GLADSTONE LAND Corp 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Index to Consolidated Financial Statements PAGE Report of Management on Internal Control over Financial Reporting 60 Report of Independent Registered Public Accounting Firm (PCAOB ID 238 ) 61 Consolidated Balance Sheets as of December 31, 2023 and 2022 63 Consolidated Statements of Operations and Comprehensive Income for the years ended December 31, 2023, 2022, and 2021 64 Consolidated Statements of Equity for the years ended December 31, 2023, 2022, and 2021 65 Consolidated Statements of Cash Flows for the years ended December 31, 2023, 2022, and 2021 67 Notes to Consolidated Financial Statements 68 Schedule III – Real Estate and Accumulated Depreciation as of December 31, 2023 95 59 Table of Content Report of Management on Internal Control over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and include those policies and procedures that pertain to the maintenance of records that in reasonable detail accurately and fairly reflect our transactions and the dispositions of our assets, provide reasonable assurance that our transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with appropriate authorizations; and provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of our assets that could have a material effect on our financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Under the supervision and with the participation of our management, we assessed the effectiveness of our internal control over financial reporting based on the framework in Internal Control—Integrated Framework (2013) issued by the Committee of Sponsoring Organizations (COSO). Based on our assessment, management concluded that our internal control over financial reporting was effective as of December 31, 2023. The effectiveness of our internal control over financial reporting as of December 31, 2023 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which is included herein. February 20, 2024 60 Table of Content Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of Gladstone Land Corporation Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheets of Gladstone Land Corporation and its subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of operations and comprehensive income, of equity and of cash flows for each of the three years in the period ended December 31, 2023, including the related notes and financial statement schedule listed in the accompanying index (collectively referred to as the “consolidated financial statements”). We also have audited the Company's internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO. Basis for Opinions The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Report of Management on Internal Control over Financial Reporting. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. 61 Table of Content Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Real Estate Impairment Evaluation – Undiscounted Future Cash Flows As described in Notes 2 and 3 to the consolidated financial statements, the Company’s consolidated total real estate, net balance was $1.2 billion as of December 31, 2023. As of December 31, 2023, management concluded that none of the properties were impaired. Management periodically reviews the carrying value of each property to determine whether indicators of impairment exist. If circumstances support the possibility of impairment, management prepares a projection of the total undiscounted future cash flows of the specific property (without interest charges), including net proceeds from disposition, if any, and compares them to the net book value of the property to determine whether the carrying value of the property is recoverable. In preparing the projection of undiscounted future cash flows, management estimates cap rates, rental rates, and property values, as applicable, using information obtained from market data and other comparable sources, such as recent sales data from comparable properties and broker quotes, and applies the undiscounted cash flows to the expected hold period. If impairment is indicated, the carrying value of the property is written down to its estimated fair value based on management’s best estimate of the property’s discounted future cash flows using market-derived terms, such as cap rates, discount rates, and rental rates applied to the expected hold period. The principal considerations for our determination that performing procedures relating to the undiscounted future cash flows used in the real estate impairment evaluation is a critical audit matter are (i) the significant judgment by management when developing the projection of the undiscounted future cash flows and (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating management’s significant assumptions related to the cap rates, rental rates, property values, and expected hold periods. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s real estate impairment evaluation, including controls over the projection of the undiscounted future cash flows. These procedures also included, among others (i) testing management’s process for developing the projection of the undiscounted future cash flows; (ii) evaluating the appropriateness of the undiscounted cash flow model; (iii) testing the completeness and accuracy of underlying data used in the undiscounted cash flow model; and (iv) evaluating the reasonableness of the significant assumptions used by management related to cap rates, rental rates, property values, and expected hold periods. Evaluating management’s assumptions related to the cap rates, rental rates, property values, and expected hold periods involved evaluating whether the assumptions used by management were reasonable considering (i) the consistency with external market and industry data and (ii) whether the rental rates assumption was consistent with evidence obtained in other areas of the audit. /s/ PricewaterhouseCoopers LLP Washington, District of Columbia February 20, 2024 We have served as the Company’s auditor since 2005. 62 Table of Content GLADSTONE LAND CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands, except share and per-share data) December 31, 2023 December 31, 2022 ASSETS Real estate, at cost $ 1,383,742 $ 1,432,394 Less: accumulated depreciation ( 142,212 ) ( 106,966 ) Total real estate, net 1,241,530 1,325,428 Lease intangibles, net 4,782 5,702 Real estate and related assets held for sale, net 53,626 — Cash and cash equivalents 18,571 61,141 Other assets, net 68,815 64,980 TOTAL ASSETS $ 1,387,324 $ 1,457,251 LIABILITIES AND EQUITY LIABILITIES: Borrowings under lines of credit $ 200 $ 100 Notes and bonds payable, net 573,911 626,400 Series D cumulative term preferred stock, net, $ 0.001 par value, $ 25.00 per share liquidation preference; 3,600,000 shares authorized, 2,415,000 shares issued and outstanding as of December 31, 2023, and December 31, 2022 59,519 59,107 Accounts payable and accrued expenses 10,298 16,266 Due to related parties, net 3,874 4,370 Other liabilities, net 19,909 19,646 Total liabilities 667,711 725,889 Commitments and contingencies (Note 7) EQUITY: Stockholders’ equity: Series B cumulative redeemable preferred stock, $ 0.001 par value; $ 25.00 per share liquidation preference; 6,456,065 shares authorized, 5,956,065 shares issued and outstanding as of December 31, 2023, and December 31, 2022 6 6 Series C cumulative redeemable preferred stock, $ 0.001 par value, $ 25.00 per share liquidation preference; 25,902,437 shares authorized, 10,156,509 shares issued and outstanding as of December 31, 2023; 25,951,347 shares authorized, 10,191,353 shares issued and outstanding as of December 31, 2022 10 10 Series E cumulative redeemable preferred stock, $ 0.001 par value, $ 25.00 per share liquidation preference; 15,998,400 shares authorized, 235,841 shares issued and outstanding as of December 31, 2023; 16,000,000 shares authorized, 0 issued, and outstanding as of December 31, 2022 — — Common stock, $ 0.001 par value; 48,043,098 shares authorized, 35,838,442 shares issued and outstanding as of December 31, 2023; 47,992,588 shares authorized, 35,050,397 shares issued and outstanding as of December 31, 2022 36 35 Additional paid-in capital 856,206 836,674 Distributions in excess of accumulated earnings ( 144,011 ) ( 114,370 ) Accumulated other comprehensive income (loss) 7,366 9,007 Total stockholders’ equity 719,613 731,362 Non-controlling interests in Operating Partnership — — Total equity 719,613 731,362 TOTAL LIABILITIES AND EQUITY $ 1,387,324 $ 1,457,251 The accompanying notes are an integral part of these consolidated financial statements. 63 Table of Content GLADSTONE LAND CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (In thousands, except share and per-share data) For the Years Ended December 31, 2023 2022 2021 OPERATING REVENUES: Lease revenue, net $ 90,319 $ 89,236 $ 75,318 Other operating revenue 79 — — Total operating revenues 90,398 89,236 75,318 OPERATING EXPENSES: Depreciation and amortization 37,161 35,366 27,183 Property operating expenses 4,201 2,819 2,536 Base management fee 8,603 8,307 6,329 Incentive fee 1,771 3,225 3,901 Administration fee 2,255 2,005 1,526 General and administrative expenses 2,924 2,740 2,139 Write-off of costs associated with offering of Series C cumulative redeemable preferred stock — 853 — Total operating expenses 56,915 55,315 43,614 OTHER INCOME (EXPENSE): Other income 3,633 3,441 2,291 Interest expense ( 23,665 ) ( 25,738 ) ( 24,883 ) Dividends declared on cumulative term preferred stock ( 3,019 ) ( 3,019 ) ( 3,068 ) Gain (loss) on dispositions of real estate assets, net 5,208 ( 3,760 ) ( 2,537 ) Property and casualty (loss) recovery, net ( 1,016 ) ( 56 ) 68 Loss from investments in unconsolidated entities ( 59 ) ( 73 ) ( 61 ) Total other expense, net ( 18,918 ) ( 29,205 ) ( 28,190 ) NET INCOME 14,565 4,716 3,514 Net income attributable to non-controlling interests — ( 8 ) ( 19 ) NET INCOME ATTRIBUTABLE TO THE COMPANY 14,565 4,708 3,495 Dividends declared on cumulative redeemable preferred stock ( 24,371 ) ( 19,693 ) ( 12,235 ) Loss on extinguishment of cumulative redeemable preferred stock ( 46 ) ( 25 ) ( 23 ) NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS $ ( 9,852 ) $ ( 15,010 ) $ ( 8,763 ) LOSS PER COMMON SHARE: Basic and diluted $ ( 0.28 ) $ ( 0.43 ) $ ( 0.29 ) WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING Basic and diluted 35,733,742 34,563,460 30,357,268 NET INCOME: 14,565 4,716 3,514 Change in fair value related to interest rate hedging instruments ( 1,641 ) 10,043 464 COMPREHENSIVE INCOME 12,924 14,759 3,978 Net income attributable to non-controlling interests — ( 8 ) ( 19 ) COMPREHENSIVE INCOME ATTRIBUTABLE TO THE COMPANY $ 12,924 $ 14,751 $ 3,959 The accompanying notes are an integral part of these consolidated financial statements. 64 Table of Content GLADSTONE LAND CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EQUITY (In thousands, except share data) Series B Preferred Stock Series C Preferred Stock Series E Preferred Stock Common Stock Additional Paid-in Capital Distributions in Excess of Accumulated Earnings Accumulated Other Comprehensive Income (Loss) Total Stockholders’ Equity Non- Controlling Interest Total Equity No. of Shares Par Value No. of Shares Par Value No. of Shares Par Value No. of Shares Par Value Balance at December 31, 2020 5,956,065 $ 6 1,088,435 $ 1 — $ — 26,219,019 $ 26 $ 440,470 $ ( 55,213 ) $ ( 1,500 ) $ 383,790 $ — $ 383,790 Issuance of Series C Preferred Stock, net — — 2,414,818 2 — — — — 54,897 — — 54,899 — 54,899 Redemptions of Series C Preferred Stock, net — — ( 9,920 ) — — — — — ( 225 ) ( 23 ) — ( 248 ) — ( 248 ) Issuance of OP Units as consideration in real estate acquisitions, net — — — — — — — — — — — — 3,970 3,970 Issuance of common stock, net — — — — — — 7,990,994 8 171,487 — — 171,495 — 171,495 Net income — — — — — — — — — 3,495 — 3,495 19 3,514 Dividends—cumulative redeemable preferred stock — — — — — — — — — ( 12,235 ) — ( 12,235 ) — ( 12,235 ) Distributions—OP Units and common stock — — — — — — — — — ( 16,491 ) — ( 16,491 ) ( 92 ) ( 16,583 ) Comprehensive income attributable to the Company — — — — — — — — — — 464 464 — 464 Adjustment to non-controlling interests resulting from changes in ownership of the Operating Partnership — — — — — — — — 1,646 — — 1,646 ( 1,646 ) — Balance at December 31, 2021 5,956,065 $ 6 3,493,333 $ 3 — $ — 34,210,013 $ 34 $ 668,275 $ ( 80,467 ) $ ( 1,036 ) $ 586,815 $ 2,251 $ 589,066 Issuance of Series C Preferred Stock, net — — 6,736,615 7 — — — — 152,732 — — 152,739 — 152,739 Redemptions of Series C Preferred Stock, net — — ( 38,595 ) — — — — — ( 876 ) ( 25 ) — ( 901 ) — ( 901 ) Redemptions of OP Units — — — — — ( 3,700 ) — — ( 3,700 ) ( 3,970 ) ( 7,670 ) Issuance of common stock, net — — — — — — 840,384 1 21,981 — — 21,982 — 21,982 Net income — — — — — — — — — 4,708 — 4,708 8 4,716 Dividends—cumulative redeemable preferred stock — — — — — — — — — ( 19,693 ) — ( 19,693 ) — ( 19,693 ) Distributions—OP Units and common stock — — — — — — — — — ( 18,893 ) — ( 18,893 ) ( 27 ) ( 18,920 ) Comprehensive income attributable to the Company — — — — — — — — — — 10,043 10,043 — 10,043 Adjustment to non-controlling interests resulting from changes in ownership of the Operating Partnership — — — — — — — — ( 1,738 ) — — ( 1,738 ) 1,738 — Balance at December 31, 2022 5,956,065 $ 6 10,191,353 $ 10 — $ — 35,050,397 $ 35 $ 836,674 $ ( 114,370 ) $ 9,007 $ 731,362 $ — $ 731,362 The accompanying notes are an integral part of these consolidated financial statements 65 Table of Content GLADSTONE LAND CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF EQUITY (Continued) (In thousands, except share data) Series B Preferred Stock Series C Preferred Stock Series E Preferred Stock Common Stock Additional Paid-in Capital Distributions in Excess of Accumulated Earnings Accumulated Other Comprehensive Income (Loss) Total Stockholders’ Equity Non- Controlling Interest Total Equity No. of Shares Par Value No. of Shares Par Value No. of Shares Par Value Number of Shares Par Value Balance at December 31, 2022 5,956,065 $ 6 10,191,353 $ 10 — $ — 35,050,397 $ 35 $ 836,674 $ ( 114,370 ) $ 9,007 $ 731,362 $ — $ 731,362 Issuance of Series C Preferred Stock, net — — 14,069 — — — — — 298 — — 298 — 298 Redemptions of Series C Preferred Stock, net — — ( 48,913 ) — — — — — ( 1,110 ) ( 46 ) — ( 1,156 ) — ( 1,156 ) Issuance of Series E Preferred Stock, net — — — — 237,441 — — — 5,301 — — 5,301 — 5,301 Redemptions of Series E Preferred Stock, net — — — — ( 1,600 ) — — — ( 36 ) — — ( 36 ) — ( 36 ) Issuance of common stock, net — — — — — — 788,045 1 15,079 — — 15,080 — 15,080 Net income — — — — — — — — — 14,565 — 14,565 — 14,565 Dividends—cumulative redeemable preferred stock — — — — — — — — — ( 24,371 ) — ( 24,371 ) — ( 24,371 ) Distributions—OP Units and common stock — — — — — — — — — ( 19,789 ) — ( 19,789 ) — ( 19,789 ) Comprehensive income attributable to the Company — — — — — — — — — — ( 1,641 ) ( 1,641 ) — ( 1,641 ) Balance at December 31, 2023 5,956,065 $ 6 10,156,509 $ 10 235,841 $ — 35,838,442 $ 36 $ 856,206 $ ( 144,011 ) $ 7,366 $ 719,613 $ — $ 719,613 The accompanying notes are an integral part of these consolidated financial statements. 66 Table of Content GLADSTONE LAND CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) For the Years Ended December 31, 2023 2022 2021 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 14,565 $ 4,716 $ 3,514 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 37,161 35,366 27,183 Amortization of debt issuance costs 1,065 1,085 1,172 Amortization of deferred rent assets and liabilities, net 534 ( 482 ) ( 581 ) Amortization of right-of-use assets from operating leases and operating lease liabilities, net 92 90 122 Loss from investments in unconsolidated entities 59 73 61 Bad debt expense 149 83 13 Write-off of unamortized deferred offering costs associated with cumulative redeemable preferred stock (Series C) — 798 — (Gain) loss on dispositions of real estate assets, net ( 5,208 ) 3,760 2,537 Property and casualty loss (recovery), net 1,016 56 ( 68 ) Changes in operating assets and liabilities: Other assets, net ( 6,914 ) ( 7,487 ) ( 5,939 ) Accounts payable and accrued expenses and Due to related parties, net ( 3,400 ) 5,678 1,905 Other liabilities, net 962 52 2,458 Net cash provided by operating activities 40,081 43,788 32,377 CASH FLOWS FROM INVESTING ACTIVITIES: Acquisition of new real estate assets — ( 62,055 ) ( 286,827 ) Capital expenditures on existing real estate assets ( 12,805 ) ( 20,126 ) ( 6,120 ) Contributions to unconsolidated real estate entities — ( 2,749 ) ( 2,054 ) Proceeds from dispositions of real estate assets 9,037 — — Deposits on prospective real estate acquisitions and investments — ( 554 ) — Net cash used in investing activities ( 3,768 ) ( 85,484 ) ( 295,001 ) CASH FLOWS FROM FINANCING ACTIVITIES: Borrowings from lines of credit 200 — — Repayments of lines of credit ( 100 ) — — Borrowings from notes and bonds payable — 9,932 67,907 Repayments of notes and bonds payable ( 53,015 ) ( 51,651 ) ( 23,924 ) Payments of financing fees ( 192 ) ( 948 ) ( 2,717 ) Proceeds from issuance of preferred and common equity 21,268 188,106 233,393 Offering costs ( 763 ) ( 13,751 ) ( 6,660 ) Redemption of cumulative term preferred stock (Series A) — — ( 28,750 ) Redemption of cumulative redeemable preferred stock ( 1,191 ) ( 901 ) ( 248 ) Proceeds from issuance of cumulative term preferred stock (Series D) — — 60,375 Payments for redemptions of OP Units — ( 7,670 ) — Dividends paid on cumulative redeemable preferred stock ( 25,301 ) ( 18,068 ) ( 12,679 ) Distributions paid to non-controlling common interests in Operating Partnership — ( 27 ) ( 92 ) Distributions paid on common stock ( 19,789 ) ( 18,893 ) ( 16,491 ) Net cash (used in) provided by financing activities ( 78,883 ) 86,129 270,114 NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS ( 42,570 ) 44,433 7,490 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 61,141 16,708 9,218 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 18,571 $ 61,141 $ 16,708 The accompanying notes are an integral part of these consolidated financial statements. GLADSTONE LAND CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued) (In thousands) SUPPLEMENTAL CASH FLOW INFORMATION: Interest paid (1) $ 26,218 $ 25,259 $ 26,935 NON-CASH INVESTING AND FINANCING INFORMATION: Issuance of non-controlling interests in Operating Partnership in conjunction with acquisitions — — 3,970 Real estate additions included in Accounts payable and accrued expenses and Due to related parties, net 441 2,657 3,724 Tenant-funded improvements included within Real estate, at cost 25 284 1,270 Stock offering and OP Unit issuance costs included in Accounts payable and accrued expenses and Due to related parties, net 11 108 3 Financing fees included in Accounts payable and accrued expenses and Due to related parties, net 7 42 116 Dividends paid on Series C Preferred Stock via additional share issuances 320 788 185 (1) Includes distributions made on our cumulative term preferred stock The accompanying notes are an integral part of these consolidated financial statements. 67 Table of Content GLADSTONE LAND CORPORATION AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS References to the number of farms/properties, acreage, and primary crop use are unaudited. NOTE 1. BUSINESS AND ORGANIZATION Business Gladstone Land Corporation (“we,” “us,” or the “Company”) is an agricultural real estate investment trust (“REIT”) that was re-incorporated in Maryland on March 24, 2011, having been originally incorporated in California on June 14, 1997. We are primarily in the business of owning and leasing farmland. Subject to certain restrictions and limitations, and pursuant to contractual agreements, our business is managed by Gladstone Management Corporation (the “Adviser”), a Delaware corporation, and administrative services are provided to us by Gladstone Administration, LLC (the “Administrator”), a Delaware limited liability company. Our Adviser and Administrator are both affiliates of ours (see Note 6, “ Related-Party Transactions ,” for additional discussion regarding our Adviser and Administrator). Organization We conduct substantially all of our operations through a subsidiary, Gladstone Land Limited Partnership (the “Operating Partnership”), a Delaware limited partnership. As we currently control the sole general partner of the Operating Partnership and own, directly or indirectly, a majority of the common units of limited partnership interest in the Operating Partnership (“OP Units”), the financial position and results of operations of the Operating Partnership are consolidated within our financial statements. As of December 31, 2023, 2022, and 2021, the Company owned approximately 100.0 %, 100.0 %, and 99.4 %, respectively, of the outstanding OP Units (see Note 8, “ Equity ,” for additional discussion regarding OP Units). Gladstone Land Partners, LLC (“Land Partners”), a Delaware limited liability company and a subsidiary of ours, was organized to engage in any lawful act or activity for which a limited liability company may be organized in Delaware. Land Partners is the general partner of the Operating Partnership and has the power to make and perform all contracts and to engage in all activities necessary in carrying out the purposes of the Company, as well as all other powers available to it as a limited liability company. As we currently own all of the membership interests of Land Partners, the financial position and results of operations of Land Partners are consolidated within our financial statements. Gladstone Land Advisers, Inc. (“Land Advisers”), a Delaware corporation and a subsidiary of ours, was created to collect any non-qualifying income related to our real estate portfolio and to perform certain small-scale farming business operations. We have elected for Land Advisers to be taxed as a taxable REIT subsidiary (“TRS”) of ours. Since we currently own all of the voting securities of Land Advisers, its financial position and results of operations are consolidated within our financial statements. For the tax years ended December 31, 2023, 2022, and 2021 , there was no taxable income or loss from Land Advisers, nor did we have any undistributed REIT taxable income. All further references herein to “we,” “us,” “our,” and the “Company” refer, collectively, to Gladstone Land Corporation and its consolidated subsidiaries, except where indicated otherwise. NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Use of Estimates The preparation of financial statements in accordance with U.S. generally-accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances. Actual results may materially differ from these estimates. Real Estate and Lease Intangibles Our investments in real estate consist of farmland, improvements made to the farmland (consisting primarily of irrigation and drainage systems and buildings), and permanent plantings acquired in connection with certain land purchases (consisting primarily of almond and pistachio trees, blueberry bushes, and wine vineyards). We record investments in real estate at cost and generally capitalize improvements and replacements when they extend the useful life or improve the efficiency of the asset. We expense costs of routine repairs and maintenance as such costs are incurred. We generally compute depreciation using the 68 Table of Content straight-line method over the shorter of the estimated useful life or 50 years for buildings, improvements, and permanent plantings, and the shorter of the estimated useful life or 5 to 20 years for equipment and fixtures. Certain of our acquisitions involve sale-leaseback transactions with newly-originated leases, and other of our acquisitions involve the acquisition of farmland that was already being operated as rental property, in which case we will typically assume the lease in place at the time of acquisition. Most of our acquisitions, including those with a prior leasing history, are generally treated as asset acquisitions under Accounting Standards Codification (“ASC”) 805, “Business Combinations” (“ASC 805”). ASC 805 requires that the purchase price of real estate be allocated to (i) the tangible assets acquired and liabilities assumed (typically consisting of land, buildings, improvements, permanent plantings, and long-term debt) and, if applicable, (ii) any identifiable intangible assets and liabilities (typically consisting of in-place lease values, lease origination costs, the values of above- and below-market leases, and tenant relationships), based in each case on their fair values. In addition, all acquisition-related costs (other than legal costs incurred directly related to either originating new leases we execute upon acquisition or reviewing in-place leases we assumed upon acquisition) are capitalized and included as part of the fair value allocation of the identifiable tangible and intangible assets acquired or liabilities assumed. Management’s estimates of fair value are made using methods similar to those used by independent appraisers, such as a sales comparison approach, a cost approach, and either an income capitalization approach or discounted cash flow analysis. Factors considered by management in its analysis include an estimate of carrying costs during hypothetical, expected lease-up periods, taking into consideration current market conditions and costs to execute similar leases. We also consider information obtained about each property as a result of our pre-acquisition due diligence, marketing, and leasing activities in estimating the fair value of the tangible and intangible assets acquired and liabilities assumed. In estimating carrying costs, management also includes lost reimbursement of real estate taxes, insurance, and certain other operating expenses, as well as estimates of lost rental income at market rates during the hypothetical, expected lease-up periods, which typically range from 1 to 24 months, depending on specific local market conditions. Management also estimates costs to execute similar leases, including leasing commissions, legal fees, and other related expenses, to the extent that such costs are not already incurred in connection with a new lease origination as part of the transaction. While management believes these estimates to be reasonable based on the information available at the time of acquisition, the purchase price allocation may be adjusted if management obtains more information regarding the valuations of the assets acquired or liabilities assumed. We allocate the purchase price to the fair value of the tangible assets and liabilities of an acquired property by valuing the property as if it were vacant. The “as-if-vacant” value is allocated to land, buildings, improvements, and permanent plantings, based on management’s determination of the relative fair values of such assets and liabilities as of the date of acquisition. We record above- and below-market lease values for acquired properties based on the present value (using a discount rate that reflects the risks associated with the leases acquired) of the difference between (i) the contractual amounts to be paid pursuant to the in-place lease agreements, and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining, non-cancelable term of the lease. When determining the non-cancelable term of the lease, we evaluate whether fixed-rate or below-market renewal options, if any, should be included. The fair value of capitalized above-market lease values, included as part of Other assets in the accompanying Consolidated Balance Sheets, is amortized as a reduction of rental income on a straight-line basis over the remaining, non-cancelable terms of the respective leases. The fair value of capitalized below-market lease values, included as part of Other liabilities in the accompanying Consolidated Balance Sheets, is amortized as an increase to rental income on a straight-line basis over the remaining, non-cancelable terms of the respective leases, including that of any fixed-price or below-market renewal options. The value of the remaining intangible assets acquired, which consists of in-place lease values, lease origination costs, and tenant relationship values, are determined based on management’s evaluation of the specific characteristics of each tenant’s lease and our overall relationship with that respective tenant. Characteristics to be considered by management in allocating these values include the nature and extent of our existing business relationships with the tenant, prospects for developing additional business with the tenant, the tenant’s credit quality, and our expectations of lease renewals (including those existing under the terms of the current lease agreement), among other factors. The value of in-place leases and certain lease origination costs (if any) are amortized to amortization expense on a straight-line basis over the remaining, non-cancelable terms of the respective leases. The value of tenant relationship intangibles, which is the benefit to us resulting from the likelihood of an existing tenant renewing its lease at the existing property or entering into a lease at a different property we own, is amortized to amortization expense over the remaining lease term and any anticipated renewal periods in the respective leases. Should a tenant terminate its lease, the unamortized portion of the above intangible assets or liabilities would be charged to the appropriate income or expense account. 69 Table of Content Total consideration for acquisitions may include a combination of cash and equity securities, such as OP Units. When OP Units are issued in connection with acquisitions, we determine the fair value of the OP Units issued based on the number of units issued multiplied by the closing price of the Company’s common stock on the date of acquisition. Real Estate Impairment Evaluation We account for the impairment of our real estate assets in accordance with ASC 360, “Property, Plant, and Equipment” (“ASC 360”), which requires us to periodically review the carrying value of each property to determine whether indicators of impairment exist or if depreciation periods should be modified. In determining if impairment exists, we consider such indicators which may include, but are not limited to, deteriorating market conditions, declines in a property’s operating performance due to near-term lease maturities or vacancy rates, environmental damage, including due to natural disasters or tenant neglect, legal concerns, and whether our hold period has shortened. If circumstances support the possibility of impairment, we prepare a projection of the total undiscounted future cash flows of the specific property (without interest charges), including net proceeds from disposition, if any, and compare them to the net book value of the property to determine whether the carrying value of the property is recoverable. In preparing the projection of undiscounted future cash flows, we estimate cap rates, rental rates, and property values, as applicable, using information that we obtain from market data and other comparable sources, such as recent sales data from comparable properties and broker quotes, and apply the undiscounted cash flows to our expected holding period. 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 market-derived terms, such as cap rates, discount rates, and rental rates applied to our expected hold period. Using the methodology discussed above, we evaluated our entire portfolio for any impairment indicators and performed an impairment analysis on select properties that had an indication of impairment. As of December 31, 2023, and December 31, 2022, we concluded that no ne of our properties were impaired. There have been no impairments recognized on our real estate assets since our inception. We will continue to monitor our portfolio for any other indicators of impairment. Held-for-Sale Property For properties classified as held-for-sale, we cease depreciating and amortizing the property and related intangible assets and value the property at the lower of depreciated and amortized cost or fair value, less costs to dispose. If the sale meets the definition of discontinued operations, we present the related assets, liabilities, and results of operations that have been sold (or that otherwise qualify as held-for-sale) as discontinued operations in all periods. The definition of discontinued operations is met if the disposal of a component or group of components either meets the held-for-sale criteria or is disposed of and also represents a strategic shift that has (or will have) a major effect on our operations and financial results. If classified as such, the components of the property’s net income (loss) that are reflected as discontinued operations include operating results, depreciation, amortization, and interest expense. When properties are considered held-for-sale, but do not qualify as a discontinued operation, we present such assets and liabilities as held for sale on the consolidated balance sheet in all periods that the related assets and liabilities meet the held-for-sale criteria under ASC 360. Components of the held-for-sale property’s net income (loss) are recorded within continuing operations on the consolidated statements of operations and comprehensive income. Tenant Improvements From time to time, our tenants may pay for improvements on certain of our properties with the ownership of the improvements remaining with us, in which case we will record the cost of such improvements as an asset (tenant-funded improvements, included within Investments in real estate, net), along with a corresponding liability (deferred rent liability, included within Other liabilities, net) on our Consolidated Balance Sheets. When we are determined to be the owner of the tenant-funded improvements, such improvements will be depreciated over the useful life in accordance with our depreciation policy noted above, and the related deferred rent liability will be amortized as an addition to rental income over the remaining term of the existing lease in place. If the tenant is determined to be the owner of a tenant improvement funded by us, such amounts are treated as a lease incentive and amortized as a reduction of rental income over the remaining term of the existing lease in place. In determining whether the tenant or the Company is the owner of such improvements, several factors will be considered, including, but not limited to: (i) whether the improvement’s useful life is greater than the remaining lease term plus any reasonably certain renewal options; (ii) whether the lease allows the tenant to remove the improvements; (iii) whether the improvement is unique to the tenant or useful to subsequent tenants; (iv) whether the improvement adds value to the property or increases the lifespan of the property; and (v) whether the tenant was provided a form of reimbursement or incentive concerning the improvement. The determination of who owns the improvements can be subject to significant judgment. Cash and Cash Equivalents 70 Table of Content We consider cash equivalents to be all short-term, highly-liquid investments that are both readily convertible to cash and have a maturity of three months or less at the time of purchase, except that any such investments purchased with funds held in escrow or similar accounts are classified as restricted cash. Items classified as cash equivalents include money-market deposit accounts. Our cash and cash equivalents as of December 31, 2023 and 2022 were held in the custody of one financial institution (which management believes to be financially sound and with minimal credit risk), and our balance at times may exceed federally-insurable limits. We did no t have any restricted cash or restricted cash equivalents as of December 31, 2023 or 2022. Debt Issuance Costs Debt issuance costs consist of costs incurred to obtain debt financing, including legal fees, origination fees, and administrative fees. Costs associated with our long-term borrowings and term preferred stock securities required to be recorded net of the respective debt for GAAP purposes are deferred and amortized over the terms of the respective financings using the straight-line method, which approximates the effective interest method. In the case of our lines of credit, the straight-line method is used due to the revolving nature of the financing instrument. Upon early extinguishment of any borrowings, the unamortized portion of the related deferred financing costs will be immediately charged to expense. In addition, in accordance with ASC 470, “Debt” (“ASC 470”), when a financing arrangement is amended so that the only material change is an increase in the borrowing capacity, the unamortized deferred financing costs from the prior arrangement are amortized over the term of the new arrangement. During the years ended December 31, 2023, 2022, and 2021, we recorded approximately $ 1.1 million, $ 1.1 million, and $ 1.2 million, respectively, of total amortization expense related to debt issuance costs . Deferred Offering Costs We account for offering costs in accordance with SEC Staff Accounting Bulletin Topic 5.A., which states that incremental offering costs directly attributable to a proposed or actual offering of securities may be deferred and charged against the gross proceeds of such offering. Accordingly, costs incurred related to our ongoing equity offerings are included in Other assets, net on the accompanying Consolidated Balance Sheets and are ratably applied to the cost of equity as the related securities are issued. If an equity offering is subsequently terminated, the remaining, unallocated portion of the related deferred offering costs are charged to expense in the period such offering is aborted and recorded on the accompanying Consolidated Statements of Operations and Comprehensive Income. Other Assets and Other Liabilities Other assets, net generally consists primarily of net deferred rent assets, rents receivable, deferred offering costs, prepaid expenses, deferred financing costs associated with our lines of credit, operating lease right-of-use assets, deposits on potential real estate acquisitions, the carrying value of certain farm equipment owned by us and used on our farms, investments in long-term water assets (see “ —Investments in Water Assets ” below for further discussion), net ownership interests in special-purpose LLCs (see “ —Investments in Unconsolidated Entities ” below for further discussion), and the fair value of interest rate swaps if market interest rates are above the fixed rate of the respective swap (see Note 4, “Borrowings—Interest Rate Swap Agreements ,” for further discussion). Other liabilities, net generally consists primarily of rents received in advance, net deferred rent liabilities, operating lease liabilities, and the fair value of interest rate swaps if market interest rates are below the fixed rate of the respective swap (see Note 4, “Borrowings—Interest Rate Swap Agreements ,” for further discussion). Investments in Unconsolidated Entities We determine if an entity is a variable interest entity (“VIE”) in accordance with ASC Topic 810, “Consolidation.” For an entity in which we have acquired an interest, the entity will be considered a VIE if either of the following characteristics are met: (i) the entity lacks sufficient equity to finance its activities without additional subordinated financial support, or (ii) equity holders, as a group, lack the characteristics of a controlling financial interest. We evaluate all significant investments in real estate-related assets to determine if they are VIEs, utilizing judgment and estimates that are inherently subjective. If an entity is determined to be a VIE, we then determine whether to consolidate the entity as the primary beneficiary. The primary beneficiary has both (i) the power to direct the activities that most significantly impact the VIE’s economic performance, and (ii) the obligation to absorb losses of the VIE or the right to receive benefits from the VIE that could potentially be significant to the entity. See Note 3, “ Real Estate and Lease Intangibles—Investments in Unconsolidated Entities ,” for further discussion. Investments in Water Assets 71 Table of Content From time to time, we have entered into contracts to acquire additional water assets for certain of our farms (see Note 3, “ Real Estate and Lease Intangibles—Investments in Water Assets ”). The water assets acquired may be in the form of either water banked at a government municipality or groundwater pumping credits obtained through groundwater recharge programs established by government municipalities, which recharge is achieved via groundwater recharge facilities we have constructed on certain of our farms. The contracts we have entered into to acquire additional water assets cannot readily be net settled by means outside of the respective contracts; therefore, in accordance with ASC 360, we recognize the investments in long-term water assets at cost, including all costs necessary to procure and transfer the water asset to its intended location. Costs to acquire water assets are initially deferred in a prepaid account until such time that the water assets are recognized by the respective water district, at which time, the costs related to the recognized water assets are reclassed and capitalized as an investment in long-term water assets. Investments in long-term water assets and the related prepaid asset are both included in Other assets, net on our accompanying Consolidated Balance Sheets. While we may, in the future, sell portions of these water assets to unrelated third parties for a profit, our current intent is to hold these water assets for the long-term for future use on our farms. There is no amount of time by which we must use these water assets. Each quarter, we will review our investments in long-term water assets for any indicators of impairment in accordance with ASC 360 and perform an impairment analysis if there are any such indicators. In determining if impairment exists, we consider such indicators which may include, but are not limited to, deteriorating market conditions and environmental or regulatory changes. As of December 31, 2023, we concluded that there were no such indicators and that the water assets were not impaired. Non-controlling Interests Non-controlling limited interests in our Operating Partnership are those OP Units not owned by us. We evaluate whether OP Units held by non-controlling OP Unitholders are subject to redemption features outside of our control. OP Units held by non-controlling OP Unitholders are redeemable at the option of the holder for cash or, at our election, shares of our common stock and thus are reported in the equity section of the Consolidated Balance Sheets but separate from stockholders’ equity. The amount reported for such non-controlling interests on the Consolidated Statements of Operations and Comprehensive Income represent the portion of income (loss) from the Operating Partnership not attributable to us. At the end of each reporting period, we determine the amount of equity (at book value) that is allocable to non-controlling interests based upon the respective ownership interests. To reflect such non-controlling interests’ equity interest in the Company, an adjustment is made to non-controlling interests, with a corresponding adjustment to paid-in capital, as reflected on the Consolidated Statements of Equity. Lease Revenue Lease revenue includes rents that each tenant pays in accordance with the terms of its respective lease, reported evenly over the non-cancelable term of the lease. Most of our leases contain rental increases at specified intervals, which we recognize on a straight-line basis. For leases that are deemed not probable of collection, revenue is recorded as the lesser of (i) the amount that would be recognized on a straight-line basis or (ii) cash that has been received from the tenant (including deferred revenue), with any receivable balances (including deferred rent receivables) charged as a direct write-off against lease revenue in the period of the change in the collectability determination. If the collectability determination for leases for which revenue is being recorded based on cash received from the tenant subsequently changes to being probable, we resume recognizing revenue, including deferred revenue, on a straight-line basis and recognize incremental revenue related to the reinstatement of cumulative deferred rent receivable and deferred revenue balances as if revenue had been recorded on a straight-line basis since the inception of the lease. As of December 31, 2023, three of our leases with two different tenants were recognized on a cash basis due to the full collectability of the remaining rental payments under the respective leases not being deemed probable. Certain other leases provide for additional rental payments that are based on a percentage of the gross crop revenues earned on the farm, which we refer to as participation rents. Such contingent revenue is generally recognized when all contingencies have been resolved and when actual results become known or estimable, enabling us to estimate and/or measure our share of such gross revenues. As a result, depending on the circumstances of each lease, certain participation rents may be recognized by us in the year the crop was harvested, while other participation rents may be recognized in the year following the harvest. Deferred rent receivable, included in Other assets on the accompanying Consolidated Balance Sheets, includes the cumulative difference between rental revenue as recorded on a straight-line basis and cash rents received from the tenants in accordance with the lease terms. In addition, we determine, in our judgment, to what extent the deferred rent receivable applicable to each specific tenant is collectable. We perform a quarterly review of the net deferred rent receivable balance as it relates to straight-line rents and take into consideration the tenant’s payment history, the financial condition of the tenant, business conditions of the industry in which the tenant operates, and economic and agricultural conditions in the geographic area in which the property is located. In the event that the collectability of deferred rent with respect to any given tenant is in doubt, we record a direct write-off of the specific rent receivable, with a corresponding adjustment to lease revenue. 72 Table of Content Tenant recovery revenue includes payments received from tenants as reimbursements for certain operating expenses, such as property taxes, insurance premiums, and water delivery costs. These expenses and their subsequent reimbursements are recognized under property operating expenses as incurred and lease revenue as earned, respectively, and are recorded in the same periods. We generally do not record any lease revenue or property operating expenses associated with costs paid directly by our tenants for net-leased properties. 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, in the form of water credits, 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. The timing of revenue recognition generally occurs once water credits are recognized by the respective water district at the estimated fair value of the resulting water credits. See Note 3, “ Real Estate and Intangible Assets—Investments in Water Assets ,” for further discussion. Gain (loss) on Dispositions of Real Estate Assets We recognize net gains (losses) on dispositions of real estate assets either upon the abandonment of an asset before the end of its useful life or upon the closing of a transaction (be it an outright sale of a property or the sale of a perpetual, right-of-way easement on all or a portion of a property) with the purchaser. When a real estate asset is abandoned prior to the end of its useful life, a loss is recorded in an amount equal to the net book value of the related real estate asset at the time of abandonment. In the case of a sale of a property, a gain (loss) is recorded to the extent that the total consideration received for a property is more (less) than the property’s net carrying value, plus any closing costs incurred, at the time of the sale. Gains are recognized using the full accrual method (i.e., when the collectability of the sales price is reasonably assured, we are not obligated to perform additional activities that may be considered significant, the initial investment from the buyer is sufficient, and other profit recognition criteria have been satisfied). Gains on sales of real estate assets may be deferred in whole or in part until the requirements for gain recognition have been met. Other Income We record non-operating and unusual or infrequent income as Other income on our Consolidated Statements of Operations. Other income recorded for the years ended December 31, 2023, 2022, and 2021 was primarily from interest patronage received on certain of our long-term borrowings and interest earned on short-term investments. Involuntary Conversions and Property and Casualty Recovery We account for involuntary conversions, for example, when a nonmonetary asset, such as property or equipment, is involuntarily converted to a monetary asset, such as insurance proceeds, in accordance with ASC 605, “Revenue Recognition,” which requires us to recognize a gain or a loss equal to the difference between the carrying amount of the nonmonetary asset and the amount of monetary assets received. Further, in accordance with ASC 450, “Contingencies,” recovery of the loss is considered to be probable, we will recognize a receivable for the amount expected to be covered by insurance proceeds, not to exceed the related loss recognized, unless such amounts have been realized. Income Taxes We have operated and intend to continue to operate in a manner that will allow us to qualify as a REIT under the Sections 856-860 of the Internal Revenue Code of 1986, as amended (the “Code”). Beginning with our tax year ended December 31, 2013, we elected to be taxed as a REIT for federal income tax purposes, and Land Advisers has been treated as a wholly-owned TRS that is subject to federal and state income taxes. As a REIT, we generally are not subject to federal corporate income taxes on amounts that we distribute to our stockholders (except income from any foreclosure property), provided that, on an annual basis, we distribute at least 90% of our REIT taxable income (excluding net capital gains) to our stockholders and meet certain other conditions. To the extent that we satisfy the annual distribution requirement but distribute less than 100% of our taxable income (including net capital gains), we will be subject to corporate income tax on our undistributed taxable income. If we fail to qualify as a REIT in any taxable year, we will be subject to federal income tax on our taxable income at regular corporate rates (including any alternative minimum tax) and may not be able to qualify as a REIT for the four immediately-subsequent taxable years. Even as a REIT, we may be subject to certain state and local income and property taxes and to federal income and excise taxes on undistributed taxable income. In general, however, as long as we qualify as a REIT, no provision for federal income taxes will be necessary, except for taxes on undistributed REIT taxable income and taxes on the income generated by a TRS (such as Land Advisers), if any. 73 Table of Content Should we have any taxable income or loss in the future, we will account for any income taxes in accordance with the provisions of ASC 740, “Income Taxes” (“ASC 740”), using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized based on differences between the financial statement carrying amounts of existing assets and liabilities and their respective income tax basis (including for operating loss, capital loss, and tax credit carryforwards) and are calculated using the enacted tax rates and laws expected to be in effect when such amounts are realized or settled. In addition, we will establish valuation allowances for tax benefits when we believe it is more-likely-than-not (defined as a likelihood of more than 50%) that such assets will not be realized. We perform an annual review for any uncertain tax positions and, if necessary, will record future tax consequences of uncertain tax positions in the financial statements. An uncertain tax position is defined as a position taken or expected to be taken in a tax return that is not based on clear and unambiguous tax law and which is reflected in measuring current or deferred income tax assets and liabilities for interim or annual periods. As of December 31, 2023 and 2022, we had no provisions for uncertain tax positions. The prior three tax years remain open for an audit by the Internal Revenue Service. Comprehensive Income We record the effective portion of changes in the fair value of the interest rate swap agreements that qualify as cash flow hedges to accumulated other comprehensive income. For the years ended December 31, 2023, 2022, and 2021, we reconciled net income attributable to the Company to comprehensive income attributable to the Company on the accompanying Consolidated Statements of Operations and Comprehensive Income. Segment Reporting We manage our operations on an aggregated, single-segment basis for purposes of assessing performance and making operating decisions and, accordingly, have only one reporting and operating segment. Recently-Issued Accounting Pronouncements As of December 31, 2023, there were no recently-issued accounting pronouncements that had a material impact on our consolidated financial statements. NOTE 3. REAL ESTATE AND INTANGIBLE ASSETS All of our properties are wholly-owned on a fee-simple basis, except where noted. The following table provides certain summary information about the 169 farms we owned as of December 31, 2023 (dollars in thousands, except for footnotes): Location No. of Farms Total Acres Farm Acres Acre-feet of Water Assets Net Cost Basis (1) Encumbrances (2) California (3)(4)(5) 63 34,844 32,321 46,400 $ 850,610 $ 389,405 Florida (6) 26 22,468 17,639 — 221,185 95,012 Washington 6 2,520 2,004 — 59,763 20,133 Arizona (7) 6 6,320 5,333 — 52,119 12,303 Colorado 12 32,773 25,577 — 45,945 14,599 Nebraska 9 7,782 7,050 — 30,402 10,357 Oregon (8) 6 898 736 — 29,534 11,308 Michigan 23 1,892 1,245 — 23,048 13,868 Texas 1 3,667 2,219 — 8,101 — Maryland 6 987 863 — 8,013 4,344 South Carolina 3 597 447 — 3,542 2,147 Georgia 2 230 175 — 2,317 1,645 North Carolina 2 310 295 — 2,117 — New Jersey 3 116 101 — 2,100 1,221 Delaware 1 180 140 — 1,296 697 Totals 169 115,584 96,145 46,400 $ 1,340,092 $ 577,039 (1) Consists of the initial acquisition price (including the costs allocated to both tangible and intangible assets acquired and liabilities assumed), plus subsequent improvements and other capitalized costs associated with the properties, and adjusted for accumulated depreciation and amortization. Specifically, includes Total real estate, net (excluding improvements paid for by the tenant) and Lease intangibles, net; plus long-term water assets, net above-market lease values, net lease incentives, and net investments in special-purpose LLCs included in Other assets, net; and less net below-market lease values and other deferred revenue included in Other liabilities, net; each as shown on the accompanying Consolidated Balance Sheets. (2) Excludes approximately $ 2.9 million of debt issuance costs related to notes and bonds payable, included in Notes and bonds payable, net on the accompanying Consolidated Balance Sheets. 74 Table of Content (3) Includes ownership in a special-purpose LLC that owns a pipeline conveying water to certain of our properties. As of December 31, 2023, this investment had a net carrying value of approximately $ 1.0 million and is included within Other assets, net on the accompanying Consolidated Balance Sheet. (4) Includes eight acres in which we own a leasehold interest via a ground lease with a private individual that expires in December 2040 and five acres in which we own a leasehold interest via a ground sublease with a California municipality that expires in December 2041. As of December 31, 2023, these two ground leases had a net cost basis of approximately $ 689,000 and are included in Lease intangibles, net on the accompanying Consolidated Balance Sheets. (5) Includes 46.003 acre-feet of water stored with Semitropic Water Storage District, located in Kern County, California and 397 surplus water credits in our account with Westlands Water District, located in Fresno County, California. See “ —Investments in Water Assets ” below for additional information. (6) Includes one property classified as held for sale; see “ —Real Estate Held for Sale ” below for additional information. (7) Includes two farms consisting of 1,368 total acres and 1,221 farm acres in which we own leasehold interests via two ground leases with the State of Arizona that expire in February 2025 and February 2032, respectively. As of December 31, 2023, these ground leases had an aggregate net cost basis of approximately $ 376,000 and are included in Lease intangibles, net on the accompanying Consolidated Balance Sheets. (8) Includes ownership in a special-purpose LLC that owns certain irrigation infrastructure that provides water to two of our farms. As of December 31, 2023, this investment had a net carrying value of approximately $ 4.8 million and is included within Other assets, net on the accompanying Consolidated Balance Sheets. Real Estate The following table sets forth the components of our investments in tangible real estate assets as of December 31, 2023 and 2022, excluding real estate held for sale (dollars in thousands): December 31, 2023 December 31, 2022 Real estate: Land and land improvements $ 792,277 $ 845,779 Permanent plantings 359,131 358,249 Irrigation and drainage systems 168,545 165,438 Farm-related facilities 50,517 48,690 Other site improvements 13,272 14,238 Real estate, at cost 1,383,742 1,432,394 Accumulated depreciation ( 142,212 ) ( 106,966 ) Real estate, net $ 1,241,530 $ 1,325,428 Real estate depreciation expense on these tangible assets was approximately $ 36.1 million, $ 34.3 million, and $ 25.9 million for the years ended December 31, 2023, 2022, and 2021, respectively. Intangible Assets and Liabilities The following table summarizes the carrying value of certain lease intangible assets and the related accumulated amortization as of December 31, 2023 and 2022, excluding real estate held for sale (dollars in thousands): December 31, 2023 December 31, 2022 Lease intangibles: Leasehold interest – land $ 4,295 $ 4,295 In-place lease values 2,470 2,763 Leasing costs 3,017 3,088 Other (1) 141 133 Lease intangibles, at gross cost 9,923 10,279 Accumulated amortization ( 5,141 ) ( 4,577 ) Lease intangibles, net $ 4,782 $ 5,702 (1) Other consists primarily of acquisition-related costs allocated to miscellaneous lease intangibles. Total amortization expense related to these lease intangible assets was approximately $ 988,000 , $ 1.0 million, and $ 1.3 million for the years ended December 31, 2023, 2022, and 2021, respectively. The following table summarizes the carrying values of certain lease intangible assets or liabilities (excluding those related to real estate held for sale) included in Other assets, net or Other liabilities, net, respectively, on the accompanying Consolidated Balance Sheets and the related accumulated amortization or accretion, respectively, as of December 31, 2023 and 2022 (dollars in thousands): 75 Table of Content December 31, 2023 December 31, 2022 Intangible Asset or Liability Deferred Rent Asset (Liability) Accumulated (Amortization) Accretion Deferred Rent Asset (Liability) Accumulated (Amortization) Accretion Above-market lease values and lease incentives (1) $ 5,342 $ ( 1,849 ) $ 4,702 $ ( 585 ) Below-market lease values and other deferred revenue (2) ( 1,944 ) 624 ( 2,010 ) 518 $ 3,398 $ ( 1,225 ) $ 2,692 $ ( 67 ) (1) Net above-market lease values and lease incentives are included as part of Other assets, net on the accompanying Consolidated Balance Sheets, and the related amortization is recorded as a reduction of Lease revenue, net on the accompanying Consolidated Statements of Operations and Comprehensive Income. (2) Net below-market lease values and other deferred revenue are included as a part of Other liabilities, net on the accompanying Consolidated Balance Sheets, and the related accretion is recorded as an increase to Lease revenue, net on the accompanying Consolidated Statements of Operations and Comprehensive Income. Total amortization related to above-market lease values and lease incentives was approximately $ 1.3 million, $ 573,000 and $ 48,000 for the years ended December 31, 2023, 2022, and 2021, respectively. Total accretion related to below-market lease values and other deferred revenue was approximately $ 172,000 , $ 178,000 and $ 224,000 for the years ended December 31, 2023, 2022, and 2021, respectively. The estimated aggregate amortization expense to be recorded related to in-place lease values, leasing costs, and tenant relationships and the estimated net impact on lease revenue from the amortization of above-market lease values and lease incentives or accretion of above-market lease values and other deferred revenues for each of the five succeeding fiscal years and thereafter is as follows (dollars in thousands): Period Estimated Amortization Expense Estimated Net Increase (Decrease) to Lease Revenue For the fiscal years ending December 31: 2024 $ 711 $ ( 1,184 ) 2025 610 ( 1,184 ) 2026 486 ( 961 ) 2027 556 ( 1,178 ) 2028 556 ( 1,178 ) Thereafter 1,863 3,512 $ 4,782 $ ( 2,173 ) Real Estate Held for Sale As of December 31, 2023, we had one property located in Martin County, Florida, that was classified as held for sale. This property had a net cost basis of approximately $ 53.6 million as of December 31, 2023, and was sold subsequent to December 31, 2023. See Note 11, “ Subsequent Events—Portfolio Activity—Property Sale ,” for additional information on this sale. We did no t have any properties classified as held for sale as of December 31, 2022. Acquisitions 2023 Acquisitions We did not acquire any new farms during the year ended December 31, 2023. 76 Table of Content 2022 Acquisitions During the year ended December 31, 2022, we completed the following acquisitions, which are summarized in the table below (dollars in thousands, except for footnotes): Property Name Property Location Acquisition Date Total Acres No. of Farms Primary Crop(s) / Use Lease Term Renewal Options Total Purchase Price Acquisition Costs (1) Annualized Straight-line Rent (2) 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) Unaudited; 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 “— Investments in Unconsolidated Entities ” below for additional information on our aggregate ownership interest in this and other LLCs. (7) These two properties were acquired as part of a single transaction. In connection with the acquisition of these vineyards, we committed to provide up to an aggregate amount of $ 2.2 million for certain irrigation and vineyard improvements on these farms, for which we will earn additional rent as the funds are disbursed by us. (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. During the year ended December 31, 2022, in the aggregate, we recognized operating revenues of approximately $ 2.1 million and net income of approximately $ 244,000 related to the above acquisitions. Purchase Price Allocations The allocation of the aggregate purchase price for the farms acquired during the year ended December 31, 2022 was as follows (dollars in thousands): Assets (Liabilities) Acquired 2022 Acquisitions Land and land improvements $ 30,353 Permanent plantings 24,706 Irrigation & drainage systems 3,102 Farm-related facilities 1,287 In-place lease values 909 Leasing costs 1,355 Above-market lease values (1) 641 Investment in LLC (1) 2,749 Total Purchase Price $ 65,102 (1) Included within Other assets, net on the accompanying Consolidated Balance Sheets. Acquired Intangibles and Liabilities The following table shows the weighted-average amortization periods (in years) for the intangible assets acquired and liabilities assumed in connection with new real estate acquired during the year ended December 31, 2022: 77 Table of Content Weighted-Average Amortization Period (in Years) Intangible Assets and Liabilities 2022 Leasehold interest – land 0.0 In-place lease values 10.9 Leasing costs 11.7 Above-market lease values and lease incentives 9.1 Below-market lease values and other deferred revenue 0.0 All intangible assets and liabilities 10.6 Property Sale 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. Investments in Unconsolidated Entities In connection with the acquisition of certain farmland located in Fresno County, California, we also acquired an ownership in a related limited liability company (the “Fresno LLC”), the sole purpose of which is to own and maintain a pipeline conveying water to our and other neighboring properties. In addition, in connection with the acquisition of certain farmland located in Umatilla County, Oregon, we also acquired an ownership in a related limited liability company (the “Umatilla LLC”), the sole purpose of which is to own and maintain an irrigation system providing water to our and other neighboring properties. As of December 31, 2023, our aggregate ownership interest in the Fresno LLC and the Umatilla LLC was 50.00 % and 20.4 %, respectively. As our investments in the Fresno LLC and Umatilla LLC are both deemed to constitute “significant influence,” we have accounted for these investments under the equity method. During the years ended December 31, 2023, 2022, and 2021, we recorded an aggregate loss of approximately $ 59,000 , $ 73,000 , and $ 61,000 , respectively (included in Loss from investments in unconsolidated entities on our Consolidated Statements of Operations and Comprehensive Income), which represents our pro-rata share of the aggregate loss recognized by the Fresno LLC and Umatilla LLC. As of both December 31, 2023 and 2022, our combined ownership interest in the Fresno LLC and Umatilla LLC had an aggregate carrying value of approximately $ 5.8 million and is included within Other assets, net on the accompanying Consolidated Balance Sheets. Investments in Water Assets In connection with the acquisition of certain farmland located in Kern County, California, we also acquired three contracts to purchase an aggregate of 45,000 acre-feet of banked water held by Semitropic Water Storage District (“SWSD”), a water storage district located in Kern County, California. We subsequently executed all three contracts to purchase all 45,000 acre-feet of banked water for an aggregate additional cost of approximately $ 2.8 million. In addition, during the three months ended December 31, 2023, we obtained another contract to purchase an additional 1,003 acre-feet of banked water held by SWSD, 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 . All acquired banked water was recognized at cost, including the subsequent cost to execute the contracts and any administrative fees necessary to transfer the water to our banked water account. As of December 31, 2023, the 46,003 acre-feet of banked water held by SWSD was recognized as a long-term water asset and had an aggregate carrying value of approximately $ 34.5 million (included within Other assets, net on our Consolidated Balance Sheets). 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. Through December 31, 2023, we have obtained 397 water credits, which represents 50 % of the total net water credits generated and confirmed by WWD under the program as of December 31, 2023. As of December 31, 2023, these water credits were recognized as a long-term water asset and had an aggregate carrying value of approximately $ 111,000 (included within Other assets, net on our Consolidated Balance Sheets). 78 Table of Content 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. As of December 31, 2023 and 2022, we owned a total of 46,400 acre-feet and 45,000 acre-feet, respectively, of long-term water assets, and our investments in these long-term water assets had an aggregate carrying value of approximately $ 34.6 million and $ 34.0 million, respectively, and are included within Other assets, net on our Consolidated Balance Sheets. We have invested approximately $ 1.8 million to construct groundwater recharge facilities on two of our farms, which is included within Real estate, at cost on our Consolidated Balance Sheets. In addition, through December 31, 2023, 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. Such costs are held in a deferred asset account (also included within Other assets, net on our Consolidated Balance Sheets) until the related net water credits become estimable and are recognized by the respective water district, at which time the costs would be reclassed to investments in long-term water assets. Future Minimum Lease Payments We account for all of our leasing arrangements in which we are the lessor as operating leases. The majority of our leases are subject to fixed rental increases, and a small subset of our lease portfolio includes lease payments based on an index, such as the consumer price index (“CPI”). In addition, several of our leases contain participation rent components based on the gross revenues earned on the respective farms. Most of our leases also include tenant renewal options; however, these renewal options are generally based on then-current market rental rates and are therefore typically excluded from the determination of the minimum lease term. The majority of our leases generally do not include tenant termination options. The following tables summarize the future lease payments to be received under noncancellable leases as of December 31, 2023 (dollars in thousands): Period Tenant Lease Revenue For the fiscal years ending December 31, 2024 $ 77,576 2025 70,372 2026 63,954 2027 60,099 2028 51,482 Thereafter 180,832 $ 504,315 Leases—Cash Basis Recognition As of December 31, 2023, 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 tenants was not deemed to be probable. As such, during the year ended December 31, 2023, we recognized all or a portion of lease revenues from the three leases with these two tenants (all farms located in California) 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. 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, 2023, we recorded lease revenues from these three leases of approximately $ 2.5 million (including approximately $ 72,000 of participation rents), as compared to approximately $ 3.1 million (including approximately $ 0.8 million of participation rents) and approximately $ 2.4 million (including approximately $ 95,000 of participation rents) during the years ended December 31, 2022 and 2021, respectively. Portfolio Concentrations Credit Risk 79 Table of Content As of December 31, 2023, our farms were leased to various different, unrelated third-party tenants, with certain tenants leasing more than one farm. No individual tenant represented greater than 10.0% of the total lease revenue recorded during the year ended December 31, 2023. Geographic Risk Farms located in California and Florida accounted for approximately $ 59.1 million ( 65.5 %) and $ 15.1 million ( 16.7 %), respectively, of the total lease revenue recorded during the year ended December 31, 2023. We seek to continue to further diversify geographically, as may be desirable or feasible. If an unexpected natural disaster (such as an earthquake, wildfire, or flood) occurs or climate change impacts the regions where our properties are located, there could be a material adverse effect on our financial performance and ability to continue operations. None of our farms in California or Florida were materially impacted by the wildfires, droughts, or hurricanes that occurred in those respective regions during the year ended December 31, 2023. See “ —California Floods ” below for a discussion on damage caused on certain of our farms by the January 2023 floods that occurred in California. Besides California and Florida, no other single state accounted for more than 10.0% of the total rental revenue recorded during the year ended December 31, 2023. 2023 California Floods In January 2023, periods of heavy rainfall in California resulted in floods that impacted several areas of the state, including regions where certain of our farms are located. As a result of the flooding, one of our farms in the Central Valley suffered damage to certain structures located on the farm, 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, included within Property and casualty (loss) recovery, net on our Consolidated Statements of Operations and Comprehensive Income. Certain of our other farms in California suffered minor damage as a result of the floods, but no other farms were materially impacted. NOTE 4. BORROWINGS Our borrowings as of December 31, 2023 and 2022 are summarized below (dollars in thousands): Carrying Value as of As of December 31, 2023 December 31, 2023 December 31, 2022 Stated Interest Rates (1) (Range; Wtd Avg) Maturity Dates (Range; Wtd Avg) Variable-rate revolving lines of credit $ 200 $ 100 7.39 % 12/15/2033 Notes and bonds payable: Fixed-rate notes payable $ 524,199 $ 550,974 2.45 %– 5.70 %; 3.71 % 9/1/2024–7/1/2051; April 2033 Variable-rate notes payable — 1,104 N/A N/A Fixed-rate bonds payable 52,640 77,776 2.66 %– 4.57 %; 3.64 % 01/12/2024–12/30/2030; August 2026 Total notes and bonds payable 576,839 629,854 Debt issuance costs – notes and bonds payable ( 2,928 ) ( 3,454 ) N/A N/A Notes and bonds payable, net $ 573,911 $ 626,400 Total borrowings, net $ 574,111 $ 626,500 (1) Where applicable, stated interest rates are before interest patronage (as described below). As of December 31, 2023, the above borrowings were collateralized by certain of our farms with an aggregate net book value of approximately $ 1.1 billion. The weighted-average interest rate charged on the above borrowings (excluding the impact of debt issuance costs and before any interest patronage, or refunded interest) was 3.79 % and 3.77 % for the years ended December 31, 2023 and 2022, respectively. In addition, 2022 interest patronage from our Farm Credit Notes Payable (as defined below) resulted in a 24.1 % reduction (approximately 109 basis points) to the stated interest rates on such borrowings. See below under “— Farm Credit Notes Payables—Interest Patronage” for further discussion on interest patronage. We generally borrow at a rate of 60 % of the value of the underlying agricultural real estate, and, except as noted herein, the amounts borrowed are not generally guaranteed by the Company. Our loan agreements generally contain various affirmative and negative covenants, including with respect to liens, indebtedness, mergers, and asset sales, and customary events of default. These agreements may also require that we satisfy certain financial covenants at the end of each calendar quarter or year. Some of these financial covenants include, but are not limited to, staying below a maximum leverage ratio and maintaining a 80 Table of Content minimum net worth value, rental-revenue-to-debt ratio, current ratio, and fixed charge coverage ratio. As of December 31, 2023, we were in compliance with all covenants applicable to the above borrowings. MetLife Facility On February 3, 2022, we amended our credit facility with Metropolitan Life Insurance Company (“MetLife”), which previously consisted of a $ 75.0 million long-term note payable (the “2020 MetLife Term Note”) and $ 75.0 million of revolving equity lines of credit (the “MetLife Lines of Credit,” and together with the 2020 MetLife Term Note, the “Prior MetLife Facility”). Pursuant to the amendment, our credit facility with MetLife now consists of the 2020 MetLife Term Note, the MetLife Lines of Credit, and a new $ 100.0 million long-term note payable (the “2022 MetLife Term Note,” and together with the 2020 MetLife Term Note and the MetLife Lines of Credit, the “Current MetLife Facility”). On December 14, 2023, we entered into an amendment with MetLife to extend the maturity dates of the MetLife Lines of Credit from April 5, 2024, to December 15, 2033. In addition, the amendment revised certain covenant thresholds and increased the minimum balance requirement on each line of credit. As part of this amendment, we paid aggregate fees of approximately $ 188,000 to MetLife. The following table summarizes the pertinent terms of the Current MetLife Facility as of December 31, 2023 (dollars in thousands, except for footnotes): Issuance Aggregate Commitment Maturity Dates Principal Outstanding Interest Rate Terms Undrawn Commitment (1) MetLife Lines of Credit $ 75,000 12/15/2033 $ 200 3M SOFR + 2.00 % (2) $ 74,800 2020 MetLife Term Note 75,000 (3) 1/5/2030 36,900 2.75 %, fixed through 1/4/2030 (4) 38,100 2022 MetLife Term Note 100,000 (3) 1/5/2032 — (4) 100,000 Totals $ 250,000 $ 37,100 $ 212,900 (1) Based on the properties that were pledged as collateral under the Current MetLife Facility, as of December 31, 2023, the maximum additional amount we could draw under the facility was approximately $ 110.2 million. (2) The interest rate on the MetLife Lines of Credit is subject to a minimum annualized rate of 2.50 %, plus an unused fee ranging from 0.10 % to 0.20 % on undrawn amounts (based on the balance drawn under each line of credit). (3) If the aggregate commitments under the 2020 MetLife Term Note and the 2022 MetLife Term Note are not fully utilized by December 31, 2024, MetLife has no obligation to disburse the additional funds under either note. (4) Interest rates on future disbursements under each of the 2020 MetLife Term Note and the 2022 MetLife Term Note will be based on prevailing market rates at the time of such disbursements. In addition, through December 31, 2024, the 2020 MetLife Term Note and the 2022 MetLife Term Note are each subject to an unused fee ranging from 0.10 % to 0.20 % on undrawn amounts (based on the balance drawn under the respective note). Under the Current MetLife Facility, we are generally allowed to borrow up to 60 % of the aggregate of the lower of cost or the appraised value of the pool of agricultural real estate pledged as collateral. Amounts owed to MetLife under the Current MetLife Facility are guaranteed by us and each subsidiary of ours that owns a property pledged as collateral pursuant to the loan documents. Farmer Mac Facility Through certain subsidiaries of our Operating Partnership, we have entered into a bond purchase agreement (the “Bond Purchase Agreement”) with Federal Agricultural Mortgage Corporation (“Farmer Mac”) and Farmer Mac Mortgage Securities Corporation (the “Bond Purchaser”) for a secured note purchase facility (the “Farmer Mac Facility”). As amended from time to time, the Farmer Mac Facility currently provides for bond issuances up to an aggregate amount of $ 225.0 million. Pursuant to the Bond Purchase Agreement, as further amended on June 2, 2023, we may issue new bonds under the Farmer Mac Facility through December 31, 2026, and the final maturity date for new bonds issued under the facility will be the date that is ten years from the applicable issuance date. We did not issue any new bonds under the Farmer Mac Facility during the year ended December 31, 2023. Pursuant to the Bond Purchase Agreement, bonds issued by us to the Bond Purchaser will be secured by a security interest in loans originated by us (pursuant to a pledge and security agreement), which, in turn, will be collateralized by first liens on agricultural real estate owned by subsidiaries of ours. The bonds issued generally have a maximum aggregate, effective loan-to-value ratio of 60 % of the underlying agricultural real estate, after giving effect to certain overcollateralization obligations. As of December 31, 2023, we had approximately $ 52.6 million of bonds issued and outstanding under the Farmer Mac Facility. Farm Credit Notes Payable From time to time since September 2014, we, through certain subsidiaries of our Operating Partnership, have entered into various loan agreements (collectively, the “Farm Credit Notes Payable”) with various different Farm Credit associations 81 Table of Content (collectively, “Farm Credit”). We did not enter into any new loan agreements with Farm Credit during the year ended December 31, 2023. Certain amounts owed under the Farm Credit Notes Payable, limited to 12 months of principal and interest due under certain of the loans, are guaranteed by us pursuant to the respective loan documents. Interest Patronage Interest patronage, or refunded interest, on our borrowings from Farm Credit is generally recorded upon receipt and is included within Other income on our Consolidated Statements of Operations and Comprehensive Income. Receipt of interest patronage typically occurs in the first half of the calendar year following the calendar year in which the respective interest expense is accrued. During the three months ended March 31, 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 , 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 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. We are unable to estimate the remaining amount of interest patronage to be received, if any, related to interest accrued during 2023 on our Farm Credit Notes Payable. Debt Service – Aggregate Maturities Scheduled principal payments of our aggregate notes and bonds payable as of December 31, 2023, for the succeeding years are as follows (dollars in thousands): Period Scheduled Principal Payments For the fiscal years ending December 31: 2024 $ 40,656 (1) 2025 39,020 2026 18,175 2027 51,389 2028 77,808 Thereafter 349,791 $ 576,839 (1) Subsequent to December 31, 2023, we repaid $ 16.2 million of expiring bonds. During the year ended December 31, 2023, we repaid approximately $ 36.0 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 3.73 % and an effective interest rate (after interest patronage) of 3.56 %. Fair Value ASC 820, “Fair Value Measurement (Subtopic 820)” (“ASC 820”), provides a definition of fair value that focuses on the exchange (exit) price of an asset or liability in the principal, or most advantageous, market and prioritizes the use of market-based inputs to the valuation. ASC 820-10 establishes a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows: • Level 1 — inputs that are based upon quoted prices (unadjusted) for identical assets or liabilities in active markets; • Level 2 — inputs are based upon quoted prices for similar assets or liabilities in active or inactive markets or model-based valuation techniques, for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and • Level 3 — inputs are generally unobservable and significant to the fair value measurement. These unobservable inputs are generally supported by little or no market activity and are based upon management’s estimates of assumptions that market participants would use in pricing the asset or liability. As of December 31, 2023, the aggregate fair value of our notes and bonds payable was approximately $ 529.4 million, as compared to an aggregate carrying value (excluding unamortized related debt issuance costs) of approximately $ 576.8 million. The fair value of our long-term notes and bonds payable is valued using Level 3 inputs under the hierarchy established by ASC 82 Table of Content 820-10 and is determined by a discounted cash flow analysis, using discount rates based on management’s estimates of market interest rates on long-term debt with comparable terms. Further, due to the revolving nature and variable interest rates applicable to the MetLife Lines of Credit, their aggregate fair value as of December 31, 2023, is deemed to approximate their aggregate carrying value of $ 200 ,000. Interest Rate Swap Agreements In order to hedge our exposure to variable interest rates, we have entered into various interest rate swap agreements in connection with certain of our mortgage financings. In accordance with these swap agreements, we will pay our counterparty a fixed interest rate on a quarterly basis and receive payments from our counterparty equal to the respective stipulated floating rates. We have adopted the fair value measurement provision for these financial instruments, and the aggregate fair value of our interest rate swap agreements is recorded in Other assets, net or Other liabilities, net, as appropriate, on our accompanying Consolidated Balance Sheets. Generally, in the absence of observable market data, we will estimate the fair value of our interest rate swaps using estimates of certain data points, including estimated remaining life, counterparty credit risk, current market yield, and interest rate spreads of similar securities as of the measurement date. In accordance with the Financial Accounting Standards Board’s fair value measurement guidance, we have made an accounting policy election to measure the credit risk of our derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio. As of December 31, 2023, our interest rate swaps were valued using Level 2 inputs. In addition, we have designated our interest rate swaps as cash flow hedges. For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is initially recorded in Accumulated other comprehensive income (loss) on the accompanying Consolidated Balance Sheets and subsequently reclassified into interest expense in the same period(s) during which the hedged transaction affects. During the next 12 months, we estimate that an additional $ 2.2 million will be reclassified as a reduction to interest expense. We had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk as of December 31, 2023 and 2022 (dollars in thousands): Period Number of Instruments Aggregate Notional Amount As of December 31, 2023 4 $ 70,229 As of December 31, 2022 4 73,392 The following table presents the fair value of our interest rate swaps and their classification on the Consolidated Balance Sheets as of December 31, 2023 and 2022 (dollars in thousands): Derivative Asset (Liability) Fair Value Derivative Type Balance Sheet Location December 31, 2023 December 31, 2022 Derivatives Designated as Hedging Instruments: Interest rate swaps Other assets, net $ 7,366 $ 9,007 Total $ 7,366 $ 9,007 The following table presents the amount of income (loss) recognized in comprehensive income within our consolidated financial statements for the years ended December 31, 2023, 2022, and 2021 (dollars in thousands): For the Years Ended December 31, 2023 December 31, 2022 December 31, 2021 Derivative in cash flow hedging relationship: Interest rate swaps $ ( 1,641 ) $ 10,043 $ 464 Total $ ( 1,641 ) $ 10,043 $ 464 Credit-risk-related Contingent Features We have agreements with each of our derivative counterparties that contain a provision where if we default on any of our indebtedness, then we could also be declared in default on our derivative obligations. As of December 31, 2023, we did not have any derivatives in a net liability position, nor have we posted any collateral related to these agreements. NOTE 5. MANDATORILY-REDEEMABLE PREFERRED STOCK Series A Term Preferred Stock 83 Table of Content In August 2016, we completed a public offering of 6.375 % Series A Cumulative Term Preferred Stock, par value $ 0.001 per share (the “Series A Term Preferred Stock”), at a public offering price of $ 25.00 per share. As a result of this offering (including the underwriters’ exercise of their option to purchase additional shares to cover over-allotments), we issued a total of 1,150,000 shares of the Series A Term Preferred Stock for gross proceeds of approximately $ 28.8 million and net proceeds, after deducting underwriting discounts and offering expenses borne by us, of approximately $ 27.6 million. On February 12, 2021, we redeemed all of our outstanding shares of Series A Term Preferred Stock at a cash redemption price of $ 25.00 per share plus all accrued and unpaid dividends up to, but excluding, the redemption date. In total, we paid approximately $ 28.8 million for the redemption of the Series A Term Preferred Stock using proceeds from the offering of our Series D Term Preferred Stock (as defined below). Our Series A Term Preferred Stock was delisted from Nasdaq on the date we redeemed all outstanding shares. In connection with this early redemption, we wrote off approximately $ 127,000 of unamortized issuance costs related to the issuance of the Series A Term Preferred Stock. Series D Term Preferred Stock In January 2021, we completed a public offering of 5.00 % Series D Cumulative Term Preferred Stock, par value $ 0.001 per share (the “Series D Term Preferred Stock”), at a public offering price of $ 25.00 per share. As a result of this offering (including the underwriters’ exercise of their option to purchase additional shares to cover over-allotments), we issued a total of 2,415,000 shares of the Series D Term Preferred Stock for gross proceeds of approximately $ 60.4 million and net proceeds, after deducting underwriting discounts and offering expenses borne by us, of approximately $ 58.3 million. The Series D Term Preferred Stock is traded under the ticker symbol “LANDM” on Nasdaq. The shares of the Series D Term Preferred Stock have a mandatory redemption date of January 31, 2026, and are not convertible into our common stock or any other securities. Generally, we were not permitted to redeem shares of the Series D Term Preferred Stock prior to January 31, 2023, except in limited circumstances to preserve our qualification as a REIT. On or after January 31, 2023, we may redeem the shares at a redemption price of $ 25.00 per share, plus any accumulated and unpaid dividends up to, but excluding, the date of redemption. We incurred approximately $ 2.1 million in total offering costs related to this issuance, which have been recorded net of the Series D Term Preferred Stock as presented on the accompanying Consolidated Balance Sheets and are being amortized over the mandatory redemption period as a component of interest expense on the accompanying Consolidated Statements of Operations and Comprehensive Income. The Series D Term Preferred Stock is recorded as a liability on our accompanying Consolidated Balance Sheets in accordance with ASC 480, “Distinguishing Liabilities from Equity,” which states that mandatorily-redeemable financial instruments should be classified as liabilities. In addition, the related dividend payments are treated similarly to interest expense on the accompanying Consolidated Statements of Operations and Comprehensive Income. As of December 31, 2023, the fair value of our Series D Term Preferred Stock was approximately $ 57.4 million, as compared to the carrying value (exclusive of unamortized offering costs) of approximately $ 60.4 million. The fair value of our Series D Term Preferred Stock uses Level 1 inputs under the hierarchy established by ASC 820-10 and is calculated based on the closing per-share price on December 31, 2023, of $ 23.75 . For information on the dividends declared by our Board of Directors and paid by us on the Series D Term Preferred Stock during the year ended December 31, 2023, see Note 8, “ Equity—Distributions .” NOTE 6. RELATED-PARTY TRANSACTIONS Our Adviser and Administrator We are externally managed pursuant to contractual arrangements with our Adviser and our Administrator, which collectively employ all of our personnel and pay their salaries, benefits, and general expenses directly. Both our Adviser and Administrator are affiliates of ours, as their parent company is owned and controlled by David Gladstone, our chairman, chief executive officer, and president. In addition, two of our executive officers, Mr. Gladstone and Terry Brubaker (our chief operating officer), serve as directors and executive officers of each of our Adviser and Administrator. Michael LiCalsi, our general counsel and secretary (who also serves as our Administrator’s president, general counsel, and secretary) is also executive vice president of administration of our Adviser. We have entered into an investment advisory agreement with our Adviser and an administration agreement with our Administrator (the “Administration Agreement”). The advisory agreement with our Advisor that was in effect through June 30, 2021 (the “Prior Advisory Agreement”), was amended and restated effective July 1, 2021 (as amended, the “Current Advisory Agreement,” and together with the Prior Advisory Agreement, the “Advisory Agreements”). Each of the Advisory Agreements and the Administration Agreement were approved unanimously by our Board of Directors, including our independent directors. 84 Table of Content Our Board of Directors reviews and considers renewing the agreement with our Adviser each July. During its July 2023 meeting, our Board of Directors reviewed and renewed each of the Current Advisory Agreement and the Administration Agreement for an additional year, through August 31, 2024. A summary of the compensation terms for each of the Advisory Agreements and a summary of the Administration Agreement is below. Advisory Agreements Pursuant to each of the Prior Advisory Agreement (which was in effect from January 1, 2020, through June 30, 2021) and the Current Advisory Agreement (which has been in effect since July 1, 2021), our Adviser is compensated in the form of a base management fee and, each as applicable, an incentive fee, a capital gains fee, and a termination fee. Our Adviser does not charge acquisition or disposition fees when we acquire or dispose of properties, as is common in other externally-managed REITs. Each of the base management, incentive, capital gains, and termination fees is described below. Base Management Fee Pursuant to the Prior Advisory Agreement, a base management fee was paid quarterly and was calculated at an annual rate of 0.50 % ( 0.125 % per quarter) of the prior calendar quarter’s “Gross Tangible Real Estate,” defined as the gross cost of tangible real estate owned by us (including land and land improvements, permanent plantings, irrigation and drainage systems, farm-related facilities, and other tangible site improvements), prior to any accumulated depreciation, and as shown on our balance sheet or the notes thereto for the applicable quarter. Pursuant to the Current Advisory Agreement, a base management fee is paid quarterly and is calculated at an annual rate of 0.60 % ( 0.15 % per quarter) of the prior calendar quarter’s Gross Tangible Real Estate. Incentive Fee Pursuant to each of the Advisory Agreements, an incentive fee is calculated and payable quarterly in arrears if the Pre-Incentive Fee FFO for a particular quarter exceeded a hurdle rate of 1.75 % ( 7.0 % annualized) of the prior calendar quarter’s Total Adjusted Common Equity. For purposes of this calculation, Pre-Incentive Fee FFO is defined in each of the Advisory Agreements as FFO (also as defined in each of the Advisory Agreements) accrued by the Company during the current calendar quarter (prior to any incentive fee calculation for the current calendar quarter), less any dividends declared on preferred stock securities that were not treated as a liability for GAAP purposes. In addition, Total Adjusted Common Equity is defined as common stockholders’ equity plus non-controlling common interests in the Operating Partnership, if any (each as reported on our balance sheet), adjusted to exclude unrealized gains and losses and certain other one-time events and non-cash items. Our Adviser receives: (i) no Incentive Fee in any calendar quarter in which the Pre-Incentive Fee FFO does not exceed the hurdle rate; (ii) 100 % of the Pre-Incentive Fee FFO with respect to that portion of such Pre-Incentive Fee FFO, if any, that exceeds the hurdle rate but was less than 2.1875 % in any calendar quarter ( 8.75 % annualized); and (iii) 20 % of the amount of the Pre-Incentive Fee FFO, if any, that exceeds 2.1875 % in any calendar quarter ( 8.75 % annualized). Capital Gains Fee Pursuant to each of the Advisory Agreements, a capital gains-based incentive fee is calculated and payable in arrears at the end of each fiscal year (or upon termination of the agreement with our Adviser). The capital gains fee shall equal: (i) 15 % of the cumulative aggregate realized capital gains minus the cumulative aggregate realized capital losses, minus (ii) any aggregate capital gains fees paid in prior periods. For purposes of this calculation, realized capital gains and losses will be calculated as (x) the sales price of the property, minus (y) any costs to sell the property and the then-current gross value of the property (which includes the property’s original acquisition price plus any subsequent, non-reimbursed capital improvements). At the end of each fiscal year, if this figure is negative, no capital gains fee shall be paid. Termination Fee Pursuant to each of the Advisory Agreements, in the event of our termination of the agreement with our Adviser for any reason (with 120 days’ prior written notice and the vote of at least two-thirds of our independent directors), a termination fee would be payable to the Adviser equal to three times the sum of the average annual base management fee and incentive fee earned by the Adviser during the 24-month period prior to such termination. Administration Agreement Pursuant to the Administration Agreement, we pay for our allocable portion of the Administrator’s expenses incurred while performing its obligations to us, including, but not limited to, rent and the salaries and benefits expenses of our Administrator’s 85 Table of Content employees, including our chief financial officer, treasurer, chief compliance officer, general counsel and secretary (who also serves as our Administrator’s president, general counsel, and secretary), and their respective staffs. As approved by our Board of Directors, our allocable portion of the Administrator’s expenses is generally derived by multiplying our Administrator’s total expenses by the approximate percentage of time the Administrator’s employees perform services for us in relation to their time spent performing services for all companies serviced by our Administrator under similar contractual agreements. Gladstone Securities We have entered into an agreement with Gladstone Securities, LLC (“Gladstone Securities”), for it to act as our non-exclusive agent to assist us with arranging financing for our properties (the “Financing Arrangement Agreement”). Gladstone Securities is a privately-held broker-dealer and a member of the Financial Industry Regulatory Authority and the Securities Investor Protection Corporation. Gladstone Securities is an affiliate of ours, as its parent company is owned and controlled by Mr. Gladstone, who also serves on the board of managers of Gladstone Securities. In addition, Michael LiCalsi, our General Counsel and Secretary, serves in several capacities for Gladstone Securities, including as chief legal officer, secretary, a member of its board of managers, and a managing principal. Financing Arrangement Agreement We pay Gladstone Securities a financing fee in connection with the services it provides to us for securing financing on our properties. Depending on the size of the financing obtained, the maximum amount of the financing fee, which will be payable upon closing of the respective financing, will range from 0.5 % to 1.0 % of the amount of financing obtained. The amount of the financing fee may be reduced or eliminated as determined by us and Gladstone Securities after taking into consideration various factors, including, but not limited to, the involvement of any unrelated third-party brokers and general market conditions. We did no t pay any financing fees to Gladstone Securities during the year ended December 31, 2023. During the years ended December 31, 2022, and 2021, we paid total financing fees to Gladstone Securities of approximately $ 154,000 and $ 166,000 , respectively. Through December 31, 2023, the total amount of financing fees paid to Gladstone Securities represented approximately 0.14 % of the total financings secured since the Financing Arrangement Agreement has been in place. Dealer-Manager Agreements We have entered into dealer-manager agreements with Gladstone Securities (collectively, the “Dealer-Manager Agreements”), pursuant to which Gladstone Securities served or serves as our exclusive dealer-manager in connection with the offering of our Series C Preferred Stock and Series E Preferred Stock (each as defined in Note 8, “ Equity—Equity Issuances ”). Pursuant to the Dealer-Manager Agreements, Gladstone Securities provided or provides certain sales, promotional, and marketing services to us in connection with the offering of the Series C Preferred Stock and Series E Preferred Stock, and we generally paid or pay Gladstone Securities for the following: • With regard to the Series C Preferred Stock: i selling commissions of up to 6.0 % of the gross proceeds from sales in the offering (the “Series C Selling Commissions”), and ii a dealer-manager fee of 3.0 % of the gross proceeds from sales in the offering (the “Series C Dealer-Manager Fee”). • With regard to the Series E Preferred Stock: i selling commissions of up to 7.0 % of the gross proceeds from sales in the offering (the “Series E Selling Commissions,” and together with the Series C Selling Commissions, the “Selling Commissions”), and ii a dealer-manager fee of 3.0 % of the gross proceeds from sales in the offering (the “Series E Dealer-Manager Fee,” and together with the Series C Dealer-Manager Fee, the “Dealer-Manager Fees”). No Selling Commissions or Dealer-Manager Fees shall be paid with respect to shares of the Series C Preferred Stock sold pursuant to our dividend reinvestment plan (the “DRIP”) for the Series C Preferred Stock. Gladstone Securities may, in its sole discretion, remit all or a portion of the Selling Commissions and also reallow all or a portion of the Dealer-Manager Fees to participating broker-dealers and wholesalers in support of the offerings. The terms of each of the Dealer-Manager Agreements were approved by our Board of Directors, including all of our independent directors. The following tables summarizes the total Selling Commissions and Dealer-Manager Fees paid to Gladstone Securities during the years ended December 31, 2023, 2022, and 2021 (dollars in thousands): 86 Table of Content For the Years Ended December 31, 2023 2022 2021 Series C Preferred Stock $ — $ 13,471 $ 4,961 Series E Preferred Stock 583 — — Total Selling Commissions and Dealer-Manager Fees $ 583 $ 13,471 $ 4,961 Selling Commissions and Dealer-Manager Fees paid to Gladstone Securities are netted against the gross proceeds received from sales of the respective securities and are included within Additional paid-in capital on the accompanying Consolidated Balance Sheets. Related Party Fees The following table summarizes related-party fees paid or accrued for and reflected in our accompanying consolidated financial statements (dollars in thousands): For the Years Ended December 31, 2023 2022 2021 Base management fee (1)(2) $ 8,603 $ 8,307 $ 6,329 Incentive fee (1)(2) 1,771 3,225 3,901 Total fees to our Adviser $ 10,374 $ 11,532 $ 10,230 Administration fee (1)(2) $ 2,255 $ 2,005 $ 1,526 Selling Commissions and Dealer-Manager Fees (1)(3) $ 583 $ 13,471 $ 4,961 Financing fees (1)(4) — 154 166 Total fees to Gladstone Securities $ 583 $ 13,625 $ 5,127 (1) Pursuant to the agreements with the respective related-party entities, as discussed above. (2) Reflected as a line item on our accompanying Consolidated Statements of Operations and Comprehensive Income. (3) Included within Additional paid-in capital on the accompanying Consolidated Balance Sheets. (4) Included within Notes and bonds payable, net on the Consolidated Balance Sheets and amortized into Interest expense on the Consolidated Statements of Operations and Comprehensive Income. Related-Party Fees Due Amounts due to related parties on our accompanying Consolidated Balance Sheets as of December 31, 2023 and 2022 were as follows (dollars in thousands): December 31, 2023 December 31, 2022 Base management fee $ 2,156 $ 2,141 Incentive fee 982 1,589 Other, net (1) 49 80 Total due to Adviser 3,187 3,810 Administration fee 546 536 Cumulative accrued but unpaid portions of prior Administration Fees (2) 141 — Total due to Administrator 687 536 Total due to Gladstone Securities (3) — 24 Total due to related parties (4) $ 3,874 $ 4,370 (1) Other amounts due to or from our Adviser primarily relate to miscellaneous general and administrative expenses either paid by our Adviser on our behalf or by us on our Adviser’s behalf. (2) Represents the cumulative accrued but unpaid portion of prior Administration fees that are scheduled to be paid during the three months ending September 30 of each year, which is the quarter following our Administrator’s fiscal year end. (3) Represents certain costs related to sales of preferred stock paid by Gladstone Securities on our behalf. (4) Reflected as a line item on our accompanying Consolidated Balance Sheets. NOTE 7. COMMITMENTS AND CONTINGENCIES 87 Table of Content Operating Obligations In connection with the execution of certain lease agreements, we have committed to provide capital improvements on certain of our farms. Below is a summary of certain of those projects for which we have incurred or accrued costs as of December 31, 2023 (dollars in thousands): Farm Locations Farm Acreage Total Commitment Obligated Completion Date (1) Amount Expended or Accrued as of December 31, 2023 Columbia, OR 157 1,800 (2) Q3 2024 1,146 St. Lucie, FL 549 230 Q3 2025 185 Atkinson, GA 175 175 Q3 2025 30 Ventura, CA 402 1,000 (2) Q4 2025 448 Napa, CA 270 1,635 (2) Q4 2029 1,158 Wicomico & Caroline, MD, and Sussex, DE 833 115 Q3 2030 49 Franklin & Grant, WA, & Umatilla, OR 1,126 2,169 (2) Q4 2032 1,997 (1) Our obligation to provide capital to fund these improvements does not extend beyond these respective dates. (2) Pursuant to contractual agreements, we will earn additional rent on the cost of these capital improvements as the funds are disbursed by us. Ground Lease Obligations In connection with certain farms acquired through a leasehold interest, we assumed certain ground lease arrangements under which we are the lessee. These operating ground leases have lease expiration dates ranging from February 2025 through December 2041, and none of these leases contain any extension, renewal, or termination options. At lease commencement, the net present value of the minimum lease payments was determined by discounting the respective future minimum lease payments using a discount rate equivalent to our fully-collateralized borrowing rate ranging from 4.22 % to 8.72 %. As of December 31, 2023 and 2022, we recorded the following as a result of these operating ground leases (dollars in thousands, except for footnotes): December 31, 2023 December 31, 2022 Operating lease right-of-use assets (1) $ 574 $ 623 Operating lease liabilities (2) $ 568 $ 617 Weighted-average remaining lease term (years) 15.0 15.3 Weighted-average incremental borrowing rate 8.12 % 7.93 % (1) Operating lease right-of-use assets are shown net of prepaid lease payments of approximately $ 6,000 for each of the years ended December 31, 2023 and 2022 and are included within Other assets , net on the accompanying Consolidated Balance Sheets. (2) Included within Other liabilities , net on the accompanying Consolidated Balance Sheets. Future minimum lease payments due under the remaining non-cancelable terms of these leases as of December 31, 2023, are as follows (dollars in thousands): Period Future Lease Payments (1) For the fiscal years ending December 31: 2024 $ 92 2025 62 2026 62 2027 62 2028 62 Thereafter 631 Total undiscounted lease payments 971 Less: imputed interest ( 403 ) Present value of lease payments $ 568 (1) Certain annual lease payments are set at the beginning of each year to then-current market rates (as determined by the lessor). The amounts shown above represent estimated amounts based on the lease rates currently in place. 88 Table of Content As a result of these ground leases, we recorded lease expense (included within Property operating expenses on the accompanying Consolidated Statement of Operations and Comprehensive Income) of approximately $ 103,000 , $ 92,000 , and $ 81,000 during the years ended December 31, 2023, 2022, and 2021, respectively. Litigation In the ordinary course of business incidental to our business, we may be involved in various legal proceedings from time to time which we may not consider material. We are not currently subject to any known material litigation known or, to our knowledge, threatened litigation. NOTE 8. EQUITY Amendment to Articles of Incorporation and Operating Partnership Agreement On January 13, 2021, we amended our articles of incorporation (i) setting forth the rights, preferences, and terms of the Series D Term Preferred Stock and (ii) reclassifying and designating 3,600,000 shares of our authorized and unissued shares of common stock as shares of Series D Term Preferred Stock. In connection with the authorization of the Series D Term Preferred Stock, we amended our Operating Partnership agreement to provide for the establishment and issuance of an equal number of 5.00 % Series D Cumulative Term Preferred Units (the “Series D Term Preferred Units”) as are issued shares of the Series D Term Preferred Stock by the Company. Generally, the Series D Term Preferred OP Units have preferences, distribution rights, and other provisions substantially equivalent to those of the Series D Term Preferred Stock. On November 9, 2022, we further amended our articles of incorporation (i) reclassifying and designating 15,551,347 authorized but unissued shares of our Series C Preferred Stock and 1,185,000 authorized but unissued shares of our Series D Term Preferred Stock as shares of common stock, (ii) setting forth the rights, preferences, and terms of the Series E Preferred Stock, and (iii) reclassifying and designating 16,000,000 shares of our authorized and unissued shares of common stock as shares of Series E Term Preferred Stock. In connection with the authorization of the Series E Preferred Stock, we amended our Operating Partnership agreement to provide for the establishment and issuance of an equal number of 5.00 % Series E Cumulative Redeemable Preferred Units (the “Series E Preferred OP Units”) as are issued shares of the Series E Preferred Stock by the Company. Generally, the Series E Preferred OP Units have preferences, distribution rights, and other provisions substantially equivalent to those of the Series E Preferred Stock. Registration Statement On March 6, 2020, we filed a universal registration statement on Form S-3 (File No. 333-236943) with the SEC (the “2020 Registration Statement”). The 2020 Registration Statement, which was declared effective by the SEC on April 1, 2020, permitted us to issue up to an aggregate of $ 1.0 billion in securities, consisting of common stock, preferred stock, warrants, debt securities, depository shares, subscription rights, and units, including through separate, concurrent offerings of two or more of such securities. Under the 2020 Registration Statement, we issued a total of approximately 10,254,072 shares of Series C Preferred Stock for gross proceeds of approximately $ 253.9 million, 2,415,000 shares of Series D Term Preferred Stock for gross proceeds of approximately $ 60.4 million, 77,841 shares of Series E Preferred Stock for gross proceeds of approximately $ 1.9 million, and 14,367,524 shares of common stock (including common stock issued to redeem OP Units) for gross proceeds of approximately $ 280.9 million. On March 28, 2023, we filed a universal registration statement on Form S-3, as amended (File No. 333-270901), with the SEC (the “2023 Registration Statement”) to replace the 2020 Registration Statement. The 2023 Registration Statement, which was declared effective by the SEC on April 13, 2023, permits us to issue up to an aggregate of $ 1.5 billion in securities consisting of common stock, preferred stock, warrants, debt securities, depository shares, subscription rights, and units, including through separate, concurrent offerings of two or more securities. Through December 31, 2023, we have issued a total of 159,600 shares of Series E Preferred Stock for gross proceeds of approximately $ 4.0 million and 124,460 shares of common stock for gross proceeds of approximately $ 2.2 million under the 2023 Registration Statement. See Note 11, “ Subsequent Events ,” for equity issuances completed subsequent to December 31, 2023. Equity Issuances Series C Preferred Stock 89 Table of Content 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 newly-designated 6.00 % Series C Cumulative Redeemable Preferred Stock, par value $ 0.001 per share (the “Series C Preferred Stock”). The Series C Offering permitted us to sell up to 20,000,000 shares (the “Primary Series C Offering”) of our Series C Preferred Stock on a “reasonable best efforts” basis through Gladstone Securities at an offering price of $ 25.00 per share and up to 6,000,000 shares of our Series C Preferred Stock pursuant to the DRIP at a price of $ 22.75 per share. 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 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 are sold. In conjunction with the amendment of the Series C Offering, 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. The Primary Series C Offering terminated on December 31, 2022, with substantially all of the allotted 10,200,000 shares being sold. In addition, the Series C Preferred Stock DRIP was terminated effective March 22, 2023. 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. See Note 6, “ Related-Party Transactions—Gladstone Securities—Dealer-Manager Agreements ,” for a discussion of the commissions and fees paid to Gladstone Securities in connection with the Series C Offering. The following table provides information on sales of the Series C Preferred Stock that occurred during the years ended December 31, 2022, and 2021 (dollars in thousands, except per-share amounts): Years Ended December 31, 2022 2021 Number of shares sold (1) 6,701,987 2,407,027 Weighted-average offering price per share $ 24.76 $ 24.81 Gross proceeds $ 165,941 $ 59,720 Net proceeds (2) $ 152,470 $ 54,760 (1) Excludes shares issued pursuant to the DRIP. During the years ended December 31, 2023, 2022, and 2021, we issued approximately 14,069 shares, 34,628 shares, and 7,791 shares, respectively, of the Series C Preferred Stock pursuant to the DRIP. (2) Net of Series C Selling Commissions, Series C Dealer-Manager Fees, and underwriting discounts. In addition, during the years ended December 31, 2023, 2022, and 2021, 48,913 shares, 38,595 shares, and 9,920 shares, respectively, of Series C Preferred Stock were tendered for optional redemption, which we satisfied with aggregate cash payments of approximately $ 1.2 million, $ 901,000 , and $ 248,000 , respectively. During the year ended December 31, 2023, we listed the Series C Preferred Stock on Nasdaq under the ticker symbol “LANDP.” Trading of the Series C Preferred Stock on Nasdaq commenced on June 8, 2023. Series E Preferred Stock On November 9, 2022, we filed a prospectus supplement with the SEC for a continuous public offering (the “Series E Offering”) of up to 8,000,000 shares of our newly-designated 5.00 % Series E Cumulative Redeemable Preferred Stock, par value $ 0.001 per share (the “Series E Preferred Stock”), on a “reasonable best efforts” basis through Gladstone Securities at an offering price of $ 25.00 per share. See Note 6, “Related-Party Transactions—Gladstone Securities—Dealer-Manager Agreements,” for a discussion of the commissions and fees to be paid to Gladstone Securities in connection with the Series E Offering. No shares of the Series E Preferred Stock had been sold during the year ended December 31, 2022. The following table provides information on sales of our Series E Preferred Stock during the year ended December 31, 2023 (dollars in thousands, except per-share amounts): Year Ended December 31, 2023 Number of shares sold 237,441 Weighted-average offering price per share $ 24.96 Gross proceeds $ 5,925 Net proceeds (1) $ 5,342 (1) Net of Selling Commissions, Dealer-Manager Fees, and underwriting discounts. 90 Table of Content Refer to Note 11, “Subsequent Events—Equity Activity—Series E Preferred Stock,” for sales of the Series E Preferred Stock completed subsequent to December 31, 2023. In addition, during the year ended December 31, 2023, 1,600 shares of Series E Preferred Stock were tendered for optional redemption, which we satisfied with an aggregate cash payment of approximately $ 36,000 . The Series E Offering will terminate on the date (the “Series E Termination Date”) that is the earlier of (i) December 31, 2025 (unless terminated or extended by its 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 12 months 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 equity distribution agreements (commonly referred to as “at-the-market 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 up to $ 260.0 million (the “Prior 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 “New ATM Program,” and collectively with the Prior ATM Program, the “ATM Program”). The following table provides information on shares of common stock sold by the Sales Agents under the ATM Program during the years ended December 31, 2023, 2022, and 2021 (dollars in thousands, except per-share amounts): Years Ended December 31, 2023 2022 2021 Number of shares sold 788,045 840,384 7,990,994 Weighted-average offering price per share $ 19.34 $ 26.47 $ 21.70 Gross proceeds $ 15,240 $ 22,242 $ 173,428 Net proceeds (1) $ 15,087 $ 21,993 $ 171,693 (1) Net of underwriting commissions. Non-Controlling Interests in Operating Partnership We consolidate our Operating Partnership, which is a majority-owned partnership. As of December 31, 2023, 2022, and 2021, we owned approximately 100.0 %, 100.0 %, and 99.4 %, respectively, of the outstanding OP Units. As of each of December 31, 2023 and 2022, there were no OP Units held by non-controlling OP Unitholders. As of December 31, 2021, there were 204,778 OP Units held by non-controlling OP Unitholders. On or after 12 months after becoming a holder of OP Units, each non-controlling OP Unitholder has the right, subject to the terms and conditions set forth in the partnership agreement of the Operating Partnership, to require the Operating Partnership to redeem all or a portion of such units in exchange for cash or, at the Company’s option, shares of our common stock on a one -for-one basis. The cash redemption per OP Unit would be based on the market price of our common stock at the time of redemption. A limited partner will not be entitled to exercise redemption rights if the delivery of common stock to the redeeming limited partner would breach restrictions on the ownership of common stock imposed under our charter and other limitations thereof. Regardless of the rights described above, the Operating Partnership will not have an obligation to issue cash to a unitholder upon a redemption request if the Company elects to redeem the OP Units for shares of its common stock. When a non-controlling unitholder redeems OP Units and the Company elects to satisfy that redemption through the issuance of common stock, non-controlling interest in the Operating Partnership is reduced and stockholders’ equity is increased. During the year ended December 31, 2021, we issued 204,778 OP Units to noncontrolling OP Unitholders representing an aggregate value of approximately $ 4.0 million, or $ 19.42 per OP Unit. During the year ended December 31, 2022, we redeemed those 204,778 OP Units with a cash payment of approximately $ 7.7 million or $ 37.45 per OP Unit. The Operating Partnership is required to make distributions on each OP Unit in the same amount as those paid on each share of the Company’s common stock, with the distributions on the OP Units held by the Company being utilized to make distributions to the Company’s common stockholders. 91 Table of Content Distributions The per-share distributions to preferred and common stockholders declared by our Board of Directors during the years ended December 31, 2023, 2022, and 2021 are reflected in the table below. For the Years Ended December 31, Issuance 2023 2022 2021 Series A Term Preferred Stock (1)(2) $ — $ — $ 0.181510 Series B Preferred Stock 1.500000 1.500000 1.500000 Series C Preferred Stock 1.500000 1.500000 1.500000 Series D Term Preferred Stock (1)(3) 1.250004 1.250004 1.184031 Series E Preferred Stock 1.250004 — — Common Stock (4) 0.553500 0.546300 0.540750 (1) Dividends are treated similar to interest expense on the accompanying Consolidated Statements of Operations and Comprehensive Income. (2) The Series A Term Preferred Stock was redeemed in full on February 12, 2021. (3) The Series D Term Preferred Stock was issued on January 19, 2021. (4) The same amounts were paid as distributions on each OP Unit held by non-controlling OP Unitholders. For federal income tax characterization purposes, distributions paid to stockholders may be characterized as ordinary income, capital gains, return of capital, or a combination thereof. The characterization of distributions on our preferred and common stock during each of the years ended December 31, 2023, 2022, and 2021 is reflected in the following table: Ordinary Income Long-term Capital Gain Return of Capital For the Year Ended December 31, 2023 Series B Preferred Stock 30.782342 % 22.611772 % 46.605886 % Series C Preferred Stock 30.782342 % 22.611772 % 46.605886 % Series D Term Preferred Stock 30.782342 % 22.611772 % 46.605886 % Series E Preferred Stock 30.782342 % 22.611772 % 46.605886 % Common Stock — % — % 100.000000 % For the Year Ended December 31, 2022 Series B Preferred Stock 34.205000 % — % 65.795000 % Series C Preferred Stock 34.205000 % — % 65.795000 % Series D Term Preferred Stock 34.205000 % — % 65.795000 % Common Stock — % — % 100.000000 % For the Year Ended December 31, 2021 Series A Term Preferred Stock 54.534493 % — % 45.465507 % Series B Preferred Stock 54.534493 % — % 45.465507 % Series C Preferred Stock 54.534493 % — % 45.465507 % Series D Term Preferred Stock 54.534493 % — % 45.465507 % Common Stock — % — % 100.000000 % NOTE 9. LEASE REVENUES The following table sets forth the components of our lease revenue for the years ended December 31, 2023, 2022, and 2021 (dollars in thousands, except for footnotes): For the Years Ended December 31, 2023 2022 2021 Fixed lease payments (1) $ 83,695 $ 81,423 $ 69,998 Variable lease payments (2) 6,624 7,813 5,320 Lease revenue, net (3) $ 90,319 $ 89,236 $ 75,318 92 Table of Content (1) Fixed lease payments include contractual rents under lease agreements with tenants recognized on a straight-line basis over the respective lease terms and includes the amortization of above-market lease values and lease incentives and the accretion of below-market lease values and other deferred revenue. (2) Variable lease payments include participation rents, which are generally based on a percentage of the gross crop revenues earned on the farm, and reimbursements of certain property operating expenses by tenants. Participation rents are generally recognized when all contingencies have been resolved and when actual results become known or estimable, enabling us to estimate and/or measure our share of such gross revenues. During the years ended December 31, 2023, 2022, and 2021, we recorded participation rents of approximately $ 5.9 million, $ 7.7 million, and $ 5.2 million, respectively, and reimbursements of certain property operating expenses by tenants of approximately $ 688,000 , $ 110,000 , and $ 101,000 , respectively. In addition, during the year ended December 31, 2023, we recorded late fees of approximately $ 46,000 . (3) Reflected as a line item on our accompanying Consolidated Statements of Operations and Comprehensive Income. NOTE 10. EARNINGS PER SHARE OF COMMON STOCK The following table sets forth the computation of basic and diluted earnings per common share for the years ended December 31, 2023, 2022, and 2021, computed using the weighted-average number of common shares outstanding during the respective periods. Earnings figures are presented net of non-controlling interests in the earnings per share calculations. The non-controlling limited partners’ outstanding OP Units (which may be redeemed for shares of common stock) have been excluded from the diluted per-share calculation, as there would be no effect on the amounts since the non-controlling OP Unitholders’ share of earnings would also be added back to net income or loss. For the Years Ended December 31, (Dollars in thousands, except per-share amounts): 2023 2022 2021 Net loss attributable to common stockholders $ ( 9,852 ) $ ( 15,010 ) $ ( 8,763 ) Weighted average shares of common stock outstanding – basic and diluted 35,733,742 34,563,460 30,357,268 Loss per common share – basic and diluted $ ( 0.28 ) $ ( 0.43 ) $ ( 0.29 ) The weighted-average number of OP Units held by non-controlling OP Unitholders was 0 , 61,714 , and 166,067 for the years ended December 31, 2023, 2022, and 2021, respectively. NOTE 11. SUBSEQUENT EVENTS Portfolio Activity—Property Sale On January 11, 2024, we completed the sale of a 3,748 -acre farm in Martin County, Florida, for approximately $ 65.7 million. Including closing costs, we recognized a net gain on the sale of approximately $ 10.4 million. 2024 California Floods 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—Loan Maturities Subsequent to December 31, 2023, we repaid $ 16.2 million in maturing bonds that bore interest at a weighted-average annual rate of 3.15 %. Equity Activity The following table provides information on equity sales that have occurred subsequent to December 31, 2023 (dollars in thousands, except per-share amounts): Type of Issuance Number of Shares Sold Weighted Average Offering Price Per Share Gross Proceeds Net Proceeds (1) Series E Preferred Stock 10,340 $ 25.00 $ 259 $ 233 (1) Net of Selling Commissions and Dealer-Manager Fees or underwriting discounts and commissions (in each case, as applicable). 93 Table of Content Distributions On January 9, 2024, our Board of Directors authorized and we declared the following monthly cash distributions to holders of our preferred and common stock: Issuance Record Date Payment Date Distribution per Share Series B Preferred Stock: January 23, 2024 January 31, 2024 $ 0.125 February 21, 2024 February 29, 2024 0.125 March 21, 2024 March 29, 2024 0.125 Total Series B Preferred Stock Distributions: $ 0.375 Series C Preferred Stock: January 23, 2024 January 31, 2024 $ 0.125 February 21, 2024 February 29, 2024 0.125 March 21, 2024 March 29, 2024 0.125 Total Series C Preferred Stock Distributions: $ 0.375 Series D Term Preferred Stock: January 23, 2024 January 31, 2024 $ 0.104167 February 21, 2024 February 29, 2024 0.104167 March 21, 2024 March 29, 2024 0.104167 Total Series D Term Preferred Stock Distributions: $ 0.312501 Series E Preferred Stock: January 25, 2024 February 5, 2024 $ 0.104167 February 27, 2024 March 5, 2024 0.104167 March 26, 2024 April 5, 2024 0.104167 Total Series E Preferred Stock Distributions: $ 0.312501 Common Stock (1) : January 23, 2024 January 31, 2024 $ 0.0465 February 21, 2024 February 29, 2024 0.0465 March 21, 2024 March 29, 2024 0.0465 Total Common Stock Distributions: $ 0.1395 (1) The same amounts paid to common stockholders will be paid as distributions on each OP Unit held by non-controlling OP Unitholders as of the above record dates. 94 Table of Content GLADSTONE LAND CORPORATION SCHEDULE III—REAL ESTATE AND ACCUMULATED DEPRECIATION December 31, 2023 (In Thousands) Initial Cost Subsequent Capitalized Additions Total Cost Location and Description of Property Date Acquired Encumbrances Land and Land Improvements Buildings & Improvements Permanent Plantings Land Improvements Buildings & Improvements Permanent Plantings Land and Land Improvements Buildings & Improvements Permanent Plantings Total (1) Accumulated Depreciation (2) Santa Cruz County, California: Land & Improvements 6/16/1997 $ 7,219 $ 4,350 $ — $ — $ — $ 622 $ — $ 4,350 $ 622 $ — $ 4,972 $ ( 429 ) Ventura County, California: Land, Buildings & Improvements 9/15/1998 28,133 9,895 5,256 — — 365 — 9,895 5,621 — 15,516 ( 4,983 ) Santa Cruz County, California: Land & Improvements 1/3/2011 6,295 8,328 — — 443 545 — 8,771 545 — 9,316 ( 259 ) Hillsborough County, Florida: Land, Buildings & Improvements 9/12/2012 — 2,199 1,657 — 14 1,796 — 2,213 3,453 — 5,666 ( 1,820 ) Monterey County, California: Land, Buildings & Improvements 10/21/2013 4,512 7,187 164 — 180 3,064 — 7,367 3,228 — 10,595 ( 1,110 ) Cochise County, Arizona: Land, Buildings & Improvements 12/27/2013 1,263 6,168 572 — 8 5,697 — 6,176 6,269 — 12,445 ( 2,098 ) Santa Cruz County, California: Land, Building & Improvements 6/13/2014 1,224 5,576 207 — — 27 — 5,576 234 — 5,810 ( 208 ) Ventura County, California: Land, Buildings & Improvements 7/23/2014 890 6,219 505 — — 85 — 6,219 590 — 6,809 ( 343 ) Kern County, California: Land & Improvements 7/25/2014 1,047 5,841 67 — — 974 — 5,841 1,041 — 6,882 ( 555 ) Manatee County, Florida: Land, Buildings & Improvements 9/29/2014 — 8,466 5,426 — — 3,734 — 8,466 9,160 — 17,626 ( 4,408 ) Ventura County, California: Land, Buildings & Improvements 10/29/2014 14,332 23,673 350 — — 2,303 — 23,673 2,653 — 26,326 ( 1,049 ) Ventura County, California: Land & Improvements 11/4/2014 — 5,860 92 — — 2 — 5,860 94 — 5,954 ( 86 ) Monterey County, California: Land, Buildings & Improvements 1/5/2015 10,673 15,852 582 — ( 156 ) 1,488 — 15,696 2,070 — 17,766 ( 1,054 ) Manatee County, Florida: Land, Buildings & Improvements 3/10/2015 — 2,403 1,871 — — 369 — 2,403 2,240 — 4,643 ( 1,618 ) Hendry County, Florida: Land, Buildings & Improvements 6/25/2015 10,356 14,411 789 — — — — 14,411 789 — 15,200 ( 678 ) Rock County, Nebraska: Land, Buildings & Improvements 8/20/2015 — 4,862 613 — — 32 — 4,862 645 — 5,507 ( 515 ) Holt County, Nebraska: Land, Buildings & Improvements 8/20/2015 — 4,690 786 — — 76 — 4,690 862 — 5,552 ( 509 ) Kern County, California: Land & Improvements 9/3/2015 14,863 18,893 497 — 688 6,607 1,418 19,581 7,104 1,418 28,103 ( 3,293 ) Cochise County, Arizona: Land, Buildings & Improvements 12/23/2015 — 4,234 1,502 — 142 3,779 — 4,376 5,281 — 9,657 ( 1,702 ) Saguache County, Colorado: Land, Buildings & Improvements 3/3/2016 880 16,756 8,348 — — 1,486 — 16,756 9,834 — 26,590 ( 6,599 ) Fresno County, California: Land, Improvements & Permanent plantings 4/5/2016 7,235 3,623 1,228 11,455 28 2,540 ( 25 ) 3,651 3,768 11,430 18,849 ( 4,237 ) Saint Lucie County, Florida: Land, Buildings & Improvements 7/1/2016 — 4,165 971 — — — — 4,165 971 — 5,136 ( 728 ) Baca County, Colorado: Land & Buildings 9/1/2016 3,185 6,167 214 — — — — 6,167 214 — 6,381 ( 104 ) Merced County, Colorado: Land & Improvements 9/14/2016 7,007 12,845 504 — — 190 — 12,845 694 — 13,539 ( 317 ) Stanislaus County, Colorado: Land & Improvements 9/14/2016 7,591 14,114 45 — 59 463 — 14,173 508 — 14,681 ( 179 ) Fresno County, California: Land, Improvements & Permanent plantings 10/13/2016 3,159 2,937 139 3,452 — — — 2,937 139 3,452 6,528 ( 1,317 ) Baca County, Colorado: Land & Improvements 12/28/2016 6,157 11,430 278 — — — — 11,430 278 — 11,708 ( 278 ) Martin County, Florida: Land & Improvements 1/12/2017 16,200 52,443 1,627 — — — — 52,443 1,627 — 54,070 ( 445 ) Yuma County, Arizona Land & Improvements 6/1/2017 11,040 12,390 12,191 — 151 16,646 — 12,541 28,837 — 41,378 ( 7,952 ) 95 Table of Content Fresno County, California: Land, Improvements & Permanent plantings 7/17/2017 6,160 5,048 777 7,818 3,614 2,209 ( 1,124 ) 8,662 2,986 6,694 18,342 ( 2,205 ) Santa Barbara County, California: Land, Improvements & Permanent plantings 8/9/2017 3,225 4,559 577 397 ( 50 ) 377 1,484 4,509 954 1,881 7,344 ( 771 ) Okeechobee County, Florida: Land & Improvements 8/9/2017 4,551 9,111 953 — 985 1,378 — 10,096 2,331 — 12,427 ( 1,073 ) Walla Walla County, Washington: Land, Improvements & Permanent plantings 9/8/2017 4,230 5,286 401 3,739 ( 26 ) — 68 5,260 401 3,807 9,468 ( 4,036 ) Baca County, Colorado Land & Improvements 10/2/2017 — 924 — — — — — 924 — — 924 — Fresno County, California: Land, Improvements & Permanent plantings 12/15/2017 2,807 2,016 324 3,626 ( 1 ) — ( 3 ) 2,015 324 3,623 5,962 ( 2,169 ) Kern County, California: Land & Improvements 1/31/2018 1,928 2,733 249 — ( 4 ) 1,529 — 2,729 1,778 — 4,507 ( 431 ) Collier & Hendry, Florida Land & Improvements 7/12/2018 19,951 36,223 344 — 1 — — 36,224 344 — 36,568 ( 269 ) Kings County, California: Land, Improvements & Permanent plantings 9/13/2018 3,898 3,264 284 3,349 5 — 5 3,269 284 3,354 6,907 ( 760 ) Madera, California: Land, Improvements & Permanent plantings 11/1/2018 12,445 12,305 1,718 9,015 13 704 ( 563 ) 12,318 2,422 8,452 23,192 ( 1,602 ) Hartley County, Texas: Land & Improvements 11/20/2018 — 7,320 1,054 — 3 96 — 7,323 1,150 — 8,473 ( 373 ) Merced County, California: Land 12/6/2018 4,343 8,210 — — 5 — — 8,215 — — 8,215 — Madera County, California: Land & Improvements 4/9/2019 15,417 8,074 2,696 17,916 — 1,571 — 8,074 4,267 17,916 30,257 ( 4,554 ) Allegran and Van Buren County, Michigan: Land & Improvements 6/4/2019 2,757 1,634 800 2,694 — — — 1,634 800 2,694 5,128 ( 841 ) Yolo County, California: Land & Improvements 6/13/2019 4,632 5,939 665 2,648 — — — 5,939 665 2,648 9,252 ( 632 ) Monterey County, California: Land & Improvements 7/11/2019 4,850 8,629 254 — 2,184 1,973 — 10,813 2,227 — 13,040 ( 324 ) Martin County, Florida: Land & Improvements 7/22/2019 34,738 51,691 6,595 — ( 2,629 ) 1 — 49,062 6,596 — 55,658 ( 2,244 ) Fresno County, California: Land & Improvements 8/16/2019 37,156 24,772 13,410 31,420 ( 3 ) 1,332 10 24,769 14,742 31,430 70,941 ( 7,865 ) Ventura County, California: Land & Improvements 8/28/2019 11,426 20,602 397 — 306 1,690 — 20,908 2,087 — 22,995 ( 559 ) Napa County, California: Land & Improvements 8/29/2019 16,478 27,509 1,646 2,923 3,235 1,263 802 30,744 2,909 3,725 37,378 ( 1,592 ) Hayes County, Nebraska: Land & Improvements 10/7/2019 2,907 4,750 264 — 16 1 — 4,766 265 — 5,031 ( 187 ) Hayes & Hitchcock County, Nebraska: Land & Improvements 10/7/2019 5,478 9,275 431 — 20 1 — 9,295 432 — 9,727 ( 338 ) Phillips County, Colorado: Land & Improvements 1/15/2020 4,377 6,875 660 — — 7 — 6,875 667 — 7,542 ( 263 ) Kern County, California: Land, Improvements & Permanent plantings 6/24/2020 7,846 12,521 1,325 370 — 121 — 12,521 1,446 370 14,337 ( 263 ) Wicomico & Caroline County, Maryland, and Sussex County, Delaware: Land & Improvements 8/31/2020 4,147 6,703 626 — — 460 — 6,703 1,086 — 7,789 ( 261 ) Fresno County, California: Land & Improvements 9/3/2020 17,324 15,071 4,680 11,921 305 548 — 15,376 5,228 11,921 32,525 ( 2,700 ) Fresno County, California: Land, Improvements & Permanent plantings 10/1/2020 17,369 7,128 9,206 15,242 8 441 16 7,136 9,647 15,258 32,041 ( 3,473 ) Ventura County, California: Land & Improvements 12/15/2020 12,450 19,215 1,264 — 48 23 — 19,263 1,287 — 20,550 ( 347 ) Tulare County, California: Land, Improvements & Permanent plantings 12/17/2020 9,292 26,952 6,420 28,152 36 9 37 26,988 6,429 28,189 61,606 ( 7,968 ) Whatcom County, Washington: Land, Improvements, & Permanent plantings 12/24/2020 15,903 8,219 7,228 16,281 18 187 35 8,237 7,415 16,316 31,968 ( 4,179 ) San Joaquin County, California: Land, Improvements, & Permanent plantings 12/24/2020 18,775 12,265 2,142 19,924 6 ( 996 ) 10 12,271 1,146 19,934 33,351 ( 5,969 ) San Joaquin County, California: Land, Improvements, & Permanent plantings 3/11/2021 2,177 — 4,306 — — — — — 4,306 — 4,306 ( 1,038 ) Tehama County, California Land & Improvements & Horticulture 4/5/2021 21,854 27,747 2,512 6,600 103 34 — 27,850 2,546 6,600 36,996 ( 2,037 ) 96 Table of Content Kern County, California Land & Improvements & Horticulture 6/4/2021 8,612 21,810 2,514 25,984 65 368 — 21,875 2,882 25,984 50,741 ( 6,550 ) Van Buren County, Michigan: Land & Improvements & Horticulture 6/9/2021 7,603 3,677 4,391 5,233 14 44 70 3,691 4,435 5,303 13,429 ( 967 ) Kern County, California Land & Improvements & Horticulture 8/11/2021 14,040 5,690 8,156 16,154 11 46 — 5,701 8,202 16,154 30,057 ( 3,829 ) Yamhill County, Oregon Land & Improvements & Horticulture 8/11/2021 6,318 2,854 2,493 6,972 8 28 — 2,862 2,521 6,972 12,355 ( 1,413 ) St. Lucie County, Florida Land & Improvements & Horticulture 8/18/2021 3,061 2,494 601 2,146 99 135 140 2,593 736 2,286 5,615 ( 599 ) Kern County, California Land & Improvements & Horticulture 12/3/2021 13,295 22,363 2,894 62,744 23 67 — 22,386 2,961 62,744 88,091 ( 5,494 ) Charlotte County, FL Land & Improvements & Horticulture 12/16/2021 4,621 7,275 75 — 1,937 647 — 9,212 722 — 9,934 ( 42 ) Glenn, California Land & Improvements 6/16/2022 — 16,184 1,298 5,933 34 600 — 16,218 1,898 5,933 24,049 ( 1,150 ) Franklin & Grant, Washington Land & Improvements & Horticulture 7/21/2022 — 11,437 1,607 15,798 50 196 191 11,487 1,803 15,989 29,279 ( 3,792 ) Umatilla, Oregon Land & Improvements & Horticulture 7/21/2022 — 344 564 2,858 14 132 1,056 358 696 3,914 4,968 ( 234 ) Miscellaneous Investments Various 25,337 39,771 11,689 10,031 263 6,879 2,709 40,035 18,567 12,740 71,342 ( 8,391 ) $ 577,039 $ 832,446 $ 156,971 $ 352,795 $ 12,273 $ 76,991 $ 6,336 $ 844,720 $ 233,961 $ 359,131 $ 1,437,812 $ ( 142,657 ) (1) The aggregate cost for land, buildings, improvements, and permanent plantings for federal income tax purposes is approximately $ 1.5 billion. (2) The Company computes depreciation using the straight-line method over the shorter of the estimated useful life or 50 for buildings, improvements, and permanent plantings, and the shorter of the estimated useful life or 5 to 20 years for equipment and fixtures. The following table reconciles the change in the balance of real estate during the years ended December 31, 2023 and 2022, respectively (dollars in thousands): 2023 2022 Balance, beginning of period $ 1,432,394 $ 1,357,800 Additions: Acquisitions during the period — 59,448 Improvements 10,578 20,030 Deductions: Dispositions during period ( 5,160 ) ( 4,884 ) Balance, end of period (1) $ 1,437,812 $ 1,432,394 (1) Includes approximately $ 54.1 million of real estate held for sale, at cost, as of December 31, 2023. The following table reconciles the change in the balance of accumulated depreciation during the years ended December 31, 2023 and 2022, respectively (dollars in thousands): 2023 2022 Balance, beginning of period $ 106,966 $ 74,002 Additions during period 36,050 34,175 Dispositions during period ( 359 ) ( 1,211 ) Balance, end of period (1) $ 142,657 $ 106,966 (1) Includes approximately $ 445,000 of accumulated depreciation related to real estate held for sale as of December 31, 2023. 97 Table of Content ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None.