UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

(Mark One)



ý	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year endedDecember 31, ~~2017~~2019



¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to _______________

Commission file number: 001-35795

GLADSTONE LAND CORPORATION

(Exact name of registrant as specified in its charter)



MARYLAND		54-1892552
(State or Other Jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

1521 WESTBRANCH DRIVE, SUITE 100 MCLEAN, VIRGINIA		22102
(Address of Principal Executive Offices)		(Zip Code)

(703) 287-5800

Registrant’s Telephone Number, Including Area Code

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.001 par value per share	LAND	The Nasdaq Stock Market, LLC
6.375% Series A Cumulative Term Preferred Stock, ~~$0.001~~ par value $0.001 per share	LANDP	The Nasdaq Stock Market, LLC

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. YES ¨ NO ý

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. YES ¨ NO ý

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES ý NO ¨

Indicate by check mark whether the registrant has submitted electronically ~~and posted on its corporate Web site, if any,~~ every Interactive Data File required to be submitted ~~and posted~~ pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit ~~and post~~ such files). YES ý NO ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 232.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ý

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.



Large accelerated filer	¨		Accelerated filer	x
Non-accelerated filer	¨	~~(Do not check if a smaller reporting company)~~	Smaller reporting company	¨x
			Emerging growth company	x¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). YES ¨ NO ý

The aggregate market value of the voting stock held by non-affiliates of the ~~registrant~~Registrant on June ~~30, 2017,~~28, 2019, based on the closing price on that date of ~~$11.67~~$11.53 on the Nasdaq Global Market, was approximately ~~$112.2~~$209.7 million. For the purposes of calculating this amount only, all directors and executive officers of the ~~registrant~~Registrant have been deemed to be affiliates.

The number of shares of the ~~registrant’s Common Stock,~~Registrant’s common stock, $0.001 par value per share, outstanding as of February ~~19, 2018,~~18, 2020, was ~~13,895,864.~~21,346,458.

Documents Incorporated by Reference: Portions of the Registrant’s Proxy Statement, to be filed no later than April 30, 2018, relating to the Registrant’s ~~2018~~2019 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K.

GLADSTONE LAND CORPORATION

FORM 10-K FOR THE YEAR ENDED

DECEMBER 31, ~~2017~~2019

TABLE OF CONTENTS




			PAGE
PART I	ITEM 1	Business	5
	ITEM 1A	Risk Factors	1413
	ITEM 1B	Unresolved Staff Comments	3330
	ITEM 2	Properties	3330
	ITEM 3	Legal Proceedings	3431
	ITEM 4	Mine Safety Disclosures	3431

PART II	ITEM 5	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	3532
	ITEM 6	Selected Financial Data	3633
	ITEM 7	Management’s Discussion and Analysis of Financial Condition and Results of Operations	4033
	ITEM 7A	Quantitative and Qualitative Disclosures About Market Risk	6355
	ITEM 8	Financial Statements and Supplementary Data	6456
	ITEM 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	~~106~~97
	ITEM 9A	Controls and Procedures	~~106~~97
	ITEM 9B	Other Information	~~106~~97

PART III	ITEM 10	Directors, Executive Officers and Corporate Governance	~~107~~98
	ITEM 11	Executive Compensation	~~107~~98
	ITEM 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	~~107~~98
	ITEM 13	Certain Relationships and Related Transactions and Director Independence	~~107~~98
	ITEM 14	Principal Accountant Fees and Services	~~107~~98

PART IV	ITEM 15	Exhibits and Financial Statement Schedules	~~108~~99
	ITEM 16	Form 10-K Summary	~~111~~102
SIGNATURES

FORWARD-LOOKING STATEMENTS

Our disclosure and analysis in this Annual Report on Form 10-K (the “Form 10-K”) and the documents that are incorporated by reference herein contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We intend such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995 and include this statement for purposes of complying with these safe harbor provisions. Forward-looking statements relate to expectations, beliefs, projections, future plans, and strategies, anticipated events, or trends concerning matters that are not historical facts. These forward-looking statements include information about possible or assumed future events, including, among other things, discussion and analysis of our business, financial condition, results of operations (including funds from operations, core funds from operations, and adjusted funds from operations (each a non-GAAP financial measure and each as defined herein)), our strategic plans and objectives, cost management, occupancy and leasing rates and trends, liquidity and ability to refinance our indebtedness as it matures, anticipated capital expenditures (and access to capital) required to complete projects, amounts of anticipated cash distributions to our stockholders in the future, and other matters. Words such as “may,” “might,” “believe,” “will,” “provided,” “anticipate,” “future,” “could,” “growth,” “plan,” “intend,” “expect,” “should,” “would,” “if,” “seek,” “possible,” “potential,” “likely” and variations of these words and similar expressions are intended to identify forward-looking statements, though not all forward-looking statements contain these words. These statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties, and other factors, some of which are beyond our control, that are difficult to predict and could cause actual results to differ materially from those expressed, implied or forecasted by such forward-looking statements. Statements regarding the following subjects, among others, are forward-looking by their nature:

our business strategy;

our ability to implement our business plan, including our ability to continue to expand both geographically and by crop type;

pending and future transactions;

our projected operating results;

our ability to obtain future financing arrangements on favorable terms;

estimates relating to our future distributions;

estimates regarding potential rental rate increases and occupancy rates;

our understanding of our competition and our ability to compete effectively;

market and industry trends;

estimates of future operating expenses, including payments to our Adviser and Administrator (each as defined herein) under the terms of our 2020 Advisory Agreement and our Administration Agreement (each as defined herein), respectively;

our compliance with tax laws, including our ability to maintain our qualification as a real estate investment trust (“REIT”) for federal income tax purposes;

the impact of technology on our operations and business, including the risk of cyberattacks, cyberliability, or potential liability for breaches of our privacy or information security systems;

projected capital expenditures; and

use of proceeds and availability of our ~~line~~lines of credit, long-term borrowings, current and future stock offerings, and other future capital resources, if any.

Forward-looking statements involve inherent uncertainty and may ultimately prove to be incorrect or false. You are cautioned to not place undue reliance on forward-looking statements. Except as otherwise may be required by law, we undertake no obligation to update or revise forward-looking statements to reflect changes to our assumptions, the occurrence of unanticipated events or actual operating results. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including, but not limited to:

our ability to successfully complete pending and future property acquisitions;

general volatility of the capital markets and the market price of our capital stock;

failure to maintain our qualification as a REIT and risks of changes in laws that affect REITs;

risks associated with negotiation and consummation of pending and future transactions;

changes in our business and investment strategy;

the adequacy of our cash reserves and working capital;

our failure to successfully integrate and operate acquired properties and operations;

defaults upon or non-renewal of leases by tenants;

decreased rental rates or increased vacancy rates;

the degree and nature of our competition, including other agricultural REITs;

availability, terms, and deployment of capital, including the ability to maintain and borrow under our line of credit, arrange for long-term mortgages on our properties, and raise equity capital;

our Adviser’s and our ~~Administrator's~~Administrator’s ability to identify, hire, and retain highly-qualified personnel in the future;

changes in the environment, our industry, interest rates, or the general economy;

changes in real estate and zoning laws and increases in real property tax rates;

changes in governmental regulations, tax rates, and similar matters;

environmental liabilities for certain of our properties and uncertainties and risks related to natural disasters or climactic changes impacting the regions in which our tenants operate; and

the loss of any of our key officers, such as Mr. David Gladstone, our chairman, president, and chief executive officer, or Mr. Terry Lee Brubaker, our vice chairman and chief operating ~~officer.~~officer, or Mr. Lewis Parrish, our chief financial officer and assistant treasurer.

This list of risks and uncertainties, however, is only a summary of some of the most important factors to us and is not intended to be exhaustive. You should carefully review the risks set forth herein under Item 1A, “Risk Factors.” New factors may also emerge from time to time that could materially and adversely affect us.

All references to “we,” “our,” “us,” and the “Company” in this Form 10-K mean Gladstone Land Corporation and its consolidated subsidiaries, except where it is made clear that the term refers only to Gladstone Land Corporation.

PART I



ITEM 1.	BUSINESS

Overview

We are an externally-managed, agricultural REIT that is engaged ~~primarily~~ 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 113 farms comprised of 87,860 acres across 10 states in the U.S., as well as several farm-related facilities.

We were re-incorporated in Maryland on March 24, 2011, having been originally incorporated in California on June 14, 1997. ~~We typically do not farm~~At the ~~properties we own; however, we currently lease (on a temporary basis) one~~time of our original incorporation in 1997, our primary purpose was the operation of strawberry farms ~~in California~~through our former subsidiary, Coastal Berry Company, LLC (“Coastal Berry”), an entity that provided contract growing, packaging, marketing, and distribution of fresh berries and other agricultural products, including commission selling and contract cooling services to ~~a wholly-owned subsidiary~~independent berry growers. We operated Coastal Berry as our primary business until 2004, when it was sold to Dole Food Company. Since 2004, our operations have consisted primarily of ~~ours.~~ leasing our farms to unrelated third-party tenants.

Upon the pricing of our initial public offering (the “IPO”), on January 29, 2013, our shares of common stock began trading on the Nasdaq Global Market (“Nasdaq”) under the symbol “LAND.” Our shares of 6.375% Series A Cumulative Term Preferred Stock (the “Series A Term Preferred Stock”) are traded on Nasdaq under the symbol “LANDP.” In addition, we have registered our 6.00% Series B Cumulative Redeemable Preferred Stock, par value $0.001 per share (the “Series B Preferred Stock”). The Series B Preferred Stock is not listed on a national securities ~~change,~~exchange, and there is currently no public market for shares of the Series B Preferred Stock.

Prior to 2004, we were engaged in the owning and leasing of farmland, as well as an agricultural operating business whereby we engaged in the farming, contract growing, packaging, marketing and distribution of fresh berries, including commission selling and contract cooling services to independent berry growers. In 2004, we sold our agricultural operating business, and since then, our operations have consisted solely of leasing our farms to third-party tenants.

We currently own 74 farms comprised of 63,175 total acres across 9 states in the U.S. (Arizona, California, Colorado, Florida, Michigan, Nebraska, North Carolina, Oregon, and Washington). We also own several farm-related facilities, such as cooling facilities, packinghouses, processing facilities, and various storage facilities. These farms and facilities are currently leased to 52 different, third-party tenants that are either independent or corporate farming operations, and, as of October 17, 2017, one farm is leased to our taxable REIT subsidiary (“TRS”). Historically, our farmland has predominantly been concentrated in locations where tenants are able to grow fresh produce annual row crops (e.g., certain berries and vegetables), which are typically planted and harvested annually. However, since our IPO, we have diversified the variety of crops grown on our farms, and we now also own ~~several~~ farms that grow permanent crops (e.g., almonds, blueberries, pistachios, and wine ~~vineyards)~~grapes), as well as ~~some~~a few farms that grow commodity crops (e.g., corn and beans). We also own several farm-related facilities that are necessary to the farming operations on the underlying farmland, such as cooling facilities, packinghouses, processing facilities, and various storage facilities. While our focus remains on farmland growing fresh produce annual row crops, in the future, we expect to acquire additional farmland that grows permanent crops, and, to a lesser extent, commodity ~~crops. We also expect to acquire~~crops, as well as more farm-related ~~facilities that are necessary to the farming operations on the underlying farmland.~~facilities.

We generally lease our properties on a triple-net basis, an arrangement under which, in addition to rent, the tenant is required to pay the related taxes, insurance costs (including drought insurance if we were to acquire properties that depend upon rainwater for irrigation), maintenance, and other operating costs. Except in unique circumstances, we do not ~~currently~~ intend to enter into the business of growing, packing, or marketing farmed products; however, if we do so in the future, we expect that it would ~~again~~ be through ~~our TRS. We may also elect to sell farmland at certain times, such as when the land could be developed by others for urban or suburban uses.~~a taxable REIT subsidiary (“TRS”).

We conduct substantially all of our business activities through an Umbrella Partnership Real Estate Investment Trust (“UPREIT”) structure, by which all of our properties are held, directly or indirectly, by Gladstone Land Limited Partnership (the “Operating Partnership”). We control the sole general partner of the Operating Partnership and currently own, directly or indirectly, approximately ~~93.2%~~98.7% of the common units of limited partnership interest in the Operating Partnership (“OP Units”). We have in the past, and may in the future, offer equity ownership in our Operating Partnership by issuing additional OP Units to farmland owners in consideration for acquiring their farms. See ~~“Our~~“Our Investment Process—Types of ~~Investments”~~Investments” below for additional information regarding OP Units.

~~On September 3, 2014, we filed our 2013 federal income tax return, on which we~~We have elected to be taxed as a REIT for federal tax purposes beginning with the year ended December 31, 2013. As a REIT, we generally will not be subject to U.S. federal income taxes on amounts that we distribute to our stockholders, provided that, on an annual basis, we distribute at least 90% of our REIT taxable income to our ~~stockholders.~~stockholders and satisfy certain other requirements, including requirements related to the sources of our gross income, the nature of our assets, and the diversity of our stock ownership. In addition, we have elected for Gladstone Land Advisers, Inc. (“Land Advisers”), a wholly-owned subsidiary of our Operating Partnership, to be taxed as a TRS. We may own or manage our assets and engage in other activities through Land Advisers or another TRS we form or acquire when we deem it necessary or advisable. On October 17, 2017, Land Advisers took over the farming operations on one of our farms in California under a lease that is scheduled to expire on July 31, 2018. There was no taxable income from Land Advisers for the year ended December 31, 2017; however, anyAny taxable income generated by Land Advisers or any other TRS in the future will be subject to regular corporate income taxes.

We are managed by our external adviser, Gladstone Management Corporation ~~(our~~(the “Adviser”), ~~a Delaware corporation and a registered investment adviser with the Securities and Exchange Commission (the “SEC”), manages our real estate portfolio pursuant to an advisory agreement,~~ and Gladstone Administration, LLC ~~(our~~(the “Administrator”), ~~a Delaware limited liability company,~~ provides administrative services to ~~us pursuant to an administration agreement. Our Adviser and Administrator collectively employ all of our personnel and pay directly their salaries, benefits, and general expenses.~~us. Both our Adviser and our Administrator are affiliates of ours and each other.

~~Fiscal Year 2017 Highlights~~

~~During 2017, we:~~

~~Acquired 16 new farms, totaling 12,641 acres across 6 different states, for approximately $128.7 million;~~

~~Executed 10 separate leases on 9 different farms for total annualized rents of approximately $2.2 million, all without incurring any downtime on the farms;~~

~~Maintained 100% occupancy on all of our properties throughout the year (including one farm that was leased to our TRS for a portion of the year);~~

Grew adjusted funds from operations (“AFFO”) by 28.2%, from approximately $5.8 million in 2016 to $7.5 million in 2017 (Net (loss) income for the years ended December 31, 2017 and 2016 was approximately $(34,000) and $473,000, respectively); and

~~Through two public offerings of our common stock and our ATM Program (as defined herein), raised approximately $39.9 million of net proceeds.~~

~~Refer to Item 6, “Selected Financial Data,” for a definition of AFFO and a reconciliation of net (loss) income to AFFO.~~

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 primary strategy to achieve our business objective is to invest in and diversify our current portfolio of primarily triple-net-leased farmland and properties related to farming operations. This strategy includes the following components:

Owning Farms and Farm-Related Real Estate for Income. We own and intend to acquire additional farms and farm-related properties and lease them to independent and corporate farming operations, including sellers who desire to continue farming the land after we acquire the property from them. We expect to hold most acquired properties for many years and to generate stable and increasing rental income from leasing these properties.

Owning Farms and Farm-Related Real Estate for Appreciation. 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 farmland portfolio. Potential purchasers may include real estate developers desiring to develop the property, or financial purchasers seeking to acquire property for investment ~~purposes.~~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. ~~To date, we have sold one farm for a net gain of approximately $85,000.~~

Continue Expanding our Operations Geographically. Our properties are currently located in ~~nine~~10 states across the U.S., and we expect that we will acquire properties in other farming regions of the U.S. in the future. While our primary regions of focus are the Pacific West and the Southeastern regions of the United States, we believe other regions of the U.S., such as the Northwest and Mid-Atlantic regions, offer attractive locations for expansion, and, to a lesser extent, we also expect to seek farmland acquisitions in certain regions of the Midwest, as well as other areas in the U.S.

Continue Expanding our Crop Varieties. Currently, the majority of tenants who farm our properties grow annual row crops dedicated to fresh produce, such as berries (e.g., strawberries and raspberries) and fresh vegetables (e.g., tomatoes, lettuce, and bell peppers). We have also expanded further into certain permanent crops (e.g., almonds, pistachios, blueberries, and wine ~~grape vineyards)~~grapes) and, to a lesser extent, commodity crops (e.g., corn and beans). We will seek to continue our recent expansion into other permanent crops and, to a lesser extent, commodity crops, while maintaining our focus on annual row-crop farms growing fresh produce.

Using Leverage. To maximize our number of investments, we intend to borrow through loans secured by long-term mortgages on our properties, and we may also borrow funds on a short-term basis or incur other indebtedness.

We intend to acquire more farmland and farm-related properties in our regions of focus that is already or will be leased to farmers, and we expect that most of our future tenants will be independent or corporate farming operations that are all unrelated to us. We intend to continue to lease the majority of our farms and farm-related facilities on a triple-net lease basis to tenants

who sell their products through national corporate marketers-distributors. We expect to continue to earn rental income from our farmland investments.

Our Investment Process

Types of Investments

We expect that substantially all of our investments will continue to be incomprised of income-producing agricultural real property, and we expect that the majority of our leases will continue to be structured as triple-net leases. Investments will not be restricted as to geographical areas, but we expect that most of our investments in farmland real estate will continue to be made within the ~~United States.~~U.S. Currently, our properties are located across ~~nine~~10 states in the U.S.

We anticipate that we will make substantially all of our investments through our Operating Partnership. Our Operating Partnership may acquire interests in real property in exchange for the issuance of shares of our common ~~shares,~~stock, OP Units, cash, or through a combination of the three. OP Units issued by our Operating Partnership will be redeemable at the option of the holder for cash or, at our election, shares of our common stock on a one-for-one basis at any time after holding the OP Units for one year. We currently, and may in the future, hold some or all of our interests in real properties through one or more wholly-owned subsidiaries, each classified as a qualified REIT subsidiary.

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. 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 that do not farm the property but rather lease the property to tenant-farmers. In situations such as these, we intend to have a lease in place prior to or simultaneously with acquiring the property. For a discussion of the risks associated with leasing property to leveraged tenants, see “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 primarily single-tenant, agricultural real property. Generally, we will lease properties to tenants that our Adviser deems creditworthy under triple-net leases that will be full-recourse obligations of our tenants or their affiliates. Most of our agricultural leases have original terms ranging from 3 to 10 years for farms growing annual row crops and 5 to 15 years for properties growing permanent crops, often with options to extend the lease further. Rent is generally payable to us in advance on either an annual or semi-annual ~~basis. Further, most of our leases contain provisions that provide~~basis, with such rent typically subject to periodic escalation clauses provided for ~~annual increases in~~within the ~~rental amounts payable by the tenants, often referred to as escalation clauses.~~lease. The escalation clauses may specify fixed dollar amounts or percentage increases each year, or they may be variable, based on standard cost of living or inflation indices. In addition, some leases that are longer-term in nature may require a regular survey of comparable land rents, with the rent owed per the lease being adjusted to reflect then-current market rents. We also have leases that include a variable ~~rents~~rent component based on the ~~success of~~gross revenues earned on the ~~harvest each year.~~respective farm. In these types of agreements, we will generally require the lease to include the guarantee of a minimum amount of rental income that satisfies our investment return criteria. Currently, our 74 farms are leased under agricultural leases with original terms ranging from 1 to 20 years, with 48 farms leased on a pure triple-net basis, 23 farms leased on a partial-net basis (with the landlord responsible for all or a portion of the related property taxes), and 2 farms leased on a gross basis (with the landlord responsible for the related property taxes, insurance, and maintenance on the property). One of our farms is currently vacant. Additionally, 13 of our farms are leased under agreements that include a variable rent component.

We believe that we can acquire farmland that we will be able to lease at annual rental rates providing net capitalization rates ranging from ~~4.5%~~5% to ~~6.5%~~7% or more of the properties’ market values. However, there can be no assurance that we will be able to achieve this level of rental rates. Since rental contracts in the farming business for annual row crops are customarily short-term agreements, rental rates are typically renegotiated regularly to then-current market rates.

Underwriting Criteria and Due Diligence Process

Selecting the Property

We consider selecting the right properties to purchase or finance as the most important aspect of our business. Buying quality farmland that can be used to grow a variety of different crops and that is located in desirable locations is essential to our success.

Our Adviser works with real estate contacts in agricultural markets throughout the U.S. to assess available properties and farming areas. We believe that our Adviser is experienced in selecting valuable farmland and will use this expertise to identify promising properties. The following is a list of important factors in our selection of farmland:

Water availability. Availability of water is essential to farming. We seek to purchase properties with ample access to water through an operating well on site or rights to use a well or other source that is located nearby. Additionally, we may, in the future, consider acquiring properties that rely on rainfall for water if the tenant on that property mitigates the drought risk by purchasing drought insurance. Typically, leases on properties that would rely on rainfall would be longer term in nature. ~~Currently, we do not own any properties that rely on rainfall for water, nor do we have any plans to acquire such properties.~~

Soil composition. In addition to water, for farming efforts to be successful, the soil must be suitable for growing crops. We will not buy or finance any real property that does not have soil conditions that we believe are favorable for growing the crops farmed on the property, except to the extent that a portion of an otherwise suitable property, while not favorable for growing the crops farmed on the property, may be utilized to build structures used in the farming business, such as cooling facilities, packinghouses, ~~silos,~~distribution centers, greenhouses, and storage ~~facilities, and distribution centers.~~facilities.

Location. Farming also requires optimal climate and growing seasons. We typically seek to purchase properties in locations that take advantage of climate conditions that are needed to grow fresh produce row crops. We intend to continue to expand throughout the U.S. in locations with productive farmland and financially sound farming tenants.

Price. We intend to purchase and finance properties that we believe are a good value and that we will be able to rent profitably ~~rent~~ for farming over the long term. Generally, the closer a property is located to urban developments, the higher the value of the property. 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. Such review will include an evaluation of the physical condition of a property and an environmental site assessment to determine potential environmental liabilities associated with a property prior to its acquisition. One of the criteria that we look for is whether mineral rights to such property, which constitute a separate estate from the surface rights to the property, have been sold to a third party. We generally seek to invest in properties where mineral rights have not been sold to third parties; however, in cases where access to mineral rights would not affect the surface farming operations, we may enter into a lease agreement for the extraction of minerals or other subterranean resources, as we have done in the past on a few of our properties. We may seek to

acquire mineral rights in connection with the acquisition of future properties to the extent such mineral rights have been sold off and the investment acquisition of such rights is considered to be favorable after our due diligence review. 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. See Item 1A, ~~“Risk~~“Risk Factors — Risks Relating to our Business and Operations — Potential liability for environmental matters could adversely affect our financial ~~condition.~~condition.”

Our Adviser will also physically inspect each property and the real estate surrounding it to estimate its value. Our Adviser’s due diligence will be primarily focused on valuing each property independent of its rental value to particular tenants to whom we plan to rent. The real estate valuations our Adviser performs will consider one or more of the following items:

The comparable value of similar real property in the same general area of the prospective property, to the extent possible.

The comparable real estate rental rates for similar properties in the same general area of the prospective property.

Alternative uses for the property to determine if there is another use for the property that would give it higher value, including potential future conversion to urban or suburban uses, such as commercial or residential development.

The assessed value as determined by the local real estate taxing authority.

In addition, our Adviser ~~may~~will generally supplement its valuation estimate with an independent real estate appraisal in connection with each investment that it considers. These appraisals may take into consideration, among other things, the terms and conditions of the particular lease transaction, the quality of the tenant’s credit and the conditions of the credit markets at the time the lease transaction is negotiated. However, the actual purchase price of a property may be greater or less than its appraised value. When appropriate, our Adviser may engage experts to undertake some or all of the due diligence efforts described above.

Underwriting the Tenant, Due Diligence Process, and Negotiating Lease Provisions

In addition to property selection, underwriting the tenant that will lease the property is also an important aspect of our investment process. Our Adviser will evaluate the creditworthiness of the tenant and assess its ability to generate sufficient cash flow from its agricultural operations to cover its payment obligations to us pursuant to our lease. The following is a list of

criteria that our Adviser may consider when evaluating potential tenants for our properties, although not all criteria may be present for each lease:

Experience. We believe that experience is the most significant characteristic when determining the creditworthiness of a tenant. Therefore, we seek to rent our properties to farmers that have an extensive track record of farming their property and particular crops successfully.

Financial Strength. We seek to rent to farming operations that have financial resources to invest in planting and harvesting their crops. We generally require annual financial statements of new tenants to evaluate the financial capability of the tenant and its ability to perform its obligations under the lease.

Adherence to Quality Standards. We seek to lease our properties to those farmers that are committed to farming in a manner that will generate high-quality crops. We intend to identify such commitment through their track records of selling produce into established distribution chains and outlets.

Lease Provisions that Enhance and Protect Value. When appropriate, our Adviser attempts to include lease provisions that require our consent to specified tenant activity or require the tenant to satisfy specific operating tests. These provisions may include, for example, requiring the tenant to meet operational or financial covenants or to indemnify us against environmental and other contingent liabilities. 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. Our Adviser generally also seeks covenants requiring tenants to receive our consent prior to any change in control of the tenant.

Credit Enhancement. To mitigate risk and enhance the likelihood of tenants satisfying their lease obligations, our Adviser may also seek cross-default provisions if a tenant has multiple obligations to us or seek a letter of credit or a guaranty of lease obligations from each tenant’s corporate affiliates, if any. We believe that these types of credit enhancements, if obtained, provide us with additional financial security.

Diversification. Our Adviser will seek to diversify our portfolio to avoid dependence on any one particular tenant, geographic location, or crop type. By diversifying our portfolio, our Adviser intends to reduce the adverse effect on our portfolio of a single underperforming investment or a downturn in any particular geographic region. 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. We currently own properties in ~~nine~~10 different states across the U.S., and over time, we expect to expand our geographic focus to other areas of the Southeast, Pacific Northwest, Midwest, and Mid-Atlantic. We will

also attempt to continue diversifying our portfolio of properties by seeking additional farmland that grows permanent crops and commodity crops, while maintaining our current focus of owning and leasing farmland that grows fresh produce annual row crops. Refer to Note 3, ~~“Real~~“Real Estate and ~~Lease~~ Intangibles Assets,” in the accompanying notes to our ~~Consolidated Financial Statements~~consolidated financial statements for a summary of our portfolio diversification and concentrations.

During the year ended December 31, 2017, we completed the sale of a 219-acre farm in Hillsborough County, Florida (“Colding Loop”), to the existing tenant for $3.9 million, recognizing a net gain on the sale (inclusive of closing costs) of approximately $85,000.

⁽¹⁰⁾

In connection with this acquisition, we executed a four-month leaseback agreement with the seller that provides for a fixed, one-time rental payment of $250,000. In addition, we also executed a 10-year, follow-on lease with a new, unrelated third-party tenant that will commence upon the expiration of the four-month leaseback agreement. The follow-on lease provides for minimum annualized straight-line rents of approximately $372,000, plus a participation rent component based on the gross revenues earned on the farm. In addition, the farm is expected to be converted to organic farmland by the second half of 2021.

Existing Properties

Leasing Activity

~~During~~The following table summarizes the ~~year ended December 31, 2017, we executed 10 separate leases~~leasing activity that has occurred on 9 different farms in California and Florida that had leases expiring in either 2017 or 2018. In total, these leases were renewed for additional terms ranging between one and five years and for total annualized rents of approximately $2.2 million, representing a decrease of approximately $167,000 (approximately 7.0%) from that ofour existing properties since January 1, 2019, through the ~~prior leases. These renewals were executed without incurring any downtime on the respective farms, and no leasing commissions or tenant improvements were incurred in connection with these renewals.~~

In addition, on December 31, 2017, we terminated the lease with Dole on one of our farms in Santa Clara, California, and entered into a new lease with a new tenant to occupy the farm. The prior lease was originally scheduled to expire on December 31, 2020, and in connection with its early termination, during the year ended December 31, 2017, we wrote off approximately $99,000 of deferred rent asset balance to bad debt expense, which is included in General and administrative expenses on the accompanying Consolidated Statements of Operations. The new lease is scheduled to expire on December 31, 2020, and provides for annualized straight-line rent of approximately $605,000, representing a 10.9% increase over that of the

~~prior lease (before its termination). No downtime was incurred as a result of the early termination and re-leasing~~date of this ~~farm, nor were any leasing commissions or tenant improvements incurred in connection with the new lease.~~

Subsequent to December 31, 2017, we terminated the leases on two of our farms in Cochise County, Arizona, early and entered into two new lease agreements with a new tenant. Each of the new leases is for a term of one year and provides for aggregate minimum rents of approximately $480,000, which represents a decrease of approximately $203,000 (approximately 29.7%) from that of the prior leases (before each of their terminations). However, each of the new leases also contains a variable rent component based on the total gross revenues earned on the respective farms, whereas the prior leases were both fixed-rent leases. In addition, both of the new leases are pure, triple-net lease agreements, whereas one of the prior leases was a partial-net lease (with us responsible for the property taxes on the farm). In connection with one of the early lease terminations, during the year ended December 31, 2017, we recorded a full allowance on the respective lease's deferred rent asset balance as of December 31, 2017, which was approximately $50,000. We recorded this allowance to bad debt expense, which is included in General and administrative expenses on the accompanying Consolidated Statements of Operations. In connection with the other early lease termination, as of the termination date, the lease has a deferred rent liability balance of approximately $84,000. In accordance with ASC 360-10, we will recognize this balance as additional rental income during the three months ending March 31, 2018 (on the lease termination date). No downtime was incurred as a result of the early terminations and re-leasing of these farms, nor were any leasing commissions or tenant improvements incurred in connection with the new leases.

~~Project Completion~~

In connection with the lease we executed upon our acquisition of an 854-acre farm in California in September 2015, we agreed to fund the development of the property into an almond orchard. The development included the removal of 274 acres of old grape vineyards, the installation of a new irrigation system, including the drilling of four new wells, and the planting of over 800 acres of new almond trees. As of December 31, 2017, the development project had been completed at a total cost of approximately $8.4 million, and, as a result, we expect to receive approximately $5.2 million of additional rent throughout the term of the lease, which expires January 9, 2031.

~~Capital Improvements~~

In connection with certain lease agreements executed during the year ended December 31, 2017, we committed to providing up to $7.8 million of aggregate capital to our tenants for improvements on certain of our farms. These improvements are expected to be completed over the next three years and, assuming full deployment of the capital commitment amounts, are expected to result in additional annual rental income of approximately $450,000. We will begin earning rental income on each of these projects as the funds are disbursed by us. See Note 8, “Commitments and Contingencies,” in the notes to our accompanying consolidated financial statements for a more detailed discussion on each of these projects.

~~TRS Lease Assumption~~

On October 17, 2017, our TRS entered into an Assignment and Assumption of Agricultural Lease (the “Assigned TRS Lease”) with the previously-existing tenant on a 169-acre farm located in Ventura County, California. The Assigned TRS Lease was then amended to shorten the lease term by two years (the new expiration date is July 31, 2018) and to remove any tenant renewal options. All other terms of the lease remained unchanged, including the rental amounts. In addition, to fund the initial operations on the farm, on October 17, 2017, our TRS issued a $1.7 million unsecured promissory note to the Company that is scheduled to mature on July 31, 2018, and will bear interest at a rate equal to the prime rate plus a spread of 5.0% per annum. Repayment of the promissory note, along with interest accrued on the note, is expected to be funded by crop sales earned on the farm by our TRS.

As our wholly-owned TRS is operating the farm, the amount of rent and interest our TRS pays to us (as the parent-landlord and parent-lender) will not be qualifying income for purposes of certain of our REIT tests; however, we do not expect such amounts to be at a level where we are at risk of not qualifying as a REIT. In addition, any taxable income generated by our TRS (whose operations are consolidated within our financial statements) will be subject to regular corporate income taxes. We are unable to estimate the amount of taxable income, if any, that will be generated by our TRS. No taxable income was generated by our TRS during the year ended December 31, 2017.

~~Financing Activity~~

~~Debt Activity~~

~~During the year ended December 31, 2017, we incurred the following new, long-term borrowings~~filing (dollars in thousands):

Lender⁽¹⁾

Aggregate
Principal
Amount

Weighted-average
Maturity Date

Weighted-average
Stated Interest
Rates⁽²⁾
Interest Rate Terms
MetLife $ 42,750
July 2027 3.84 % Fixed through March 2026 (variable thereafter)
Farmer Mac 35,625
June 2022 3.40 % Fixed throughout term
Farm Credit West 11,717
June 2037 4.42 %
⁽³⁾
Fixed through August 2025 (variable thereafter)
Farm Credit FL 5,820
March 2037 4.70 %
⁽⁴⁾
Fixed through February 2024 (variable thereafter)
Farm Credit CFL⁽⁵⁾
5,472
August 2022 4.47 %
⁽⁶⁾
Fixed throughout term
NW Farm Credit 5,460
September 2024 4.41 %
⁽⁴⁾
Fixed throughout term
CF Farm Credit 1,301
July 2022 4.41 %
⁽⁴⁾
Fixed throughout term
Rabo AgriFinance 540
October 2022 4.59 % Fixed throughout term
$ 108,685

PRIOR LEASES

NEW LEASES⁽¹⁾

Farm
Locations

Number

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. Avg.

Term
(Years)

# of Leases
with
Participation
Rents

Lease
Structures
(# of NNN
/ NN / N)⁽³⁾

AZ, CA, FL, MI, NC, NE, & TX

23,407

13,230

19 / 10 / 2

14,351

6.5

16 / 15 / 0

⁽¹⁾

~~For further discussion on borrowings from each~~

In connection with certain of these ~~lenders, refer~~leases, we committed to provide capital for certain improvements on these farms. See Note ~~4, “Borrowings,~~7, “Commitments and Contingencies—Operating Obligations” in the accompanying notes to our ~~accompanying~~ consolidated financial ~~statements.~~statements for additional information on certain of these commitments.


⁽²⁾	~~Where~~Annualized straight-line rent is based on the minimum cash rental payments guaranteed under the applicable ~~rate is before interest patronage, or refunded interest.~~leases (presented on an annualized basis), as required under GAAP, and excludes contingent rental payments, such as participation rents.


⁽³⁾	~~In February 2017,~~ “NNN” refers to leases under triple-net lease arrangements, “NN” refers to leases under partial-net lease arrangements, and “N” refers to leases under single-net lease arrangements, in each case, as described above under “Leases—General.”

Lease Termination

On February 10, 2020, we reached an agreement with a tenant occupying four of our farms in Arizona to terminate the existing leases encompassing those four farms effective February 10, 2020. As part of the termination agreement, the outgoing tenant made a one-time termination payment to us of $3.0 million, which will be recognized as additional lease revenue by us during the three months ending March 31, 2020. The prior leases were scheduled to expire on September 15, 2026 (with two of the farms subject to the renewal of certain state leases currently scheduled to expire on February 14, 2022, and February 14, 2025), and in connection with the early termination of these leases, we will write off an aggregate net deferred rent balance of approximately $104,000, which will also be written off during the three months ending March 31, 2020. In addition, upon termination of these leases, we entered into a new, seven-year lease with a new tenant effective immediately. These leases are included in the Leasing Activity table above.

Project Completion

During 2018 and 2019, we replaced a total of 40 irrigation pivots on one of our properties in Colorado at an aggregate total cost of approximately $2.6 million. Pursuant to lease amendments executed during the year ended December 31, 2019, in connection with this project, we will earn additional straight-line rental income of approximately $196,000 per year throughout the remaining term of the lease, which expires on February 28, 2021.

Financing Activity

Debt Activity

Since January 1, 2019, through the date of this filing, we have incurred the following new, long-term borrowings (dollars in thousands, except for footnotes; for further discussion on certain defined terms used below, refer to Note 4, “Borrowings,” in the accompanying notes to our consolidated financial statements):

Lender

Date of
Issuance

Principal

Amount

Maturity
Date

Principal
Amortization

Stated

Interest

Rate

Expected

Effective

Interest

Rate⁽¹⁾

Interest Rate Terms

Premier Farm Credit, FLCA

2/7/2019

1,440

11/1/2043

25.0 years

5.45%

4.70%

Fixed through October 31, 2023 (variable thereafter)

Prudential

6/17/2019

17,130

7/1/2029

25.0 years

4.00%

Fixed throughout term⁽²⁾

Rabo Agrifinance, LLC

7/10/2019

5,514

6/1/2029

25.0 years

4.04%

Fixed throughout term⁽³⁾

GreenStone Farm Credit Services

7/11/2019

1,609

8/1/2044

25.0 years

5.00%

4.40%

Fixed through June 30, 2029 (variable thereafter)

GreenStone Farm Credit Services

7/11/2019

3,060

8/1/2044

25.0 years

5.00%

4.40%

Fixed through June 30, 2029 (variable thereafter)

Farm Credit West, FLCA

7/11/2019

5,400

5/1/2044

24.5 years

4.24%

3.23%

Fixed through July 31, 2026 (variable thereafter)

Farm Credit of Central Florida, ACA

7/22/2019

31,850

7/1/2027

25.2 years

5.05%

4.11%

Fixed throughout term

Farm Credit of Central Florida, ACA

7/22/2019

5,850

7/1/2027

None
(interest only)

5.05%

4.11%

Fixed throughout term

MetLife

8/16/2019

16,500

1/5/2029

28.6 years

3.70%

Fixed through January 4, 2027 (variable thereafter)⁽⁴⁾

Farm Credit West, FLCA

8/28/2019

12,792

5/1/2044

24.5 years

3.84%

2.83%

Fixed through August 31, 2026 (variable thereafter)⁽⁵⁾

American AgCredit, ACA

8/29/2019

19,254

10/1/2039

20.0 years

3.84%

3.04%

Fixed through August 31, 2029 (variable thereafter)

Rabo Agrifinance, LLC

10/16/2019

5,739

10/1/2029

25.0 years

3.67%

Fixed throughout term⁽³⁾

Rabo Agrifinance, LLC

10/16/2019

3,045

10/1/2029

25.0 years

3.67%

Fixed throughout term⁽³⁾

Diversified Financial

10/17/2019

976

10/17/2026

7.0 years

4.75%

Fixed throughout term

MetLife

11/1/2019

25,500

1/5/2029

28.6 years

3.81%

Fixed through January 4, 2027 (variable thereafter)⁽⁴⁾

Farmer Mac

12/11/2019

3,285

12/11/2020

None
(interest only)

2.61%

Fixed throughout term⁽⁶⁾

Farmer Mac

12/11/2019

10,568

12/11/2020

None
(interest only)

2.61%

Fixed throughout term⁽⁶⁾

Farmer Mac

1/10/2020

8,100

1/12/2024

None
(interest only)

2.66%

Fixed throughout term⁽⁶⁾

Total / Weighted-averages

177,612

4.00%

3.59%

⁽¹⁾

On borrowings from the various Farm Credit associations, we receive interest patronage, or refunded interest, which is typically received in the calendar year following the year in which the related interest expense was accrued. The expected effective interest rates reflected in the table above are the interest rates net of expected interest patronage, which is based on either historical patronage actually received (for pre-existing lenders whom we have received interest patronage from) or indications from ~~Farm Credit West representing a 21.3% refund~~the respective lenders of the interest accrued on all borrowings from Farm Credit West during the year ended December 31, 2016. This interest patronage reduced the interest rates on our borrowings from Farm Credit West during the year ended December 31, 2016, from a weighted-average stated interest rate of 3.59% to a weighted-average effective interest rate of 2.83%. We are unable to estimate the amount of interestestimated patronage to be paid (for new lenders). See Note 4, “Borrowings,” in the accompanying notes to our consolidated financial statements for additional information on interest patronage received ~~if any, related~~in current and prior years.

⁽²⁾

Approximately $498,000 of this funding was held back by the lender until certain irrigation improvements on the property were completed and is included within Other assets on the accompanying Consolidated Balance Sheet as of December 31, 2019. We currently expect these irrigation improvements to be completed during the three months ending March 31, 2020, at which point these funds will be released to us pursuant to an escrow holdback agreement.


⁽³⁾	Loans were issued as variable-rate loans but were effectively fixed through our entry into interest ~~accrued during 2017~~rate swap agreements with the lender (as counterparty). See Note 4, “Borrowings—Interest Rate Swap Agreements,” in the accompanying notes to our consolidated financial statements for further discussion on ~~our Farm Credit West borrowings.~~these agreements.


⁽⁴⁾	Loans disbursed under the MetLife Facility. The Interest ~~patronage is expected to be received related to interest accrued during 2017~~rates on these ~~borrowings; however, we are unable to estimate~~new disbursements were blended with the ~~amount to be received, if any.~~existing interest rate on the previously-outstanding balance under the MetLife Term Notes.

⁽⁵⁾

~~During the year ended December 31, 2017, we amended four existing~~Loan originally issued as a variable-rate loan ~~agreements with Farm Credit CFL~~and was converted to ~~increase the~~a fixed-rate loan amounts and adjust the principal amortization and interest rate terms as shown in the table above. The amount presented in the table above represents the total additional funds advanced under the four loans. The new terms of each of these four loans are pari passu with one another.effective September 1, 2019.

⁽⁶⁾

~~In April 2017, we received interest patronage from Farm Credit CFL representing a 15.8% refund of~~Represent amendments to bonds previously issued under the interest accrued on all borrowings from Farm Credit CFL during the year ended December 31, 2016. This interest patronage reduced the interest rates on our borrowings from Farm Credit CFL during the year ended December 31, 2016, from a weighted-average stated interest rate of 3.47% to a weighted-average effective interest rate of 2.93%. We are unable to estimate the amount of interest patronage to be received, if any, related to interest accrued during 2017 on our Farm Credit CFL borrowings.Farmer Mac Facility.

~~On December 15, 2017, we executed~~

Proceeds from these financings were used to fund new acquisitions, repay existing indebtedness, and for general corporate purposes. Gladstone Securities, LLC (“Gladstone Securities”), an ~~amendment to our credit facility with Metropolitan Life Insurance Company (“MetLife”), which, in aggregate, previously consisted~~affiliate of ~~$150.0 million~~ours, earned total financing fees of term notes and $50.0 million of revolving equity lines of credit (the “MetLife Facility”). Pursuant to the amendment, the MetLife Facility now consists of an aggregate of $200.0 million of term notes and $75.0 million of revolving equity lines of credit. In addition, the amendment extended the draw period under each of the term notes by an additional year, through December 31, 2019, and adjusted the unused fee on all borrowings from a flat fee of 0.20% on undrawn amounts to a sliding fee (ranging from 0.10% to 0.20%) based on the amount drawn under each individual note.

~~In addition, on November 30, 2017,~~approximately $235,000 in connection with the sale of Colding Loop, we repaid a mortgage note collateralized by the property in the amount of approximately $2.6 million, plus all accrued interest. The mortgage note bore interest at a fixed rate of 2.90% (which was fixed through April 30, 2018) and was originally scheduled to mature on May 1, 2030. There was no prepayment penalty incurred in connection with the early repayment.securing these financings.

Equity Activity

~~Secondary Offerings~~Series B Preferred Stock

~~During~~On May 31, 2018, we filed a prospectus supplement with the ~~year ended December 31, 2017, we completed two overnight~~SEC for a continuous public ~~offerings~~offering of up to 6,000,000 shares (the “Series B Offering”) of our ~~common stock. In the aggregate, these offerings resulted in the issuance~~newly-designated 6.00% Series B Cumulative Redeemable Preferred Stock (the “Series B Preferred Stock”) at an offering price of ~~2,975,749 new shares (including 295,749 shares issued as a result of the underwriters exercising their over-allotment options) of our common stock~~$25.00 per share for ~~aggregate~~ gross proceeds of ~~approximately $34.8~~up to $150.0 million and net proceeds (after deducting ~~underwriting discounts~~dealer-manager fees, selling commissions, and estimated expenses of the offering ~~expenses borne~~payable by us) of up to

approximately ~~$32.9 million.~~$131.3 million, assuming all shares of the Series B Preferred Stock are sold in the Series B Offering. The Series B Preferred Stock is being offered on a continuous, “reasonable best efforts” basis by Gladstone Securities, our dealer-manager for the Series B Offering. Over the course of the Series B Offering, through the date of this filing, approximately 93.8% of the total Selling Commissions and Dealer-Manager Fees we paid to Gladstone Securities have been paid by Gladstone Securities to unrelated third-parties involved in the offering, including participating broker-dealers and wholesalers. See Note 6, “Related-Party Transactions—Gladstone Securities—Dealer-Manager Agreement,” within the accompanying notes to our consolidated financial statements for more details on the Dealer-Manager Agreement.

The following table summarizes the sales of our Series B Preferred Stock that occurred since January 1, 2019, through the date of this filing (dollars in thousands, except per-share amounts and footnotes):



Number of Shares Sold	Weighted-average Sales Price Per Share		Gross Proceeds		Net Proceeds⁽¹⁾
4,537,459	$	24.59	$	111,585	$	102,093


⁽¹⁾	Net of selling commissions and dealer-manager fees borne by us. Aggregate selling commissions and dealer-manager fees paid to Gladstone Securities as a result of these sales was approximately $9.5 million (of which approximately $8.9 million was remitted by Gladstone Securities to unrelated third-parties involved in the offering, such as participating broker-dealers and wholesalers).

In addition, since January 1, 2019, through the date of this filing, 20,353 shares of the Series B Preferred Stock were tendered for redemption at a weighted-average cash redemption price of $23.62 per share. As a result, we paid total redemption costs of approximately $481,000 to redeem and retire these shares.

The offering of the Series B Preferred Stock will terminate on the date that is the earlier of either June 1, 2023 (unless terminated earlier or extended by our Board of Directors), or the date on which all 6,000,000 shares offered in the Series B Offering are sold (the “Termination Date”). There is currently no public market for shares of the Series B Preferred Stock; however, we intend to apply to list the Series B Preferred Stock on Nasdaq or another national securities exchange within one calendar year after the Termination Date, though there can be no assurance that a listing will be achieved in such timeframe, or at all.

Common Stock

Follow-on Offerings

From January 1, 2019, through the date of this filing, we completed one overnight public offering of our common stock, which is summarized in the following table (dollars in thousands, except per-share amounts):



Number of Shares Sold⁽¹⁾	Weighted-average Offering Price Per Share		Gross Proceeds⁽¹⁾		Net Proceeds⁽¹⁾⁽²⁾
2,277,297	$	11.73	$	26,713	$	25,401


⁽¹⁾	Includes the underwriters’ exercise of the over-allotment option in connection with each offering.


⁽²⁾	Net of underwriting commissions and discounts.

At-the-Market Program

On August 7, 2015, we entered into equity distribution agreements ~~(“Sales Agreements”)~~ with Cantor Fitzgerald & Co. and Ladenburg Thalmann & Co., Inc. (each a “Sales Agent”), under which we may issue and sell, from time to time and through the Sales Agents, shares of our common stock having an aggregate offering price of up to $30.0 million (the “ATM Program”). ~~On April 13, 2017, we amended~~The following table summarizes the ~~Sales Agreements to reference~~activity under the new universal registration statement on Form S-3 (File No. 333-217042) (the “2017 Registration Statement”), filed with the SEC on March 31, 2017, and declared effective on April 12, 2017. All other material terms of the Sales Agreements remained the same.

~~Since~~ATM Program from January 1, ~~2017,~~2019, through the date of this filing (dollars in thousands):



Number of Shares Sold	Weighted-average Offering Price Per Share		Gross Proceeds		Net Proceeds⁽¹⁾
606,942	$	12.94	$	7,854	$	7,763


⁽¹⁾	Net of underwriter commissions and discounts.

OP Units

From January 1, 2019, through the date of this filing, we ~~sold 640,665 shares~~issued 288,303 OP Units as partial consideration for a new acquisition. The OP Units were valued at $11.41 per unit (based on the closing stock price of ~~our~~the Company’s common stock ~~under the ATM Program at an average sales price of $13.07 per share for gross proceeds of approximately $8.4 million and net proceeds (after deducting~~

offering expenses borne by us) of approximately $8.2 million. To date, we have sold 705,226 shares of our common stock at an average sales price of $12.81 per share under the ATM Program for gross proceeds of approximately $9.0 million and net proceeds (after deducting offering expenses borne by us) of approximately $8.9 million.

~~OP Unit Redemptions~~

~~Since January 1, 2017, through~~on the date of ~~this filing,~~issuance) for a total aggregate fair value of approximately $3.3 million. In addition, since January 1, 2019, a total of ~~478,653~~570,879 OP Units were tendered for redemption. As a result, we issued ~~254,575~~570,879 shares of common stock (in exchange for ~~254,575~~570,879 of the tendered OP Units),.

LIBOR Transition

The majority of our debt is at fixed rates, and we ~~satisfied~~currently have very limited exposure to variable-rate debt based upon the redemption of the remaining 224,078 tendered OP Units with an aggregate cash payment of approximately $3.0 million (approximately $13.25 per OP Unit). Currently, there are 970,605 OP Units held by non-controlling limited partners outstanding and eligibleLondon Interbank Offered Rate (“LIBOR”), which is anticipated to be ~~tendered~~phased out during late 2021. LIBOR is currently expected to transition to a new standard rate, the Secured Overnight Financing Rate (“SOFR”), which will incorporate certain overnight repo market data collected from multiple data sets. The current intent is to adjust the SOFR to minimize the differences between the interest that a borrower would be paying using LIBOR versus what it will be paying SOFR. We are currently monitoring the transition and cannot yet assess whether SOFR will become a standard rate for ~~redemption.~~

~~Series B Preferred Stock Offering~~

~~On January 10, 2018,~~variable-rate debt. Our lines of credit with MetLife and three term loans with Rabo (which are effectively fixed through our entry into interest swap agreements) are currently based upon one-month LIBOR. As such, we ~~filed a prospectus supplement (the “Prospectus Supplement”) with the SEC for a continuous public offering of up~~expect we will need to 6,000,000 shares (the “Primary Offering”) of our newly-designated Series B Preferred Stock at an offering price of $25.00 per share (the “Offering Price”), for gross proceeds of up to $150.0 million and net proceeds, after deducting dealer-manager fees, selling commissions, and estimated expenses of the offering payable by us, of up to approximately $131.3 million, assuming all shares of the Series B Preferred Stock are soldrenegotiate these agreements in the ~~offering. We are also offering up~~future. Assuming that SOFR replaces LIBOR and is appropriately adjusted, we currently expect the transition to ~~500,000 additional shares of the Series B Preferred Stock pursuant~~result in a minimal impact to our dividend reinvestment plan (the “DRIP”) to those holders of the Series B Preferred Stock who elect to participate in such plan. The Series B Preferred Stock is being offered on a “reasonable best efforts” basis by Gladstone Securities, an affiliate of ours who will serve as our exclusive dealer-manager in connection with the Primary Offering (see “—Dealer-Manager Agreement” below).

The offering of the Series B Preferred Stock will terminate on the date (the “Termination Date”) that is the earlier of either January 10, 2023 (unless terminated earlier or extended by our Board of Directors), or the date on which all 6,000,000 shares offered in the Primary Offering are sold.

There is currently no public market for shares of the Series B Preferred Stock; however, we intend to apply to list the Series B Preferred Stock on Nasdaq or another national securities exchange within one calendar year after the offering's Termination Date, though there can be no assurance that a listing will be achieved in such timeframe, or at all.

We intend to use the net proceeds from the Series B Offering to repay existing indebtedness, to fund future acquisitions, and for other general corporate purposes. No sales of the Series B Preferred Stock have been made through the date of this filing.

We are still assessing the accounting treatment of shares of the Series B Preferred Stock, though we anticipate that they will be treated as permanent equity (within stockholders' equity) on the Consolidated Balance Sheet, as the shares are redeemable only upon the occurrence of an event within our control (due to our ability to terminate or suspend all shareholder redemption options at any time). For a more detailed discussion on this offering, see Note 11, “Subsequent Events—Equity Activity—Series B Preferred Stock,” in the accompanying notes to our consolidated financial statements.overall operations.

Our Adviser and Administrator

We are externally managed pursuant to contractual arrangements with our Adviser and our Administrator (both affiliates of ours), which collectively employ all of our personnel and pay their salaries, benefits, and general expenses directly.

The investment advisory agreement with our Adviser that was in effect through March 31, 2017, ~~(the “Prior Advisory Agreement”),~~ and the current administration agreement with our Administrator (the “Administration Agreement”) each became effective February 1, 2013. ~~On April 11, 2017, we entered into the Amended Advisory Agreement~~The advisory agreement with our Adviser that became effective beginning with the three months ended June 30, 2017. A summary of the management investment advisory and administrative services and fees under these agreements are described below, and further discussion can also be found in Note 6, “Related-Party Transactions,” in the accompanying notes to our consolidated financial statements.

~~Prior Advisory Agreement~~

~~Pursuant to the Prior Advisory Agreement~~ that was in effect through ~~March 31, 2017, our Adviser~~June 30, 2019 (the “Prior Advisory Agreement”), was ~~compensated in~~amended and restated on July 9, 2019 (as amended, the ~~form of a base management fee~~“2019 Advisory Agreement”), and ~~as applicable, an incentive fee. Each of these fees is described below.~~

~~Base Management Fee~~

~~We paid an annual base management fee equal to 2.0% of our adjusted stockholders’ equity, which was defined as our total stockholders’ equity at~~again amended and restated on January 14, 2020 (as amended, the ~~end of each quarter less the recorded value of any preferred stock we may have issued.~~

~~Incentive Fee~~

~~We also paid an additional quarterly incentive fee based on funds from operations (as defined in~~“2020 Advisory Agreement,” and, together with the Prior Advisory ~~Agreement)~~Agreement and the 2019 Advisory Agreement, the “Advisory Agreements”). For purposes of calculating the incentive fee, our funds from operations, before giving effect to any incentive fee (our “Pre-Incentive Fee FFO”), included any realized capital gains or losses, less any distributions paid on our preferred stock, but did not include any unrealized capital gains or losses. The incentive fee rewarded our Adviser if our Pre-Incentive Fee FFO for a particular calendar quarter exceeded a hurdle rate of 1.75% (7.0% annualized) of our total stockholders’ equity (as shown on the balance sheet) at the endAdministration Agreement and each of the ~~quarter. Our Adviser earned 100%~~Advisory Agreements were approved unanimously by our board of directors, including our independent directors.

A summary of the ~~amount~~compensation terms for each of the ~~Pre-Incentive Fee FFO for~~Advisory Agreements and the quarter that exceeded the hurdle rate but was less than 2.1875% of our total stockholders' equity at the end of the quarter (8.75% annualized) and 20% of the amount of our Pre-Incentive Fee FFO that exceeded 2.1875% for the quarter.Administration Agreement is below.

~~Amended~~ Advisory ~~Agreement~~Agreements

Pursuant to each of the ~~Amended~~Prior Advisory Agreement (which was in effect from April 1, 2017, through June 30, 2019), the 2019 Advisory Agreement (which was in effect from July 1, 2019, through December 31, 2019), and the 2020 Advisory Agreement (which was effective as of January 1, 2020), 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. The 2019 Advisory Agreement modified the calculation of the base management and incentive fees to exclude preferred equity from such calculations, while the capital gains and termination fees remained unchanged. The 2020 Advisory Agreement revised and replaced the previous calculation of the base management fee, which was previously based on equity, with a calculation based on gross real estate assets (in each case, as further described below), while all other fees remained unchanged. Each of ~~these~~the base management, incentive, capital gains, and termination fees is described below.

Base Management Fee

APursuant to the Prior Advisory Agreement, a base management fee ~~will be~~was paid quarterly and ~~will be~~was calculated as 2.0% per annum (0.50% per quarter) of the ~~prior~~ calendar ~~quarter's~~quarter’s total adjusted equity, which iswas defined as total equity plus total mezzanine equity, if any ~~each~~(each as reported on ~~the~~our balance ~~sheet,~~sheet), adjusted to exclude unrealized gains and losses and certain other one-time events and non-cash items (“Total Adjusted Equity”).

Under the 2019 Advisory Agreement, a base management fee was paid quarterly and was calculated as 2.0% per annum (0.50% per quarter) of the prior calendar quarter’s total adjusted common equity, which was defined as common stockholders’ equity plus non-controlling common interests in the Operating Partnership, if any (each as reported on our balance sheet), adjusted to exclude unrealized gains and losses and certain other one-time events and non-cash items (“Total Adjusted Common Equity”).

Pursuant to the 2020 Advisory Agreement, a base management fee will be paid quarterly and will be calculated at an annual rate of 0.50% (0.125% per quarter) of the prior calendar quarter’s “Gross Tangible Real Estate,” defined as the gross cost of tangible real estate owned by us (including land and land improvements, irrigation and drainage systems, horticulture, 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. Relevant to prior agreements with our Adviser, which calculated the management fee based on an equity component, management believes the updated fee calculation pursuant to the 2020 Advisory Agreement provides for a more direct correlation between the fee paid to our Adviser and the assets our Adviser is responsible for managing. The following table compares what the historical base management fee has been on an actual basis for the years ended December 31, 2019, 2018, and 2017, versus what it would have been had the 2020 Advisory Agreement

been in place during each of those years (dollars in thousands):



	For the Years Ended December 31,
	2019			2018			2017
Actual gross base management fee⁽¹⁾	$	3,623		$	2,837		$	2,041
Hypothetical gross base management fee⁽²⁾	3,150			2,433			2,010
Hypothetical increase (decrease) in base management fee	$	(473	)	$	(404	)	$	(31	)


⁽¹⁾	Actual figures calculated pursuant to the agreements with our Adviser in place during the respective periods.


⁽²⁾	Calculated as if the 2020 Advisory Agreement had been in place as of January 1, 2017.

We are unable to project the impact of the 2020 Advisory Agreement on the base management fee going forward and how it might compare to that of the 2019 Advisory Agreement or the Prior Advisory Agreement, as we are unable to estimate the amount of equity to be issued or new tangible assets to be acquired in future periods.

During the years ended December 31, 2019 and 2018, our Adviser granted us certain non-contractual, unconditional, and irrevocable waivers (as discussed further below, under “—Results of Operations—Operating Expenses—Related-Party Fees”), which were applied as credits against the base management fees for the respective periods.

Incentive Fee

AnPursuant to the Prior Advisory Agreement, an incentive fee was calculated and payable quarterly in arrears if the Pre-Incentive Fee FFO for a particular quarter exceeded a hurdle rate of 1.75% (7.0% annualized) of the prior calendar quarter’s Total Adjusted Equity.

Under each of the 2019 Advisory Agreement and the 2020 Advisory Agreement, an incentive fee was and will be calculated and payable quarterly in arrears if the Pre-Incentive Fee FFO for a particular quarter ~~exceeds~~exceeded a hurdle rate of 1.75% (7.0% annualized) of the prior calendar ~~quarter's~~quarter’s Total Adjusted Common Equity.

For purposes of this calculation, Pre-Incentive Fee FFO is defined in each of the ~~Amended~~ Advisory ~~Agreement~~Agreements as FFO (also as defined in each of the ~~Amended~~ Advisory ~~Agreement)~~Agreements) accrued by the Company during the current calendar quarter (prior to any incentive fee calculation for the current calendar quarter), less any dividends paid on preferred stock securities that are not treated as a liability for GAAP ~~(as defined below)~~ purposes.

We pay our Adviser an incentive fee with respect to our Pre-Incentive Fee FFO quarterly, as follows:

no Incentive Fee in any calendar quarter in which our Pre-Incentive Fee FFO does not exceed the hurdle rate of 1.75% (7.0% annualized);

100% of the amount of our Pre-Incentive Fee FFO with respect to that portion of such Pre-Incentive Fee FFO, if any, that exceeds the hurdle rate but is less than 2.1875% in any calendar quarter (8.75% annualized); and

20% of the amount of our Pre-Incentive fee FFO, if any, that exceeds 2.1875% in any calendar quarter (8.75% annualized).

Quarterly Incentive Fee Based on Pre-Incentive Fee FFO

Pre-Incentive Fee FFO

(expressed as a percentage of Total Adjusted Equity or Total Adjusted Common Equity, as applicable)

Percentage of Pre-Incentive Fee FFO allocated to Incentive Fee

Capital Gains Fee

APursuant to each of the Advisory Agreements, a capital gains-based incentive fee ~~will be~~is calculated and payable in arrears at the end of each fiscal year (or upon termination of the ~~Amended Advisory Agreement)~~agreement with our Adviser). The capital gains fee shall equal: (i) 15% of the cumulative aggregate realized capital gains minus the cumulative aggregate realized capital losses, minus (ii) any aggregate capital gains fees paid in prior periods. For purposes of this calculation, realized capital gains and losses will be calculated as (x) the sales price of the property, minus (y) any costs to sell the property and the then-current gross value of the property (which includes the ~~property's~~property’s original acquisition price plus any subsequent, non-reimbursed capital improvements). At the end of each fiscal year, if this figure is negative, no capital gains fee shall be paid. ~~To date, no capital gains fee has been earned by our Advisor.~~

Termination Fee

Pursuant to each of the Advisory Agreements, in the event of our termination of the ~~Amended Advisory Agreement~~agreement for any reason (with 120 days’ prior written notice and the vote of at least two-thirds of our independent directors), a termination fee would be payable to our Adviser equal to three times

the sum of the average annual base management fee and incentive fee earned by the Adviser during the 24-month period prior to such termination.

Administration Agreement

Pursuant to the Administration Agreement, we pay for our allocable portion of the Administrator’s expenses incurred while performing services to us, including, but not limited to, rent and the salaries and benefits expenses of our Administrator’s employees, including our chief financial officer, treasurer, chief compliance officer, general counsel and secretary (who also serves as our Administrator’s president, general counsel, and secretary), and their respective staffs.

As approved by our Board of Directors, effective July 1, 2014, our allocable portion of the Administrator’s expenses is generally derived by multiplying our Administrator’s total expenses by the approximate percentage of time the Administrator’s employees perform services for us in relation to their time spent performing services for all companies serviced by our Administrator under similar contractual agreements.

Former Emerging Growth Company Status

~~We are~~Through December 30, 2018, we were an “emerging growth company,” as defined in the JOBS Act, and ~~we may~~were permitted to take advantage of certain exemptions from various reporting requirements that ~~are~~were applicable to other public companies that are not “emerging growth companies.” In particular, Section 107 of the JOBS Act provides that an emerging growth company may choose to take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act of 1933, as amended, for complying with new or revised accounting standards, meaning that the company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. Additionally, we ~~are~~were eligible to take advantage of certain other exemptions from various reporting requirements that ~~are~~were applicable to public companies that are not emerging growth companies, including, but not limited to, an exemption from the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002. As an emerging growth company, we ~~have~~had the ability to defer compliance with new or revised accounting standards to the dates on which adoption of such standards iswas required for private companies for as long as we ~~maintain~~maintained our emerging company status. The election to defer such compliance ~~could~~did not have a material impact on our financial statements and the comparability of our financial statements to that of similar public companies. ~~We will remain an “emerging growth company”~~

Current Smaller Reporting Company Status

As of December 31, 2018, and through December ~~30, 2018, unless~~31, 2019, we qualified as a “smaller reporting company” under Rule 12b-2 of the ~~market value~~Exchange Act, which is defined as a company with a public equity float of less than $250 million or less than $100 million in annual revenues for the previous year and no public float. Companies can also qualify as a smaller reporting company if they have annual revenues of less than $100 million for the previous year and a public float of less than $700 million. Though we are no longer an emerging growth company, as a smaller reporting company, we have reduced disclosure requirements for our ~~common stock that is held by non-affiliates exceeds $700.0 million as~~public filings, some of ~~any June 30 before that time.~~which are similar to those of an emerging growth company, including the reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements.

Critical Accounting Policies

The preparation of our financial statements in accordance with GAAP requires management to make judgments that are subjective in nature to make certain estimates and assumptions. Application of these accounting policies involves the exercise of judgment regarding the use of assumptions as to future uncertainties, and, as a result, actual results could materially differ from these estimates. A summary of all of our significant accounting policies are provided in Note 2, ~~“Summary~~“Summary of Significant Accounting Policies,” in the accompanying notes to our consolidated financial statements, located elsewhere in this Form 10-K, and a summary of our critical accounting policies is below. 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, ~~2017.~~2019.

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), buildings, ~~horticulture,~~ and ~~long-term debt,~~horticulture, 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.

Certain of our acquisitions involve sale-leaseback transactions with newly-originated leases, and other of our acquisitions involve the acquisition of farmland that is already being operated as rental property, in which case we will typically assume the lease in place at the time of acquisition. Prior to us early adopting Accounting Standards Update (“ASU”) 2017-01, “Clarifying the Definition of a Business” (as further described in Note 2, ~~“Summary~~“Summary of Significant Accounting Pronouncements,” under the caption, “—Recently-Issued Accounting Pronouncements,” in the accompanying consolidated financial statements), acquisitions of farmland already being operated as rental property were generally considered to be business combinations under Accounting Standards Codification (“ASC”) 805, “Business Combinations.” However, after our adoption of ASU 2017-01, effective October 1, 2016, we now generally consider both types of acquisitions to be asset acquisitions under ASC 360, “Property Plant and Equipment.” ASC 360 requires us to capitalize the transaction costs incurred in connection with the

acquisition, whereas ASC 805 required that all costs related to the acquisition be expensed as incurred, rather than capitalized into the cost of the acquisition.

Whether an acquisition is considered an asset acquisition or a business combination, both ASC 360 and ASC 805 require 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~~management’s determination of the relative fair values of such assets and liabilities as of the date of acquisition.

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

Recently-Issued Accounting Pronouncements

See Note 2, ~~“Summary~~“Summary of Significant Accounting ~~Policies,~~Policies—Recently-Issued Accounting Pronouncements,” in the accompanying notes to our consolidated financial statements for a description of recently-issued accounting pronouncements.

RESULTS OF OPERATIONS

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

~~With~~expenses with regard to the comparison between the years ended December 31, ~~2017 versus 2016:~~2019 and 2018:


◦▪	Same-property basis represents ~~properties~~farms owned as of December 31, ~~2015,~~2017, and were not vacant at any point during either period presented.

◦▪

Properties acquired or disposed of are farms that were either acquired or disposed of at any point subsequent to December 31, 2017. From January 1, 2018, through December 31, 2019, we acquired 39 new farms (including one farm that we acquired without a lease in place and was mostly vacant during ~~the prior-year period are properties acquired during~~a majority of the year ended December 31, ~~2016.~~2018) and disposed of one farm; and


◦▪	~~Properties acquired subsequent to prior-year period are properties acquired subsequent to December 31, 2016.~~

◦

~~Disposed of, vacant,~~Vacant or self-operated ~~farms~~properties represent ~~properties~~farms that were either ~~(i) disposed of during either period presented, (ii)~~ vacant (either wholly or partially) at any point during either period presented or ~~(iii)~~ operated by a wholly-owned subsidiary of ~~ours (in which case no revenues would have been recognized on our consolidated statements of operations).~~ours. We ~~sold one property during the year ended December 31, 2017, and this same property was also vacant for a portion of the year ended December 31, 2016. In addition, one of our~~had two farms ~~was leased to our TRS for a portion of the year ended December 31, 2017.~~

~~With regard to the comparison between the year ended December 31, 2016 versus 2015:~~


◦	~~Same-property basis represents properties owned as of December 31, 2014, and were not vacant at any point during either period presented.~~


◦	~~Properties acquired during the prior-year period are properties acquired during the year ended December 31, 2015.~~


◦	~~Properties acquired subsequent to prior-year period are properties acquired subsequent to December 31, 2015.~~

◦

Disposed of, vacant, or self-operated farms represent properties that were either (i) disposed of during either period presented, (ii) vacant at any point during either period presented, or (iii) operated by a wholly-owned subsidiary of ours (in which case no revenues would have been recognized on our consolidated statements of operations. We did not dispose of any properties during either of the years ended December 31, 2016 or 2015; however, we had one property that was vacant for a portion of the year ended December 31, 2016, and two properties that were vacant for a portion of the year December 31, 2019, and we had two farms that were either vacant or leased to Land Advisers during a portion of the year ended December 31, ~~2015. In addition, no farms were self-operated during either of the years ended December 31, 2016 or 2015.~~2018.

A comparison of our operating results for the years endedDecember 31, ~~2017~~2019 and ~~2016~~2018 is below (dollars in thousands):

For the Years Ended December 31,
2017 2016 $ Change % Change
Operating revenues:
Rental revenues $ 25,111
$ 17,306
$ 7,805
45.1%
Tenant recovery revenue 11
11
—
—%
Total operating revenues 25,122
17,317
7,805
45.1%
Operating expenses:
Depreciation and amortization 7,237
5,187
2,050
39.5%
Property operating expenses 1,165
787
378
48.0%
Acquisition-related expenses 127
246
(119 ) (48.4)%
Management and incentive fees, net of fee credits 2,675
1,892
783
41.4%
Administration fee 914
771
143
18.5%
General and administrative 1,628
1,378
250
18.1%
Total operating expenses, net of fee credits 13,746
10,261
3,485
34.0%
Operating income 11,376
7,056
4,320
61.2%
Other income (expense)
Other income 206
109
97
89.0%
Interest expense (9,762 ) (6,015 ) (3,747 ) 62.3%
Distributions attributable to mandatorily-redeemable preferred stock (1,833 ) (677 ) (1,156 ) 170.8%
Loss on disposals of real estate assets, net (21 ) —
(21 ) NM
Total other expense (11,410 ) (6,583 ) (4,827 ) 73.3%
Net (loss) income (34 ) 473
(507 ) (107.2)%
Net loss (income) attributable to non-controlling interests 3
(25 ) 28
(112.0)%
Net (loss) income attributable to the Company $ (31 ) $ 448
$ (479 ) (106.9)%



	For the Years Ended December 31,
	2019			2018			$ Change			% Change
Operating revenues:
Lease revenues:
Fixed lease payments	$	38,168		$	28,112		$	10,056		35.8%
Variable lease payments – participation rents	2,326			1,210			1,116			92.2%
Variable lease payments – tenant reimbursements	198			40			158			395.0%
Total lease revenues	40,692			29,362			11,330			38.6%
Other operating revenues	—			7,325			(7,325		)	NM
Total operating revenues	40,692			36,687			4,005			10.9%
Operating expenses:
Depreciation and amortization	12,790			9,375			3,415			36.4%
Property operating expenses	2,473			2,043			430			21.0%
Management, incentive, and capital gains fees, net of credits	2,927			2,451			476			19.4%
Administration fee	1,207			1,275			(68		)	(5.3)%
General and administrative expenses	1,989			1,751			238			13.6%
Other operating expenses	—			7,680			(7,680		)	NM
Total operating expenses, net of credits	21,386			24,575			(3,189		)	(13.0)%
Operating income	19,306			12,112			7,194			59.4%
Other income (expense)
Other income	938			373			565			151.5%
Interest expense	(16,331		)	(12,130		)	(4,201		)	34.6%
Dividends declared on Series A Term Preferred Stock	(1,833		)	(1,833		)	—			—%
(Loss) gain on dispositions of real estate assets, net	(328		)	5,532			(5,860		)	NM
Property and casualty recovery (loss), net	10			(194		)	204			NM
Loss on write-down of inventory	—			(1,094		)	1,094			NM
Total other expense, net	(17,544		)	(9,346		)	(8,198		)	87.7%
Net income	1,762			2,766			(1,004		)	(36.3)%
Net income attributable to non-controlling interests	(21		)	(137		)	116			(84.7)%
Net income attributable to the Company	1,741			2,629			(888		)	(33.8)%
Dividends declared on Series B Preferred Stock	(4,240		)	(379		)	(3,861		)	1,018.7%
Net (loss) income attributable to common stockholders	$	(2,499	)	$	2,250		$	(4,749	)	NM

NM = Not Meaningful

Operating Revenues

~~Same-property Analysis~~Lease Revenues

The following table provides a summary of our lease revenues during the years ended December 31, 2019 and 2018 (dollars in thousands):

Rental Revenues: For the Years Ended December 31,
2017 2016 $ Change % Change
Same-property basis $ 14,178
$ 13,858
$ 320
2.3%
Properties acquired during prior-year period 5,750
2,636
3,114
118.1%
Properties acquired subsequent to prior-year period 4,541
—
4,541
—
Disposed of, vacant, or self-operated properties 642
812
(170 ) (20.9)%
$ 25,111
$ 17,306
$ 7,805
45.1%



	For the Years Ended December 31,
	2019		2018		$ Change			% Change
Same-property basis:
Fixed lease payments	$	25,689	$	25,104	$	585		2.3%
Participation rents	1,840		1,210		630			52.1%
Total – Same-property basis	27,529		26,314		1,215			4.6%
Properties acquired or disposed of:
Fixed lease payments	11,638		2,013		9,625			478.1%
Participation rents	486		—		486			—%
Total – Properties acquired or disposed of	12,124		2,013		10,111			502.3%
Vacant or self-operated properties	841		995		(154		)	(15.5)%
Tenant reimbursements⁽¹⁾	198		40		158			395.0%
Total Lease revenues	$	40,692	$	29,362	$	11,330		38.6%


⁽¹⁾	Tenant reimbursements generally represent tenant-reimbursed property operating expenses on certain of our farms, including property taxes, insurance premiums, and other property-related expenses. Corresponding amounts were also recorded as property operating expenses during the respective periods.

Same-property Basis – 2019 compared to 2018

~~Rental~~Lease revenues ~~on a same-property basis~~from fixed lease payments increased for the year ended December 31, ~~2017, as compared to the prior year, by 2.3%. This increase was~~2019, primarily due to ~~earning~~recent renewals of certain leases at higher rental rates, as well as additional ~~revenue~~rents earned on recent capital improvements ~~constructed~~completed on certain ~~properties,~~of our farms. These increases were partially offset by the ~~recent~~ renewals of certain other leases, ~~on four~~in which we decreased the fixed base rent component in exchange for adding in a participation rent component to the lease structure.

Lease revenues from participation rents increased for year ended December 31, 2019, primarily due to strong production and pricing from certain of our ~~California~~ farms ~~that resulted in a net decrease in aggregate annualized revenues of approximately $199,000. Rental~~growing nuts.

Other – 2019 compared to 2018

Lease revenues from ~~acquired properties~~both fixed rents and participation rents increased for the year ended December 31, ~~2017, as compared to the prior year,~~2019, primarily due to ~~the~~ additional revenues ~~recorded~~earned on new farms acquired subsequent to December 31, 2017, partially offset by the loss of revenue from ~~owning~~a farm that was sold in July 2018.

Lease revenues from vacant or self-operated properties decreased for year ended December 31, 2019, primarily due to certain leases being renewed at lower rental rates on farms following their respective vacancies, partially offset by additional revenue earned on the ~~15 farms we acquired~~farm that was operated by Land Advisers during a portion of 2018.

The increase in tenant reimbursements for year ended December 31, 2019, was due to additional contractual reimbursements of property taxes and other operating costs. Tenant reimbursements during the year ended December 31, ~~2016, for~~2019, also included payments made by a tenant to an unconsolidated entity of ours on our behalf pursuant to the ~~full year in 2017, coupled with additional~~lease agreement.

Other Operating Revenues:

Other operating revenues primarily consisted of revenue earned from sales of harvested crops on a farm that was operated by Land Advisers from October 17, 2017, until July 31, 2018, at which time the 16farm was leased to a new, ~~farms we acquired~~unrelated third-party tenant under a 10-year lease.

Operating Expenses

Depreciation and Amortization

The following table provides a summary of the depreciation and amortization expense recorded during the year ended December 31, 2017. In addition, during the year ended December 31, 2017, we received a variable rent payment of approximately $304,000 from a farm in California that was acquired during the year ended December 31, 2016, which was recorded as additional rental revenue upon receipt. No variable rent revenues had been recorded prior to the receipt of this payment. Rental revenues from disposed of, vacant, or self-operated properties decreased for the year ended December 31, 2017, due primarily to the loss of revenues on the one farm in California that is currently being farmed by our TRS, as there were no crop sales on the farm during the year ended December 31, 2017,2019 and ~~revenue from rents owed to us from our TRS were eliminated on consolidation. We had one farm that was vacant for a portion of the year~~

ended December 31, 2016; however, this property was sold during the year ended December 31, 2017. As a result, there was not a significant difference in rent earned from this property during each of the periods presented.

~~Other Operating Revenues~~

Tenant recovery revenue represents real estate taxes and insurance premiums paid on certain of our properties that, per the leases, are required to be reimbursed by the tenant. Corresponding amounts were also recorded as property operating expenses during the respective periods.

~~Operating Expenses~~

~~Same-property Analysis~~2018 (dollars in thousands)

Depreciation and amortization: For the Years Ended December 31,
2017 2016 $ Change % Change
Same-property basis $ 3,617
$ 3,534
$ 83
2.3%
Properties acquired during prior-year period 2,160
1,463
697
47.6%
Properties acquired subsequent to prior-year period 1,265
—
1,265
—
Disposed of, vacant, or self-operated properties 195
190
5
2.6%
$ 7,237
$ 5,187
$ 2,050
39.5%



	For the Years Ended December 31,
	2019		2018		$ Change			% Change
Same-property basis	$	9,433	$	8,720	$	713		8.2%
Properties acquired or disposed of	3,066		327		2,739			837.6%
Vacant or self-operated properties	291		328		(37		)	(11.3)%
Total Depreciation and amortization expense	$	12,790	$	9,375	$	3,415		36.4%

Depreciation and amortization expense on a same-property basis increased for ~~the~~ year ended December 31, ~~2017,~~2019, as compared to the prior year, primarily as a result of additional depreciation on site improvements completed on certain properties ~~during~~subsequent to December 31, 2017, partially offset by the expiration of certain lease intangible amortization periods ~~during~~subsequent to December 31, 2017. Depreciation and amortization expense on properties acquired ~~properties~~or disposed of increased for ~~the~~ year ended December 31, ~~2017,~~2019, as compared to the prior year, primarily due to ~~the additional depreciation and amortization expense recorded from owning the 15 farms we acquired during the year ended December 31, 2016, for the full year in 2017, coupled with~~ the additional depreciation and amortization expense incurred on the 16 new farms we acquired ~~during the year ended~~subsequent to December 31, 2017. Depreciation and amortization expense ~~on disposed of,~~from vacant or self-operated properties decreased for the year ended December 31, ~~2017, remained relatively flat from~~2019, as compared to the prior year, primarily due to the expiration of certain depreciation periods on a farm that was vacant during a portion of the prior year, as the additional depreciation expense incurred as a result of making capital improvements to the farm currently operated by our TRS was offset by the sale of a property during the year ended December 31, 2017.year.

Property-operating Expenses

Property operating expenses: For the Years Ended December 31,
2017 2016 $ Change % Change
Same-property basis $ 752
$ 660
$ 92
13.9%
Properties acquired during prior-year period 39
12
27
225.0%
Properties acquired subsequent to prior-year period 272
—
272
—
Disposed of, vacant, or self-operated properties 102
115
(13 ) (11.3)%
$ 1,165
$ 787
$ 378
48.0%

Property operating expenses consist primarily of real estate taxes, ~~repairs~~repair and maintenance expense, insurance premiums, and other miscellaneous operating expenses paid for certain of our properties. ~~Property~~In addition, from approximately July 2018 through June 2019, we incurred additional expenses related to temporary generator rental costs to power newly-drilled wells on one of our properties. During the second half of 2019, these wells were connected to permanent power sources, and the generators were no longer needed. The following table provides a summary of the property-operating expenses recorded during years ended December 31, 2019 and 2018 (dollars in thousands):



	For the Years Ended December 31,
	2019		2018		$ Change			% Change
Same-property basis	$	1,928	$	1,853	$	75		4.0%
Properties acquired or disposed of	242		38		204			536.8%
Vacant or self-operated properties	105		112		(7		)	(6.3)%
Tenant-reimbursed property operating expenses⁽¹⁾	198		40		158			395.0%
Total Property operating expenses	$	2,473	$	2,043	$	430		21.0%


⁽¹⁾	Represents certain operating expenses (property taxes, insurance premiums, and other property-related expenses) paid by us that, per the respective leases, are required to be reimbursed to us by the tenant. Corresponding amounts were also recorded as lease revenues during the respective periods.

Same-property Basis – 2019 compared to 2018

For the year ended December 31, 2019, property-operating expenses on a same-property basis increased, ~~by approximately $92,000~~primarily due to an increase in costs incurred for the year ended December 31, 2017, as compared to the prior year. This increase was primarily driven by a net increase in aggregate property tax expense (due to one of our pure, triple-net leases converting to a partial-net lease during the three months ended December 31, 2016, partially offset by a decrease in property taxes on certain properties that were entered into land conservation contracts under the California Land Conservation Act (which restricts the land to agricultural use and reduces the property tax assessment), effective January 1, 2017),above-referenced generator rentals, as well as incurring additional expenses ~~incurred~~ related to obtaining certain permits on one of our California properties.

Other – 2019 compared to 2018

Property operating expenses on properties acquired ~~properties~~or disposed of increased for the year ended December 31, ~~2017,~~2019, primarily due to additional miscellaneous property-operating expenses incurred on certain of the new farms we acquired subsequent to December 31, 2017. Property operating expenses on vacant or self-operated properties decreased for the year ended December 31, 2019, primarily due to the farm that was operated by Land Advisers during a portion of 2018 being leased to an unrelated third-party tenant under a triple-net lease agreement during the entirety of 2019. The increase in tenant-reimbursed property operating expenses for the year ended December 31, 2019, was due to additional property taxes paid by us on certain of our properties, as well as miscellaneous operating costs incurred by us in connection with our ownership interest in an unconsolidated entity. In both of these situations, the respective tenants are contractually obligated to reimburse us per the respective leases.

Related-Party Fees

Certain fee calculations changed pursuant to an amendment to the agreement with our Adviser during the year ended December 31, 2019. For a discussion of the changes to these fees, see above, under “—Our Adviser and Administrator—Advisory Agreements—Incentive Fee”). The following table summarizes the base management, incentive, and capital gains fees due to our adviser, in each case, as applicable, net of the respective credits, for the years ended December 31, 2019 and 2018 (dollars in thousands):



	For the Years Ended December 31,
	2019			2018			$ Change			% Change
Base management fee, gross⁽¹⁾	$	3,623		$	2,837		$	786		27.7%
Credits granted by Adviser’s board of directors applied against the base management fee⁽²⁾	(1,543		)	(236		)	(1,307		)	553.8%
Base management fee, net	2,080			2,601			(521		)	(20.0)%
Incentive fee, gross⁽¹⁾	847			—			847			—%
Credits granted by Adviser’s board of directors applied against the incentive fee⁽²⁾	—			—			—			—%
Incentive fee, net	847			—			847			—%
Capital gains fee, gross⁽¹⁾	—			628			(628		)	(100.0)%
Credits granted by Adviser’s board of directors applied against the capital gains fee⁽²⁾	—			(778		)	778			(100.0)%
Capital gains fee, net	—			(150		)	150			(100.0)%
Total fees to Adviser, gross	4,470			3,465			1,005			29.0%
Total credits granted by Adviser’s board of directors⁽¹⁾	(1,543		)	(1,014		)	(529		)	52.2%
Total fees to Adviser, net	$	2,927		$	2,451		$	476		19.4%


⁽¹⁾	Reflected as a line item on our accompanying Consolidated Statements of Operations and Comprehensive Income.


⁽²⁾	Represent non-contractual, unconditional, and irrevocable waivers granted to us by our Adviser.

The base management fee increased during the year ended December 31, 2019, as compared to the prior year, primarily due to additional property taxes and other operating expenses owed on certain of the new farms we acquired during 2017, as two of the leases we acquired during the year ended December 31, 2017, were gross leases. Property operating expenses on disposed of, vacant, or self-operated properties for the year ended December 31, 2017, decreased as a result of lower property taxes (due to certain properties being entered into a land conservation contract under the California Land Conservation Act) and a property sale during 2017. On our overall portfolio, for the year ended December 31, 2017, we recorded approximately $703,000 of aggregate real estate taxes related to certain of our farms, as compared to approximately $488,000 for the prior year.

~~Other Operating Expenses~~

Acquisition-related expenses generally consist of legal fees and fees incurred for third-party reports prepared in connection with potential acquisitions and the related due diligence analyses. Acquisition-related expenses decreased for the year ended December 31, 2017, as compared to the prior year, primarily due to the difference in accounting treatment of such expenses incurred in connection with the properties acquired during each of the respective periods or expected to be acquired in the near future (i.e., acquisition costs are capitalized under ASC 360 if the acquisition is considered an asset acquisition, whereas such costs are expensed under ASC 805 if the acquisition is treated as a business combination). With our adoption of ASU 2017-01, as defined in Note 2, “Summary of Significant Accounting Policies—Recently-Issued Accounting Pronouncements,” in the notes to our accompanying consolidated financial statements, we anticipate that most of our acquisitions will be treated as asset acquisitions, which will result in lower acquisition-related expenses, as the majority of these costs will be capitalized and included as part of the fair value allocation of the purchase price. As of December 31, 2017, we have capitalized approximately $41,000 of acquisition-related costs (which costs were incurred during the year ended December 31, 2017) related to farms we expect to acquire during the six months ending June 30, 2018, as these acquisitions are reasonably assured to be completed and are expected to be treated as asset acquisitions. These costs are included in Other assets, net on the accompanying Consolidated Balance Sheet as of December 31, 2017.

The aggregate net fees to our Adviser, including both the management and incentive fees and any credits to those fees, increased for the year ended December 31, 2017, as compared to the prior year. For the year ended December 31, 2017, the gross management fee increased by approximately $499,000, primarily due to additional common equity raised since January 1, ~~2016.~~2018, partially offset by a change in the calculation of the base management fee pursuant to the 2019 Advisory Agreement. From January 1, ~~2016,~~2018, through December 31, ~~2017,~~2019, we ~~have~~ raised approximately ~~$39.9~~$106.0 million of aggregate net proceeds (net of both direct costs and allocated indirect costs and net of redemptions) through sales of our Series B Preferred Stock (which increased the base on which the base management fee was calculated through June 30, 2019) and approximately $72.1 million of aggregate net proceeds (net of both direct costs and allocated indirect costs) through follow-on common stock offerings and our ATM Program ~~increasing~~(which increased the base on which the base management fee iswas calculated ~~which, until March~~through December 31, ~~2017, was the book value of~~2019). In addition, our ~~common stockholders' equity. Pursuant~~Adviser granted us non-contractual, unconditional, and irrevocable waivers to ~~the Amended Advisory Agreement, which became effective beginning with the three months ended June 30, 2017,~~be applied against the base ~~on which the~~ management fee is calculated was adjusted to include, among other items, the balance of non-controlling interests in our operating partnership, which further increased the management fee recorded for the year ended December 31, 2017. Our Adviser also earned incentive fees during each of the years ended December 31, ~~2017~~2019 and ~~2016,~~2018.

Our Adviser earned an incentive fee during the year ended December 31, 2019, due to our Pre-Incentive Fee FFO (as defined in the respective agreement with our Adviser) exceeding the required hurdle rate of the ~~equity base~~ applicable base. No incentive fee was earned by our Adviser during the year ended December 31, 2018.

Our Adviser earned a capital gains fee during the year ended December 31, 2018, primarily as a result of the gain recognized on the sale of a farm that occurred in Oregon in July 2018. In addition, our Adviser granted us a non-contractual, unconditional, and irrevocable waiver to ~~each period (which was total stockholders' equity through March 31, 2017, under our Prior Advisory Agreement; and, beginning with~~be applied against the capital gains fee earned during the three months ended ~~June~~September 30, ~~2017,~~2018. The waiver was ~~Total Adjusted Equity (which includes non-controlling interests in~~calculated as of September 30, 2018; however, additional capital losses incurred due to asset dispositions during the ~~Operating Partnership) under our Amended Advisory Agreement). The incentive fees~~three months ended December 31, 2018, further decreased the amount of capital gains fee earned by our Adviser, ~~(net of credits)~~resulting in a net credit for the year ended December 31, ~~2017, increased~~2018. No capital gains fee was earned by ~~approximately $284,000, compared to the prior year, primarily due to increased rental revenues earned on properties acquired~~our Adviser during ~~and subsequent to~~ the year ended December 31, 2016, outpacing the operating expenses (other than depreciation and amortization expense) incurred on such properties. The credit to the incentive fee of $54,000 that was recorded for year ended December 31, 2017, represents an irrevocable waiver granted by our Adviser. See “Our Adviser and Administrator—Amended Advisory Agreement” above for further discussion on changes to the compensation terms stipulated in the Amended Advisory Agreement.2019.

The administration fee paid to our Administrator ~~increased~~decreased for the year ended December 31, ~~2017,~~2019, as compared to the prior year, primarily due to ~~higher overall costs incurred by our Administrator and~~ us using a ~~higher~~lower share of our Administrator’s resources in relation to those used by other funds and affiliated companies serviced by our ~~Administrator during the year ended December 31, 2017.~~Administrator.

Other Operating Expenses

General and administrative expenses consist primarily of professional fees, director fees, stockholder-related expenses, overhead insurance, acquisition-related costs for investments no longer being pursued, and other miscellaneous expenses. General and administrative expenses increased for the year ended December 31, ~~2017,~~2019, as compared to the prior ~~year. This increase was~~year, primarily driven by ~~the following factors: (i)~~higher professional fees (specifically, increased ~~accounting fees (due to additional expenses related to new acquisitions~~auditing and ~~higher tax preparation fees caused~~accounting-related expenses), partially offset by ~~having to file additional tax returns for our Operating Partnership); (ii) additional~~decreases in acquisition-related costs ~~associated with the implementation of a new accounting system (which was completed during the three months ended June 30, 2016); (iii) increased marketing~~expensed and ~~advertising efforts during the current year; (iv) an increase in~~ bad debt ~~expense, as we wrote off approximately $150,000~~expense.

Other operating expenses represent the portion of ~~deferred rent asset balances during~~growing costs, harvesting and selling costs, and certain overhead costs allocated to the costs of crops sold on a farm that was operated by Land Advisers from October 17, 2017, until July 31, 2018. During the year ended December 31, ~~2017, related~~2018, we allocated approximately $7.7 million of costs to ~~two early lease terminations (each~~the crops sold during the period (excluding the allocation of fees earned by our Adviser from Land Advisers of approximately $176,000). Additionally, our

Adviser granted Land Advisers a non-contractual, unconditional, and irrevocable waiver of approximately $190,000 to be applied against a portion of the ~~properties were immediately re-leased with~~fees incurred by our Adviser on behalf of Land Advisers pursuant to the TRS Expense Sharing Agreement. Effective August 1, 2018, the farm was leased to a new, tenants without incurring any downtime), compared to approximately $85,000 of deferred rent asset balances written off due to an early lease termination during the prior year; and (v) during the year ended December 31, 2017, we wrote off approximately $46,000 of unallocated costs associated with the initial filing of our prior universal registration statement on Form S-3 (File No. 333-194539) (the “2014 Registration Statement”), which was replaced with the 2017 Registration Statement.unrelated third-party tenant under a 10-year lease.

Other Income (Expense)

Other income, which generally consists ~~primarily~~ of interest patronage received from Farm Credit (as defined in Note 4, “Borrowings,” in the accompanying notes to our consolidated financial statements) and interest earned on short-term investments, increased for the year ended December 31, ~~2017,~~2019, as compared to the prior year, primarily driven by additional interest patronage received from Farm Credit (due to increased borrowings from Farm Credit). During the year ended December 31, ~~2017,~~2019, we recorded approximately ~~$183,000~~$700,000 of interest patronage from Farm Credit related to interest accrued during ~~2016,~~2018, compared to ~~$94,000~~approximately $336,000 of interest patronage recorded during the prior year. The receipt of ~~this~~ interest patronage

received from Farm Credit during 2019 resulted in a ~~17.2%~~21.2% decrease in(approximately 95 basis points) to our effective interest rate on our aggregate borrowings from Farm Credit during the year ended December 31, ~~2016.~~2018. In addition, during the year ended December 31, 2019, we also recorded as income a commission rebate received in connection with a property acquired during the period and, through July 31, 2019, contractual payments received from a potential buyer of one of our farms pursuant to a reinstated sale agreement to keep the purchase option open (which amounts were nonrefundable and were recognized as income upon receipt). This sale agreement was terminated in August 2019, at which time we recognized $110,000 of income as a result of accumulated deferred revenue related to the terminated sale agreement. Payments received from the potential buyer of the farm were initially deferred and were recognized as income upon termination of the agreement.

Interest expense increased for the year ended December 31, ~~2017,~~2019, as compared to the prior year, primarily due to increased overall borrowings. The weighted-average principal balance of our aggregate borrowings (excluding our Series A Term Preferred Stock) outstanding for the year ended December 31, ~~2017,~~2019, was approximately ~~$273.6~~$397.9 million, as compared to approximately ~~$176.7~~$312.2 million for the prior year. Including interest patronage received on certain of our Farm Credit borrowings, the overall effective interest rate charged on our aggregate borrowings (excluding the impact of ~~deferred financing~~debt issuance costs) was ~~3.31%~~3.77% and 3.59% for the ~~year~~years ended December 31, ~~2017, as compared to 3.21% for the prior year.~~2019 and 2018, respectively.

During each of the ~~year~~years ended December 31, ~~2017,~~2019 and 2018, we paid aggregate distributions on our Series A Term Preferred Stock (which distributions are treated similar to interest expense) of approximately $1.8 ~~million, as compared to approximately $677,000 for the year ended December 31, 2016. The offering of the Series A Term Preferred Stock was completed in August 2016.~~million.

During the year ended December 31, ~~2017,~~2019, we ~~recognized~~recorded a net loss on dispositions of ~~approximately $21,000 on~~real estate assets, primarily related to the disposal of ~~real estate assets. This~~certain irrigation improvements on two of our farms. During the year ended December 31, 2018, we recorded a net ~~loss was composed of the following items: (i) an aggregate loss of approximately $106,000 due to the removal of certain blueberry bushes owned~~capital gain, primarily driven by ~~us that were removed to allow for the planting of new varieties and the abandonment~~a sale of one ~~well, and (ii) the sale of Colding Loop, which resulted in a net gain of approximately $85,000.~~

~~A comparison~~ of our ~~operating results for~~farms in Oregon.

The net property and casualty recoveries (losses) recorded during each of the years ended December 31, ~~2016~~2019 and ~~2015 is below (dollars in thousands):~~

For the Years Ended December 31,
2016 2015 $ Change % Change
Operating revenues:
Rental revenues $ 17,306
$ 11,888
$ 5,418
45.6%
Tenant recovery revenue 11
13
(2 ) (15.4)%
Total operating revenues 17,317
11,901
5,416
45.5%
Operating expenses:
Depreciation and amortization 5,187
3,113
2,074
66.6%
Property operating expenses 787
803
(16 ) (2.0)%
Acquisition-related expenses 246
467
(221 ) (47.3)%
Management and incentive fees, net of fee credits 1,892
1,022
870
85.1%
Administration fee 771
680
91
13.4%
General and administrative 1,378
1,247
131
10.5%
Total operating expenses, net of fee credits 10,261
7,332
2,929
39.9%
Operating income 7,056
4,569
2,487
54.4%
Other income (expense)
Other income 109
49
60
122.4%
Interest expense (6,015 ) (4,160 ) (1,855 ) 44.6%
Distributions attributable to mandatorily-redeemable preferred stock (677 ) —
(677 ) NM
Property and casualty recovery, net —
97
(97 ) (100.0)%
Gain on disposals of real estate assets, net —
14
(14 ) (100.0)%
Total other expense (6,583 ) (4,000 ) (2,583 ) 64.6%
Net income 473
569
(121 ) 21.3%
Net income attributable to non-controlling interests (25 ) —
(25 ) NM
Net income attributable to the Company $ 448
$ 569
$ (121 ) 21.3%

~~NM = Not Meaningful~~

~~Operating Revenues~~

~~Same-property Analysis (dollars in thousands)~~

Rental Revenues: For the Years Ended December 31,
2016 2015 $ Change % Change
Same-property basis $ 10,108
$ 9,707
$ 401
4.1%
Properties acquired during prior-year period 4,340
1,975
2,365
119.7%
Properties acquired subsequent to prior-year period 2,636
—
2,636
—
Disposed of, vacant, or self-operated properties 222
206
16
7.8%
$ 17,306
$ 11,888
$ 5,418
45.6%

~~Rental revenues~~2018, related to natural disasters that damaged certain irrigation improvements on ~~a same-property basis increased for~~two of our properties and the insurance recoveries received related to the damaged improvements. During the year ended December 31, ~~2016, as compared~~2019, we estimated the aggregate carrying value of the damaged improvements to ~~the prior year, by 4.1%. This increase was primarily~~be approximately $74,000, and we received insurance recoveries of approximately $84,000, resulting in a ~~result~~net property and casualty recovery of ~~our ability to renew existing leases at higher rental rates and earning additional revenue on capital improvements constructed on certain properties. Rental revenues from acquired properties increased~~approximately $10,000 for the ~~year ended December 31, 2016, as compared to~~year. For the ~~prior year, due to the additional revenues recorded from owning the 11 farms we acquired~~loss incurred during the year ended December 31, ~~2015, for~~2018, we estimated the ~~full year~~aggregate carrying value of the damaged improvements to be approximately $194,000, and we recognized the write-down in ~~2016, coupled with additional revenues earned from~~ the ~~15 new farms we acquired~~carrying value of the assets as a property and casualty loss during the year ended December 31, ~~2016. Rental revenues from disposed~~2018.

The loss on write-down of ~~vacant, or self-operated properties increased for the year ended December 31, 2016, as compared to the prior year, due to a decrease in the number of aggregate property-vacant days~~crop inventory recorded during the year ended December 31, ~~2016, as compared~~2018, was the result of unsold crops grown on the farm operated by Land Advisers. Due to certain market conditions during 2018, we were unable to sell all of the ~~prior year.~~

~~Other Operating Revenues~~

~~Tenant recovery revenue represents real estate taxes~~crops and ~~insurance premiums paid on certain of our properties that, per the leases, are required~~therefore assessed their market value to be ~~reimbursed by~~zero. Accordingly, we wrote down the ~~tenant. Corresponding amounts were also~~cost of crop inventory to its estimated market value of zero and recorded ~~as property operating expenses during the respective periods.~~

~~Operating Expenses~~

~~Same-property Analysis (dollars in thousands)~~

Depreciation and amortization: For the Years Ended December 31,
2016 2015 $ Change % Change
Same-property basis $ 2,201
$ 2,240
$ (39 ) (1.7)%
Properties acquired during prior-year period 1,377
721
656
91.0%
Properties acquired subsequent to prior-year period 1,463
—
1,463
—
Disposed of, vacant, or self-operated properties 146
152
(6 ) (3.9)%
$ 5,187
$ 3,113
$ 2,074
66.6%

~~Depreciation and amortization expense on~~ a same-property basis decreased for the year ended December 31, 2016, as compared to the prior year, primarily as a result of certain lease intangible amortization periods expiring during 2015 and 2016, partially offset by additional depreciation on site improvements completed on certain properties during 2016. Depreciation and amortization expense on acquired properties increased for the year ended December 31, 2016, as compared to the prior year, due to the additional depreciation and amortization expense recorded from owning the 11 farms we acquiredloss during the year ended December 31, 2015, for the full year in 2016, coupled with the additional depreciation and amortization expense incurred on the 15 new farms we acquired during the year ended December 31, 2016. Depreciation and amortization expense on disposed of, vacant, or self-operated properties decreased for the year ended December 31, 2016, as compared to the prior year, due to writing off a larger amount of unamortized leasing intangibles during the year ended December 31, 2015, as compared to the current year, in connection with early lease termination.

Property operating expenses: For the Years Ended December 31,
2016 2015 $ Change % Change
Same-property basis $ 593
$ 731
$ (138 ) (18.9)%
Properties acquired during prior-year period 165
53
112
211.3%
Properties acquired subsequent to prior-year period 11
—
11
—
Disposed of, vacant, or self-operated properties 18
19
(1 ) (5.3)%
$ 787
$ 803
$ (16 ) (2.0)%

Property operating expenses consist primarily of real estate taxes, repairs and maintenance expense, insurance expense, and other miscellaneous operating expenses paid for certain of our properties. Property operating expenses on a same-property basis decreased by approximately $138,000 for the year ended December 31, 2016, as compared to the prior year, primarily due

to a decrease in aggregate property tax expense on those properties, as two partial-net leases converted to pure, triple-net leases during year ended December 31, 2015, and, beginning in 2016, certain other properties were entered into land conservation contracts under the California Land Conservation Act, restricting the land to agricultural use and reducing the property tax assessments on those properties. Property operating expenses on acquired properties increased for the year ended December 31, 2016, as compared to the prior year, primarily due to additional property taxes owed on certain of the farms we acquired during and subsequent to the year ended December 31, 2015. Property operating expenses on disposed of, vacant, or self-operated properties remained relatively flat year-over-year. On our overall portfolio, for the year ended December 31, 2016, we recorded approximately $488,000 of aggregate real estate taxes related to certain of our farms, which included the recognition of certain prior-year supplemental taxes as a result of stepped-up tax assessments of those properties after our acquisitions of them, as compared to approximately $574,000 for the prior year.

~~Other Operating Expenses~~

The aggregate net fees to our Adviser, including both the management and incentive fees and any credits to those fees, increased for the year ended December 31, 2016, as compared to the prior year. For the year ended December 31, 2016, the gross management fee increased by approximately $199,000, primarily due to additional common equity raised over the past two years. From March 31, 2015, through December 31, 2016, we raised approximately $21.9 million of net proceeds (net of both direct costs and allocated indirect costs) through follow-on common stock offerings and our ATM Program, increasing the base (the book value of our common stockholders' equity) on which the management fee was calculated. In addition, on a net basis, the net management fee increased for the year ended December 31, 2016, as compared to the prior year, as a result of a finder's fee of approximately $321,000 earned by our Adviser in connection with one of our acquisitions during the year ended December 31, 2015, which the Adviser applied as a credit to the management fee (as an irrevocable waiver granted by our Adviser) for the year ended December 31, 2015. Our Adviser also earned an incentive fee of approximately $350,000 during the year ended December 31, 2016, due to our Pre-Incentive Fee FFO exceeding the required hurdle rate of our total stockholders' equity, as stipulated in the Prior Advisory Agreement. The increase in our Pre-Incentive Fee FFO was primarily due to increased rental revenues earned on properties acquired during and subsequent to the year ended December 31, 2015, outpacing the operating expenses (other than depreciation and amortization expense) incurred on such properties. No incentive fee was earned during the prior year.

The administration fee paid to our Administrator increased for the year ended December 31, 2016, as compared to the prior year, primarily due to higher overall costs incurred by our Administrator and us using a higher share of our Administrator’s resources in relation to those used by other funds and affiliated companies serviced by our Administrator during the year ended December 31, 2016.

General and administrative expenses increased for the year ended December 31, 2016, as compared to the prior year, primarily as a result of additional legal costs incurred related to obtaining certain permits on one of our California properties and completing the settlement of an eminent domain lawsuit on another of our California properties, increased accounting fees related to a higher volume of acquisitions during the current year, additional costs associated with updating the valuations of certain of our farms, and additional advertising and marketing expenses incurred during the current year. In addition, during the years ended December 31, 2016 and 2015, we wrote off approximately $85,000 and $32,000, respectively, of deferred rent asset balances related to leases on two of our properties that were terminated prior to their expirations and subsequently re-leased to new tenants. These increases were partially offset by lower overhead insurance expense.

~~Other Income (Expense)~~

Other income, which consists primarily of interest patronage received from Farm Credit, interest earned on short-term investments, and state income tax refunds, increased for the year ended December 31, 2016, as compared to the prior year, primarily driven by additional interest patronage received from Farm Credit (due to increased borrowings from Farm Credit). During the year ended December 31, 2016, we recorded approximately $94,000 of interest patronage from Farm Credit related to interest accrued during 2015, compared to $15,000 of interest patronage recorded during the prior year. The receipt of this interest patronage resulted in a 16.1% decrease in our effective interest rate on our aggregate borrowings from Farm Credit during the year ended December 31, 2016.

Interest expense increased for the year ended December 31, 2016, as compared to the prior year, primarily due to increased overall borrowings. The weighted-average principal balance of our aggregate borrowings (excluding our Series A Term Preferred Stock) outstanding for the year ended December 31, 2016, was approximately $176.6 million, as compared to $118.3 million for the prior year. Including interest patronage received on our Farm Credit borrowings, the overall effective interest rate charged on our aggregate borrowings (excluding the impact of deferred financing costs) was 3.22% for the year ended December 31, 2016, as compared to 3.42% for the prior year.

During the year ended December 31, 2016, we paid aggregate distributions on our Series A Term Preferred Stock (which distributions are treated as a component of interest expense) of approximately $677,000. There was no Series A Term Preferred Stock outstanding during 2015.

During the year ended December 31, 2015, we received additional insurance proceeds as a result of a fire on one of our properties in California. This claim was closed during the year ended September 30, 2015. There were no claims during the year ended December 31, 2016.

During the year ended December 31, 2015, we executed an agreement for a perpetual right-of-way easement to allow for the installation of a natural gas pipeline underneath approximately 2.6 nonfarmable acres on one of our properties. In return, we received $17,021 of gross consideration, of which $14,483 was recognized as a capital gain during the year ended December 31, 2015. No property sales or disposals occurred during the year ended December 31, 2016.2018.

LIQUIDITY AND CAPITAL RESOURCES

Overview

Since our IPO in January 2013, we have invested approximately $415.8 million into 63 new farms, and we have expended or accrued an additional $18.3 million for capital improvements on existing properties. 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 MetLife Facility, ~~and the Farmer Mac Facility)~~as defined below under “—Debt Capital”), and issuances of additional equity securities. Our current available liquidity is approximately ~~$7.9~~$53.8 million, consisting of ~~$3.3~~approximately $28.5 million in cash on hand and, based on the current level of collateral pledged, ~~$4.6~~approximately $25.3 million of availability under the MetLife Facility ~~subject~~(subject to compliance with ~~covenants.~~

As of December 31, 2017, our total-debt-to-total-capitalization ratio (including our Series A Term Preferred Stock as debt), at book value, was 73.6%, which is up from 72.8% as of December 31, 2016. However, on a fair value basis, our total-debt-to-total-capitalization ratio (including our Series A Term Preferred Stock as debt) as of December 31, 2017, was 61.1%, which is up from 59.3% as of December 31, 2016 (see “Non-GAAP Financial Information—Net Asset Value” below for an explanation of our fair value process)covenants).

Future Capital Needs

Our short- and long-term liquidity requirements consist primarily of making distributions to stockholders (including non-controlling OP ~~Unitholders)~~Unitholders, if any) to maintain our qualification as a REIT, funding our general operating costs, making principal and interest payments on outstanding borrowings, making dividend payments on our Series A Term Preferred Stock ~~(and on our~~and Series B Preferred Stock, ~~if and when shares are sold),~~ and, as capital is available, funding new farmland and farm-related ~~property~~ acquisitions consistent with our investment strategy.

We believe that our current and short-term cash resources will be sufficient to fund our distributions to stockholders (including non-controlling OP Unitholders), service our debt, pay dividends on our Series A Term Preferred Stock ~~(and on our~~and Series B Preferred Stock, ~~if and when shares are sold),~~ and fund our current operating costs in the near term. We expect to meet our long-term liquidity requirements through various sources of capital, including future equity issuances (including, but not limited to, shares of common stock through our ATM Program, OP Units through our Operating Partnership as consideration for future acquisitions, and ~~sales of~~ shares of our Series B Preferred Stock), long-term mortgage indebtedness and bond issuances, and other secured and unsecured borrowings.

We intend to use a significant portion of any current and future available liquidity to purchase additional farms and farm-related ~~properties.~~facilities. We continue to actively seek and evaluate acquisitions of additional farms and farm-related ~~properties~~facilities that satisfy our investment criteria, and our pipeline of potential acquisitions remains healthy. We ~~currently~~ have ~~two~~several properties under signed purchase and sale agreements ~~for an aggregate proposed purchase price~~or non-binding letters of ~~approximately $21.1 million (a portion of which is expected~~intent that we hope to ~~be paid in OP Units), which we expect to be consummated~~consummate during the six months ending June 30, 2018. We currently have access to the capital required to complete these transactions for the proposed purchase price amounts; however, we continue to explore various options for access to additional capital, as evidenced by our recent launchfirst half of ~~a continuous offering of the Series B Preferred Stock.~~2020. We also have many other properties that are in various other stages of our due diligence ~~process, including several properties under signed, non-binding letters of intent.~~process. However, all potential

acquisitions will be subject to our due diligence investigation of such properties, and there can be no assurance that we will be successful in identifying or acquiring any properties in the future.

Cash Flow Resources

The following table summarizes total net cash flows for operating, investing, and financing activities for the years ended December 31, ~~2017~~2019 and ~~2016:~~2018 (dollars in thousands):


	2017			2016			Change ($)			Change (%)	2019			2018			$ Change			% Change
Net change in cash from:
Operating activities	$	6,515		$	8,403		$	(1,888	)	(22.5)%	$	21,370		$	10,408		$	10,962		105.3%
Investing activities	(129,645		)	(95,501		)	(34,144		)	(35.8)%	(262,650		)	(93,809		)	(168,841		)	(180.0)%
Financing activities	123,630			87,003			36,627			42.1%	240,238			95,193			145,045			152.4%
Net Change in Cash and cash equivalents	$	500		$	(95	)	$	595		(626.3)%
Net change in Cash and cash equivalents											$	(1,042	)	$	11,792		$	(12,834	)	(108.8)%

Issuer

Date of

Issuance

Amount

Maturity

Date

Principal

Amortization

Interest Rate Terms⁽¹⁾

Premier Farm Credit, FLCA

2/7/2019

1,440

11/1/2043

25.0 years

5.45%, fixed through October 31, 2023 (variable thereafter)

GreenStone Farm Credit Services

7/11/2019

1,609

8/1/2044

25.0 years

5.00%, fixed through June 30, 2029 (variable thereafter)

GreenStone Farm Credit Services

7/11/2019

3,060

8/1/2044

25.0 years

5.00%, fixed through June 30, 2029 (variable thereafter)

Farm Credit West, FLCA

7/11/2019

5,400

5/1/2044

24.5 years

4.24%, fixed through July 31, 2026 (variable thereafter)

Farm Credit of Central Florida, ACA

7/22/2019

31,850

7/1/2027

25.2 years

5.05%, fixed throughout term

Farm Credit of Central Florida, ACA

7/22/2019

5,850

7/1/2027

None
(interest only)

5.05%, fixed throughout term

Farm Credit West, FLCA

8/28/2019

12,792

5/1/2044

24.5 years

3.84%, fixed through August 31, 2026 (variable thereafter)⁽²⁾

American AgCredit, ACA

8/29/2019

19,254

10/1/2039

20.0 years

3.84%, fixed through August 31, 2029 (variable thereafter)

Issuer
Date of
Issuance

Amount⁽¹⁾

Maturity
Date

Principal
Amortization

Stated Interest Rate Terms⁽²⁾
CF Farm Credit 6/14/2017 $ 1,301
7/1/2022 40.2 years 4.41%, fixed throughout its term
Farm Credit CFL⁽³⁾
7/13/2017 5,472
8/1/2022 28.4 years 4.47%, fixed throughout term
Farm Credit West 7/17/2017 8,162
5/1/2037 20.0 years 4.31%, fixed through 7/31/2024, variable thereafter
Farm Credit FL 8/9/2017 5,820
3/1/2037 19.5 years 4.70%, fixed through 2/29/2024, variable thereafter
NW Farm Credit 9/8/2017 5,460
9/1/2024 39.6 years 4.41%, fixed throughout its term
Farm Credit West 12/20/2017 3,555
11/1/2037 20.0 years 4.67%, fixed through 12/31/2027, variable thereafter


⁽¹⁾	~~Proceeds from these notes were used to fund new acquisitions, to repay existing indebtedness, and for other general corporate purposes.~~Stated rate is before interest patronage, as described below.


⁽²⁾	~~Stated rate is before interest patronage,~~Loan originally issued as ~~discussed below.~~

⁽³⁾

~~In July 2017, we amended four existing~~a variable-rate loan ~~agreements with Farm Credit CFL~~and was converted to ~~increase the~~a fixed-rate loan amounts and adjust the principal amortization and interest rate terms as shown in the table above. The amount presented in the table above represents the total additional funds advanced under the four loans. The new terms of each of these four loans are pari passu with one another.

In addition, on November 30, 2017, in connection with the sale of Colding Loop, we repaid a Farm Credit CFL mortgage note collateralized by the property in the amount of approximately $2.6 million, plus all accrued interest. The mortgage note bore interest at a fixed rate of 2.90% (which was fixed through April 30, 2018) and was originally scheduled to mature on May 1, 2030. There was no prepayment penalty incurred in connection with the early repayment.

The following table summarizes, in the aggregate, the pertinent terms of the loans outstanding from Farm Credit (collectively, the “Farm Credit Notes Payable”) as of December 31, 2017 (dollars in thousands, except for footnotes):

Issuer
# of Loans
Outstanding
Dates of Issuance Maturity Dates
Principal
Outstanding

Stated Interest
Rate⁽¹⁾

Farm Credit CFL 7 9/19/2014 – 7/13/2017 6/1/2020 – 10/1/2040 $ 24,664
4.29%
⁽²⁾
Farm Credit West 4 4/4/2016 – 12/20/2017 5/1/2037 – 11/1/2041 24,222
4.02%
⁽³⁾
CF Farm Credit 1 6/14/2017 7/1/2022 1,301
4.41%
⁽⁴⁾
Farm Credit FL 1 8/9/2017 3/1/2037 5,820
4.70%
⁽⁴⁾
NW Farm Credit 1 9/8/2017 9/1/2024 5,412
4.41%
⁽⁴⁾
Total 14 $ 61,419


⁽¹⁾	~~Represents the weighted-average, blended rate (before interest patronage, as discussed below) on the respective borrowings as of December 31, 2017.~~


⁽²⁾	In April 2017, we received interest patronage of approximately $124,000 related to interest accrued on loans from Farm Credit CFL during the year ended December 31, 2016, which resulted in a 15.8% reduction (approximately 55 basis points) to the stated interest rates on such borrowings. In March 2016, we received interest patronage related to loans from Farm Credit CFL of approximately $94,000.


⁽³⁾	In February 2017, we received interest patronage of approximately $59,000 related to interest accrued on loans from Farm Credit West during the year ended December 31, 2016, which resulted in a 21.3% reduction (approximately 76 basis points) to the stated interest rates on such borrowings. We did not receive any patronage related to loans from Farm Credit West during the prior year.


⁽⁴⁾	~~To date, no interest patronage has been received or recorded associated with these loans, as they were not outstanding prior to 2017.~~effective September 1, 2019.

Interest patronage, or refunded interest, on our borrowings from ~~the various~~ Farm Credit ~~associations~~ is generally recorded upon receipt and is included inwithin Other income on our Consolidated Statements of ~~Operations.~~Operations and Comprehensive Income. Receipt of interest patronage typically occurs in the first half of the calendar year following the calendar year in which the respective interest payments are made.

~~Loans~~ During the three months ended March 31, 2019, we recorded interest patronage of approximately $700,000 related to interest accrued on loans from Farm Credit ~~will generally have~~during the year ended December 31, 2018, which resulted in a ~~loan-to-value ratio of 60% of~~21.2% reduction (approximately 95 basis points) to the underlying agricultural real estate. Our agreements with Farm Credit contain various affirmative and negative covenants, including with respect to liens, indebtedness, mergers, and asset sales. The Farm Credit Notes Payable also require us to satisfy certain financial covenants at the end of each calendar year, including maintaining a minimum current ratio and net worth value and staying below a maximum leverage ratio. In addition, certainstated interest rates on such borrowings.

Certain amounts owed under the Farm Credit Notes Payable, limited to 12 months of principal and interest due under certain of the loans, are guaranteed by us pursuant to the respective loan documents. ~~As of December 31, 2017, we were in compliance with all covenants applicable to the Farm Credit Notes Payable.~~

In connection with the Farm Credit Notes Payable, through December 31, 2017, we have incurred total loan origination fees of approximately $276,000 and additional financing costs (consisting of legal fees and administrative fees) of approximately $306,000.

~~As of December 31, 2017, the Farm Credit Notes Payable were collateralized by 22 farms with an aggregate book value of approximately $95.6 million.~~

Farmer Mac Facility

On December 5, 2014, we, through certain subsidiaries of our Operating Partnership, entered into a bond purchase agreement (the “Bond Purchase Agreement”) with Federal Agricultural Mortgage Corporation (“Farmer Mac”) and Farmer Mac Mortgage

Securities Corporation (the “Bond Purchaser”), for a secured note purchase ~~facility that initially~~facility. As subsequently amended, the Bond Purchase Agreement provided for bond issuances up to an aggregate ~~principal~~ amount of ~~$75.0~~$125.0 million (the “Farmer Mac Facility”)~~. On June 16, 2016,~~ through December 11, 2018, after which date the Bond Purchaser had the option to continue buying new bonds issued under the Farmer Mac Facility.

During the year ended December 31, 2019, we ~~entered into an amendment to increase the maximum borrowing capacity~~amended and restated two bonds totaling approximately $13.9 million that were previously issued under the Farmer Mac Facility ~~from $75.0 million~~and were originally scheduled to ~~$125.0 million~~mature on December 11, 2019, and ~~extend the term~~January 6, 2020, respectively. The pertinent terms of the ~~Bond Purchase Agreement by~~ two ~~years, to December 11, 2018.~~amended and restated bonds are summarized in the table below (dollars in thousands):



Date of Issuance	Amount		Maturity Dates	Principal Amortization	Interest Rate Terms
12/11/2019	$	3,285	12/11/2020	None (interest only)	2.61%; fixed throughout term
12/11/2019	10,568		12/11/2020	None (interest only)	2.61%; fixed throughout term

No prepayment penalties were incurred in connection with these amendments, and all other material items of the amended and restated bonds remained unchanged.

Pursuant to the Bond Purchase Agreement, ~~we may, from time to time, issue one or more~~ bonds issued by us to the Bond Purchaser ~~that~~ will be secured by a security interest in ~~one or more~~ loans originated by us (pursuant to ~~the Pledge~~a pledge and ~~Security Agreement described below)~~security agreement), which, in turn, will be collateralized by first liens on agricultural real estate owned by subsidiaries of ours. The interest rate for each bond issuance will be based on prevailing market rates at the time of such issuance, and prepayment of each bond issuance will not be permitted unless otherwise agreed upon by all parties to the Bond Purchase Agreement. The bonds issued ~~will~~ generally have a maximum aggregate, effective loan-to-value ratio of 60% of the underlying agricultural real estate, after giving effect to ~~the~~certain overcollateralization ~~obligations described below.~~obligations.

Prudential Note Payable

During the year ended December 31, ~~2017,~~2019, we ~~issued five bonds for gross proceeds of approximately $35.6 million,~~entered into a loan agreement with PGMI Real Estate Finance, LLC (“Prudential”), the terms of which are summarized in the ~~aggregate in the~~following table ~~below~~ (dollars in thousands):

Dates of Issuance
Gross
Proceeds
Maturity Dates Principal Amortization Interest Rate Terms
1/12/2017-8/30/2017 $ 35,625
⁽¹⁾
1/10/2020 – 8/30/2024 None 2.80% – 4.05%, fixed throughout their respective terms



Date of Issuance	Amount			Maturity Date	Principal Amortization	Interest Rate Terms
6/17/2019	$	17,130	⁽¹⁾	7/1/2029	25.0 years	4.00%, fixed throughout term

⁽¹⁾

~~Proceeds from~~Approximately $498,000 of this funding was held back by the lender until certain irrigation improvements on the property were completed and is included within Other assets on the accompanying Consolidated Balance Sheet as of December 31, 2019. We currently expect these ~~bonds were used for~~irrigation improvements to be completed during the ~~acquisition of new properties.~~three months ending March 31, 2020, at which point these funds will be released to us pursuant to an escrow holdback agreement.

~~The following table summarizes, in~~Rabo Notes Payable

During the ~~aggregate, the terms of the 14 bonds outstanding under the Farmer Mac Facility as of~~year ended December 31, ~~2017 (dollars in thousands)~~2019, we, through certain subsidiaries of our Operating Partnership, entered into the following loan agreements with Rabo AgriFinance, LLC (“Rabo”):

Dates of Issuance
Initial
Commitment
Maturity Dates
Principal
Outstanding

Stated
Interest Rate⁽¹⁾

Undrawn
Commitment

12/11/2014–8/30/2017 $ 125,000
⁽²⁾
7/30/2018–8/30/2024 $ 84,519
3.13% $ 39,118
⁽³⁾



Date of Issuance	Amount		Maturity Date	Principal Amortization	Interest Rate Terms
7/10/2019	$	5,514	6/1/2029	25.0 years	1-Month LIBOR + 1.75% ⁽¹⁾
10/16/2019	5,739		10/1/2029	25.0 years	1-Month LIBOR + 1.75% ⁽²⁾
10/16/2019	3,045		10/1/2029	25.0 years	1-Month LIBOR + 1.75% ⁽²⁾

⁽¹⁾

~~Represents~~

In connection with securing this loan and to hedge our exposure to the ~~weighted-average~~above variable interest rate, aswe entered into an interest rate swap agreement in which we agreed to pay a fixed interest rate to our counterparty of ~~December 31, 2017.~~4.04% through June 1, 2029. See “—Interest Rate Swap Agreements” below for additional information on this swap agreement.

⁽²⁾

~~If facility is not fully utilized by December 11, 2018, Farmer Mac has the option~~

In connection with securing these loans, we entered into two interest rate swap agreements in which we agreed to ~~be relieved~~pay a fixed interest rate to our counterparty of ~~its obligations to purchase~~3.67% through October 1, 2029. See “—Interest Rate Swap Agreements” below for additional ~~bonds under the facility.~~


⁽³⁾information on these swap agreements.	~~As of December 31, 2017, there was no additional availability to draw under this facility, as no additional properties had been pledged as collateral.~~

~~Our ability to borrow under~~Diversified Financial Note Payable

During the Farmer Mac Facility is subject to our ongoing compliance with a number of customary affirmative and negative covenants, as well as financial covenants, including staying below a maximum leverage ratio and maintaining a minimum fixed charge coverage ratio and a tangible net worth. As ofyear ended December 31, ~~2017,~~2019, we ~~were in compliance with all covenants under the Farmer Mac Facility.~~

~~In connection with the Bond Purchase Agreement, on December 5, 2014, we also~~ entered into a ~~pledge and security~~loan agreement ~~(the “Pledge and Security Agreement”~~with Diversified Financial Services, LLC (“Diversified Financial”) ~~in favor~~to finance approximately $1.1 million of ~~the Bond Purchaser and Farmer Mac, which provides for us to pledge, as collateral for bonds issued pursuant to the Farmer Mac Facility, all~~irrigation improvements we funded on one of our ~~respective right, title,~~properties in Colorado (See Note 3, “Real Estate and ~~interest in mortgage loans made by us, which, among other things, must have at all times a value~~Lease Intangibles—Significant Existing Real Estate Activity—Project Completions”). The following table summarizes the pertinent terms of ~~not less than 110% of the aggregate principal amount of the outstanding bonds held by the Bond Purchaser.~~

The Bond Purchase Agreement and the Pledge Agreement include customary events of default, the occurrence of any of which, after any applicable cure period, would permit the Bond Purchaser and Farmer Mac to, among other things, accelerate payment of all amounts outstanding under the Farmer Mac Facility and to exercise its remedies with respect to the pledged collateral, including foreclosure and sale of the agricultural real estate underlying the pledged mortgage loans.

~~In connection with the Farmer Mac Facility, through December 31, 2017, we have incurred aggregate financing costs, which include legal fees and administrative fees, of approximately $506,000.~~

~~As of December 31, 2017, the Farmer Mac Facility was collateralized by 13 farms with an aggregate book value of approximately $139.8 million.~~

~~Rabo Note Payable~~

~~On October 13, 2017, in connection with the acquisition of JJ Road, we closed on a~~our term loan from Rabo AgriFinance, LLC (“Rabo”), for $540,000 (the “Rabo Note Payable”). The loan is scheduled to mature on October 1, 2022, and will bear interest at a fixed rate of 4.59% per annum throughout its term.Diversified Financial (dollars in

thousands):



Date of Issuance	Amount		Maturity Date	Principal Amortization	Interest Rate Terms
10/17/2019	$	976	10/17/2026	7.0 years	4.75%, fixed throughout term

Debt Service – Aggregate Maturities

Scheduled principal payments of our aggregate ~~mortgage~~ notes and bonds payable as of December 31, ~~2017,~~2019, for the succeeding years are as follows (dollars in thousands):


For the Years Ended December 31,	Scheduled Principal Payments
2018	$	23,434
2019	11,065
For the Fiscal Years Ending December 31,			Scheduled Principal Payments
2020	26,495		$	34,052
2021	7,259		18,834
2022	36,541		41,707
2023			35,974
2024			27,163
Thereafter	188,194		327,219
	$	292,988	$	484,949



Number of Individuals		Functional Area
12		Executive Management
3638		Investment Management, Portfolio Management, and Due Diligence
1720		Administration, Accounting, Compliance, Human Resources, Legal, and Treasury


Location	No. of Farms	Total Acres	Farm Acres	Net Cost Basis⁽¹⁾		Encumbrances⁽²⁾		No. of Farms	Total Acres	Farm Acres	Net Cost Basis⁽¹⁾		Encumbrances⁽²⁾
California(3)	28	8,080	7,308	$	208,774	$	152,860	42	14,830	13,610	$	420,537	$	261,957
Florida	16	11,006	8,846	114,225		73,264		23	20,770	16,256	211,132		133,327
Arizona⁽⁴⁾								6	6,280	5,228	55,941		22,427
Colorado	10	31,450	24,513	42,409		25,579		10	31,448	24,513	42,125		27,089
Arizona⁽³⁾	6	6,280	5,228	41,341		23,333
Oregon	4	2,313	2,003	19,806		12,978
Nebraska	2	2,559	2,101	10,626		6,602		8	7,104	6,402	27,439		17,246
Washington	1	746	417	9,386		5,412		1	746	417	8,302		5,052
Texas								1	3,667	2,219	8,335		5,227
Oregon								3	418	363	6,266		3,840
Michigan	4	270	183	2,936		1,659		15	962	682	12,408		7,646
North Carolina	2	310	295	2,361		1,301		2	310	295	2,284		1,238
	73	63,014	50,894	$	451,864	$	302,988	111	86,535	69,985	$	794,769	$	485,049



		Price Range				Distributions per
Period		Low		High		Common Share
2017:	Q1	$	10.83	$	12.89	$	0.12900
	Q2	10.77		11.78		0.13050
	Q3	11.26		14.09		0.13200
	Q4	12.97		14.29		0.13230

2016:	Q1	$	6.72	$	10.16	$	0.12000
	Q2	9.61		11.10		0.12375
	Q3	10.54		12.00		0.12375
	Q4	9.51		11.40		0.12750



			As of December 31,
	1/29/2013*		2014		2015		2016		2017
LAND	$	100.00	$	80.57	$	68.18	$	93.02	$	115.94
S&P 500	100.00		136.55		135.55		148.48		177.31
NAREIT Index	100.00		124.85		127.41		139.36		152.31



	As of and For the Years Ended December 31,
	2017			2016			2015			2014			2013
Balance Sheet Data:
Net investments in real estate, at cost⁽¹⁾	$	451,864		$	325,747		$	222,197		$	144,575		$	75,476
Total assets⁽²⁾	$	462,278		$	333,985		$	228,684		$	150,804		$	93,391
Total indebtedness⁽³⁾	$	302,988		$	208,759		$	142,733		$	86,417		$	43,154
Total equity	$	117,951		$	87,777		$	78,007		$	59,969		$	48,512
Total common shares outstanding⁽⁴⁾	13,791,574			10,024,875			9,992,941			7,753,717			6,530,264
Operating Data:
Total operating revenues	$	25,122		$	17,317		$	11,901		$	7,185		$	4,038
Operating income	$	11,376		$	7,056		$	4,569		$	1,600		$	1,357
Net (loss) income	$	(34	)	$	473		$	569		$	(125	)	$	(1,225	)
Funds from operations⁽⁵⁾	$	7,224		$	5,660		$	3,668		$	1,611		$	(502	)
Adjusted funds from operations⁽⁶⁾	$	7,463		$	5,823		$	3,440		$	1,713		$	998
Share and Per-Share Data:
Diluted weighted-average total shares outstanding⁽⁴⁾	13,414,581			10,773,701			8,639,397			6,852,917			6,214,557
Diluted net (loss) income	$	(0.003	)	$	0.045		$	0.070		$	(0.020	)	$	(0.200	)
Diluted funds from operations⁽⁵⁾	$	0.539		$	0.525		$	0.420		$	0.240		$	(0.080	)
Diluted adjusted funds from operations⁽⁵⁾	$	0.556		$	0.541		$	0.400		$	0.250		$	0.160
Distributions per total share⁽⁷⁾	$	0.524		$	0.495		$	0.465		$	0.360		$	1.490
Supplemental Data:
Cash flows from (used in) operations	$	6,515		$	8,403		$	4,754		$	3,544		$	(460	)
Number of farms owned	73			58			43			32			21
Total acres owned	63,014			50,592			16,810			8,039			6,000
Occupancy rate⁽⁸⁾	100		%	100		%	100		%	100		%	100		%
Farmland portfolio value⁽⁹⁾	$	533,297		$	401,122		$	285,316		$	192,953		$	115,977
Net asset value per share⁽⁹⁾	$	13.96		$	14.21		$	14.20		$	13.94		$	13.51


⁽²⁾	Excludes approximately ~~$2.0~~$3.1 million of ~~deferred financing~~debt issuance costs related to ~~mortgage~~ notes and bonds payable, included in ~~Mortgage notes~~Notes and bonds payable, net on the accompanying Consolidated Balance Sheet.


⁽³⁾	Includes ownership in a special-purpose LLC that owns a pipeline conveying water to one of our properties. As of December 31, 2019, this investment was valued at approximately $587,000 and is included within Other assets, net on the accompanying Consolidated Balance Sheet.



ITEM 5.	MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES


⁽²⁾	We adopted Accounting Standards Update 2015-03 during the year ended December 31, 2016, which, collectively, require the presentation of debt issuance costs (other than line of credit arrangements) on the balance sheet as a deduction from the carrying amount of the related debt liability instead of a deferred financing costs. All periods presented have been retroactively adjusted.


⁽³⁾	~~Representative of the principal balances outstanding of all borrowings, including mortgage notes and bonds payable and borrowings under our lines of credit, plus our Series A Term Preferred Stock.~~


⁽⁴⁾	Includes shares of common stock and OP Units held by third parties. As of December 31, 2017 and 2016, there were 1,008,105 and 1,449,258, respectively, OP Units held by third parties; there were no OP Units held outside of the Company prior to 2016.


⁽⁵⁾	~~Funds from operations is a term developed by NAREIT and is defined below. A reconciliation of net income to funds from operation is also below.~~


⁽⁶⁾	~~Adjusted funds from operations is defined below. A reconciliation of net income to adjusted funds from operation is also below.~~


⁽⁷⁾	~~2013 distributions included a one-time declaration to distribute the final amount of remaining earnings and profits from prior years.~~


⁽⁸⁾	~~As of December 31, 2017, includes one farm temporarily leased to our TRS.~~



ITEM 1A.	RISK FACTORS



ITEM 1B.	UNRESOLVED STAFF COMMENTS



ITEM 2.	PROPERTIES



ITEM 3.	LEGAL PROCEEDINGS


⁽⁹⁾	~~As presented in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Net Asset Value.”~~


⁽²⁾	Using our previous definition of AFFO, the net adjustment for cash rents for the years ended December 31, 2015, 2014, and 2013 would have been an increase (decrease) of approximately $1.1 million, $(7,000) and $(297,000), respectively.


⁽³⁾	Includes only OP Units held by third parties. As of December 31, 2017 and 2016, there were 1,008,105 and 1,449,258, respectively, OP Units held by non-controlling limited partners, representing 6.8% and 12.6%, respectively, of all OP Units issued and outstanding. There were no OP Units held outside of the Company prior to 2016.



ITEM 7.	MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS



	As of and For the Year Ended December 31, 2017					As of and For the Year Ended December 31, 2016					Annualized Straight-line Rent as of December 31, 2017⁽¹⁾
Revenue Source	Total Farmable Acres	% of Total Farmable Acres	Rental Revenue		% of Total Revenue	Total Farmable Acres	% of Total Farmable Acres	Rental Revenue		% of Total Revenue	Total Rental Revenue		% of Total Revenue
Annual row crops – fresh produce⁽²⁾	14,694	28.9%	$	14,500	57.7%	9,768	24.5%	$	11,252	65.0%	$	14,293	53.2%
Annual row crops – commodity crops⁽³⁾	30,160	59.2%	3,615		14.4%	25,874	64.8%	1,716		9.9%	4,368		16.2%
Subtotal – Total annual row crops	44,854	88.1%	18,115		72.1%	35,642	89.3%	12,968		74.9%	18,661		69.4%
Permanent crops⁽⁴⁾	6,040	11.9%	5,021		20.0%	4,253	10.7%	2,581		14.9%	6,097		22.7%
Subtotal – Total crops	50,894	100.0%	23,136		92.1%	39,895	100.0%	15,549		89.8%	24,758		92.1%
Facilities and other⁽⁵⁾	—	—%	1,975		7.9%	—	—%	1,757		10.2%	2,129		7.9%
Total	50,894	100.0%	$	25,111	100.0%	39,895	100.0%	$	17,306	100.0%	$	26,887	100.0%


⁽¹⁾	Annualized straight-line rent amount is based on the minimum rental payments guaranteed under the lease, as required under GAAP. Excludes contingent rental payments, such as crop share proceeds, and excludes rent owed to us by our TRS.


⁽²⁾	Includes berries and other fruits, such as blackberries, melons, raspberries, and strawberries; and vegetables, such as arugula, broccoli, cabbage, carrots, celery, cilantro, cucumbers, edamame, green beans, kale, lettuce, mint, onions, peas, peppers, potatoes, radicchio, spinach, and tomatoes.


⁽³⁾	~~Includes alfalfa, barley, corn, edible beans, grass, popcorn, soybeans, and wheat.~~


⁽⁴⁾	~~Includes almonds, apples, avocados, blueberries, cherries, lemons, pistachios, and wine grapes.~~


⁽⁵⁾	Consists primarily of rental revenue from: (i) farm-related facilities, such as cooling facilities, packinghouses, distribution centers, residential houses for tenant farmers, and other farm-related buildings; (ii) two oil and gas surface area leases on small parcels of two of our properties; and (iii) unimproved or non-farmable acreage on certain of our farms.


	As of and For the Year Ended December 31, 2017					As of and For the Year Ended December 31, 2016					Annualized Straight- line Rent as of December 31, 2017⁽¹⁾			For the Year Ended December 31, 2019						For the Year Ended December 31, 2018
State	Total Acres	% of Total Acres	Rental Revenue		% of Total Rental Revenue	Total Acres	% of Total Acres	Rental Revenue		% of Total Rental Revenue	Total Rental Revenue		% of Total Rental Revenue	Number of Farms	Total Acres	% of Total Acres	Lease Revenue		% of Total Lease Revenue	Number of Farms	Total Acres	% of Total Acres	Lease Revenue		% of Total Lease Revenue
California(1)	8,080	12.8%	$	12,006	47.8%	6,713	13.3%	$	9,829	56.8%	$	12,102	45.0%	42	14,830	17.1%	$	21,701	53.3%	33	10,147	13.8%	$	13,672	46.6%
Florida	11,006	17.5%	6,585		26.2%	5,567	11.0%	3,293		19.0%	6,976		25.9%	23	20,770	24.0%	11,115		27.3%	22	17,184	23.5%	8,133		27.7%
Colorado	31,450	49.9%	2,704		10.8%	30,170	59.6%	1,453		8.4%	2,743		10.2%	10	31,448	36.3%	2,857		7.0%	10	31,448	42.9%	2,743		9.3%
Arizona	6,280	10.0%	1,572		6.3%	3,000	5.9%	729		4.2%	2,414		9.0%	6	6,280	7.3%	2,219		5.5%	6	6,280	8.6%	2,045		7.0%
Nebraska														8	7,104	8.2%	665		1.6%	2	2,559	3.5%	580		2.0%
Texas														1	3,667	4.2%	527		1.3%	1	3,667	5.0%	60		0.2%
Oregon	2,313	3.7%	1,189		4.7%	2,313	4.6%	1,172		6.8%	1,208		4.5%	3	418	0.5%	515		1.3%	3	418	0.6%	893		3.0%
Nebraska	2,559	4.0%	580		2.3%	2,559	5.1%	580		3.4%	580		2.2%
Washington														1	746	0.9%	506		1.2%	1	746	1.1%	718		2.4%
Michigan	270	0.4%	249		1.0%	270	0.5%	250		1.4%	249		0.9%	15	962	1.1%	429		1.1%	5	446	0.6%	370		1.3%
Washington	746	1.2%	152		0.6%	—	—%	—		—%	484		1.8%
North Carolina	310	0.5%	74		0.3%	—	—%	—		—%	131		0.5%	2	310	0.4%	158		0.4%	2	310	0.4%	148		0.5%
Total	63,014	100.0%	$	25,111	100.0%	50,592	100.0%	$	17,306	100.0%	$	26,887	100.0%
TOTALS														111	86,535	100%	$	40,692	100%	85	73,205	100%	$	29,362	100%



Year	Number of Expiring Leases⁽¹⁾		Expiring Leased Acreage	% of Total Acreage	Lease Revenues for the Year ended December 31, 2019		% of Total Lease Revenues
2020	9	⁽²⁾	27,309	31.6%	$	3,763	9.2%
2021	10		8,849	10.2%	2,479		6.1%
2022	5		386	0.5%	973		2.4%
2023	7		6,259	7.2%	4,850		11.9%
2024	5		6,243	7.2%	2,355		5.8%
Thereafter	40		37,482	43.3%	26,153		64.3%
Other⁽³⁾	7		7	—%	119		0.3%
Totals	83		86,535	100.0%	$	40,692	100.0%


⁽²⁾	Includes two leases that were renewed for five years each subsequent to December 31, 2019 (see “Recent Developments—Portfolio Activity—Existing Properties—Leasing Activity” below for a summary of these and other recent leasing activities).


⁽³⁾	Consists of ancillary leases (e.g., oil, gas, and mineral leases, telecommunications leases, etc.) with varying expirations on certain of our farms.



Year	Number of Expiring Leases			Expiring Leased Acreage	% of Total Acreage	Rental Revenue for the Year Ended December 31, 2017		% of Total Rental Revenue
2018		5	^(1),(4)	2,879	4.6%	$	1,391	5.5%
2019		5	^(2),(4)	157	0.2%	156		0.6%
2020		12		28,497	45.2%	7,465		29.7%
2021		6		8,234	13.1%	1,952		7.8%
2022		3	⁽³⁾	269	0.4%	616		2.5%
2023		6		7,046	11.2%	4,844		19.3%
Thereafter		20	⁽⁴⁾	15,932	25.3%	8,687		34.6%
Totals		57		63,014	100.0%	$	25,111	100.0%



Property Name	Property Location	Acquisition Date	Total Acreage	No. of Farms	Primary Crop(s) / Use	Lease Term	Renewal Options	Total Purchase Price		Acquisition Costs⁽¹⁾		Annualized Straight-line Rent⁽²⁾
Somerset Road	Lincoln, NE	1/22/2019	695	1	Popcorn & edible beans	4.9 years	1 (5 years)	$	2,400	$	33	$	126
Greenhills Boulevard⁽³⁾	Madera, CA	4/9/2019	928	1	Pistachios	10.6 years	2 (5 years)	28,550		141		1,721
Van Buren Trail	Van Buren, MI	5/29/2019	159	2	Blueberries & cranberries	10.6 years	2 (5 years)	2,682		26		206
Blue Star Highway	Allegran & Van Buren, MI	6/4/2019	357	8	Blueberries	10.6 years	2 (5 years)	5,100		30		390
Yolo County Line Road	Yolo, CA	6/13/2019	542	1	Olives for olive oil	14.6 years	1 (5 years)	9,190		68		624
San Juan Grade Road⁽⁴⁾	Monterey, CA	7/11/2019	324	1	Strawberries & vegetables	0.3 years	None	9,000		68		632
West Citrus Boulevard⁽⁵⁾	Martin, FL	7/22/2019	3,586	1	Water retention	8.4 years	2 (10 years)	57,790		516		3,696
Sutter Avenue (Phase I)⁽³⁾⁽⁶⁾	Fresno, CA	8/16/2019	1,011	1	Pistachios	8.2 years	2 (5 years)	33,000		146		2,106
Las Posas Road⁽⁷⁾	Ventura, CA	8/28/2019	413	3	Sod & vegetables	3.3 years	1 (2 years)	21,320		111		1,283
Withers Road⁽⁸⁾	Napa, CA	8/29/2019	366	1	Wine grapes	10.3 years	2 (10 years)	32,000		84		2,256
Highway 17⁽⁹⁾	Hayes, NE	10/7/2019	2,561	3	Corn, soybeans, & edible beans	0.2 years	None	9,690		44		489
Indian Highway⁽¹⁰⁾	Hayes & Hitchcock, NE	10/7/2019	1,289	2	Corn, soybeans, & edible beans	0.3 years	None	5,000		36		788
Sutter Avenue (Phase II)⁽³⁾⁽⁶⁾	Fresno, CA	11/1/2019	1,099	1	Pistachios	8.0 years	2 (5 years)	37,000		73		2,365
County Road 18	Phillips, CO	1/15/2020	1,325	2	Sugar beets, edible beans, potatoes, & corn	6.0 years	None	7,500		27		417
			14,655	28				$	260,222	$	1,403	$	17,099


⁽²⁾	~~Includes one cellular lease, for which we recorded approximately $2,000 of~~Annualized straight-line rent is based on the minimum cash rental ~~revenue during~~payments guaranteed under the ~~year ended December 31, 2017.~~respective leases, as required under GAAP, and excludes contingent rental payments, such as participation rents.


⁽³⁾	~~Includes one oil, gas, and mineral lease,~~Leases provide for ~~which we recorded no rental revenue during~~a participation rent component based on the ~~year ended December 31, 2017.~~gross crop revenues earned on the respective farms. The rent figures above represent only the minimum cash guaranteed under the respective leases.


⁽¹⁾	~~Where more than one lease was assumed or executed, represents the weighted-average lease term on the property.~~


⁽²⁾	Unless noted otherwise, acquisitions were accounted for as asset acquisitions under ASC 360. As such, all acquisition-related costs were capitalized and allocated among the identifiable assets acquired. The figures above represent only costs paid or accrued for as of the date of this filing.