What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2024-02-20 compared with 2023-02-21 · 279 added, 270 removed, 499 unchanged (52% of the section changed)

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

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

Gladstone Land Corporation controls the sole general partner of the Operating Partnership and currently owns, directly or indirectly, 100.0% of the units of limited partnership interest in the

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Operating Partnership (“OP Units”).

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

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• we owned 168 farms comprised of 111,836 total acres across 15 states in the U.S.;

• our occupancy rate (based on gross acreage) was 100.0%, and our farms were leased to 89 different, unrelated third-party tenants growing over 60 different types of crops;

• our occupancy rate (based on farmable acreage) was 98.9%, and our farms were leased to 93 different, unrelated third-party tenants growing over 60 different types of crops;

• the weighted-average remaining lease term across our agricultural real estate holdings was 5.9 years;

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Business Environment

Impact of Inflation and Rising Interest Rates

Impact of Inflation and Interest Rates

According to the U.S.

Bureau of Labor Statistics, the consumer price index (“CPI”) grew at an annual rate of 6.5% through December 2022, as overall inflation continued to ease from levels earlier in 2022, when it reached the highest rates seen in over 40 years.

However, food prices have continued to outpace the rate of inflation, with the overall food segment increasing at an annual rate of 10.4% through December 2022, and the food at home segment (which encompasses over 90% of the crops grown on our farms) growing by 11.8%.

Bureau of Labor Statistics, the consumer price index (“CPI”) grew at an annual rate of 3.4% through December 31, 2023, as overall inflation continued to ease from the peak levels experienced in the summer of 2022, when it reached the highest rates seen in over 40 years.

The increase in food prices has also slowed but has generally kept pace with the rate of inflation until the past couple of months, as the overall food segment increased at an annual rate of 2.7% through December 31, 2023.

In addition, according to the NCREIF Farmland Index, which, as of December 31, 2023, consisted of approximately $16.6 billion of farms across the U.S., the total return on U.S.

farmland (including appreciation and income) was 5.0% for the 12 months ended December 31, 2023.

If the increases in food prices continue to outpace inflation, we believe this will help mitigate the increase in input costs currently experienced by our farm operators.

While showing signs of slowing from its peak levels, overall inflation remains significantly above the Federal Reserve’s target long-term rate of 2.0%, leading the Federal Reserve to raise its benchmark funds rate eight times since March 2022.

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

Despite the slowdown in food prices in recent months, prices remain high, as the overall food segment increased by 25.2% since from December 2019 to December 2023, outpacing overall inflation of 19.4% over the same time period.

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

To combat inflation, the Federal Reserve raised its benchmark funds rate 11 times between March 2022 and July 2023, resulting in the highest target rate seen since January 2011.

Since that time, it has held rates flat, and many now expect the Federal Reserve to begin cutting rates later this year.

While we do not currently expect additional rate hikes, the timing of rate cuts, if any, remains uncertain.

Despite cooling inflation and a strong labor market, the Federal Reserve has indicated its desire to see more evidence of inflation being on a sustainable path to its target rate of 2.0%.

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

The yield on the 10-year U.S.

Treasury Note has increased substantially over the past 12 months and recently surpassed 4% for the first time since 2008, which adversely affects interest rates on long-term financing.

In addition, global recessionary conditions appear likely to occur within the next 12 months, caused in part by inflation, the potential emergence of new COVID-19 variants, and geopolitical conditions, although the actual timeline, impact, and duration are unknown.

Treasury Note has withdrawn from the 16-year high it achieved in October 2023 but still remains above 4.0%.

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

Over 99.9% of our borrowings are currently at fixed rates, and on a weighted-average basis, these rates are fixed at an effective interest rate of 3.34% for another 4.2 years.

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

California Floods and Impact on Drought

Recent storms have brought tremendous amounts of rain and snow to California, increasing the state’s snowpack and water resources and bringing some much-needed relief to a region that, as of now, remains in a prolonged drought.

As a result of the heavy rain and snowfall, drought conditions throughout California have been significantly improved, as the state no longer has any areas under “extreme drought” or “exceptional drought” conditions, the two most severe drought categories, thus marking a vast improvement from three months earlier when approximately 58% of the state fell under these two categories.

On a statewide basis, snowpack levels are more than twice their 20-year historical averages for this time of year and have already surpassed their historical average April 1 st benchmark levels (April 1 st has been used as a benchmark since 1941 by the California Department of Water Resources, as it is when the snowpack in California is generally the deepest).

reservoirs across California have seen their water levels rise significantly.

The state’s three largest reservoirs are currently at approximately 86% of their historical average, compared to just 53% just a few months ago.

However, despite the storms reducing the intensity of the drought, approximately one-third of California is still considered to be under “severe drought” conditions.

In addition, most underground aquifers remain depleted, as the state does not have the infrastructure in place to allow the aquifers to fully benefit from such a massive rainfall to recharge.

As such, groundwater pumping continues to be strained, due to both aquifers’ receding water lines and pumping restrictions pursuant to regulations under the Sustainable Groundwater Management Act (“SGMA”).

To date, none of our farms have suffered water shortages due to our wells not being able to reach the aquifers.

We continue to seek out opportunities to provide additional sources of water to our farms, such as acquiring supplemental water banked at local water districts or by entering into separate agreements directly with water districts for surface water deliveries.

In addition, we are also currently looking into capital improvements on certain of our farms, such as building pipelines to allow for surface water deliveries and building recharge basins on unplanted acres to capture stormwater and allow it to recharge the aquifers below.

As such, with respect to our current borrowings, we have experienced minimal impact from the recent increases in interest rates, and we believe we are well-protected against the potential of continued high interest rates or any further interest rate increases.

California Water Outlook

Moving into 2024, we continue to see the impacts of the extremely wet year California experienced starting in early 2023.

Due to the extreme rainfall and snowpack over the past year, California has come out of drought conditions, and its reservoir levels remain above historical averages.

The 2023 water year carry-over should provide stability in 2024, reducing the dependency on historic rain events to keep the state out of drought conditions.

If 2024 proves to be another average or above-average year in terms of precipitation, we expect the continuation of programs developed by certain California water districts for the long-term storage of excess water supplies, which would create opportunities to capture and store more water.

With the continued implementation of the Sustainable Groundwater Management Act (“SGMA”), farmland operators continue to experience groundwater restrictions across the state.

These restrictions have led to the implementation of supplemental water projects that allow farmland owners and operators to capture or import surplus surface water supplies.

Significant investments were made in these projects in 2023, led by farmers and water districts to take advantage of the excess water supplies made available by the state.

These water supplies are critical to the long-term water strategy for farmers, allowing them to acquire

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supplemental water in wet years and store that water for use in dry years when supplemental water is in short supply or unavailable.

Factors Impacting Agricultural Land Values in our Regions of Focus

The agricultural real estate market in the western U.S.

is largely driven by water availability, which is impacted by both environmental and regulatory conditions.

Going into the winter of 2021-2022, the current drought caused major shortages of surface water deliveries, and the persistence of below-normal rainfall and snowpack levels in California into 2022 led to groundwater levels dropping so far as to significantly reduce groundwater well production in a number of areas throughout the state.

From a regulatory perspective, while the winter of 2022-2023 is off to a very strong start, the capture of runoff from the storms has been extremely limited due to restrictions imposed by current management guidelines over potentially endangered species in the California water system.

In addition, the impact of SGMA is affecting grower operations, as sustainable pumping levels are being identified, thus allowing operators to calculate or estimate their future groundwater access and plan (or scale back) accordingly.

From a land value perspective, a growing divide is occurring between farms that have adequate water and farms that are short on water.

We are seeing land values in areas with strong water sources increase significantly, while values of farms in areas with more limited water sources are decreasing to price levels not seen in decades.

Farmland with infrastructure in place to allow it to bring in more water or to store water is also generally experiencing increases in value.

Expectations of future water availability are also causing a change in crop economics throughout the state.

The profitability of crops being grown is also driving agricultural land values.

Most almond growers have had difficulties due to operating costs at all-time highs and almond prices dropping to levels not seen since the 1990s.

As a result, the pace of new almond plantings has slowed dramatically, and older orchards are being removed at a quicker pace.

Farmland growing pistachios have maintained their high values but have generally plateaued since last year’s run-up in land value.

Crop yields for the 2022 harvest were mostly lower, which led to increased pricing for the 2022 marketing window, which runs through late 2023.

In coastal California, strawberry production was down on a per-acre basis, and leafy greens experienced unprecedented crop failures due to disease.

This lower production led to historically high crop prices, which more than offset the lower yields.

As a result, growers were generally willing to pay slightly higher rents, causing land prices to trend slightly higher.

In the past year, land values in the western U.S.

have been heavily impacted by the higher interest rate environment and depressed crop pricing, particularly in almonds, wine grapes, and apples.

The almond and wine grape industries have experienced large amounts of acres being removed, and the increased cost of capital is preventing much of that acreage from being replanted at this time.

Row crops and pistachios are faring much better and are experiencing stronger profitability, despite an increase in bearing acreage of pistachios.

With water being more abundant, row crop acreage has increased, which could put downward pressure on future pricing of these crops.

The cost of most crop inputs have leveled off;

however, there continue to be shortages of certain equipment and some petroleum-based inputs.

Large amounts of land are becoming available in the Central Valley of California;

however, while smaller acreages are transacting rather quickly, larger holdings are sitting on the market longer.

Groundwater plans to be in compliance with SGMA are being approved and implemented, which continues to significantly impact land values.

Values of land that is short on water are decreasing to levels not seen in decades, while land with sufficient water resources is selling for extremely high prices, a trend that we expect to see continue for the next several years.

Coastal California land is still in short supply, and values are either stable or increasing.

Land values in the Pacific Northwest have been relatively stable despite troubles in the wine grape and apple industries.

Southeastern U.S.

Values of farmland growing strawberries in Florida have been steadily increasing for the past several years, with several out-of-state growers expanding their operations to the central area of the state.

Values of vegetable farms in Florida, which are often impacted by production from Mexico, continue to be stable.

Overall, land values throughout the Southeastern U.S.

continue to benefit from upward pricing pressure caused, in part, by the large influx of new people moving to the region, each year, particularly Florida and the Carolinas.

Values of farmland in the Southeast growing fruits and vegetables continue to increase at a steady pace, driven in part by significant and sustained migration to that region.

Our land holdings in Florida, in particular, have benefited greatly from a substantial amount of residential development and state projects taking place in the surrounding areas, all putting upward pressure on the value of our portfolio in the region.

Despite ongoing pressure from production in Mexico, the strawberry industry has continued to thrive, resulting in upward rent pressure on our farms, and vegetable ground has also seen steady demand.

Further, after a decade-long decline in citrus due to falling consumer demand and production declines caused by the plant disease known as “citrus greening,” we are seeing the citrus industry start to stabilize, as acreage has right-sized, and new applications to combat citrus greening and other blights have proven very effective.

Portfolio Diversification

Since our initial public offering in January 2013 (the “IPO”), we have expanded our portfolio from 12 farms leased to 7 different, unrelated tenants to a current portfolio of 168 farms leased to 93 different, unrelated third-party tenants who grow over 60 different types of crops on our farms.

Our investment focus is in farmland suitable for growing either fresh produce

annual row crops (e.g., certain berries and vegetables) or certain permanent crops (e.g., almonds, blueberries, pistachios, and wine grapes), with an ancillary focus on farmland growing certain commodity crops (e.g., beans and corn).

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

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

The following table summarizes the geographic locations (by state) of our farms owned and with leases in place as of December 31, 2022, 2021, and 2020 (dollars in thousands):

The following table summarizes the geographic locations (by state) of our farms owned as of and during the years ended December 31, 2023, 2022, and 2021 (dollars in thousands):

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As of and For the Year Ended

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63 34,844 30.1% $ 59,143 65.5% 63 34,844 30.1% $ 61,118 68.5% 62 33,027 29.3% $ 49,644 65.9%

Florida 26 22,606 19.5% 14,537 16.3% 26 22,591 20.1% 13,675 18.2% 23 20,770 20.5% 13,342 23.4%

26 22,468 19.4% 15,076 16.7% 26 22,606 19.5% 14,537 16.3% 26 22,591 20.1% 13,675 18.2%

Washington 6 2,520 2.2% 4,651 5.1% 6 2,529 2.2% 3,401 3.8% 3 1,384 1.2% 2,384 3.2%

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Arizona 6 6,320 5.5% 2,263 2.5% 6 6,320 5.5% 2,100 2.4% 6 6,280 5.6% 1,951 2.6%

Nebraska 9 7,782 6.7% 1,712 1.9% 9 7,782 6.9% 1,588 2.1% 9 7,782 7.7% 1,556 2.7%

Oregon 6 898 0.8% 2,181 2.4% 6 898 0.8% 1,710 1.9% 5 726 0.6% 854 1.1%

Nebraska 9 7,782 6.7% 1,778 2.0% 9 7,782 6.7% 1,712 1.9% 9 7,782 6.9% 1,588 2.1%

Michigan 23 1,892 1.6% 966 1.1% 23 1,892 1.6% 786 0.9% 23 1,892 1.7% 1,040 1.4%

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our farms are spread across six of these growing regions.

(2) Includes a 3,748-acre farm that was sold on January 11, 2024.

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

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

Currently, 123 of our farms are leased on a pure, triple-net basis, 43 farms are leased on a partial-net basis (with us, as landlord, responsible for all or a portion of the related property taxes), and 3 farms are leased on a single-net basis (with us, as landlord, responsible for the related property taxes, as well as certain maintenance, repairs, and insurance costs).

Additionally, 35 of our farms are leased under agreements that include a variable rent component, called “participation rents,” that are based on the gross revenues earned on the respective farms.

Currently, 105 of our farms are leased on a pure, triple-net basis, 45 farms are leased on a partial-net basis (with us, as landlord, responsible for all or a portion of the related property taxes), 3 farms are leased on a single-net basis (with us, as landlord, responsible for the related property taxes, as well as certain maintenance, repairs, and insurance costs), and 15 farms are vacant.

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

Lease Expirations

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Year Number of

Acreage % of Total

Acreage Lease Revenues for the Year Ended December 31, 2022 % of Total

Expiring / Expired

Leased Acreage % of Total

Acreage Lease Revenue for the Year Ended December 31, 2023 % of Total

2024 8 9,171 7.9% $ 9,361 10.4%

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13 37 —% 485 0.5%

Terminated/expired leases and sold properties (3)

N/A 5,271 4.6% 3,389 3.8%

Totals 111 115,584 100.0% $ 90,319 100.0%

(1) Certain lease agreements encompass multiple farms.

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

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

oil, gas, and mineral leases;

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

(3) Includes approximately $463,000 of lease revenue recorded from 15 farms on which the respective leases expired during the three months ended December 31, 2023, and remain vacant, and approximately $2.9 million from one farm that was sold subsequent to December 31, 2023, which expired on December 31, 2023.

We currently have one agricultural lease scheduled to expire within the next six months on a farm in California.

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

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

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

We may choose to replant a portion of this farm with new plantings, which would likely result in a decrease in cash rent for the first few years while the new plantings are being established.

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

Recent Developments

Portfolio Activity

Property Acquisitions

Since January 1, 2022, through the date of this filing, we completed the following acquisitions, which are summarized in the table below (dollars in thousands, except for footnotes):

Name Property

Location Acquisition

Farms Primary

Crop(s) / Use Lease

Options Total

Price Acquisition

Straight-line

Farm Road (3)

Charlotte, FL 5/20/2022 15 0 Adjacent parcel N/A None $ 54 $ 15 $ —

County Road 35 Glenn, CA 6/16/2022 1,374 1 Olives for Olive Oil 14.5 years 1 (5 years) 24,500 55 1,714

Reagan Road (4)

Cochise, AZ 7/13/2022 40 0 Corn 12.5 years None 120 17 39

North Columbia River Road (5)(7)

Franklin & Grant, WA 7/21/2022 1,145 3 Wine Grapes 8.4 years None 30,320 146 2,296

Prunedale Road (6)(7)

Umatilla, OR 7/21/2022 172 1 Wine Grapes 10.4 years None 7,008 36 286

Phelps Avenue (8)

Fresno, CA 12/29/2022 443 0 Open ground and water credits 5.0 years 1 (5 years) 3,100 72 25

3,189 5 $ 65,102 $ 341 $ 4,360

(1) Includes approximately $27,000 of external legal fees associated with negotiating and originating the leases associated with these acquisitions, which were expensed in the period incurred.

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

(3) Represents the acquisition of a parcel of land adjacent to an existing farm, providing additional road access to such farm.

No new lease was executed related to this acquisition.

(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 Note 3, “ Real Estate and Intangible Assets — Investments in Unconsolidated Entities ,” within the accompanying notes to our consolidated financial statements 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.

(8) Represents the acquisition of three parcels of land adjacent to an existing farm that will initially be utilized for its water rights (including additional surface water rights and groundwater pumping rights) to be used on nearby farms.

In addition, a portion of this acquisition was leased back to the seller.

Existing Properties

Portfolio Activity—Existing Properties

Property Sales

On June 23, 2023, we completed the sale of a 138-acre parcel of unfarmed land in Florida for $9.6 million.

Including closing costs, we recognized a net gain on the sale of approximately $6.4 million.

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

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

Leasing Activity

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/ NN / N) (3)

FL, MI, & NE 23 31,317 $ 9,446 8 14 / 8 / 1 $ 9,094 5.4 5 11 / 12 / 0

CA, CO, FL, MI, NC, & NE 31 48,670 $ 24,051 6 18 / 11 / 2 $ 23,838 6.9 4 14 / 17 / 0

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

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

(4) Total annualized straight-line rent for new leases is net of aggregate one-time fixed payments of approximately $3.4 million we agreed to pay in connection with two leases to cover the majority of the operating expenses on the farms in exchange for adding a significant participation rent component into the leases.

Additionally, as of December 31, 2022, due to credit issues with two of our tenants, we determined that the full collectability of the remaining rental payments under the respective leases with these two tenants was not deemed to be probable.

As such, during the three months ended December 31, 2022, we began recognizing lease revenues from the six leases with these two tenants (three on farms in California and three on farms in Michigan) on a cash basis.

We are continuing to work with the current tenants and will seek to come to an agreement for the remaining rental payments, if possible.

Such agreement, if one can be reached, may include placing these tenants on payment plans, deferring a portion of the rent owed to us, or agreeing to terminate the respective leases.

Vacant, Self-operated, and Non-accrual Properties

During a portion of the year ended December 31, 2023, we had 22 farms (7 in California, 14 in Michigan, and 1 in Washington) that were either vacant, self-operated, or on which lease revenues were recognized on a cash basis (due to credit issues with three tenants causing us to determine that the full collectability of the remaining rental payments under the respective leases were not deemed to be probable).

During the year ended December 31, 2023, we recorded lease revenues related to the aforementioned farms of approximately $2.8 million (including approximately $240,000 of participation rents), as compared to approximately $4.0 million (including approximately $829,000 of participation rents) and approximately $4.3 million (including approximately $121,000 of participation rents) during the years ended December 31, 2022 and 2021, respectively.

Currently, 15 farms (14 in Michigan and 1 in Washington) are vacant, and 5 farms in California remain on non-accrual status.

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

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

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

Regarding the properties currently on non-accrual status, the tenants on three of the five farms are current with their rental payments to us.

We are continuing to work with the tenant leasing the other two farms and will seek to come to an agreement

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for the remaining rental payments, if possible.

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

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

During the year ended December 31, 2022, we recorded aggregate lease revenues from these six leases of approximately $258,000 (including approximately $31,000 of participation rents), as compared to approximately $1.7 million (including approximately $121,000 of participation rents) and approximately $1.5 million (including approximately $221,000 of participation rents) during the years ended December 31, 2021 and 2020, respectively.

Water Asset Acquisitions

During the three months ended December 31, 2023, we obtained a contract to purchase 1,003 acre-feet of banked water held by Semitropic Water Storage District (“SWSD”), a water storage district located in Kern County, California, which was received from one of our tenants as partial consideration for a rent payment owed.

We subsequently executed the contract to purchase all 1,003 acre-feet of banked water for an aggregate cost of approximately $61,000.

We currently have a total of 46,003 acre-feet of banked water held by SWSD at a total carrying value of approximately $34.5 million.

In addition, during the year ended December 31, 2023, we elected to participate in a groundwater recharge program established by Westlands Water District (“WWD”), a water district located in Fresno County, California.

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

Delivery of water under this program is subject to surplus water availability at WWD’s discretion, and WWD has not yet announced a termination date for this program.

To date, we have obtained 397 water credits, which represents 50% of the total net water credits generated and confirmed by WWD under the program thus far, at a total carrying value of approximately $111,000.

During the year ended December 31, 2023, we also entered into various other agreements with certain third parties (including local water districts and private individuals) to either buy water directly, buy a portion of other water districts’ surface water allocations in future years in which allocations are granted, or to store surface water on others’ behalf in one of our groundwater recharge facilities in exchange for a portion of the net groundwater credits produced and recognized by the respective water district.

We currently own a total of 46,400 acre-feet of long-term water assets, and our investments in these long-term water assets have an aggregate carrying value of approximately $34.6 million.

To date, we have invested approximately $1.8 million to construct groundwater recharge facilities on two of our farms, and we have invested an additional $1.8 million in the aggregate in connection with these agreements that are expected to result in additional groundwater credits in the future;

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

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, 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 year ended December 31, 2023, we wrote down the carrying value of these structures and also recorded a corresponding property and casualty loss.

Certain of our other farms in California suffered minor damage as a result of the floods, but no other farms were materially impacted.

In addition, in February 2024, certain parts of California, particularly the southern part of the state, experienced a “one-in-one-thousand year” rainfall event, as atmospheric river storms caused widespread flooding and mudslides in multiple areas.

Certain of our farms in the state suffered minor damage as a result of the storms, but no farms were materially impacted.

Financing Activity

Debt Activity

From January 1, 2022, through the date of this filing, we entered into the following loan agreements (dollars in thousands):

Lender Date of

Issuance Amount Maturity

Date Principal

Amortization Stated

Rate Expected

Interest Rate Terms

Farmer Mac (2)

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

Northwest Farm Credit Services, FLCA 1/31/2022 1,442 2/1/2032 20.1 years 4.65% 3.40% Fixed throughout term

Farmer Mac (2)

2/25/2022 1,710 12/30/2030 25.0 years 3.68% 3.68% Fixed throughout term

Farm Credit of Central Florida, ACA 4/5/2022 4,800 2/1/2046 23.8 years 4.36% 2.89% Fixed through 2/28/2027;

variable thereafter

Total / Weighted-average $ 9,932 4.08% 3.19%

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

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

See Note 4, “ Borrowings—Farm

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

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

In connection with securing the above borrowings, Gladstone Securities LLC (“Gladstone Securities”), an affiliate of ours, earned total financing fees of approximately $15,000.

In addition, from January 1, 2022, through the date of this filing, we repaid approximately $44.7 million of maturing loans.

On a weighted-average basis, these borrowings bore interest at a stated rate of 4.14% and an effective interest rate (after interest patronage) of 3.09%.

Loan Repayments

From January 1, 2023, through the date of this filing, we repaid approximately $52.2 million of notes and bonds that were either maturing or scheduled for a price reset.

On a weighted-average basis, these borrowings bore interest at a stated rate of 3.55% and an effective interest rate (after interest patronage, where applicable) of 3.43%.

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

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

Treasury plus a spread to be determined by the lender.

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

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

All other material items of the Prior MetLife Facility remained unchanged.

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

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

On December 14, 2023, we amended our facility with Metropolitan Life Insurance Company (“MetLife”), which currently consists of a $75.0 million long-term note payable (the “2020 MetLife Term Note”), $75.0 million of revolving equity lines of credit (the “MetLife Lines of Credit”), and a $100.0 million long-term note payable (the “2022 MetLife Term Note,” and

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together with the 2020 MetLife Term Note and the MetLife Lines of Credit, the “Current MetLife Facility”).

Pursuant to the amendment, the maturity dates of the MetLife Lines of Credit were extended to December 15, 2033.

As part of this amendment, we paid aggregate fees of approximately $188,000 to MetLife.

Farmer Mac Facility

On June 2, 2023, we amended our agreement with Federal Agricultural Mortgage Corporation (“Farmer Mac”), which provides for bond issuances up to an aggregate amount of $225.0 million (the “Farmer Mac Facility”).

Pursuant to the amendment, the date through which we may issue new bonds under the Farmer Mac Facility was extended to 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.

Farm Credit Notes Payable—Interest Patronage

From time to time since September 2014, we, through certain subsidiaries of our Operating Partnership, have entered into various loan agreements (collectively, the “Farm Credit Notes Payable”) with 13 different Farm Credit associations (collectively, “Farm Credit”).

During the three months ended March 31, 2022, we recorded interest patronage of approximately $2.8 million related to interest accrued on the Farm Credit Notes Payable during the year ended December 31, 2021 , and during the three months ended September 30, 2022, we received approximately $113,000 of interest patronage, as certain Farm Credit associations paid a portion of the 2022 interest patronage (which relates to interest accrued during 2022 but is typically paid during the first half of 2023) early.

2021 interest patronage (which was recorded during the three months ended March 31, 2022) resulted in a 29.9% reduction (approximately 137 basis points) to the interest rates on such borrowings .

During the three months ended March 31, 2023, we recorded interest patronage of approximately $2.3 million related to interest accrued on the Farm Credit Notes Payable during the year ended December 31, 2022.

D uring the three months ended September 30, 2022, we received approximately $113,000 of interest patronage, as certain Farm Credit associations paid a portion of the 2022 interest patronage (which relates to interest accrued during 2022 but is typically paid during the first half of 2023) early.

In total, 2022 interest patronage resulted in a 24.1% reduction (approximately 109 basis points) to the interest rates on such borrowings.

In addition, during the three months ended September 30, 2023, we recorded approximately $111,000 of interest patronage, as certain Farm Credit associations paid a portion of the 2023 interest patronage early.

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

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Series C Preferred Stock

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

Under the Series C Offering, we were permitted to sell up to 20,000,000 shares of our Series C Preferred Stock on a “reasonable best efforts” basis through Gladstone Securities at an offering price of $25.00 per share (the “Primary Series C Offering”) and up to 6,000,000 additional shares of our Series C Preferred Stock pursuant to our dividend reinvestment plan (the “DRIP”) at a price of $22.75 per share.

On August 24, 2022, we amended the Series C Offering to (i) reduce the amount of shares of the Series C Preferred Stock offered through the Primary Series C Offering to 10,200,000, (ii) reduce the amount of shares of the Series C Preferred Stock offered pursuant to the DRIP to 200,000, and (iii) reduce the duration of the period during which shares of the Series C Preferred Stock may be offered for sale through the Primary Series C Offering to the earlier of (a) December 31, 2022 (unless earlier terminated or extended by our Board of Directors) or (b) the date on which all 10,200,000 shares of the Series C Preferred Stock offered in the Primary Series C Offering were sold.

The offering period for the DRIP will terminate on the earlier of (1) the issuance of all 200,000 shares of Series C Preferred Stock under the DRIP or (2) the listing of the Series C Preferred Stock on Nasdaq or another national securities exchange.

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

The following table summarizes the sales of our Series C Preferred Stock that occurred since January 1, 2022, through the date of this filing (dollars in thousands, except per-share amounts and footnotes):

Shares Sold (1)

Weighted-average

Offering Price Per Share Gross Proceeds Net Proceeds (2)

6,701,987 $ 24.76 $ 165,941 $ 152,470

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

From January 1, 2022, through the date of this filing, we redeemed 38,995 shares and issued approximately 43,600 shares of the Series C Preferred Stock pursuant to the DRIP.

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

Aggregate selling commissions and dealer-manager fees paid to Gladstone Securities as a result of these sales was approximately $13.5 million.

The Primary Series C Offering terminated on December 31, 2022, with substantially all of the allotted 10,200,000 shares being sold.

Exclusive of redemptions, the Primary Series C Offering resulted in total gross proceeds of approximately $252.6 million and net proceeds, after deducting Series C Selling Commissions, Series C Dealer-Manager Fees, and offering expenses payable by us, of approximately $230.5 million.

In conjunction with the amendment of the Series C Offering, which reduced the number of shares of Series C Preferred Stock to be offered, during the year ended December 31, 2022, we expensed approximately $798,000 of unamortized deferred offering costs.

These costs were recorded to Write-off of costs associated with the offering of Series C cumulative redeemable preferred stock on the accompanying Consolidated Statements of Operations and Comprehensive Income during the year ended December 31, 2022.

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.

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 by December 31, 2023, though there can be no assurance that a listing will be achieved in such timeframe, or at all.

On April 3, 2020, we filed a prospectus supplement with the SEC for a continuous public offering (the “Series C Offering”) of our 6.00% Series C Cumulative Redeemable Preferred Stock (the “Series C Preferred Stock”).

Under the Series C Offering, as amended, we were permitted to sell up to 10,200,000 shares of our Series C Preferred Stock on a “reasonable best efforts” basis through Gladstone Securities at an offering price of $25.00 per share (the “Primary Series C Offering”) and up to 200,000 additional shares of our Series C Preferred Stock pursuant to our dividend reinvestment plan (the “DRIP”) at a price of $22.75 per share.

The Primary Series C Offering terminated on December 31, 2022, and the DRIP was terminated effective March 22, 2023.

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.

From January 1, 2023, through the date we listed the Series C Preferred Stock on Nasdaq, we issued approximately 14,069 shares of the Series C Preferred Stock pursuant to the DRIP and redeemed 48,913 shares that were tendered for optional redemption, which we satisfied with an aggregate cash payment of approximately $1.2 million.

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.

No sales of the Series E Preferred Stock occurred during the year ended December 31, 2022.

The following table summarizes the sales of our Series E Preferred Stock that occurred subsequent to December 31, 2022, through the date of this filing (dollars in thousands, except per-share amounts and footnotes):

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

Shares Sold Weighted-average

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Aggregate selling commissions and dealer-manager fees paid to Gladstone Securities as a result of these sales was approximately $609,000.

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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 offering in the Series E Offering are sold.

There is currently no public market for shares of Series E Preferred Stock.

The Company intends to apply to list the Series E Preferred Stock on Nasdaq or another national securities exchange within one calendar year of the Series E Termination Date;

We intend to apply to list the Series E Preferred Stock on Nasdaq or another national securities exchange within one calendar year after the Series E Termination Date;

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

Common Stock—At-the-Market Program

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

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

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

The following table summarizes the activity under the ATM Programs from January 1, 2022, through the date of this filing (dollars in thousands):

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

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

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

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

Number of Shares Sold Weighted-average

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LIBOR Transition

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

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

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

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

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

Our lines of credit with MetLife and four term loans with Rabo AgriFinance LLC (which are effectively fixed through our entry into interest swap agreements) are currently indexed based on LIBOR, and we have begun discussions with the respective lenders to negotiate these agreements prior to the phase-out of LIBOR.

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

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

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

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

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

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

Our Adviser and Administrator

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Base Management Fee

Pursuant to the Prior Advisory Agreement, through June 30, 2021, a base management fee was paid quarterly and was calculated at an annual rate of 0.50% (0.125% per quarter), of the prior calendar quarter’s “Gross Tangible Real Estate,” defined as the gross cost of tangible real estate owned by us (including land and land improvements, permanent plantings, irrigation and drainage systems, farm-related facilities, and other tangible site improvements), prior to any accumulated depreciation, and as shown on our balance sheet or the notes thereto for the applicable quarter.

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defined as the gross cost of tangible real estate owned by us (including land and land improvements, permanent plantings, irrigation and drainage systems, farm-related facilities, and other tangible site improvements), prior to any accumulated depreciation, and as shown on our balance sheet or the notes thereto for the applicable quarter.

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

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There were no material changes in our critical accounting policies during the year ended December 31, 2023.

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Purchase Price Allocation

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We generally consider both types of acquisitions to be asset acquisitions under ASC 360, “Property Plant and Equipment,” which requires us to capitalize the transaction costs incurred in connection with the acquisition.

ASC 360 further requires that the purchase price of real estate be allocated to (i) the tangible assets acquired and

liabilities assumed, and, if applicable, (ii) any identifiable intangible assets and liabilities, by valuing the property as if it was vacant, based on management’s determination of the relative fair values of such assets and liabilities as of the date of acquisition.

ASC 360 further requires that the purchase price of real estate be allocated to (i) the tangible assets acquired and liabilities assumed, and, if applicable, (ii) any identifiable intangible assets and liabilities, by valuing the property as if it was vacant, based on management’s determination of the relative fair values of such assets and liabilities as of the date of acquisition.

For a more detailed discussion on this accounting policy, see Note 2, “ Summary of Significant Accounting Policies—Real Estate and Lease Intangibles ,” in the accompanying notes to our consolidated financial statements.

Real Estate Impairment Evaluation

We account for the impairment of our real estate assets in accordance with ASC 360, which requires us to periodically review the carrying value of each property to determine whether indicators of impairment exist or if depreciation periods should be modified.

If circumstances support the possibility of impairment, we prepare a projection of the total undiscounted future cash flows of the specific property and compare them to the net book value of the property to determine whether the carrying value of the property is recoverable.

If impairment is indicated, the carrying value of the property is written down to its estimated fair value based on our best estimate of the property’s discounted future cash flows using certain market-derived terms.

Any material changes to the estimates and assumptions used in this analysis could have a significant impact on our results of operations, as the changes would impact our determination of whether impairment is deemed to have occurred and the amount of impairment loss that we would recognize.

For a more detailed discussion on this accounting policy, see Note 2, “ Summary of Significant Accounting Policies—Real Estate Impairment Evaluation ,” in the accompanying notes to our consolidated financial statements.

Recently-Issued Accounting Pronouncements

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RESULTS OF OPERATIONS

For the purposes of the following discussions on certain operating revenues and expenses with regard to the comparison between the years ended December 31, 2022 and 2021:

▪ Same-property basis represents farms owned as of December 31, 2020, and were not vacant at any point during either period presented;

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

▪ With regard to the comparison between the years ended December 31, 2023 and 2022:

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

▪ Properties acquired or disposed of are farms that were either acquired or disposed of at any point subsequent to December 31, 2021.

From January 1, 2021, through December 31, 2022, we acquired 32 new farms and did not have any farm dispositions.

We did not have any vacant or self-operated farms during either of the years ended December 31, 2022 or 2021.

From January 1, 2022, through December 31, 2023, we acquired five new farms and had one partial farm disposition;

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

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

Five of our farms were vacant during a portion of either of the years ended December 31, 2023 or 2022;

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

11 of our farms were self-operated (on a temporary basis via management agreements with unrelated third-parties) during a portion of the year ended December 31, 2023;

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

During a portion of the year ended

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December 31, 2023, we recognized revenue from four different leases with three separate tenants (encompassing six different farms) on a cash basis.

A comparison of results of components comprising our operating income for the years ended December 31, 2023 and 2022 is below (dollars in thousands):

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Operating revenues:

Lease revenues:

Lease revenue:

Fixed lease payments

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734 110 624 567.3%

Total lease revenue

90,319 89,236 1,083 1.2%

Other operating revenue

Total operating revenues

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Operating Revenues

Lease Revenues

The following table provides a summary of our lease revenues during the years ended December 31, 2022 and 2021 (dollars in thousands):

Lease Revenue

The following table provides a summary of our lease revenue during the years ended December 31, 2023 and 2022 (dollars in thousands):

For the Years Ended December 31,

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Fixed lease payments 4,357 2,067 2,290 110.8%

Participation rents 1,352 630 722 114.6%

Total – Properties acquired or disposed of 4,357 2,067 2,290 110.8%

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

Fixed lease payments 2,472 3,174 (702) (22.1)%

Participation rents 240 829 (589) (71.0)%

Total – Vacant, self-operated, or non-accrual properties 2,712 4,003 (1,291) (32.3)%

Tenant reimbursements (1)

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Same-property Basis – 2023 compared to 2022

Lease revenues from fixed lease payments decreased primarily due to revenue from six leases (collectively leased to two separate tenants) being recognized on a cash basis during the year ended December 31, 2022, rather than a straight-line basis (as prescribed under GAAP) due to full collectability of future rental payments under the respective leases deemed not to be probable as a result of tenant credit issues.

During the year ended December 31, 2022, we recognized aggregate fixed lease payments from these six leases of approximately $227,000, as compared to approximately $1.6 million during the prior year.

See above under “ —Recent Developments—Portfolio Activity—Existing Properties—Leasing Activity ” for further discussion on these leases.

The decrease in lease revenues from fixed lease payments was also attributable to certain lease amendments and renewals executed, through which we decreased the fixed base rent component in exchange for either adding a participation rent component to the lease structure or reducing certain operating expenses for which the landlord was previously responsible.

These decreases in fixed lease payments were partially offset by certain new leases, amendments, and renewals executed at higher rental rates and additional rents earned on capital improvements completed on certain of our farms.

The increase in participation rents was primarily driven by strong production (i.e., pounds per acre) on many of our pistachio farms coupled with continued strong demand for the crop, partially offset by weaker almond prices, as the almond market continued to be hampered with oversupply exacerbated by supply chain disruptions that occurred during the height of the COVID-19 pandemic.

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Lease revenues from fixed lease payments increased primarily due to additional rents earned on capital improvements completed on certain of our farms, partially offset by the execution of one lease agreement in the fourth quarter of 2022, pursuant to which we agreed to reduce the fixed base rent amount in exchange for increasing the participation rent component in the lease, the majority of which was realized in the fourth quarter of 2023.

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

Other – 2023 compared to 2022

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

Fixed lease payments from vacant, self-operated, or non-accrual properties decreased primarily due to revenue from certain of our leases being recognized on a cash basis during a portion of the year ended December 31, 2023 (rather than a straight-line basis), due to full collectability of future rental payments under the respective leases deemed not to be probable as a result of tenant credit issues.

In addition, 11 of our farms were self-operated (on a temporary basis via management agreements with unrelated third-parties) and 5 of our farms were vacant during portions of the year ended December 31, 2023.

The decrease in lease revenue from vacant, self-operated, or non-accrual properties was partially offset by cash collections (in part or in whole) from tenants occupying certain of these properties during the year ended December 31, 2023.

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

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

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

Amounts recorded during the current year include increased reimbursements from certain tenants for costs to delivery water to their farms via a pipeline owned by an unconsolidated entity of ours, as well as late fees received from certain tenants.

Other Operating Revenue

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

During the year ended December 31, 2023, we recognized approximately $79,000 of non-cash revenue associated with the transfer and storing of surplus water on behalf of a government municipality using a groundwater recharge facility constructed on one of our farms.

See Note 2, “Summary of Significant Accounting Policies—Other Operating Revenue , ” and Note 3, “ Real Estate and Intangible Assets—Investments in Water Assets ,” within the accompanying notes to our consolidated financial statements for further discussion.

Operating Expenses

Depreciation and Amortization

Depreciation and amortization expense increased primarily due to additional depreciation and amortization expense incurred on new farms acquired subsequent to December 31, 2020, as well as an increase in depreciation associated with additional capital expenditures on certain of our farms.

The increase was partially offset by a decrease attributable to asset dispositions on certain of our farms and the expiration of certain lease intangible amortization periods.

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

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

Property Operating Expenses

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Properties acquired or disposed of 6 29 (23) (79.3)%

Vacant, self-operated properties, or non-accrual, properties 723 273 450 164.8%

Tenant-reimbursed property operating expenses (1)

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Similar amounts are also recorded as lease revenue when earned in accordance with the lease.

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Same-property Basis – 2023 compared to 2022

Property operating expenses increased primarily due to higher property tax expenses, as well as additional legal fees incurred in connection with protecting water rights on certain farms in California.

This increase was partially offset by a decrease in costs associated with our limited obligation to reimburse one of our tenants for certain water usage in accordance with the lease terms during the prior-year period, which obligation expired on December 31, 2021.

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

We also recorded additional repairs and maintenance expense as a result of minor damage caused by natural disasters at certain of our farms.

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

Other – 2023 compared to 2022

Property operating expenses on properties acquired or disposed of increased primarily due to additional miscellaneous property-operating expenses incurred on certain of the new farms we acquired subsequent to December 31, 2020.

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

Property operating expenses attributable to vacant, self-operated, or non-accrual properties increased primarily due to additional legal fees incurred in connection with rent collection, lease termination, or re-leasing efforts on such farms, as well as an increase in real estate tax expense that the prior tenants were previously responsible for.

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

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

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

Related-Party Fees

The following table provides the calculations of the base management and incentive fees due to our Advisor pursuant to the Prior Advisory Agreement (which was in effect from January 1, 2020, through June 30, 2021) and the Current Advisory Agreement (which has been in effect since July 1, 2021) for the years ended December 31, 2022 and 2021 (dollars in thousands;

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

The following table provides the calculations of the base management and incentive fees due to our Advisor pursuant to the Current Advisory Agreement for the years ended December 31, 2023 and 2022 (dollars in thousands;

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

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Quarters Ended Year to Date

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Total fees due to Adviser, net $ 3,168 $ 2,043 $ 2,591 $ 3,730 $ 11,532

(1) As defined in the Advisory Agreements.

(1) As defined in the Current Advisory Agreement.

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

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

The base management fee increased primarily due to additional assets acquired since December 31, 2020, and an increase in the annual rate applied to the prior calendar quarter’s Gross Tangible Real Estate Assets (from 0.50% pursuant to the Prior Advisory Agreement to 0.60% pursuant to the Current Advisory Agreement), effective July 1, 2021.

Our Adviser earned incentive fees during each of the years ended December 31, 2022 and 2021 due to our Pre-Incentive Fee FFO (as defined in the Advisory Agreements) exceeding the required hurdle rate of the applicable equity base during each of the first, third, and fourth quarters of fiscal years 2022 and 2021.

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The base management fee increased primarily due to additional assets acquired and improvements made on certain of our farms since December 31, 2021.

Our Adviser earned incentive fees during each of the years ended December 31, 2023 and 2022 due to our Pre-Incentive Fee FFO (as defined in the Advisory Agreements) exceeding the required hurdle rate of the applicable equity base during the third and fourth quarters of 2023 and during the first, third, and fourth quarters of 2022.

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

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

General and administrative expenses increased during the year ended December 31, 2022, primarily due to an increase in professional fees (driven by higher audit fees and appraisal costs) and an increase in acquisition-related costs for investments no longer being pursued.

General and administrative expenses increased during the current year, primarily due to an increase in professional fees (driven by higher legal and accounting fees), additional costs expensed related to amending our Current MetLife Facility, and an increase in stockholder-related expenses related to the listing of the Series C Preferred Stock on Nasdaq.

This increase was partially offset by a decrease in acquisition-related costs for investments no longer being pursued.

During the year ended December 31, 2022, we wrote off approximately $853,000 of costs (including approximately $798,000 of unamortized deferred offering costs) related to the Series C Offering due to an amendment that reduced the number of shares of Series C Preferred Stock to be offered.

See Note 8, “Equity - Equity Issuances - Series C Preferred Stock,” in the accompanying notes to our condensed consolidated financial statements for additional discussion of the amendment of the Series C Offering.

A comparison of results of other components contributing to net loss attributable to common stockholders for the years ended December 31, 2023 and 2022 is below (dollars in thousands):

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(23,665) (25,738) 2,073 (8.1)%

Dividends declared on Series A and Series D Term Preferred Stock

Dividends declared on cumulative term preferred stock

(3,019) (3,019) — —%

Loss on dispositions of real estate assets, net

Gain (loss) on dispositions of real estate assets, net

5,208 (3,760) 8,968 (238.5)%

Property and casualty (loss) recovery, net

Property and casualty loss, net

(1,016) (56) (960) 1,714.3%

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14,565 4,708 9,857 209.4%

Aggregate dividends declared on and charges related to extinguishment of Series B and Series C cumulative redeemable preferred stock

Aggregate dividends declared on and charges related to extinguishment of cumulative redeemable preferred stock

(24,417) (19,718) (4,699) 23.8%

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Other Income (Expense)

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

During the three months ended March 31, 2022, we recorded approximately $2.8 million of interest patronage from Farm Credit related to interest accrued during 2021, and during the three months ended September 30, 2022, we received approximately $113,000 of interest patronage, as certain Farm Credit associations paid a portion of the 2022 interest patronage (which relates to interest accrued during 2022 but is typically paid during the first half of 2023) early.

In the aggregate, we

recorded approximately $2.9 million of interest patronage from Farm Credit during the year ended December 31, 2022, as compared to approximately $2.2 million of interest patronage recorded during the prior-year period.

2021 interest patronage (which was recorded during the three months ended March 31, 2022), resulted in a 29.9% reduction (approximately 137 basis points) to the interest rate of such borrowings.

Interest expense increased primarily due to increased overall borrowings.

The weighted- average principal balance of our aggregate borrowings (excluding our Series A Term Preferred Stock and Series D Term Preferred Stock) outstanding for the year ended December 31, 2022, was approximately $654.7 million, as compared to approximately $637.6 million for the prior-year period.

Excluding interest patronage received on certain of our Farm Credit borrowings and the impact of debt issuance costs, the overall effective interest rate charged on our aggregate borrowings was 3.77% and 3.72% for the years ended December 31, 2022 and 2021, respectively.

Losses on dispositions of real estate assets related to the disposals of certain irrigation and other improvements on certain of our farms.

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

The aggregate dividends paid on our Series B Preferred Stock and Series C Preferred Stock increased due to additional shares issued and outstanding during the current year.

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

During the three months ended March 31, 2023, we recorded approximately $2.3 million of interest patronage from Farm Credit related to interest accrued during 2022, as compared to approximately $2.8 million of interest patronage recorded during the prior-year period that related to interest accrued during 2021.

In addition, during the three months ended September 30, 2022, we received approximately $113,000 of interest patronage related to interest accrued during 2022, as certain Farm Credit associations paid a portion of 2022 interest patronage (which is typically paid during the first half of 2023) early.

In total, 2022 interest patronage resulted in a 24.1% reduction (approximately 109 basis points) to the interest rate of such borrowings.

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addition, during the three months ended September 30, 2023, we recorded approximately $111,000 of interest patronage, as certain Farm Credit associations paid a portion of the 2023 interest patronage early.

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

The weighted-average principal balance of our aggregate borrowings (excluding our cumulative term preferred stock) outstanding for the year ended December 31, 2023, was approximately $595.8 million, as compared to approximately $654.7 million for the prior-year period.

Excluding interest patronage received on certain of our Farm Credit borrowings and the impact of debt issuance costs, the weighted average interest rate charged on our aggregate borrowings was 3.79% and 3.77% for the years ended December 31, 2023 and 2022, respectively.

During the year ended December 31, 2023, we recorded a net capital gain, driven by the sale of a 138-acre parcel of unfarmed land in Florida for $9.6 million, which, after accounting for closing costs, resulted in a net gain of approximately $6.4 million.

The net losses recorded during the year ended December 31, 2022, related to the disposals of certain irrigation and other improvements on certain of our farms.

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

The property and casualty loss recorded during the year ended December 31, 2023, was the result of the heavy rainfall that occurred in California in early 2023 and the resulting flooding, which damaged certain structures located on one of our farms in the Central Valley.

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

Comparison of Results of Operations for the Years Ended December 31, 2022 and 2021

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In addition, the weighted-average remaining term of our notes and bonds payable is approximately 8.8 years.

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

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

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

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

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

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funding our general operating costs;

making dividend payments on our Series B Preferred Stock, Series C Preferred Stock, Series D Term Preferred Stock, and Series E Preferred Stock;

making dividend payments on our currently-designated preferred securities;

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

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fund our current operating costs;

pay dividends on our Series B Preferred Stock, Series C Preferred Stock, Series D Term Preferred Stock, and Series E Preferred Stock;

pay dividends on our currently-designated preferred securities;

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

We expect to meet our long-term liquidity requirements through various sources of capital, including long-term mortgage indebtedness and bond issuances, future equity issuances (including, but not limited to, shares of our Series E Preferred Stock,

OP Units through our Operating Partnership as consideration for future acquisitions, and shares of common stock through our ATM Program), and other secured and unsecured borrowings.

We expect to meet our long-term liquidity requirements through

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

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

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

Cash provided by operating activities increased primarily due to additional rental payments received from tenants and interest patronage received from Farm Credit, partially offset by an increase in fees paid to our Advisor and increases in the amount of interest payments made.

Cash provided by operating activities decreased, primarily due to the acquisition of additional long-term water assets during 2023 and the timing of certain rental cash payments received and interest payments made during the respective periods.

This was partially offset by a decrease in aggregate fees paid to our Advisor during the current year.

Investing Activities

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

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

Financing Activities

The decrease in cash provided by financing activities was primarily due to a decrease in aggregate net borrowings of approximately $85.7 million, the issuance of our Series D Term Preferred Stock in the first quarter of 2021 (which, after voluntarily redeeming our Series A Term Preferred Stock in full, resulted in net cash proceeds of approximately $31.6 million), a decrease in aggregate net cash proceeds received from equity offerings (including our common stock and the Series C Preferred Stock) of approximately $52.4 million, and an increase in aggregate distributions paid on our preferred stock (including our Series B Preferred Stock and our Series C Preferred Stock) and common stock of approximately $7.7 million.

In addition, during the year ended December 31, 2022, we paid approximately $7.7 million to redeem 204,778 OP Units.

The change in cash from financing activities was primarily due to a decrease in aggregate net proceeds received from preferred and common equity offerings of approximately $153.9 million and a decrease in aggregate net borrowings of approximately $11.2 million.

MetLife Facility

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

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

availability under the Current MetLife Facility.

The draw period for both term notes expires on December 31, 2024, after which MetLife has no obligation to disburse any additional undrawn funds under the term notes.

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

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

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Farmer Mac Facility

Our agreement with Farmer Mac provides for bond issuances up to an aggregate amount of $225.0 million (the “Farmer Mac Facility”) by May 31, 2023, after which, Farmer Mac has no obligation to purchase additional bonds under this facility.

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

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

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

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

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

Equity Capital

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Per Share Gross Proceeds Net Proceeds (1)

Series C Preferred Stock (2)

6,701,987 $ 24.76 $ 165,941 $ 152,470

Series E Preferred Stock 247,781 24.96 6,184 5,575

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

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

Our 2023 Registration Statement (as defined in Note 8, “Equity—Registration Statement,” within the accompanying notes to our consolidated financial statements) permits us to issue up to an aggregate of $1.5 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 of such securities.

To date, we have issued approximately $253.8 million of Series C Preferred Stock (including $1.2 million issued pursuant to the DRIP), $60.4 million of Series D Term Preferred Stock, $864,000 of Series E Preferred Stock, and $280.9 million of common stock (including common stock issued to redeem OP Units) under the Registration Statement.

To date, we have issued approximately $4.2 million of Series E Preferred Stock, and $2.2 million of common stock under the 2023 Registration Statement.

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

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

We believe that these additional performance metrics, along with the most directly-comparable GAAP measure, provide investors with helpful insight regarding how management measures our ongoing performance, as each of CFFO and AFFO (and their respective per-share amounts) are used by management and our board of directors, as appropriate, in assessing overall performance, as well as in certain decision-making analysis, including, but not limited to, the timing of acquisitions and

potential equity raises (and the type of securities to offer in any such equity raises), the determination of any fee credits, and declarations of distributions on our common stock.

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

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

We believe that net income is the most directly-comparable GAAP measure to each of FFO, CFFO, and AFFO.

Specifically, we believe that FFO is helpful to investors in better understanding our operating performance, primarily because its calculation excludes depreciation and amortization expense on real estate assets, as we believe that GAAP historical cost depreciation of real estate assets is generally not correlated with changes in the value of those assets, particularly with farmland real estate, the value of which does not diminish in a predictable manner over time, as historical cost depreciation implies.

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depreciation of real estate assets is generally not correlated with changes in the value of those assets, particularly with farmland real estate, the value of which does not diminish in a predictable manner over time, as historical cost depreciation implies.

Further, we believe that CFFO and AFFO are helpful in understanding our operating performance in that it removes certain items that, by their nature, are not comparable on a period-over-period basis and therefore tend to obscure actual operating performance.

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• Rent adjustments.

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

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

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

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

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

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

• Amortization of debt issuance costs .

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

number of total shares (including shares of our common stock and OP Units held by non-controlling limited partners) outstanding on a fully-diluted basis during a period.

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

We believe that diluted earnings per share is the most directly-comparable GAAP measure to each of Diluted FFO, CFFO, and AFFO per share.

Because many REITs provide Diluted FFO, CFFO, and AFFO per share information to the investment community, we believe these are useful supplemental measures when comparing us to other REITs.

Because many REITs provide Diluted FFO, CFFO, and

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AFFO per share information to the investment community, we believe these are useful supplemental measures when comparing us to other REITs.

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

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Net income $ 14,565 $ 4,716 $ 3,514

Aggregate dividends declared on and charges related to extinguishment of Series B Preferred Stock and Series C Preferred Stock (1)

Aggregate dividends declared on and charges related to extinguishment of cumulative redeemable preferred stock (1)

(24,417) (19,718) (12,258)

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Real estate and intangible depreciation and amortization 37,161 35,366 27,183

Losses on dispositions of real estate assets, net 3,760 2,537 2,180

(Gains) losses on dispositions of real estate assets, net (5,208) 3,760 2,537

Adjustments for unconsolidated entities (2)

FFO available to common stockholders and non-controlling OP Unitholders 22,193 24,181 21,012

Acquisition- and disposition-related expenses 438 355 210

Acquisition- and disposition-related expenses, net 149 438 355

Other nonrecurring charges (receipts), net (3)

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Amortization of debt issuance costs 1,065 1,085 1,172

Other non-cash charges, net (4)

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

AFFO available to common stockholders and non-controlling OP Unitholders $ 20,323 $ 24,263 $ 20,359

Weighted-average common stock outstanding—basic and diluted 34,563,460 30,357,268 22,258,121

Weighted-average shares of common stock outstanding 35,733,742 34,563,460 30,357,268

Weighted-average common non-controlling OP Units outstanding — 61,714 166,067

Weighted-average total common shares outstanding 34,625,174 30,523,335 22,389,866

Weighted-average shares of common shares outstanding, fully diluted 35,733,742 34,625,174 30,523,335

Diluted FFO per weighted-average total common share $ 0.62 $ 0.70 $ 0.69

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Distributions declared per total common share $ 0.55 $ 0.55 $ 0.54

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

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

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

(3) Consists primarily of (i) costs related to the reduction in size of the Series C Offering that were expensed during the year ended December 31, 2022, (ii) net property and casualty losses (recoveries) recorded and the cost of related repairs expensed as a result of damage caused to certain improvements by natural disasters on certain of our farms, (iii) one-time listing fees related to our Series D Term Preferred Stock, (iv) certain one-time costs related to the early redemption of our Series A Term Preferred Stock, and (v) for 2020 only, the write-off of certain unallocated costs related to a prior universal registration statement and costs expensed during the year related to an aborted offering.

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

(3) Consists primarily of (i) net property and casualty losses (recoveries) recorded and the cost of related repairs expensed as a result of the damage caused to certain improvements by natural disasters on certain of our farms, (ii) costs related to the amendment, termination, and listing of shares from the Series C Offering that were expensed, and (iii) the write-off of certain unallocated costs related to a prior universal registration statement.

(4) Consists of (i) the amount of dividends on the Series C Preferred Stock paid via issuing new shares (pursuant to the DRIP), (ii) the pro-rata write-off of offering costs related to shares of cumulative redeemable preferred stock that were redeemed, which were noncash charges, (iii) our remaining pro-rata share of (income) loss recorded from investments in unconsolidated entities during the respective periods, and (iv) less noncash income recorded during 2023 as a result of additional water assets received as consideration in certain transactions.

Net Asset Value

Real estate companies are required to record real estate using the historical cost basis of the real estate, adjusted for accumulated depreciation and amortization, and, as a result, the carrying value of the real estate does not typically change as the

fair value of the assets change.

Thus, one challenge is determining the fair value of the real estate in order to allow stockholders to see the value of the real estate increase or decrease over time, which we believe is useful to our investors.

Determination of Fair Value

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Our Board of Directors reviews and approves the valuations of our properties pursuant to a valuation policy approved by our Board of Directors (the “Valuation Policy”).

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Purchase Price — — — 1,400 $ 573 $ 573 0.0%

Sales Price 1 3,748 3,748 — 53,626 65,652 4.2%

Internal Valuation 3 6,189 4,730 — 20,034 36,000 2.3%

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(2) Appraisals performed between March 2023 and December 2023.

Some of the significant assumptions used by appraisers and the Valuation Team in valuing our portfolio as of December 31, 2022, include land values per farmable acre, market rental rates per farmable acre and the resulting net operating income (“NOI”) at the property level, and capitalization rates, among others.

Some of the significant assumptions used by appraisers and the Valuation Team in valuing our portfolio as of December 31, 2023, include land values per farmable acre, market rental rates per farmable acre and the resulting net operating income

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(“NOI”) at the property level, and capitalization rates, among others.

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

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Market Capitalization Rate 3.30% – 5.30% 4.43% N/A N/A

Figures in the table above apply only to the farmland portion of our portfolio and exclude assumptions made relating to farm-related facilities (e.g., cooling facilities), and other structures on our properties (e.g., residential housing), as their aggregate value was considered to be insignificant in relation to that of the farmland.

Figures in the table above apply only to the farmland portion of our portfolio and exclude assumptions made related to water, farm-related facilities (e.g., cooling facilities), and other structures on our properties (e.g., residential housing).

Our Valuation Team reviews the appraisals, including the significant assumptions and inputs used in determining the appraised values, and considers any developments that may have occurred since the time the appraisals were performed.

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Management believes that the purchase prices of the farms acquired during the previous 12 months and the most recent appraisals available for the farms acquired prior to the previous 12 months fairly represent the current market values of the properties as of December 31, 2023, and, accordingly, did not make any adjustment to these values.

A quarterly roll-forward of the change in our portfolio value for the three months ended December 31, 2022, from the prior value basis as of September 30, 2022, is provided in the table below (dollars in thousands):

A quarterly rollforward of the change in our portfolio value for the three months ended December 31, 2023, from the prior value basis as of September 30, 2023, is provided in the table below (dollars in thousands):

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

Acquisitions of new farms during the three months ended December 31, 2022 3,100

Plus net value appreciation during the three months ended December 31, 2022:

Acquisition of water assets during the three months ended December 31, 2023 551

Change in value of farms during the three months ended December 31, 2023

Farms valued based on sales price $ 1,951

Farms valued via third-party appraisals (15,359)

Total net appreciation for the three months ended December 31, 2022 9,144

Net change in value of farms during the three months ended December 31, 2023 (13,408)

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

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Using a discounted cash flow analysis, management determined that the fair value of all long-term encumbrances on our properties as of December 31, 2023, was approximately $529.4 million, as compared to a carrying value (excluding unamortized related debt issuance costs) of approximately $576.8 million.

The fair values of our Series B Preferred Stock and Series D Term Preferred Stock were determined using the closing stock prices as of December 31, 2022, of $23.51 per share and $23.41 per share, respectively.

Finally, pursuant to Financial Industry Regulatory Authority Rule 2310(b)(5), with the assistance of a third-party valuation expert, we determined the estimated value of our Series C Preferred Stock to be $25.00 per share as of December 31, 2022 (see Exhibit 99.1 to this Form 10-K).

The fair values of our Series B Preferred Stock, Series C Preferred Stock, and Series D Term Preferred Stock were determined using the closing stock prices as of December 31, 2023, of $19.25 per share, $19.00 per share, and $23.75 per share, respectively.

Finally, pursuant to Financial Industry Regulatory Authority Rule 2310(b)(5), with the assistance of a third-party valuation expert, we determined the estimated value of our Series E Preferred Stock to be $25.00 per share as of December 31, 2023 (see Exhibit 99.1 to this Form 10-K).

Calculation of Estimated Net Asset Value

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

PricewaterhouseCoopers LLP has neither examined, compiled, nor performed any procedures with respect to the fair values or the calculation of net asset value per common share, which utilizes

information that is not disclosed within the financial statements, and, accordingly, does not express an opinion or any other form of assurance with respect thereto.

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

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As of December 31, 2023, we estimate the NAV per common share to be $19.06.

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Estimated NAV $ 996,487

aggregate fair value of Series B Preferred Stock and Series C Preferred Stock (5)

aggregate fair value of cumulative redeemable preferred stock (5)

Estimated NAV available to common stockholders and non-controlling OP Unitholders $ 682,963

Total common shares and non-controlling OP Units outstanding 35,838,442

Estimated NAV per common share and non-controlling OP Unit $ 17.08

Estimated NAV per common share and OP Unit $ 19.06

(1) Per Net Cost Basis as presented in the table above.

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The Series D Term Preferred Stock was valued based on its closing stock price as of December 31, 2023.

(5) The Series B Preferred Stock was valued based on its closing stock price as of December 31, 2022, while the Series C Preferred Stock was valued at its liquidation value, as discussed above.

(5) The Series B Preferred Stock and Series C Preferred Stock were valued based on their respective closing stock prices as of December 31, 2023, while the Series E Preferred Stock was valued at its liquidation value, as discussed above.

A quarterly rollforward in the estimated NAV per common share and OP Unit for the three months ended December 31, 2023, is provided below:

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Net change in unrealized fair value of long-term indebtedness (0.35)

Net change in unrealized fair value of preferred equity securities (0.46)

Net change in valuations (0.93)

Less distributions on common stock and non-controlling OP Units (0.14)

Plus net accretive effect of equity issuances 0.39

Less net dilutive effect of equity issuances and redemptions, net (0.08)

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

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

(i) an increase of $0.26 per share due to the net appreciation in value of the farms that were valued during the three months ended December 31, 2022, (ii) an increase of $0.27 per share due to the aggregate depreciation and amortization expense recorded during the three months ended December 31, 2022, and (iii) a decrease of $0.17 per share due to net asset dispositions or capital improvements made on certain farms that have not yet been considered in the determination of the respective farms’ estimated fair values.

(i) a decrease of $0.43 per share due to the net depreciation in value of the farms that were valued during the three months ended December 31, 2023, (ii) an increase of $0.27 per share due to the aggregate depreciation and amortization expense recorded during the three months ended December 31, 2023, and (iii) an increase of $0.04 per share due to net asset dispositions or capital improvements made on certain farms that have not yet been considered in the determination of the respective farms’ estimated fair values.

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

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

Changes in the market environment and other events that may occur during our ownership of these properties may cause the values reported above to

vary from the actual fair value that may be obtained in the open market.

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

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

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

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dispositions and the then-current market conditions.

There can be no assurance that the ultimate realized value upon disposition of an asset will approximate the estimated fair value above.

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

What changed 10-K

Item 7. Management’s Discussion and Analysis