What changed in this filing

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Item 1. Financial Statements

2023-11-07 compared with 2023-08-07 · 195 added, 170 removed, 608 unchanged (38% of the section changed)

3 unchanged sentences

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

June 30, 2023 December 31, 2022

September 30, 2023 December 31, 2022

Real estate, at cost $ 1,437,268 $ 1,432,394

9 unchanged sentences

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

3,600,000 shares authorized, 2,415,000 shares issued and outstanding as of June 30, 2023, and December 31, 2022

3,600,000 shares authorized, 2,415,000 shares issued and outstanding as of September 30, 2023, and December 31, 2022

59,416 59,107

6 unchanged sentences

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 June 30, 2023, and December 31, 2022

6,456,065 shares authorized, 5,956,065 shares issued and outstanding as of September 30, 2023, and December 31, 2022

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

25,902,437 shares authorized, 10,156,509 shares issued and outstanding as of June 30, 2023;

25,902,437 shares authorized, 10,156,509 shares issued and outstanding as of September 30, 2023;

25,951,347 shares authorized, 10,191,353 shares issued and outstanding as of December 31, 2022

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

16,000,000 shares authorized, 135,409 shares issued and outstanding as of June 30, 2023;

15,998,400 shares authorized, 221,481 shares issued and outstanding as of September 30, 2023;

16,000,000 shares authorized, 0 shares issued and outstanding as of December 31, 2022

Common stock, $ 0.001 par value;

48,041,498 shares authorized, 35,780,082 shares issued and outstanding as of June 30, 2023;

48,043,098 shares authorized, 35,838,442 shares issued and outstanding as of September 30, 2023;

47,992,588 shares authorized, 35,050,397 shares issued and outstanding as of December 31, 2022

10 unchanged sentences

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

For the Three Months Ended June 30, For the Six Months Ended June 30,

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

2023 2022 2023 2022

9 unchanged sentences

General and administrative expenses 605 729 2,181 1,983

Write-off of costs associated with offering of Series C cumulative redeemable preferred stock — 851 — 851

Total operating expenses 14,136 14,566 41,276 40,091

3 unchanged sentences

Dividends declared on cumulative term preferred stock ( 755 ) ( 755 ) ( 2,264 ) ( 2,264 )

Gain (loss) on dispositions of real estate assets, net 6,394 ( 305 ) 5,914 ( 1,280 )

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

Property and casualty (loss) recovery, net — — ( 1,016 ) 49

Loss from investments in unconsolidated entities ( 24 ) ( 24 ) ( 84 ) ( 54 )

Total other income (expense), net 28 ( 7,520 ) ( 5,666 ) ( 12,911 )

Total other expense, net ( 6,257 ) ( 7,837 ) ( 11,924 ) ( 20,748 )

NET INCOME 3,141 1,806 12,746 3,606

Net loss (income) attributable to non-controlling interests — 3 — ( 6 )

Net income attributable to non-controlling interests — ( 2 ) — ( 9 )

NET INCOME ATTRIBUTABLE TO THE COMPANY 3,141 1,804 12,746 3,597

1 unchanged sentence

Loss on extinguishment of cumulative redeemable preferred stock — ( 9 ) ( 46 ) ( 15 )

NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 1,727 $ ( 3,873 ) $ ( 2,593 ) $ ( 6,610 )

INCOME (LOSS) PER COMMON SHARE:

NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ ( 2,964 ) $ ( 3,594 ) $ ( 5,557 ) $ ( 10,204 )

LOSS PER COMMON SHARE:

Basic and diluted $ ( 0.08 ) $ ( 0.10 ) $ ( 0.16 ) $ ( 0.30 )

4 unchanged sentences

COMPREHENSIVE INCOME 4,698 5,005 14,010 14,097

Net loss (income) attributable to non-controlling interests — 3 — ( 6 )

Net income attributable to non-controlling interests — ( 2 ) — ( 9 )

COMPREHENSIVE INCOME ATTRIBUTABLE TO THE COMPANY $ 4,698 $ 5,003 $ 14,010 $ 14,088

3 unchanged sentences

(In thousands, except share data)

Three Months Ended June 30, 2023

Three Months Ended September 30, 2023

Preferred Stock Series C

7 unchanged sentences

Interests Total

Balance at March 31, 2023 5,956,065 $ 6 10,195,602 $ 10 60,200 $ — 35,713,982 $ 36 $ 851,063 $ ( 123,594 ) $ 7,359 $ 734,880 $ — $ 734,880

Redemptions of Series C Preferred Stock — — ( 39,093 ) — — — — — ( 907 ) ( 44 ) — ( 951 ) — ( 951 )

Balance at June 30, 2023 5,956,065 $ 6 10,156,509 $ 10 135,409 $ — 35,780,082 $ 36 $ 852,967 $ ( 126,799 ) $ 8,714 $ 734,934 $ — $ 734,934

Issuance of Series E Preferred Stock, net — — — — 87,672 — — — 1,958 — — 1,958 — 1,958

Redemptions of Series E Preferred Stock, net — — — — ( 1,600 ) — — — ( 36 ) — — ( 36 ) — ( 36 )

Issuance of common stock, net — — — — — — 58,360 — 1,002 — — 1,002 — 1,002

3 unchanged sentences

Comprehensive income attributable to the Company — — — — — — — — — — 1,557 1,557 — 1,557

Balance at June 30, 2023 5,956,065 $ 6 10,156,509 $ 10 135,409 $ — 35,780,082 $ 36 $ 852,967 $ ( 126,799 ) $ 8,714 $ 734,934 $ — $ 734,934

Six Months Ended June 30, 2023

Balance at September 30, 2023 5,956,065 $ 6 10,156,509 $ 10 221,481 $ — 35,838,442 $ 36 $ 855,891 $ ( 134,728 ) $ 10,271 $ 731,486 $ — $ 731,486

Nine months ended September 30, 2023

Preferred Stock Series C

9 unchanged sentences

Issuance of Series C Preferred Stock, net — — 14,069 — — — — — 298 — — 298 — 298

Redemptions of Series C Preferred Stock — — ( 48,913 ) — — — — — ( 1,130 ) ( 46 ) — ( 1,176 ) — ( 1,176 )

Redemptions of Series C Preferred Stock, net — — ( 48,913 ) — — — — — ( 1,110 ) ( 46 ) — ( 1,156 ) — ( 1,156 )

Issuance of Series E Preferred Stock, net — — — — 223,081 — — — 4,986 — — 4,986 — 4,986

Redemptions of Series E Preferred Stock, net — — — — ( 1,600 ) — — — ( 36 ) — — ( 36 ) — ( 36 )

Issuance of common stock, net — — — — — — 788,045 1 15,079 — — 15,080 — 15,080

2 unchanged sentences

Distributions—OP Units and common stock — — — — — — — — — ( 14,801 ) — ( 14,801 ) — ( 14,801 )

Comprehensive loss attributable to the Company — — — — — — — — — — ( 293 ) ( 293 ) — ( 293 )

Balance at June 30, 2023 5,956,065 $ 6 10,156,509 $ 10 135,409 $ — 35,780,082 $ 36 $ 852,967 $ ( 126,799 ) $ 8,714 $ 734,934 $ — $ 734,934

Comprehensive income attributable to the Company — — — — — — — — — — 1,264 1,264 — 1,264

Balance at September 30, 2023 5,956,065 $ 6 10,156,509 $ 10 221,481 $ — 35,838,442 $ 36 $ 855,891 $ ( 134,728 ) $ 10,271 $ 731,486 $ — $ 731,486

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

2 unchanged sentences

(In thousands, except share data)

Three Months Ended June 30, 2022

Three months ended September 30, 2022

Preferred Stock Series C

7 unchanged sentences

Interests Total

Balance at March 31, 2022 5,956,065 $ 6 5,045,023 $ 5 — $ — 34,520,068 $ 35 $ 713,805 $ ( 87,868 ) $ 3,694 $ 629,677 $ 2,248 $ 631,925

Balance at June 30, 2022 5,956,065 $ 6 6,529,895 $ 7 — $ — 34,520,068 $ 35 $ 742,070 $ ( 96,442 ) $ 6,256 $ 651,932 $ — $ 651,932

Issuance of Series C Preferred Stock, net — — 2,480,956 2 — — — — 56,272 — — 56,274 — 56,274

Redemptions of Series C Preferred Stock — — ( 2,160 ) — — — — — ( 49 ) ( 3 ) — ( 52 ) — ( 52 )

Redemptions of OP Units — — — — — — — — ( 3,700 ) — — ( 3,700 ) ( 3,970 ) ( 7,670 )

Redemptions of Series C Preferred Stock, net — — ( 18,075 ) — — — — — ( 411 ) ( 9 ) — ( 420 ) — ( 420 )

Issuance of common stock, net — — — — — — 183,937 — 4,563 — — 4,563 — 4,563

Net income — — — — — — — — — 1,804 — 1,804 2 1,806

3 unchanged sentences

Adjustment to non-controlling interests resulting from changes in ownership of the Operating Partnership — — — — — — — — 2 — — 2 ( 2 ) —

Balance at June 30, 2022 5,956,065 $ 6 6,529,895 $ 7 — $ — 34,520,068 $ 35 $ 742,070 $ ( 96,442 ) $ 6,256 $ 651,932 $ — $ 651,932

Six Months Ended June 30, 2022

Balance at September 30, 2022 5,956,065 $ 6 8,992,776 $ 9 — $ — 34,704,005 $ 35 $ 802,496 $ ( 104,775 ) $ 9,455 $ 707,226 $ — $ 707,226

Nine months ended September 30, 2022

Preferred Stock Series C

9 unchanged sentences

Issuance of Series C Preferred Stock, net — — 5,522,158 6 — — — — 125,291 — — 125,297 — 125,297

Redemptions of Series C Preferred Stock — — ( 4,640 ) — — — — — ( 105 ) ( 6 ) — ( 111 ) — ( 111 )

Redemptions of Series C Preferred Stock, net — — ( 22,715 ) — — — — — ( 516 ) ( 15 ) — ( 531 ) — ( 531 )

Redemptions of OP Units — — — — — — — ( 3,700 ) — — ( 3,700 ) ( 3,970 ) ( 7,670 )

5 unchanged sentences

Adjustment to non-controlling interests resulting from changes in ownership of the Operating Partnership — — — — — — — — ( 1,738 ) — — ( 1,738 ) 1,738 —

Balance at June 30, 2022 5,956,065 $ 6 6,529,895 $ 7 — $ — 34,520,068 $ 35 $ 742,070 $ ( 96,442 ) $ 6,256 $ 651,932 $ — $ 651,932

Balance at September 30, 2022 5,956,065 $ 6 8,992,776 $ 9 — $ — 34,704,005 $ 35 $ 802,496 $ ( 104,775 ) $ 9,455 $ 707,226 $ — $ 707,226

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

2 unchanged sentences

(In thousands)

For the Six Months Ended June 30,

For the Nine Months Ended September 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

7 unchanged sentences

Bad debt expense 70 68

Write-off of unamortized deferred offering costs associated with cumulative redeemable preferred stock (Series C) — 798

(Gain) loss on dispositions of real estate assets, net ( 5,910 ) 2,100

8 unchanged sentences

Capital expenditures on existing real estate assets ( 9,978 ) ( 16,072 )

Contributions to unconsolidated real estate entities — ( 2,749 )

Proceeds from dispositions of real estate assets 9,037 —

Deposits on prospective real estate acquisitions and investments ( 145 ) ( 704 )

Net cash provided by (used in) investing activities 3,101 ( 35,147 )

Net cash used in investing activities ( 1,086 ) ( 78,627 )

CASH FLOWS FROM FINANCING ACTIVITIES:

28 unchanged sentences

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

As of June 30, 2023, and December 31, 2022, the Company owned 100.0 % of the outstanding OP Units (see Note 8, “ Equity ,” for additional discussion regarding OP Units).

As of September 30, 2023, and December 31, 2022, the Company owned 100.0 % of the outstanding OP Units (see Note 8, “ Equity ,” for additional discussion regarding OP Units).

Gladstone Land Advisers, Inc.

2 unchanged sentences

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.

For the six months ended June 30, 2023, and for the tax year ended December 31, 2022, there was no taxable income or loss from Land Advisers, nor did we have any undistributed REIT taxable income.

For the nine months ended September 30, 2023, and for the tax year ended December 31, 2022, there was no taxable income or loss from Land Advisers, nor did we have any undistributed REIT taxable income.

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.

8 unchanged sentences

Securities and Exchange Commission (the “SEC”) on February 21, 2023 (the “Form 10-K”).

The results of operations for the three and six months ended June 30, 2023, are not necessarily indicative of the results that may be expected for other interim periods or for the full fiscal year.

The results of operations for the three and nine months ended September 30, 2023, are not necessarily indicative of the results that may be expected for other interim periods or for the full fiscal year.

Use of Estimates

3 unchanged sentences

Recently-Issued Accounting Pronouncements

As of June 30, 2023, there were no recently-issued accounting pronouncements that had a material impact on our condensed consolidated financial statements.

As of September 30, 2023, there were no recently-issued accounting pronouncements that had a material impact on our condensed consolidated financial statements.

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 169 farms we owned as of June 30, 2023 (dollars in thousands, except for footnotes):

The following table provides certain summary information about the 169 farms we owned as of September 30, 2023 (dollars in thousands, except for footnotes):

of Farms Total

26 unchanged sentences

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

As of June 30, 2023, this investment had a net carrying value of approximately $ 1.0 million and is included within Other assets, net on the accompanying Condensed Consolidated Balance Sheets.

As of September 30, 2023, this investment had a net carrying value of approximately $ 1.0 million and is included within Other assets, net on the accompanying Condensed Consolidated Balance Sheets.

(4) Includes eight acres in which we own a leasehold interest via a ground lease with a private individual that expires in December 2040 and five acres in which we own a leasehold interest via a ground sublease with a California municipality that expires in December 2041.

As of June 30, 2023, these two ground leases had a net cost basis of approximately $ 709,000 and are included in Lease intangibles, net on the accompanying Condensed Consolidated Balance Sheets.

(5) Includes 45,000 acre-feet of water stored with Semitropic Water Storage District, located in Kern County, California, and 16 acre-feet of groundwater pumping credits with Westlands Water District, located in Fresno County, California.

As of September 30, 2023, these two ground leases had a net cost basis of approximately $ 699,000 and are included in Lease intangibles, net on the accompanying Condensed Consolidated Balance Sheets.

(5) Includes 45,000 acre-feet of water stored with Semitropic Water Storage District, located in Kern County.

See “— Investments in Water Assets ” below for additional information.

(6) Includes two farms consisting of 1,368 total acres and 1,221 farm acres in which we own leasehold interests via two ground leases with the State of Arizona that expire in February 2025 and February 2032, respectively.

As of June 30, 2023, these ground leases had an aggregate net cost basis of approximately $ 543,000 and are included in Lease intangibles, net on the accompanying Condensed Consolidated Balance Sheets.

As of September 30, 2023, these ground leases had an aggregate net cost basis of approximately $ 460,000 and are included in Lease intangibles, net on the accompanying Condensed Consolidated Balance Sheets.

(7) Includes ownership in a special-purpose LLC that owns certain irrigation infrastructure that provides water to two of our farms.

As of June 30, 2023, this investment had a net carrying value of approximately $ 4.8 million and is included within Other assets, net on the accompanying Condensed Consolidated Balance Sheets.

The following table sets forth the components of our investments in tangible real estate assets as of June 30, 2023, and December 31, 2022 (dollars in thousands):

June 30, 2023 December 31, 2022

As of September 30, 2023, this investment had a net carrying value of approximately $ 4.8 million and is included within Other assets, net on the accompanying Condensed Consolidated Balance Sheets.

The following table sets forth the components of our investments in tangible real estate assets as of September 30, 2023, and December 31, 2022 (dollars in thousands):

September 30, 2023 December 31, 2022

Land and land improvements $ 843,205 $ 845,779

6 unchanged sentences

Total real estate, net $ 1,304,031 $ 1,325,428

Real estate depreciation expense on these tangible assets was approximately $ 8.8 million and $ 17.7 million for the three and six months ended June 30, 2023, respectively, and approximately $ 8.1 million and $ 16.2 million for the three and six months ended June 30, 2022, respectively.

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

As of June 30, 2023, and December 31, 2022, we recorded tenant-funded improvements, net of accumulated depreciation, of approximately $ 2.7 million and $ 3.0 million, respectively.

We recorded additional lease revenue related to these tenant-funded improvements of approximately $ 136,000 a nd $ 284,000 during the three and six months ended June 30, 2023, respectively, and approximately $ 103,000 and $ 207,000 during the three and six months ended June 30, 2022, respectively.

Real estate depreciation expense on these tangible assets was approximately $ 9.0 million and $ 26.7 million for the three and nine months ended September 30, 2023, respectively, and approximately $ 8.9 million and $ 25.1 million for the three and nine months ended September 30, 2022, respectively.

Intangible Assets and Liabilities

The following table summarizes the carrying values of certain lease intangible assets and the related accumulated amortization as of June 30, 2023, and December 31, 2022 (dollars in thousands):

June 30, 2023 December 31, 2022

The following table summarizes the carrying values of certain lease intangible assets and the related accumulated amortization as of September 30, 2023, and December 31, 2022 (dollars in thousands):

September 30, 2023 December 31, 2022

Lease intangibles:

6 unchanged sentences

(1) Other includes tenant relationships and acquisition-related costs allocated to miscellaneous lease intangibles.

Total amortization expense related to these lease intangible assets was approximately $ 256,000 and $ 508,000 for the three and six months ended June 30, 2023, respectively, and approximately $ 245,000 and $ 511,000 for the three and six months ended June 30, 2022, respectively.

The following table summarizes the carrying values of certain lease intangible assets or liabilities included in Other assets, net or Other liabilities, net, respectively, on the accompanying Condensed Consolidated Balance Sheets and the related accumulated amortization or accretion, respectively, as of June 30, 2023, and December 31, 2022 (dollars in thousands):

June 30, 2023 December 31, 2022

Total amortization expense related to these lease intangible assets was approximately $ 244,000 and $ 752,000 for the three and nine months ended September 30, 2023, respectively, and approximately $ 258,000 and $ 769,000 for the three and nine months ended September 30, 2022, respectively.

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, 2023, and December 31, 2022 (dollars in thousands):

September 30, 2023 December 31, 2022

Intangible Asset or Liability Deferred

11 unchanged sentences

(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 $ 200,000 and $ 359,000 for the three and six months ended June 30, 2023, respectively, and approximately $ 122,000 and $ 203,000 for the three and six months ended June 30, 2022, respectively.

Total accretion related to below-market lease values and other deferred revenue was approximately $ 44,000 and $ 88,000 for the three and six months ended June 30, 2023, respectively, and approximately $ 44,000 and $ 89,000 for the three and six months ended June 30, 2022, respectively.

Total amortization related to above-market lease values and lease incentives was approximately $ 200,000 and $ 558,000 for the three and nine months ended September 30, 2023, respectively, and approximately $ 136,000 and $ 339,000 for the three and nine months ended September 30, 2022, respectively.

Total accretion related to below-market lease values and other deferred revenue was approximately $ 42,000 and $ 131,000 for the three and nine months ended September 30, 2023, respectively, and approximately $ 44,000 and $ 134,000 for the three and nine months ended September 30, 2022, respectively.

2023 Acquisitions

We did not acquire any new farms during the six months ended June 30, 2023.

We did not acquire any new farms during the nine months ended September 30, 2023.

2022 Acquisitions

During the six months ended June 30, 2022, we completed the following acquisitions, which are summarized in the table below (dollars in thousands, except for footnotes):

During the nine months ended September 30, 2022, we completed the following acquisitions, which are summarized in the table below (dollars in thousands, except for footnotes):

Name Property

4 unchanged sentences

Price Acquisition

Costs Annualized

Straight-line

3 unchanged sentences

24,500 55 1,714

Reagan Road (4)

Cochise, AZ 7/13/2022 40 0 Corn 12.5 years N/A 120 17 39

North Columbia River Road (5)(7)

Franklin & Grant, WA 7/21/2022 1,145 3 Wine Grapes 8.4 years N/A 30,320 146 2,296

Prunedale Road (6)(7)

Umatilla, OR 7/21/2022 172 1 Wine Grapes 10.4 years N/A 7,008 36 286

2,746 5 $ 62,002 $ 269 $ 4,335

(1) Includes approximately $ 23,000 of external legal fees associated with negotiating and originating the leases associated with these acquisitions, which were expensed in the period incurred.

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

1 unchanged sentence

No new lease was executed related to this acquisition.

During each of the three and six months ended June 30, 2022, in the aggregate, we recognized operating revenues of approximately $ 71,000 , and net income of approximately $ 38,000 , related to the above acquisitions.

(4) Represents the acquisition of a parcel of farmable land adjacent to an existing farm.

Subsequent to acquisition, we spent approximately $ 153,000 to install certain improvements on this property.

(5) Upon acquisition, we executed three new leases with the existing tenants on these farms.

The lease terms above represent the weighted-average lease term and aggregate annualized straight-line rent of these three leases.

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

Our acquired ownership, which equated to an 11.3 % interest in the LLC, was valued at approximately $ 2.7 million at the time of acquisition and is included within Other assets, net on the accompanying Consolidated Balance Sheets.

See “ —Investments in Unconsolidated Entities ” below for additional information on our aggregate ownership interest in this and other LLCs.

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

In connection with the acquisition of these vineyards, we committed to provide up to an aggregate amount of $ 2.2 million for certain irrigation and vineyard improvements on these farms, for which we will earn additional rent as the funds are disbursed by us.

During the three and nine months ended September 30, 2022, in the aggregate, we recognized operating revenues of approximately $ 920,000 and $ 991,000 , respectively, and net income of approximately $ 110,000 and $ 147,000 , respectively, related to the above acquisitions.

Purchase Price Allocations

The allocation of the aggregate purchase price for the farms acquired during the six months ended June 30, 2022, was as follows (dollars in thousands):

The allocation of the aggregate purchase price for the farms acquired during the nine months ended September 30, 2022, was as follows (dollars in thousands):

Assets (Liabilities) Acquired 2022 Acquisitions

2 unchanged sentences

Irrigation & drainage systems 2,973

Farm-related facilities 530

In-place lease values 909

Leasing costs 1,355

Above-market lease values (1)

Investment in LLC (1)

Total Purchase Price $ 62,002

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

Property Disposition

2 unchanged sentences

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 limited liability company (the “Fresno LLC”), the sole purpose of which is to own and maintain a pipeline conveying water to our and other neighboring properties.

water to our and other neighboring properties.

In addition, in connection with the acquisition of certain farmland located in Umatilla County, Oregon, we also acquired an ownership in a related limited liability company (the “Umatilla LLC”), the sole purpose of which is to own and maintain an irrigation system providing water to our and other neighboring properties.

As of June 30, 2023, our aggregate ownership interest in the Fresno LLC and the Umatilla LLC was 50.0 % and 20.4 %, respectively.

As of September 30, 2023, our aggregate ownership interest in the Fresno LLC and the Umatilla LLC was 50.0 % and 20.4 %, respectively.

As our investments in the Fresno LLC and Umatilla LLC are both deemed to constitute “significant influence,” we have accounted for these investments under the equity method.

We recorded an aggregate loss of approximately $ 33,000 and $ 60,000 during the three and six months ended June 30, 2023, respectively, and approximately $ 0 and $ 29,000 during the three and six months ended June 30, 2022, respectively (included in Loss from investments in unconsolidated entities on our Condensed Consolidated Statements of Operations and Comprehensive Income), which represents our pro-rata share of the aggregate loss recognized by the Fresno LLC and Umatilla LLC.

As of both June 30, 2023, and December 31, 2022, our combined ownership interest in the Fresno LLC and Umatilla LLC had an aggregate carrying value of approximately $ 5.8 million and is included within Other assets, net on the accompanying Condensed Consolidated Balance Sheets.

We recorded an aggregate loss of approximately $ 24,000 and $ 84,000 during the three and nine months ended September 30, 2023, respectively, and approximately $ 24,000 and $ 54,000 during the three and nine months ended September 30, 2022, respectively (included in Loss from investments in unconsolidated entities on our Condensed Consolidated Statements of Operations and Comprehensive Income), which represents our pro-rata share of the aggregate loss recognized by the Fresno LLC and Umatilla LLC.

As of September 30, 2023, and December 31, 2022, our combined ownership interest in the Fresno LLC and Umatilla LLC had an aggregate carrying value of approximately $ 5.7 million and $ 5.8 million, respectively, and is included within Other assets, net on the accompanying Condensed Consolidated Balance Sheets.

Investments in Water Assets

In connection with the acquisition of certain farmland located in Kern County, California, we also acquired three contracts to purchase an aggregate of 45,000 acre-feet of banked water held by Semitropic Water Storage District (“SWSD”), a water

storage district located in Kern County, California.

During the year ended December 31, 2021, we executed all three contracts to purchase all 45,000 acre-feet of banked water for an aggregate additional cost of approximately $ 2.8 million.

The purchased banked water was recognized at cost, including any administrative fees necessary to transfer the water to our banked water account.

While we may, in the future, sell the banked water to an unrelated third party for a profit, our current intent is to hold the water for the long-term for future use on our farms.

We subsequently executed all three contracts to purchase all 45,000 acre-feet of banked water for an aggregate additional cost of approximately $ 2.8 million.

The purchased banked water was recognized at cost, including the subsequent cost to execute the contracts and any administrative fees necessary to transfer the water to our banked water account.

While we may, in the future, sell the banked water to unrelated third parties for a profit, our current intent is to hold the water for the long-term for future use on our farms.

There is no amount of time by which we must use the water held by SWSD.

As of June 30, 2023, the investment in banked water had a carrying value of approximately $ 34.0 million, which includes the subsequent cost to execute the contracts, and is included within Other assets, net on our Condensed Consolidated Balance Sheets.

As of September 30, 2023, our investment in water assets had an aggregate carrying value of approximately $ 34.0 million and is included within Other assets, net on our Condensed Consolidated Balance Sheets.

Portfolio Concentrations

As of June 30, 2023, our farms were leased to various different, unrelated third-party tenants, with certain tenants leasing more than one farm.

No individual tenant represented greater than 10% of the total lease revenue recorded during the six months ended June 30, 2023.

As of September 30, 2023, our farms were leased to various different, unrelated third-party tenants, with certain tenants leasing more than one farm.

No individual tenant represented greater than 10% of the total lease revenue recorded during the nine months ended September 30, 2023.

Geographic Risk

Farms located in California and Florida accounted for approximately $ 27.1 million ( 64.0 %) and $ 7.5 million ( 17.7 %), respectively, of the total lease revenue recorded during the six months ended June 30, 2023.

Farms located in California and Florida accounted for approximately $ 42.9 million ( 65.1 %) and $ 11.3 million ( 17.1 %), respectively, of the total lease revenue recorded during the nine months ended September 30, 2023.

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 climate 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, droughts, or hurricanes that occurred in those respective regions.

See “ —California Floods ” below for a discussion on damage caused on certain of our farms by the recent floods that occurred in California.

No other single state accounted for more than 10% of the total rental revenue recorded during the six months ended June 30, 2023.

See “ —California Floods ” below for a discussion on damage caused on certain of our farms by the January 2023 floods that occurred in California.

No other single state accounted for more than 10% of the total rental revenue recorded during the nine months ended September 30, 2023.

California Floods

In January 2023, periods of heavy rainfall in California resulted in floods that impacted several areas of the state, including regions where certain of our farms are located.

As a result of the flooding, one of our farms in the Central Valley suffered damage to certain structures located on the farm.

We are still in the process of assessing the damage;

however, as of June 30, 2023, we estimated the carrying value of the structures on this property damaged by the floods to be approximately $ 855,000 .

As a result of the flooding, one of our farms in the Central Valley suffered damage to certain structures located on the farm, and we estimated the carrying value of the structures on this property damaged by the floods to be approximately $ 855,000 .

As such, during the three months ended March 31, 2023, we wrote down the carrying value of these structures and also recorded a corresponding property and casualty loss, included within Property and casualty (loss) recovery, net on our Condensed Consolidated Statements of Operations and Comprehensive Income.

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

As of June 30, 2023, and December 31, 2022, we concluded that no ne of our properties were impaired.

As of September 30, 2023, and December 31, 2022, we concluded that no ne of our properties or investments in water assets were impaired.

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

Our borrowings as of June 30, 2023, and December 31, 2022, are summarized below (dollars in thousands):

Carrying Value as of As of June 30, 2023

June 30, 2023 December 31, 2022 Stated Interest

Our borrowings as of September 30, 2023, and December 31, 2022, are summarized below (dollars in thousands):

Carrying Value as of As of September 30, 2023

September 30, 2023 December 31, 2022 Stated Interest

Maturity Dates

Variable-rate revolving lines of credit $ 100 $ 100 7.36 % 4/5/2024

Notes and bonds payable:

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Notes and bonds payable, net $ 584,098 $ 626,400

Variable-rate revolving lines of credit $ 100 $ 100 7.02 % 4/5/2024

Total borrowings, net $ 584,198 $ 626,500

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

As of June 30, 2023, the above borrowings were collateralized by certain of our farms with an aggregate net book value of approximately $ 1.2 billion.

The weighted-average stated interest rate charged on the above borrowings (excluding the impact of debt issuance costs a nd before any interest patronage, or refunded interest) was 3.79 % and 3.78 % for the three and six months ended June 30, 2023, respectively, as compared to 3.75 % and 3.73 % for the three and six months ended June 30, 2022, respectively .

As of September 30, 2023, the above borrowings were collateralized by certain of our farms with an aggregate net book value of approximately $ 1.1 billion.

The weighted-average stated interest rate charged on the above borrowings (excluding the impact of debt issuance costs and before any interest patronage, or refunded interest) was 3.81 % and 3.79 % for the three and nine months ended September 30, 2023 , respectively, as compared to 3.82 % and 3.76 % for the three and nine months ended September 30, 2022, respectively .

I n addition, 2022 interest patronage from our Farm Credit Notes Payable (as defined below) resulted in a 24.1 % reduction (approximately 109 basis points) to the stated interest rates on such borrowings.

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

As of June 30, 2023, we were in compliance with all covenants applicable to the above borrowings.

As of September 30, 2023, we were in compliance with all covenants applicable to the above borrowings.

MetLife Facility

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

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

The following table summarizes the pertinent terms of the Current MetLife Facility as of June 30, 2023 (dollars in thousands, except for footnotes):

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

The following table summarizes the pertinent terms of the Current MetLife Facility as of September 30, 2023 (dollars in thousands, except for footnotes):

Issuance Aggregate

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Totals $ 250,000 $ 37,000 $ 213,000

(1) Based on the properties that were pledged as collateral under the Current MetLife Facility, as of June 30, 2023, the maximum additional amount we could draw under the facility was approximately $ 110.3 million.

(1) Based on the properties that were pledged as collateral under the Current MetLife Facility, as of September 30, 2023, the maximum additional amount we could draw under the facility was approximately $ 110.3 million.

(2) 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).

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Through certain subsidiaries of our Operating Partnership, we have 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 (the “Farmer Mac Facility”).

As amended from time to

time, the Farmer Mac Facility currently provides for bond issuances up to an aggregate amount of $ 225.0 million.

As amended from time to time, the Farmer Mac Facility currently provides for bond issuances up to an aggregate amount of $ 225.0 million.

Pursuant to the Bond Purchase Agreement, as further amended on June 2, 2023, we may issue new bonds under the Farmer Mac Facility through December 31, 2026, and the final maturity date for new bonds issued under the facility will be the date that is ten years from the applicable issuance date.

As of June 30, 2023, we had approximately $ 57.0 million of bonds issued and outstanding under the Farmer Mac Facility.

As of September 30, 2023, we had approximately $ 52.7 million of bonds issued and outstanding under the Farmer Mac Facility.

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

We did not enter into any new loan agreements with Farm Credit during the six months ended June 30, 2023.

We did not enter into any new loan agreements with Farm Credit during the nine months ended September 30, 2023.

Interest Patronage

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Debt Service – Aggregate Maturities

Scheduled principal payments of our aggregate notes and bonds payable as of June 30, 2023 , for the succeeding years are as follows (dollars in thousands):

Scheduled principal payments of our aggregate notes and bonds payable as of September 30, 2023 , for the succeeding years are as follows (dollars in thousands):

Period Scheduled Principal Payments

For the remaining six months ending December 31:

2023 $ 12,622

For the remaining three months ending December 31:

For the fiscal years ending December 31:

Thereafter 354,855

During the six months ended June 30, 2023, we repaid approximately $ 24.3 million of maturing loans.

During the nine months ended September 30, 2023, we repaid approximately $ 28.5 million of maturing loans.

On a weighted-average basis, these borrowings bore interest at a stated rate of 3.32 % and an effective interest rate (after interest patronage, where applicable) of 3.21 %.

ASC 820, “Fair Value Measurement (Subtopic 820)” (“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 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.

ASC 820-10 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:

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

As of June 30, 2023, the aggregate fair value of our notes and bonds payable was approximately $ 541.2 million, as compared to an aggregate carrying value (excluding unamortized related debt issuance costs) of approximately $ 596.9 million.

As of September 30, 2023, the aggregate fair value of our notes and bonds payable was approximately $ 527.1 million, as compared to an aggregate carrying value (excluding unamortized related debt issuance costs) of approximately $ 587.2 million.

The fair value of our 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 debt with comparable terms.

Further, due to the revolving nature and variable interest rates applicable to the MetLife Lines of Credit, their aggregate fair value as of June 30, 2023, is deemed to approximate their aggregate carrying value of $ 100,000 .

Further, due to the revolving nature and variable interest rates applicable to the MetLife Lines of Credit, their aggregate fair value as of September 30, 2023, is deemed to approximate their aggregate carrying value of $ 100,000 .

Interest Rate Swap Agreements

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In accordance with the Financial Accounting Standards Board’s fair value measurement guidance, we have made an accounting policy election to measure the credit risk of our derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio.

As of June 30, 2023 , our interest rate swaps were valued using Level 2 inputs.

As of September 30, 2023 , our interest rate swaps were valued using Level 2 inputs.

In addition, we have designated our interest rate swaps as cash flow hedges.

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During the next 12 months, we estimate that an additional $ 2.6 million will be reclassified as a reduction to interest expense.

We had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk as of June 30, 2023 , and December 31, 2022 (dollars in thousands):

We had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk as of September 30, 2023 , and December 31, 2022 (dollars in thousands):

Period Number of Instruments Aggregate Notional Amount

As of June 30, 2023 4 $ 71,701

As of September 30, 2023 4 $ 71,501

As of December 31, 2022 4 73,392

The following table presents the fair value of our interest rate swaps as well as their classification on the Condensed Consolidated Balance Sheets as of June 30, 2023 , and December 31, 2022 (dollars in thousands):

The following table presents the fair value of our interest rate swaps as well as their classification on the Condensed Consolidated Balance Sheets as of September 30, 2023 , and December 31, 2022 (dollars in thousands):

Derivative Asset (Liability) Fair Value

Derivative Type Balance Sheet Location June 30, 2023 December 31, 2022

Derivative Type Balance Sheet Location September 30, 2023 December 31, 2022

Derivatives Designated as Hedging Instruments:

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Total $ 10,271 $ 9,007

The following table presents the amount of (loss) income recognized in comprehensive income within our condensed consolidated financial statements for the three and six months ended June 30, 2023 and 2022 (dollars in thousands):

For the Three Months Ended June 30, For the Six Months Ended June 30,

The following table presents the amount of income recognized in comprehensive income within our condensed consolidated financial statements for the three and nine months ended September 30, 2023 and 2022 (dollars in thousands):

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

2023 2022 2023 2022

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We have agreements with each of our derivative counterparties that contain a provision where if we default on any of our indebtedness, then we could also be declared in default on our derivative obligations.

As of June 30, 2023 , we did not have any derivatives in a net liability position, nor have we posted any collateral related to these agreements.

As of September 30, 2023 , we did not have any derivatives in a net liability position, nor have we posted any collateral related to these agreements.

CUMULATIVE TERM PREFERRED STOCK

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

As of June 30, 2023, the fair value of our Series D Term Preferred Stock was approximately $ 56.9 million, as compared to the carrying value (exclusive of unamortized offering costs) of approximately $ 60.4 million.

The fair value of our Series D Term Preferred Stock uses Level 1 inputs under the hierarchy established by ASC 820-10 and is calculated based on the closing per-share price on June 30, 2023, of $ 23.55 .

For information on the dividends declared by our Board of Directors and paid by us on the Series D Term Preferred Stock during the three months ended June 30, 2023, see Note 8, “ Equity—Distributions .”

As of September 30, 2023, the fair value of our Series D Term Preferred Stock was approximately $ 57.4 million, as compared to the carrying value (exclusive of unamortized offering costs) of approximately $ 60.4 million.

The fair value of our Series D Term Preferred Stock uses Level 1 inputs under the hierarchy established by ASC 820-10 and is calculated based on the closing per-share price on September 30, 2023, of $ 23.75 .

For information on the dividends declared by our Board of Directors and paid by us on the Series D Term Preferred Stock during the nine months ended September 30, 2023, see Note 8, “ Equity—Distributions .”

RELATED-PARTY TRANSACTIONS

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Depending on the size of the financing obtained, the maximum amount of the financing fee, which will be payable upon closing of the respective financing, will range 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 did not pay any financing fees to Gladstone Securities during either of the three or six months ended June 30, 2023.

During the three and six months ended June 30, 2022, we paid total financing fees to Gladstone Securities of approximately $ 0 and $ 94,000 respectively.

Through June 30, 2023, the total amount of financing fees paid to Gladstone Securities represented approximately 0.14 % of the total financings secured since the Financing Arrangement Agreement has been in place.

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 did not pay any financing fees to Gladstone Securities during either of the three or nine months ended September 30, 2023.

During the three and nine months ended September 30, 2022, we paid total financing fees to Gladstone Securities of approximately $ 23,000 and $ 117,000 respectively.

Through September 30, 2023, the total amount of financing fees paid to Gladstone Securities represented approximately 0.14 % of the total financings secured since the Financing Arrangement Agreement has been in place.

Dealer-Manager Agreements

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

The following tables summarizes the total Selling Commissions and Dealer-Manager Fees paid to Gladstone Securities during the three and six months ended June 30, 2023 and 2022 (dollars in thousands):

For the Three Months Ended June 30, For the Six Months Ended June 30,

The following tables summarizes the total Selling Commissions and Dealer-Manager Fees paid to Gladstone Securities during the three and nine months ended September 30, 2023 and 2022 (dollars in thousands):

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

2023 2022 2023 2022

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

For the Three Months Ended June 30, For the Six Months Ended June 30,

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

2023 2022 2023 2022

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Incentive fee (1)(2)

789 505 789 1,636

Total fees to our Adviser $ 2,939 $ 2,591 $ 7,236 $ 7,801

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Related-Party Fees Due

Amounts due to related parties on our accompanying Condensed Consolidated Balance Sheets as of June 30, 2023, and December 31, 2022, were as follows (dollars in thousands):

June 30, 2023 December 31, 2022

Amounts due to related parties on our accompanying Condensed Consolidated Balance Sheets as of September 30, 2023, and December 31, 2022, were as follows (dollars in thousands):

September 30, 2023 December 31, 2022

Base management fee $ 2,150 $ 2,141

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Total due to Adviser 3,001 3,810

Administration fee 514 536

Cumulative accrued but unpaid portion of prior Administration Fees (2)

Total due to Administrator 619 536

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(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.

(2) Represents certain costs related to sales of preferred stock paid by Gladstone Securities on our behalf.

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The 2023 Registration Statement, which was declared effective by the SEC on April 13, 2023, permits us to issue up to an aggregate of $ 1.5 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 securities.

Through June 30, 2023, we have issued a total of 57,568 shares of Series E Preferred Stock for gross proceeds of approximately $ 1.4 million and 66,100 shares of common stock for gross proceeds of approximately $ 1.1 million under the 2023 Registration Statement.

See Note 11, “ Subsequent Events ,” for equity issuances completed subsequent to June 30, 2023.

Through September 30, 2023, we have issued a total of 145,240 shares of Series E Preferred Stock for gross proceeds of approximately $ 3.6 million and 124,460 shares of common stock for gross proceeds of approximately $ 2.2 million under the 2023 Registration Statement.

See Note 11, “ Subsequent Events ,” for equity issuances completed subsequent to September 30, 2023.

Equity Issuances

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

The following table provides information on sales of our Series C Preferred Stock during the three and six months ended June 30, 2022 (dollars in thousands, except per-share amounts):

Three Months Ended June 30, 2022 Six Months Ended June 30, 2022

The following table provides information on sales of our Series C Preferred Stock during the three and nine months ended September 30, 2022 (dollars in thousands, except per-share amounts):

Three Months Ended September 30, 2022 Nine Months Ended September 30, 2022

Number of shares sold (1)

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(1) Excludes shares issued pursuant to the DRIP.

We issued approximately 0 and 14,067 shares of the Series C Preferred Stock pursuant to the DRIP during the three and six months ended June 30, 2023, respectively, and approximately 7,488 and 12,727 shares of the Series C Preferred Stock pursuant to the DRIP during the three and six months ended June 30, 2022, respectively.

We issued approximately 0 and 14,067 shares of the Series C Preferred Stock pursuant to the DRIP during the three and nine months ended September 30, 2023, respectively, and approximately 10,048 and 22,775 shares of the Series C Preferred Stock pursuant to the DRIP during the three and nine months ended September 30, 2022, respectively.

(2) Net of Selling Commissions, Dealer-Manager Fees, and underwriting discounts.

In addition, during the three and six months ended June 30, 2023, 39,093 and 48,913 shares, respectively, of Series C Preferred Stock were tendered for optional redemption, which we satisfied with an aggregate cash payment of approximately $ 951,000 and $ 1.2 million, respectively.

During the three and six months ended June 30, 2022, 2,160 and 4,640 shares, respectively, of Series C Preferred Stock were tendered for optional redemption, which we satisfied with an aggregate cash payment of approximately $ 52,000 and $ 111,000 , respectively.

During the three months ended June 30, 2023, we listed the Series C Preferred Stock on Nasdaq under the ticker symbol “LANDP.” Trading of the Series C Preferred Stock on Nasdaq commenced on June 8, 2023.

In addition, during the nine months ended September 30, 2023, 48,913 shares of Series C Preferred Stock were tendered for optional redemption, which we satisfied with an aggregate cash payment of approximately $ 1.2 million (no shares were tendered for optional redemption during the three months ended September 30, 2023 ).

During the three and nine months ended September 30, 2022, 18,075 and 22,715 shares, respectively, of Series C Preferred Stock were tendered for optional redemption, which we satisfied with an aggregate cash payment of approximately $ 420,000 and $ 531,000 , respectively.

During the nine months ended September 30, 2023, we listed the Series C Preferred Stock on Nasdaq under the ticker symbol “LANDP.” Trading of the Series C Preferred Stock on Nasdaq commenced on June 8, 2023.

Series E Preferred Stock

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

The following table provides information on sales of our Series E Preferred Stock during the three and six months ended June 30, 2023 (dollars in thousands, except per-share amounts):

Three Months Ended June 30, 2023 Six Months Ended June 30, 2023

The following table provides information on sales of our Series E Preferred Stock during the three and nine months ended September 30, 2023 (dollars in thousands, except per-share amounts):

Three Months Ended September 30, 2023 Nine Months Ended September 30, 2023

Number of shares sold 87,672 223,081

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(1) Net of Selling Commissions, Dealer-Manager Fees, and underwriting discounts.

Refer to Note 11, “Subsequent Events—Financing Activity—Equity Activity,” for sales of the Series E Preferred Stock completed subsequent to June 30, 2023.

Refer to Note 11, “Subsequent Events—Financing Activity—Equity Activity,” for sales of the Series E Preferred Stock completed subsequent to September 30, 2023.

In addition, during the each of the three and nine months ended September 30, 2023, 1,600 shares of Series E Preferred Stock were tendered for optional redemption, which we satisfied with an aggregate cash payment of approximately $ 36,000 .

The Series E Offering will terminate on the date (the “Series E Termination Date”) that is the earlier of (i) December 31, 2025 (unless terminated or extended by our Board of Directors) and (ii) the date on which all 8,000,000 shares of Series E Preferred Stock offered in the Series E Offering are sold.

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

The following table provides information on shares of common stock sold by the Sales Agents under the ATM Program during the three and six months ended June 30, 2023 and 2022 (dollars in thousands, except per-share amounts):

Three Months Ended June 30, Six Months Ended June 30,

The following table provides information on shares of common stock sold by the Sales Agents under the ATM Program during the three and nine months ended September 30, 2023 and 2022 (dollars in thousands, except per-share amounts):

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

2023 2022 2023 2022

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(1) Net of underwriting commissions.

Refer to Note 11, “Subsequent Events—Financing Activity—Equity Activity,” for sales of common stock under the ATM Program completed subsequent to June 30, 2023.

Non-Controlling Interests in Operating Partnership

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

As of June 30, 2023, and December 31, 2022, we owned 100.0 % of the outstanding OP Units.

As of September 30, 2023, and December 31, 2022, we owned 100.0 % of the outstanding OP Units.

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.

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Distributions

The per-share distributions to preferred and common stockholders declared by our Board of Directors during the three and six months ended June 30, 2023 and 2022 are reflected in the table below.

Three Months Ended June 30, Six Months Ended June 30,

The per-share distributions to preferred and common stockholders declared by our Board of Directors during the three and nine months ended September 30, 2023 and 2022 are reflected in the table below.

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

Issuance 2023 2022 2023 2022

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LEASE REVENUES

The following table sets forth the components of our lease revenue for the three and six months ended June 30, 2023 and 2022 (dollars in thousands, except for footnotes):

Three Months Ended June 30, Six Months Ended June 30,

The following table sets forth the components of our lease revenue for the three and nine months ended September 30, 2023 and 2022 (dollars in thousands, except for footnotes):

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

2023 2022 2023 2022

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Variable lease payments (2)

2,432 3,031 2,766 3,058

Lease revenue, net (3)

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

During the three and six months ended June 30, 2023, we recorded participation rents of approximately $ 0 and $ 195,000 , respectively, and reimbursements of certain property operating expenses by tenants of approximately $ 57,000 and $ 93,000 , respectively.

During the three and six months ended June 30, 2022, we recorded participation rents of approximately $ 20,000 during each period and reimbursements of certain property operating expenses by tenants of approximately $ 0 and $ 6,000 , respectively.

In addition, during the three and six months ended June 30, 2023, we recorded late fees of approximately $ 35,000 and $ 46,000 , respectively.

During the three and nine months ended September 30, 2023, we recorded participation rents of approximately $ 2.4 million and $ 2.6 million, respectively, and reimbursements of certain property operating expenses by tenants of approximately $ 47,000 and $ 140,000 , respectively.

During the three and nine months ended September 30, 2022, we recorded participation rents of approximately $ 3.0 million during each period and reimbursements of certain property operating expenses by tenants of approximately $ 28,000 and $ 34,000 , respectively.

In addition, during the three and nine months ended September 30, 2023, we recorded late fees of approximately $ 0 and $ 46,000 , respectively.

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

EARNINGS PER SHARE OF COMMON STOCK

The following table sets forth the computation of basic and diluted earnings per common share for the three and six months ended June 30, 2023 and 2022, computed using the weighted average number of common shares outstanding during the respective periods.

The following table sets forth the computation of basic and diluted earnings per common share for the three and nine months ended September 30, 2023 and 2022, computed using the weighted average number of common shares outstanding during the respective periods.

Earnings 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 income or loss.

Three Months Ended June 30, Six Months Ended June 30,

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

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

2023 2022 2023 2022

Net income (loss) attributable to common stockholders $ 1,727 $ ( 3,873 ) $ ( 2,593 ) $ ( 6,610 )

Net loss attributable to common stockholders $ ( 2,964 ) $ ( 3,594 ) $ ( 5,557 ) $ ( 10,204 )

Weighted average shares of common stock outstanding – basic and diluted 35,822,123 34,607,440 35,698,458 34,472,018

Income (loss) per common share – basic and diluted $ 0.05 $ ( 0.11 ) $ ( 0.07 ) $ ( 0.19 )

The weighted-average number of OP Units held by non-controlling OP Unitholders was 0 for each of the three and six months ended June 30, 2023, and 45,006 and 124,451 for the three and six months ended June 30, 2022 , respectively .

Loss per common share – basic and diluted $ ( 0.08 ) $ ( 0.10 ) $ ( 0.16 ) $ ( 0.30 )

The weighted-average number of OP Units held by non-controlling OP Unitholders was 0 for each of the three and nine months ended September 30, 2023, and 0 and 82,511 for the three and nine months ended September 30, 2022 , respectively .

SUBSEQUENT EVENTS

Portfolio Activity—Water Acquisition

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

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

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

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

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

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

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

Department of Interior, Bureau of Reclamation.

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

Financing Activity

Debt Activity—Loan Maturities

Subsequent to June 30, 2023, we repaid a $ 3.2 million maturing bond that bore interest at an annual rate of 2.13 % .

Subsequent to September 30, 2023, we repaid approximately $ 2.7 million of maturing loans.

On a weighted-average basis, these borrowings bore interest at a stated rate of 5.05 % and an effective rate (after interest patronage, where applicable) of 4.06 % .

Equity Activity

The following table provides information on equity sales that have occurred subsequent to June 30, 2023 (dollars in thousands, except per-share amounts):

The following table provides information on equity sales that have occurred subsequent to September 30, 2023 (dollars in thousands, except per-share amounts):

Type of Issuance Number of

2 unchanged sentences

Series E Preferred Stock 2,200 $ 25.00 $ 55 $ 50

Common Stock – ATM Program 58,360 17.34 1,012 1,002

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

(1) Net of Selling Commissions and Dealer-Manager Fees.

Distributions

On July 11, 2023, our Board of Directors authorized and we declared the following monthly cash distributions to holders of our preferred and common stock:

On October 10, 2023, our Board of Directors authorized and we declared the following monthly cash distributions to holders of our preferred and common stock:

Issuance Record Date Payment Date Distribution per Share

Series B Preferred Stock:

July 21, 2023 July 31, 2023 $ 0.125

August 23, 2023 August 31, 2023 0.125

September 21, 2023 September 29, 2023 0.125

October 20, 2023 October 31, 2023 $ 0.125

November 20, 2023 November 30, 2023 0.125

December 18, 2023 December 29, 2023 0.125

Total Series B Preferred Stock Distributions:

Series C Preferred Stock:

July 21, 2023 July 31, 2023 $ 0.125

August 23, 2023 August 31, 2023 0.125

September 21, 2023 September 29, 2023 0.125

October 20, 2023 October 31, 2023 $ 0.125

November 20, 2023 November 30, 2023 0.125

December 18, 2023 December 29, 2023 0.125

Total Series C Preferred Stock Distributions:

Series D Term Preferred Stock:

July 21, 2023 July 31, 2023 $ 0.104167

August 23, 2023 August 31, 2023 0.104167

September 21, 2023 September 29, 2023 0.104167

October 20, 2023 October 31, 2023 $ 0.104167

November 20, 2023 November 30, 2023 0.104167

December 18, 2023 December 29, 2023 0.104167

Total Series D Term Preferred Stock Distributions:

Series E Preferred Stock:

July 27, 2023 August 4, 2023 $ 0.104167

August 28, 2023 September 6, 2023 0.104167

September 27, 2023 October 5, 2023 0.104167

October 25, 2023 November 3, 2023 $ 0.104167

November 28, 2023 December 5, 2023 0.104167

December 27, 2023 January 5, 2024 0.104167

Total Series E Preferred Stock Distributions:

Common Stock (1) :

July 21, 2023 July 31, 2023 $ 0.0462

August 23, 2023 August 31, 2023 0.0462

September 21, 2023 September 29, 2023 0.0462

October 20, 2023 October 31, 2023 $ 0.0464

November 20, 2023 November 30, 2023 0.0464

December 18, 2023 December 29, 2023 0.0464

Total Common Stock Distributions $ 0.1392

1 unchanged sentence

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

What changed 10-Q

Item 1. Financial Statements