million. The Series A Term Preferred Stock is traded under the ticker symbol “LANDP” on Nasdaq. Generally, we were not permitted to redeem shares of the Series A Term Preferred Stock prior to September 30, 2018, except in limited circumstances to preserve our qualification as a REIT. Since September 30, 2018, we have been permitted to redeem the shares at a redemption price of $ 25.00 per share, plus any accumulated and unpaid dividends up to, but excluding, the date of redemption. The shares of the Series A Term Preferred Stock have a mandatory redemption date of September 30, 2021, and are not convertible into our common stock or any other securities. As of September 30, 2020, no shares of Series A Term Preferred Stock have been redeemed. We incurred approximately $ 1.2 million in total offering costs related to this issuance, which have been recorded net of the Series A Term Preferred Stock as presented on the accompanying Condensed Consolidated Balance Sheets and are being amortized over the mandatory redemption period as a component of interest expense on the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income. The Series A Term Preferred Stock is recorded as a liability on our accompanying Condensed Consolidated Balance Sheets in accordance with ASC 480, “Distinguishing Liabilities from Equity,” which states that mandatorily-redeemable financial instruments should be classified as liabilities. In addition, the related dividend payments are treated similarly to interest expense on the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income. Due to the short-term maturity of our Series A Term Preferred Stock, its carrying value (exclusive of unamortized offering costs) of approximately $ 28.8 million was deemed to approximate its fair value as of September 30, 2020. For information on the dividends declared by our Board of Directors and paid by us on the Series A Term Preferred Stock during the nine months ended September 30, 2020 and 2019, see Note 8, “ Equity—Distributions .” NOTE 6. RELATED-PARTY TRANSACTIONS Our Adviser and Administrator We are externally managed pursuant to contractual arrangements with our Adviser and our Administrator, which collectively employ all of our personnel and pay their salaries, benefits, and general expenses directly. Both our Adviser and Administrator are affiliates of ours, as their parent company is owned and controlled by David Gladstone, our chairman, chief executive officer, and president. In addition, two of our executive officers, Mr. Gladstone and Terry Brubaker (our vice chairman and chief operating officer), serve as directors and executive officers of each of our Adviser and Administrator, and Michael LiCalsi, our general counsel and secretary (who also serves as our Administrator’s president, general counsel, and secretary), is also executive vice president of administration of our Adviser. 21 Table of Contents We have entered into an investment advisory agreement with our Adviser and an administration agreement with our Administrator (the “Administration Agreement”). The advisory agreement with our Adviser that was in effect through March 31, 2017, and the Administration Agreement each became effective February 1, 2013. The advisory agreement with our Adviser that was in effect through June 30, 2019 (the “Prior Advisory Agreement”), was amended and restated on July 9, 2019 (as amended, the “2019 Advisory Agreement”), and again amended and restated on January 14, 2020 (as amended, the “2020 Advisory Agreement,” and, together with the Prior Advisory Agreement and the 2019 Advisory Agreement, the “Advisory Agreements”). The Administration Agreement and each of the Advisory Agreements were approved unanimously by our board of directors, including our independent directors. A summary of the compensation terms for each of the Advisory Agreements and the Administration Agreement is below. Advisory Agreements Pursuant to each of the Prior Advisory Agreement (which was in effect from April 1, 2017, through June 30, 2019), the 2019 Advisory Agreement (which was in effect from July 1, 2019, through December 31, 2019), and the 2020 Advisory Agreement (which has been in effect since January 1, 2020), our Adviser is compensated in the form of a base management fee and, each as applicable, an incentive fee, a capital gains fee, and a termination fee. Our Adviser does not charge acquisition or disposition fees when we acquire or dispose of properties, as is common in other externally-managed REITs. The 2019 Advisory Agreement modified the calculation of the base management and incentive fees to exclude preferred equity from such calculations, while the capital gains and termination fees remained unchanged. The 2020 Advisory Agreement revised and replaced the previous calculation of the base management fee, which was previously based on equity, with a calculation based on gross real estate assets, while all other fees remained unchanged. Each of the base management, incentive, capital gains, and termination fees is described below. Base Management Fee Pursuant to the Prior Advisory Agreement, a base management fee was paid quarterly and was calculated as 2.0 % per annum ( 0.50 % per quarter) of the calendar quarter’s total adjusted equity, which was defined as total equity plus total mezzanine equity, if any (each as reported on our balance sheet), adjusted to exclude unrealized gains and losses and certain other one-time events and non-cash items (“Total Adjusted Equity”). Pursuant to the 2019 Advisory Agreement, a base management fee was paid quarterly and was calculated as 2.0 % per annum ( 0.50 % per quarter) of the prior calendar quarter’s total adjusted common equity, which was defined as common stockholders’ equity plus non-controlling common interests in the Operating Partnership, if any (each as reported on our balance sheet), adjusted to exclude unrealized gains and losses and certain other one-time events and non-cash items (“Total Adjusted Common Equity”). Under the 2020 Advisory Agreement, a base management fee is paid quarterly and is calculated at an annual rate of 0.50 % ( 0.125 % per quarter) of the prior calendar quarter’s “Gross Tangible Real Estate,” defined as the gross cost of tangible real estate owned by us (including land and land improvements, irrigation and drainage systems, horticulture, farm-related facilities, and other tangible site improvements), prior to any accumulated depreciation, and as shown on our balance sheet or the notes thereto for the applicable quarter. During the three and nine months ended September 30, 2019, our Adviser granted us certain non-contractual, unconditional, and irrevocable waivers, which were applied as credits against the base management fee for the period, as detailed in the table below under “ —Related-Party Fees .” We did not have any such waivers for the three and nine months ended September 30, 2020. Incentive Fee Pursuant to the Prior Advisory Agreement, an incentive fee was calculated and payable quarterly in arrears if the Pre-Incentive Fee FFO for a particular quarter exceeded a hurdle rate of 1.75 % ( 7.0 % annualized) of the prior calendar quarter’s Total Adjusted Equity. Under each of the 2019 Advisory Agreement and the 2020 Advisory Agreement, an incentive fee was and is calculated and payable quarterly in arrears if the Pre-Incentive Fee FFO for a particular quarter exceeds a hurdle rate of 1.75 % ( 7.0 % annualized) of the prior calendar quarter’s Total Adjusted Common Equity. For purposes of the calculation of the Incentive Fee, Pre-Incentive Fee FFO was defined in each of the Advisory Agreements as FFO (also as defined in each of the Advisory Agreements) accrued by the Company during the current calendar quarter (prior to any incentive fee calculation for the current calendar quarter), less any dividends paid on preferred stock securities that were not treated as a liability for GAAP purposes. Our Adviser would receive: (i) no Incentive Fee in any calendar quarter in which the Pre-Incentive Fee FFO did not exceed the hurdle rate; (ii) 100 % of the Pre-Incentive Fee FFO with respect to that portion of such Pre-Incentive Fee FFO, if any, that exceeded the hurdle rate but was less than 2.1875 % in any calendar quarter 22 Table of Contents ( 8.75 % annualized); and (iii) 20 % of the amount of the Pre-Incentive Fee FFO, if any, that exceeds 2.1875 % in any calendar quarter ( 8.75 % annualized). Capital Gains Fee Pursuant to each of the Advisory Agreements, a capital gains-based incentive fee will be calculated and payable in arrears at the end of each fiscal year (or upon termination of the Advisory Agreement). The capital gains fee shall equal: (i) 15 % of the cumulative aggregate realized capital gains minus the cumulative aggregate realized capital losses, minus (ii) any aggregate capital gains fees paid in prior periods. For purposes of this calculation, realized capital gains and losses will be calculated as (x) the sales price of the property, minus (y) any costs to sell the property and the then-current gross value of the property (which includes the property’s original acquisition price plus any subsequent, non-reimbursed capital improvements). At the end of each fiscal year, if this figure is negative, no capital gains fee shall be paid. Termination Fee Pursuant to each of the Advisory Agreements, in the event of our termination of the agreement with our Adviser for any reason (with 120 days’ prior written notice and the vote of at least two-thirds of our independent directors), a termination fee would be payable to the Adviser equal to three times the sum of the average annual base management fee and incentive fee earned by the Adviser during the 24-month period prior to such termination. Administration Agreement Pursuant to the Administration Agreement, we pay for our allocable portion of the Administrator’s expenses incurred while performing its obligations to us, including, but not limited to, rent and the salaries and benefits expenses of our Administrator’s employees, including our chief financial officer, treasurer, chief compliance officer, general counsel and secretary (who also serves as our Administrator’s president, general counsel, and secretary), and their respective staffs. As approved by our Board of Directors, effective July 1, 2014, our allocable portion of the Administrator’s expenses is generally derived by multiplying our Administrator’s total expenses by the approximate percentage of time the Administrator’s employees perform services for us in relation to their time spent performing services for all companies serviced by our Administrator under similar contractual agreements. Gladstone Securities On April 11, 2017, we entered into an agreement with Gladstone Securities, LLC (“Gladstone Securities”), for it to act as our non-exclusive agent to assist us with arranging financing for our properties (the “Financing Arrangement Agreement”). Gladstone Securities is a privately-held broker-dealer and a member of the Financial Industry Regulatory Authority and the Securities Investor Protection Corporation. Gladstone Securities is an affiliate of ours, as its parent company is owned and controlled by Mr. Gladstone, who also serves on the board of managers of Gladstone Securities. Financing Arrangement Agreement We pay Gladstone Securities a financing fee in connection with the services provided to us for securing financing on our properties. Depending on the size of the financing obtained, the maximum amount of the financing fee, which is payable upon closing of the respective financing, ranges from 0.5 % to 1.0 % of the amount of financing obtained. The amount of the financing fee may be reduced or eliminated as determined by us and Gladstone Securities after taking into consideration various factors, including, but not limited to, the involvement of any unrelated third-party brokers and general market conditions. We paid total financing fees to Gladstone Securities of approximately $ 7,000 and $ 35,000 during each of the three and nine months ended September 30, 2020, and approximately $ 160,000 and $ 188,000 during the three and nine months ended September 30, 2019, respectively. Through September 30, 2020, the total amount of financing fees paid to Gladstone Securities represented approximately 0.13 % of the total financings secured since the Financing Arrangement Agreement has been in place. Series B Dealer-Manager Agreement On January 10, 2018, we entered into a dealer-manager agreement, which was amended and restated on May 31, 2018 (the “Series B Dealer-Manager Agreement”), with Gladstone Securities, whereby Gladstone Securities served as our exclusive dealer-manager in connection with the offering of our Series B Preferred Stock (as defined in Note 8, “ Equity—Series B Preferred Stock ”). Pursuant to the Series B Dealer-Manager Agreement, Gladstone Securities provided certain sales, promotional, and marketing services to us in connection with the offering of the Series B Preferred Stock, and we generally paid Gladstone Securities: (i) selling commissions of up to 7.0 % of the gross proceeds from sales of Series B Preferred Stock in the offering (the “Series B Selling Commissions”), and (ii) a dealer-manager fee of 3.0 % of the gross proceeds from sales of 23 Table of Contents Series B Preferred Stock in the offering (the “Series B Dealer-Manager Fee”). Gladstone Securities was permitted, in its sole discretion, to remit all or a portion of the Series B Selling Commissions and also to reallow all or a portion of the Series B Dealer-Manager Fees to participating broker-dealers and wholesalers in support of the offering. The terms of the Series B Dealer-Manager Agreement were approved by our board of directors, including all of its independent directors. In connection with the sales of the Series B Preferred Stock, we paid total Series B Selling Commissions and Series B Dealer-Manager Fees to Gladstone Securities of approximately $ 0 and $ 2.5 million during the three and nine months ended September 30, 2020, respectively, and approximately $ 1.8 million and $ 5.1 million during the three and nine months ended September 30, 2019, respectively. The majority of these amounts were then remitted by Gladstone Securities to unrelated third-parties involved in the offering, including participating broker-dealers and wholesalers. Series B Selling Commissions and Series B Dealer-Manager Fees paid to Gladstone Securities are netted against the gross proceeds received from sales of the Series B Preferred Stock and are included within Additional paid-in capital on the accompanying Condensed Consolidated Balance Sheets. The offering of our Series B Preferred Stock was completed on March 5, 2020. Series C Dealer-Manager Agreement On February 20, 2020, we entered into a dealer-manager agreement (the “Series C Dealer-Manager Agreement”), with Gladstone Securities, whereby Gladstone Securities will serve as our exclusive dealer-manager in connection with the offering of our Series C Preferred Stock (as defined in Note 8, “ Equity—Equity Issuances—Series C Preferred Stock ”). Pursuant to the Series C Dealer-Manager Agreement, Gladstone Securities provides certain sales, promotional, and marketing services to us in connection with the offering of the Series C Preferred Stock, and we pay Gladstone Securities (i) selling commissions of up to 6.0 % of the gross proceeds from sales of Series C Preferred Stock (the “Series C Selling Commissions”) in the Primary Series C Offering (as defined in Note 8, “ Equity—Equity Issuances—Series C Preferred Stock ”), and (ii) a dealer-manager fee of 3.0 % of the gross proceeds from sales of Series C Preferred Stock in the Primary Series C Offering (the “Series C Dealer-Manager Fee”). No Series C Selling Commissions or Series C Dealer-Manager Fee shall be paid with respect to shares of the Series C Preferred Stock sold pursuant to our dividend reinvestment plan (the “DRIP”) for the Series C Preferred Stock. Gladstone Securities may, in its sole discretion, reallow a portion of the Series C Dealer-Manager Fee to participating broker-dealers in support of the Primary Series C Offering. The terms of the Series C Dealer-Manager Agreement were approved by our board of directors, including all of our independent directors. During the three and nine months ended September 30, 2020, we paid approximately $ 598,000 and $ 885,000 , respectively, of Series C Selling Commissions and Series C Dealer-Manager Fees to Gladstone Securities in connection with sales of the Series C Preferred Stock. The majority of these amounts were then remitted by Gladstone Securities to unrelated third-parties involved in the offering, including participating broker-dealers and wholesalers. Series C Selling Commissions and Series C Dealer-Manager Fees paid to Gladstone Securities are netted against the gross proceeds received from sales of the Series C Preferred Stock and are included within Additional paid-in capital on the accompanying Condensed Consolidated Balance Sheets. Related-Party Fees The following table summarizes related-party fees paid or accrued for and reflected in our accompanying condensed consolidated financial statements (dollars in thousands): For the Three Months Ended September 30, For the Nine Months Ended September 30, 2020 2019 2020 2019 Base management fee (1)(2) $ 1,078 $ 862 $ 3,159 $ 2,741 Incentive fee (1)(2) 821 — 2,155 — Credits from non-contractual, unconditional, and irrevocable waiver granted by Adviser’s board of directors (2) — — — ( 1,542 ) Total fees to our Adviser, net $ 1,899 $ 862 $ 5,314 $ 1,199 Administration fee (1)(2) $ 344 $ 311 $ 1,084 $ 866 Selling Commissions and Dealer-Manager Fees (1)(3) $ 598 $ 1,777 $ 3,368 $ 5,089 Financing fees (1)(4) 7 160 35 188 Total fees to Gladstone Securities $ 605 $ 1,937 $ 3,403 $ 5,277 (1) Pursuant to the agreements with the respective related-party entities, as discussed above. (2) Reflected as a line item on our accompanying Condensed Consolidated Statements of Operations and Comprehensive Income. 24 Table of Contents (3) Included within Additional paid-in capital on the accompanying Condensed Consolidated Balance Sheets. Includes selling commissions and dealer-manager fees related to both the Series B Preferred Stock and the Series C Preferred Stock. (4) Included within Notes and bonds payable, net on the Condensed Consolidated Balance Sheets and amortized into Interest expense on the Condensed Consolidated Statements of Operations and Comprehensive Income. Related-Party Fees Due Amounts due to related parties on our accompanying Condensed Consolidated Balance Sheets as of September 30, 2020, and December 31, 2019, were as follows (dollars in thousands): September 30, 2020 December 31, 2019 Base management fee $ 1,078 $ 881 Incentive fee 821 847 Other (1) 23 25 Total due to Adviser 1,922 1,753 Administration fee 344 341 Cumulative accrued but unpaid portion of prior Administration Fees (2) — 75 Total due to Administrator 344 416 Total due to related parties (3) $ 2,266 $ 2,169 (1) Other amounts due to or from our Adviser primarily relate to miscellaneous general and administrative expenses either paid by our Adviser on our behalf or by us on our Adviser’s behalf. (2) Represents the cumulative accrued but unpaid portion of prior Administration fees that are scheduled to be paid during the three months ending September 30 of each year, which is the quarter following our Administrator’s fiscal year end. (3) Reflected as a line item on our accompanying Condensed Consolidated Balance Sheet. NOTE 7. COMMITMENTS AND CONTINGENCIES Operating Obligations In connection with the execution of certain lease agreements, we have committed to provide capital improvements on certain of our farms, which are summarized in the table below (dollars in thousands): Farm Location Farm Acreage Total Commitment Obligated Completion Date (1) Amount Expended or Accrued as of September 30, 2020 Hillsborough, FL 55 $ 2,250 (2) Q2 2021 $ 989 Wicomico & Caroline, MD, and Sussex, DE 833 505 Q3 2021 36 Van Buren, MI 89 150 Q4 2021 126 Napa, CA 270 1,548 (2) Q3 2023 — Santa Barbara, CA 271 4,000 (2) Q3 2024 2,267 Columbia, OR 157 1,800 (2) Q3 2024 1,146 Collier & Hendry, FL 3,612 2,000 (2) Q2 2025 — Monterey, CA 304 1,248 Q4 2025 880 (1) Our obligation to provide capital to fund these improvements does not extend beyond these respective dates. (2) Pursuant to contractual agreements, we will earn additional rent on the cost of these capital improvements as the funds are disbursed by us. Litigation In the ordinary course of business, we may be involved in legal proceedings from time to time. We are not currently subject to any material known or threatened litigation. NOTE 8. EQUITY Amendment to Articles of Incorporation On February 20, 2020, we filed with the Maryland Department of Assessments and Taxation an Articles Supplementary (i) setting forth the rights, preferences, and terms of the Series C Preferred Stock and (ii) reclassifying and designating 25 Table of Contents 26,000,000 shares of our authorized and unissued shares of common stock as shares of Series C Preferred Stock. The reclassification decreased the number of shares classified as common stock from approximately 91.5 million shares immediately prior to the reclassification to 65.5 million shares immediately after the reclassification. Amendment to Operating Partnership Agreement In connection with the authorization of the Series C Preferred Stock, the Operating Partnership adopted the Fourth Amendment to its First Amended and Restated Agreement of Limited Partnership, including Exhibit SC thereto (collectively, the “Amendment”), as amended from time to time, establishing the rights, privileges, and preferences of 6.00 % Series C Cumulative Redeemable Preferred Units, a newly-designated class of limited partnership interests (the “Series C Preferred OP Units”). The Amendment provides for the Operating Partnership’s establishment and issuance of an equal number of Series C Preferred OP Units as are issued shares of Series C Preferred Stock by the Company in connection with the Series C Offering upon the Company’s contributions to the Operating Partnership of the net proceeds of the Series C Offering. Generally, the Series C Preferred OP Units provided for under the Amendment have preferences, distribution rights and other provisions substantially equivalent to those of the Series C Preferred Stock. Non-Controlling Interests in Operating Partnership We consolidate our Operating Partnership, which is a majority-owned partnership. As of September 30, 2020, and December 31, 2019, we owned 100.0 % and approximately 98.6 %, respectively, of the outstanding OP Units. As of September 30, 2020, and December 31, 2019, there were 0 and 288,303 OP Units held by non-controlling OP Unitholders. On or after 12 months after becoming a holder of OP Units, each limited partner, other than the Company, has the right, subject to the terms and conditions set forth in the partnership agreement of the Operating Partnership, to require the Operating Partnership to redeem all or a portion of such units in exchange for cash or, at the Company’s option, shares of our common stock on a one-for-one basis. The cash redemption per OP Unit would be based on the market price of our common stock at the time of redemption. A limited partner will not be entitled to exercise redemption rights if the delivery of common stock to the redeeming limited partner would breach restrictions on the ownership of common stock imposed under our charter and other limitations thereof. We did not issue any OP Units to noncontrolling OP Unitholders during the three or nine months ended September 30, 2020. Information regarding OP Units issued to noncontrolling OP Unitholders during the three and nine months ended September 30, 2019, is provided in the following table (dollars in thousands, except per-unit amounts): Number of OP Units Issued Weighted Average Issuance Price per OP Unit Aggregate Value (1) 288,303 $ 11.41 $ 3,290 (1) Based on the closing stock price of the Company’s common stock on the date of issuance. Information related to OP Units tendered for redemption during the three and nine months ended September 30, 2020 and 2019 is provided in the table below: Period OP Units Tendered for Redemption Shares of Common Stock Issued 2020: Three months ended September 30, 2020 144,151 144,151 Nine months ended September 30, 2020 288,303 288,303 2019: Three months ended September 30, 2019 — — Nine months ended September 30, 2019 570,879 570,879 Regardless of the rights described above, the Operating Partnership will not have an obligation to issue cash to a unitholder upon a redemption request if the Company elects to redeem the OP Units for shares of its common stock. When a non-controlling unitholder redeems OP Units and the Company elects to satisfy that redemption through the issuance of common stock, non-controlling interest in the Operating Partnership is reduced, and stockholders’ equity is increased. The Operating Partnership is required to make distributions on each OP Unit in the same amount as those paid on each share of the Company’s common stock, with the distributions on the OP Units held by the Company being utilized to make distributions to the Company’s common stockholders. 26 Table of Contents Registration Statement On March 30, 2017, we filed a universal registration statement on Form S-3 (File No. 333-217042) with the SEC (the “2017 Registration Statement”) to replace our previous registration statement. The 2017 Registration Statement, which was declared effective by the SEC on April 12, 2017, permitted us to issue up to an aggregate of $ 300.0 million in securities, consisting of common stock, preferred stock, warrants, debt securities, depository shares, subscription rights, and units, including through separate, concurrent offerings of two or more of such securities. Under the 2017 Registration Statement, we issued a total of 9,495,834 shares of common stock (excluding 1,215,565 shares of common stock issued in exchange for certain OP Units that were tendered for redemption) for gross proceeds of approximately $ 117.4 million and 6,000,000 shares of Series B Preferred Stock for gross proceeds of approximately $ 147.5 million. On March 6, 2020, we filed a universal registration statement on Form S-3 (File No. 333-236943) with the SEC (the “2020 Registration Statement”) to replace the 2017 Registration Statement. The 2020 Registration Statement, which was declared effective by the SEC on April 1, 2020, permits us to issue up to an aggregate of $ 1.0 billion in securities, consisting of common stock, preferred stock, warrants, debt securities, depository shares, subscription rights, and units, including through separate, concurrent offerings of two or more of such securities. Through September 30, 2020, we had issued a total of 570,145 shares of common stock (excluding 288,303 shares of common stock issued in exchange for certain OP Units that were tendered for redemption) for gross proceeds of approximately $ 9.2 million and 420,196 shares of Series C Preferred Stock for gross proceeds of approximately $ 10.4 million under the 2020 Registration Statement. In conjunction with the filing of the 2020 Registration Statement, we wrote off approximately $ 29 ,000 of unallocated costs associated with the initial filing of the 2017 Registration Statement. These costs were written off to professional fees, which is included within General and administrative expenses on our accompanying Condensed Consolidated Statements of Operations and Comprehensive Income, during the nine months ended September 30, 2020. Equity Issuances Series B Preferred Stock On May 31, 2018, we filed a prospectus supplement with the SEC for a continuous public offering of up to 6,000,000 shares (the “Series B Offering”) of our 6.00 % Series B Cumulative Redeemable Preferred Stock (the “Series B Preferred Stock”) at an offering price of $ 25.00 per share. The Series B Preferred Stock was offered on a continuous, “reasonable best efforts” basis by Gladstone Securities, the dealer-manager for the Series B Offering. See Note 6, “ Related-Party Transactions—Gladstone Securities—Series B Dealer-Manager Agreement ,” for a discussion of the fees and commissions to be paid to Gladstone Securities in connection with the Series B Offering. The following table provides information on sales of the Series B Preferred Stock that occurred during the three and nine months ended September 30, 2020 and 2019 (dollars in thousands, except per-share amounts): Period Number of Shares Sold Weighted-average Offering Price per Share Gross Proceeds Net Proceeds (1) 2020 (2) : Nine months ended September 30, 2020 1,229,531 $ 24.52 $ 30,148 $ 27,664 2019: Three months ended September 30, 2019 831,579 $ 24.64 $ 20,487 $ 18,711 Nine months ended September 30, 2019 2,330,654 24.68 57,529 52,440 (1) Net of Series B Selling Commissions and Series B Dealer-Manager Fees borne by us. (2) The Series B Offering was completed during the three months ended March 31, 2020. The following table provides information on redemptions of the Series B Preferred Stock that occurred during the three and nine months ended September 30, 2020 and 2019 (dollars in thousands, except per-share amounts): 27 Table of Contents Period Number of Shares Redeemed Weighted-average Redemption Price per Share Cash Redemption Paid 2020: Three months ended September 30, 2020 16,417 $ 22.68 $ 372 Nine months ended September 30, 2020 29,335 23.22 681 2019: Three months ended September 30, 2019 2,120 $ 22.50 $ 48 Nine months ended September 30, 2019 9,520 22.50 214 The Series B Offering was completed on March 5, 2020 (the “Series B Termination Date”), with the full 6,000,000 allotted shares being sold, and, exclusive of redemptions, resulted in total gross proceeds of approximately $ 147.5 million and net proceeds, after deducting Series B Selling Commissions, Series B Dealer-Manager Fees, and offering expenses payable by us, of approximately $ 133.4 million. Excluding Series B Selling Commissions and Series B Dealer-Manager Fees, we incurred approximately $ 1.6 million of total costs related to the Series B Offering, which were initially recorded as deferred offering costs (included within Other assets, net on the accompanying Condensed Consolidated Balance Sheets) and were applied against the gross proceeds received from the offering through additional paid-in capital as shares of the Series B Preferred Stock were sold. As of September 30, 2020, there was no public market for shares of the Series B Preferred Stock; however, subsequent to September 30, 2020, we successfully listed the Series B Preferred Stock on Nasdaq under the ticker “LANDO.” See Note 11, “ Subsequent Events ,” for a discussion of the listing of the Series B Preferred Stock. Series C Preferred Stock On February 20, 2020, we filed a prospectus supplement with the SEC for a continuous public offering of up to 400,000 shares of our newly-designated 6.00 % Series C Cumulative Redeemable Preferred Stock, par value $ 0.001 per share (the “Series C Preferred Stock”), on a “reasonable best efforts” basis through Gladstone Securities at an offering price of $ 25.00 per share, and up to 120,000 shares of our Series C Preferred Stock pursuant to the DRIP at a price of $ 22.75 per share. No shares of the Series C Preferred Stock were sold pursuant to the prospectus supplement dated February 20, 2020. On April 3, 2020, we filed a new prospectus supplement with the SEC for a continuous offering of up to 26,000,000 shares of the Series C Preferred Stock, which superseded and replaced the prospectus supplement dated February 20, 2020, for a continuous public offering (the “Series C Offering”) of up to 26,000,000 shares of the Series C Preferred Stock. The Series C Offering permits us to sell up to 20,000,000 shares (the “Primary Series C Offering”) of our Series C Preferred Stock on a “reasonable best efforts” basis through Gladstone Securities at an offering price of $ 25.00 per share and up to 6,000,000 shares of our Series C Preferred Stock pursuant to the DRIP at a price of $ 22.75 per share. See Note 6, “ Related-Party Transactions—Gladstone Securities—Series C Dealer-Manager Agreement ,” for a discussion of the commissions and fees to be paid to Gladstone Securities in connection with the Series C Offering. The following table provides information on equity sales that have occurred during the three and nine months ended September 30, 2020 (dollars in thousands, except per-share amounts): Period Number of Shares Sold (1) Weighted Average Offering Price Per Share Gross Proceeds Net Proceeds (2) Three months ended September 30, 2020 289,494 $ 24.82 $ 7,184 $ 6,586 Nine months ended September 30, 2020 420,196 24.86 10,444 9,559 (1) Excludes shares issued pursuant to the DRIP. During each of the three and nine months ended September 30, 2020, we issued approximately 34 shares of the Series C Preferred Stock pursuant to the DRIP. (2) Net of Series C Selling Commissions and Series C Dealer-Manager Fees. As of September 30, 2020, excluding Series C Selling Commissions and Series C Dealer-Manager Fees, we have incurred approximately $ 225,000 of costs related to the Series C Offering, which are initially recorded as deferred offering costs (included within Other assets, net on the accompanying Condensed Consolidated Balance Sheets) and are applied against gross proceeds received from the offering through additional paid-in capital as shares of the Series C Preferred Stock are sold. See Note 11, “ Subsequent Events—Equity Activity—Series C Preferred Stock ,” for sales of Series C Preferred Stock completed subsequent to September 30, 2020. The Series C Offering will terminate on the date (the “Series C Termination Date”) that is the earlier of either June 1, 2025 (unless terminated earlier or extended by our Board of Directors), or the date on which all 20,000,000 shares in the Primary 28 Table of Contents Series C Offering are sold. There is currently no public market for shares of the Series C Preferred Stock; however, we intend to apply to list the Series C Preferred Stock on Nasdaq or another national securities exchange within one calendar year after the Series C Termination Date, though there can be no assurance that a listing will be achieved in such timeframe, or at all. Common Stock At-the-Market Program On August 7, 2015, we entered into equity distribution agreements (commonly referred to as “at-the-market agreements”), as amended from time to time, with Cantor Fitzgerald & Co., Ladenburg Thalmann & Co., Inc., and Virtu Americas, LLC (each a “Sales Agent”), under which we were permitted to issue and sell, from time to time and through the Sales Agents, shares of our common stock having an aggregate offering price of up to $ 30.0 million (the “Prior ATM Program”). On May 12, 2020, we terminated the Prior ATM Program and entered into new equity distribution agreements with Virtu Americas, LLC, and Ladenburg & Co., Inc., under which we may issue and sell, from time to time and through the current Sales Agents, shares of our common stock having an aggregate offering price of up to $ 100.0 million (the “Current ATM Program,” and collectively with the Prior ATM Program, the “ATM Programs”). The following table provides information on shares of common stock sold by the Sales Agents under the ATM Programs during the three and nine months ended September 30, 2020 and 2019 (dollars in thousands, except per-share amounts): Period Number of Shares Sold Weighted-average Offering Price Per Share Gross Proceeds Net Proceeds (1) 2020: Three months ended September 30, 2020 526,016 $ 16.13 $ 8,483 $ 8,398 Nine months ended September 30, 2020 979,945 14.94 14,638 14,491 2019: Three months ended September 30, 2019 78,008 $ 12.01 $ 937 $ 923 Nine months ended September 30, 2019 148,559 12.32 1,830 1,802 (1) Net of underwriting commissions and discounts. Distributions The per-share distributions to preferred and common stockholders declared by our Board of Directors and paid by us (except as noted) during the three and nine months ended September 30, 2020 and 2019 are reflected in the table below. Three months ended September 30, Nine months ended September 30, Issuance 2020 2019 2020 2019 Series A Term Preferred Stock (1) $ 0.3984375 $ 0.3984375 $ 1.1953125 $ 1.1953125 Series B Preferred Stock (2) 0.375 0.375 1.125 1.125 Series C Preferred Stock (2) 0.375 — 0.750 — Common Stock (3) 0.13440 0.13365 0.40245 0.40050 (1) Treated similar to interest expense on the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income. (2) Of the aggregate dividends declared on the Series B Preferred Stock and Series C Preferred Stock by our Board of Directors on July 14, 2020, and July 9, 2019, approximately $ 797 ,000 and $ 433,000 , respectively, was paid (as scheduled) by us on October 7, 2020, and October 3, 2019, respectively. (3) The same amounts were paid as distributions on each OP Unit held by non-controlling OP Unitholders. NOTE 9. LEASE REVENUES The following table sets forth the components of our lease revenues for the three and nine months ended September 30, 2020 and 2019 (dollars in thousands, except for footnotes): Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Fixed lease payments (1) $ 12,838 $ 10,131 $ 37,450 $ 26,236 Variable lease payments (2) 1,151 881 4,457 967 Lease revenues, net (3) $ 13,989 $ 11,012 $ 41,907 $ 27,203 29 Table of Contents (1) Fixed lease payments include contractual rents under lease agreements with tenants recognized on a straight-line basis over the respective lease terms and includes the amortization of above-market lease values and lease incentives and the accretion of below-market lease values and other deferred revenue. (2) Variable lease payments include participation rents, which are generally based on a percentage of the gross crop revenues earned on the farm, and reimbursements of certain property operating expenses by tenants. Participation rents are generally recognized when all contingencies have been resolved and when actual results become known or estimable, enabling us to estimate and/or measure our share of such gross revenues. During the three and nine months ended September 30, 2020, we recorded participation rents of approximately $ 1.1 million and $ 1.2 million, respectively, and reimbursements of certain property operating expenses by tenants of approximately $ 19 ,000 and $ 441 ,000, respectively. During the three and nine months ended September 30, 2019, we recorded participation rents of approximately $ 848 ,000 and $ 874 ,000, respectively, and reimbursements of certain property operating expenses by tenants of approximately $ 33 ,000 and $ 93 ,000, respectively. In addition, during the nine months ended September 30, 2020, we received a lease termination payment of approximately $ 3.0 million. (3) Reflected as a line item on our accompanying Condensed Consolidated Statements of Operations and Comprehensive Income. NOTE 10. EARNINGS PER SHARE OF COMMON STOCK The following table sets forth the computation of basic and diluted net loss per common share for the three and nine months ended September 30, 2020 and 2019, computed using the weighted average number of shares outstanding during the respective periods. Net loss figures are presented net of non-controlling interests in the earnings per share calculations. The non-controlling limited partners’ outstanding OP Units (which may be redeemed for shares of common stock) have been excluded from the diluted per-share calculation, as there would be no effect on the amounts since the non-controlling OP Unitholders’ share of earnings would also be added back to net loss. Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 (Dollars in thousands, except per-share amounts) (Dollars in thousands, except per-share amounts) Net loss attributable to common stockholders $ ( 837 ) $ ( 644 ) $ ( 1,981 ) $ ( 1,860 ) Weighted average shares of common stock outstanding – basic and diluted 21,991,291 20,763,615 21,558,859 19,154,744 Loss per common share – basic and diluted $ ( 0.04 ) $ ( 0.03 ) $ ( 0.09 ) $ ( 0.10 ) The weighted-average number of OP Units held by non-controlling OP Unitholders was 16,452 and 175,981 for the three and nine months ended September 30, 2020, respectively, and 222,494 and 217,857 for the three and nine months ended September 30, 2019, respectively. NOTE 11. SUBSEQUENT EVENTS Portfolio Activity Acquisition Activity Subsequent to September 30, 2020, we acquired four new farms, which are summarized in the table below (dollars in thousands, except for footnotes): Property Name Property Location Acquisition Date Total Acres No. of Farms Primary Crop(s) Lease Term Renewal Options Total Purchase Price Acquisition Costs (1) Annualized Straight-line Rent (2) West Lost Hills Road (3)(4)(5) Fresno, CA 10/1/2020 801 1 Pistachios 1.1 years 4 (3 years) $ 31,828 $ 52 $ 1,560 Tractor Road Bamberg & Orangeburg, SC 10/23/2020 597 3 Sod 9.5 years None 3,765 48 244 1,398 4 $ 35,593 $ 100 $ 1,804 (1) Acquisitions will be accounted for as asset acquisitions in accordance with ASC 360. The figures above represent only costs paid or accrued for as of the date of this filing. (2) Annualized straight-line rent is based on the minimum cash rental payments guaranteed under the applicable leases, as required under GAAP, and excludes contingent rental payments, such as participation rents. (3) Lease provides for a participation rent component based on the gross crop revenues earned on the farm. The rent figure above represents only the minimum cash guaranteed under the lease. (4) Lease provides for an initial term of 3.1 years but also includes an annual tenant termination option, effective as of the end of the then-current lease year (as defined within the lease). The lease term stated above represents the term through the first available termination option, and the annualized straight-line rent amount represents the rent guaranteed through the noncancellable term of the lease. (5) In connection with the acquisition of this property, we also acquired a 12.5 % ownership interest in a related LLC, the sole purpose of which is to own and maintain a pipeline conveying water to this and other neighboring properties. 30 Table of Contents Financing Activity Borrowing Activity Subsequent to September 30, 2020, through the date of this filing, we have entered into the following loan agreements (dollars in thousands): Lender Date of Issuance Principal Amount Maturity Date Principal Amortization Stated Interest Rate Interest Rate Terms PGIM Real Estate Finance, LLC 10/1/2020 $ 19,042 7/1/2028 25.0 years 2.47 % Fixed throughout term PGIM Real Estate Finance, LLC 10/1/2020 19,096 7/1/2028 25.0 years 2.45 % Fixed throughout term AgAmerica Lending, LLC 10/23/2020 2,259 1/1/2028 30.0 years 3.50 % Fixed throughout term Equity Activity Equity Issuances The following table provides information on equity sales that have occurred subsequent to September 30, 2020 (dollars in thousands, except per-share amounts): Type of Issuance Number of Shares Sold Weighted Average Offering Price Per Share Gross Proceeds Net Proceeds (1) Series C Preferred Stock 203,861 $ 24.92 $ 5,081 $ 4,638 Common Stock – Follow-on Offering (2) 1,897,500 14.40 27,324 26,094 (1) Net of Series C Selling Commissions and Series C Dealer-Manager Fees or underwriting commissions and discounts (in each case, as applicable). (2) Includes the underwriters’ exercise of the full over-allotment option in connection with the offering. Equity Listing Subsequent to September 30, 2020, we listed the Series B Preferred Stock on Nasdaq under the ticker symbol “LANDO.” Trading of the Series B Preferred Stock on Nasdaq commenced on October 19, 2020. Distributions On October 13, 2020, our Board of Directors authorized and we declared the following monthly cash distributions to holders of our preferred and common stock: 31 Table of Contents Issuance Record Date Payment Date Distribution per Share Series A Term Preferred Stock: October 23, 2020 October 30, 2020 $ 0.1328125 November 20, 2020 November 30, 2020 0.1328125 December 23, 2020 December 31, 2020 0.1328125 Total Series A Term Preferred Stock Distributions: $ 0.3984375 Series B Preferred Stock: October 27, 2020 November 5, 2020 $ 0.125 November 25, 2020 December 4, 2020 0.125 December 24, 2020 January 5, 2021 0.125 Total Series B Preferred Stock Distributions: $ 0.375 Series C Preferred Stock: October 27, 2020 November 5, 2020 $ 0.125 November 25, 2020 December 4, 2020 0.125 December 24, 2020 January 5, 2021 0.125 Total Series C Preferred Stock Distributions: $ 0.375 Common Stock: October 23, 2020 October 30, 2020 $ 0.0449 November 20, 2020 November 30, 2020 0.0449 December 23, 2020 December 31, 2020 0.0449 Total Common Stock Distributions: $ 0.1347 The same amounts paid to common stockholders will be paid as distributions on each OP Unit held by non-controlling OP Unitholders as of the above record dates. COVID-19 In July 2020, we granted extensions of up to 123 days to two tenants who owed semi-annual rental payments totaling approximately $ 343,000 . These payments were originally scheduled to be paid on July 1, 2020, and the rent deferrals we granted to these tenants extend the new due dates to be on or before November 1, 2020, with all other terms of the existing lease agreements remaining unchanged. These rental payments were collected in full subsequent to September 30, 2020. We have not received any other requests from tenants seeking relief as a result of COVID-19; however, no assurances can be made that we will not receive additional rent deferral or modification requests in the future. 32 Table of Contents