GLADSTONE LAND Corp 10-Q

ITEM 1. FINANCIAL STATEMENTS GLADSTONE LAND CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share and per-share data) (Unaudited) March 31, 2025 December 31, 2024 ASSETS Real estate, at cost $ 1,326,588 $ 1,324,632 Less: accumulated depreciation ( 176,046 ) ( 167,782 ) Total real estate, net 1,150,542 1,156,850 Lease intangibles, net 3,440 3,588 Real estate and related assets held for sale, net — 46,314 Cash and cash equivalents 42,917 18,275 Other assets, net 84,837 87,168 TOTAL ASSETS $ 1,281,736 $ 1,312,195 LIABILITIES AND EQUITY LIABILITIES: Borrowings under lines of credit $ 200 $ 3,600 Notes and bonds payable, net 498,631 523,922 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 March 31, 2025, and December 31, 2024 60,032 59,930 Accounts payable and accrued expenses 15,710 18,404 Due to related parties, net 3,349 2,972 Other liabilities, net 13,936 16,185 Total Liabilities 591,858 625,013 Commitments and contingencies (Note 7) EQUITY: Stockholders’ equity: Series B cumulative redeemable preferred stock, $ 0.001 par value, $ 25.00 per share liquidation preference; 6,340,889 shares authorized, 5,840,889 shares issued and outstanding as of March 31, 2025, and December 31, 2024 6 6 Series C cumulative redeemable preferred stock, $ 0.001 par value, $ 25.00 per share liquidation preference; 25,700,791 shares authorized, 9,954,863 shares issued and outstanding as of March 31, 2025, and December 31, 2024 10 10 Series E cumulative redeemable preferred stock, $ 0.001 par value, $ 25.00 per share liquidation preference; 15,997,600 shares authorized, 251,636 shares issued and outstanding as of March 31, 2025; 15,998,400 shares authorized, 252,436 shares issued and outstanding as of December 31, 2024 — — Common stock, $ 0.001 par value; 48,360,720 shares authorized, 36,184,658 shares issued and outstanding as of March 31, 2025; 48,359,920 shares authorized, 36,184,658 shares issued and outstanding as of December 31, 2024 36 36 Additional paid-in capital 854,037 854,059 Distributions in excess of accumulated earnings ( 170,525 ) ( 174,561 ) Accumulated other comprehensive income 6,314 7,632 Total stockholders’ equity 689,878 687,182 Non-controlling interests in Operating Partnership — — Total Equity 689,878 687,182 TOTAL LIABILITIES AND EQUITY $ 1,281,736 $ 1,312,195 The accompanying notes are an integral part of these condensed consolidated financial statements. 3 Table of Contents GLADSTONE LAND CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (In thousands, except share and per-share data) (Unaudited) For the Three Months Ended March 31, 2025 2024 OPERATING REVENUES: Lease revenue, net $ 16,803 $ 19,826 Other operating revenue 1 426 Total operating revenues 16,804 20,252 OPERATING EXPENSES: Depreciation and amortization 8,429 8,789 Property operating expenses 1,128 877 Base management fee 2,058 2,156 Capital gains fee 188 — Administration fee 642 603 General and administrative expenses 682 566 Total operating expenses, net of credits to fees 13,127 12,991 OTHER INCOME (EXPENSE): Other income 1,952 2,428 Interest expense ( 5,177 ) ( 5,555 ) Dividends declared on cumulative term preferred stock ( 755 ) ( 755 ) Gain on dispositions of real estate assets, net 15,410 10,273 Property and casualty recovery, net 137 — Loss from investments in unconsolidated entities ( 136 ) ( 85 ) Total other income, net 11,431 6,306 NET INCOME 15,108 13,567 Net income attributable to non-controlling interests — — NET INCOME ATTRIBUTABLE TO THE COMPANY 15,108 13,567 Dividends declared on cumulative redeemable preferred stock ( 6,002 ) ( 6,118 ) NET INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS $ 9,106 $ 7,449 NET INCOME PER COMMON SHARE: Basic and diluted $ 0.25 $ 0.21 WEIGHTED-AVERAGE SHARES OF COMMON STOCK OUTSTANDING: Basic and diluted 36,184,658 35,838,442 NET INCOME $ 15,108 $ 13,567 Change in fair value related to interest rate hedging instruments ( 1,318 ) 1,008 COMPREHENSIVE INCOME 13,790 14,575 Comprehensive income attributable to non-controlling interests — — COMPREHENSIVE INCOME ATTRIBUTABLE TO THE COMPANY $ 13,790 $ 14,575 The accompanying notes are an integral part of these condensed consolidated financial statements. 4 Table of Contents GLADSTONE LAND CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (In thousands, except share data) (Unaudited) Three Months Ended March 31, 2025 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 Total Stockholders’ Equity Non- Controlling Interests 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, 2024 5,840,889 $ 6 9,954,863 $ 10 252,436 $ — 36,184,658 $ 36 $ 854,059 $ ( 174,561 ) $ 7,632 $ 687,182 $ — $ 687,182 Issuance of Series E Preferred Stock, net — — — — — — — — ( 4 ) — — ( 4 ) — ( 4 ) Redemptions of Series E Preferred Stock, net — — — — ( 800 ) — — — ( 18 ) — — ( 18 ) — ( 18 ) Net income — — — — — — — — — 15,108 — 15,108 — 15,108 Dividends—cumulative redeemable preferred stock — — — — — — — — — ( 6,002 ) — ( 6,002 ) — ( 6,002 ) Distributions—OP Units and common stock — — — — — — — — — ( 5,070 ) — ( 5,070 ) — ( 5,070 ) Comprehensive loss attributable to the Company — — — — — — — — — — ( 1,318 ) ( 1,318 ) — ( 1,318 ) Balance at March 31, 2025 5,840,889 $ 6 9,954,863 $ 10 251,636 $ — 36,184,658 $ 36 $ 854,037 $ ( 170,525 ) $ 6,314 $ 689,878 $ — $ 689,878 Three Months Ended March 31, 2024 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 Total Stockholders’ Equity Non- Controlling Interests 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, 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 Issuance of Series E Preferred Stock, net — — — — 11,340 — — — 249 — — 249 — 249 Net income — — — — — — — — — 13,567 — 13,567 — 13,567 Dividends—cumulative redeemable preferred stock — — — — — — — — — ( 6,118 ) — ( 6,118 ) — ( 6,118 ) Distributions—OP Units and common stock — — — — — — — — — ( 5,000 ) — ( 5,000 ) — ( 5,000 ) Comprehensive income attributable to the Company — — — — — — — — — — 1,008 1,008 — 1,008 Balance at March 31, 2024 5,956,065 $ 6 10,156,509 $ 10 247,181 $ — 35,838,442 $ 36 $ 856,455 $ ( 141,562 ) $ 8,374 $ 723,319 $ — $ 723,319 The accompanying notes are an integral part of these condensed consolidated financial statements 5 Table of Contents GLADSTONE LAND CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited) For the Three Months Ended March 31, 2025 2024 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $ 15,108 $ 13,567 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 8,429 8,789 Amortization of debt issuance costs 365 243 Amortization of deferred rent assets and liabilities, net 3,253 492 Amortization of right-of-use assets from operating leases and operating lease liabilities, net 24 23 Loss from investments in unconsolidated entities 136 85 Bad debt expense 38 12 Gain on dispositions of real estate assets, net ( 15,410 ) ( 10,273 ) Property and casualty recovery, net ( 137 ) — Changes in operating assets and liabilities: Other assets, net ( 1,265 ) ( 3,750 ) Accounts payable and accrued expenses and Due to related parties, net ( 3,597 ) ( 2,904 ) Other liabilities, net ( 2,477 ) ( 2,864 ) Net cash provided by operating activities 4,467 3,420 CASH FLOWS FROM INVESTING ACTIVITIES: Capital expenditures on existing real estate assets ( 1,796 ) ( 1,478 ) Proceeds from dispositions of real estate assets, net 62,012 63,997 Net cash provided by investing activities 60,216 62,519 CASH FLOWS FROM FINANCING ACTIVITIES: Repayments of lines of credit ( 3,400 ) — Repayments of notes and bonds payable ( 25,546 ) ( 22,071 ) Payments of financing fees ( 7 ) ( 11 ) Proceeds from issuance of preferred and common equity — 284 Offering costs 2 ( 40 ) Redemptions of cumulative redeemable preferred stock ( 18 ) — Dividends paid on cumulative redeemable preferred stock ( 6,002 ) ( 6,117 ) Distributions paid on common stock ( 5,070 ) ( 5,000 ) Net cash used in financing activities ( 40,041 ) ( 32,955 ) NET INCREASE IN CASH AND CASH EQUIVALENTS 24,642 32,984 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 18,275 18,571 CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 42,917 $ 51,555 NON-CASH INVESTING AND FINANCING INFORMATION: Real estate additions included in Accounts payable and accrued expenses and Due to related parties, net $ 847 $ 689 Stock offering and OP Unit issuance costs included in Accounts payable and accrued expenses and Due to related parties, net 10 — Financing fees included in Accounts payable and accrued expenses and Due to related parties, net 22 19 The accompanying notes are an integral part of these condensed consolidated financial statements. 6 Table of Contents GLADSTONE LAND CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE 1. BUSINESS AND ORGANIZATION Business and Organization Gladstone Land Corporation (“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, occasionally through lease structures that include a variable rent component based on the gross revenues generated from certain farms in lieu of fixed base rent. From time to time, and on a temporary basis, we may also directly operate certain of our farms via management agreements with third-party operators and/or through a taxable REIT subsidiary (“TRS”). As of March 31, 2025, we owned 150 farms totaling 103,001 acres across 15 states in the U.S. and 55,350 acre-feet of water assets in California. In addition, as of March 31, 2025, two of our properties (comprising four farms) were being directly operated. 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 March 31, 2025, and December 31, 2024, the Company owned 100.0 % of the outstanding OP Units (see Note 8, “ Equity ,” for additional discussion regarding OP Units). Gladstone Land Advisers, Inc. (“Land Advisers”), a Delaware corporation and an indirect wholly-owned 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 TRS of ours. Since we currently indirectly own 100 % of the voting securities of Land Advisers, its financial position and results of operations are consolidated within our financial statements. For the three months ended March 31, 2025, and for the tax year ended December 31, 2024, there was no taxable income or loss from Land Advisers, nor did we have any undistributed REIT taxable income. Subject to certain restrictions and limitations, and pursuant to contractual agreements, our business is managed by Gladstone Management Corporation (the “Adviser”), a Delaware corporation, and administrative services are provided to us by Gladstone Administration, LLC (the “Administrator”), a Delaware limited liability company. Our Adviser and Administrator are both affiliates of ours (see Note 6, “ Related-Party Transactions ,” for additional discussion regarding our Adviser and Administrator). All further references herein to “we,” “us,” “our,” and the “Company” refer, collectively, to Gladstone Land Corporation and its consolidated subsidiaries, except where indicated otherwise. NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Interim Financial Information Our interim financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and pursuant to the requirements for reporting on Form 10-Q in accordance with Article 10 of Regulation S-X. Accordingly, certain disclosures accompanying annual financial statements prepared in accordance with GAAP are omitted. The interim financial statements and accompanying notes should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2024, as filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 19, 2025 (the “Form 10-K”). The results of operations for the three months ended March 31, 2025, are not necessarily indicative of the results that may be expected for other interim periods or for the full fiscal year. Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect our reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and our 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, the results of which form the basis for making certain judgments. Actual results may materially differ from these estimates. 7 Table of Contents Crop Inventory Through certain of our wholly-owned subsidiaries and via a management agreement with a third-party operator, we currently manage a 2,409 -acre farm located in Kern County, California, which includes 2,293 acres of bearing almond and pistachio orchards. Through March 31, 2025, we have incurred approximately $ 2.9 million in growing costs, primarily related to pollination, fertilization, pesticide application, irrigation, and labor. These costs have been capitalized as crop inventory and are included in “Other assets, net” on the accompanying Condensed Consolidated Balance Sheets at the lower of cost or net realizable value. As the related crops are harvested and sold later in 2025 and throughout 2026, these costs will be charged to cost of products sold. In addition, as the crops are harvested and sold, we anticipate incurring additional costs (including harvesting costs, crop insurance, and post-harvest handling fees), which will also be expensed to the cost of products sold. Segment Reporting Our current business strategy includes one operating segment: Real Estate Rental Operations. We generate revenues, earnings, net income, and cash flows through our single segment by collecting rents from our tenants through operating leases, including reimbursements for certain of our property operating costs. We expect to generate earnings growth by increasing rents, maintaining high occupancy rates, and controlling expenses. The primary driver of our revenue growth will be the renewal of existing leases at current market rental rates upon expiration and the acquisition of new properties. We further believe our active portfolio management, combined with the skills of our asset management team, will allow us to maximize net income across our portfolio. Our CODM is our President and CEO. Our CODM uses net income to make decisions about allocating resources to individual properties and assessing performance. The CODM will sometimes reference other metrics, including net operating income; however, as net income is the measure most consistent with the amounts disclosed in the consolidated financial statements, only net income is disclosed. Recently-Issued Accounting Pronouncements In November 2024, the FASB issued ASU 2024-03, “Income Statement—Reporting Comprehensive Income–Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses” (“ASU 2024-03”). ASU 2024-03 requires public entities to disaggregate specific types of expenses, including disclosures for depreciation, intangible asset amortization, and selling expenses. The pronouncement is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027. Prospective application is required, and retrospective application or early adoption is permitted. We are currently assessing the impact of the requirements on our consolidated financial statements and disclosures. 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 150 farms we owned as of March 31, 2025 (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 34,845 32,321 55,350 $ 833,896 $ 364,788 Florida 20 13,090 10,279 0 129,003 57,155 Washington 6 2,520 2,004 0 55,219 15,196 Arizona (6) 6 6,320 5,333 0 49,248 11,556 Colorado 12 32,773 25,577 0 45,490 13,562 Oregon (7) 6 898 736 0 29,020 10,801 Nebraska 7 5,223 4,949 0 19,807 9,689 Michigan 12 1,245 778 0 15,069 8,560 Texas 1 3,667 2,219 0 8,990 — Maryland 6 987 863 0 7,916 4,153 South Carolina 3 597 447 0 3,429 2,076 Georgia 2 230 175 0 2,331 1,577 North Carolina 2 310 295 0 2,065 — New Jersey 3 116 101 0 2,045 1,185 Delaware 1 180 140 0 1,275 666 150 103,001 86,217 55,350 $ 1,204,803 $ 500,964 (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. 8 Specifically, includes Total real estate, net and Lease intangibles, net; plus long-term water assets and related acquisition costs, 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 Condensed Consolidated Balance Sheets. (2) Excludes approximately $ 2.1 million of debt issuance costs related to notes and bonds payable, included in Notes and bonds payable, net on the accompanying Condensed Consolidated Balance Sheets. (3) Includes ownership in a special-purpose LLC that owns a pipeline conveying water to certain of our properties. As of March 31, 2025, this investment had a net carrying value of approximately $ 902,000 and is included within Other assets, net on the accompanying Condensed Consolidated Balance Sheets. (4) Includes eight acres in which we own a leasehold interest via a ground lease with a private individual that expires in December 2040 and five acres in which we own a leasehold interest via a ground sublease with a California municipality that expires in December 2041. As of March 31, 2025, these two ground leases had a net cost basis of approximately $ 642,000 and are included in Lease intangibles, net on the accompanying Condensed Consolidated Balance Sheets. (5) Includes 48,309 acre-feet of water stored with Semitropic Water Storage District, located in Kern County, California, and 7,041 surplus water credits in certain of our accounts with Westlands Water District, located in Fresno County, California. See “— Investments in Water Assets ” below for additional information. (6) Includes two farms consisting of 1,368 total acres and 1,221 farm acres in which we own leasehold interests via two ground leases with the State of Arizona that expire in February 2032 and February 2035, respectively. As of March 31, 2025, these ground leases had an aggregate net cost basis of zero . (7) Includes ownership in a special-purpose LLC that owns certain irrigation infrastructure that provides water to two of our farms. As of March 31, 2025, this investment had a net carrying value of approximately $ 4.7 million and is included within Other assets, net on the accompanying Condensed Consolidated Balance Sheets. Real Estate The following table sets forth the components of our investments in tangible real estate assets as of March 31, 2025, and December 31, 2024 (dollars in thousands): March 31, 2025 December 31, 2024 Real estate: Land and land improvements $ 743,158 $ 743,141 Permanent plantings 350,251 349,761 Irrigation and drainage systems 170,010 169,098 Farm-related facilities 49,063 49,063 Other site improvements 14,106 13,569 Real estate, at cost 1,326,588 1,324,632 Accumulated depreciation ( 176,046 ) ( 167,782 ) Total real estate, net $ 1,150,542 $ 1,156,850 Real estate depreciation expense on these tangible assets was approximately $ 8.3 million and $ 8.5 million for the three months ended March 31, 2025 and 2024, respectively. Intangible Assets and Liabilities The following table summarizes the carrying values of certain lease intangible assets and the related accumulated amortization as of March 31, 2025, and December 31, 2024 (dollars in thousands): March 31, 2025 December 31, 2024 Lease intangibles: Leasehold interest – land $ 797 $ 3,372 In-place lease values 1,798 1,798 Leasing costs 2,279 2,280 Other (1) 117 117 Lease intangibles, at cost 4,991 7,567 Accumulated amortization ( 1,551 ) ( 3,979 ) Lease intangibles, net $ 3,440 $ 3,588 (1) Other includes tenant relationships and acquisition-related costs allocated to miscellaneous lease intangibles. Total amortization expense related to these lease intangible assets was approximate ly $ 148,000 and $ 231,000 for the three months ended March 31, 2025 and 2024, 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 Condensed 9 Consolidated Balance Sheets and the related accumulated amortization or accretion, respectively, as of March 31, 2025, and December 31, 2024 (dollars in thousands): March 31, 2025 December 31, 2024 Intangible Asset or Liability Deferred Rent Asset (Liability) Accumulated (Amortization) Accretion Deferred Rent Asset (Liability) Accumulated (Amortization) Accretion Above-market lease values (1) $ 695 $ ( 217 ) $ 695 $ ( 198 ) Below-market lease values (2) ( 1,371 ) 595 ( 1,371 ) 561 Lease incentives and other deferred revenue, net (3) 13,625 ( 5,296 ) 14,192 ( 3,691 ) $ 12,949 $ ( 4,918 ) $ 13,516 $ ( 3,328 ) (1) Included as part of Other assets, net on the accompanying Condensed Consolidated Balance Sheets, and the related amortization is recorded as a reduction of Lease revenue, net on the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income. (2) Included as a part of Other liabilities, net on the accompanying Condensed Consolidated Balance Sheets, and the related accretion is recorded as an increase to Lease revenue, net on the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income. (3) Lease incentives are included as part of Other assets, net on the accompanying Condensed Consolidated Balance Sheets, and the related amortization is recorded as a reduction of Lease revenue, net on the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income. Other deferred revenue primarily is primarily attributable to tenant-funded improvements and is included as a part of Other liabilities, net on the accompanying Condensed Consolidated Balance Sheets, and the related accretion is recorded as an increase to Lease revenue, net on the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income. For each of the three months ended March 31, 2025 and 2024, total amortization related to above-market lease values was approximat ely $ 19,000 ; total accretion related to below-market lease values was approxima tely $ 34,000 and $ 41,000 , respectively; and total net amortization related to lease incentives and other deferred revenue, net was approximately $ 3.3 million and $ 513,000 , respectively. Acquisitions We did not acquire any new farms during either of the three months ended March 31, 2025 or 2024. Property Sales 2025 Property Sales In January 2025, we completed the sale of five farms in Florida totaling 5,630 gross acres for an aggregate sales price of approximately $ 52.5 million. Including closing costs, we recognized a net gain on the sale of approximately $ 14.1 million. In February 2025, we completed the sale of two farms in Nebraska totaling 2,559 gross acres for an aggregate sales price of $ 12.0 million. Including closing costs, we recognized an aggregate net gain on these sales of approximately $ 1.6 million. 2024 Property Sales In January 2024, we completed the sale of a 3,748 -acre farm in Florida for approximately $ 65.7 million. Including closing costs, we recognized a net gain on the sale of approximately $ 10.4 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 March 31, 2025, our aggregate ownership interest in the Fresno LLC and the Umatilla LLC was 50.0 % and 20.5 %, 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 three months ended March 31, 2025 or 2024, w e rec orded an aggregate loss of approximately $ 136,000 and $ 85,000 , respectively (included in Loss from investments in unconsolidated entities on our Condensed Consolidated Statements of Operations and Comprehensive Income), which represents our pro-rata share of the aggregate loss recognized by the Fresno LLC and Umatilla LLC. As of March 31, 2025, and December 31, 2024, our combined ownership interest in the Fresno LLC and the Umatilla LLC had an aggregate carrying value of approximately $ 5.6 million and $ 5.7 million, respectively, and is included within Other assets, net on the accompanying Condensed Consolidated Balance Sheets. Investments in Water Assets 10 Semitropic Water Storage District Banked Water In connection with the acquisition of certain farmland located in Kern County, California, in 2021, 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. Subsequently in 2021, we executed all three contracts to purchase all 45,000 acre-feet of banked water for an aggregate additional cost of approximately $ 2.8 million. In addition, since the initial acquisition, additional contracts to purchase banked water held by SWSD were conveyed to us by one of our tenants as partial consideration for rent payments owed. The following table summarizes the total acre-feet of banked water obtained through exercising these contracts as of March 31, 2025 (dollars in thousands): Period Acquired Acre-feet of Banked Water Available to Purchase per Contract Acre-feet of Banked Water Purchased (1) Value Attributed to Contract (2) Cost to Exercise Contract Total Carrying Value of Banked Water Purchased Three months ended December 31, 2023 1,003 1,003 $ 401 $ 62 $ 463 Three months ended March 31, 2024 2,306 2,306 923 141 1,064 Total 3,309 3,309 $ 1,324 $ 203 $ 1,527 (1) All contracts to purchase additional banked water were exercised in the same quarter in which the respective contract was conveyed to us. (2) Represents noncash income received during the respective periods. The straight-line impact of these receipts is included within Lease revenue, net on the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income. All banked water acquired 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 March 31, 2025, the 48,309 acre-feet of banked water held by SWSD was recognized as a long-term water asset and had an aggregate carrying value of approximately $ 35.5 million (included within Other assets, net on our Condensed Consolidated Balance Sheets). Westlands Water District Groundwater Credits In addition, from May 2023 through March 2024, we elected to participate in a groundwater recharge program established by Westlands Water District (“WWD”), a water district located in Fresno County, California. Under the program, WWD paid for surplus surface water to be delivered to individual landowners’ properties with district-approved groundwater recharge facilities, also known as “water banks.” The landowner was allowed to keep 50 % of the net amount of groundwater credits generated under the program (after allowing for certain leave-behind and evaporative losses), and the remaining 50 % was used to recharge the aquifer and retained by WWD. Delivery of water under this program was subject to surplus water availability at WWD’s discretion. WWD terminated the program for the 2024 water year effective March 5, 2024. Through March 31, 2025, we have recognized 2,660 acre-feet of water credits, which represents 50 % of the total net water credits generated and confirmed by WWD under the program as of such date. As of March 31, 2025, these water credits were recognized as a long-term water asset and had an aggregate carrying value of approximately $ 753,000 (included within Other assets, net on our Condensed Consolidated Balance Sheets). In addition, as a result of being granted these water credits in exchange for transferring and storing this surplus water on behalf of WWD, we recognized approximately $ 0 and $ 426,000 of non-cash revenue during the three months ended March 31, 2025 and 2024, respectively, which represents the estimated fair value of the water credits obtained during the period. Other Groundwater Credits Since 2023, we have 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. Through March 31, 2025, we have obtained 4,382 acre-feet of water credits as a result of these agreements, which were recognized as a long-term water asset with an aggregate carrying value of approximately $ 862,000 (included within Other assets, net on our Condensed Consolidated Balance Sheets). Total Long-term Water Assets As of March 31, 2025, we owned a total of 55,350 acre-feet of long-term water assets, and our investments in these assets had an aggregate carrying value of approximately $ 37.2 million and are included within Other assets, net on our Condensed Consolidated Balance Sheets. We have invested approximately $ 1.4 million to construct groundwater recharge facilities on two of our farms, which is included within Real estate, at cost on our Condensed Consolidated Balance Sheets. In addition, through March 31, 2025, we have invested an additional $ 3.8 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 11 costs are held in a deferred asset account (also included within Other assets, net on our Condensed 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. Portfolio Concentrations Credit Risk As of March 31, 2025, our farms were leased to various different, unrelated third-party tenants, with certain tenants leasing more than one farm. Due primarily to a lease termination payment received from an outgoing tenant (“Tenant A”) during the three months ended March 31, 2025, aggregate lease revenue attributable to Tenant A accounted for approximately $ 2.4 million, or 14.2 % of the total lease revenue recorded during the three months ended March 31, 2025. As of March 31, 2025, we are no longer a party to any contractual agreements with Tenant A. In addition, one unrelated third-party tenant (“Tenant B”) leases six of our farms under leases expiring in 2030 or later. During the three months ended March 31, 2025, aggregate lease revenue attributable to Tenant B accounted for approximately $ 1.9 million, or 11.2 % of the total lease revenue recorded during the three months ended March 31, 2025. If Tenant B fails to make rental payments or elects to terminate its leases prior to their expirations (and we cannot re-lease the farms on satisfactory terms), there could be a material adverse effect on our financial performance. No other individual tenant represented greater than 10% of the total lease revenue recorded during the three months ended March 31, 2025. Geographic Risk Farms located in California and Florida accounted for approximately $ 10.5 million ( 62.4 %) and $ 2.6 million ( 15.3 %), respectively, of the total lease revenue recorded during the three months ended March 31, 2025. We seek to continue to further diversify geographically, as may be desirable or feasible. If an unexpected natural disaster (such as an earthquake, wildfire, flood, or hurricane) 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 our operations. To date, none of our farms have been materially impacted by natural disasters, including the January 2025 wildfires that occurred in southern California. See “ —Southeastern U.S. Hurricanes ” below for a discussion on damage caused on certain of our farms by the hurricanes that occurred in the Southeastern U.S. in September and October 2024. Besides California and Florida, no other single state accounted for more than 10.0% of the total lease revenue recorded during the three months ended March 31, 2025. Southeastern U.S. Hurricanes In September and October 2024, Hurricanes Helene and Milton caused widespread destruction across many states in the Southeastern U.S., including areas where several of our farms are located. As a result of Hurricane Helene in September 2024, one of our farms in Georgia suffered damage to certain permanent plantings on the farm. At the time, we estimated the carrying value of such plantings to be approximately $ 275,000 , and during the three months ended September 30, 2024, we wrote down the carrying value of these plantings and also recorded a corresponding property and casualty loss. During the three months ended March 31, 2025, after further inspection of the property, it was determined that the damage was not as extensive as originally estimated, and we recorded an adjustment to our original estimate, which is included within Property and casualty recovery, net on our Condensed Consolidated Statements of Operations and Comprehensive Income. Certain of our other farms in the region suffered minor damage as a result of Hurricanes Helene and Milton, but none of our other farms were materially impacted. Impairment We evaluate our entire portfolio each quarter for any impairment indicators and perform an impairment analysis on those select properties and water assets that have an indication of impairment. If this analysis indicates that the carrying value may not be recoverable, an impairment loss is recorded in earnings equal to the amount by which the carrying value exceeds the fair value of the asset. As of March 31, 2025, and December 31, 2024 , we concluded that none of our properties or water assets were impaired. NOTE 4. BORROWINGS Our borrowings as of March 31, 2025, and December 31, 2024, are summarized below (dollars in thousands): 12 Carrying Value as of As of March 31, 2025 March 31, 2025 December 31, 2024 Stated Interest Rates (1) (Range; Wtd Avg) Maturity Dates (Range; Wtd Avg) Variable-rate revolving lines of credit $ 200 $ 3,600 6.31 % 12/15/2033 Notes and bonds payable: Fixed-rate notes payable $ 467,938 $ 493,363 2.45 %– 6.97 %; 3.70 % 4/14/2025–7/1/2051; December 2032 Fixed-rate bonds payable 32,826 32,946 3.13 %– 4.57 %; 3.85 % 7/24/2025–12/30/2030; Jan 2028 Total notes and bonds payable 500,764 526,309 Debt issuance costs – notes and bonds payable ( 2,133 ) ( 2,387 ) N/A N/A Notes and bonds payable, net $ 498,631 $ 523,922 Total borrowings, net $ 498,831 $ 527,522 (1) Where applicable, stated interest rates are before interest patronage (as described below). As of March 31, 2025, the above borrowings were collateralized by certain of our farms with an aggregate net book value of approximately $ 1.0 billion. The weighted-average stated interest rate charged on the above borrowings (excluding the impact of debt issuance costs and before any interest patronage, or refunded inte rest) was 3.79 % for the three months ended March 31, 2025, as compared to 3.81 % for the three months ended March 31, 2024. In addition, 2024 interest patronage from our Farm Credit Notes Payable (as defined below) resulte d in a 21.9 % reduction (approximately 101 basis points) to the stated interest rates on such borrowings. See below under “ —Farm Credit Notes Payable—Interest Patronage” for further discussion on interest patronage. As of March 31, 2025, we were in compliance with all covenants applicable to the above borrowings. MetLife Facility As amended, our credit facility with Metropolitan Life Insurance Company (“MetLife”) consists of $ 75.0 million of revolving equity lines of credit (the “MetLife Lines of Credit”), a $ 75.0 million long-term note payable (the “2020 MetLife Term Note”), and a $ 100.0 million long-term note payable (the “2022 MetLife Term Note,” and together with the MetLife Lines of Credit and the 2020 MetLife Term Note, the “MetLife Facility”). The following table summarizes the pertinent terms of the MetLife Facility as of March 31, 2025 (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 Term SOFR + 2.00 % (2) $ 74,800 2020 MetLife Term Note 75,000 (3) 1/5/2030 36,254 2.75 %, fixed through 1/4/2030 (4) 38,746 2022 MetLife Term Note 100,000 (3) 1/5/2032 — (4) 100,000 Totals $ 250,000 $ 36,454 $ 213,546 (1) Based on the properties that were pledged as collateral under the MetLife Facility, as of March 31, 2025, the maximum additional amount we could draw under the facility was approximately $ 110.0 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, 2026 , 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, 2026, 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). 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 three months ended March 31, 2025. 13 As of March 31, 2025, we had approximately $ 32.8 million of bonds issued and outstanding under the Farmer Mac Facility. Farm Credit Notes Payable From time to time since September 2014, we, through certain subsidiaries of our Operating Partnership, have entered into various loan agreements (collectively, the “Farm Credit Notes Payable”) with various different Farm Credit associations (collectively, “Farm Credit”). We did not enter into any new loan agreements with Farm Credit during the three months ended March 31, 2025. 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 Condensed Consolidated Statements of Operations and Comprehensive Income. Receipt of interest patronage typically occurs in the first half of the calendar year following the calendar year in which the respective interest expense is accrued. During the three months ended March 31, 2025, we recorded interest patronage of approximately $ 1.7 million related to interest accrued on the Farm Credit Notes Payable during the year ended December 31, 2024, and during the three months ended September 30, 2024, we received approximately $ 108,000 of interest patronage, as certain Farm Credit associations paid a portion of the 2024 interest patronage (which relates to interest accrued during 2024 but typically would be paid during the first half of 2025) early. In total, 2024 interest patronage resulted in a 21.9 % reduction (approximately 101 basis points) to the interest rates on such borrowings. Interest patronage is paid at Farm Credit’s discretio n, and we are therefore unable to estimate the amount of interest patronage to be received, if any, related to interest accrued during 2025 on our Farm Credit Notes Payable. Debt Service – Aggregate Maturities Scheduled principal payments of our aggregate notes and bonds payable as of March 31, 2025 , for the succeeding years are as follows (dollars in thousands): Period Scheduled Principal Payments For the remaining nine months ending December 31: 2025 $ 31,710 (1) For the fiscal years ending December 31: 2026 16,967 2027 50,111 2028 76,457 2029 151,876 2030 84,961 Thereafter 88,682 $ 500,764 (1) Subsequent to March 31, 2025, a loan of approximately $ 10.3 million that was originally scheduled to mature in 2025 was refinanced and extended for an additional five years . Fair Value Accounting Standards Codification (“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 March 31, 2025, the aggregate fair value of our notes and bonds payable was approximately $ 472.0 million, as compared to an aggregate carrying value (excluding unamortized related debt issuance costs) of approximately $ 500.8 million. The fair value of our notes and bonds payable is valued using Level 3 inputs under the hierarchy established by ASC 820-10 and is 14 calculated based on a discounted cash flow analysis, using discount rates based on management’s estimates of market interest rates on debt with comparable terms. Further, due to the revolving nature and variable interest rates applicable to the MetLife Lines of Credit, their aggregate fair value as of March 31, 2025, 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 Condensed Consolidated Balance Sheets. Generally, in the absence of observable market data, we will estimate the fair value of our interest rate swaps using estimates of certain data points, including estimated remaining life, counterparty credit risk, current market yield, and interest rate spreads of similar securities as of the measurement date. 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 March 31, 2025 , 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 on the accompanying Condensed 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 $ 1.6 million will be reclassified as a reduction to interest expense. We had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk as of March 31, 2025 , and December 31, 2024 (dollars in thousands): Period Number of Instruments Aggregate Notional Amount As of March 31, 2025 4 $ 66,647 As of December 31, 2024 4 67,067 The following table presents the fair value of our interest rate swaps as well as their classification on the Condensed Consolidated Balance Sheets as of March 31, 2025 , and December 31, 2024 (dollars in thousands): Derivative Asset (Liability) Fair Value Derivative Type Balance Sheet Location March 31, 2025 December 31, 2024 Derivatives Designated as Hedging Instruments: Interest rate swaps Other assets, net $ 6,314 $ 7,632 Total $ 6,314 $ 7,632 The following table presents the amount of (los s) income recognized in comprehensive (loss) income within our condensed consolidated financial statements for the three months ended March 31, 2025 and 2024 (dollars in thousands): For the Three Months Ended March 31, 2025 2024 Derivative in cash flow hedging relationship: Interest rate swaps $ ( 1,318 ) $ 1,008 Total $ ( 1,318 ) $ 1,008 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 March 31, 2025 , we did not have any derivatives in a net liability position, nor have we posted any collateral related to these agreements. NOTE 5. CUMULATIVE 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, 15 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. 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 Condensed Consolidated Balance Sheets and are being amortized over the mandatory redemption period as a component of interest expense on the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income. The Series D Term Preferred Stock is recorded as a liability on our accompanying Condensed Consolidated Balance Sheets in accordance with ASC 480, “Distinguishing Liabilities from Equity,” which states that mandatorily-redeemable financial instruments should be classified as liabilities. In addition, the related dividend payments are treated similarly to interest expense on the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income. As of March 31, 2025, the fair value of our Series D Term Preferred Stock was approximately $ 60.1 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 March 31, 2025, of $ 24.88 . For information on the dividends declared by our Board of Directors and paid by us on the Series D Term Preferred Stock during the three months ended March 31, 2025, 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. Mr. Gladstone also serves as a director and executive officer of each of our Adviser and Administrator. In addition, Michael LiCalsi, our general counsel and secretary (who also serves as our Administrator’s president, general counsel, and secretary) is executive vice president of administration of our Adviser. We have entered into an investment advisory agreement with our Adviser (the “Advisory Agreement”) and an administration agreement with our Administrator (the “Administration Agreement”). Both the Advisory Agreement and the Administration Agreement were approved unanimously by our Board of Directors, including our independent directors. A summary of the compensation terms for the Advisory Agreement and a summary of the Administration Agreement is below. Advisory Agreement Pursuant to the Advisory Agreement, 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 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,” 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. Incentive Fee Pursuant to the Advisory Agreement, an incentive fee is calculated and payable quarterly in arrears if the Pre-Incentive Fee FFO (defined below) for a particular quarter exceeds a hurdle rate of 1.75 % ( 7.0 % annualized) of the prior calendar quarter’s Total Adjusted Common Equity. For purposes of this calculation, Pre-Incentive Fee FFO is defined in the Advisory Agreement as FFO (also as defined in the Advisory Agreement) 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 are not treated as a liability for GAAP 16 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 is 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 the Advisory Agreement, a capital gains-based incentive fee is calculated and payable in arrears at the end of each fiscal year (or upon termination of the Advisory Agreement). The capital gains fee shall equal: (i) 15 % of the cumulative aggregate realized capital gains minus the cumulative aggregate realized capital losses, minus (ii) any aggregate capital gains fees paid in prior periods. For purposes of this calculation, realized capital gains and losses will be calculated as (x) the sales price of the property, minus (y) any costs to sell the property and the then-current gross value of the property (which includes the property’s original acquisition price plus any subsequent, non-reimbursed capital improvements). At the end of each fiscal year, if this figure is negative, no capital gains fee shall be paid. Termination Fee Pursuant to the Advisory Agreement, in the event of our termination of the agreement with our Adviser for any reason (with 120 days’ prior written notice and the vote of at least two-thirds of our independent directors), a termination fee would be payable to the Adviser equal to three times the sum of the average annual base management fee and incentive fee earned by the Adviser during the 24-month period prior to such termination. Administration Agreement Pursuant to the Administration Agreement, we pay for our allocable portion of the Administrator’s expenses incurred while performing its obligations to us, including, but not limited to, rent and the salaries and benefits expenses of our Administrator’s employees, including our chief financial officer, treasurer, chief compliance officer, general counsel and secretary (who also serves as our Administrator’s president, general counsel, and secretary), and their respective staffs. As approved by our Board of Directors, 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 its 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 not pay any financing fees to Gladstone Securities during either of the three months ended March 31, 2025 or 2024. Through March 31, 2025, 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 Agreement 17 We have entered into a dealer-manager agreement with Gladstone Securities (the “Dealer-Manager Agreement”), pursuant to which Gladstone Securities serves as our exclusive dealer-manager in connection with the offering of our 5.00 % Series E Cumulative Redeemable Preferred Stock, par value $ 0.001 per share (the “Series E Preferred Stock”). Pursuant to the Dealer-Manager Agreement, Gladstone Securities provides certain sales, promotional, and marketing services to us in connection with the offering of the Series E Preferred Stock, and we generally paid or pay Gladstone Securities the following: i a selling commission of up to 7.0 % of the gross proceeds from sales in the offering (the “Selling Commissions”), and ii a dealer-manager fee of 3.0 % of the gross proceeds from sales in the offering (the “Dealer-Manager Fees”). 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 the Dealer-Manager Agreement were approved by our board of directors, including its independent directors. The following table summarizes the total Selling Commissions and Dealer-Manager Fees paid to Gladstone Securities during the three months ended March 31, 2025 and 2024 (dollars in thousands): For the Three Months Ended March 31, 2025 2024 Series E Preferred Stock $ — $ 28 Total Selling Commissions and Dealer-Manager Fees $ — $ 28 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 Condensed Consolidated Balance Sheets. Related-Party Fees The following table summarizes related-party fees paid or accrued for and reflected in our accompanying condensed consolidated financial statements (dollars in thousands): For the Three Months Ended March 31, 2025 2024 Base management fee (1)(2) $ 2,058 $ 2,156 Capital gains fee (1)(2) 188 — Total fees to our Adviser $ 2,246 $ 2,156 Administration fee (1)(2) $ 642 $ 603 Selling Commissions and Dealer-Manager Fees (1)(3) $ — $ 28 Total fees to Gladstone Securities $ — $ 28 (1) Pursuant to the agreements with the respective related-party entities, as discussed above. (2) Reflected as a line item on our accompanying Condensed Consolidated Statements of Operations and Comprehensive Income. (3) Included within Additional paid-in capital on the accompanying Condensed Consolidated Balance Sheets. Related-Party Fees Due Amounts due to related parties on our accompanying Condensed Consolidated Balance Sheets as of March 31, 2025, and December 31, 2024, were as follows (dollars in thousands): 18 March 31, 2025 December 31, 2024 Base management fee $ 2,058 $ 2,067 Capital gains fee 188 — Other, net (1) 42 75 Total due to Adviser 2,288 2,142 Administration fee 642 613 Cumulative accrued but unpaid portion of prior Administration Fees (2) 419 217 Total due to Administrator 1,061 830 Total due to related parties (3) $ 3,349 $ 2,972 (1) Other amounts due to or from our Adviser primarily relate to miscellaneous general and administrative expenses either paid by our Adviser on our behalf or by us on our Adviser’s behalf. (2) Represents the cumulative accrued but unpaid portion of prior Administration fees that are scheduled to be paid during the three months ending September 30 of each year, which is the quarter following our Administrator’s fiscal year end. (3) Reflected as a line item on our accompanying Condensed Consolidated Balance Sheets. NOTE 7. COMMITMENTS AND CONTINGENCIES Litigation In the ordinary course of business, we may be involved in legal proceedings from time to time. We are not currently subject to any material known or threatened litigation. NOTE 8. EQUITY Registration Statement On March 28, 2023, we filed a universal shelf registration statement on Form S-3, as amended (File No. 333-270901), with the SEC (the “2023 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 March 31, 2025, we have issued a total of 176,195 shares of Series E Preferred Stock for gross proceeds of approximately $ 4.4 million and 470,676 shares of common stock for gross proceeds of approximately $ 6.8 million under the 2023 Registration Statement. Equity Issuances 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 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 Agreement,” 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 were sold during the three months ended March 31, 2025. The following table provides information on sales of our Series E Preferred Stock during the three months ended March 31, 2024 (dollars in thousands, except per-share amounts): Three Months Ended March 31, 2024 Number of shares sold 11,340 Weighted-average offering price per share $ 25.00 Gross proceeds $ 284 Net proceeds (1) $ 255 (1) Net of Selling Commissions, Dealer-Manager Fees, and underwriting discounts. In addition, during the three months ended March 31, 2025, 800 shares of Series E Preferred Stock were tendered for optional redemption, which we satisfied with an aggregate cash payment of approximately $ 18,000 . No shares of the Series E Preferred Stock were tendered for optional redemption during the three months ended March 31, 2024. 19 The Series E Offering will terminate on the date (the “Series E Termination Date”) that is the earlier of (i) December 31, 2025 (unless terminated or extended by our Board of Directors) and (ii) the date on which all 8,000,000 shares of Series E Preferred Stock offered in the Series E Offering are sold. There is currently no public market for shares of Series E Preferred Stock. We intend to apply to list the Series E Preferred Stock on Nasdaq or another national securities exchange within one calendar year of the Series E Termination Date; however, there can be no assurance that a listing will be achieved in such timeframe, or at all. Common Stock—At-the-Market Program We have entered into equity distribution agreements (commonly referred to as “at-the-market agreements”) with Virtu Americas LLC and Ladenburg & Co. Inc. (each a “Sales Agent”), that, as amended, currently permit us to issue and sell, from time to time and through the Sales Agents, shares of our common stock having an aggregate offering price of up to $ 500.0 million (the “ATM Program”). We did not sell any shares of common stock under the ATM Program during either of the three months ended March 31, 2025 or 2024. Repurchase Program On May 17, 2024, our Board of Directors approved a share repurchase program authorizing us to repurchase up to $ 20.0 million of our 6.00 % Series B Cumulative Redeemable Preferred Stock, par value $ 0.001 per share (the “Series B Preferred Stock”) and up to $ 35.0 million of our 6.00 % Series C Cumulative Redeemable Preferred Stock, par value $ 0.001 per share (the “Series C Preferred Stock”) (collectively, the “Repurchase Program”). The Board’s authorization of the Repurchase Program may be suspended or discontinued at any time, does not obligate us to acquire any particular amount of securities, and expires on May 17, 2025. Under the Repurchase Program, repurchases are intended to be implemented through open market transactions on U.S. exchanges and/or in privately-negotiated transactions facilitated by a third-party broker acting as agent for us in accordance with applicable securities laws. Any repurchases will be made during applicable trading window periods or pursuant to applicable Rule 10b5-1 trading plans. During the three months ended March 31, 2025 and 2024, we did not repurchase any shares of our Series B Preferred Stock or Series C Preferred Stock. Non-Controlling Interests in Operating Partnership We consolidate our Operating Partnership, which is a majority-owned partnership. As of March 31, 2025, and December 31, 2024, we owned 100.0 % of the outstanding OP Units. On or after 12 months after becoming a holder of OP Units, each limited partner, other than the Company, has the right, subject to the terms and conditions set forth in the partnership agreement of the Operating Partnership, to require the Operating Partnership to redeem all or a portion of such units in exchange for cash or, at the Company’s option, shares of our common stock on a one -for-one basis. 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. 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. Distributions The per-share distributions to preferred and common stockholders declared by our Board of Directors during the three months ended March 31, 2025 and 2024 are reflected in the table below. 20 Three Months Ended March 31, Issuance 2025 2024 Series B Preferred Stock $ 0.375 $ 0.375 Series C Preferred Stock 0.375 0.375 Series D Term Preferred Stock (1) 0.312501 0.312501 Series E Term Preferred Stock 0.312501 0.312501 Common Stock (2) 0.1401 0.1395 (1) Dividends are treated similar to interest expense on the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income. (2) The same amounts were paid as distributions on each OP Unit held by non-controlling OP Unitholders, if any, as of the applicable date of record. NOTE 9. LEASE REVENUES The following table sets forth the components of our lease revenue for the three months ended March 31, 2025 and 2024 (dollars in thousands, except for footnotes): Three Months Ended March 31, 2025 2024 Fixed lease payments (1) $ 13,927 $ 19,593 Variable lease payments (2) 2,876 233 Lease revenue, net (3) $ 16,803 $ 19,826 (1) Fixed lease payments include contractual rents under lease agreements with tenants recognized on a straight-line basis over the respective lease terms and includes the amortization of above-market lease values and lease incentives and the accretion of below-market lease values and other deferred revenue. (2) Variable lease payments include participation rents, which are generally based on a percentage of the gross crop revenues earned on the farm, and reimbursements of certain property operating expenses by tenants. Participation rents are generally recognized when all contingencies have been resolved and when actual results become known or estimable, enabling us to estimate and/or measure our share of such gross revenues. During the three months ended March 31, 2025 and 2024, we recorded participation rents of approximately $ 465,000 and $ 0 , respectively, and reimbursements of certain property operating expenses by tenants of approximately $ 31,000 and $ 233,000 , respectively. In addition, during the three months ended March 31, 2025, we recorded a lease termination fee of approximately $ 2.4 million. (3) Reflected as a line item on our accompanying Condensed Consolidated Statements of Operations and Comprehensive Income. NOTE 10. EARNINGS PER SHARE OF COMMON STOCK The following table sets forth the computation of basic and diluted earnings per common share for the three months ended March 31, 2025 and 2024, 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. (Dollars in thousands, except per-share amounts): Three Months Ended March 31, 2025 2024 Net income attributable to common stockholders $ 9,106 $ 7,449 Weighted average shares of common stock outstanding – basic and diluted 36,184,658 35,838,442 Income per common share – basic and diluted $ 0.25 $ 0.21 There were no OP Units held by non-controlling OP Unitholders during either of the three months ended March 31, 2025 or 2024 . NOTE 11. SUBSEQUENT EVENTS Distributions On April 8, 2025, our Board of Directors declared the following monthly cash distributions to holders of our preferred and common stock: 21 Issuance Record Date Payment Date Distribution per Share Series B Preferred Stock: April 21, 2025 April 30, 2025 $ 0.125 May 21, 2025 May 30, 2025 0.125 June 20, 2025 June 30, 2025 0.125 Total Series B Preferred Stock Distributions: $ 0.375 Series C Preferred Stock: April 21, 2025 April 30, 2025 $ 0.125 May 21, 2025 May 30, 2025 0.125 June 20, 2025 June 30, 2025 0.125 Total Series C Preferred Stock Distributions: $ 0.375 Series D Term Preferred Stock: April 21, 2025 April 30, 2025 $ 0.104167 May 21, 2025 May 30, 2025 0.104167 June 20, 2025 June 30, 2025 0.104167 Total Series D Term Preferred Stock Distributions: $ 0.312501 Series E Preferred Stock: April 25, 2025 May 5, 2025 $ 0.104167 May 27, 2025 June 5, 2025 0.104167 June 25, 2025 July 3, 2025 0.104167 Total Series E Preferred Stock Distributions: $ 0.312501 Common Stock (1) : April 21, 2025 April 30, 2025 $ 0.0467 May 21, 2025 May 30, 2025 0.0467 June 20, 2025 June 30, 2025 0.0467 Total Common Stock Distributions $ 0.1401 (1) The same amounts paid to common stockholders were or will be paid as distributions on each OP Unit held by non-controlling OP Unitholders, if any, as of the above record dates. 22