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What changed in GLADSTONE LAND Corp's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of GLADSTONE LAND Corp's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+366 added−348 removedSource: 10-K (2025-02-19) vs 10-K (2024-02-20)

Top changes in GLADSTONE LAND Corp's 2024 10-K

366 paragraphs added · 348 removed · 274 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

38 edited+7 added−3 removed102 unchanged
Biggest changeOur Adviser has an investment committee that evaluates and approves each of our investments. This investment committee is currently comprised of Messrs. Gladstone, Brubaker, and Reiman; Mr. John Sateri, who is a managing director of our Adviser; and Ms. Laura Gladstone, who is a managing director of our Adviser.
Biggest changeDavid Gladstone, our chairman, chief executive officer, president, and largest stockholder, is also the chairman, chief executive officer, and the controlling stockholder of our Adviser and our Administrator. Our Adviser has an investment committee that evaluates and approves each of our investments. This investment committee is currently comprised of Messrs. Gladstone and Reiman; Mr.
We have adopted a policy that without the permission of our Board of Directors, we will not: • invest 50% or more of our total assets in a single property at the time of investment; • invest in real property owned by our Adviser, any of its affiliates or any entity in which our Adviser or any of its affiliates have invested; • invest in commodities or commodity futures contracts, with this limitation not being applicable to futures contracts when used solely for the purpose of hedging in connection with our ordinary business of investing in properties and making mortgage loans; • invest in contracts for the sale of real estate unless the contract is in recordable form and is appropriately recorded in the chain of title; • issue equity securities on a deferred payment basis or other similar arrangement; • grant warrants or options to purchase shares of our stock to our Adviser or its affiliates; • engage in trading, as compared with investment activities, or engage in the business of underwriting, or the agency distribution of, securities issued by other persons; • invest more than 5% of the value of our assets in the securities of any one issuer if the investment would cause us to fail to maintain our qualification as a REIT; • invest in securities representing more than 10% of the outstanding securities (by vote or value) of any one issuer if the investment would cause us to fail to maintain our qualification as a REIT; or 9 Table of Content • acquire securities in any company holding investments or engaging in activities prohibited in the foregoing clauses.
We have adopted a policy that without the permission of our Board of Directors, we will not: • invest 50% or more of our total assets in a single property at the time of investment; • invest in real property owned by our Adviser, any of its affiliates or any entity in which our Adviser or any of its affiliates have invested; • invest in commodities or commodity futures contracts, with this limitation not being applicable to futures contracts when used solely for the purpose of hedging in connection with our ordinary business of investing in properties and making mortgage loans; 9 Table of Content • invest in contracts for the sale of real estate unless the contract is in recordable form and is appropriately recorded in the chain of title; • issue equity securities on a deferred payment basis or other similar arrangement; • grant warrants or options to purchase shares of our stock to our Adviser or its affiliates; • engage in trading, as compared with investment activities, or engage in the business of underwriting, or the agency distribution of, securities issued by other persons; • invest more than 5% of the value of our assets in the securities of any one issuer if the investment would cause us to fail to maintain our qualification as a REIT; • invest in securities representing more than 10% of the outstanding securities (by vote or value) of any one issuer if the investment would cause us to fail to maintain our qualification as a REIT; or • acquire securities in any company holding investments or engaging in activities prohibited in the foregoing clauses.
These firms engage in the acquisition, asset management, valuation, and disposition of farmland properties. Further competition may also come from other agricultural REITs, both publicly-traded (e.g., Farmland Partners, Inc.) and privately-held (e.g., Iroquois Valley Farmland REIT, PBC); other agricultural-focused privately-held funds, such as AgIS Capital, LLC, and Homestead Capital; and various online farmland crowdfunding platforms (e.g., AcreTrader, FarmTogether).
These firms engage in the acquisition, asset management, valuation, and disposition of farmland properties. Further competition may also come from other agricultural REITs, both publicly-traded (e.g., Farmland Partners, Inc.) and privately-held (e.g., Iroquois Valley Farmland REIT, PBC); other agricultural-focused privately-held funds, such as AgIS Capital, LLC, and Homestead Capital; and various online farmland crowdfunding platforms (e.g., AcreTrader, FarmTogether, etc.).
Some types of transactions, including the following, require the prior approval of our Board of Directors, including a majority of our independent directors: • any acquisition which at the time of investment would have a cost exceeding 50% of our total assets; and • transactions that involve conflicts of interest with our Adviser (other than reimbursement of expenses in accordance with the Current Advisory Agreement).
Some types of transactions, including the following, require the prior approval of our Board of Directors, including a majority of our independent directors: • any acquisition which at the time of investment would have a cost exceeding 50% of our total assets; and • transactions that involve conflicts of interest with our Adviser (other than reimbursement of expenses in accordance with the Advisory Agreement).
Our Adviser’s board of directors has empowered the investment committee to authorize and approve our investments, subject to the terms of the Current Advisory Agreement. Before we acquire any property, the proposed transaction is be reviewed by the investment committee to ensure that, in its view, the transaction satisfies our investment criteria and is within our investment policies.
Our Adviser’s board of directors has empowered the investment committee to authorize and approve our investments, subject to the terms of the Advisory Agreement. Before we acquire any property, the proposed transaction is be reviewed by the investment committee to ensure that, in its view, the transaction satisfies our investment criteria and is within our investment policies.
The Current Advisory Agreement is not assignable or transferable by either us or our Adviser without the consent of the other party, except that our Adviser may assign the Current Advisory Agreement to an affiliate for whom our Adviser agrees to guarantee its obligations to us.
The Advisory Agreement is not assignable or transferable by either us or our Adviser without the consent of the other party, except that our Adviser may assign the Advisory Agreement to an affiliate for whom our Adviser agrees to guarantee its obligations to us.
Adviser Duties and Authority under the Current Advisory Agreement Under the terms of the Current Advisory Agreement, our Adviser is required to present to us investment opportunities consistent with our investment policies and objectives as adopted by our Board of Directors.
Adviser Duties and Authority under the Advisory Agreement Under the terms of the Advisory Agreement, our Adviser is required to present to us investment opportunities consistent with our investment policies and objectives as adopted by our Board of Directors.
We have entered into an investment advisory agreement with our Adviser, which was most recently amended and restated effective July 1, 2021 (the “Current Advisory Agreement”), under which our Adviser is responsible for managing our assets and liabilities, for operating our business on a day-to-day basis, and for identifying, evaluating, negotiating, and consummating investment transactions consistent with our investment policies as determined by our Board of Directors from time to time.
We have entered into an investment advisory agreement with our Adviser, which was most recently amended and restated effective July 1, 2021 (the “Advisory Agreement”), under which our Adviser is responsible for managing our assets and liabilities, for operating our business on a day-to-day basis, and for identifying, evaluating, negotiating, and consummating investment transactions consistent with our investment policies as determined by our Board of Directors from time to time.
Developments related to public health emergencies, including laws and regulations implemented by federal governmental authorities or state and local governmental authorities in jurisdictions where our properties are located in response to such public health emergencies, may impact our ability to operate our business, or those of our tenants, in the ordinary course, which may materially affect our results of operations for the year ending December 31, 2024.
Developments related to public health emergencies, including laws and regulations implemented by federal governmental authorities or state and local governmental authorities in jurisdictions where our properties are located in response to such public health emergencies, may impact our ability to operate our business, or those of our tenants, in the ordinary course, which may materially affect our results of operations for the year ending December 31, 2025.
In performing its duties, our Adviser, either directly or indirectly by engaging an affiliate: • finds, evaluates, presents, and recommends to us a continuing series of real estate investment opportunities consistent with our investment policies and objectives; • provides advice to us and acts on our behalf with respect to the negotiation, acquisition, financing, refinancing, holding, leasing, and disposition of real estate investments; • enters into contracts to purchase real estate on our behalf in compliance with our investment procedures, objectives, and policies, subject to approval of our Board of Directors, where required; • takes the actions and obtains the services necessary to effect the negotiation, acquisition, financing, refinancing holding, leasing, and disposition of real estate investments; and • provides day-to-day management of our real estate activities and other administrative services.
In performing its duties, our Adviser, either directly or indirectly by engaging an affiliate: • finds, evaluates, presents, and recommends to us a continuing series of real estate investment opportunities consistent with our investment policies and objectives; • provides advice to us and acts on our behalf with respect to the negotiation, acquisition, financing, refinancing, holding, leasing, and disposition of real estate investments; • enters into contracts to purchase real estate on our behalf in compliance with our investment procedures, objectives, and policies, subject to approval of our Board of Directors, where required; 11 Table of Content • takes the actions and obtains the services necessary to effect the negotiation, acquisition, financing, refinancing holding, leasing, and disposition of real estate investments; and • provides day-to-day management of our real estate activities and other administrative services.
Available Information Copies of each of our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements, and amendments, if any, to those reports filed or furnished with the SEC, pursuant to Section 13(a) or 15(d) of the Exchange Act are available free of charge through our website at www.GladstoneLand.com .
Available Information 13 Table of Content Copies of each of our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, proxy statements, and amendments, if any, to those reports filed or furnished with the SEC, pursuant to Section 13(a) or 15(d) of the Exchange Act are available free of charge through our website at www.GladstoneLand.com .
Our Investment Objectives and Our Strategy Our principal business objective is to maximize stockholder returns through a combination of: (i) monthly cash distributions to our stockholders, which we hope to sustain and increase through long-term growth in cash flows from increased rents; (ii) appreciation of our land; and (iii) capital gains derived from the sale of our properties.
Our Investment Objectives and Our Strategy Our principal business objective is to maximize stockholder returns through a combination of: (i) monthly cash distributions to our stockholders, which we hope to sustain and increase through long-term growth in cash flows from increased rents (including participation rents); (ii) appreciation of our land; and (iii) capital gains derived from the sale of our properties.
For a discussion of the risks associated with leasing property to leveraged tenants, see Part I, Item 1A,“ Risk Factors—Risks Relating to Our Business and Operations—Some of our tenants may be unable to pay rent, which could adversely affect our cash available to make distributions to our stockholders or otherwise impair the value of your investment .” 6 Table of Content We intend to own and lease primarily single-tenant, agricultural real property, and we may acquire and lease properties used by businesses that support farming communities.
For a discussion of the risks associated with leasing property to leveraged tenants, see Part I, Item 1A,“ Risk Factors—Risks Relating to Our Business and Operations—Some of our tenants may be unable to pay rent, which could adversely affect our cash available to make distributions to our stockholders or otherwise impair the value of your investment .” We intend to own and lease primarily single-tenant, agricultural real property, and we may acquire and lease properties used by businesses that support farming communities.
Otherwise, we do not expect that compliance with the various laws and regulations we are subject to will have a material effect on our capital expenditures, results of operations, or competitive position for the year ending December 31, 2024, as compared to prior periods.
Otherwise, we do not expect that compliance with the various laws and regulations we are subject to will have a material effect on our capital expenditures, results of operations, or competitive position for the year ending December 31, 2025, as compared to prior periods.
We expect that approximately 15 to 25 full-time employees of our Adviser and our Administrator will spend substantial time on our matters during the 2024 calendar year. Our CFO, accounting team, and the employees of our Adviser who manage our assets and investments spend all of their time on our matters.
We expect that approximately 15 to 25 full-time employees of our Adviser and our Administrator will spend substantial time on our matters during the 2025 calendar year. Our CFO, accounting team, and the employees of our Adviser who manage our assets and investments spend all of their time on our matters.
Despite the conduct of these reviews, there can be no assurance that hazardous substances or waste, as determined under present or future federal or state laws or regulations, will not be discovered on the property after we acquire it. 7 Table of Content Our Adviser will also physically inspect each property and the real estate surrounding it to estimate its value.
Despite the conduct of these reviews, there can be no assurance that hazardous substances or waste, as determined under present or future federal or state laws or regulations, will not be discovered on the property after we acquire it. Our Adviser will also physically inspect each property and the real estate surrounding it to estimate its value.
As a result, properties that are currently located in close proximity to urban developments are likely to be too expensive to justify farming over an extended period of time, and, therefore, we are unlikely to invest in such properties. Our Adviser will perform a due diligence review with respect to each potential property acquisition.
As a result, properties that are currently located in close proximity to urban developments are likely to be too expensive to justify farming over an extended period of time, and, therefore, we are unlikely to invest in such properties. 7 Table of Content Our Adviser will perform a due diligence review with respect to each potential property acquisition.
Many of the areas in which we purchase or finance properties are likely to have their own microclimates and, although they appear to be in close proximity to one another, generally will not be similarly affected by weather or 8 Table of Content other natural occurrences at the same time.
Many of the areas in which we purchase or finance properties are likely to have their own microclimates and, although they appear to be in close proximity to one another, generally will not be similarly affected by weather or other natural occurrences at the same time.
Dealer-Manager Agreements In connection with the continuous public offering of our Series B Preferred Stock (which was completed in March 2020), our Series C Preferred Stock (which was completed in December 2022), and our Series E Preferred Stock (which offering is ongoing), we entered into certain dealer-manager agreements with Gladstone Securities, whereby Gladstone Securities served or serves, as appropriate, as our exclusive dealer-manager.
Dealer-Manager Agreements In connection with the continuous public offering of our Series C Preferred Stock (which was completed in December 2022) and our Series E Preferred Stock (which offering is ongoing), we entered into certain dealer-manager agreements with Gladstone Securities, whereby Gladstone Securities served or serves, as appropriate, as our exclusive dealer-manager.
We believe that these provisions serve to protect our investments from adverse changes in the operating and financial characteristics of a tenant that may impact its ability to satisfy its obligations to us or that could reduce the value of our properties.
We believe that these provisions serve to protect our investments from adverse changes in the operating and financial characteristics of a tenant that may impact its ability 8 Table of Content to satisfy its obligations to us or that could reduce the value of our properties.
We intend to lease acquired properties over the long term. However, from time to time, we may sell one or more properties if we believe it to be in the best interests of our stockholders and best to maintain the overall 5 Table of Content value of our portfolio.
We intend to lease acquired properties over the long term. However, from time to time, we may sell one or more properties if we believe it to be in the best interests of our stockholders and best to maintain the overall value of our portfolio.
Competition We face competition for farmland acreage from many different entities, including, but not limited to, developers, municipalities, individual farmers, agriculture corporations, institutional investors, and others. Investment firms that we might compete 12 Table of Content directly against could include agricultural investment firms, such as Hancock Agricultural Investment Group, Prudential Agricultural Investments, and UBS AgriVest, LLC.
Competition We face competition for farmland acreage from many different entities, including, but not limited to, developers, municipalities, individual farmers, agriculture corporations, institutional investors, and others. Investment firms that we might compete directly against could include agricultural investment firms, such as Hancock Agricultural Investment Group, Prudential Agricultural Investments, and UBS AgriVest, LLC.
Code of Ethics We have adopted a code of ethics and business conduct applicable to all personnel of our Adviser and Administrator that complies with the guidelines set forth in Item 406 of Regulation S-K of the Securities Act of 1933, as amended.
Code of Ethics We have adopted a code of ethics and business conduct applicable to all personnel of our Adviser and Administrator that complies with the guidelines set forth in Item 406 of Regulation S-K of the Securities Act.
Our Administrator employs 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 and provides 10 Table of Content administrative services to us under the amended and restated Administration Agreement entered into on February 1, 2013 (the “Administration Agreement”).
Our Administrator employs 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 and provides administrative services to us under the amended and restated Administration Agreement entered into on February 1, 2013 (the “Administration Agreement”).
A breakdown thereof is summarized by functional area in the table below: Number of Individuals Functional Area 13 Executive Management 35 Investment Management, Portfolio Management, and Due Diligence 21 Administration, Accounting, Compliance, Human Resources, Legal, and Treasury The Adviser and the Administrator aim to attract and retain capable advisory and administrative personnel, respectively, by offering competitive base salaries, benefits, and bonus structure and by providing employees with appropriate opportunities for professional development and growth.
A breakdown thereof is summarized by functional area in the table below: Number of Individuals Functional Area 12 Executive Management 37 Investment Management, Portfolio Management, and Due Diligence 23 Administration, Accounting, Compliance, Human Resources, Legal, and Treasury The Adviser and the Administrator aim to attract and retain capable advisory and administrative personnel, respectively, by offering competitive base salaries, benefits, and bonus structure and by providing employees with appropriate opportunities for professional development and growth.
Currently, services necessary for our business are provided by individuals who are employees of our Adviser and our Administrator pursuant to the terms of the Current Advisory Agreement and the Administration Agreement, respectively. Each of our executive officers is an employee or executive officer, or both, of each our Adviser and our Administrator.
Currently, services necessary for our business are provided by individuals who are employees of our Adviser and our Administrator pursuant to the terms of the Advisory Agreement and the Administration Agreement, respectively. Each of our executive 12 Table of Content officers is an employee or executive officer, or both, of each our Adviser and our Administrator.
However, under the Current Advisory 11 Table of Content Agreement, our Adviser is required to devote sufficient resources to the administration of our affairs to discharge its obligations under the agreement.
However, under the Advisory Agreement, our Adviser is required to devote sufficient resources to the administration of our affairs to discharge its obligations under the agreement.
Potential purchasers may include real estate developers desiring to develop the property, financial purchasers seeking to acquire property for investment purposes, or farmers who have operated or seek to operate the land. Accordingly, we will seek to acquire properties that we believe have potential for long-term appreciation in value. • Continue Expanding our Operations Geographically.
Potential purchasers may include real estate developers desiring to develop the property, financial purchasers seeking to acquire property for investment purposes, or farmers who have operated or seek to operate the land. Accordingly, we will seek to acquire properties that we believe have potential for long-term appreciation in value. • Operating Certain Farms under Certain Conditions .
As of December 31, 2023, our Adviser and Administrator, collectively, had 69 full-time employees.
As of December 31, 2024, our Adviser and Administrator, collectively, had 72 full-time employees.
Such businesses may include, but are not limited to, farmer-owned cooperatives, rural infrastructure providers, and other agribusinesses. We intend to hold most acquired properties for many years and to generate stable and increasing rental income from leasing these properties. • Owning Farms, Farm-Related Real Estate, and Real Estate used by Businesses that Support Farming Communities for Appreciation.
Such businesses may include, but are not limited to, farmer-owned cooperatives, rural infrastructure providers, and other agribusinesses. We intend to hold most acquired properties for many years and to generate stable and increasing rental income from leasing these properties.
We also own several farm-related facilities that are necessary to the farming operations on the underlying farmland. Our farmland is predominantly concentrated in locations where farmers are able to grow either fresh produce annual row crops (e.g., certain berries and vegetables), which are typically planted and harvested annually, or certain permanent crops (e.g., almonds, blueberries, pistachios, and wine grapes).
Our farmland is predominantly concentrated in locations where farmers are able to grow either fresh produce annual row crops (e.g., certain berries and vegetables), which are typically planted and harvested annually, or certain permanent crops (e.g., almonds, blueberries, pistachios, and wine grapes). To a much lesser extent, we also own farms that grow certain commodity crops (e.g., corn and beans).
The officers, directors, and employees of our Adviser have significant experience in making investments in and lending to businesses of all sizes, including investing in real estate and making mortgage loans.
The code also requires the pre-clearance of transactions in Fund securities. Our Adviser and Administrator We are externally managed by our Adviser. The officers, directors, and employees of our Adviser have significant experience in making investments in and lending to businesses of all sizes, including investing in real estate and making mortgage loans.
We anticipate that some of our transactions will be in conjunction with acquisitions, recapitalizations, or other corporate transactions affecting our tenants. We also expect that many of the farms and farm-related facilities we acquire will be purchased from owners who do not farm the property but rather lease the property to other tenant-farmers.
We also expect that many of the farms and farm-related facilities we acquire will be purchased from owners who do not farm the property but rather lease the property to other tenant-farmers. In situations such as these, we intend to have a lease in place prior to or simultaneously with acquiring the property.
For example, our Adviser and Administrator also serve as the external adviser and administrator, respectively, to Gladstone Capital Corporation (“Gladstone Capital”) and Gladstone Investment Corporation (“Gladstone Investment”), both publicly-traded business development companies affiliated with us, and Gladstone Commercial Corporation (“Gladstone Commercial”), a publicly-traded REIT affiliated with us.
For example, our Adviser and Administrator also serve as the external adviser and administrator, respectively, to Gladstone Capital and Gladstone Investment, both publicly-traded business development companies affiliated with us; Gladstone Commercial, a publicly-traded REIT affiliated with us; and Gladstone Alternative, a non-diversified, closed-end management investment company that operates as an “interval fund” that is also our affiliate.
Property Acquisitions and Leasing We anticipate that many of the farms and farm-related facilities we purchase will be acquired from independent farmers or agricultural companies and that they will simultaneously lease the properties back from us. These transactions will provide the tenants with an alternative to other financing sources, such as borrowing, mortgaging real property, or selling securities.
Property Acquisitions and Leasing 6 Table of Content We anticipate that many of the farms and farm-related facilities we purchase will be acquired from independent farmers or agricultural companies and that they will simultaneously lease the properties back from us.
ITEM 1. BUSINESS Overview We are an externally-managed, agricultural REIT that is engaged in the business of owning and leasing farmland. We are not a grower of crops, nor do we typically farm the properties we own. We currently own 168 farms comprised of 111,836 acres across 15 states in the U.S.
ITEM 1. BUSINESS Overview We are an externally-managed, agricultural real estate investment trust (“REIT”) that is engaged in the business of owning and leasing farmland. We are not generally a grower of crops, nor do we typically farm the properties we own, though we may, on a temporary basis, do so in the future on select properties in certain situations.
To a much lesser extent, we also own farms that grow certain commodity crops (e.g., corn and beans). In addition, we own several farm-related facilities, such as cooling facilities, packinghouses, processing facilities, and various storage facilities.
In addition, we own several farm-related facilities, such as cooling facilities, packinghouses, processing facilities, and various storage facilities.
Our properties are currently located in 15 states across the U.S., and we expect that we will acquire properties in other farming regions of the U.S. in the future.
If we choose to operate any farms we own, we anticipate doing so via a management agreement with a third-party operator and/or through our TRS. • Continue Expanding our Operations Geographically. Our properties are currently located in 15 states across the U.S., and we expect that we will acquire properties in other farming regions of the U.S. in the future.
Removed
In situations such as these, we intend to have a lease in place prior to or simultaneously with acquiring the property.
Added
If we choose to operate any farms we own, we anticipate doing so via a management agreement with a third-party operator and/or through a taxable REIT subsidiary (“TRS”). We currently own 150 farms comprised of 103,001 acres across 15 states in the U.S. We also own several farm-related facilities that are necessary to the farming operations on the underlying farmland.
Removed
We intend to provide any required disclosure of any amendments to or waivers of this code of ethics by posting information regarding any such amendment or waiver to our website. Our Adviser and Administrator We are externally managed by our Adviser.
Added
However, from time to time, we may explore alternative 5 Table of Content options with certain of our farms, including entering into agreements where we finance a portion of the planting, growing, and harvesting costs on certain farms in exchange for receiving a larger share of the resulting crop sales. • Owning Farms, Farm-Related Real Estate, and Real Estate used by Businesses that Support Farming Communities for Appreciation.
Removed
David Gladstone, our chairman, chief executive officer, president, and largest stockholder, is also the chairman, chief executive officer, and the controlling stockholder of our Adviser and our Administrator. Terry Lee Brubaker, our chief operating officer, also serves as vice chairman, chief operating officer, and a member of the Board of Directors for our Adviser and Administrator.
Added
While we do not generally intend to be a grower of crops, we may choose to do so on select properties in certain unique situations if we believe it to be in the best interests of our stockholders and best to maintain the overall value of our portfolio.
Added
These transactions will provide the tenants with an alternative to other financing sources, such as borrowing, mortgaging real property, or selling securities. We anticipate that some of our transactions will be in conjunction with acquisitions, recapitalizations, or other corporate transactions affecting our tenants.
Added
From time to time, we may also explore alternative leasing options with tenants on certain of our farms, including entering into agreements where we finance a portion of the planting, growing, and harvesting costs on certain farms in exchange for receiving a larger share of the resulting crop sales.
Added
We intend to provide any required disclosure of any amendments to or waivers of this code of ethics by posting information regarding any such amendment or waiver to our website. 10 Table of Content Insider Trading Policy In addition, the code of ethics and business conduct, among other things, prohibits directors, officers and other employees of the Company, Gladstone Capital Corporation (“Gladstone Capital”), Gladstone Commercial Corporation (“Gladstone Commercial”), Gladstone Investment Corporation (“Gladstone Investment”), Gladstone Alternative Income Fund (“Gladstone Alternative,” and collectively, with the Company, the “Funds”), the Administrator, or the Adviser, including such persons’ spouse, minor children, family members living within the same household, and any other affiliates or affiliated entities, from trading in the Funds’ securities while in possession of material non-public information and entering into a short sale transaction or trading in options (including puts and calls), warrants, convertible securities, appreciation rights, or other derivative securities, with respect to the Company’s securities (or securities of the Funds) granted as compensation or held directly or indirectly by the individuals covered under the policy, or use any other derivative transaction or instrument to take a short position in respect of such Fund’s securities.
Added
John Sateri, who is a managing director of our Adviser and President of Gladstone Alternative; and Ms. Laura Gladstone, who is a managing director of our Adviser.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

73 edited+28 added−10 removed265 unchanged
Biggest changeAll distributions will be made at the discretion of our Board of Directors and will depend on our earnings, our financial condition, whether we are able to maintain our qualification as a REIT, and other factors as our Board of Directors may deem relevant from time to time. We may not be able to make distributions in the future.
Biggest changeIf we do not have sufficient cash available for distribution generated by our assets to pay the distributions set by our Board of Directors, or if cash available for distribution decreases in future periods, the market price of our common stock could decrease. 15 Table of Content All distributions will be made at the discretion of our Board of Directors and will depend on our earnings, our financial condition, whether we are able to maintain our qualification as a REIT, and other factors as our Board of Directors may deem relevant from time to time.
In addition, such agreements may prohibit or limit the ability of our subsidiaries to transfer any of their property or assets to us, any of our other subsidiaries, or to third parties. Our future indebtedness or our subsidiaries’ future indebtedness may also include restrictions with similar effects.
In addition, such agreements may prohibit or limit the ability of our subsidiaries to transfer any of their property or assets to us, any of our other subsidiaries, or to third parties. Our future indebtedness or our subsidiaries’ future indebtedness may also include restrictions with similar effects.
Examples of these potential conflicts include: • our Adviser may realize substantial compensation on account of its activities on our behalf and may be motivated to approve acquisitions solely on the basis of increasing its compensation from us; • our agreements with our Adviser are not arm’s-length agreements, which could result in terms in those agreements that are less favorable than we could obtain from independent third parties; • we may experience competition with our affiliates for potential financing transactions; and • our Adviser and other affiliates, such as Gladstone Commercial, Gladstone Capital, and Gladstone Investment could compete for the time and services of our officers and directors and reduce the amount of time they are able to devote to management of our business.
Examples of these potential conflicts include: • our Adviser may realize substantial compensation on account of its activities on our behalf and may be motivated to approve acquisitions solely on the basis of increasing its compensation from us; • our agreements with our Adviser are not arm’s-length agreements, which could result in terms in those agreements that are less favorable than we could obtain from independent third parties; • we may experience competition with our affiliates for potential financing transactions; and • our Adviser and other affiliates, such as Gladstone Commercial, Gladstone Capital, Gladstone Investment, and Gladstone Alternative, could compete for the time and services of our officers and directors and reduce the amount of time they are able to devote to management of our business.
If a farmer loses a permanent crop to any natural disaster, such as drought, flooding, fire, or disease, there would generally be significant time and capital needed to return the land to commercial production because a tree, bush, or vine may take years to grow before bearing fruit.
If a farmer loses a permanent crop to any natural disaster, such as drought, hurricane, flooding, fire, or disease, there would generally be significant time and capital needed to return the land to commercial production because a tree, bush, or vine may take years to grow before bearing fruit.
Losses from disaster-type occurrences, such as wars, earthquakes and weather-related disasters, may be either uninsurable or not insurable on economically viable terms. Should an uninsured loss occur, we could lose our capital investment or anticipated profits and cash flows from one or more properties.
Losses from disaster-type occurrences, such as wars, wildfires, earthquakes and weather-related disasters, may be either uninsurable or not insurable on economically viable terms. Should an uninsured loss occur, we could lose our capital investment or anticipated profits and cash flows from one or more properties.
In addition to the risks associated with real estate investments in general, as described elsewhere in this Form 10-K, the risks associated with our development farms include, among other things: • significant time lag between commencement of development and commercial productivity for permanent crop development farms subjects us to greater risks due to fluctuations in the general economy, crop prices, and adverse weather conditions; • expenditure of money and time on development that may not be completed; • inability to achieve rental rates per acre at newly-developed farms to make the properties profitable; • higher than estimated costs, including labor and planting, irrigation or other related costs; and • possible delays in development due to a number of factors, including weather, labor disruptions, regulatory approvals, acts of terror or other acts of violence, or acts of God (such as fires, earthquakes, or floods).
In addition to the risks 14 Table of Content associated with real estate investments in general, as described elsewhere in this Form 10-K, the risks associated with our development farms include, among other things: • significant time lag between commencement of development and commercial productivity for permanent crop development farms subjects us to greater risks due to fluctuations in the general economy, crop prices, and adverse weather conditions; • expenditure of money and time on development that may not be completed; • inability to achieve rental rates per acre at newly-developed farms to make the properties profitable; • higher than estimated costs, including labor and planting, irrigation or other related costs; and • possible delays in development due to a number of factors, including weather, labor disruptions, regulatory approvals, acts of terror or other acts of violence, or acts of God (such as fires, earthquakes, or floods).
Even if the Series E Preferred Stock is listed on Nasdaq or another national securities exchange within one calendar year of the respective offerings’ termination date, as anticipated, there is a risk that such shares may be thinly traded, and the market for such shares may be relatively illiquid compared to the market for other types of securities, with the spread between the bid and asked prices considerably greater than the spreads of other securities with comparable terms and features.
Even if the Series E Preferred Stock is listed on Nasdaq or another national securities exchange within one calendar year of the respective offerings’ termination date, as anticipated, there is a risk that such shares may be thinly traded, and the market for such shares may be relatively illiquid compared to the market for other types of securities, with the spread between the bid and ask prices considerably greater than the spreads of other securities with comparable terms and features.
Parrish, is also an executive officer of Gladstone Commercial, which actively makes real estate investments, and Gladstone Capital and Gladstone Investment, which actively make loans to and invest in small- and medium-sized companies.
Parrish, is also an executive officer of Gladstone Commercial, which actively makes real estate investments, and Gladstone Capital, Gladstone Investment, and Gladstone Alternative, which actively make loans to and invest in small- and medium-sized companies.
To facilitate compliance with this requirement, our charter prohibits any individual from owning more than 3.3% in value of our outstanding stock. Pursuant to an exception from this limit contained in our charter, as of December 31, 2023, David Gladstone owned, directly or indirectly, including through certain trusts, aggregate beneficial ownership of approximately 8.3% of our outstanding common stock.
To facilitate compliance with this requirement, our charter prohibits any individual from owning more than 3.3% in value of our outstanding stock. Pursuant to an exception from this limit contained in our charter, as of December 31, 2024, David Gladstone owned, directly or indirectly, including through certain trusts, aggregate beneficial ownership of approximately 8.3% of our outstanding common stock.
However, such a reduction would not be effective for any stockholder who beneficially owns more than the reduced ownership limit. We believe that we have satisfied the ownership diversification requirements, including with respect to our taxable year ended December 31, 2023.
However, such a reduction would not be effective for any stockholder who beneficially owns more than the reduced ownership limit. We believe that we have satisfied the ownership diversification requirements, including with respect to our taxable year ended December 31, 2024.
As a result, we may, from time to time, have conflicts of interest with our Adviser in its management of our business and that of Gladstone Commercial, Gladstone Investment, or Gladstone Capital, which may arise primarily from the involvement of our Adviser, Gladstone Commercial, Gladstone Capital, Gladstone Investment, and their affiliates in other activities that may conflict with our business.
As a result, we may, from time to time, have conflicts of interest with our Adviser in its management of our business and that of Gladstone Commercial, Gladstone Investment, Gladstone Capital, and Gladstone Alternative, which may arise primarily from the involvement of our Adviser, Gladstone Commercial, Gladstone Capital, Gladstone Investment, Gladstone Alternative, and their affiliates in other activities that may conflict with our business.
We have implemented processes, procedures, and internal controls to help prevent, detect, and mitigate cybersecurity threats and cyber intrusions, but these measures, as well as our increased awareness of the nature and extent of a threat of a cyber-incident, 22 Table of Content do not guarantee that a cyber-incident will not occur, will be timely detected, or that our financial results, operations, or confidential information will not be negatively impacted by such an incident.
We have implemented processes, procedures, and internal controls to help prevent, detect, and mitigate cybersecurity threats and cyber intrusions, but these measures, as well as our increased awareness of the nature and extent of a threat of a cyber-incident, do not guarantee that a cyber-incident will not occur, will be timely detected, or that our financial results, operations, or confidential information will not be negatively impacted by such an incident.
As a result, there is a risk that this continuing crisis could adversely impact our ability to source, manage, and divest investments and the Company’s ability to achieve its investment objectives, all of which could result in significant losses to us and could impact our ability to make interest and distribution payments to lenders and stockholders, respectively, including their respective amounts.
As a result, there is a risk that any such continuing crisis could adversely impact our ability to source, manage, and divest investments and the Company’s ability to achieve its investment objectives, all of which could result in significant losses to us and could impact our ability to make interest and distribution payments to lenders and stockholders, respectively, including their respective amounts.
As additional acquisition opportunities arise, we may issue additional shares of common stock or preferred stock, or we may issue OP Units, which are redeemable for cash or, at our option, our common stock on a one-to-one basis, to raise the capital necessary to finance these acquisitions, thus potentially further diluting stockholders’ equity.
As additional acquisition opportunities arise, we may issue additional shares of common stock or preferred stock, or we may issue OP Units, which are redeemable for cash or, at our option, our common 27 Table of Content stock on a one-to-one basis, to raise the capital necessary to finance these acquisitions, thus potentially further diluting stockholders’ equity.
Risks Relating to Our Business and Operations 13 Table of Content Our real estate portfolio is concentrated across a limited number of states, which subjects us to an increased risk of significant loss if adverse weather, economic, or regulatory changes or developments in the markets in which our properties are located occur.
Risks Relating to Our Business and Operations Our real estate portfolio is concentrated across a limited number of states, which subjects us to an increased risk of significant loss if adverse weather, economic, or regulatory changes or developments in the markets in which our properties are located occur.
In addition, we will incur a 4% nondeductible excise tax on the amount, if any, by which our distributions in any year are less than the sum of: • 85% of our ordinary income for that year; • 95% of our capital gain net income for that year; and 27 Table of Content • 100% of our undistributed taxable income from prior years.
In addition, we will incur a 4% nondeductible excise tax on the amount, if any, by which our distributions in any year are less than the sum of: • 85% of our ordinary income for that year; • 95% of our capital gain net income for that year; and • 100% of our undistributed taxable income from prior years.
(“Land Advisers”), a wholly-owned subsidiary of our Operating Partnership, as a TRS. We may also form other TRSs as part of our overall business strategy. A TRS may earn income that would not be qualifying income if earned directly by the parent REIT. Both the subsidiary and the REIT must jointly elect to treat the subsidiary as a TRS.
(“Land Advisers”), a wholly-owned subsidiary of ours, as a TRS. We may also form other TRSs as part of our overall business strategy. A TRS may earn income that would not be qualifying income if earned directly by the parent REIT. Both the subsidiary and the REIT must jointly elect to treat the subsidiary as a TRS.
Our claim would likely be capped at the amount the tenant owed us for unpaid rent prior to the bankruptcy unrelated to the termination, plus the greater of one year of lease payments or 15% of the remaining lease payments payable under the lease, but in no case more than three years of lease payments.
Our claim would likely be capped at the amount the tenant owed us for unpaid rent prior to the bankruptcy unrelated to the termination, plus the greater of one year of lease payments or 15% of the remaining lease payments payable under the lease, but in no case more than 16 Table of Content three years of lease payments.
The devotion of a portion of our properties to these oil and gas 21 Table of Content operations would reduce the amount of the surface available for farming or farm-related uses, which could adversely impact the rents that we receive from leasing these properties. Interest rate fluctuations may adversely affect our results of operations.
The devotion of a portion of our properties to these oil and gas operations would reduce the amount of the surface available for farming or farm-related uses, which could adversely impact the rents that we receive from leasing these properties. Interest rate fluctuations may adversely affect our results of operations.
Our pre-incentive fee FFO for a particular quarter for incentive compensation purposes excludes the effect of any unrealized gains, losses, or other items during that quarter that do not affect realized net income, even if these adjustments result in a net loss on our statement of operations for that quarter.
Our pre-incentive fee FFO for a particular quarter for incentive compensation purposes excludes the effect of any unrealized gains, losses, or other 25 Table of Content items during that quarter that do not affect realized net income, even if these adjustments result in a net loss on our statement of operations for that quarter.
A failure to pay amounts due to lenders or redeem shares of our Series D Term Preferred Stock under the mandatory redemption requirement may result in a default on our obligations and result in certain penalties, such as increased interest rates.
A failure to pay amounts due to lenders or redeem shares of our 20 Table of Content Series D Term Preferred Stock under the mandatory redemption requirement may result in a default on our obligations and result in certain penalties, such as increased interest rates.
This includes the availability and identity of quality tenant farmers, forging new business relationships in the area and unfamiliarity with local government requirements and procedures. Furthermore, the evaluation and negotiation of a potential expansion into new markets would divert management time and other resources.
This includes the availability and identity of 21 Table of Content quality tenant farmers, forging new business relationships in the area and unfamiliarity with local government requirements and procedures. Furthermore, the evaluation and negotiation of a potential expansion into new markets would divert management time and other resources.
Permits for drilling water wells are required by state and county regulations, and such permits may be difficult to obtain due to the limited supply of water in areas where we expect to acquire properties, such as the farming regions of California.
Permits for drilling water wells are required by state and county regulations, and such permits may be difficult to obtain due to the limited supply of water 18 Table of Content in areas where we expect to acquire properties, such as the farming regions of California.
Therefore, although it may be in our stockholders’ best interests that we sell one of these properties, it may be economically 25 Table of Content prohibitive for us to do so if we are a party to such a tax protection agreement.
Therefore, although it may be in our stockholders’ best interests that we sell one of these properties, it may be economically prohibitive for us to do so if we are a party to such a tax protection agreement.
Tenants that have been impacted adversely by public health emergencies may not be able to make timely rental payments due to labor shortages, supply chain issues, or due to government-mandated lockdowns or other measures taken to address such public health emergencies.
Tenants that have been impacted adversely by public health emergencies may not be able to make timely rental payments due to labor shortages, supply chain issues, or other measures taken to address such public health emergencies.
Risks Associated With Our Use of an Adviser to Manage Our Business We are dependent upon our key management personnel for our future success, particularly David Gladstone, Terry Lee Brubaker, Bill Reiman, Lewis Parrish, and Jay Beckhorn.
Risks Associated with Our Use of an Adviser to Manage Our Business We are dependent upon our key management personnel for our future success, particularly David Gladstone, Bill Reiman, Lewis Parrish, and Jay Beckhorn.
At the same time, our Advisory Agreement permits our Adviser to conduct other 23 Table of Content commercial activities and to provide management and advisory services to other entities, including, but not limited to, Gladstone Commercial, Gladstone Capital, and Gladstone Investment, each of which is affiliated with us. Each of our executive officers, other than Mr.
At the same time, our Advisory Agreement permits our Adviser to conduct other commercial activities and to provide management and advisory services to other entities, including, but not limited to, Gladstone Commercial, Gladstone Capital, Gladstone Investment, and Gladstone Alternative, each of which is affiliated with us. Each of our executive officers, other than Mr.
As of December 31, 2023, David Gladstone, our chairman, chief executive officer, and president, and pursuant to an exception approved by our Board of Directors and in compliance with our charter, owned, directly or indirectly, 24 Table of Content including through certain foundations and trusts, approximately 7.0% of our common stock, and the Gladstone Future Trust, for the benefit of Mr.
As of December 31, 2024, David Gladstone, our chairman, chief executive officer, and president, and pursuant to an exception approved by our Board of Directors and in compliance with our charter, owned, directly or indirectly, including through certain foundations and trusts, approximately 7.0% of our common stock, and the Gladstone Future Trust, for the benefit of Mr.
In addition, some of our distributions may include a return of capital. To the extent that our Board of Directors approves distributions in excess of our then current and accumulated earnings and profits, these excess distributions would generally be considered a return of capital for federal income tax purposes to the extent of your adjusted tax basis in your shares.
To the extent that our Board of Directors approves distributions in excess of our then current and accumulated earnings and profits, these excess distributions would generally be considered a return of capital for federal income tax purposes to the extent of your adjusted tax basis in your shares.
In addition, our officers and directors, our Adviser and its affiliates could be deemed to be fiduciaries under ERISA and subject to 28 Table of Content other conditions, restrictions and prohibitions under Part 4 of Title I of ERISA.
In addition, our officers and directors, our Adviser and its affiliates could be deemed to be fiduciaries under ERISA and subject to other conditions, restrictions and prohibitions under Part 4 of Title I of ERISA.
A reduction in the rent we receive could have a material adverse effect on our cash flow and ability to make distributions to our stockholders. 16 Table of Content Our investments in farmland used for permanent crops have a higher risk profile than farmland used for annual row crops.
A reduction in the rent we receive could have a material adverse effect on our cash flow and ability to make distributions to our stockholders. Our investments in farmland used for permanent crops have a higher risk profile than farmland used for annual row crops.
Our ability to maintain our qualification as a REIT depends on our ability to satisfy requirements set forth in the Code, concerning, among other things, the ownership of our outstanding common stock, the nature of our assets, the sources of our income and the amount of our distributions to our stockholders.
Our ability to maintain our qualification as a REIT depends on our ability to satisfy requirements set forth in the Internal Revenue Code of 1986, as amended (the “Code”), concerning, among other things, the ownership of our outstanding common stock, the nature of our assets, the sources of our income and the amount of our distributions to our stockholders.
There is currently no public market for the Series E Preferred Stock. We intend to apply to list the Series E Preferred Stock on Nasdaq or another national securities exchange or to include these shares for quotation on a national securities market sometime within 12 months following the Series E Preferred Stock offering’s termination date.
We intend to apply to list the Series E Preferred Stock on Nasdaq or another national securities exchange or to include these shares for quotation on a national securities market sometime within 12 months following the Series E Preferred Stock offering’s termination date.
Our future success depends to a significant extent on the continued service and coordination of our senior management team, particularly David Gladstone, our chairman, chief executive officer and president; Terry Lee Brubaker, our chief operating officer; Bill Reiman, our Executive Vice President; and Lewis Parrish, our chief financial officer and assistant treasurer. Mr.
Our future success depends to a significant extent on the continued service and coordination of our senior management team, particularly David Gladstone, our chairman, chief executive officer and president; Bill Reiman, our Executive Vice President; Lewis Parrish, our chief financial officer and assistant treasurer; and Jay Beckhorn, our treasurer. Mr.
The remainder of our investment in securities other than government securities, securities of a taxable REIT subsidiary (“TRS”), and qualified real estate assets generally cannot include more than 10% of the outstanding voting securities of any one issuer or more than 10% of the total value of the outstanding securities of any one issuer.
The remainder of our investment in securities other than government securities, securities of a TRS, and qualified real estate assets generally cannot include more than 10% of the outstanding voting securities of any one issuer or more than 10% of the total value of the outstanding securities of any one issuer.
If market interest rates 29 Table of Content increase, prospective investors may desire a higher distribution yield on our common stock or may seek securities paying higher dividends or interest.
If market interest rates increase, prospective investors may desire a higher distribution yield on our common stock or may seek securities paying higher dividends or interest.
While we do not expect participation rents to make up a significant portion of our overall leased portfolio, we intend to enter into additional leases with participation rent components.
While we do not generally intend for participation rents to make up a significant portion of our overall leased portfolio, we anticipate entering into additional leases with participation rent components.
Maryland law provides that a director or officer has no liability in that capacity if he or she performs his or her duties in good faith, in a manner he or she reasonably believes to be advisable and in our best interests and with the care that an ordinarily prudent person in a like position would use under similar circumstances.
Our rights and the rights of our stockholders to take action against our directors and officers are limited. 26 Table of Content Maryland law provides that a director or officer has no liability in that capacity if he or she performs his or her duties in good faith, in a manner he or she reasonably believes to be advisable and in our best interests and with the care that an ordinarily prudent person in a like position would use under similar circumstances.
Gladstone also serves as the chief executive officer of our Adviser and our Administrator, and Mr. Brubaker is also an executive officer of our Adviser and our Administrator.
Gladstone also serves as the chief executive officer of our Adviser and our Administrator.
If we issue additional preferred securities that rank senior to our common shares in our capital structure, the holders of such preferred securities may have separate voting rights and other rights, preferences, or privileges, economic and otherwise, more favorable than those of our common shares and our currently-designated preferred securities, and the issuance of such preferred securities could have the effect of delaying, deferring, or preventing a transaction or a change of control that might involve a premium price for common stockholders. 18 Table of Content Any inability to access additional financing on terms that are favorable to us may adversely affect our ability to grow and our business generally.
If we issue additional preferred securities that rank senior to our common shares in our capital structure, the holders of such preferred securities may have separate voting rights and other rights, preferences, or privileges, economic and otherwise, more favorable than those of our common shares and our currently-designated preferred securities, and the issuance of such preferred securities could have the effect of delaying, deferring, or preventing a transaction or a change of control that might involve a premium price for common stockholders.
We intend to apply for quotation on Nasdaq for the Series E Preferred Stock in the future; however, there is currently no public market for this security. Even after listing, if achieved, a liquid secondary trading market may not develop, and the features of the Series E Preferred Stock may not provide holders of such shares with favorable liquidity options.
Even after listing, if achieved, a liquid secondary trading market may not develop, and the features of the Series E Preferred Stock may not provide holders of such shares with favorable liquidity options. There is currently no public market for the Series E Preferred Stock.
These actions could have the effect of reducing our income and amounts available for distribution to our stockholders. Failure to make required distributions, both prior to and following our REIT election, would jeopardize our REIT status, which could require us to pay taxes and negatively impact our cash available for future distribution.
Failure to make required distributions, both prior to and following our REIT election, would jeopardize our REIT status, which could require us to pay taxes and negatively impact our cash available for future distribution.
No assurance can be given as to whether, when, or in what form the U.S. federal income tax laws applicable to us and our stockholders may be enacted. Changes to the U.S. federal income tax laws and interpretations of U.S. federal tax laws could adversely affect an investment in our common stock.
No assurance can be given as to whether, when, or in what form the U.S. federal income tax laws applicable to us and our stockholders may be enacted.
This would reduce our ability to make additional investments and limit the further diversification of our portfolio. Our currently-designated preferred securities all bear a risk of redemption by us.
This would reduce our ability to make additional investments and limit the further diversification of our portfolio. Our currently-designated preferred securities all bear a risk of redemption by us. We may voluntarily redeem some or all of the Series B Preferred Stock or Series C Preferred Stock.
If a sale-leaseback transaction were so re-characterized, we might fail to satisfy the asset or income tests required for REIT qualification and consequently could lose our REIT status. Alternatively, the amount of our REIT taxable income could be recalculated, which could cause us to fail the distribution test for REIT qualification.
If a sale-leaseback transaction were so re-characterized, we might fail to satisfy the asset or income tests required for REIT qualification and consequently could lose our REIT status.
Although the current development market contains uncertainties, these uncertainties may be more acute over time, since we do 20 Table of Content not intend to acquire properties that are expected to be converted to urban or suburban uses in the near term.
These uncertainties are particularly pronounced in light of the current economic environment, in which the pace of future development is unclear. Although the current development market contains uncertainties, these uncertainties may be more acute over time, since we do not intend to acquire properties that are expected to be converted to urban or suburban uses in the near term.
A significant change in interest rates could have an adverse impact on our results of operations. While the U.S. Federal Reserve increased the federal funds rate 11 times from March 2022 through July 2023, they have held the federal funds rate flat since then.
A significant change in interest rates could have an adverse impact on our results of operations. While the U.S. Federal Reserve increased the federal funds rate 11 times from March 2022 through July 2023, they cut the interest rate for the first time in four years in September 2024 but have held rates flat thus far in 2025.
Despite careful security and controls design, implementation, updating, and independent third-party verification, our information technology systems, and those of our third-party providers, could become subject to cybersecurity incidents.
We also rely extensively on computer systems to process transactions and manage our business. Despite careful security and controls design, implementation, updating, and independent third-party verification, our information technology systems, and those of our third-party providers, could become subject to cybersecurity incidents.
Cybersecurity risks and cyber incidents may adversely affect our business by causing a disruption to our operations or the operations of businesses in which we invest, a compromise or corruption of our confidential information, and/or damage to our business relationships, all of which could negatively impact our business, financial condition, and operating results.
Cybersecurity risks and cyber incidents may adversely affect our business by causing a disruption to our operations or the operations of businesses in which we invest, a compromise or corruption of our confidential information, and/or damage to our business relationships, all of which could negatively impact our business, financial condition, and operating results. 23 Table of Content In the normal course of business, we and our service providers collect and retain certain personal information provided by our tenants, employees of our Administrator and Adviser, and vendors.
Risks Relating to the Market for our Common Stock, Series B Preferred Stock, Series C Preferred Stock, Series D Term Preferred Stock, and Series E Preferred Stock Future issuances and sales of shares of our common stock, our currently-designated preferred securities, future series of preferred securities, or the perception that such issuances will occur, may have adverse effects on the trading prices of our shares.
Changes to the U.S. federal income tax laws and interpretations of U.S. federal tax laws could adversely affect an investment in our common stock. 30 Table of Content Risks Relating to the Market for our Common Stock, Series B Preferred Stock, Series C Preferred Stock, Series D Term Preferred Stock, and Series E Preferred Stock Future issuances and sales of shares of our common stock, our currently-designated preferred securities, future series of preferred securities, or the perception that such issuances will occur, may have adverse effects on the trading prices of our shares.
We anticipate that the majority of such leases will continue to have a floor that guarantees a minimum amount of rental income that generally satisfies our investment return criteria; however, such leases will still be impacted by factors related to the success of the farmer-tenant’s harvest, including, but not limited to, declining crop prices and lower-than-average crop production, that may result in us receiving less rent than anticipated or projected when entering into such leases.
Such leases will still be impacted by factors related to the success of the farmer-tenant’s harvest, including, but not limited to, declining crop prices and lower-than-average crop production, that may result in us receiving less rent than anticipated or projected when entering into such leases.
Because we must distribute a substantial portion of our net income to maintain our qualification as a REIT, we will be largely dependent on third-party sources of capital to fund our future capital needs.
Because we must distribute a substantial portion of our net income to maintain our qualification as a REIT, we will be largely dependent on third-party sources of capital to fund our future capital needs. 19 Table of Content To maintain our qualification as a REIT, we generally must distribute to our stockholders at least 90% of our taxable income each year, excluding net capital gains.
We may not be successful in identifying and consummating additional suitable acquisitions that meet our investment criteria, which may impede our growth and negatively affect our results of operations.
These risks may harm our farming operations and have a material adverse effect on our results of operations and cash flow. We may not be successful in identifying and consummating additional suitable acquisitions that meet our investment criteria, which may impede our growth and negatively affect our results of operations.
This will generally provide for less price stability of the harvested crop and therefore less stability of the underlying land value for cropland producing permanent crops. As a result, permanent crop farms typically have a higher risk profile than annual row crop farms.
As a result, permanent crops are usually less insulated from the global produce market volatility than annual row crops. This will generally provide for less price stability of the harvested crop and therefore less stability of the underlying land value for cropland producing permanent crops.
If demand for one type of permanent crop decreases, the permanent crop farmer cannot easily convert the farm to another type of crop because permanent crop farmland is dedicated to one crop during the lifespan of the trees, bushes, or vines and therefore cannot easily be rotated to adapt to changing environmental or market conditions.
If demand for one type of permanent crop decreases, the permanent crop farmer cannot easily convert the farm to another type of crop because permanent crop farmland is dedicated to one crop during the lifespan of the trees, bushes, or vines and therefore cannot easily be rotated to adapt to changing environmental or market conditions. 17 Table of Content In addition, permanent crops, which can generally endure long periods of time from harvest to consumption, allow for global shipment and trade.
The death, disability or resignation of one or more of these persons could have a material adverse impact on our tenant and, in turn, on us.
Furthermore, the success of a medium-sized business may also depend on the management talents and efforts of one or a small group of persons. The death, disability or resignation of one or more of these persons could have a material adverse impact on our tenant and, in turn, on us.
Our agricultural properties are subject to adverse weather conditions, seasonal variability, crop disease and other contaminants, which may affect our tenants’ ability to pay rent and thereby have an adverse effect on our results of operations and our ability to make distributions to stockholders. 17 Table of Content Fresh produce, including produce used in canning and other packaged food operations, is vulnerable to adverse weather conditions, including windstorms, floods, drought and temperature extremes, which are common but difficult to predict.
Our agricultural properties are subject to adverse weather conditions, seasonal variability, crop disease and other contaminants, which may affect our tenants’ ability to pay rent and thereby have an adverse effect on our results of operations and our ability to make distributions to stockholders.
Competition for the acquisition of agricultural real estate may impede our ability to make acquisitions, increase the cost of these acquisitions or decrease or prevent increases in the occupancy and rental rates of our current properties. 19 Table of Content We will compete for the acquisition of properties with many other entities engaged in agricultural and real estate investment activities, including corporate agriculture companies, financial institutions, institutional pension funds, real estate companies, private equity funds and private real estate investors.
We will compete for the acquisition of properties with many other entities engaged in agricultural and real estate investment activities, including corporate agriculture companies, financial institutions, institutional pension funds, real estate companies, private equity funds and private real estate investors.
Therefore, in the event of our bankruptcy, liquidation, or reorganization, claims of holders of our currently-designated preferred securities will be satisfied only after all of our and the Operating Partnership’s and its subsidiaries’ liabilities and obligations have been paid in full.
Therefore, in the event of our bankruptcy, liquidation, or reorganization, claims of holders of our currently-designated preferred securities will be satisfied only after all of our and the Operating Partnership’s and its subsidiaries’ liabilities and obligations have been paid in full. 31 Table of Content We intend to apply for quotation on Nasdaq for the Series E Preferred Stock in the future; however, there is currently no public market for this security.
Should the Federal Reserve continue to keep the federal funds rate flat for a prolonged period of time, or should it announce further increases, this may cause interest rates and borrowing costs to remain high or rise even further, which may negatively impact our ability to access the debt markets on favorable terms and the market value of our capital stock.
While the Federal Reserve recently cut the interest rate for the first time in four years in September 2024, but have held rates flat thus far in 2025 and may announce further increases in the future, causing interest rates and borrowing costs to remain high or rise even further, which may negatively impact our ability to access the debt markets on favorable terms and the market value of our capital stock.
Also, since the Series E Preferred Stock has a stated maturity date, holders may be forced to hold the Series E Preferred Stock and receive stated dividends on the shares when, as, and if authorized by our Board of Directors and declared by us with no assurance as to ever receiving the liquidation preference. 30 Table of Content We will be required to terminate the Series E Offering (as defined elsewhere in this Form 10-K) if our common stock and our publicly-traded, currently-designated preferred securities are all no longer listed on Nasdaq or another national securities exchange.
Also, since the Series E Preferred Stock has a stated maturity date, holders may be forced to hold the Series E Preferred Stock and receive stated dividends on the shares when, as, and if authorized by our Board of Directors and declared by us with no assurance as to ever receiving the liquidation preference.
If that were to occur, it would result in the amount of distributions that exceed our current and accumulated earnings and profits being treated first as a return of capital to the extent of the holder’s adjusted tax basis in the respective security and then, to the extent of any excess over such adjusted tax basis, as capital gain. 26 Table of Content We may not be able to maintain our qualification as a REIT for federal income tax purposes, which would subject us to federal income tax on our taxable income at regular corporate rates, thereby reducing the amount of funds available for paying distributions to stockholders.
If that were to occur, it would result in the amount of distributions that exceed our current and accumulated earnings and profits being treated first as a return of capital to the extent of the holder’s adjusted tax basis in the respective security and then, to the extent of any excess over such adjusted tax basis, as capital gain.
These companies are more vulnerable to adverse conditions in their businesses or industries and economic conditions generally, as well as to increases in interest rates.
These companies are more vulnerable to adverse conditions in their businesses or industries and economic conditions generally, as well as to increases in interest rates. In addition, these companies’ revenues and expenses may fluctuate according to the growing season, which may impact their ability to make regular lease payments.
In addition, in general, no more than 5% of the value of our assets other than government securities, securities of TRSs, and qualified real estate assets can consist of the securities of any one issuer, and no more than 20% (or 25% for taxable years ended on or before December 31, 2017) of the value of our total assets can be represented by securities of one or more TRSs.
In addition, in general, no more than 5% of the value of our assets other than government securities, securities of TRSs, and qualified real estate assets can consist of the securities of any one issuer, and no more than 20% (or 25% for taxable years ended on or before December 31, 2017) of the value of our total assets can be represented by securities of one or more TRSs. 28 Table of Content If we fail to comply with these requirements, we must correct the failure within 30 days after the end of the calendar quarter or qualify for certain statutory relief provisions to avoid losing our REIT qualification and suffering adverse tax consequences.
The departure of any of our executive officers or key personnel of our Adviser or Administrator, as applicable, could have a material adverse effect on our ability to implement our business strategy and to achieve our investment objectives.
Although we engage in customary mitigating activities, the departure of any of our executive officers or key personnel of our Adviser or Administrator, as applicable, could have a material adverse effect on our ability to implement our business strategy and to achieve our investment objectives. 24 Table of Content Our success will continue to depend on the performance of our Adviser and if our Adviser makes inadvisable investment or management decisions, our operations could be materially adversely impacted.
The presence of endangered or threatened species on or near our acquired farmland could restrict the activities of our agricultural tenants, which could in turn have a material adverse impact on the value of our assets and our results of operations.
Additionally, shifts in federal immigration policy could adversely affect the overall farming labor market, which could result in upward pressure on wages for farm labor and adversely affect our tenants’ profitability and ability to pay rent, which could in turn adversely affect our results of operations. 22 Table of Content The presence of endangered or threatened species on or near our acquired farmland could restrict the activities of our agricultural tenants, which could in turn have a material adverse impact on the value of our assets and our results of operations.
Investments in our common stock may not be suitable for pension or profit-sharing trusts, Keogh Plans or individual retirement accounts (“IRAs”).
Alternatively, the amount of our REIT taxable income could be recalculated, which could cause us to fail the distribution test for REIT qualification. 29 Table of Content Investments in our common stock may not be suitable for pension or profit-sharing trusts, Keogh Plans or individual retirement accounts (“IRAs”).
In the event of a default by a tenant, we may also experience delays in enforcing our rights as landlord and may incur substantial costs in protecting our investment and re-leasing our property. Some of our tenants could be susceptible to bankruptcy, which would affect our ability to generate rents from them and therefore negatively affect our results of operations.
Any lease payment defaults by a tenant could adversely affect our cash flows and cause us to reduce the amount of distributions to stockholders. In the event of a default by a tenant, we may also experience delays in enforcing our rights as landlord and may incur substantial costs in protecting our investment and re-leasing our property.
They also tend to experience significant fluctuations in their operating results and to be more vulnerable to competitors’ actions and market conditions, as well as general economic downturns.
They also tend to experience significant fluctuations in their operating results and to be more vulnerable to competitors’ actions and market conditions, as well as general economic downturns. In addition, our target tenants may face intense competition, including competition from companies with greater financial resources, which could lead to price pressure on crops that could lower our tenants’ income.
To maintain our qualification as a REIT, we generally must distribute to our stockholders at least 90% of our taxable income each year, excluding net capital gains. Because of this distribution requirement, it is not likely that we will be able to fund a significant portion of our future capital needs, including property acquisitions, from retained earnings.
Because of this distribution requirement, it is not likely that we will be able to fund a significant portion of our future capital needs, including property acquisitions, from retained earnings. Therefore, we may acquire additional capital from the issuance of securities senior to our common shares, including borrowings or other indebtedness, preferred shares, or the issuance of other securities.
Such a default may adversely affect our financial condition, results of operations and ability to pay distributions to our stockholders.
Such a default may adversely affect our financial condition, results of operations and ability to pay distributions to our stockholders. Competition for the acquisition of agricultural real estate may impede our ability to make acquisitions, increase the cost of these acquisitions or decrease or prevent increases in the occupancy and rental rates of our current properties.
The Federal Reserve has kept the federal funds rate flat since July 2023, and there can be no assurance if or when any reductions will be announced. Partly due to increases in the federal funds rate prior to July 2023 and the uncertainty over future actions of the Federal Reserve, borrowing costs remain high.
Partly due to the continued elevated levels of the federal funds rate and the uncertainty over future actions of the Federal Reserve, borrowing costs remain high.
If we fail to comply with these requirements, we must correct the failure within 30 days after the end of the calendar quarter or qualify for certain statutory relief provisions to avoid losing our REIT qualification and suffering adverse tax consequences. As a result, we may be required to dispose of otherwise attractive investments to satisfy REIT requirements.
As a result, we may be required to dispose of otherwise attractive investments to satisfy REIT requirements. These actions could have the effect of reducing our income and amounts available for distribution to our stockholders.
Removed
In addition, our target tenants may face intense competition, including competition from companies with greater financial resources, which could lead to price pressure on crops that could lower our tenants’ income. 14 Table of Content Furthermore, the success of a medium-sized business may also depend on the management talents and efforts of one or a small group of persons.
Added
We may operate farms on certain of our properties, which will increase our operating costs and expose us to additional farming and related operational risks . We may, on a temporary basis, operate certain of our farms via a management agreement with a third-party operator.
Removed
If we do not have sufficient cash available for distribution generated by our assets to pay the distributions set by our Board of Directors, or if cash available for distribution decreases in future periods, the market price of our common stock could decrease.
Added
If we choose to operate any farms we own, we will incur additional costs associated with such farming activities. In addition, we will be exposed to risks related to farming these properties, including, but not limited to, overall market conditions, natural disasters, adverse weather conditions (including drought), crop-related disease, lower-than-expected harvests, and regulatory restrictions.
Removed
In addition, these companies’ revenues and expenses may fluctuate according to the growing season, which may impact their ability to make regular lease payments. 15 Table of Content Any lease payment defaults by a tenant could adversely affect our cash flows and cause us to reduce the amount of distributions to stockholders.
Added
We may not be able to make distributions in the future. In addition, some of our distributions may include a return of capital.
Removed
In addition, permanent crops, which can generally endure long periods of time from harvest to consumption, allow for global shipment and trade. As a result, permanent crops are usually less insulated from the global produce market volatility than annual row crops.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

13 edited+2 added−0 removed9 unchanged
Biggest changeNotwithstanding our risk management and strategy described above, we may not be successful in preventing or mitigating a cybersecurity incident that could have a material adverse effect on us.
Biggest changeNotwithstanding our risk management and strategy described above, we may not be successful in preventing or mitigating a cybersecurity incident that could have a material adverse effect on us. We are not currently aware of any known cybersecurity risks that may materially impact our operations, though we may not be able to determine the likelihood of such risks.
Contractually, we require the ISP to provide us with annually a third-party report on its systems and on the suitability of the design and operating effectiveness of its controls relevant to information and cyber security.
Contractually, we require the ISP to annually provide us with a third-party report on its systems and on the suitability of the design and operating effectiveness of its controls relevant to information and cyber security.
ITEM 1C. CYBERSECURITY Risk Management and Strategy We have implemented ongoing processes that are designed to continually identify, assess, manage, and mitigate the dynamic and evolving material risks to us from cybersecurity threats.
ITEM 1C. CYBERSECURITY Risk Management and Strategy We have implemented ongoing processes that are designed to continually identify, assess, manage, monitor, and mitigate the dynamic and evolving material risks to us from cybersecurity threats.
Relevant examples of such efforts include but are not limited to: ▪ implementation of industry-leading Cloud solutions and business applications which possess integrated cybersecurity safeguards, ▪ anti-malware, antivirus, and threat detection software, ▪ ransomware containment and isolation software, 31 Table of Content ▪ enhanced password requirements and multifactor authentication requirements, ▪ endpoint encryption, ▪ intrusion detection and response system conduct file integrity monitoring, ▪ email archiving, firewalls, and quarantine capabilities, ▪ mobile device management of business applications, ▪ frequent systems backups with recovery capabilities, and ▪ regular vulnerability scans and penetration testing.
Relevant examples of such efforts include but are not limited to: ▪ implementation of industry-leading Cloud solutions and business applications which possess integrated cybersecurity safeguards; ▪ anti-malware, antivirus, and threat detection software; ▪ ransomware containment and isolation software; ▪ enhanced password requirements and multifactor authentication requirements; ▪ endpoint encryption; ▪ intrusion detection and response system conduct file integrity monitoring; ▪ email archiving, firewalls, and quarantine capabilities; ▪ mobile device management of business applications; ▪ frequent systems backups with recovery capabilities; and ▪ regular vulnerability scans and penetration testing.
In addition to the ongoing dialogue and technology interaction between our Adviser and Administrator and our ISP, any significant findings in these reports are shared with us, including our Board of Directors and other officers, to enhance ongoing monitoring and assessment of our information technology and cybersecurity risk management.
In addition to the ongoing dialogue and technology interaction between the Director of IT, our Adviser and Administrator, and the ISP, any significant findings in these reports are shared with us, including our Board of Directors and other officers, to enhance ongoing monitoring and assessment of our information technology and cybersecurity risk management.
The reports are distributed to our Board of Directors, and our CCO engages in detailed discussions with the independent board members during the independent members’ session. The reports cover all potentially material cybersecurity threats facing us, as well as key risks and mitigation efforts undertaken by us and our Adviser and Administrator.
The reports are distributed to our Board of Directors, and our CCO engages in detailed discussions with the independent board members during the independent members’ session. The reports cover all potentially material cybersecurity threats facing us, as well as key 33 Table of Content risks and mitigation efforts undertaken by us and our Adviser and Administrator.
See Part I, Item 1A, “ Risk Factors—Risks Relating to Our Business and Operations—Cybersecurity risks and cyber incidents may adversely affect our business by causing a disruption to our operations or the operations of businesses in which we invest, a compromise or corruption of our confidential information, and/or damage to our business relationships, all of which could negatively impact our business, financial condition, and operating results.” Governance Our Board of Directors is actively engaged in overseeing our cybersecurity and information security program.
See Part I, Item 1A, “ Risk Factors—Risks Relating to Our Business and Operations—Cybersecurity risks and cyber incidents may adversely affect our business by causing a disruption to our operations or the operations of businesses in which we invest, a compromise or corruption of our confidential information, and/or damage to our business relationships, all of which could negatively impact our business, financial condition, and operating results , ” for a discussion of risks related to cybersecurity and cyber incidents.
Our cybersecurity threat risks are identified, assessed, managed, and monitored by our Adviser’s and Administrator’s resource management and compliance departments, which work in conjunction with an independent third-party information technology service provider (“ISP”) engaged by our Adviser to manage our information technology strategy. The ISP regularly performs cyber assessments and assists in maintaining our cyber and information security programs.
Our Adviser’s and Administrator’s resource management, information technology (“IT”), and compliance departments work in conjunction with an independent third-party information technology service provider (“ISP”) engaged by our Adviser to manage our information technology strategy. The ISP regularly performs cyber assessments and assists us in maintaining our cyber and information security programs.
The ISP proposes recommendations to our Adviser’s resource management and compliance departments, which are then considered by other officers and employees of our Adviser and Administrator working on our behalf before improvements are implemented to our information technology strategy, cybersecurity, and incident response policies, processes, and procedures.
The ISP proposes recommendations for improvements to our Adviser’s Head of Resource Management, Director of IT, and Chief Compliance Officer (“CCO”), which are then considered by other officers and employees of our Adviser and Administrator 32 Table of Content working on our behalf before improvements are implemented to our information technology strategy, cybersecurity, and incident response policies, processes, and procedures.
While our ISP works to create a hardened information technology systems environment, our Adviser and Administrator also regularly trains employees working on our behalf on the evolving threats and educates them on cybersecurity risks.
While our ISP works to create a hardened information technology systems environment, our Adviser and Administrator also regularly trains employees working on our behalf on the evolving threats and educates them on cybersecurity risks to provide an additional protection barrier through end-user knowledge.
Our Board of Directors receives regular reports during board meetings from our CCO on our and our Adviser’s and Administrator’s efforts concerning information security and addressing information technology and cybersecurity risks no less than quarterly.
Our Board of Directors receives regular reports during board meetings from our CCO on our and our Adviser’s and Administrator’s efforts concerning information security and addressing information technology and cybersecurity risks no less than quarterly and regularly receives updates from third parties on various business risks, which include cybersecurity matters.
As an international service provider, our ISP constantly monitors information technology risk and cybersecurity threats globally. When risks are detected, we, through our Adviser and Administrator, consult with the ISP to assess if the risk is a cybersecurity threat to our information technology systems or data.
As an international service provider, our ISP constantly monitors information technology risk and cybersecurity threats globally. When risks are detected, the Director of IT, Head of Resource Management, and CCO consult with the ISP to assess if the risk is a cybersecurity threat to our information technology systems or data.
In addition, regular ongoing cybersecurity threat risk assessments are performed throughout the year and reported to our officers and Board of Directors by our Chief Compliance Officer (“CCO”) no less than quarterly.
In addition, regular ongoing cybersecurity threat risk assessments, which also cover third-party business applications, are performed throughout the year and reported to our officers and Board of Directors by our CCO no less than quarterly.
Added
Governance Our Board of Directors is actively engaged in overseeing our cybersecurity and information security program.
Added
Our Director of IT has over 20 years of experience in IT, with a focus in the implementation of information security projects to enhance organizations’ resilience against emerging threats, and has collaborated closely with security vendors and partners to contain and address cybersecurity incidents.

Item 2. Properties

Properties — owned and leased real estate

9 edited+0 added−1 removed2 unchanged
Biggest changeThe following table provides certain summary information about the 169 farms we owned as of December 31, 2023 (dollars in thousands, except for footnotes): 32 Table of Content 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.
Biggest changeThe following table provides certain summary information about the 157 farms we owned as of December 31, 2024 (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 55,387 $ 840,374 $ 372,780 Florida (6) 25 18,720 13,891 — 166,471 76,917 Washington 6 2,520 2,004 — 56,171 15,196 Arizona (7) 6 6,320 5,333 — 49,840 11,939 Colorado 12 32,773 25,577 — 45,579 13,849 Nebraska (6) 9 7,782 7,050 — 29,898 9,912 Oregon (8) 6 898 736 — 28,991 10,873 Michigan 12 1,245 778 — 15,204 8,663 Texas 1 3,667 2,219 — 8,026 — Maryland 6 987 863 — 7,948 4,218 South Carolina 3 597 447 — 3,452 2,100 Georgia 2 230 175 — 2,222 1,600 North Carolina 2 310 295 — 2,076 — New Jersey 3 116 101 — 2,059 1,185 Delaware 1 180 140 — 1,280 677 Totals 157 111,190 91,930 55,387 $ 1,259,591 $ 529,909 (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.
(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. (3) Includes ownership in a special-purpose LLC that owns a pipeline conveying water to certain of our properties.
(2) Excludes approximately $2.4 million of debt issuance costs related to notes and bonds payable, included in Notes and bonds payable, net on the accompanying Consolidated Balance Sheets. (3) Includes ownership in a special-purpose LLC that owns a pipeline conveying water to certain of our properties.
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, 2024, these ground leases had an aggregate net cost basis of approximately $42,000 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, 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.
As of December 31, 2024, these two ground leases had a net cost basis of approximately $651,000 and are included in Lease intangibles, net on the accompanying Consolidated Balance Sheets.
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.
As of December 31, 2024, this investment had a net carrying value of approximately $4.7 million and is included within Other assets, 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 Note 3, “ Real Estate and Intangible Assets—Investments in Water Assets, ” in the accompanying notes to our consolidated financial statements for additional information.
(5) Includes 48,309 acre-feet of water stored with Semitropic Water Storage District, located in Kern County, California, and 7,078 surplus water credits in our account with Westlands Water District, located in Fresno County, California. See Note 3, “ Real Estate and Intangible Assets—Investments in Water Assets, ” in the accompanying notes to our consolidated financial statements for additional information.
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.
Specifically, includes Total real estate, net and Lease intangibles, net; plus Real estate and related assets held for sale, 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.
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.
As of December 31, 2024, this investment had a net carrying value of approximately $962,000 and is included within Other assets, net on the accompanying Consolidated Balance Sheet.
(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.
(6) Includes certain properties classified as held for sale; see Note 3, “ Real Estate and Intangible Assets—Real Estate Held for Sale, ” in the accompanying notes to our consolidated financial statements for additional information. 34 Table of Content (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.
Removed
(6) Includes one property classified as held for sale; see Note 3, “ Real Estate and Intangible Assets—Real Estate Held for Sale, ” in the accompanying notes to our consolidated financial statements for additional information.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

6 edited+6 added−0 removed8 unchanged
Biggest changeThe stock performance graph assumes $100 was invested on December 31, 2018. As of December 31, Index 2018 2019 2020 2021 2022 2023 LAND $ 100.00 $ 118.07 $ 138.58 $ 327.40 $ 181.98 $ 148.32 S&P 500 100.00 128.88 149.83 190.13 153.16 190.27 FNAR 100.00 123.50 111.47 152.60 108.78 117.18
Biggest changeThe stock performance graph assumes $100 was invested on December 31, 2019. 37 Table of Content As of December 31, Index 2019 2020 2021 2022 2023 2024 LAND $ 100.00 $ 117.37 $ 277.29 $ 154.12 $ 125.61 $ 94.21 S&P 500 100.00 116.26 147.52 118.84 147.64 182.05 FNAR 100.00 90.26 123.57 88.08 94.89 93.73
After a mandatory one-year holding period, our OP Units are redeemable at the option of the holder for cash or, at our election, shares of our common stock on a one-for-one basis. OP Unit Redemptions Since January 1, 2023, through the date of this filing, no OP Units were tendered for redemption.
After a mandatory one-year holding period, our OP Units are redeemable at the option of the holder for cash or, at our election, shares of our common stock on a one-for-one basis. OP Unit Redemptions Since January 1, 2024, through the date of this filing, no OP Units were tendered for redemption.
There are currently no OP Units outstanding other than those owned by the Company. Sale of Unregistered Securities We did not sell any unregistered shares of stock during the three months or year ended December 31, 2023.
There are currently no OP Units outstanding other than those owned by the Company. Sale of Unregistered Securities We did not sell any unregistered shares of stock during the three months or year ended December 31, 2024.
Stock Performance Graph The following graph compares the cumulative stockholder return (assuming reinvestment of distributions) of our common stock with that of the Standard and Poor’s 500 Index (“S&P 500”) and the FTSE NAREIT All REIT Index (“FNAR”), which is a market capitalization-weighted index that includes all REITs that are listed on the New York Stock Exchange, the American 34 Table of Content Stock Exchange, or the Nasdaq National Market List.
Stock Performance Graph The following graph compares the cumulative stockholder return (assuming reinvestment of distributions) of our common stock with that of the Standard and Poor’s 500 Index (“S&P 500”) and the FTSE NAREIT All REIT Index (“FNAR”), which is a market capitalization-weighted index that includes all REITs that are listed on the New York Stock Exchange, the American Stock Exchange, or the Nasdaq National Market List.
Issuer Purchaser of Equity Securities We did not purchase any class of our equity securities registered under Section 12 of the Exchange Act during the three months or year ended December 31, 2023.
We did not purchase any class of our equity securities registered under Section 12 of the Exchange Act during the three months or year ended December 31, 2023.
Stockholder Information As of February 12, 2024: • there were 19 registered holders of record and approximately 53,664 beneficial owners of our common stock; and • other than those owned by the Company, there were no holders of record or beneficial owners of our OP Units.
Stockholder Information As of February 10, 2025: • there were 18 registered holders of record and 57,408 beneficial owners of our common stock; and • other than those owned by the Company, there were no holders of record or beneficial owners of our OP Units.
Added
Issuer Purchaser of Equity Securities On May 17, 2024, our Board of Directors approved a share repurchase program authorizing us to repurchase up to $20.0 million of our Series B Preferred Stock and up to $35.0 million of our Series C Preferred Stock (collectively, the “Repurchase Program”).
Added
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.
Added
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. 36 Table of Content Any repurchases will be made during applicable trading window periods or pursuant to applicable Rule 10b5-1 trading plans.
Added
We currently have $17.6 million of Series B Preferred Stock remaining and $30.8 million of Series C Preferred Stock remaining that may be repurchased under the Repurchase Program.
Added
The following table summarizes repurchase activity under the Repurchase Program during the year ended December 31, 2024 (dollars in thousands, except per-share amounts): For the year ended December 31, 2024 Series B Preferred Stock: Number of shares repurchased 115,176 Gross repurchase price (1) $2,429 Weighted-average repurchase price per share $21.09 Gain on repurchase (2) $133 Series C Preferred Stock: Number of shares repurchased 201,646 Gross repurchase price (1) $4,201 Weighted-average repurchase price per share $20.83 Gain on repurchase (2) $372 (1) Inclusive of broker commissions.
Added
(2) The gain on the repurchase of cumulative redeemable preferred stock is included within Gain (loss) on extinguishment of cumulative redeemable preferred stock, net on our accompanying Condensed Consolidated Statements of Operations and Comprehensive Income.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

131 edited+49 added−60 removed74 unchanged
Biggest changeThe following table summarizes the geographic locations (by state) of our farms owned as of and during the years ended December 31, 2023, 2022, and 2021 (dollars in thousands): 37 Table of Content As of and For the Year Ended December 31, 2023 As of and For the Year Ended December 31, 2022 As of and For the Year Ended December 31, 2021 State No. of Farms Total Acres % of Total Acres Lease Revenue % of Total Lease Revenue No. of Farms Total Acres % of Total Acres Lease Revenue % of Total Lease Revenue No. of Farms Total Acres % of Total Acres Lease Revenue % of Total Lease Revenue California (1) 63 34,844 30.1% $ 59,143 65.5% 63 34,844 30.1% $ 61,118 68.5% 62 33,027 29.3% $ 49,644 65.9% Florida (2) 26 22,468 19.4% 15,076 16.7% 26 22,606 19.5% 14,537 16.3% 26 22,591 20.1% 13,675 18.2% Washington 6 2,520 2.2% 4,651 5.1% 6 2,529 2.2% 3,401 3.8% 3 1,384 1.2% 2,384 3.2% Colorado 12 32,773 28.3% 2,564 2.8% 12 32,773 28.3% 2,153 2.4% 12 32,773 29.1% 2,675 3.6% Arizona 6 6,320 5.5% 2,263 2.5% 6 6,320 5.5% 2,100 2.4% 6 6,280 5.6% 1,951 2.6% Oregon 6 898 0.8% 2,181 2.4% 6 898 0.8% 1,710 1.9% 5 726 0.6% 854 1.1% Nebraska 9 7,782 6.7% 1,778 2.0% 9 7,782 6.7% 1,712 1.9% 9 7,782 6.9% 1,588 2.1% Michigan 23 1,892 1.6% 966 1.1% 23 1,892 1.6% 786 0.9% 23 1,892 1.7% 1,040 1.4% Maryland 6 987 0.9% 461 0.5% 6 987 0.8% 453 0.5% 6 987 0.9% 476 0.6% Texas 1 3,667 3.2% 450 0.5% 1 3,667 3.2% 450 0.5% 1 3,667 3.3% 450 0.6% South Carolina 3 597 0.5% 244 0.3% 3 597 0.5% 244 0.3% 3 597 0.5% 244 0.3% Georgia 2 230 0.2% 224 0.3% 2 230 0.2% 224 0.3% 2 230 0.2% 31 —% New Jersey 3 116 0.1% 129 0.1% 3 116 0.1% 129 —% 3 116 0.1% 75 0.1% North Carolina 2 310 0.3% 114 0.1% 2 310 0.3% 145 0.2% 2 310 0.3% 150 0.2% Delaware 1 180 0.2% 75 0.1% 1 180 0.2% 74 0.1% 1 180 0.2% 81 0.1% TOTALS 169 115,584 100.0% $ 90,319 100.0% 169 115,731 100.0% $ 89,236 100.0% 164 112,542 100.0% $ 75,318 100.0% (1) According to the California Chapter of the American Society of Farm Managers and Rural Appraisers, there are eight distinct growing regions within California; our farms are spread across six of these growing regions.
Biggest changeThe following table summarizes the geographic locations (by state) of our farms owned as of and during the years ended December 31, 2024, 2023, and 2022 (dollars in thousands): As of and For the Year Ended December 31, 2024 As of and For the Year Ended December 31, 2023 As of and For the Year Ended December 31, 2022 State No. of Farms Total Acres % of Total Acres Lease Revenue % of Total Lease Revenue No. of Farms Total Acres % of Total Acres Lease Revenue % of Total Lease Revenue No. of Farms Total Acres % of Total Acres Lease Revenue % of Total Lease Revenue California (1) 63 34,845 31.3% $ 58,055 68.5% 63 34,844 30.1% $ 59,143 65.5% 63 34,844 30.1% $ 61,118 68.5% Florida (2) 25 18,720 16.8% 12,055 14.2% 26 22,468 19.4% 15,076 16.7% 26 22,606 19.5% 14,537 16.3% Washington 6 2,520 2.3% 4,291 5.1% 6 2,520 2.2% 4,651 5.1% 6 2,529 2.2% 3,401 3.8% Colorado 12 32,773 29.5% 2,645 3.1% 12 32,773 28.3% 2,564 2.8% 12 32,773 28.3% 2,153 2.4% Arizona 6 6,320 5.7% 2,275 2.7% 6 6,320 5.5% 2,263 2.5% 6 6,320 5.5% 2,100 2.4% Oregon 6 898 0.8% 1,965 2.3% 6 898 0.8% 2,181 2.4% 6 898 0.8% 1,710 1.9% Michigan 12 1,245 1.1% 1,021 1.2% 23 1,892 1.6% 966 1.1% 23 1,892 1.6% 786 0.9% Nebraska (2) 9 7,782 7.0% 892 1.1% 9 7,782 6.7% 1,778 2.0% 9 7,782 6.7% 1,712 1.9% Texas 1 3,667 3.3% 468 0.5% 1 3,667 3.2% 450 0.5% 1 3,667 3.2% 450 0.5% Maryland 6 987 0.9% 466 0.5% 6 987 0.9% 461 0.5% 6 987 0.8% 453 0.5% South Carolina 3 597 0.5% 244 0.3% 3 597 0.5% 244 0.3% 3 597 0.5% 244 0.3% Georgia 2 230 0.2% 224 0.3% 2 230 0.2% 224 0.3% 2 230 0.2% 224 0.3% New Jersey 3 116 0.1% 134 0.2% 3 116 0.1% 129 0.1% 3 116 0.1% 129 0.2% Delaware 1 180 0.2% 76 0.1% 1 180 0.2% 75 0.1% 1 180 0.2% 74 —% North Carolina 2 310 0.3% (48) (0.1)% 2 310 0.3% 114 0.1% 2 310 0.3% 145 0.1% TOTALS 157 111,190 100.0% $ 84,763 100.0% 169 115,584 100.0% $ 90,319 100.0% 169 115,731 100.0% $ 89,236 100.0% (1) According to the California Chapter of the American Society of Farm Managers and Rural Appraisers, there are eight distinct growing regions within California; our farms are spread across six of these growing regions.
In the near term, we believe that our current and short-term cash resources will be sufficient to service our debt; fund our current operating costs; pay dividends on our currently-designated preferred securities; and fund our distributions to stockholders (including non-controlling OP Unitholders).
In the near term, we believe that our current and short-term cash resources will be sufficient to service our debt, fund our current operating costs, pay dividends on our currently-designated preferred securities, and fund our distributions to common stockholders (including non-controlling OP Unitholders).
The property and casualty loss recorded during the year ended December 31, 2023, was the result of the heavy rainfall that occurred in California in early 2023 and the resulting flooding, which damaged certain structures located on one of our farms in the Central Valley.
The property and casualty loss recorded during the year ended December 31, 2024, was the result of the heavy rainfall that occurred in California in early 2023 and the resulting flooding, which damaged certain structures located on one of our farms in the Central Valley.
RESULTS OF OPERATIONS For the purposes of the following discussions on certain operating revenues and expenses: ▪ With regard to the comparison between the years ended December 31, 2023 and 2022: ▪ Same-property basis represents farms owned as of December 31, 2021, which were not vacant at any point during either period presented and full collectability of future rental payments under the respective leases was deemed probable during the entirety of both periods; ▪ Properties acquired or disposed of are farms that were either acquired or disposed of at any point subsequent to December 31, 2021.
RESULTS OF OPERATIONS For the purposes of the following discussions on certain operating revenues and expenses with regard to the comparison between the years ended December 31, 2024 and 2023: • Same-property basis represents farms owned as of December 31, 2022, which were not vacant at any point during either period presented and full collectability of future rental payments under the respective leases was deemed probable during the entirety of both periods; • Properties acquired or disposed of are farms that were either acquired or disposed of at any point subsequent to December 31, 2022.
Leasing Activity The following table summarizes certain leasing activity that has occurred on our existing properties since January 1, 2023, through the date of this filing (dollars in thousands, except for footnotes): PRIOR LEASES NEW LEASES (1) Farm Locations Number of Leases Total Farm Acres Total Annualized Straight-line Rent (2) # of Leases with Participation Rents Lease Structures (# of NNN / NN / N) (3) Total Annualized Straight-line Rent (2) Wtd.
Leasing Activity The following table summarizes certain leasing activity that has occurred on our existing properties since January 1, 2024, through the date of this filing (dollars in thousands, except for footnotes): PRIOR LEASES NEW LEASES (1) Farm Locations Number of Leases Total Farm Acres Total Annualized Straight-line Rent (2) # of Leases with Participation Rents Lease Structures (# of NNN / NN / N) (3) Total Annualized Straight-line Rent (2) Wtd.
Further, on a quarterly basis, the Board of Directors reviews the Valuation Policy to determine if changes thereto are advisable and also reviews whether the Valuation Team has applied the Valuation Policy consistently.
Further, on a quarterly basis, the Board of Directors reviews the Valuation Policy to determine if changes to the policy are advisable and also reviews whether the Valuation Team has applied the Valuation Policy consistently.
Further, we calculate NAV per common share by dividing NAV by our total common shares outstanding (consisting of our common stock and OP Units held by non-controlling limited partners). The fair values presented above and their usage in the calculation of net asset value per share presented below have been prepared by and is the responsibility of management.
Further, we calculate NAV per common share by dividing NAV by our total common shares outstanding (consisting of our common stock and OP Units held by non-controlling limited partners). The fair values presented above and their usage in the calculation of net asset value per share presented below have been prepared by and are the responsibility of management.
This adjustment removes the effects of straight-lining rental income, as well as the amortization related to above-market lease values and certain noncash lease incentives and accretion related to below-market lease values, certain other deferred revenue, and tenant improvements, resulting in rental income reflected on a modified accrual cash basis.
This adjustment removes the effects of straight-lining rental income, as well as the amortization related to above-market lease values and certain non-cash lease incentives and accretion related to below-market lease values, certain other deferred revenue, and tenant improvements, resulting in rental income reflected on a modified accrual cash basis.
Management believes that the purchase prices of the farms acquired during the previous 12 months and the most recent appraisals available for the farms acquired prior to the previous 12 months fairly represent the current market values of the properties as of December 31, 2023, and, accordingly, did not make any adjustment to these values.
Management believes that the purchase prices of the farms acquired during the previous 12 months and the most recent appraisals available for the farms acquired prior to the previous 12 months fairly represent the current market values of the properties as of December 31, 2024, and, accordingly, did not make any adjustment to these values.
The fluctuations in tenant-reimbursed property operating expenses are primarily driven by miscellaneous property operating costs incurred by us in connection with our ownership interests in certain unconsolidated entities, for which our tenants are contractually obligated to reimburse us under the terms of the respective leases.
The fluctuation in tenant-reimbursed property operating expenses are primarily driven by miscellaneous property operating costs incurred by us in connection with our ownership interests in certain unconsolidated entities, for which our tenants are contractually obligated to reimburse us under the terms of the respective leases.
Specifically, we believe that FFO is helpful to investors in better understanding our operating performance, primarily because its calculation excludes depreciation and amortization expense on real estate assets, as we believe that GAAP historical cost 52 Table of Content depreciation of real estate assets is generally not correlated with changes in the value of those assets, particularly with farmland real estate, the value of which does not diminish in a predictable manner over time, as historical cost depreciation implies.
Specifically, we believe that FFO is helpful to investors in better understanding our operating performance, primarily because its calculation excludes depreciation and amortization expense on real estate assets, as we believe that GAAP historical cost depreciation of real estate assets is generally not correlated with changes in the value of those assets, particularly with farmland real estate, the value of which does not diminish in a predictable manner over time, as historical cost depreciation implies.
Additionally, 27 of our farms are leased under agreements that include a variable rent component, called “participation rents,” that are based on the gross revenues earned on the respective farms (though such leases generally include a guarantee of a minimum amount of rental income).
Additionally, 27 of our farms are leased under agreements that include a variable rent component, called “participation rents,” that are based on the gross revenues earned on the respective farms (though such leases often include a guarantee of a minimum amount of rental income).
The base management and incentive fees are described below. For information on the capital gains and termination fees, refer to Note 6, “ Related-Party Transactions—Our Adviser and Administrator—Advisory Agreements ,” within the accompanying notes to our consolidated financial statements.
The base management and incentive fees are described below. For information on the capital gains and termination fees, refer to Note 6, “ Related-Party Transactions—Our Adviser and Administrator—Advisory Agreement ,” within the accompanying notes to our consolidated financial statements.
ASC 360 further requires that the purchase price of real estate be allocated to (i) the tangible assets acquired and liabilities assumed, and, if applicable, (ii) any identifiable intangible assets and liabilities, by valuing the property as if it was vacant, based on management’s determination of the relative fair values of such assets and liabilities as of the date of acquisition.
ASC 360 further requires that the purchase price of real estate be allocated to (i) the tangible assets acquired and 45 Table of Content liabilities assumed, and, if applicable, (ii) any identifiable intangible assets and liabilities, by valuing the property as if it was vacant, based on management’s determination of the relative fair values of such assets and liabilities as of the date of acquisition.
We further present core FFO (“CFFO”) and adjusted FFO (“AFFO”) as additional non-GAAP financial measures of our operational performance, as we believe both CFFO and AFFO improve comparability on a period-over-period basis and are more useful supplemental metrics for investors to use in assessing our operational performance on a more sustainable basis than FFO.
We further present core FFO (“CFFO”) and adjusted FFO (“AFFO”) as additional non-GAAP financial measures of our operational 54 Table of Content performance, as we believe both CFFO and AFFO improve comparability on a period-over-period basis and are more useful supplemental metrics for investors to use in assessing our operational performance on a more sustainable basis than FFO.
In addition, in February 2024, certain parts of California, particularly the southern part of the state, experienced a “one-in-one-thousand year” rainfall event, as atmospheric river storms caused widespread flooding and mudslides in multiple areas. Certain of our farms in the state suffered minor damage as a result of the storms, but no farms were materially impacted.
Natural Disasters 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 suffered minor damage as a result of the storms, but no farms were materially impacted.
Advisory Agreements Pursuant to each of the Advisory Agreements, our Adviser is compensated in the form of a base management fee, 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.
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.
Further, while management believes the values presented reflect current market conditions, the ultimate amount realized on any asset will be based on the timing of such 57 Table of Content dispositions and the then-current market conditions. There can be no assurance that the ultimate realized value upon disposition of an asset will approximate the estimated fair value above.
Further, while management believes the values presented reflect current market conditions, the ultimate amount realized on any asset will be based on the timing of such dispositions and the then-current market conditions. There can be no assurance that the ultimate realized value upon disposition of an asset will approximate the estimated fair value above.
Fixed lease payments from vacant, self-operated, or non-accrual properties decreased primarily due to revenue from certain of our leases being recognized on a cash basis during a portion of the year ended December 31, 2023 (rather than a straight-line basis), due to full collectability of future rental payments under the respective leases deemed not to be probable as a result of tenant credit issues.
Fixed lease payments from vacant, direct-operated, or non-accrual properties decreased primarily due to revenue from certain of our leases being recognized on a cash basis during a portion of the year ended December 31, 2024 (rather than a straight-line basis), due to the full collectability of future rental payments under the respective leases being deemed not to be probable as a result of tenant credit issues.
We believe that diluted earnings per share is the most directly-comparable GAAP measure to each of Diluted FFO, CFFO, and AFFO per share. Because many REITs provide Diluted FFO, CFFO, and 53 Table of Content AFFO per share information to the investment community, we believe these are useful supplemental measures when comparing us to other REITs.
We believe that diluted earnings per share is the most directly-comparable GAAP measure to each of Diluted FFO, CFFO, and AFFO per share. Because many REITs provide Diluted FFO, CFFO, and AFFO per share information to the investment community, we believe these are useful supplemental measures when comparing us to other REITs.
To date, we have issued approximately $4.2 million of Series E Preferred Stock, and $2.2 million of common stock under the 2023 Registration Statement. In addition, we have the ability to, and expect to in the future, issue additional OP Units to third parties as consideration in future property acquisitions.
To date, we have issued approximately $4.4 million of Series E Preferred Stock, and $6.8 million of common stock under the 2023 Registration Statement. In addition, we have the ability to, and expect to in the future, issue additional OP Units to third parties as consideration in future property acquisitions.
Our investment focus is in farmland suitable for growing either fresh produce annual row crops (e.g., certain berries and vegetables) or certain permanent crops (e.g., almonds, blueberries, pistachios, and wine grapes), with an ancillary focus on farmland growing certain commodity crops (e.g., beans and corn).
O ur investment focus is in farmland suitable for growing either fresh produce annual row crops (e.g., certain berries and vegetables) or certain permanent crops (e.g., almonds, blueberries, pistachios, and wine grapes), with an ancillary focus on farmland growing certain commodity crops (e.g., beans and corn).
The administration fee paid to our Administrator increased primarily due to hiring additional personnel and us using a higher overall share of our Administrator’s resources in relation to those used by other funds and affiliated companies serviced by our Administrator.
The administration fee paid to our Administrator increased primarily due to us using a higher overall share of our Administrator’s resources in relation to those used by other funds and affiliated companies serviced by our Administrator.
Rent is generally payable to us in advance on either an annual or semi-annual basis, with such rent typically subject to periodic escalation clauses provided for within the lease.
R ent is generally payable to us in advance on either an annual, semi-annual, or quarterly basis, with such rent typically subject to periodic escalation clauses provided for within the lease.
In the event of a termination, we estimate that we would be able to find new tenants to lease each of these properties to at market rental rates within 1 to 12 months.
In the event of a termination, we estimate that we would be able to find a new tenant to lease these properties at market rental rates within 1 to 12 months.
Excluding interest patronage received on certain of our Farm Credit borrowings and the impact of debt issuance costs, the weighted average interest rate charged on our aggregate borrowings was 3.79% and 3.77% for the years ended December 31, 2023 and 2022, respectively.
Excluding interest patronage received on certain of our Farm Credit borrowings and the impact of debt issuance costs, the weighted average interest rate charged on our aggregate borrowings was 3.82% and 3.79% for the years ended December 31, 2024 and 2023, respectively.
Comparison of Results of Operations for the Years Ended December 31, 2022 and 2021 A comparison of our operating results for the years ended December 31, 2022 and 2021 was included in our Annual Report on Form 10-K for the year ended December 31, 2022, beginning on page 45 under Part II, Item 7, “Management’s Discussion and Analysis of Financial Position and Results of Operations,” which was filed with the Securities and Exchange Commission, or SEC, on February 21, 2023.
Comparison of Results of Operations for the Years Ended December 31, 2023 and 2022 A comparison of our operating results for the years ended December 31, 2023 and 2022 was included in our Annual Report on Form 10-K for the year ended December 31, 2023, beginning on page 44 under Part II, Item 7, “Management’s Discussion and Analysis of Financial Position and Results of Operations,” which was filed with the Securities and Exchange Commission, or SEC, on February 20, 2024.
The results of all years presented, including those of the prior years, have been adjusted in the table below to conform with this new definition. • Amortization of debt issuance costs .
The results of all periods presented, including those of the prior year, have been adjusted in the table below to conform with this new definition. • Amortization of debt issuance costs .
We intend to use a significant portion of any current and future available liquidity to purchase additional farms and farm-related facilities. We continue to actively seek and evaluate acquisitions of additional farms and farm-related facilities that satisfy our investment criteria, and we have several properties that are in various stages of our due diligence process.
We intend to use a significant portion of any current and future available liquidity to purchase additional farms and farm-related assets as opportunities arise. We continue to actively seek and evaluate acquisitions of additional farms and farm-related assets that satisfy our investment criteria, and we have several properties that are in various stages of our due diligence process.
Determination of Fair Value 54 Table of Content Our Board of Directors reviews and approves the valuations of our properties pursuant to a valuation policy approved by our Board of Directors (the “Valuation Policy”).
Determination of Fair Value Our Board of Directors reviews and approves the valuations of our properties pursuant to a valuation policy approved by the Board of Directors (the “Valuation Policy”).
During the year ended December 31, 2023, we recognized approximately $79,000 of non-cash revenue associated with the transfer and storing of surplus water on behalf of a government municipality using a groundwater recharge facility constructed on one of our farms.
During the years ended December 31, 2024 and 2023, we recognized approximately $453,000 and $79,000, respectively, of non-cash revenue associated with the transfer and storing of surplus water on behalf of a government municipality using a groundwater recharge facility constructed on one of our farms.
The fluctuations in tenant reimbursement revenue are primarily driven by payments made by certain tenants on our behalf (pursuant to the lease agreements) to unconsolidated entities of ours that convey water to the respective properties. As such, the timing of tenant reimbursement revenue fluctuates as payments are made by our tenants.
The fluctuation in tenant reimbursement and other revenue is primarily driven by payments made by certain tenants on our behalf (pursuant to the lease agreements) to unconsolidated entities of ours that convey water to the respective properties. As such, the timing of tenant reimbursement revenue fluctuates as payments are made by our tenants.
Off-Balance Sheet Arrangements As of December 31, 2023, we did not have any off-balance sheet arrangements.
Off-Balance Sheet Arrangements As of December 31, 2024, we did not have any off-balance sheet arrangements.
During the three months ended March 31, 2023, we recorded approximately $2.3 million of interest patronage from Farm Credit related to interest accrued during 2022, as compared to approximately $2.8 million of interest patronage recorded during the prior-year period that related to interest accrued during 2021.
During the three months ended March 31, 2024 we recorded approximately $1.9 million of interest patronage from Farm Credit related to interest accrued during 2023, as compared to approximately $2.3 million of interest patronage recorded during the prior-year period that related to interest accrued during 2022.
Our Adviser earned incentive fees during each of the years ended December 31, 2023 and 2022 due to our Pre-Incentive Fee FFO (as defined in the Advisory Agreements) exceeding the required hurdle rate of the applicable equity base during the third and fourth quarters of 2023 and during the first, third, and fourth quarters of 2022.
Our Adviser earned incentive fees during each of the years ended December 31, 2024 and 2023 due to our Pre-Incentive Fee FFO (as defined in the Advisory Agreement) exceeding the required hurdle rate of the applicable equity base during the third quarter of 2024 and during each of the third and fourth quarters of 2023.
We expect to meet our long-term liquidity requirements through 50 Table of Content various sources of capital, including long-term mortgage indebtedness and bond issuances, future equity issuances (including, but not limited to, shares of our Series E Preferred Stock, OP Units through our Operating Partnership as consideration for future acquisitions, and shares of common stock through our ATM Program), and other secured and unsecured borrowings.
We expect to meet our long-term liquidity requirements through various sources of capital, including capacity under current lines of credits, long-term mortgage indebtedness and bond issuances, future equity issuances (including, but not limited to, shares of our Series E Preferred Stock, OP Units through our Operating Partnership as consideration for future acquisitions, and shares of common stock through our ATM Program), and other secured and unsecured borrowings.
(each a “Sales Agent”), that, as subsequently amended, permitted us to issue and sell, from time to time and through the Sales Agents, shares of our common stock having an aggregate offering price of up to $260.0 million (the “ATM Program”).
(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”).
Over 99.9% of our borrowings are currently at fixed rates, and on a weighted-average basis, these rates are fixed at an effective interest rate of 3.34% for another 4.2 years.
Over 99.9% of our borrowings are currently at fixed rates, and on a weighted-average basis, these rates are fixed at an effective interest rate of 3.35% for another 3.6 years.
Each of the Advisory Agreements and the current administration agreement with our Administrator (the “Administration Agreement”) were approved unanimously by our Board of Directors, including, specifically, our independent directors. A summary of certain compensation terms within the Advisory Agreements and a summary of the Administration Agreement is below.
The current Advisory Agreement and the current Administration Agreement were each approved unanimously by our board of directors, including, specifically, our independent directors. A summary of certain compensation terms within the Advisory Agreement and a summary of the Administration Agreement is below.
Some of the significant assumptions used by appraisers and the Valuation Team in valuing our portfolio as of December 31, 2023, include land values per farmable acre, market rental rates per farmable acre and the resulting net operating income 55 Table of Content (“NOI”) at the property level, and capitalization rates, among others.
(2) Appraisals performed between December 2023 and December 2024. Some of the significant assumptions used by appraisers and the Valuation Team in valuing our portfolio as of December 31, 2024, include land values per farmable acre, market rental rates per farmable acre and the resulting net operating income (“NOI”) at the property level, and capitalization rates, among others.
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.
See Note 6, “Related-Party Transactions—Gladstone Securities—Dealer-Manager Agreements,” in the accompanying notes to our consolidated financial statements for a discussion of the commissions and fees to be paid to Gladstone Securities in connection with the Series E Offering.
In addition, the trading price of our common shares may differ significantly from our most recent estimated NAV per common share calculation. For example, while we estimated our NAV per common share to be $19.06 as of December 31, 2023, based on the calculation above, the closing price of our common stock on December 31, 2023, was $14.45 per share.
In addition, the trading price of our common shares may differ significantly from our most recent estimated NAV per common share calculation. For example, while we estimated our NAV per common share to be $14.91 as of December 31, 2024, based on the calculation above, the closing price of our common stock on December 31, 2024, was $10.85 per share.
We believe the exclusion of such non-cash amounts improves comparability of our operating results on a period-to-period basis and will apply consistent definitions of AFFO for all prior-year periods presented to provide consistency and better comparability. We believe the foregoing adjustments aid our investors’ understanding of our ongoing operational performance.
We believe the exclusion of such non-cash amounts improves comparability of our operating results on a period-to-period basis and will apply consistent definitions of AFFO for all prior-year periods presented to provide consistency and better comparability.
On a weighted-average basis, these borrowings bore interest at a stated rate of 3.55% and an effective interest rate (after interest patronage, where applicable) of 3.43%.
On a weighted-average basis, these borrowings bore interest at a stated rate of 4.31% and an effective interest rate (after interest patronage, where applicable) of 3.69%.
Base Management Fee Pursuant to the Prior Advisory Agreement, through June 30, 2021, a base management fee was paid quarterly and was calculated at an annual rate of 0.50% (0.125% per quarter), of the prior calendar quarter’s “Gross Tangible Real Estate,” 42 Table of Content 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.
Base Management Fee Pursuant to the Advisory Agreement, a base management fee is paid quarterly in arrears 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.
In addition, we currently have certain properties valued at a total of approximately $130.5 million that are unencumbered and eligible to be pledged as collateral. Over 99.9% of our borrowings are currently at fixed rates, and on a weighted-average basis, these rates are fixed at an effective interest rate (after interest patronage) of 3.34% for another 4.2 years.
In addition, we currently have certain properties valued at a total of approximately $147.8 million that are unencumbered and eligible to be pledged as collateral. Over 99.9% of our borrowings are currently at fixed rates, and on a weighted-average basis, these rates are fixed at an effective interest rate of 3.35% for another 3.6 years.
FFO, CFFO, and AFFO do not represent cash flows from operating activities in accordance with GAAP, which, unlike FFO, CFFO, and AFFO, generally reflects all cash effects of transactions and other events in the determination of net income, and should not be considered an alternative to net income as an indication of our performance or to cash flows from operations as a measure of liquidity or ability to make distributions.
We believe the foregoing adjustments aid our investors’ understanding of our ongoing operational performance. 55 Table of Content FFO, CFFO, and AFFO do not represent cash flows from operating activities in accordance with GAAP, which, unlike FFO, CFFO, and AFFO, generally reflects all cash effects of transactions and other events in the determination of net income, and should not be considered an alternative to net income as an indication of our performance or to cash flows from operations as a measure of liquidity or ability to make distributions.
Using a discounted cash flow analysis, management determined that the fair value of all long-term encumbrances on our properties as of December 31, 2023, was approximately $529.4 million, as compared to a carrying value (excluding unamortized related debt issuance costs) of approximately $576.8 million.
Using a discounted cash flow analysis, management determined that the fair value of all long-term encumbrances on our properties as of December 31, 2024, was approximately $486.3 million, as compared to a carrying value (excluding unamortized related debt issuance costs) of approximately $526.3 million.
LIQUIDITY AND CAPITAL RESOURCES Overview Our current short- and long-term sources of funds include cash and cash equivalents, cash flows from operations, borrowings (including the undrawn commitments available under the Current MetLife Facility), and issuances of additional equity securities.
LIQUIDITY AND CAPITAL RESOURCES Overview Our current short- and long-term sources of funds include cash and cash equivalents, cash flows from operations, borrowings (including the undrawn commitments available under our credit facility with Metropolitan Life Insurance Company (“MetLife”)), and issuances of additional equity securities.
Future Capital Needs Our short- and long-term liquidity requirements consist primarily of making principal and interest payments on outstanding borrowings; funding our general operating costs; making dividend payments on our currently-designated preferred securities; making distributions to stockholders (including non-controlling OP Unitholders, if any) to maintain our qualification as a REIT; and, as capital is available, funding capital improvements on existing farms and new farmland and farm-related acquisitions consistent with our investment strategy.
Future Capital Needs Our short- and long-term liquidity requirements consist primarily of making principal and interest payments on outstanding borrowings; funding our general operating costs; making dividend payments on our currently-designated preferred securities; making distributions to stockholders (including non-controlling OP Unitholders, if any) to maintain our qualification as a REIT; and, as capital is available or as desired, funding capital improvements and, in certain situations, growing costs on existing 52 Table of Content farms, repurchases of preferred shares of preferred stock under our Repurchase Program, and new farmland and farm-related acquisitions consistent with our investment strategy.
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.
Equity Activity Series E Preferred Stock On November 9, 2022, we filed a prospectus supplement with the SEC for a continuous public 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 (the “Series E Offering”).
Property operating expenses attributable to vacant, self-operated, or non-accrual properties increased primarily due to additional legal fees incurred in connection with rent collection, lease termination, or re-leasing efforts on such farms, as well as an increase in real estate tax expense that the prior tenants were previously responsible for.
Property operating expenses attributable to vacant, direct-operated, or non-accrual properties increased primarily due to an increase in legal fees incurred in connection with rent collection, lease termination, or re-leasing efforts on such farms, as well as additional property taxes incurred on certain of those farms, for which the prior tenants were previously responsible.
PricewaterhouseCoopers LLP has neither examined, compiled, nor performed any procedures with respect to the fair values or the calculation of net asset value per common share, which utilizes information that is not disclosed within the financial statements, and, accordingly, does not express an opinion or any other form of assurance with respect thereto. 56 Table of Content As of December 31, 2023, we estimate the NAV per common share to be $19.06.
PricewaterhouseCoopers LLP has neither examined, compiled, nor performed any procedures with respect to the fair values or the calculation of net asset value per common share, which utilizes information that is not disclosed within the financial statements, and, accordingly, does not express an opinion or any other form of assurance with respect thereto.
The following table summarizes the sales of our Series E Preferred Stock that occurred from January 1, 2023, through the date of this filing (dollars in thousands): Number of Shares Sold Weighted-average Offering Price Per Share Gross Proceeds Net Proceeds (1) 247,781 $ 24.96 $ 6,184 $ 5,575 (1) Net of underwriting discounts and selling commissions and dealer-manager fees borne by us.
The following table summarizes the sales of our Series E Preferred Stock that occurred from January 1, 2024, through the date of this filing (dollars in thousands): Number of Shares Sold Weighted-average Offering Price Per Share Gross Proceeds Net Proceeds (1) 16,595 $ 24.98 $ 414 $ 373 (1) Net of underwriting discounts and selling commissions and dealer-manager fees borne by us.
Business Environment Impact of Inflation and Interest Rates According to the U.S. Bureau of Labor Statistics, the consumer price index (“CPI”) grew at an annual rate of 3.4% through December 31, 2023, as overall inflation continued to ease from the peak levels experienced in the summer of 2022, when it reached the highest rates seen in over 40 years.
Business Environment Impact of Inflation and Interest Rates According to the U.S. Bureau of Labor Statistics, the consumer price index (“CPI”) grew at an annual rate of 2.9% through December 31, 2024, as overall inflation continued to decline from its peak in the summer of 2022, when it reached the highest level in over 40 years.
In addition, during the three months ended September 30, 2022, we received approximately $113,000 of interest patronage related to interest accrued during 2022, as certain Farm Credit associations paid a portion of 2022 interest patronage (which is typically paid during the first half of 2023) early.
In addition, during the three months ended September 30, 2023, 51 Table of Content we received approximately $111,000 of interest patronage related to interest accrued during 2023, as certain Farm Credit associations paid a portion of 2023 interest patronage (which would typically be paid during the first half of 2024) early.
There were no material changes in our critical accounting policies during the year ended December 31, 2023. 43 Table of Content Purchase Price Allocation When we acquire real estate, we allocate the purchase price to: (i) the tangible assets acquired and liabilities assumed, consisting primarily of land, improvements (including irrigation and drainage systems), permanent plantings, and farm-related facilities and, if applicable, (ii) any identifiable intangible assets and liabilities, which primarily consist of the values of above- and below-market leases, in-place lease values, lease origination costs, and tenant relationships, based in each case on their fair values.
Purchase Price Allocation When we acquire real estate, we allocate the purchase price to: (i) the tangible assets acquired and liabilities assumed, consisting primarily of land, improvements (including irrigation and drainage systems), permanent plantings, and farm-related facilities and, if applicable, (ii) any identifiable intangible assets and liabilities, which primarily consist of the values of above- and below-market leases, in-place lease values, lease origination costs, and tenant relationships, based in each case on their fair values.
Our current available liquidity is approximately $209.7 million, consisting of approximately $60.1 million in cash on hand and, based on the current level of collateral pledged, approximately $149.6 million of availability under the Current MetLife Facility (subject to compliance with covenants) and other undrawn notes or bonds.
Our current available liquidity is approximately $193.3 million, consisting of approximately $47.6 million in cash on hand and, based on the current level of collateral pledged, approximately $145.7 million of availability under our credit facility with MetLife (subject to compliance with covenants) and other undrawn lines of credits, notes, or bonds.
As of February 20, 2024: • we owned 168 farms comprised of 111,836 total acres across 15 states in the U.S.; • our occupancy rate (based on farmable acreage) was 98.9%, and our farms were leased to 93 different, unrelated third-party tenants growing over 60 different types of crops; • the weighted-average remaining lease term across our agricultural real estate holdings was 5.9 years; and • the weighted-average term to maturity of our notes and bonds payable was 8.8 years, and over 99.9% of our notes and bonds payable bore interest at fixed rates; on a weighted-average basis, the remaining fixed-price term of our borrowings was 4.2 years, with an expected weighted-average effective interest rate (after interest patronage, as described below) of 3.34% over that term.
As of February 19, 2025: • we owned 150 farms comprised of 103,001 total acres across 15 states in the U.S.; • our occupancy rate (based on farmable acreage and including direct-operated farms) was 95.9% , and our farms were leased to 87 d ifferent, unrelated third-party tenants growing over 60 different types of crops; • the weighted-average remaining lease term across our agricultural real estate holdings was 5.2 years; and • the weighted-average term to maturity of our notes and bonds payable was 7.6 years, and over 99.9% of our borrowings bore interest at fixed rates; on a weighted-average basis, the remaining fixed-price term of our borrowings was 3.6 years, with an expected weighted-average effective interest rate (after interest patronage, as described below) of 3.35% over that term.
We currently own a total of 46,400 acre-feet of long-term water assets, and our investments in these long-term water assets have an aggregate carrying value of approximately $34.6 million.
We currently own a total of 55,387 acre-feet of long-term water assets, and our investments in these long-term water assets have an aggregate carrying value of approximately $36.9 million.
Land values in the Pacific Northwest have been relatively stable despite troubles in the wine grape and apple industries. Southeastern U.S. Values of farmland in the Southeast growing fruits and vegetables continue to increase at a steady pace, driven in part by significant and sustained migration to that region.
Meanwhile, land values in the Pacific Northwest have remained relatively stable despite challenges in the wine grape and apple industries. Southeastern U.S. Values of farmland in the Southeast, particularly those growing fruits and vegetables, continue to rise at a steady pace, driven in part by sustained population growth and migration to the region.
Currently, 105 of our farms are leased on a pure, triple-net basis, 45 farms are leased on a partial-net basis (with us, as landlord, responsible for all or a portion of the related property taxes), 3 farms are leased on a single-net basis (with us, as landlord, responsible for the related property taxes, as well as certain maintenance, repairs, and insurance costs), and 15 farms are vacant.
Currently, 95 of our farms are leased on a pure, triple-net basis, 46 farms are leased on a partial-net basis (with us, as landlord, responsible for all or a portion of the related property taxes), 3 f a rms are leased on a single-net basis (with us, as landlord, responsible for the related property taxes, as well as certain maintenance, repairs, and insurance costs), 1 farm is direct-operated, and 5 farms are vacant.
(2) Includes a 3,748-acre farm that was sold on January 11, 2024. Leases General Most of our leases are on a triple-net basis, an arrangement under which, in addition to rent, the tenant is required to directly pay the related taxes, insurance costs, maintenance, and other operating costs.
Leases General Most of our leases are on a triple-net basis, an arrangement under which, in addition to rent, the tenant is required to directly pay the related taxes, insurance costs, maintenance, and other operating costs.
In addition, the weighted-average remaining term of our notes and bonds payable is approximately 8.8 years. As such, with respect to our current borrowings, we have experienced minimal impact from increased interest rates over the past year, and we believe we are well-protected against any further interest rate increases.
In addition, the weighted-average remaining term of our notes and bonds payable is approximately 7.6 years. As such, with respect to our current borrowings, we have experienced minimal impact from increased interest rates in recent years, and we believe we are well-protected against a prolonged high rate environment.
The following table provides a reconciliation of our FFO, CFFO, and AFFO for the years ended December 31, 2023, 2022, and 2021 to the most directly-comparable GAAP measure, net income, and a computation of diluted FFO, CFFO, and AFFO per share, using the weighted-average number of total shares (including shares of our common stock and OP Units held by non-controlling OP Unitholders) outstanding during the respective periods (dollars in thousands, except per-share amounts): For the Years Ended December 31, 2023 2022 2021 Net income $ 14,565 $ 4,716 $ 3,514 Less: Aggregate dividends declared on and charges related to extinguishment of cumulative redeemable preferred stock (1) (24,417) (19,718) (12,258) Net loss attributable to common stockholders and non-controlling OP Unitholders (9,852) (15,002) (8,744) Plus: Real estate and intangible depreciation and amortization 37,161 35,366 27,183 (Less) plus: (Gains) losses on dispositions of real estate assets, net (5,208) 3,760 2,537 Adjustments for unconsolidated entities (2) 92 57 36 FFO available to common stockholders and non-controlling OP Unitholders 22,193 24,181 21,012 Plus: Acquisition- and disposition-related expenses, net 149 438 355 Plus (less): Other nonrecurring charges (receipts), net (3) 1,418 1,023 (12) CFFO available to common stockholders and non-controlling OP Unitholders 23,760 25,642 21,355 Net rent adjustments (4,519) (3,371) (2,414) Plus: Amortization of debt issuance costs 1,065 1,085 1,172 (Less) plus: Other non-cash (receipts) charges, net (4) 17 907 246 AFFO available to common stockholders and non-controlling OP Unitholders $ 20,323 $ 24,263 $ 20,359 Weighted-average shares of common stock outstanding 35,733,742 34,563,460 30,357,268 Weighted-average common non-controlling OP Units outstanding — 61,714 166,067 Weighted-average shares of common shares outstanding, fully diluted 35,733,742 34,625,174 30,523,335 Diluted FFO per weighted-average total common share $ 0.62 $ 0.70 $ 0.69 Diluted CFFO per weighted-average total common share $ 0.66 $ 0.74 $ 0.70 Diluted AFFO per weighted-average total common share $ 0.57 $ 0.70 $ 0.67 Distributions declared per total common share $ 0.55 $ 0.55 $ 0.54 (1) Includes (i) cash dividends paid on our cumulative redeemable preferred stock, (ii) the value of additional shares of Series C Preferred Stock issued pursuant to the DRIP, and (iii) the pro-rata write-off of offering costs related to shares of cumulative redeemable preferred stock that were redeemed during the respective periods.
The following table provides a reconciliation of our FFO, CFFO, and AFFO for the years ended December 31, 2024, 2023, and 2022 to the most directly-comparable GAAP measure, net income, and a computation of diluted FFO, CFFO, and AFFO per share, using the weighted-average number of total shares (including shares of our common stock and OP Units held by non-controlling OP Unitholders) outstanding during the respective periods (dollars in thousands, except per-share amounts): For the Years Ended December 31, 2024 2023 2022 Net income $ 13,290 $ 14,565 $ 4,716 Less: Aggregate dividends declared on and gains on or charges related to extinguishment of cumulative redeemable preferred stock (1) (23,745) (24,417) (19,718) Net loss attributable to common stockholders and non-controlling OP Unitholders (10,455) (9,852) (15,002) Plus: Real estate and intangible depreciation and amortization 35,055 37,161 35,366 (Less) plus: (Gains) losses on dispositions of real estate assets, net (5,886) (5,208) 3,760 Plus: Impairment charges 2,106 — — Adjustments for unconsolidated entities (2) 67 92 57 FFO available to common stockholders and non-controlling OP Unitholders 20,887 22,193 24,181 Plus: Acquisition- and disposition-related expenses, net 5 149 438 Plus: Other nonrecurring charges, net (3) 349 1,418 1,023 CFFO available to common stockholders and non-controlling OP Unitholders 21,241 23,760 25,642 Net rent adjustments (3,356) (4,519) (3,371) Plus: Amortization of debt issuance costs 990 1,065 1,085 (Less) plus: Other non-cash (receipts) charges, net (4) (2,154) 17 907 AFFO available to common stockholders and non-controlling OP Unitholders $ 16,721 $ 20,323 $ 24,263 Weighted-average shares of common stock outstanding 35,909,956 35,733,742 34,563,460 Weighted-average common non-controlling OP Units outstanding — — 61,714 Weighted-average shares of common shares outstanding, fully diluted 35,909,956 35,733,742 34,625,174 Diluted FFO per weighted-average common share $ 0.58 $ 0.62 $ 0.70 Diluted CFFO per weighted-average common share $ 0.59 $ 0.66 $ 0.74 Diluted AFFO per weighted-average common share $ 0.47 $ 0.57 $ 0.70 Distributions declared per total common share $ 0.56 $ 0.55 $ 0.55 (1) Includes (i) cash dividends paid on our cumulative redeemable preferred stock, (ii) the value of additional shares of Series C Preferred Stock issued pursuant to our dividend reinvestment plan (the “DRIP”), and (iii) the net gain (loss) recognized as a result of shares of cumulative redeemable preferred stock that were redeemed during the respective periods.
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.
Recent Developments Portfolio Activity—Existing Properties 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.
We consider these policies to be critical because they involve estimates and assumptions that require complex, subjective or significant judgments in their application and that materially affect our results of operations.
We consider these policies to be critical because they involve estimates and assumptions that require complex, subjective or significant judgments in their application and that materially affect our results of operations. There were no material changes in our critical accounting policies during the year ended December 31, 2024.
A summary of these significant assumptions is provided in the following table: Appraisal Assumptions Internal Valuation Assumptions Range (Low - High) Weighted Average Range (Low - High) Weighted Average Land Value (per farmable acre) $708 – $123,280 $35,320 $5,512 – $17,521 $13,268 Market NOI (per farmable acre) $230 – $3,536 $1,526 N/A N/A Market Capitalization Rate 3.30% – 5.30% 4.43% N/A N/A Note: Figures in the table above apply only to the farmland portion of our portfolio and exclude assumptions made related to water, farm-related facilities (e.g., cooling facilities), and other structures on our properties (e.g., residential housing).
A summary of these significant assumptions as of December 31, 2024, is provided in the following table: Appraisal Assumptions Internal Valuation Assumptions Range (Low - High) Weighted Average Range (Low - High) Weighted Average Land Value (per farmable acre) $708 – $128,519 $34,923 $5,918 – $5,918 $5,918 Market NOI (per farmable acre) $188 – $3,979 $1,968 N/A N/A Market Capitalization Rate 3.30% – 6.20% 4.42% N/A N/A Note: Figures in the table above apply only to the farmland portion of our portfolio and exclude assumptions made related to water, farm-related facilities (e.g., cooling facilities), and other structures on our properties (e.g., residential housing).
In addition, 11 of our farms were self-operated (on a temporary basis via management agreements with unrelated third-parties) and 5 of our farms were vacant during portions of the year ended December 31, 2023.
In addition, certain of our farms were direct-operated (on a temporary basis via management agreements with unrelated third-parties) or vacant for portions of each of the years ended December 31, 2024 and 2023.
A quarterly rollforward of the change in our portfolio value for the three months ended December 31, 2023, from the prior value basis as of September 30, 2023, is provided in the table below (dollars in thousands): Total portfolio fair value as of September 30, 2023 $ 1,579,331 Plus: Acquisition of water assets during the three months ended December 31, 2023 551 Change in value of farms during the three months ended December 31, 2023 Farms valued based on sales price $ 1,951 Farms valued via third-party appraisals (15,359) Net change in value of farms during the three months ended December 31, 2023 (13,408) Total portfolio fair value as of December 31, 2023 $ 1,566,474 Management also determined fair values of all of its long-term borrowings and preferred stock.
A quarterly rollforward of the change in our portfolio value for the three months ended December 31, 2024, from the prior value basis as of September 30, 2024, is provided in the table below (dollars in thousands): Total portfolio fair value as of September 30, 2024 $ 1,462,362 Plus: Water asset acquisitions during the three months ended December 31, 2024 118 Less: Farm sales during the three months ended December 31, 2024 (5,740) Change in value of farms during the three months ended December 31, 2024: Farms and water assets valued based on sales price $ 2,350 Farms and water assets valued via third-party appraisals (53,740) Net change in value of farms and water assets during the three months ended December 31, 2024 (51,390) Total portfolio fair value as of December 31, 2024 $ 1,405,350 Management also determined fair values of all of its long-term borrowings and preferred stock.
Equity Capital The following table provides information on equity sales that have occurred since January 1, 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 247,781 24.96 6,184 5,575 Common Stock – ATM Program 788,045 19.34 15,240 15,087 (1) Net of selling commissions and dealer-manager fees or underwriting discounts and commissions (in each case, as applicable).
Equity Capital The following table provides information on equity sales that have occurred since January 1, 2024 (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 16,595 $ 24.98 $ 414 $ 373 Common Stock – ATM Program 346,216 13.52 4,680 4,633 (1) Net of selling commissions and dealer-manager fees or underwriting discounts and commissions (in each case, as applicable).
The fair values of our Series B Preferred Stock, Series C Preferred Stock, and Series D Term Preferred Stock were determined using the closing stock prices as of December 31, 2023, of $19.25 per share, $19.00 per share, and $23.75 per share, respectively.
The fair values of our Series B Preferred Stock, Series C Preferred Stock, and Series D Term Preferred Stock were determined using the closing stock prices as of December 31, 2024, of $20.90 per share, $20.70 per share, and $24.64 per share, respectively.
A quarterly rollforward in the estimated NAV per common share and OP Unit for the three months ended December 31, 2023, is provided below: Estimated NAV per common share and non-controlling OP Unit as of September 30, 2023 $ 20.33 Less net loss attributable to common stockholders and non-controlling OP Unitholders (0.12) Adjustments for net change in valuations: Net change in unrealized fair value of farmland portfolio (1) $ (0.12) Net change in unrealized fair value of long-term indebtedness (0.35) Net change in unrealized fair value of preferred equity securities (0.46) Net change in valuations (0.93) Less distributions on common stock and non-controlling OP Units (0.14) Less net dilutive effect of equity issuances and redemptions, net (0.08) Estimated NAV per common share and non-controlling OP Unit as of December 31, 2023 $ 19.06 (1) The net change in unrealized fair value of our farmland portfolio consists of three components: (i) a decrease of $0.43 per share due to the net depreciation in value of the farms that were valued during the three months ended December 31, 2023, (ii) an increase of $0.27 per share due to the aggregate depreciation and amortization expense recorded during the three months ended December 31, 2023, and (iii) an increase of $0.04 per share due to net asset dispositions or capital improvements made on certain farms that have not yet been considered in the determination of the respective farms’ estimated fair values.
(5) The Series B Preferred Stock and Series C Preferred Stock were valued based on their respective closing stock prices as of December 31, 2024, while the Series E Preferred Stock was valued at its liquidation value, as discussed above. 59 Table of Content A quarterly rollforward in the estimated NAV per common share and OP Unit for the three months ended December 31, 2024, is provided below: Estimated NAV per common share and non-controlling OP Unit as of September 30, 2024 $ 15.57 Less net loss attributable to common stockholders and non-controlling OP Unitholders (0.15) Adjustments for net change in valuations: Net change in unrealized fair value of farmland portfolio (1) $ (1.19) Net change in unrealized fair value of long-term indebtedness 0.18 Net change in unrealized fair value of preferred equity securities 0.61 Net change in valuations (0.40) Less distributions on common stock and non-controlling OP Units (0.14) Plus (less) net accretive (dilutive) effect of equity issuances and redemptions, net 0.03 Estimated NAV per common share and non-controlling OP Unit as of December 31, 2024 $ 14.91 (1) The net change in unrealized fair value of our farmland portfolio consists of three components: (i) a decrease of $1.49 per share due to the net depreciation in value of the farms that were valued during the three months ended December 31, 2024, (ii) an increase of $0.24 per share due to the decrease in net book value of our real estate holdings as a result of the aggregate depreciation and amortization expense recorded during the three months ended December 31, 2024, and (iii) an increase of $0.06 per share due to net asset dispositions or capital improvements made on certain farms that either did not impact or have not yet been considered in the determination of the respective farms’ estimated fair values.
The net losses recorded during the year ended December 31, 2022, related to the disposals of certain irrigation and other improvements on certain of our farms. The net property and casualty loss related to net expenses incurred and insurance recoveries received for certain improvements that were damaged due to natural disasters.
The net property and casualty losses related to net expenses incurred and insurance recoveries received for certain improvements that were damaged due to natural disasters. The property and casualty loss recorded during year ended December 31, 2024, was primarily due to damage caused by Hurricane Helene to certain permanent plants on one of our farms in Georgia.
Common Stock—At-the-Market Program On May 12, 2020, we entered into equity distribution agreements with Virtu Americas, LLC, and Ladenburg Thalmann & Co., Inc.
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 Thalmann & Co. Inc.
Aggregate selling commissions and dealer-manager fees paid to Gladstone Securities as a result of these sales was approximately $609,000. 41 Table of Content The Series E Offering will terminate on the date (the “Series E Termination Date”) that is the earlier of (i) December 31, 2025 (unless terminated or extended by our Board of Directors) and (ii) the date on which all 8,000,000 shares of Series E Preferred Stock offering in the Series E Offering are sold.
The Series E Offering will terminate on the date (the “Series E Termination Date”) that is the earlier of (i) December 31, 2025 (unless terminated or extended by our Board of Directors) and (ii) the date on which all 8,000,000 shares of Series E Preferred Stock offering in the Series E Offering are sold.
The following table summarizes the activity under the ATM Program from January 1, 2023, through the date of this filing (dollars in thousands): Number of Shares Sold Weighted-average Offering Price Per Share Gross Proceeds Net Proceeds (1) 788,045 $ 19.34 $ 15,240 $ 15,087 (1) Net of underwriter commissions.
The following table summarizes the activity under the ATM Program from January 1, 2024, through the date of this filing (dollars in thousands): Number of Shares Sold Weighted-average Offering Price Per Share Gross Proceeds Net Proceeds (1) 346,216 $ 13.52 $ 4,680 $ 4,633 43 Table of Content (1) Net of underwriter commissions.
Interest expense decreased, primarily due to a decrease in overall borrowings. The weighted-average principal balance of our aggregate borrowings (excluding our cumulative term preferred stock) outstanding for the year ended December 31, 2023, was approximately $595.8 million, as compared to approximately $654.7 million for the prior-year period.
The weighted-average principal balance of our aggregate borrowings (excluding our cumulative term preferred stock) outstanding for the year ended December 31, 2024, was approximately $545.4 million, as compared to approximately $595.8 million for the prior year.
For further discussion on interest patronage, refer to Note 4, “ Borrowings—Farm Credit Notes Payable—Interest Patronage ,” in the accompanying notes to our consolidated financial statements.
In total, 2023 interest patronage resulted in a 22.0% reduction (approximately 101 basis points) to the interest rates on such borrowings. For further discussion on interest patronage, refer to Note 4, “ Borrowings—Farm Credit Notes Payable—Interest Patronage ,” in the accompanying notes to our consolidated financial statements.
Large amounts of land are becoming available in the Central Valley of California; however, while smaller acreages are transacting rather quickly, larger holdings are sitting on the market longer. Groundwater plans to be in compliance with SGMA are being approved and implemented, which continues to significantly impact land values.
Large tracts of land are becoming available in California’s Central Valley; however, while smaller parcels are selling rather quickly, larger holdings are sitting on the market longer. The implementation of groundwater plans to comply with SGMA continues to significantly impact land values.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe following table summarizes the hypothetical change in fair value of our fixed-rate borrowings at December 31, 2023, if market interest rates had been one or two percentage points lower or higher than those in place as of December 31, 2023 (dollars in thousands): Change in Market Interest Rates Carrying Value (1) Fair Value Difference 2% decrease $ 576,839 $ 562,496 $ (14,343) 1% decrease 576,839 545,510 (31,329) No change 576,839 529,366 (47,473) 1% increase 576,839 514,021 (62,818) 2% increase 576,839 499,421 (77,418) (1) Includes the principal balances outstanding of all long-term borrowings (consisting of notes and bonds payable), excluding unamortized debt issuance costs.
Biggest changeThe following table summarizes the hypothetical change in fair value of our fixed-rate borrowings at December 31, 2024, if market interest rates had been one or two percentage points lower or higher than those in place as of December 31, 2024 (dollars in thousands): 60 Table of Content Change in Market Interest Rates Carrying Value (1) Fair Value Difference 2% decrease $ 526,309 $ 511,544 $ (14,765) 1% decrease 526,309 498,658 (27,651) No change 526,309 486,314 (39,995) 1% increase 526,309 474,586 (51,723) 2% increase 526,309 463,336 (62,973) (1) Includes the principal balances outstanding of all long-term borrowings (consisting of notes and bonds payable), excluding unamortized debt issuance costs.
In addition to changes in interest rates, the fair value of our farmland portfolio is subject to fluctuations based on changes in local and regional economic conditions and changes in the creditworthiness of our tenants. Materially adverse changes in the fair value of our real estate may affect our ability to refinance our debt, if necessary. 58 Table of Content
In addition to changes in interest rates, the fair value of our farmland portfolio is subject to fluctuations based on changes in local and regional economic conditions and changes in the creditworthiness of our tenants. Materially adverse changes in the fair value of our real estate may affect our ability to refinance our debt, if necessary. 61 Table of Content
Currently, over 99.9% of our borrowings are at fixed rates, and on a weighted-average basis, these rates are fixed at an effective interest rate (after interest patronage) of 3.34% for another 4.2 years. As such, with respect to our current borrowings, we believe fluctuations in interest rates would have a minimal impact on our net income.
Currently, over 99.9% of our borrowings are at fixed rates, and on a weighted-average basis, these rates are fixed at an effective interest rate (after interest patronage) of 3.35% for another 3.6 years. As such, with respect to our current borrowings, we believe fluctuations in interest rates would have a minimal impact on our net income.
However, interest rate fluctuations may affect the fair value of our fixed-rate borrowings. As of December 31, 2023, the fair value of our fixed-rate borrowings outstanding (excluding our Series D Term Preferred Stock) was approximately $529.4 million.
However, interest rate fluctuations may affect the fair value of our fixed-rate borrowings. As of December 31, 2024, the fair value of our fixed-rate borrowings outstanding (excluding our Series D Term Preferred Stock) was approximately $486.3 million.

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