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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington,WASHINGTON, D.C. 20549
FORM 10-Q

(Mark One)
ý☒QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended SEPTEMBERJune 30, 20172023
or
¨☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________
Commission file numbernumber:001-35795

GLADSTONE LAND CORPORATION
(Exact Namename of Registrantregistrant as Specifiedspecified in its Charter)

charter)
Maryland54-1892552
(State or other jurisdiction of
incorporation or organization)		(I.R.S. Employer Identification No.)
MARYLAND54-1892552
State or Other Jurisdiction of
Incorporation or Organization
1521 Westbranch Drive,		Suite 100I.R.S. Employer Identification No.
McLean,Virginia22102
1521 WESTBRANCH DRIVE, SUITE 100
MCLEAN, VIRGINIA
22102
(Address of Principal Executive Officesprincipal executive offices)(Zip CodeCode)
(703) 287-5800
(Registrant’s Telephone Number, Including Area Codetelephone number, including area code)
Not Applicable
(Former Name, Former Addressname, former address and Former Fiscal Year,former fiscal year, if Changed Since Last Reportchanged since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.001 par value per shareLANDThe Nasdaq Stock Market, LLC
6.00% Series B Cumulative Redeemable Preferred Stock, $0.001 par value per shareLANDOThe Nasdaq Stock Market, LLC
6.00% Series C Cumulative Redeemable Preferred Stock, $0.01 par value per shareLANDPThe Nasdaq Stock Market, LLC
5.00% Series D Cumulative Redeemable Term Preferred Stock, $0.001 par value per shareLANDMThe Nasdaq Stock Market, LLC
Indicate by check mark whether the registrantregistrant: (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 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“emerging growth company"company” in Rule 12b-2 of the Exchange Act.

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Large accelerated filer¨☒Accelerated filerx☐
Non-accelerated filer
¨
☐		(Do not check if a smaller reporting company)Smaller reporting companyx☐
Emerging growth company
¨
☐
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 Exchange Act).     Yes  ¨☐    No  ý.☒
The number of shares of the registrant’s Common Stock, $0.001 par value per share, outstanding as of November 6, 2017,August 4, 2023, was 13,637,938.35,838,442.


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GLADSTONE LAND CORPORATION
FORM 10-Q FOR THE QUARTER ENDED
SEPTEMBERJUNE 30, 20172023
TABLE OF CONTENTS
PAGE
PAGE
FINANCIAL INFORMATION
ITEM 1.
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PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
GLADSTONE LAND CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per-share data)
(Unaudited)

June 30, 2023December 31, 2022
ASSETS
Real estate, at cost$1,433,714 $1,432,394 
Less: accumulated depreciation(124,300)(106,966)
Total real estate, net1,309,414 1,325,428 
Lease intangibles, net5,262 5,702 
Cash and cash equivalents48,208 61,141 
Other assets, net65,848 64,980 
TOTAL ASSETS$1,428,732 $1,457,251 
LIABILITIES AND EQUITY
LIABILITIES:
Borrowings under lines of credit$100 $100 
Notes and bonds payable, net593,656 626,400 
Series D cumulative term preferred stock, net, $0.001 par value, $25.00 per share liquidation preference; 3,600,000 shares authorized, 2,415,000 shares issued and outstanding as of June 30, 2023, and December 31, 202259,313 59,107 
Accounts payable and accrued expenses14,096 16,266 
Due to related parties, net3,095 4,370 
Other liabilities, net23,538 19,646 
Total liabilities693,798 725,889 
Commitments and contingencies (Note 7)
EQUITY:
Stockholders’ equity:
Series B cumulative redeemable preferred stock, $0.001 par value, $25.00 per share liquidation preference; 6,456,065 shares authorized, 5,956,065 shares issued and outstanding as of June 30, 2023, and December 31, 20226 6 
Series C cumulative redeemable preferred stock, $0.001 par value, $25.00 per share liquidation preference; 25,902,437 shares authorized, 10,156,509 shares issued and outstanding as of June 30, 2023; 25,951,347 shares authorized, 10,191,353 shares issued and outstanding as of December 31, 202210 10 
Series E cumulative redeemable preferred stock, $0.001 par value, $25.00 per share liquidation preference; 16,000,000 shares authorized, 135,409 shares issued and outstanding as of June 30, 2023; 16,000,000 shares authorized, 0 shares issued and outstanding as of December 31, 2022
0 — 
Common stock, $0.001 par value; 48,041,498 shares authorized, 35,780,082 shares issued and outstanding as of June 30, 2023; 47,992,588 shares authorized, 35,050,397 shares issued and outstanding as of December 31, 202236 35 
Additional paid-in capital852,967 836,674 
Distributions in excess of accumulated earnings(126,799)(114,370)
Accumulated other comprehensive income8,714 9,007 
Total stockholders’ equity734,934 731,362 
Non-controlling interests in Operating Partnership— — 
Total equity734,934 731,362 
TOTAL LIABILITIES AND EQUITY$1,428,732 $1,457,251 
 September 30, 2017 December 31, 2016
ASSETS   
Investments in real estate, net$444,390
 $326,311
Lease intangibles, net5,796
 2,000
Cash and cash equivalents3,758
 2,438
Deferred financing costs related to borrowings under line of credit, net209
 239
Other assets, net2,407
 2,997
TOTAL ASSETS$456,560
 $333,985
    
LIABILITIES AND EQUITY   
LIABILITIES:   
Borrowings under lines of credit$5,100
 $16,550
Mortgage notes and bonds payable, net290,234
 190,797
Series A cumulative term preferred stock, par value $0.001 per share; $25.00 per share liquidation preference; 2,000,000 shares authorized, 1,150,000 shares issued and outstanding as of September 30, 2017, and December 31, 2016, net27,831
 27,655
Accounts payable and accrued expenses4,382
 2,801
Due to related parties, net(1)
984
 751
Other liabilities, net9,043
 7,654
Total liabilities337,574
 246,208
Commitments and contingencies(2)

 
EQUITY:   
Stockholders’ equity:   
Common stock, $0.001 par value; 98,000,000 shares authorized, 13,485,025 shares issued and outstanding as of September 30, 2017; 18,000,000 shares authorized, 10,024,875 shares issued and outstanding as of December 31, 201613
 10
Additional paid-in capital126,848
 90,082
Accumulated deficit(17,801) (13,402)
Total stockholders’ equity109,060
 76,690
Non-controlling interests in the Operating Partnership9,926
 11,087
Total equity118,986
 87,777
TOTAL LIABILITIES AND EQUITY$456,560
 $333,985


(1)
Refer to Note 6, “Related-Party Transactions,” for additional information.
(2)
Refer to Note 8, “Commitments and Contingencies,” for additional information.
The accompanying notes are an integral part of these condensed consolidated financial statements.

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GLADSTONE LAND CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(In thousands, except share and per-share data)
(Unaudited)
 For the Three Months Ended June 30,For the Six Months Ended June 30,
 2023202220232022
OPERATING REVENUES:
Lease revenue, net$21,210 $20,293 $42,412 $40,236 
Total operating revenues21,210 20,293 42,412 40,236 
OPERATING EXPENSES:
Depreciation and amortization9,044 8,392 18,163 16,738 
Property operating expenses887 695 2,015 1,398 
Base management fee2,148 2,043 4,296 4,079 
Incentive fee— — — 1,131 
Administration fee514 463 1,090 926 
General and administrative expenses790 567 1,577 1,253 
Total operating expenses13,383 12,160 27,141 25,525 
OTHER INCOME (EXPENSE):
Other income364 63 2,984 2,829 
Interest expense(5,942)(6,523)(11,979)(12,971)
Dividends declared on cumulative term preferred stock(755)(755)(1,509)(1,509)
Gain (loss) on dispositions of real estate assets, net6,394 (305)5,914 (1,280)
Property and casualty (loss) recovery, net— — (1,016)49 
Loss from investments in unconsolidated entities(33)— (60)(29)
Total other income (expense), net28 (7,520)(5,666)(12,911)
NET INCOME7,855 613 9,605 1,800 
Net loss (income) attributable to non-controlling interests— 3 — (6)
NET INCOME ATTRIBUTABLE TO THE COMPANY7,855 616 9,605 1,794 
Dividends declared on cumulative redeemable preferred stock(6,084)(4,486)(12,152)(8,398)
Loss on extinguishment of cumulative redeemable preferred stock(44)(3)(46)(6)
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCKHOLDERS$1,727 $(3,873)$(2,593)$(6,610)
INCOME (LOSS) PER COMMON SHARE:
Basic and diluted$0.05 $(0.11)$(0.07)$(0.19)
WEIGHTED-AVERAGE SHARES OF COMMON STOCK OUTSTANDING:
Basic and diluted35,722,836 34,520,068 35,635,601 34,403,184 
NET INCOME$7,855 $613 $9,605 $1,800 
Change in fair value related to interest rate hedging instruments1,355 2,562 (293)7,292 
COMPREHENSIVE INCOME9,210 3,175 9,312 9,092 
Net loss (income) attributable to non-controlling interests— 3 — (6)
COMPREHENSIVE INCOME ATTRIBUTABLE TO THE COMPANY$9,210 $3,178 $9,312 $9,086 
 For the Three Months Ended September 30, For the Nine Months Ended September 30,
 2017 2016 2017 2016
OPERATING REVENUES:       
Rental revenue$6,561
 $4,467
 $18,302
 $12,388
Tenant recovery revenue3
 2
 8
 8
Total operating revenues6,564
 4,469
 18,310
 12,396
OPERATING EXPENSES:       
Depreciation and amortization2,051
 1,432
 5,123
 3,744
Property operating expenses257
 161
 747
 545
Acquisition-related expenses22
 123
 68
 243
Management fee(1)
523
 385
 1,446
 1,158
Incentive fee(1)
261
 22
 688
 181
Administration fee(1)
211
 184
 656
 575
General and administrative expenses374
 356
 1,208
 1,150
Total operating expenses3,699
 2,663
 9,936
 7,596
Credits to fees from Adviser(1)
(54) —
 (54) —
Total operating expenses, net of credits to fees3,645
 2,663
 9,882
 7,596
OPERATING INCOME2,919
 1,806
 8,428
 4,800
        
OTHER INCOME (EXPENSE):       
Other income4
 2
 190
 106
Interest expense(2,634) (1,554) (6,984) (4,297)
Distributions attributable to mandatorily-redeemable preferred stock(458) (219) (1,375) (219)
Loss on disposal of real estate asset(78) —
 (78) —
Total other expense(3,166) (1,771) (8,247) (4,410)
NET (LOSS) INCOME(247) 35
 181
 390
Plus (less) net loss (income) attributable to non-controlling interests26
 (3) (23) (16)
NET (LOSS) INCOME ATTRIBUTABLE TO THE COMPANY$(221) $32
 $158
 $374
(LOSS) EARNINGS PER COMMON SHARE:       
Basic and diluted$(0.02) $0.00
 $0.01
 $0.04
WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING:       
Basic and diluted12,271,925
 10,018,331
 11,512,968
 10,001,466

(1)
Refer to Note 6, “Related-Party Transactions,” for additional information.
The accompanying notes are an integral part of these condensed consolidated financial statements.

4

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GLADSTONE LAND CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
(In thousands, except share data)
(Unaudited)

Three Months Ended June 30, 2023
 Series B
Preferred Stock		Series C
Preferred Stock		Series E
Preferred Stock		Common StockAdditional
Paid-in 
Capital		Distributions
in Excess of
Accumulated
Earnings		Accumulated
Other
Comprehensive
Income (Loss)		Total
Stockholders’
Equity		Non-
Controlling
Interests		Total
Equity
No. of
Shares		Par
Value		No. of
Shares		Par
Value		No. of
Shares		Par
Value		No. of
Shares		Par
Value
Balance at March 31, 20235,956,065$6 10,195,602$10 60,200$— 35,713,982$36 $851,063 $(123,594)$7,359 $734,880 $— $734,880 
Redemptions of Series C Preferred Stock—— (39,093)— —— —— (907)(44)— (951)— (951)
Issuance of Series E Preferred Stock, net—— —— 75,209— —— 1,679 — — 1,679 — 1,679 
Issuance of common stock, net—— —— —— 66,100— 1,132 — — 1,132 — 1,132 
Net income—— —— —— —— — 7,855 — 7,855 — 7,855 
Dividends—cumulative redeemable preferred stock—— —— —— —— — (6,084)— (6,084)— (6,084)
Distributions—OP Units and common stock—— —— —— —— — (4,932)— (4,932)— (4,932)
Comprehensive income attributable to the Company—— —— —— —— — — 1,355 1,355 — 1,355 
Balance at June 30, 20235,956,065$6 10,156,509$10 135,409$— 35,780,082$36 $852,967 $(126,799)$8,714 $734,934 $— $734,934 
 Common Stock        
 
Number
of Shares
 Par Value 
Additional
Paid-in Capital
 
Accumulated
Deficit
 
Non-
Controlling
Interests
 
Total
Equity
Balance at December 31, 20159,992,941
 $10
 $86,892
 $(8,895) $—
 $78,007
Net income—
 —
 —
 374
 16
 390
Proceeds from issuance of common stock, net31,934
 —
 350
 —
 —
 350
Distributions—
 —
 —
 (3,676) (234) (3,910)
Issuance of OP Units as consideration in real estate acquisitions, net—
 —
 —
 —
 11,708
 11,708
Adjustment to non-controlling interests resulting from changes in ownership of the Operating Partnership—
 —
 2,133
 —
 (2,133) —
Balance at September 30, 201610,024,875
 $10
 $89,375
 $(12,197) $9,357
 $86,545
            
Balance at December 31, 201610,024,875
 $10
 $90,082
 $(13,402) $11,087
 $87,777
Net income—
 —
 —
 158
 23
 181
Proceeds from issuance of common stock, net3,410,150
 3
 38,420
 —
 —
 38,423
Distributions—
 —
 —
 (4,557) (568) (5,125)
Issuance of OP Units as consideration in real estate acquisitions, net—
 —
 —
 —
 —
 —
Redemption of OP Units50,000
 —
 404
 —
 (2,674) (2,270)
Adjustment to non-controlling interests resulting from changes in ownership of the Operating Partnership—
 —
 (2,058) —
 2,058
 —
Balance at September 30, 201713,485,025
 $13
 $126,848
 $(17,801) $9,926
 $118,986


Six Months Ended June 30, 2023
 Series B
Preferred Stock		Series C
Preferred Stock		Series E
Preferred Stock		Common StockAdditional
Paid-in 
Capital		Distributions
in Excess of
Accumulated
Earnings		Accumulated
Other
Comprehensive
Income (Loss)		Total
Stockholders’
Equity		Non-
Controlling
Interests		Total
Equity
No. of
Shares		Par
Value		No. of
Shares		Par
Value		No. of
Shares		Par
Value		No. of
Shares		Par
Value
Balance at December 31, 20225,956,065$6 10,191,353$10 —$— 35,050,397$35 $836,674 $(114,370)$9,007 $731,362 $— $731,362 
Issuance of Series C Preferred Stock, net—— 14,069— —— —— 318 — — 318 — 318 
Redemptions of Series C Preferred Stock—— (48,913)— —— —— (1,130)(46)— (1,176)— (1,176)
Issuance of Series E Preferred Stock, net—— —— 135,409— —— 3,028 — — 3,028 — 3,028 
Issuance of common stock, net—— —— —— 729,6851 14,077 — — 14,078 — 14,078 
Net income—— —— —— —— — 9,605 — 9,605 — 9,605 
Dividends—cumulative redeemable preferred stock—— —— —— —— — (12,152)— (12,152)— (12,152)
Distributions—OP Units and common stock—— —— —— —— — (9,836)— (9,836)— (9,836)
Comprehensive loss attributable to the Company—— —— —— —— — — (293)(293)— (293)
Balance at June 30, 20235,956,065$6 10,156,509$10 135,409$— 35,780,082$36 $852,967 $(126,799)$8,714 $734,934 $— $734,934 



The accompanying notes are an integral part of these condensed consolidated financial statements.



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GLADSTONE LAND CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY (Continued)
(In thousands, except share data)
(Unaudited)
Three Months Ended June 30, 2022
 Series B
Preferred Stock		Series C
Preferred Stock		Series E
Preferred Stock		Common StockAdditional
Paid-in 
Capital		Distributions
in Excess of
Accumulated
Earnings		Accumulated
Other
Comprehensive
Income (Loss)		Total
Stockholders’
Equity		Non-
Controlling
Interests		Total
Equity
No. of
Shares		Par
Value		No. of
Shares		Par
Value		No. of
Shares		Par
Value		No. of
Shares		Par
Value
Balance at March 31, 20225,956,065$6 5,045,023$5 —$— 34,520,068$35 $713,805 $(87,868)$3,694 $629,677 $2,248 $631,925 
Issuance of Series C Preferred Stock, net—— 1,487,0322 —— —— 33,739 — — 33,741 — 33,741 
Redemptions of Series C Preferred Stock—— (2,160)— —— —— (49)(3)— (52)— (52)
Redemptions of OP Units—— —— —— —— (3,700)— — (3,700)(3,970)(7,670)
Net income—— —— —— —— — 616 — 616 (3)613 
Dividends—cumulative redeemable preferred stock—— —— —— —— — (4,486)— (4,486)— (4,486)
Distributions—OP Units and common stock—— —— —— —— — (4,701)— (4,701)— (4,701)
Comprehensive income attributable to the Company—— —— —— —— — — 2,562 2,562 — 2,562 
Adjustment to non-controlling interests resulting from changes in ownership of the Operating Partnership—— —— —— —— (1,725)— — (1,725)1,725 — 
Balance at June 30, 20225,956,065$6 6,529,895$7 —$— 34,520,068$35 $742,070 $(96,442)$6,256 $651,932 $— $651,932 

Six Months Ended June 30, 2022
 Series B
Preferred Stock		Series C
Preferred Stock		Series E
Preferred Stock		Common StockAdditional
Paid-in 
Capital		Distributions
in Excess of
Accumulated
Earnings		Accumulated
Other
Comprehensive
Income (Loss)		Total
Stockholders’
Equity		Non-
Controlling
Interests		Total
Equity
No. of
Shares		Par
Value		No. of
Shares		Par
Value		No. of
Shares		Par
Value		No. of
Shares		Par
Value
Balance at December 31, 20215,956,065$6 3,493,333$3 —$— 34,210,013$34 $668,275 $(80,467)$(1,036)$586,815 $2,251 $589,066 
Issuance of Series C Preferred Stock, net—— 3,041,2024 —— —— 69,019 — — 69,023 — 69,023 
Redemptions of Series C Preferred Stock—— (4,640)— —— —— (105)(6)— (111)— (111)
Redemptions of OP Units—— —— —— — (3,700)— — (3,700)(3,970)(7,670)
Issuance of common stock, net—— —— —— 310,0551 10,321 — — 10,322 — 10,322 
Net income—— —— —— —— — 1,794 — 1,794 6 1,800 
Dividends—cumulative redeemable preferred stock—— —— —— —— — (8,398)— (8,398)— (8,398)
Distributions—OP Units and common stock—— —— —— —— — (9,365)— (9,365)(27)(9,392)
Comprehensive income attributable to the Company—— —— —— —— — — 7,292 7,292 — 7,292 
Adjustment to non-controlling interests resulting from changes in ownership of the Operating Partnership—— —— —— —— (1,740)— — (1,740)1,740 — 
Balance at June 30, 20225,956,065$6 6,529,895$7 —$— 34,520,068$35 $742,070 $(96,442)$6,256 $651,932 $— $651,932 
The accompanying notes are an integral part of these condensed consolidated financial statements.
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GLADSTONE LAND CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 For the Six Months Ended June 30,
 20232022
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income$9,605 $1,800 
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization18,163 16,738 
Amortization of debt issuance costs519 548 
Amortization of deferred rent assets and liabilities, net(13)(93)
Amortization of right-of-use assets from operating leases and operating lease liabilities, net46 46 
Loss from investments in unconsolidated entities60 29 
Bad debt expense63 67 
(Gain) loss on dispositions of real estate assets, net(5,914)1,280 
Property and casualty loss (recovery), net1,016 (49)
Changes in operating assets and liabilities:
Other assets, net(1,263)(2,516)
Accounts payable and accrued expenses and Due to related parties, net(3,628)1,366 
Other liabilities, net3,923 139 
Net cash provided by operating activities22,577 19,355 
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of new real estate assets— (24,320)
Capital expenditures on existing real estate assets(5,691)(10,118)
Proceeds from dispositions of real estate assets9,037 — 
Deposits on prospective real estate acquisitions and investments(245)(709)
Net cash provided by (used in) investing activities3,101 (35,147)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings from notes and bonds payable— 9,932 
Repayments of notes and bonds payable(32,987)(15,925)
Payments of financing fees(3)(743)
Proceeds from issuance of preferred and common equity17,709 85,356 
Offering costs(496)(6,191)
Redemptions of cumulative redeemable preferred stock(1,176)(111)
Payments for redemptions of OP Units— (7,670)
Dividends paid on cumulative redeemable preferred stock(11,822)(7,728)
Distributions paid on non-controlling common interests in Operating Partnership— (27)
Distributions paid on common stock(9,836)(9,365)
Net cash (used in) provided by financing activities(38,611)47,528 
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS(12,933)31,736 
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD61,141 16,708 
CASH AND CASH EQUIVALENTS AT END OF PERIOD$48,208 $48,444 
NON-CASH INVESTING AND FINANCING INFORMATION:
Real estate additions included in Accounts payable and accrued expenses and Due to related parties, net$2,510 $4,182 
Tenant-funded improvements included within Real estate, at cost25 284 
Stock offering and OP Unit issuance costs included in Accounts payable and accrued expenses and Due to related parties, net155 10 
Financing fees included in Accounts payable and accrued expenses and Due to related parties, net5 13 
Unrealized gain related to interest rate hedging instruments8,714 6,256 
Dividends paid on Series C Preferred Stock via additional share issuances320 170 
  For the Nine Months Ended September 30,
  2017 2016
CASH FLOWS FROM OPERATING ACTIVITIES:    
Net income $181
 $390
Adjustments to reconcile net income to net cash provided by operating activities:    
Depreciation and amortization 5,123
 3,744
Amortization of deferred financing costs 366
 135
Amortization of deferred rent assets and liabilities, net (189) (129)
Allowance for doubtful accounts —
 72
Loss on disposal of real estate asset 78
 —
Changes in operating assets and liabilities:    
Other assets 492
 (153)
Accounts payable, accrued expenses, and due to related parties 541
 (273)
Other liabilities 1,079
 4,126
Net cash provided by operating activities 7,671
 7,912
CASH FLOWS FROM INVESTING ACTIVITIES:    
Acquisition of new real estate (120,985) (69,174)
Capital expenditures on existing real estate (3,438) (10,126)
Proceeds from sale of real estate —
 156
Change in deposits on real estate acquisitions and investments, net (865) (617)
Net cash used in investing activities (125,288) (79,761)
CASH FLOWS FROM FINANCING ACTIVITIES:    
Proceeds from issuance of equity 40,421
 360
Offering costs (1,962) (242)
Payment for redemption of OP Units (2,270) —
Borrowings from mortgage notes and bonds payable 104,590
 28,953
Repayments on mortgage notes and bonds payable (4,663) (2,606)
Borrowings from lines of credit 52,500
 44,700
Repayments on lines of credit (63,950) (22,300)
Proceeds from issuance of mandatorily-redeemable preferred stock —
 28,750
Payment of financing fees (604) (1,292)
Distributions paid on common stock (4,557) (3,676)
Distributions paid to non-controlling interests in Operating Partnership (568) (234)
Payment of contingent consideration —
 (700)
Net cash provided by financing activities 118,937
 71,713
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 1,320
 (136)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 2,438
 2,533
CASH AND CASH EQUIVALENTS AT END OF PERIOD $3,758
 $2,397
NON-CASH INVESTING AND FINANCING INFORMATION:    
Issuance of non-controlling interests in operating partnership in conjunction with acquisitions $—
 $11,763
Real estate additions included in Other assets 15
 —
Real estate additions included in Accounts payable, accrued expenses, and due to related parties 1,140
 390
Loss on disposal of real estate asset included in Accounts payable, accrued expenses, and due to related parties 23
 —
Real estate additions included in Other liabilities 506
 809
Common stock offering and OP Unit issuance costs included in Accounts payable, accrued expenses, and due to related parties 237
 31
Financing fees included in Accounts payable, accrued expenses, and due to related parties 54
 59
The accompanying notes are an integral part of these condensed consolidated financial statements.

7
Table of Contents
GLADSTONE LAND CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1. BUSINESS AND ORGANIZATION
Business and Organization
Gladstone Land Corporation (the "Company"(“we,” “us,” or the “Company”) is an agricultural real estate investment trust (“REIT”) that was re-incorporated in Maryland on March 24, 2011, having been previously re-incorporated in Delaware on May 25, 2004, and having been originally incorporated in California on June 14, 1997. We are primarily in the business of owning and leasing farmland, and we conduct substantially all of our operations through a subsidiary, Gladstone Land Limited Partnership (the “Operating Partnership”), a Delaware limited partnership. The Company owned 91.7% and 87.4%As we currently control the sole general partner of the Operating Partnership and own, directly or indirectly, a majority of the common units of limited partnership interestsinterest in the Operating Partnership ("(“OP Units"Units”) as, the financial position and results of Septemberoperations of the Operating Partnership are consolidated within our financial statements. As of June 30, 2017,2023, and December 31, 2016, respectively2022, the Company owned 100.0% of the outstanding OP Units (see Note 7, "Equity,"8, “Equity,” for additional discussion regarding OP Units). In addition, we have elected for
Gladstone Land Advisers, Inc. ("(“Land Advisers"Advisers”), a Delaware corporation and a wholly-owned subsidiary of ours, was created to collect any non-qualifying income related to our real estate portfolio and to perform certain small-scale farming business operations. We have elected for Land Advisers to be taxed as a taxable REIT subsidiary ("TRS"(“TRS”). of ours. Since we currently own 100% of the voting securities of Land Advisers, its financial position and results of operations are consolidated within our financial statements. For the six months ended June 30, 2023, and for the tax year ended December 31, 2022, there was no taxable income or loss from Land Advisers, nor did we have any undistributed REIT taxable income.
Subject to certain restrictions and limitations, and pursuant to contractual agreements, our business is managed by Gladstone Management Corporation (the “Adviser”), a Delaware corporation, and administrative services are provided to us by Gladstone Administration, LLC (the “Administrator”), a Delaware limited liability company. Our Adviser and Administrator are both affiliates of ours (see Note 6, "Related-Party“Related-Party Transactions",” for additional discussion regarding our Adviser and Administrator).
All further references herein to “we,” “us,” “our,” and the “Company” refer, collectively, to Gladstone Land Corporation and its consolidated subsidiaries, except where indicated otherwise.
NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Interim Financial Information
Our interim financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) for interim financial information and pursuant to the requirements for reporting on Form 10-Q in accordance with Article 10 of Regulation S-X. Accordingly, certain disclosures accompanying annual financial statements prepared in accordance with GAAP are omitted. In the opinion of our management, all adjustments, consisting solely of normal recurring accruals, necessary for the fair statement of financial statements for the interim period have been included. The interim financial statements and accompanying notes should be read in conjunction with the consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2016,2022, as filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 21, 20172023 (the “Form 10-K”). The results of operations for the three and ninesix months ended SeptemberJune 30, 2017,2023, are not necessarily indicative of the results that may be expected for other interim periods or for the full fiscal year.
Use of Estimates
The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting periods. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making certain judgments. Actual results couldmay materially differ from thosethese estimates.
Reclassifications
Certain line items on the accompanying Condensed Consolidated Statement of Operations and Condensed Consolidated Statement of Cash Flows for the three and nine months ended September 30, 2016, have been reclassified to conform to the current period’s presentation. These reclassifications had no impact on previously-reported stockholders’ equity, net income or net change in cash and cash equivalents.
Non-controlling Interests
Non-controlling interests are interests in the Operating Partnership not owned by us. We evaluate whether non-controlling interests are subject to redemption features outside of our control. As of both September 30, 2017, and December 31, 2016, the non-controlling interests in the Operating Partnership are redeemable at the option of the holder for cash or, at our election, shares of our common stock and thus are reported in the equity section of the accompanying Condensed Consolidated Balance Sheet but separate from stockholders’ equity. The amounts reported for non-controlling interests on the accompanying Condensed Consolidated Statement of Operations represent the portion of income from the Operating Partnership not attributable to us. At the end of each reporting period, we determine the amount of equity (at book value) that is allocable to

non-controlling interests based upon the respective ownership interests. To reflect the non-controlling interests' equity interest in the Company, an adjustment is made to non-controlling interests, with a corresponding adjustment to paid-in capital, as reflected on the accompanying Condensed Consolidated Statements of Equity.
Critical Accounting Policies
The preparation of financial statements in accordance with GAAP requires management to make judgments that are subjective in order to make certain estimates and assumptions, and our application of these accounting policies involves the exercise of judgment regarding the use of assumptions as to future uncertainties. A summary of our significant accounting policies is provided in Note 2 to our consolidated financial statements included in our Form 10-K. There were no material changes to our significant accounting policies during the nine months ended September 30, 2017.
Recently-Issued Accounting Pronouncements
In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) 2014-09, "Revenue from Contracts with Customers (Topic 606)" ("ASU 2014-09"), which was amended in eachAs of March, April, May, and December of 2016. ASU 2014-09, as amended, supersedes or replaces nearly all GAAP revenue recognition guidance and establishes a new, control-based revenue recognition model, changes the basis for deciding when revenue is recognized over time or at a point in time and will expand disclosures about revenue. As deferred by the FASB in July 2015, ASU 2014-09, as amended, is effective for annual reporting periods beginning after December 15, 2017, and interim periods within those years. We will adopt this guidance for our annual and interim periods beginning January 1, 2018, and expect to use the modified retrospective method, under which the cumulative effect of initially applying the guidance is recognized at the date of initial application. We do not expect ASU 2014-09 to have a material impact on our results of operations or financial condition, as the primary impact of this update is related to common area maintenance and other material tenant reimbursements, whereas the majority of our revenue is from rental income pursuant to net-lease agreements, with very little being attributed to tenant recoveries.
In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842): An Amendment of the FASB Accounting Standards Codification” (“ASU 2016-02”). The new standard requires lessees to apply a dual approach, classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee, which classification determines whether lease expense is recognized based on an effective interest method or on a straight-line basis, respectively, over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months, regardless of the classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases. The new standard requires lessors to account for leases using an approachJune 30, 2023, there were no recently-issued accounting pronouncements that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. ASU 2016-02 supersedes the previous leasing standard, Accounting Standards Codification ("ASC") 840, “Leases,” and is effective on January 1, 2019, with early adoption permitted. We expect our legal expenses (included in General and administrative expenses on our Condensed Consolidated Statements of Operations) to increase marginally, as the new standard requires us to expense indirect leasing costs that were previously capitalized; however, we do not expect ASU 2016-02 to materially impact our condensed consolidated financial statements, as we currently only have two operating ground lease arrangements with terms greater than one year for which we are the lessee.
In August 2016, the FASB issued ASU 2016-15, "Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments" ("ASU 2016-15"), which clarifies how entities should classify certain cash receipts and cash payments on the statement of cash flows, with the objective of reducing the existing diversity in practice related to certain cash flow issues. ASU 2016-15 is effective for annual periods beginning after December 15, 2017, and interim periods within those fiscal years, with early adoption permitted. We will adopt this guidance for our annual and interim periods beginning January 1, 2018. We do not expect the adoption of ASU 2016-15 to havehad a material impact on our condensed consolidated financial statements.
In November 2016, the FASB issued ASU 2016-18, "Statement of Cash Flows (Topic 230): Restricted cash (a consensus of the FASB Emerging Issues Task Force)" ("ASU 2016-18"), which requires the statement of cash flows to explain the change during the period in the total of cash, cash equivalents, and amounts described as restricted cash or restricted cash equivalents. Under ASU 2016-18, amounts described as restricted cash and restricted cash equivalents will be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period total amounts shown on the statement of cash flows. This guidance is effective for us beginning January 1, 2018, with early adoption permitted. We do not expect the adoption of ASU 2016-18 to have a material impact on our condensed consolidated financial statements.
In January 2017, the FASB issued ASU 2017-01, "Business Combinations (Topic 805): Clarifying the Definition of a Business" ("ASU 2017-01"), which clarifies the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting, including acquisitions and disposals. ASU 2017-01 is effective for

annual periods beginning after December 15, 2017, including interim periods within those fiscal years, with early adoption permitted. We adopted ASU 2017-01, effective October 1, 2016, and, as a result of our early adoption, all of our farmland acquisitions since our adoption have been treated as asset acquisitions under ASC 360, which has resulted in a lower amount of acquisition-related costs being expensed on our condensed consolidated statements of operations, as the majority of those costs have been capitalized and included as part of the fair value allocation of the respective purchase prices. We anticipate that the majority of our future acquisitions will continue to be treated as asset acquisitions under ASC 360, resulting in similar treatment of acquisition-related costs.
NOTE 3. REAL ESTATE AND INTANGIBLE ASSETS
8

All of our farmsproperties are ownedwholly-owned on a fee-simple basis, except where noted. The following table provides certain summary information about our 72the 169 farms we owned as of SeptemberJune 30, 20172023 (dollars in thousands, except for footnotes):
LocationNo. of FarmsTotal
Acres		Farm AcresAcre-feet
of Water
Net Cost Basis(1)
Encumbrances(2)
California(3)(4)(5)
6334,84432,32145,016$859,556 $398,110 
Florida2622,46817,6390220,401 98,369 
Washington62,5291,997062,738 20,597 
Arizona(6)
66,3205,333053,230 12,545 
Colorado1232,77325,577046,181 14,921 
Nebraska97,7827,050030,578 11,880 
Oregon(7)
6898736029,921 11,506 
Michigan231,8921,245023,515 14,037 
Texas13,6672,21908,138 4,814 
Maryland698786308,084 4,406 
South Carolina359744703,587 2,170 
Georgia223017502,676 1,667 
North Carolina231029502,138 — 
New Jersey311610102,105 1,238 
Delaware118014001,308 707 
169115,59396,13845,016$1,354,156 $596,967 
Location No. of Farms Total Acres Farm Acres 
Net Cost Basis(1)
 
Encumbrances(2)
California 27 7,921 7,156 $202,181
 $145,819
Florida 17 11,225 9,027 117,549
 76,072
Colorado 9 30,170 23,257 41,812
 24,686
Arizona(3)
 6 6,280 5,228 40,570
 23,166
Oregon 4 2,313 2,003 19,755
 12,528
Nebraska 2 2,559 2,101 10,667
 6,602
Washington 1 746 417 9,525
 5,460
Michigan 4 270 183 2,965
 1,602
North Carolina 2 310 295 2,308
 1,301
  72 61,794 49,667 $447,332
 $297,236
(1)Consists of the initial acquisition price (including the costs allocated to both tangible and intangible assets acquired and liabilities assumed), plus subsequent improvements and other capitalized costs associated with the properties, and adjusted for accumulated depreciation and amortization. Specifically, includes Total real estate, net (excluding improvements paid for by the tenant) and Lease intangibles, net; plus long-term water assets, net above-market lease values, lease incentives, and investments in special-purpose LLCs included in Other assets, net; and less net below-market lease values and other deferred revenue included in Other liabilities, net; each as shown on the accompanying Condensed Consolidated Balance Sheets.
(1)
(2)Excludes approximately $3.2 million of debt issuance costs related to notes and bonds payable, included in Notes and bonds payable, net on the accompanying Condensed Consolidated Balance Sheets.
(3)Includes ownership in a special-purpose LLC that owns a pipeline conveying water to certain of our properties. As of June 30, 2023, this investment had a net carrying value of approximately $1.0 million and is included within Other assets, net on the accompanying Condensed Consolidated Balance Sheets.
(4)Includes eight acres in which we own a leasehold interest via a ground lease with a private individual that expires in December 2040 and five acres in which we own a leasehold interest via a ground sublease with a California municipality that expires in December 2041. As of June 30, 2023, these two ground leases had a net cost basis of approximately $709,000 and are included in Lease intangibles, net on the accompanying Condensed Consolidated Balance Sheets.
(5)Includes 45,000 acre-feet of water stored with Semitropic Water Storage District, located in Kern County, California, and 16 acre-feet of groundwater pumping credits with Westlands Water District, located in Fresno County, California. See “—Investments in Water Assets” below for additional information.
(6)Includes two farms consisting of 1,368 total acres and 1,221 farm acres in which we own leasehold interests via two ground leases with the State of Arizona that expire in February 2025 and February 2032, respectively. As of June 30, 2023, these ground leases had an aggregate net cost basis of approximately $543,000 and are included in Lease intangibles, net on the accompanying Condensed Consolidated Balance Sheets.
(7)Includes ownership in a special-purpose LLC that owns certain irrigation infrastructure that provides water to two of our farms. As of June 30, 2023, this investment had a net carrying value of approximately $4.8 million and is included within Other assets, net on the accompanying Condensed Consolidated Balance Sheets.
Consists of the initial acquisition price (including the costs allocated to both tangible and intangible assets acquired and liabilities assumed), plus subsequent improvements and other capitalized costs associated with the properties, and adjusted for accumulated depreciation and amortization. Includes Investments in real estate, net (excluding improvements paid for by the tenant) and Lease intangibles, net; plus net above-market lease values included in Other assets; and less net below-market lease values and deferred revenue included in Other liabilities, each as shown on the accompanying Condensed Consolidated Balance Sheet.
(2)
Excludes approximately $1.9 million of deferred financing costs related to mortgage notes and bonds payable included in Mortgage notes and bonds payable, net on the accompanying Condensed Consolidated Balance Sheet.
(3)
Includes two farms in which we own a leasehold interest via ground leases with the State of Arizona that expire in February 2022 and February 2025, respectively. In total, these two farms consist of 1,368 total acres and 1,221 farm acres and had a net cost basis of approximately $3.3 million as of September 30, 2017 (included in Lease intangibles, net on the accompanying Condensed Consolidated Balance Sheet).
Real Estate
The following table sets forth the components of our investments in tangible real estate assets as of SeptemberJune 30, 2017,2023, and December 31, 20162022 (dollars in thousands):
June 30, 2023December 31, 2022
Real estate:
Land and land improvements$843,210 $845,779 
Permanent plantings359,273 358,249 
Irrigation and drainage systems168,520 165,438 
Farm-related facilities49,407 48,690 
Other site improvements13,304 14,238 
Real estate, at cost1,433,714 1,432,394 
Accumulated depreciation(124,300)(106,966)
Total real estate, net$1,309,414 $1,325,428 
9
  September 30, 2017 December 31, 2016
Real estate:    
Land and land improvements $356,015
 $265,985
Irrigation systems 48,750
 33,969
Buildings 17,790
 14,671
Horticulture 30,967
 17,759
Other improvements 6,244
 4,993
Real estate, at cost 459,766
 337,377
Accumulated depreciation (15,376) (11,066)
Real estate, net $444,390
 $326,311

Real estate depreciation expense on these tangible assets was approximately $1.7$8.8 million and $4.4$17.7 million for the three and ninesix months ended SeptemberJune 30, 2017,2023, respectively, and $1.2approximately $8.1 million and $3.2$16.2 million for the three and ninesix months ended SeptemberJune 30, 2016,2022, respectively.
Included in the figures above are amounts related to improvements made on certain of our properties paid for by our tenants but owned by us, or tenanttenant-funded improvements. As of SeptemberJune 30, 2017,2023, and December 31, 2016,2022, we recorded tenanttenant-funded improvements, net of accumulated depreciation, of approximately $2.2$2.7 million and $1.8$3.0 million, respectively. We recorded both depreciation expense and additional rentallease revenue related to these tenanttenant-funded improvements of approximately $61,000 and $150,000 for the

three and nine months ended September 30, 2017, respectively, and $31,000 and $98,000 for$136,000 and $284,000 during the three and ninesix months ended SeptemberJune 30, 2016,2023, respectively, and approximately $103,000 and $207,000 during the three and six months ended June 30, 2022, respectively.
Intangible Assets and Liabilities
The following table summarizes the carrying values of certain lease intangible assets and the related accumulated amortization as of SeptemberJune 30, 2017,2023, and December 31, 20162022 (dollars in thousands):
June 30, 2023December 31, 2022
Lease intangibles:
Leasehold interest – land$4,295 $4,295 
In-place lease values2,763 2,763 
Leasing costs3,136 3,088 
Other(1)
141 133 
Lease intangibles, at cost10,335 10,279 
Accumulated amortization(5,073)(4,577)
Lease intangibles, net$5,262 $5,702 
  September 30, 2017 December 31, 2016
Lease intangibles:    
Leasehold interest – land $3,498
 $—
In-place leases 1,523
 1,481
Leasing costs 1,511
 1,086
Tenant relationships 439
 706
Lease intangibles, at cost 6,971
 3,273
Accumulated amortization (1,175) (1,273)
Lease intangibles, net $5,796
 $2,000
(1)Other includes tenant relationships and acquisition-related costs allocated to miscellaneous lease intangibles.
Total amortization expense related to these lease intangible assets was approximately $390,000$256,000 and $739,000$508,000 for the three and ninesix months ended SeptemberJune 30, 2017,2023, respectively, and $207,000approximately $245,000 and $582,000$511,000 for the three and ninesix months ended SeptemberJune 30, 2016,2022, respectively.
The following table summarizes the carrying values of certain lease intangible assets or liabilities included in Other assets, andnet or Other liabilities, net, respectively, on the accompanying Condensed Consolidated Balance Sheets and the related accumulated amortization or accretion, respectively, as of SeptemberJune 30, 2017,2023, and December 31, 20162022 (dollars in thousands).:
 June 30, 2023December 31, 2022
Intangible Asset or LiabilityDeferred
Rent Asset
(Liability)		Accumulated
(Amortization)
Accretion		Deferred
Rent Asset
(Liability)		Accumulated
(Amortization)
Accretion
Above-market lease values and lease incentives(1)
$4,691 $(933)$4,702 $(585)
Below-market lease values and other deferred revenue(2)
(2,010)606 (2,010)518 
$2,681 $(327)$2,692 $(67)
  September 30, 2017 December 31, 2016
Intangible Asset or Liability 
Deferred
Rent Asset
(Liability)
 
Accumulated
(Amortization)
Accretion
 
Deferred
Rent Asset
(Liability)
 
Accumulated
(Amortization)
Accretion
Above-market lease values and lease incentives(1)
 $46
 $(21) $19
 $(14)
Below-market lease values and deferred revenue(2)
 (823) 108
 (785) 61
  $(777) $87
 $(766) $47
(1)Net above-market lease values and lease incentives are included as part of Other assets, net on the accompanying Condensed Consolidated Balance Sheets, and the related amortization is recorded as a reduction of Lease revenue on the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income.
(1)
(2)Net below-market lease values and other deferred revenue are included as a part of Other liabilities, net on the accompanying Condensed Consolidated Balance Sheets, and the related accretion is recorded as an increase to Lease revenue on the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income.
Above-market lease values and lease incentives are included as part of Other assets in the accompanying Condensed Consolidated Balance Sheets, and the related amortization is recorded as a reduction of rental income.
(2)
Below-market lease values and deferred revenue are included as a part of Other liabilities in the accompanying Condensed Consolidated Balance Sheets, and the related accretion is recorded as an increase to rental income.
Total amortization related to above-market lease values and lease incentives was approximately $4,000$200,000 and $7,000$359,000 for the three and ninesix months ended SeptemberJune 30, 2017,2023, respectively, and $2,000approximately $122,000 and $5,000$203,000 for the three and ninesix months ended SeptemberJune 30, 2016,2022, respectively. Total accretion related to below-market lease values and other deferred revenue was approximately $17,000$44,000 and $47,000$88,000 for the three and ninesix months ended SeptemberJune 30, 2017,2023, respectively, and $9,000approximately $44,000 and $24,000$89,000 for the three and ninesix months ended SeptemberJune 30, 2016,2022, respectively.
Acquisitions
Until our adoption of ASU 2017-01, which clarified the definition of a business, certain acquisitions2023 Acquisitions
We did not acquire any new farms during the prior-year period were accounted for as business combinations in accordance with ASC 805, as there was a prior leasing history on the property. As such, the fair value of all assets acquired and liabilities assumed were determined in accordance with ASC 805, and all acquisition-related costs were expensed as incurred, other than those costs directly related to reviewing or assigning leases that we assumed upon acquisition, which were capitalized as part of leasing costs. Upon our early adoption of ASU 2017-01, effective October 1, 2016, most acquisitions, including those with a prior leasing history, are now generally treated as an asset acquisition under ASC 360. For acquisitions accounted for as asset acquisitions under ASC 360, all acquisition-related costs were capitalized and included as part of the fair value allocation of the identifiable tangible and intangible assets acquired, other than those costs that directly related to originating new leases we executed upon acquisition, which were capitalized as part of leasing costs.six months ended June 30, 2023.
In addition, total consideration for acquisitions may include a combination of cash and equity securities, such as OP Units. When OP Units are issued in connection with acquisitions, we determine the fair value of the OP Units issued based on the number of units issued multiplied by the closing price of the Company’s common stock on the date of acquisition.
10


20172022 Acquisitions
During the ninesix months ended SeptemberJune 30, 2017,2022, we acquired 14 new farms in seven separate transactions,completed the following acquisitions, which are summarized in the table below (dollars in thousands, except for footnotes).:
Property
Name		Property
Location		Acquisition
Date		Total
Acres		No. of
Farms		Primary
Crop(s) / Use		Lease
Term		Renewal
Options		Total
Purchase
Price		Acquisition
Costs
Annualized
Straight-line
Rent(1)
Farm Road(2)
Charlotte, FL5/20/2022150Adjacent parcelN/AN/A$54 $15 $— 
County Road 35Glenn, CA6/16/20221,3741Olives for Olive Oil14.5 years1 (5 years)24,500 55 1,714 
1,3891$24,554 $70 $1,714 
(1)Based on the minimum cash rental payments guaranteed under the respective leases, as required under GAAP, and excludes contingent rental payments, such as participation rents.
Property
Name
 
Property
Location
 
Acquisition
Date
 
Total
Acreage
 
No. of
Farms
 
Primary
Crop(s)
 
Lease
Term(1)
 
Renewal
Options
 
Total
Purchase
Price
 
Acquisition
Costs(2)
 
Annualized
Straight-line
Rent(3)
 
New
Long-term
Debt
Citrus Boulevard Martin, FL 1/12/2017 3,748 1 Organic Vegetables 7.0 years 3 (5 years) $54,000
 $80
 $2,926
 $32,400
Spot Road(4)
 Yuma, AZ 6/1/2017 3,280 4 Melons and Alfalfa Hay 8.6 years 1 (10 years) & 1 (2 years) 27,500
 88
 1,673
 15,300
Poplar Street Bladen, NC 6/2/2017 310 2 Organic Blueberries 9.6 years 1 (5 years) 2,169
 49
 122
(5) 
1,301
Phelps Avenue Fresno, CA 7/17/2017 847 4 Pistachios and Almonds 10.3 years 1 (5 years) 13,603
 43
 681
(5) 
8,162
Parrot Avenue(6)
 Okeechobee, FL 8/9/2017 1,910 1 Misc. Vegetables 0.5 years None 9,700
 64
 488
 5,820
Cat Canyon Road(7)
 Santa Barbara, CA 8/30/2017 361 1 Wine Grapes 9.8 years 2 (5 years) 5,375
 67
 322
 3,225
Oasis Road Walla Walla, WA 9/8/2017 746 1 Apples, Cherries, and Wine Grapes 6.3 years None 9,500
 45
 480
(5) 
5,460
      11,202 14       $121,847
 $436
 $6,692
 $71,668
(2)Represents the acquisition of a parcel of land adjacent to an existing farm, providing additional road access to such farm. No new lease was executed related to this acquisition.
(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.
(3)
Annualized straight-line amount is based on the minimum cash rental payments guaranteed under the lease, as required under GAAP.
(4)
Includes two farms (1,368 total acres) acquired through a leasehold interest, with the State
During each of Arizona as the lessor. These state leases expire in February 2022 (485 total acres) and February 2025 (883 total acres). In addition, in connection with the acquisition of this property, we assumed four in-place leases with us as the lessor or sublessor. Three of these leases are agricultural leases, with one lease expiring on June 30, 2019, and two leases expiring on September 15, 2026. The fourth lease is a residential lease that expires on September 30, 2019. If either of the state leases is not renewed upon its expiration, the subleases on the respective acreage shall terminate automatically.
(5)
Leases also provide for a variable rent component based on the gross crop revenues earned on the property. The figures above represent only the minimum cash rents guaranteed under the respective leases.
(6)
In connection with the acquisition of this property, we executed a 6-year, follow-on lease with a new tenant that begins upon the expiration of the 7-month lease assumed at acquisition. The follow-on lease includes two, 6-year extension options and provides for minimum annualized straight-line rents of approximately $542,000. In addition, in connection with the execution of the follow-on lease, we committed to providing up to $1.0 million of capital for certain irrigation and property improvements. As stipulated in the follow-on lease, we will earn additional rent income on the total cost of the improvements as disbursements are made by us at a rate commensurate with the annual yield on the farmland (as determined by each year's minimum cash rent per the follow-on lease).
(7)
In connection with the acquisition of this property, we committed up to $4.0 million of capital to fund the development of additional vineyard acreage on the property. As stipulated in the lease agreement, we will earn additional rental income on the total cost of the project as the capital is disbursed by us at rates specified in the lease.
During the three and ninesix months ended SeptemberJune 30, 2017,2022, in the aggregate, we recognized operating revenues of approximately $1.5 million$71,000, and $3.0 million, respectively, and earningsnet income of approximately $341,000 and $1.2 million, respectively,$38,000, related to the above acquisitions.


2016 Acquisitions
During the nine months ended September 30, 2016, we acquired 13 new farms in seven separate transactions, which are summarized in the table below (dollars in thousands, except for footnotes).
Property
Name		 Property
Location		 Acquisition
Date		 Total
Acreage		 No. of
Farms		 Primary
Crop(s)		 Lease
Term		 Renewal
Options		 Total
Purchase
Price		 Acquisition
Costs		 
Annualized
Straight-line
Rent(1)
 Net
Long-term
Debt Issued
Gunbarrel Road (2)
 Saguache, CO 3/3/2016 6,191 3 Organic Potatoes 5 years 1 (5 years) $25,736
 $119
(3) 
$1,591
 $15,531
Calaveras Avenue Fresno, CA 4/5/2016 453 1 Pistachios 10 years 1 (5 years) 15,470
 39
(4) 
774
(5) 
9,282
Orange Avenue St. Lucie, FL 7/1/2016 401 1 Vegetables 7 years 2 (7 years) 5,100
 38
(4) 
291
 3,120
Lithia Road Hillsborough, FL 8/11/2016 72 1 Strawberries 5 years None 1,700
 38
(3) 
97
 1,020
Baca County(6)
 Baca, CO 9/1/2016 7,384 5 Grass Hay
and Alfalfa		 4 years 1 (5 years) 6,323
 73
(4) 
384
 —
Diego Ranch(7)
 Stanislaus, CA 9/14/2016 1,357 1 Almonds 3 years 3 (5 years) & 1 (3 years) 13,997
 64
(3) 
621
 —
Nevada Ranch Merced, CA 9/14/2016 1,130 1 Almonds 3 years 3 (5 years) & 1 (3 years) 13,232
 42
(3) 
574
 —
      16,988 13       $81,558
 $413
 $4,332
 $28,953
(1)
Annualized straight-line amount is based on the minimum cash rental payments guaranteed under the lease, as required under GAAP.
(2)
As partial consideration for the acquisition of this property, we issued 745,879 OP Units, constituting an aggregate fair value of approximately $6.5 million as of the acquisition date. We incurred $25,500 of legal costs in connection with the issuance of these OP Units.
(3)
Acquisition accounted for as a business combination under ASC 805. In aggregate, $9,520 of these costs were direct leasing costs incurred in connection with these acquisitions.
(4)
Acquisition accounted for as an asset acquisition under ASC 360.
(5)
Leases provide for a variable rent component based on the gross crop revenues earned on the property. The figures above represent only the minimum cash rents guaranteed under the respective leases.
(6)
As partial consideration for the acquisition of this property, we issued 125,677 OP Units, constituting an aggregate fair value of approximately $1.5 million as of the acquisition date. We incurred approximately $8,235 of legal costs in connection with the issuance of these OP Units.
(7)
As partial consideration for the acquisition of this property, we issued 343,750 OP Units, constituting an aggregate fair value of approximately $3.9 million as of the acquisition date. We incurred approximately $21,710 of legal costs in connection with the issuance of these OP Units.
During the three and nine months ended September 30, 2016, in the aggregate, we recognized operating revenues of approximately $770,000 and $1.5 million, respectively, and losses of of approximately $42,000 and $196,000, respectively, related to the above acquisitions (which loss figures include approximately $128,000 and $229,000, respectively, of non-recurring acquisition-related costs).
Purchase Price Allocations
The allocation of the aggregate purchase price for the farms acquired during each of the ninesix months ended SeptemberJune 30, 2017 and 2016 is2022, was as follows (dollars in thousands):
Assets (Liabilities) Acquired2022 Acquisitions
Land and land improvements$16,237 
Permanent plantings5,933 
Irrigation & drainage systems1,298 
In-place lease values359 
Leasing costs727 
Total Purchase Price$24,554
Acquisition Period 
Land and
Land
Improvements
 Buildings 
Irrigation
System
 
Other
Improvements
 Horticulture 
Leasehold
Interest –
Land
 
In-place
Leases
 
Leasing
Costs
 Net Below-Market Leases 
Total
Purchase
Price
2017 Acquisitions $89,614
 $2,804
 $11,534
 $824
 $12,611
 $3,488
 487
 $508
 $(23) $121,847
2016 Acquisitions 59,038
 3,691
 4,952
 2,079
 11,431
 —
 501
 448
 (582) 81,558
Property Disposition

Acquired Intangibles and Liabilities
The following table showsOn June 23, 2023, we completed the weighted-average amortization period, in years, for the intangible assets acquired and liabilities assumed in connection with new real estate acquired during the nine months ended September 30, 2017 and 2016:
  
Weighted-Average
Amortization Period
(in Years)
Intangible Assets and Liabilities 2017 2016
Leasehold interest – land 6.9 —
In-place leases 6.3 8.7
Leasing costs 8.8 10.6
Above-market lease values 2.1 —
Below-market lease values and deferred revenue 4.7 20.9
All intangible assets and liabilities7.0 14.0
Pro-Forma Financials
During the nine months ended September 30, 2016, we acquired six farms that qualified as business combinations. No farms were acquired during the nine months ended September 30, 2017 that were treated as business combinations. The following table reflects pro-forma consolidated financial information as if each farm acquired during the nine months ended September 30, 2016, as partsale of a business combination was acquired on January 1, 2015. In addition, pro-forma earnings have been adjusted to assume that acquisition-related138-acre parcel of unfarmed land in Florida for $9.6 million. Including closing costs related to these farms were incurred at the beginning of the previous fiscal year (dollars in thousands, except share and per-share amounts).
  For the three months ended September 30, 2016 For the nine months ended September 30, 2016
  (Unaudited) (Unaudited)
Operating Data:    
Total operating revenue $4,718
 $13,286
Net income attributable to the company $212
 $594
Share and Per-share Data:    
Earnings per share of common stock – basic and diluted $0.02
 $0.06
Weighted-average common shares outstanding – basic and diluted 10,018,331
 10,001,466
The pro-forma consolidated results are prepared for informational purposes only. They are not necessarily indicative of what our consolidated financial condition or results of operations actually would have been assuming the acquisitions had occurred at the beginning of the previous fiscal year, nor do they purport to represent our consolidated financial position or results of operations for future periods.
Significant Existing Real Estate Activity
Lease Extensions and Renewals
During the nine months ended September 30, 2017, we executed ten separate leases on nine 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$563,000, we recognized a decreasenet gain on the sale of approximately $167,000 (approximately 7.0%) from that of the prior leases. These renewals were executed without incurring any downtime on the respective farms, and no leasing commissions or tenant improvements were incurred$6.4 million.
Investments in connection with these renewals.
Project CompletionUnconsolidated Entities
In connection with the leaseacquisition of certain farmland located in Fresno County, California, we also acquired an ownership in a related limited liability company (the “Fresno LLC”), the sole purpose of which is to own and maintain a pipeline conveying water to our and other neighboring properties. In addition, in connection with the acquisition of certain farmland located in Umatilla County, Oregon, we also acquired an ownership in a related limited liability company (the “Umatilla LLC”), the sole purpose of which is to own and maintain an irrigation system providing water to our and other neighboring properties.
As of June 30, 2023, our aggregate ownership interest in the Fresno LLC and the Umatilla LLC was 50.0% and 20.4%, respectively. As our investments in the Fresno LLC and Umatilla LLC are both deemed to constitute “significant influence,” we have accounted for these investments under the equity method.
We recorded an aggregate loss of approximately $33,000 and $60,000 during the three and six months ended June 30, 2023, respectively, and approximately $0 and $29,000 during the three and six months ended June 30, 2022, respectively (included in Loss from investments in unconsolidated entities on our Condensed Consolidated Statements of Operations and Comprehensive Income), which represents our pro-rata share of the aggregate loss recognized by the Fresno LLC and Umatilla LLC. As of both June 30, 2023, and December 31, 2022, our combined ownership interest in the Fresno LLC and Umatilla LLC had an aggregate carrying value of approximately $5.8 million and is included within Other assets, net on the accompanying Condensed Consolidated Balance Sheets.
Investments in Water Assets
In connection with the acquisition of certain farmland located in Kern County, California, we also acquired three contracts to purchase an aggregate of 45,000 acre-feet of banked water held by Semitropic Water Storage District (“SWSD”), a water
11

storage district located in Kern County, California. During the year ended December 31, 2021, we executed upon our acquisitionall three contracts to purchase all 45,000 acre-feet of banked water for 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 September 30, 2017, the development project had been completed at a totalaggregate additional cost of approximately $8.4$2.8 million. The purchased banked water was recognized at cost, including any administrative fees necessary to transfer the water to our banked water account. While we may, in the future, sell the banked water to an unrelated third party for a profit, our current intent is to hold the water for the long-term for future use on our farms. There is no amount of time by which we must use the water held by SWSD.
As of June 30, 2023, the investment in banked water had a carrying value of approximately $34.0 million, which includes the subsequent cost to execute the contracts, 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.

is included within Other assets, net on our Condensed Consolidated Balance Sheets.
Portfolio Diversification and Concentrations
Diversification
The following table summarizes the geographic locations, by state, of our properties with leases in place as of September 30, 2017 and 2016 (dollars in thousands):
  As of and For the Nine Months Ended September 30, 2017 As of and For the Nine Months Ended September 30, 2016
State 
Number
of
Farms
 
Total
Acres
 
% of
Total
Acres
 
Rental
Revenue
 
% of Total
Rental
Revenue
 Number
of
Farms		 Total
Acres		 % of
Total
Acres		 Rental
Revenue		 % of Total
Rental
Revenue
California 27 7,921 12.8% $8,749
 47.8% 21 6,516 19.3% $6,986
 56.4%
Florida 17 11,225 18.2% 4,839
 26.5% 15 5,567 16.5% 2,408
 19.4%
Colorado 9 30,170 48.8% 2,018
 11.0% 8 13,575 40.1% 951
 7.7%
Arizona 6 6,280 10.2% 1,114
 6.1% 2 3,000 8.9% 544
 4.4%
Oregon 4 2,313 3.7% 887
 4.8% 4 2,313 6.8% 877
 7.1%
Nebraska 2 2,559 4.2% 435
 2.4% 2 2,559 7.6% 435
 3.5%
Michigan 4 270 0.4% 187
 1.0% 4 270 0.8% 187
 1.5%
North Carolina 2 310 0.5% 42
 0.2% — — —% —
 —%
Washington 1 746 1.2% 31
 0.2% — — —% —
 —%
TOTALS 72 61,794 100.0% $18,302
 100.0% 56 33,800 100.0% $12,388
 100.0%
Concentrations
Credit Risk
As of SeptemberJune 30, 2017,2023, our farms were leased to 49various different, unrelated third-party tenants, with certain tenants leasing more than one farm. One unrelated tenant ("Tenant A") leases five of our farms, and aggregate rental revenue attributable to Tenant A accounted for approximately $3.2 million, or 17.7% of the rental revenue recorded during the nine months ended September 30, 2017. In addition, Dole Food Company (“Dole”) leases two of our farms, and aggregate rental revenue attributable to Dole accounted for approximately $2.2 million, or 12.2% of the rental revenue recorded during the nine months ended September 30, 2017. If either Tenant A or Dole fail to make rental payments or elect to terminate their respective leases, and the properties cannot be re-leased on satisfactory terms, there could be a material adverse effect on our financial performance and ability to continue operations. No other individual tenant represented greater than 10.0%10% of the total rentallease revenue recorded during the ninesix months ended SeptemberJune 30, 2017.2023.
Geographic Risk
As of September 30, 2017, 27 of the 72 farms we owned wereFarms located in California 17 farms were located inand Florida and 9 farms were located in Colorado. Further, our California, Florida, and Colorado farms accounted for approximately $8.7$27.1 million (47.8%(64.0%), $4.8 and $7.5 million (26.5%), and $2.0 million (11.0%(17.7%), respectively, of the rentaltotal lease revenue recorded during the ninesix months ended SeptemberJune 30, 2017. Our 27 California farms are spread across four of the many different growing regions within the state.2023. Though we seek to continue to further diversify geographically, as may be desirable or feasible, should an unexpected natural disaster (such as an earthquake, wildfire, or flood) occur or climate change impact the regions where our properties are located, there could be a material adverse effect on our financial performance and ability to continue operations. None of our farms in California or Florida have been materially impacted by the recent wildfires, droughts, or hurricanes that occurred in those respective regions. See “—California Floods” below for a discussion on damage caused on certain of our farms by the recent floods that occurred in California. No other single state accounted for more than 10.0%10% of the total rental revenue recorded during the ninesix months ended SeptemberJune 30, 2017.2023.

California Floods
In January 2023, periods of heavy rainfall in California resulted in floods that impacted several areas of the state, including regions where certain of our farms are located. As a result of the flooding, one of our farms in the Central Valley suffered damage to certain structures located on the farm. We are still in the process of assessing the damage; however, as of June 30, 2023, we estimated the carrying value of the structures on this property damaged by the floods to be approximately $855,000. As such, during the three months ended March 31, 2023, we wrote down the carrying value of these structures and also recorded a corresponding property and casualty loss, included within Property and casualty (loss) recovery, net on our Condensed Consolidated Statements of Operations and Comprehensive Income. Certain of our other farms in California suffered minor damage as a result of the floods, but no other farms were materially impacted.
Impairment
We evaluate our entire portfolio each quarter for any impairment indicators and perform an impairment analysis on those select properties that have an indication of impairment. As of June 30, 2023, and December 31, 2022, we concluded that none of our properties were impaired. There have been no impairments recognized on our real estate assets since our inception.
NOTE 4. BORROWINGS
Our borrowings as of SeptemberJune 30, 2017,2023, and December 31, 20162022, are summarized below (dollars in thousands):
  Carrying Value as of As of September 30, 2017
  September 30, 2017 December 31, 2016 
Stated Interest
Rates(1)
(Range; Wtd Avg)
 
Maturity Dates
(Range; Wtd Avg)
Mortgage notes and bonds payable:        
Fixed-rate mortgage notes payable $207,618
 $142,861
 
2.90%–4.47%; 3.59%
 
6/1/2020–11/1/2041; April 2029
Fixed-rate bonds payable 84,518
 49,348
 
2.38%–4.05%; 3.13%
 
7/30/2018–8/30/2024; June 2021
Total mortgage notes and bonds payable 292,136
 192,209
    
Deferred financing costs – mortgage notes and bonds payable (1,902) (1,412) N/A N/A
Mortgage notes and bonds payable, net $290,234
 $190,797
    
         
Variable-rate revolving lines of credit $5,100
 $16,550
 3.55% 4/5/2024
         
Total borrowings, net $295,334
 $207,347
    
12
(1)
Where applicable, stated interest rates are before interest patronage (as described below).

 Carrying Value as of As of June 30, 2023
June 30, 2023December 31, 2022
Stated Interest
Rates(1)
(Range; Wtd. Avg)
Maturity Dates
(Range; Wtd. Avg)
Notes and bonds payable:
Fixed-rate notes payable$539,894 $550,974 2.45%-5.70%; 3.73%9/1/2024–7/1/2051; June 2033
Variable-rate notes payable— 1,104 N/AN/A
Fixed-rate bonds payable56,973 77,776 2.13%–4.57%; 3.54%7/31/2023–12/30/2030; May 2026
Total notes and bonds payable596,867 629,854 
Debt issuance costs – notes and bonds payable(3,211)(3,454)N/AN/A
Notes and bonds payable, net$593,656 $626,400 
Variable-rate revolving lines of credit$100 $100 7.02%4/5/2024
Total borrowings, net$593,756 $626,500 
(1)Where applicable, stated interest rates are before interest patronage (as described below).
As of June 30, 2023, the above borrowings were collateralized by certain of our farms with an aggregate net book value of approximately $1.2 billion. The weighted-average stated interest rate charged on the above borrowings excluding(excluding the impact of deferred financingdebt issuance costs andand before any interest patronage, or refunded interest,interest) was 3.44%3.79% and 3.33%3.78% for the three and ninesix months ended SeptemberJune 30, 2017,2023, respectively, as compared to 3.75% and 3.29% and 3.27%3.73% for the three and ninesix months ended SeptemberJune 30, 2016, respectively. In2022, respectively. In addition, 20162022 interest patronage from our Farm Credit Notes Payable (as defined below), which we received and recorded during the six months ended June 30, 2017, resulted in a 17.2%24.1% reduction (approximately 61109 basis points) to the stated interest rates on such borrowings. See below under “—Farm Credit Notes Payable—Interest Patronage” for further discussion on interest patronage.
MetLife BorrowingsAs of June 30, 2023, we were in compliance with all covenants applicable to the above borrowings.
MetLife Facility
On May 9, 2014,February 3, 2022, we closed on aamended our credit facility (the "MetLife Facility") with Metropolitan Life Insurance Company (“MetLife”) that originally, which previously consisted of a $75.0 million long-term note payable (the “2020 MetLife Term Note”) and $75.0 million of revolving equity lines of credit (the “MetLife Lines of Credit,” and together with the 2020 MetLife Term Note, the “Prior MetLife Facility”). Pursuant to the amendment, our credit facility with MetLife now consists of the 2020 MetLife Term Note, the MetLife Lines of Credit, and a new $100.0 million long-term note payable (the “2015“2022 MetLife Term Note”) and a $25.0 million revolving equity line of credit (the “2015 MetLife Line of Credit”). As amended on October 5, 2016, the overall size of the MetLife Facility was increased from $125.0 million to $200.0 million (the "2016 Amendment"). Pursuant to the 2016 Amendment, the MetLife Facility now consists of the 2015 MetLife Term Note, the 2015 MetLife Line of Credit, a $50.0 million long-term note payable (the "2016 MetLife Term Note"” and together with the 2015 MetLife Term Note, the "MetLife Term Notes"), the terms of which are pari passu with those of the 20152020 MetLife Term Note and a second $25.0 million revolving equity line of credit (the "2016 MetLife Line of Credit" and, together with the 2015 MetLife Line of Credit, the "MetLife Lines of Credit"), the terms of which are pari passu to those of the 2015 MetLife Line of Credit.
On September 19, 2017, we drew approximately $27.5 million on the MetLife Term Notes, which was used to repay a portion of the balance outstanding under the MetLife Lines of Credit. The interest rate onCredit, the new disbursement was 3.85% per annum (which rate is fixed through January 4, 2027) and was blended with the existing interest rate on the previously-outstanding balance under the“Current MetLife Term Notes.

Facility”).
The following table summarizes the pertinent terms of the Current MetLife Facility as of SeptemberJune 30, 20172023 (dollars in thousands, except for footnotes):
IssuanceAggregate
Commitment		Maturity
Dates		Principal
Outstanding		 Interest Rate Terms 
Undrawn
Commitment(1)
MetLife Lines of Credit$75,000 4/5/2024$100 3-month Term SOFR + 2.11%(2)$74,900 
2020 MetLife Term Note75,000 (3)1/5/203036,900 2.75%, fixed through 1/4/2030(4)38,100 
2022 MetLife Term Note100,000 (3)1/5/2032— (4)

100,000 
Totals$250,000 $37,000 $213,000 
Issuance 
Aggregate
Commitment
 
Maturity
Dates
 
Principal
Outstanding
 Interest Rate Terms 
Undrawn
Commitment
 
MetLife Term Notes $150,000
(1) 
1/5/2029 $131,210
 3.30%, fixed through 1/4/2027
(2) 
$13,530
(3),(4) 
MetLife Lines of Credit 50,000
 4/5/2024 5,100
 3-month LIBOR + 2.25%
(5) 
44,900
(3) 
Total principal outstanding   $136,310
      
(1)
If the aggregate commitment under the MetLife Facility is not fully utilized by December 31, 2018, MetLife has the option to be relieved of its obligation to disburse the additional funds under the MetLife Term Notes.
(2)
Represents the blended interest rate on the MetLife Term Notes as of September 30, 2017. Interest rates for subsequent disbursements will be based on then-prevailing market rates. The interest rate on all then-outstanding disbursements will be subject to adjustment on January 5, 2027. Through December 31, 2018, the MetLife Term Notes are also subject to an unused fee of 0.20% on undrawn amounts.
(3)
Based on the properties that were pledged as collateral under the MetLife Facility, as of September 30, 2017, the maximum additional amount we could draw under the facility was approximately $12.9 million.
(4)
Net of amortizing principal payments of approximately $5.3 million.
(5)
The interest rate on the MetLife Lines of Credit is subject to a minimum annualized rate of 2.50%, plus an unused fee of 0.20% on undrawn amounts. The interest rate spread will be subject to adjustment on October 5, 2019. As of September 30, 2017, the interest rate on the MetLife Lines of Credit was 3.55%.
Individual(1)Based on the properties that were pledged as collateral under the Current MetLife NotesFacility, as of June 30, 2023, the maximum additional amount we could draw under the facility was approximately $110.3 million.
In May 2017, we also entered into two new loan agreements with(2)The interest rate on the MetLife (collectively,Lines of Credit is subject to a minimum annualized rate of 2.50%, plus an unused fee ranging from 0.10% to 0.20% on undrawn amounts (based on the "Individual MetLife Notes"), the termsbalance drawn under each line of which are summarized incredit).
(3)If the aggregate incommitments under the table below (dollars in thousands):2020 MetLife Term Note and the 2022 MetLife Term Note are not fully utilized by December 31, 2024, MetLife has no obligation to disburse the additional funds under either note.
(4)Interest rates on future disbursements under each of the 2020 MetLife Term Note and the 2022 MetLife Term Note will be based on prevailing market rates at the time of such disbursements. In addition, through December 31, 2024, the 2020 MetLife Term Note and the 2022 MetLife Term Note are each subject to an unused fee ranging from 0.10% to 0.20% on undrawn amounts (based on the balance drawn under the respective note).
Date of IssuanceAmountMaturity DatePrincipal AmortizationInterest Rate Terms
5/31/2017$15,300
(1)
2/14/2022 & 2/14/202528.6 years3.55% & 3.85%, fixed throughout their respective terms
(1)
Proceeds from these notes were used for the acquisition of a new property.
As of September 30, 2017, we were in compliance with all covenants applicable to the MetLife Borrowings.Farmer Mac Facility
Farm Credit Notes Payable
From time to time since September 2014, we, throughThrough certain subsidiaries of our Operating Partnership, have entered into various loan agreements with certain Farm Credit associations, including Farm Credit of Central Florida, FLCA ("Farm Credit CFL"), Farm Credit West, FLCA ("Farm Credit West"), Cape Fear Farm Credit, ACA ("CF Farm Credit"), Farm Credit of Florida, ACA ("Farm Credit FL"), and Northwest Farm Credit Services, FLCA ("NW Farm Credit," and, collectively, with the other Farm Credit associations, "Farm Credit"). During the nine months ended September 30, 2017, we entered into the following loan agreements with Farm Credit (dollars in thousands):
Issuer Date of Issuance 
Amount(1)
 Maturity Date Principal Amortization 
Interest Rate Terms(2)
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
CF Farm Credit 6/14/2017 1,301
 7/1/2022 40.2 years 4.41%, fixed throughout its term
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
(1)
Proceeds from these notes were used to fund new acquisitions, to repay existing indebtedness, and for other general corporate purposes.
(2)
Stated rate is before interest patronage, as discussed below.
(3)
During the three months ended September 30, 2017, we amended four existing loan agreements with Farm Credit CFL to increase the 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.

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 September 30, 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 8 9/19/2014 – 7/13/2017 6/1/2020 – 10/1/2040 $27,472
 4.15%
(2) 
Farm Credit West 3 4/4/2016 – 7/17/2017 5/1/2037 – 11/1/2041 21,054
 3.91%
(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 5,460
 4.41%
(4) 
Total 14     $61,107
   
(1)
Represents the weighted-average, blended rate (before interest patronage, as discussed below) on the respective borrowings as of September 30, 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 during 2016.
Interest patronage, or refunded interest, on our borrowings from Farm Credit associations is recorded upon receipt and is included in Other income on our Condensed Consolidated Statements of Operations. Receipt of interest patronage typically occurs in the first half of the calendar year following the year in which the respective interest payments are made.
As of September 30, 2017, we were in compliance with all covenants applicable to the Farm Credit Notes Payable.
Farmer Mac Facility
On December 5, 2014, we, through certain subsidiaries of our Operating Partnership,have entered into a bond purchase agreement (the “Bond Purchase Agreement”) with Federal Agricultural Mortgage Corporation (“Farmer Mac”) and Farmer Mac Mortgage Securities Corporation (the “Bond Purchaser”), for a secured note purchase facility that(the “Farmer Mac Facility”). As amended from time to
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time, the Farmer Mac Facility currently provides for bond issuances up to an aggregate principal amount of $75.0 million (the “Farmer Mac Facility”). On$225.0 million. Pursuant to the Bond Purchase Agreement, as further amended on June 16, 2016,2, 2023, we amendedmay issue new bonds under the Farmer Mac Facility to increasethrough December 31, 2026, and the maximum borrowing capacityfinal maturity date for new bonds issued under the facility will be the date that is ten years from $75.0the applicable issuance date.
As of June 30, 2023, we had approximately $57.0 million to $125.0 millionof bonds issued and extend the term of the Bond Purchase Agreement by two years, to December 11, 2018.
During the nine months ended September 30, 2017, we issued five bonds for gross proceeds of approximately $35.6 million, the terms of which are summarized, in the aggregate, in the table below (dollars in thousands):
Date of Issuance 
Gross
Proceeds(1)
 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
(1)
Proceeds from these bonds were used for the acquisitions of new properties.
The following table summarizes, in the aggregate, the terms of the 14 bonds outstanding under the Farmer Mac Facility asFacility.
Farm Credit Notes Payable
From time to time since September 2014, we, through certain subsidiaries of our Operating Partnership, have entered into various loan agreements (collectively, the “Farm Credit Notes Payable”) with various different Farm Credit associations (collectively, “Farm Credit”). We did not enter into any new loan agreements with Farm Credit during the six months ended June 30, 2023.
Interest Patronage
Interest patronage, or refunded interest, on our borrowings from Farm Credit is generally recorded upon receipt and is included within Other income on our Condensed Consolidated Statements of Operations and Comprehensive Income. Receipt of interest patronage typically occurs in the first half of the calendar year following the calendar year in which the respective interest expense is accrued.
During the three months ended March 31, 2023, we recorded interest patronage of approximately $2.3 million related to interest accrued on the Farm Credit Notes Payable during the year ended December 31, 2022, and during the three months ended September 30, 2017 (dollars2022, we received approximately $113,000 of interest patronage, as certain Farm Credit associations paid a portion of the 2022 interest patronage (which relates to interest accrued during 2022 but is typically paid during the first half of 2023) early. In total, 2022 interest patronage resulted in thousands):
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) 
(1)
Represents the weighted-average interest rate as of September 30, 2017.
(2)
If the balance of the Farmer Mac Facility is not fully utilized by December 11, 2018, Farmer Mac has the optiona 24.1% reduction (approximately 109 basis points) to be relieved of its obligations to purchase additional bonds under the facility.
(3)
As of September 30, 2017, there was no additional availability to draw under the Farmer Mac Facility, as no additional properties had been pledged as collateral.
As of September 30, 2017, we were in compliance with all covenants under the Farmer Mac Facility.

interest rates on such borrowings.
Debt Service – Aggregate Maturities
Scheduled principal payments of our aggregate mortgage notes and bonds payable as of SeptemberJune 30, 2017,2023, for the succeeding years are as follows (dollars in thousands):
PeriodScheduled Principal Payments
For the remaining six months ending December 31:2023$12,622 
For the fiscal years ending December 31:202440,869 
202539,246 
202618,412 
202751,638 
202878,071 
Thereafter356,009 
$596,867 
Period 
Scheduled
Principal Payments
For the remaining three months ending December 31:2017 $601
For the fiscal years ending December 31:2018 23,433
 2019 11,060
 2020 26,484
 2021 7,242
 2022 36,089
 Thereafter 187,227
   $292,136
During the six months ended June 30, 2023, we repaid approximately $24.3 million of maturing loans. On a weighted-average basis, these borrowings bore interest at a stated rate of 3.50% and an effective interest rate (after interest patronage, where applicable) of 3.36%.
Fair Value
ASC 820, “Fair Value Measurement (Subtopic 820)” (“ASC 820”), provides a definition of fair value that focuses on the exchange (exit) price of an asset or liability in the principal, or most advantageous market, and prioritizes the use of market-based inputs to the valuation. ASC 820-10 "Fair Value Measurements and Disclosures," establishes a three-level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability as of the measurement date. The three levels are defined as follows:
•Level 1 — inputs that are based upon quoted prices (unadjusted) for identical assets or liabilities in active markets;
•Level 2 — inputs are based upon quoted prices for similar assets or liabilities in active or inactive markets or model-based valuation techniques, for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and
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•Level 3 — inputs are generally unobservable and significant to the fair value measurement. These unobservable inputs are generally supported by little or no market activity and are based upon management'smanagement’s estimates of assumptions that market participants would use in pricing the asset or liability.
As of SeptemberJune 30, 2017,2023, the aggregate fair value of our long-term, fixed-rate mortgage notes and bonds payable was approximately $286.3$541.2 million, as compared to an aggregate carrying value (excluding unamortized related debt issuance costs) of $292.1approximately $596.9 million. The fair value of our long-term, fixed-rate mortgage notes and bonds payable is valued using Level 3 inputs under the hierarchy established by ASC 820-10 and is calculated based on a discounted cash flow analysis, using discount rates based on management’s estimates of market interest rates on long-term debt with comparable terms. Further, due to the revolving nature ofand variable interest rates applicable to the MetLife Lines of Credit, and the lack of changes in market credit spreads, their aggregate fair value as of SeptemberJune 30, 2017,2023, is deemed to approximate their aggregate carrying value of $5.1 million. $100,000.
Interest Rate Swap Agreements
In order to hedge our exposure to variable interest rates, we have entered into various interest rate swap agreements in connection with certain of our mortgage financings. In accordance with these swap agreements, we will pay our counterparty a fixed interest rate on a quarterly basis and receive payments from our counterparty equal to the respective stipulated floating rates. We have adopted the fair value measurement provision for these financial instruments, and the aggregate fair value of our interest rate swap agreements is recorded in Other assets, net or Other liabilities, net, as appropriate, on our accompanying Condensed Consolidated Balance Sheets. Generally, in the absence of observable market data, we will estimate the fair value of our interest rate swaps using estimates of certain data points, including estimated remaining life, counterparty credit risk, current market yield, and interest rate spreads of similar securities as of the measurement date. In accordance with the Financial Accounting Standards Board’s fair value measurement guidance, we have made an accounting policy election to measure the credit risk of our derivative financial instruments that are subject to master netting agreements on a net basis by counterparty portfolio.As of June 30, 2023, our interest rate swaps were valued using Level 2 inputs.
In addition, we have designated our interest rate swaps as cash flow hedges. For derivatives designated and that qualify as cash flow hedges of interest rate risk, the gain or loss on the derivative is initially recorded in Accumulated other comprehensive income (loss) on the accompanying Condensed Consolidated Balance Sheets and subsequently reclassified into interest expense in the same period(s) during which the hedged transaction affects. During the next 12 months, we estimate that an additional $2.6 million will be reclassified as a reduction to interest expense.
We had the following outstanding interest rate derivatives that were designated as cash flow hedges of interest rate risk as of June 30, 2023, and December 31, 2022 (dollars in thousands):
PeriodNumber of InstrumentsAggregate Notional Amount
As of June 30, 20234$71,701 
As of December 31, 2022473,392 
The following table presents the fair value of our interest rate swaps as well as their classification on the Condensed Consolidated Balance Sheets as of June 30, 2023, and December 31, 2022 (dollars in thousands):
Derivative Asset (Liability) Fair Value
Derivative TypeBalance Sheet LocationJune 30, 2023December 31, 2022
Derivatives Designated as Hedging Instruments:
Interest rate swapsOther assets, net$8,714 $9,007 
Total$8,714 $9,007 
The following table presents the amount of (loss) income recognized in comprehensive income within our condensed consolidated financial statements for the three and six months ended June 30, 2023 and 2022 (dollars in thousands):
For the Three Months Ended June 30,For the Six Months Ended June 30,
2023202220232022
Derivative in cash flow hedging relationship:
Interest rate swaps$1,355 $2,562 $(293)$7,292 
Total$1,355 $2,562 $(293)$7,292 
Credit-risk-related Contingent Features
We have agreements with each of our derivative counterparties that contain a provision where if we default on any of our indebtedness, then we could also be declared in default on our derivative obligations. As of June 30, 2023, we did not have any derivatives in a net liability position, nor have we posted any collateral related to these agreements.
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NOTE 5. MANDATORILY-REDEEMABLECUMULATIVE TERM PREFERRED STOCK
On August 17, 2016,In January 2021, we completed a public offering of 1,000,000 shares of 6.375%5.00% Series AD Cumulative Term Preferred Stock, par value $0.001 per share (the "Term“Series D Term Preferred Stock"Stock”), at a public offering price of $25.00 per share. Simultaneous with the closing of the offering and on the same terms and conditions, the underwriters exercised in full their option to purchase an additional 150,000 shares of the Term Preferred Stock to cover over-allotments. As a result of this offering (including the underwriters’ exercise of their option to purchase additional shares to cover over-allotments), we issued a total of 1,150,0002,415,000 shares of the Series D Term Preferred Stock for gross proceeds of approximately $28.8$60.4 million and net proceeds, after deducting underwriting discounts and offering expenses borne by us, of approximately $27.6$58.3 million. These proceeds were used to repay existing indebtedness, to fund new property acquisitions and for other general corporate purposes. The Series D Term Preferred Stock is traded under the ticker symbol "LANDP,"“LANDM” on Nasdaq.
The shares of the NASDAQ Global Market. TheSeries D Term Preferred Stock ishave a mandatory redemption date of January 31, 2026, and are not convertible into our common stock or any other securities.
Generally, we maywere not permitted to redeem shares of the Series D Term Preferred Stock prior to September 30, 2018,January 31, 2023, except in limited circumstances to preserve our qualification as a REIT. On or after September 30, 2018,January 31, 2023, we may redeem the shares at a redemption price of $25.00 per share, plus any accumulated and unpaid dividends up to, but excluding, the date of redemption. The shares of the Term Preferred Stock have a mandatory redemption date of September 30, 2021.
We incurred approximately $1.2$2.1 million in total offering costs related to this issuance, which have been recorded net of the Series D Term Preferred Stock as presented on the accompanying Condensed Consolidated Balance Sheet,Sheets and we will amortize these costsare being amortized over the mandatory redemption period which endsas a component of interest expense on September 30, 2021.

the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income. The Series D Term Preferred Stock is recorded as a liability on our accompanying Condensed Consolidated Balance SheetSheets in accordance with ASC 480, "Distinguishing“Distinguishing Liabilities from Equity,"” which states that mandatorily redeemablemandatorily-redeemable financial instruments should be classified as liabilities. In addition, the related dividend payments are treated similarsimilarly to interest expense inon the accompanying Condensed Consolidated StatementStatements of Operations.Operations and Comprehensive Income.
As of SeptemberJune 30, 2017,2023, the fair value of our Series D Term Preferred Stock was approximately $29.8$56.9 million, as compared to the carrying value exclusive(exclusive of unamortized offering costs,costs) of $28.8approximately $60.4 million. The fair value of our Series D Term Preferred Stock is valued usinguses Level 1 inputs under the hierarchy established by ASC 820-10 "Fair Value Measurements and Disclosures," and is calculated based on the closing per-share price ason June 30, 2023, of September 30, 2017, of $25.93.$23.55.
TheFor information on the dividends to preferred stockholders declared by our Board of Directors and paid by us on the Series D Term Preferred Stock during the ninethree months ended SeptemberJune 30, 2017 and 2016 are reflected in the table below.2023, see Note 8, “Equity—Distributions.”
Fiscal Year Declaration Date Record Date Payment Date Dividend per
Preferred Share		 
2017 January 10, 2017 January 20, 2017 January 31, 2017 $0.1328125
 
  January 10, 2017 February 16, 2017 February 28, 2017 0.1328125
 
  January 10, 2017 March 22, 2017 March 31, 2017 0.1328125
 
  April 11, 2017 April 21, 2017 April 28, 2017 0.1328125
 
  April 11, 2017 May 19, 2017 May 31, 2017 0.1328125
 
  April 11, 2017 June 21, 2017 June 30, 2017 0.1328125
 
  July 11, 2017 July 21, 2017 July 31, 2017 0.1328125
 
  July 11, 2017 August 21, 2017 August 31, 2017 0.1328125
 
  July 11, 2017 September 20, 2017 September 29, 2017 0.1328125
 
  Nine months ended September 30, 2017 $1.1953125
 
          
2016 September 12, 2016 September 21, 2016 September 30, 2016 $0.190364583
(1) 
  Nine months ended September 30, 2016 $0.190364583
 
(1)
Represents the cumulative dividend from (but excluding) the date of original issuance through the month ended September 30, 2016.

NOTE 6. RELATED-PARTY TRANSACTIONS
Our Adviser and Administrator
We are externally managed pursuant to contractual arrangements with our Adviser and our Administrator, which collectively employ all of our personnel and pay their salaries, benefits, and general expenses directly. Both our Adviser and Administrator are affiliates of ours, as their parent company is owned and controlled by David Gladstone, our chairman, and chief executive officer.officer, and president. In addition, two of our executive officers, Mr. Gladstone and Terry Brubaker (our vice chairman and chief operating officer), serve as directors and executive officers of each of our Adviser and Administrator, andAdministrator. Michael LiCalsi, our general counsel and secretary (who also serves as our Administrator’s president.president, general counsel, and secretary) is also executive vice president of administration of our Adviser.
TheWe have entered into an investment advisory agreement with our Adviser that was in effect through March 31, 2017 (the “Advisory Agreement”), and the currentan administration agreement with our Administrator (the “Administration Agreement”) each became effective February 1, 2013. A summary of each of these agreements is provided in Note 6 to our consolidated financial statements included in our Form 10-K.
On April 11, 2017, we entered into a Second Amended and Restated Investment. Both the Advisory Agreement (the "Amended Advisory Agreement") with our Adviser that became effective beginning withand the three months ended June 30, 2017. Our entrance into the Amended AdvisoryAdministration Agreement waswere approved unanimously by our boardBoard of directors,Directors, including specifically, our independent directors.
In addition, on April 11, 2017, we entered into an agreement with Gladstone Securities, LLC, ("Gladstone Securities"), effective beginning with the three months ended June 30, 2017, for it to act as our non-exclusive agent to assist us with arranging financing for our properties (the "Financing Arrangement Agreement"). Gladstone Securities is a privately-held broker-dealer registered with the Financial Industry Regulatory Authority and insured by the Securities Investor Protection Corporation. Gladstone Securities is an affiliate of ours, as its parent company is owned and controlled by David Gladstone, our chairman and chief executive officer. Mr. Gladstone also serves on the board of managers of Gladstone Securities.

A summary of the compensation terms for each of the Amended Advisory Agreement and a summary of the Financing ArrangementAdministration Agreement is below.
In addition, subsequent to September 30, 2017, the existing lease on one of our farms was assigned by the tenant to our TRS. See Note 10, "Subsequent Events," for further discussion on this transaction.
Amended Advisory Agreement
Pursuant to the Amended Advisory Agreement, effective beginning with the three months ended June 30, 2017, our Adviser is compensated in the form of a base management fee and, each as applicable, an incentive fee, a capital gains fee, and a termination fee. Our Adviser does not charge acquisition or disposition fees when we acquire or dispose of properties, as is common in other externally-managed REITs. Each of thesethe base management, incentive, capital gains, and termination fees is described below.
Base Management Fee
APursuant to the Advisory Agreement, a base management fee will beis paid quarterly and will beis calculated as 2.0% per annum (0.50%at an annual rate of 0.60% (0.15% per quarter) of the prior calendar quarter's total adjusted equity, which isquarter’s “Gross Tangible Real Estate,” defined as total equity plus total mezzanine equity, ifthe gross cost of tangible real estate owned by us (including land and land improvements, permanent plantings, irrigation and drainage systems, farm-related facilities, and other tangible site improvements), prior to any eachaccumulated depreciation, and as reportedshown on our balance sheet adjusted to exclude unrealized gains and losses and certain other one-time events and non-cash items ("Total Adjusted Equity").or the notes thereto for the applicable quarter.
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Incentive Fee
AnPursuant to the Advisory Agreement, an incentive fee will beis calculated and payable quarterly in arrears if the Pre-Incentive Fee FFO for a particular quarter exceeds a hurdle rate of 1.75% (7.0% annualized) of the prior calendar quarter'squarter’s Total Adjusted Common Equity.
For purposes of this calculation, Pre-Incentive Fee FFO is defined in the Amended Advisory Agreement as FFO (also as defined in the Amended Advisory Agreement) accrued by the Company during the current calendar quarter (prior to any incentive fee calculation for the current calendar quarter), less any dividends paiddeclared on preferred stock securities that are not treated as a liability for GAAP purposes. In addition, Total Adjusted Common Equity is defined as common stockholders’ equity plus non-controlling common interests in the Operating Partnership, if any (each as reported on our balance sheet), adjusted to exclude unrealized gains and losses and certain other one-time events and non-cash items.
Our Adviser will receive:receives: (i) no Incentive Fee in any calendar quarter in which the Pre-Incentive Fee FFO does not exceed the hurdle rate; (ii) 100% of the Pre-Incentive Fee FFO with respect to that portion of such Pre-Incentive Fee FFO, if any, that exceeds the hurdle rate but is less than 2.1875% in any calendar quarter (8.75% annualized); and (iii) 20% of the amount of the Pre-Incentive Fee FFO, if any, that exceeds 2.1875% in any calendar quarter (8.75% annualized).
Capital Gains Fee
APursuant to the Advisory Agreement, a capital gains-based incentive fee will beis calculated and payable in arrears at the end of each fiscal year (or upon termination of the Amended Advisory Agreement). The capital gains fee shall equal: (i) 15% of the cumulative aggregate realized capital gains minus the cumulative aggregate realized capital losses, minus (ii) any aggregate capital gains fees paid in prior periods. For purposes of this calculation, realized capital gains and losses will be calculated as (x) the sales price of the property, minus (y) any costs to sell the property and the then-current gross value of the property (which includes the property'sproperty’s original acquisition price plus any subsequent, non-reimbursed capital improvements). At the end of each fiscal year, if this figure is negative, no capital gains fee shall be paid.
Termination Fee
InPursuant to the Advisory Agreement, in the event of our termination of the Amended Advisory Agreementagreement with our Adviser for any reason (with 120 days’ prior written notice and the vote of at least two-thirds of our independent directors), a termination fee would be payable to the Adviser equal to three times the sum of the average annual base management fee and incentive fee earned by the Adviser during the 24-month period prior to such termination.
Administration Agreement
Pursuant to the Administration Agreement, we pay for our allocable portion of the Administrator’s expenses incurred while performing its obligations to us, including, but not limited to, rent and the salaries and benefits expenses of our Administrator’s employees, including our chief financial officer, treasurer, chief compliance officer, general counsel and secretary (who also serves as our Administrator’s president, general counsel, and secretary), and their respective staffs.
As approved by our Board of Directors, our allocable portion of the Administrator’s expenses is generally derived by multiplying our Administrator’s total expenses by the approximate percentage of time the Administrator’s employees perform services for us in relation to their time spent performing services for all companies serviced by our Administrator under similar contractual agreements.
Gladstone Securities
We have entered into an agreement with Gladstone Securities, LLC (“Gladstone Securities”), for it to act as our non-exclusive agent to assist us with arranging financing for our properties (the “Financing Arrangement Agreement”). Gladstone Securities is a privately-held broker-dealer and a member of the Financial Industry Regulatory Authority and the Securities Investor Protection Corporation. Gladstone Securities is an affiliate of ours, as its parent company is owned and controlled by Mr. Gladstone, who also serves on the board of managers of Gladstone Securities. In addition, Michael LiCalsi, our general counsel and secretary, serves in several capacities for Gladstone Securities, including as chief legal officer, secretary, a member of its board of managers, and a managing principal.
Financing Arrangement Agreement
In connection with the Financing Arrangement Agreement, Gladstone Securities may, from time to time, solicit the interest of various agricultural or commercial real estate lenders and/or recommend to us third-party lenders offering credit products or packages that are responsive to our needs. We will pay Gladstone Securities a financing fee in connection with the services it provides to us for securing financing on our properties. Depending on the size of the financing obtained, the maximum amount of the financing fee, which will be payable upon closing of the respective financing, will range from 0.5% to 1.0% of the amount of financing obtained. The amount of the
17

financing fee may be reduced or eliminated as determined by us and Gladstone Securities after taking into consideration various factors, including, but not limited to, the involvement of any unrelated third-party brokers and general market conditions. During each
We did not pay any financing fees to Gladstone Securities during either of the three and nineor six months ended SeptemberJune 30, 2017,2023. During the three and six months ended June 30, 2022, we paid total financing fees to Gladstone Securities of approximately $0 and $94,000 respectively. Through June 30, 2023, the total amount of financing fees paid to Gladstone Securities represented approximately 0.1%0.14% of the total financings secured since the Financing Arrangement Agreement has been in place.

Dealer-Manager Agreements
We have entered into dealer-manager agreements with Gladstone Securities (collectively, the “Dealer-Manager Agreements”), pursuant to which Gladstone Securities served or serves as our exclusive dealer-manager in connection with the offering of our Series C Preferred Stock and Series E Preferred Stock (each as defined in Note 8, “Equity—Equity Issuances”).
Pursuant to the Dealer-Manager Agreements, Gladstone Securities provides certain sales, promotional, and marketing services to us in connection with the offering of the Series C Preferred Stock and Series E Preferred Stock, and we generally paid or pay Gladstone Securities the following:
•With regard to the Series C Preferred Stock:
iselling commissions of up to 6.0% of the gross proceeds from sales in the offering (the “Series C Selling Commissions”), and
iia dealer-manager fee of 3.0% of the gross proceeds from sales in the offering (the “Series C Dealer-Manager Fee”).
•With regard to the Series E Preferred Stock:
iselling commissions of up to 7.0% of the gross proceeds from sales in the offering (the “Series E Selling Commissions,” and together with the Series C Selling Commissions, the “Selling Commissions”), and
iia dealer-manager fee of 3.0% of the gross proceeds from sales in the offering (the “Series E Dealer-Manager Fee,” and together with the Series C Dealer-Manager Fee, the “Dealer-Manager Fees”).
No Selling Commissions or Dealer-Manager Fees were paid with respect to shares of the Series C Preferred Stock sold pursuant to our dividend reinvestment plan (the “DRIP”) for the Series C Preferred Stock. Gladstone Securities may, in its sole discretion, remit all or a portion of the Selling Commissions and also reallow all or a portion of the Dealer-Manager Fees to participating broker-dealers and wholesalers in support of the offerings. The terms of the Dealer-Manager Agreement were approved by our board of directors, including its independent directors.
The following tables summarizes the total Selling Commissions and Dealer-Manager Fees paid to Gladstone Securities during the three and six months ended June 30, 2023 and 2022 (dollars in thousands):
For the Three Months Ended June 30,For the Six Months Ended June 30,
2023202220232022
Series C Preferred Stock$— $2,891 $— $6,069 
Series E Preferred Stock183 — 332 — 
Total Selling Commissions and Dealer-Manager Fees$183 $2,891 $332 $6,069 
Selling Commissions and Dealer-Manager Fees paid to Gladstone Securities are netted against the gross proceeds received from sales of the respective securities and are included within Additional paid-in capital on the accompanying Condensed Consolidated Balance Sheets.
Related-Party Fees
The following table summarizes certain related-party fees paid or accrued for and reflected in our accompanying condensed consolidated financial statements (dollars in thousands):
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 For the Three Months Ended June 30,For the Six Months Ended June 30,
 2023202220232022
Base management fee(1)(2)
$2,148 $2,043 $4,296 $4,079 
Incentive fee(1)(2)
— — — 1,131 
Total fees to our Adviser$2,148 $2,043 $4,296 $5,210 
Administration fee(1)(2)
$514 $463 $1,090 $926 
Selling Commissions and Dealer-Manager Fees(1)(3)
$183 $2,891 $332 $6,069 
Financing fees(1)(4)
— — — 94 
Total fees to Gladstone Securities$183 $2,891 $332 $6,163 
(1)Pursuant to the agreements with the respective related-party entities, as discussed above.
(2)Reflected as a line item on our accompanying Condensed Consolidated Statements of Operations (dollars in thousands):and Comprehensive Income.
(3)Included within Additional paid-in capital on the accompanying Condensed Consolidated Balance Sheets.
 For the Three Months Ended September 30, For the Nine Months Ended September 30,
 2017 2016 2017 2016
Management fee(1)(2)
$523
 $385
 $1,446
 $1,158
Incentive fee(1)(2)
261
 22
 688
 181
Credits from voluntary, irrevocable waiver granted by Adviser’s board of directors(2)(3)
(54) —
 (54) —
Net fees due to our Adviser$730
 $407
 $2,080
 $1,339
Administration fee(1)(2)
$211
 $184
 $656
 $575
Financing Fees to Gladstone Securities(4)
$28
 $—
 $30
 $—
(4)Included within Notes and bonds payable, net on the Condensed Consolidated Balance Sheets and amortized into Interest expense on the Condensed Consolidated Statements of Operations and Comprehensive Income.
(1)
Pursuant to the Advisory and Administration Agreements, respectively.
(2)
Reflected as a line item on our accompanying Condensed Consolidated Statements of Operations.
(3)
The credit received from our Advisor for the three and nine months ended September 30, 2017, was granted as a voluntary, irrevocable waiver to be applied against the incentive fee payable to the Advisor.
(4)
Included in Mortgage notes and bonds payable, net on the Condensed Consolidated Balance Sheets and amortized into Interest expense on the Condensed Consolidated Statements of Operations.
Related-Party Fees Due
Amounts due to related parties on our accompanying Condensed Consolidated Balance Sheets as of SeptemberJune 30, 2017,2023, and December 31, 2016,2022, were as follows (dollars in thousands):
June 30, 2023December 31, 2022
Base management fee$2,148 $2,141 
Incentive fee— 1,589 
Other, net(1)
63 80 
Total due to Adviser2,211 3,810 
Administration fee514 536 
Cumulative accrued but unpaid portion of prior Administration Fees(2)
366 — 
Total due to Administrator880 536 
Total due to Gladstone Securities(3)
4 24 
Total due to related parties(4)
$3,095 $4,370 
  September 30, 2017 December 31, 2016
Management fee due to Adviser $523
 $384
Incentive fee due to Adviser 261
 169
Credits to fees due to Adviser(1)
 (54) —
Other due to Adviser(2)
 43
 2
Total due to Adviser 773
 555
Administration fee due to Administrator 211
 202
Other due from Administrator(2)
 —
 (6)
Total due to Administrator 211
 196
Total due to related parties(3)
 $984
 $751
(1)Other amounts due to or from our Adviser primarily relate to miscellaneous general and administrative expenses either paid by our Adviser on our behalf or by us on our Adviser’s behalf.
(1)
The credit received from our Advisor for the three and nine months ended September 30, 2017, was granted as a voluntary, irrevocable waiver to be applied against the incentive fee payable to our Advisor.
(2)
Other fees due to or from related parties primarily relate to miscellaneous general and administrative expenses paid by our Adviser or Administrator on our behalf or by us on our Adviser's or Administrator's behalf.
(3)
(2)Represents the cumulative accrued but unpaid portion of prior Administration fees that are scheduled to be paid during the three months ending September 30 of each year, which is the quarter following our Administrator’s fiscal year end.
(3)Represents certain costs related to sales of preferred stock paid by Gladstone Securities on our behalf.
(4)Reflected as a line item on our accompanying Condensed Consolidated Balance Sheets.
NOTE 7. EQUITY
Amendment to Articles of Incorporation
On July 12, 2017, we filed an Articles of Amendment with the State Department of Assessments and Taxation for Maryland to increase the number of shares of capital stock that we have authority to issue from 20,000,000 shares to 100,000,000 shares, with the additional 80,000,000 shares of stock being initially classified as common stock, $0.001 par value per share.

Stockholders’ Equity
As of September 30, 2017, there were 98,000,000 shares of common stock, par value $0.001 per share, authorized, with 13,485,025 shares issued and outstanding. As of December 31, 2016, there were 18,000,000 shares of common stock, par value $0.001 per share, authorized, with 10,024,875 shares issued and outstanding.
Non-Controlling Interests in Operating Partnership
We consolidate our Operating Partnership, which is a majority-owned partnership.  As of September 30, 2017, and December 31, 2016, we owned approximately 91.7% and 87.4%, respectively, of the outstanding OP Units.
On or after 12 months after becoming a holder of OP Units, each limited partner, other than the Company, has the right, subject to the terms and conditions set forth in the partnership agreement of the Operating Partnership, to require the Operating Partnership to redeem all or a portion of such units in exchange for cash or, at the Company’s option, shares of our common stock on a one-for-one basis.  The cash redemption per OP Unit would be based on the market price of our common stock at the time of redemption.  A limited partner will not be entitled to exercise redemption rights if the delivery of common stock to the redeeming limited partner would breach restrictions on the ownership of common stock imposed under our charter and other limitations thereof.
On September 20, 2017, 221,875 OP Units were tendered for redemption, and on September 29, 2017, we issued 50,000 shares of common stock in exchange for 50,000 OP Units, and we satisfied the redemption of 171,875 OP Units with a cash payment of approximately $2.3 million (approximately $13.21 per OP Unit).
Regardless of the rights described above, the Operating Partnership will not have an obligation to issue cash to a unitholder upon a redemption request if the Company elects to redeem the OP Units for shares of its common stock.  When a non-Company unitholder redeems an OP Unit, non-controlling interest in the Operating Partnership is reduced, and stockholders’ equity is increased.
The Operating Partnership is required to make distributions on each OP Unit in the same amount as those paid on each share of the Company’s common stock, with the distributions on the OP Units held by the Company being utilized to make distributions to the Company’s common stockholders.
As of September 30, 2017, and December 31, 2016, there were 1,227,383 and 1,449,258 OP Units held by non-controlling limited partners outstanding, respectively, of which 993,431 and zero OP Units, respectively, were eligible to be tendered for redemption. Subsequent to September 30, 2017, 121,875 additional OP Units were tendered for redemption; see Note 10, "Subsequent Events," for further discussion on the redemption of these OP Units.

Distributions
The distributions to common stockholders declared by our Board of Directors and paid by us during the nine months ended September 30, 2017 and 2016 are reflected in the table below.
Fiscal Year Declaration Date Record Date Payment Date 
Distributions per
Common Share
2017 January 10, 2017 January 20, 2017 January 31, 2017 $0.04300
  January 10, 2017 February 16, 2017 February 28, 2017 0.04300
  January 10, 2017 March 22, 2017 March 31, 2017 0.04300
  April 11, 2017 April 21, 2017 April 28, 2017 0.04350
  April 11, 2017 May 19, 2017 May 31, 2017 0.04350
  April 11, 2017 June 21, 2017 June 30, 2017 0.04350
  July 11, 2017 July 21, 2017 July 31, 2017 0.04400
  July 11, 2017 August 21, 2017 August 31, 2017 0.04400
  July 11, 2017 September 20, 2017 September 29, 2017 0.04400
    Nine Months Ended September 30, 2017 $0.39150
         
2016 January 12, 2016 January 22, 2016 February 2, 2016 $0.04000
  January 12, 2016 February 18, 2016 February 29, 2016 0.04000
  January 12, 2016 March 21, 2016 March 31, 2016 0.04000
  April 12, 2016 April 22, 2016 May 2, 2016 0.04125
  April 12, 2016 May 19, 2016 May 31, 2016 0.04125
  April 12, 2016 June 17, 2016 June 30, 2016 0.04125
  July 12, 2016 July 22, 2016 August 2, 2016 0.04125
  July 12, 2016 August 22, 2016 August 31, 2016 0.04125
  July 12, 2016 September 21, 2016 September 30, 2016 0.04125
    Nine Months Ended September 30, 2016 $0.36750
The same amounts were paid as distributions on each OP Unit held by non-controlling limited partners of the Operating Partnership as of the above record dates.
Registration Statement
On March 30, 2017, we filed a universal registration statement on Form S-3 (File No. 333-217042) with the SEC (the "2017 Registration Statement") to replace our previous registration statement, which expired on April 1, 2017 (the "2014 Registration Statement"). The 2017 Registration Statement, which was declared effective by the SEC on April 12, 2017, permits us to issue up to an aggregate of $300.0 million in securities, consisting of common stock, preferred stock, warrants, debt securities, depository shares, subscription rights and units, including through separate, concurrent offerings of two or more of such securities. As of September 30, 2017, we have issued a total of 1,584,401 shares of common stock (excluding 50,000 shares of common stock issued in exchange for certain OP Units that were tendered for redemption) for gross proceeds of approximately $19.7 million under the 2017 Registration Statement.
In conjunction with the replacement of the 2014 Registration Statement, during the three months ended March 31, 2017, we wrote off approximately $46,000 of unallocated costs associated with the initial filing of the 2014 Registration Statement. These costs were written off to professional fees and stockholder-related expenses, both of which are included in General and administrative expenses on our accompanying Condensed Consolidated Statement of Operations.Balance Sheets.
2017 Equity Issuances
On March 8, 2017, we completed a public offering of 1,680,000 shares of our common stock at a public offering price of $11.35 per share. This issuance settled on March 13, 2017, and resulted in gross proceeds of approximately $19.1 million and net proceeds, after deducting underwriting discounts and offering expenses borne by us, of approximately $18.0 million. On March 17, 2017, the underwriters exercised a portion of their over-allotment option in connection with this offering, and, as a result, we issued an additional 145,749 shares. This issuance settled on March 22, 2017, and resulted in gross proceeds of approximately $1.7 million and net proceeds, after deducting underwriting discounts and offering expenses borne by us, of approximately $1.6 million. We used the proceeds received from this offering to repay existing indebtedness (which, in turn, was used to fund future farmland acquisitions) and for other general corporate purposes.

On September 8, 2017, we completed a public offering of 1,150,000 shares (including 150,000 shares issued as a result of the underwriters simultaneously exercising their over-allotment option) of our common stock at a public offering price of $12.25 per share. This issuance settled on September 12, 2017, and resulted in gross proceeds of approximately $14.1 million and net proceeds, after deducting underwriting discounts and offering expenses borne by us, of approximately $13.4 million. We used the proceeds received from this offering to repay existing indebtedness and for other general corporate purposes.
At-the-Market Program
On August 7, 2015, we entered into equity distribution agreements (commonly referred to as "at-the-market agreements" or our "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”). During both the three and nine months ended September 30, 2017, we issued and sold 434,401 shares of our common stock at an average sales price of $12.92 per share under the ATM Program for gross proceeds of approximately $5.6 million and net proceeds of approximately $5.5 million. Through September 30, 2017, we have issued and sold a total of 498,962 shares of our common stock at an average sales price of $12.57 per share for gross proceeds of approximately $6.3 million and net proceeds of approximately $6.2 million. See Note 10, "Subsequent Events," for shares of common stock issued and sold under the ATM Program subsequent to September 30, 2017.
On April 13, 2017, we amended each of the Sales Agreements to reference the new 2017 Registration Statement. All other material terms of the Sales Agreements remained unchanged.
NOTE 8.7. COMMITMENTS AND CONTINGENCIES
Operating Obligations
In connection with a lease amendment we executed on one of our Oregon farms in May 2017, we committed to providing up to $1.8 million of capital for anticipated improvements on the farm, including irrigation upgrades and the planting of new blueberry bushes, which improvements are expected to be completed by December 31, 2020. As stipulated in the lease amendment, we will begin earning additional rent on the cost of the improvements as the funds are disbursed by us at an initial annual rate of 6.5%, which rate is subject to annual escalations and market resets. As a result of this project, and assuming full deployment of the capital commitment amount, we expect to receive approximately $718,000 of additional rent throughout the term of the lease, which expires September 30, 2024. As of September 30, 2017, we have expended or accrued approximately $677,000 related to this project. In addition, as part of the project, certain blueberry bushes owned by us were removed to allow for the planting of new varieties of blueberry bushes. As a result, during the three months ended September 30, 2017, we recorded a loss of approximately $78,000 associated with the removal of these bushes, which amount represents the net cost basis of such bushes plus all removal costs. This loss is recorded as Loss on disposal of real estate asset on our Condensed Consolidated Statement of Operations for the three and nine months ended September 30, 2017.Litigation
In connection with the leaseordinary course of business, we executed upon our acquisition of our two North Carolina farmsmay be involved in June 2017, we committedlegal proceedings from time to providing up to $300,000 of capital over the first two years to support additional plantings and infrastructure on the farm, which improvements are expected to be completed by June 30, 2019. As stipulated in the lease, we will earn additional rent on the total cost of the improvements as disbursements are made by us at a rate commensurate with the annual yield on the farmland (as determined by each year's minimum cash rent per the lease). As a result of this project, and assuming full deployment of the capital commitment amount, we expect to receive approximately $157,000 of additional rent throughout the term of the lease, which expires December 31, 2026. As of September 30, 2017, we have expended or accrued approximately $103,000 related to this project.
In connection with a lease amendment we executed on one of our Florida properties in June 2017, we committed to providing up to $700,000 of capital to expand and upgrade the existing cooler on the property, which improvements are expected to be completed during the three months ending December 31, 2017. As stipulated in the lease amendment, we will begin earning additional rent on the cost of the improvements as the funds are disbursed by us at an initial annual rate of 8.5%, which rate is subject to annual escalations. As a result of this project, and assuming full deployment of the capital commitment amount, we expect to receive approximately $280,000 of additional rent throughout the term of the lease, which expires June 30, 2022. As of September 30, 2017, we have expended or accrued approximately $240,000 related to this project.
In connection with the follow-on lease we executed upon our acquisition of a 1,910-acre farm in Florida in August 2017 (which has a commencement date of February 24, 2018), we committed to providing up to $1.0 million of capital in the first year of the lease to support additional plantings and infrastructure on the farm, which improvements are expected to be completed during the three months ending March 31, 2019. As stipulated in the follow-on lease, we will earn additional rent on the total cost of the improvements as disbursements are made by us at a rate commensurate with the annual yield on the farmland (as determined by each year's minimum cash rent per the lease). As a result of this project, and assuming full deployment of the

capital commitment amount, we expect to receive approximately $305,000 of additional rent throughout the term of the lease, which expires February 23, 2024. We have not expended or accrued any costs related to this project, as the follow-on lease has not yet gone into effect.
In connection with the lease we executed upon our acquisition of a 361-acre farm in California in August 2017, we committed to providing up to $4.0 million of capital over the first two years to fund the development of additional vineyard acreage on the farm, which development is expected to be completed completed by August 30, 2019. As stipulated in the lease, we will earn additional rent on the total cost of the improvements as the funds are disbursed by us at an initial annual rate of 6.0%, which is subject to annual escalations. As a result of this project, and assuming full deployment of the capital commitment amount, we expect to receive approximately $2.3 million of additional rent throughout the term of the lease, which expires May 31, 2027. As of September 30, 2017, we have expended or accrued approximately $132,000 related to this project.
Litigation
time. We are not currently subject to any material known or threatened litigation.
NOTE 8. EQUITY
Registration Statement
On March 6, 2020, we filed a universal registration statement on Form S-3 (File No. 333-236943) with the SEC (the “2020 Registration Statement”). The 2020 Registration Statement, which was declared effective by the SEC on April 1, 2020, permitted us to issue up to an aggregate of $1.0 billion in securities, consisting of common stock, preferred stock, warrants, debt securities, depository shares, subscription rights, and units, including through separate, concurrent offerings of two or more of such securities. Under the 2020 Registration Statement, we issued a total of 10,254,072 shares of Series C Preferred Stock for gross proceeds of approximately $253.9 million, 2,415,000 shares of Series D Term Preferred Stock for gross proceeds of approximately $60.4 million, 77,841 shares of Series E Preferred Stock for gross proceeds of approximately $1.9 million, and
19

14,367,524 shares of common stock (including common stock issued to redeem OP Units) for gross proceeds of approximately $280.9 million.
On March 28, 2023, we filed a universal registration statement on Form S-3, as amended (File No. 333-270901), with the SEC (the “2023 Registration Statement”) to replace the 2020 Registration Statement. The 2023 Registration Statement, which was declared effective by the SEC on April 13, 2023, permits us to issue up to an aggregate of $1.5 billion in securities consisting of common stock, preferred stock, warrants, debt securities, depository shares, subscription rights, and units, including through separate, concurrent offerings of two or more securities. Through June 30, 2023, we have issued a total of 57,568 shares of Series E Preferred Stock for gross proceeds of approximately $1.4 million and 66,100 shares of common stock for gross proceeds of approximately $1.1 million under the 2023 Registration Statement. See Note 11, “Subsequent Events,” for equity issuances completed subsequent to June 30, 2023.
Equity Issuances
Series C Preferred Stock
On April 3, 2020, we filed a prospectus supplement with the SEC for a continuous public offering (the “Series C Offering”) of up to 26,000,000 shares of our newly-designated 6.00% Series C Cumulative Redeemable Preferred Stock, par value $0.001 per share (the “Series C Preferred Stock”). The Series C Offering permitted us to sell up to 20,000,000 shares (the “Primary Series C Offering”) of our Series C Preferred Stock on a “reasonable best efforts” basis through Gladstone Securities at an offering price of $25.00 per share and up to 6,000,000 shares of our Series C Preferred Stock pursuant to the DRIP at a price of $22.75 per share. On August 24, 2022, we amended the Series C Offering, to (i) reduce the amount of shares of the Series C Preferred Stock offered through the Primary Series C Offering to 10,200,000, (ii) reduce the amount of shares of the Series C Preferred Stock offered pursuant to the DRIP to 200,000; and (iii) reduce the duration of the period during which shares of the Series C Preferred Stock may be offered for sale to the earlier of (a) December 31, 2022 (unless earlier terminated or extended by our Board of Directors) or (b) the date on which all 10,200,000 shares of the Series C Preferred Stock offered in the Primary Series C Offering were sold.
The Primary Series C Offering terminated on December 31, 2022, with substantially all of the allotted 10,200,000 shares being sold. In addition, the Series C Preferred Stock DRIP was terminated effective March 22, 2023. Exclusive of redemptions, the Primary Series C Offering resulted in total gross proceeds of approximately $252.6 million and net proceeds, after deducting Series C Selling Commissions, Series C Dealer-Manager Fees, and offering expenses payable by us, of approximately $230.5 million. See Note 6, “Related-Party Transactions—Gladstone Securities—Dealer-Manager Agreements,” for a discussion of the commissions and fees paid to Gladstone Securities in connection with the Series C Offering.
The following table provides information on sales of our Series C Preferred Stock during the three and six months ended June 30, 2022 (dollars in thousands, except per-share amounts):
Three Months Ended June 30, 2022Six Months Ended June 30, 2022
Number of shares sold(1)
1,479,544 3,028,475 
Weighted-average offering price per share$24.70 $24.75 
Gross proceeds$36,551 $74,967 
Net proceeds(2)
$33,660 $68,898 
(1)Excludes shares issued pursuant to the DRIP. We issued approximately 0 and 14,067 shares of the Series C Preferred Stock pursuant to the DRIP during the three and six months ended June 30, 2023, respectively, and approximately 7,488 and 12,727 shares of the Series C Preferred Stock pursuant to the DRIP during the three and six months ended June 30, 2022, respectively.
(2)Net of Selling Commissions, Dealer-Manager Fees, and underwriting discounts.
In addition, during the three and six months ended June 30, 2023, 39,093 and 48,913 shares, respectively, of Series C Preferred Stock were tendered for optional redemption, which we satisfied with an aggregate cash payment of approximately $951,000 and $1.2 million, respectively. During the three and six months ended June 30, 2022, 2,160 and 4,640 shares, respectively, of Series C Preferred Stock were tendered for optional redemption, which we satisfied with an aggregate cash payment of approximately $52,000 and $111,000, respectively.
During the three months ended June 30, 2023, we listed the Series C Preferred Stock on Nasdaq under the ticker symbol “LANDP.” Trading of the Series C Preferred Stock on Nasdaq commenced on June 8, 2023.
Series E Preferred Stock
20

On November 9, 2022, we filed a prospectus supplement with the SEC for a continuous public offering (the “Series E Offering”) of up to 8,000,000 shares of our newly-designated 5.00% Series E Cumulative Redeemable Preferred Stock, par value $0.001 per share (the “Series E Preferred Stock”), on a “reasonable best efforts” basis through Gladstone Securities at an offering price of $25.00 per share. See Note 6, “Related-Party Transactions—Gladstone Securities—Dealer-Manager Agreements,” for a discussion of the commissions and fees to be paid to Gladstone Securities in connection with the Series E Offering.
The following table provides information on sales of our Series E Preferred Stock during the three and six months ended June 30, 2023 (dollars in thousands, except per-share amounts):
Three Months Ended June 30, 2023Six Months Ended June 30, 2023
Number of shares sold75,209 135,409 
Weighted-average offering price per share$24.93 $24.95 
Gross proceeds$1,875 $3,378 
Net proceeds(1)
$1,692 $3,047 
(1)Net of Selling Commissions, Dealer-Manager Fees, and underwriting discounts.
Refer to Note 11, “Subsequent Events—Financing Activity—Equity Activity,” for sales of the Series E Preferred Stock completed subsequent to June 30, 2023.
The Series E Offering will terminate on the date (the “Series E Termination Date”) that is the earlier of (i) December 31, 2025 (unless terminated or extended by our Board of Directors) and (ii) the date on which all 8,000,000 shares of Series E Preferred Stock offered in the Series E Offering are sold. There is currently no public market for shares of Series E Preferred Stock. We intend to apply to list the Series E Preferred Stock on Nasdaq or another national securities exchange within one calendar year of the Series E Termination Date; however, there can be no assurance that a listing will be achieved in such timeframe, or at all.
Common Stock
At-the-Market Program
On May 12, 2020, we entered into equity distribution agreements (commonly referred to as “at-the-market agreements”) with Virtu Americas LLC and Ladenburg & Co. Inc. (each a “Sales Agent”), that, as subsequently amended, permitted us to issue and sell, from time to time and through the Sales Agents, shares of our common stock having an aggregate offering price of up to $260.0 million (the “Prior ATM Program”). On April 13, 2023, we entered into separate amended and restated equity distribution agreements with the Sales Agents to allow us to sell shares of our common stock having an aggregate offering price of up to $500.0 million (the “New ATM Program,” and collectively with the Prior ATM Program, the “ATM Program”). The following table provides information on shares of common stock sold by the Sales Agents under the ATM Program during the three and six months ended June 30, 2023 and 2022 (dollars in thousands, except per-share amounts):
Three Months Ended June 30,Six Months Ended June 30,
2023202220232022
Number of shares sold66,100 — 729,685 310,055 
Weighted-average offering price per share$17.31 $— $19.50 $33.64 
Gross proceeds$1,144 $— $14,228 $10,431 
Net proceeds(1)
$1,133 $— $14,086 $10,327 
(1)Net of underwriting commissions.
Refer to Note 11, “Subsequent Events—Financing Activity—Equity Activity,” for sales of common stock under the ATM Program completed subsequent to June 30, 2023.
Non-Controlling Interests in Operating Partnership
We consolidate our Operating Partnership, which is a majority-owned partnership.  As of June 30, 2023, and December 31, 2022, we owned 100.0% of the outstanding OP Units.
On or after 12 months after becoming a holder of OP Units, each limited partner, other than the Company, has the right, subject to the terms and conditions set forth in the partnership agreement of the Operating Partnership, to require the Operating Partnership to redeem all or a portion of such units in exchange for cash or, at the Company’s option, shares of our common stock on a one-for-one basis. The cash redemption per OP Unit would be based on the market price of our common stock at the time of redemption. A limited partner will not be entitled to exercise redemption rights if the delivery of common stock to the
21

redeeming limited partner would breach restrictions on the ownership of common stock imposed under our charter and other limitations thereof.
Regardless of the rights described above, the Operating Partnership will not have an obligation to issue cash to a unitholder upon a redemption request if the Company elects to redeem the OP Units for shares of its common stock. When a non-controlling unitholder redeems OP Units and the Company elects to satisfy that redemption through the issuance of common stock, non-controlling interest in the Operating Partnership is reduced, and stockholders’ equity is increased.
The Operating Partnership is required to make distributions on each OP Unit in the same amount as those paid on each share of the Company’s common stock, with the distributions on the OP Units held by the Company being utilized to make distributions to the Company’s common stockholders.
Distributions
The per-share distributions to preferred and common stockholders declared by our Board of Directors during the three and six months ended June 30, 2023 and 2022 are reflected in the table below.
Three Months Ended June 30,Six Months Ended June 30,
Issuance2023202220232022
Series B Preferred Stock$0.375 $0.375 $0.750 $0.750 
Series C Preferred Stock0.375 0.375 0.750 0.750 
Series D Term Preferred Stock(1)
0.312501 0.312501 0.625002 0.625002 
Series E Term Preferred Stock0.312501 — 0.625002 — 
Common Stock(2)
0.1380 0.1362 0.2757 0.2721 
(1)Dividends are treated similar to interest expense on the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income.
(2)The same amounts were paid as distributions on each OP Unit held by non-controlling OP Unitholders.
NOTE 9. LEASE REVENUES
The following table sets forth the components of our lease revenue for the three and six months ended June 30, 2023 and 2022 (dollars in thousands, except for footnotes):
Three Months Ended June 30,Six Months Ended June 30,
2023202220232022
Fixed lease payments(1)
$21,118 $20,273 $42,078 $40,210 
Variable lease payments(2)
92 20 334 26 
Lease revenue, net(3)
$21,210 $20,293 $42,412 $40,236 
(1)Fixed lease payments include contractual rents under lease agreements with tenants recognized on a straight-line basis over the respective lease terms and includes the amortization of above-market lease values and lease incentives and the accretion of below-market lease values and other deferred revenue.
(2)Variable lease payments primarily consist of participation rents, which are generally based on a percentage of the gross crop revenues earned on the farm, and reimbursements of certain property operating expenses by tenants. Participation rents are generally recognized when all contingencies have been resolved and when actual results become known or estimable, enabling us to estimate and/or measure our share of such gross revenues. During the three and six months ended June 30, 2023, we recorded participation rents of approximately $0 and $195,000, respectively, and reimbursements of certain property operating expenses by tenants of approximately $57,000 and $93,000, respectively. During the three and six months ended June 30, 2022, we recorded participation rents of approximately $20,000 during each period and reimbursements of certain property operating expenses by tenants of approximately $0 and $6,000, respectively. In addition, during the three and six months ended June 30, 2023, we recorded late fees of approximately $35,000 and $46,000, respectively.
(3)Reflected as a line item on our accompanying Condensed Consolidated Statements of Operations and Comprehensive Income.
NOTE 9.10. EARNINGS PER SHARE OF COMMON STOCK
The following table sets forth the computation of basic and diluted earnings per common share for the three and ninesix months ended SeptemberJune 30, 20172023 and 2016,2022, computed using the weighted average number of common shares outstanding during the respective periods. Earnings figures are presented net of non-controlling interests in the earnings per share calculations. The non-controlling limited partners’ outstanding OP Units (which may be redeemed for shares of common stock) have been excluded from the diluted earnings per share calculations,per-share calculation, as there would be no effect on the amounts since the non-controlling limited partners’OP Unitholders’ share of incomeearnings would also be added back to net income. Net income figures are presented net of non-controlling interests in the earnings per share calculations.or loss.
22

  For the Three Months Ended September 30, For the Nine Months Ended September 30,
  2017 2016 2017 2016
  (Dollars in thousands, except per-share amounts)
Net (loss) income attributable to the Company $(221) $32
 $158
 $374
Weighted average number of common shares outstanding – basic and diluted 12,271,925
 10,018,331
 11,512,968
 10,001,466
(Loss) earnings per common share – basic and diluted $(0.02) $0.00
 $0.01
 $0.04
 Three Months Ended June 30,Six Months Ended June 30,
(Dollars in thousands, except per-share amounts):2023202220232022
Net income (loss) attributable to common stockholders$1,727 $(3,873)$(2,593)$(6,610)
Weighted average shares of common stock outstanding – basic and diluted35,722,836 34,520,068 35,635,601 34,403,184 
Income (loss) per common share – basic and diluted$0.05 $(0.11)$(0.07)$(0.19)
The weighted-average number of OP Units held by non-controlling limited partnersOP Unitholders was 1,444,4350 for each of the three and 1,447,633six months ended June 30, 2023, and 45,006 and 124,451 for the three and ninesix months ended SeptemberJune 30, 2017, respectively, and 854,116 and 613,446 for the three and nine months ended September 30, 2016,2022, respectively.
NOTE 10.11. SUBSEQUENT EVENTS
Acquisition Activity
On October 2, 2017, we added onto one of our existing farms by acquiring an adjacent, 1,280-acre farm in Baca County, Colorado ("JJ Road"), for $900,000. At closing, we entered into a sale-leaseback agreement with the seller for a 4-year, triple-net lease that includes one, 5-year extension option and provides for minimum annualized, straight-line rents of approximately $52,000. We will account for this acquisition as an asset acquisition in accordance with ASC 360.
Financing Activity
On October 13, 2017, in connection with the acquisition of JJ Road,Debt Activity—Loan Maturities
Subsequent to June 30, 2023, we closed onrepaid a term loan from Rabo AgriFinance, LLC, for $540,000. The loan is scheduled to mature on October 1, 2022, and will bear$3.2 millionmaturing bond that bore interest at a fixedan annual rate of 4.59% per annum throughout its term.
Related-Party Activity
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 one of our farms 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, in connection with 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.
As a result of this transaction, the amount of rent and interest our TRS pays to us (as the parent-landlord) 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 would be 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, which we will account for in accordance with the provisions of ASC 740, "Income Taxes." At this time, we are unable to estimate the amount of taxable income, if any, that will be generated by our TRS.2.13%.
Equity Activity
RedemptionThe following table provides information on equity sales that have occurred subsequent to June 30, 2023 (dollars in thousands, except per-share amounts):
Type of IssuanceNumber of
Shares Sold		Weighted Average Offering
Price Per Share		Gross Proceeds
Net Proceeds(1)
Series E Preferred Stock41,600$25.00 $1,040 $936 
Common Stock – ATM Program58,36017.34 1,012 1,002 
(1)Net of OP Units
On October 6, 2017, 121,875 OP Units were tendered for redemption,Selling Commissions and on October 13, 2017, we issued 121,875 shares of common stock in exchange for 121,875 OP Units.
ATM Program
Subsequent to September 30, 2017, through the date of this filing, we sold 31,038 shares of our common stock at an average sales price of $13.39 per share under the ATM Program for gross proceeds of approximately $416,000Dealer-Manager Fees or underwriting discounts and net proceeds of approximately $409,000.commissions (in each case, as applicable).
Distributions
On October 10, 2017,July 11, 2023, our Board of Directors authorized and we declared the following monthly cash distributions to common stockholders and holders of our Term Preferred Stock:preferred and common stock:
23

Record Date Payment Date 
Distribution per
Common Share
 
Dividend per share of
Term Preferred Stock
October 20, 2017 October 31, 2017 $0.0441
 $0.1328125
November 20, 2017 November 30, 2017 0.0441
 0.1328125
December 19, 2017 December 29, 2017 0.0441
 0.1328125
Total:   $0.1323
 $0.3984375
IssuanceRecord DatePayment DateDistribution per Share
Series B Preferred Stock:July 21, 2023July 31, 2023$0.125 
August 23, 2023August 31, 20230.125 
September 21, 2023September 29, 20230.125 
Total Series B Preferred Stock Distributions:$0.375
Series C Preferred Stock:July 21, 2023July 31, 2023$0.125 
August 23, 2023August 31, 20230.125 
September 21, 2023September 29, 20230.125 
Total Series C Preferred Stock Distributions:$0.375
Series D Term Preferred Stock:July 21, 2023July 31, 2023$0.104167 
August 23, 2023August 31, 20230.104167 
September 21, 2023September 29, 20230.104167 
Total Series D Term Preferred Stock Distributions:$0.312501
Series E Preferred Stock:July 27, 2023August 4, 2023$0.104167 
August 28, 2023September 6, 20230.104167 
September 27, 2023October 5, 20230.104167 
Total Series E Preferred Stock Distributions:$0.312501
Common Stock(1):
July 21, 2023July 31, 2023$0.0462 
August 23, 2023August 31, 20230.0462 
September 21, 2023September 29, 20230.0462 
Total Common Stock Distributions$0.1386
(1)The same amounts paid to common stockholders will be paid as distributions on each OP Unit held by non-controlling limited partners of the Operating PartnershipOP Unitholders as of the above record dates.


24

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
All statements contained herein, other than historical facts, may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). These statements may relate to, among other things, future events or our future performance or financial condition. In some cases, you can identify forward-looking statements by terminology such as “may,” “might,” “believe,” “will,” “provided,” “anticipate,” “future,” “could,” “growth,” “plan,” “intend,” “expect,” “should,” “would,” “if,” “seek,” “possible,” “potential,” “likely”“likely,” or the negative of such terms or comparable terminology. These forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our business, financial condition, liquidity, results of operations, funds from operations or prospects to be materially different from any future business, financial condition, liquidity, results of operations, funds from operations or prospects expressed or implied by such forward-looking statements. For further information about these and other factors that could affect our future results, please see the captions titled "Forward-Looking Statements"“Forward-Looking Statements” and “Risk Factors” in this report and our Annual Report on Form 10-K for the year ended December 31, 20162022 (the “Form 10-K”). We caution readers not to place undue reliance on any such forward-looking statements, which are made pursuant to the Private Securities Litigation Reform Act of 1995 and, as such, speak only as of the date made. We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, after the date of this Quarterly Report on Form 10-Q (the “Quarterly Report”), except as required by law.
All references to “we,” “our,” “us” and the “Company” in this Quarterly Report mean Gladstone Land Corporation and its consolidated subsidiaries, except where it is made clear that the term refers only to Gladstone Land Corporation.
OVERVIEW
General
We are an externally-managed, agricultural real estate investment trust (“REIT”) that is engaged primarily in the business of owning and leasing farmland. With the exception of one farm in Ventura County, California, which is currently leasedself-operated (on a temporary basis) tobasis and via a wholly-owned subsidiary of ours,management agreement with an unrelated third-party), we are not a grower of crops, nor do we typically farm the properties we own. We currently own 73169 farms comprised of 63,074115,593 acres located across nine15 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, buildings utilized for the storage and assembly of boxes for shipping produce ("box barns"), packinghouses, processing facilities, and various storage facilities.
We conduct substantially all of our investment activities through, and all of our properties are held, directly or indirectly, by, Gladstone Land Limited Partnership (the “Operating Partnership”). Gladstone Land Corporation controls the sole general partner of the Operating Partnership and currently owns, directly or indirectly, approximately 92.5%100.0% of the units of limited partnership interest in the Operating Partnership (“OP Units”). In addition, we have elected for Gladstone Land Advisers, Inc. (“Land Advisers”), a wholly-owned subsidiary of ours, to be taxedtreated as a taxable REIT subsidiary ("TRS"(“TRS”).
Gladstone Management Corporation (our “Adviser”) manages our real estate portfolio pursuant to an advisory agreement, and Gladstone Administration, LLC (our “Administrator”), provides administrative services to us pursuant to an administration agreement.  Our Adviser and our Administrator collectively employ all of our personnel and directly pay directly their salaries, benefits, and general expenses.
Leases
General
Our farms are currently leased to 49 different, third-party tenants that are either independent or corporate farming operations,and, as of October 17, 2017, one farm is leased to our TRS.We primarily lease our farms on a triple-net basis, an arrangement under which 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. Generally, our leases will have original terms ranging from 3 to 10 years for farms growing row crops and 5 to 15 years for farms growing permanent crops and will contain built-in rental rate increases. Currently, our 73 farms are leased under agricultural leases with original terms ranging from 1 to 15 years, with 47 farms leased on a pure triple-net basis, 24 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). Additionally, 12 of our farms are leased under agreements that include a variable rent component based on the success of the farms' harvests each year.

Lease Expirations
Farm leases are often short-term in nature, so in any given year, we may have multiple leases up for renewal or extension. The following table summarizes the lease expirations by year for the properties owned as of September 30, 2017, and with leases currently in place (dollars in thousands):
Year Number of Expiring Leases Expiring Leased Acreage % of Total Acreage Rental Revenue for the Nine Months Ended September 30, 2017 % of Total Revenue
2017 1
(1) 
— —% $24
 0.1%
2018 5  4,839 7.8% 665
 3.6%
2019 4  157 0.3% 113
 0.6%
2020 13  28,666 46.4% 6,178
 33.8%
2021 5  6,954 11.3% 1,455
 8.0%
2022 3  269 0.4% 451
 2.5%
Thereafter 25  20,909 33.8% 9,416
 51.4%
Totals 56  61,794 100.0% $18,302
 100.0%
(1)
Represents one oil and gas lease which continues on a year-to-year basis.
Recent Developments
Investment, Leasing and Other Portfolio Activity
Property Acquisitions
Since July 1, 2017, through the date of this filing, we have acquired eight farms, which are summarized in the table below (dollars in thousands, except for footnotes):
Property
Name
 
Property
Location
 
Acquisition
Date
 
Total
Acreage
 
No. of
Farms
 
Primary
Crop(s)
 
Lease
Term
 
Renewal
Options
 
Total
Purchase
Price
 
Acquisition
Costs(1)
 
Annualized
Straight-line
Rent(2)
 
Phelps Avenue Fresno, CA 7/17/2017 847 4 Pistachios and Almonds 10.3 years 1 (5 years) $13,603
 $43
 $681
(3) 
Parrot Avenue(4)
 Okeechobee, FL 8/9/2017 1,910 1 Misc. Vegetables 0.5 years None 9,700
 64
 488
 
Cat Canyon Road(5)
 Santa Barbara, CA 8/30/2017 361 1 Wine Grapes 9.8 years 2 (5 years) 5,375
 67
 322
 
Oasis Road Walla Walla, WA 9/8/2017 746 1 Apples, Cherries, and Wine Grapes 6.3 years None 9,500
 45
 480
(3) 
JJ Road Baca, CO 10/2/2017 1,280 1 Grass Hay and Alfalfa 4.3 years 1 (5 years) 900
 26
 52
 
      5,144 8       $39,078
 $245
 $2,023
 
(1)
Acquisition accounted for as an asset acquisition under ASC 360. As such, all acquisition-related costs were capitalized and allocated among the identifiable assets acquired. The figures above represent only the costs paid or accrued for as of the date of this filing.
(2)
Annualized straight-line amount is based on the minimum cash rental payments guaranteed under the lease, as required under GAAP.
(3)
Leases also provide for a variable rent component based on the gross crop revenues earned on the property. The figures above represent only the minimum cash rents guaranteed under the lease.
(4)
In connection with the acquisition of this property, we executed a 6-year, follow-on lease with a new tenant that begins upon the expiration of the 7-month lease assumed at acquisition. The follow-on lease includes two, 6-year extension options and provides for minimum annualized straight-line rents of approximately $542,000. In addition, in connection with the execution of the follow-on lease, we committed to providing up to $1.0 million of capital for certain irrigation and property improvements. As stipulated in the follow-on lease, we will earn additional rent income on the total cost of the improvements as disbursements are made by us at a rate commensurate with the annual yield on the farmland (as determined by each year's minimum cash rent per the follow-on lease).
(5)
In connection with the acquisition of this property, we committed up to $4.0 million of capital to fund the development of additional vineyard acreage on the property. As stipulated in the lease agreement, we will earn additional rental income on the total cost of the project as the capital is disbursed by us at rates specified in the lease.

Existing Properties
Lease Renewals
During the three months ended September 30, 2017, we renewed the final two agricultural leases that were originally scheduled to expire in 2017. Each of these leases (which were on two of our farms in California) were renewed for an additional three years for total annualized rents of approximately $1.1 million, representing a decrease of approximately 12.5% (or approximately $163,000) from that of 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.
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. We completed the project during the three months ended September 30, 2017, 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.
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 one of our farms 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, in connection with 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.
As a result of this transaction, the amount of rent and interest our TRS pays to us (as the parent-landlord) 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, which we will account for in accordance with the provisions of ASC 740, "Income Taxes." We are unable to estimate the amount of taxable income, if any, that will be generated by our TRS.
Financing Activity
Debt Activity
Since July 1, 2017, through the date of this filing, we have entered into the following loan agreements (dollars in thousands):
Lender(1)
 
Dates of
Issuance
 
Principal
Amount
 
Maturity
Date
 
Principal
Amortization
 
Stated Interest Rate Terms(2)
Farm Credit CFL(3),(4)
 7/13/2017 $5,472
 8/1/2022 28.4 years 4.47%, fixed throughout term
Farm Credit West(5)
 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)
Farmer Mac 8/30/2017 3,225
 8/30/2024 None 4.05%, fixed throughout term
NW Farm Credit 9/8/2017 5,460
 9/1/2024 39.6 years 4.41%, fixed throughout term
MetLife(6)
 9/19/2017 27,450
 1/5/2029 28.6 years 3.85%, fixed through 1/4/2027
Rabo AgriFinance 10/13/2017 540
 10/1/2022 25.0 years 4.59%, fixed throughout term
    $56,129
      
(1)
For further discussion on borrowings from each of these lenders, refer to Note 4, "Borrowings," in the notes to our accompanying condensed consolidated financial statements.
(2)
Where applicable, rate is before interest patronage, or refunded interest.
(3)
In April 2017, we received interest patronage from Farm Credit CFL representing a 15.8% refund of 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.
(4)
During the three months ended September 30, 2017, we amended four existing loan agreements with Farm Credit CFL to increase the 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.

(5)
In February 2017, we received interest patronage from Farm Credit West representing a 21.3% refund 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 interest patronage to be received, if any, related to interest accrued during 2017 on our Farm Credit West borrowings.
(6)
This balance was drawn on the MetLife Term Notes, with the proceeds from the disbursement being used to repay a portion of the balance outstanding under the MetLife Lines of Credit (refer to Note 4, "Borrowings," in the notes to our accompanying condensed consolidated financial statements for definitions of each of these terms). The interest rate on the new disbursement under the MetLife Term Notes was blended with the interest rate in place for the previously-existing balance drawn, which resulted in a new, overall blended interest rate on the MetLife Term Notes of 3.30% per annum, which rate is fixed through January 4, 2027.
Proceeds from the above borrowings were used to fund new farm acquisitions, repay existing indebtedness, and for other general corporate purposes.
Equity Activity
September 2017 Offering
In September 2017, we completed an overnight offering of our common stock at public offering price of $12.25 per share (the “September 2017 Offering”). Including the underwriters' simultaneous exercise of their over-allotment option, we issued a total of 1,150,000 shares in connection with the September 2017 Offering, resulting in gross proceeds of approximately $14.1 million and net proceeds, after deducting underwriting discounts and offering expenses borne by us, of approximately $13.4 million. We used the proceeds received from this offering to repay existing indebtedness (which, in turn, was used to fund future farmland acquisitions) and for other general corporate purposes.
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 Sales Agreements to reference 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 July 1, 2017, through the date of this filing, we sold 465,439 shares of our common stock under the ATM Program at an average sales price of $12.95 per share for gross proceeds of approximately $6.0 million and net proceeds of approximately $5.9 million. To date, we have sold 530,000 shares of our common stock at an average sales price of $12.62 per share under the ATM Program for gross proceeds of approximately $6.7 million and net proceeds of approximately $6.6 million.
OP Unit Redemptions
Since July 1, 2017, through the date of this filing, a total of 343,750 OP Units were tendered for redemption. As a result, the Company issued 171,875 shares of common stock (in exchange for 171,875 of the tendered OP Units), and we satisfied the redemption of the remaining 171,875 of the tendered OP Units with a cash payment of approximately $2.3 million (approximately $13.21 per OP Unit). Currently, there are 1,105,508 OP Units held by non-controlling limited partners outstanding, of which 871,556 are eligible to be tendered for redemption.

Portfolio DiversityDiversification
Since our initial public offering in January 2013 (the “IPO”), we have expanded our portfolio from 12 farms leased to 7 different, unrelated tenants to a current portfolio of 73169 farms leased to 4992 different, unrelated third-party tenants (plus one related-party tenant). Whilewho grow over 60 different types of crops on our farms. Our investment focus remainsis in farmland suitable for growing either fresh produce annual row crops we have also begun to diversify our portfolio into farmland suitable for other crop types, including(e.g., certain berries and vegetables) or certain permanent crops consisting primarily of(e.g., almonds, blueberries, pistachios, and blueberries, andwine grapes), with an ancillary focus on farmland growing certain commodity crops consisting primarily of corn(e.g., beans and beans. The following table summarizes the different sources of revenues for our properties with leases in place as of and for the nine months ended September 30, 2017 and 2016 (dollars in thousands):corn).
  As of and For the As of and For the Annualized GAAP
Rental Revenue as of
  Nine Months Ended September 30, 2017 Nine Months Ended September 30, 2016 
September 30, 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)
 14,935 30.1% $10,926
 59.7% 9,768 34.9% $8,303
 67.0% $14,988
 55.3%
Annual row crops – commodity crops(3)
 28,851 58.1% 2,645
 14.4% 14,132 50.6% 1,206
 9.8% 4,436
 16.3%
Subtotal – Total annual row crops 43,786 88.2% 13,571
 74.1% 23,900 85.5% 9,509
 76.8% 19,424
 71.6%
Permanent crops(4)
 5,881 11.8% 3,272
 17.9% 4,058 14.5% 1,587
 12.8% 5,683
 21.0%
Subtotal – Total crops 49,667 100.0% 16,843
 92.0% 27,958 100.0% 11,096
 89.6% 25,107
 92.6%
Facilities and other(5)
 — — 1,459
 8.0% — — 1,292
 10.4% 2,005
 7.4%
Total 49,667 100.0% $18,302
 100.0% 27,958 100.0% $12,388
 100.0% $27,112
 100.0%
(1)
Annualized GAAP rental revenue is based on the minimum rental payments required per the leases in place as of September 30, 2017, and includes the amortization of any above-market lease values or accretion of any below-market lease values, deferred revenue and tenant improvements.
(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 coolers, 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.
OurThe acquisition of 61additional farms since our IPO has also allowed us to further diversify our portfolio geographically. The following table summarizes the different geographic locations (by state) of our propertiesfarms owned as of and during the six months ended June 30, 2023 and 2022 (dollars in thousands):
25

 As of and For the Six Months Ended June 30, 2023As of and For the Six Months Ended June 30, 2022
StateNumber
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)
6334,84430.1%$27,126 64.0%6334,40130.2%$26,775 66.5%
Florida2622,46819.4%7,522 17.7%2622,60619.8%7,189 17.9%
Washington62,5292.2%2,325 5.5%31,3841.2%1,199 3.0%
Colorado1232,77328.4%1,243 2.9%1232,77328.8%1,082 2.7%
Arizona66,3205.5%1,129 2.7%66,2805.5%1,016 2.5%
Oregon68980.8%1,067 2.5%57260.6%734 1.8%
Nebraska97,7826.7%693 1.6%97,7826.8%596 1.5%
Michigan231,8921.6%487 1.1%231,8921.7%783 1.9%
Maryland69870.8%230 0.5%69870.9%222 0.5%
Texas13,6673.2%225 0.5%13,6673.2%225 0.6%
South Carolina35970.5%122 0.3%35970.5%122 0.3%
Georgia22300.2%112 0.3%22300.2%112 0.3%
New Jersey31160.1%64 0.2%31160.1%64 0.2%
Delaware11800.2%37 0.1%11800.2%36 0.1%
North Carolina23100.3%30 0.1%23100.3%81 0.2%
TOTALS169115,593100.0%$42,412 100.0%165113,931100.0%$40,236 100.0%
(1)According to the California Chapter of the American Society of Farm Managers and Rural Appraisers, there are eight distinct growing regions within California; our farms are spread across six of these growing regions.
Leases
General
Most of our leases are on a triple-net basis, an arrangement under which, in addition to rent, the tenant is required to pay the related taxes, insurance costs, maintenance, and other operating costs. Our leases generally have original terms ranging from 3 to 10 years for farms growing row crops and 7 to 15 years for farms growing permanent crops (in each case, often with options to extend the lease further). Rent is generally payable to us in advance on either an annual, semi-annual, or quarterly basis, with such rent typically subject to periodic escalation clauses provided for within the lease. Currently, 106 of our farms are leased on a pure, triple-net basis, 59 farms are leased on a partial-net basis (with us, as landlord, responsible for all or a portion of the related property taxes), 3 farms are leased on a single-net basis (with us, as landlord, responsible for the related property taxes, as well as certain maintenance, repairs, or insurance costs), and 1 farm is self-operated. Additionally, 27 of our farms are leased under agreements that include a variable rent component, called “participation rents,” that are based on the gross revenues earned on the respective farms.
Lease Expirations
Agricultural leases are often shorter term in nature (relative to leases of other types of real estate assets), so in any given year, we may have multiple leases up for extension or renewal. The following table summarizes the lease expirations by year for the farms owned and with leases in place as of and for the nine months ended SeptemberJune 30, 2017 and 20162023 (dollars in thousands):
Year
Number of
Expiring
Leases(1)
 Expiring
Leased
Acreage		% of Total
Acreage
Lease Revenues for the
Six Months Ended June 30, 2023
% of Total
Lease
Revenues
2023(2)106,5145.6%$3,103 7.3%
2024(3)79,9978.7%3,220 7.6%
20251020,63117.9%3,724 8.8%
20261011,67310.1%2,735 6.5%
202756,9476.0%4,546 10.7%
Thereafter5959,43351.4%24,787 58.4%
Other(4)
113980.3%297 0.7%
Totals112115,593100.0%$42,412 100.0%
(1)Certain lease agreements encompass multiple farms.
(2)Includes two leases with tenant termination options that we do not currently expect to be exercised.
(3)Includes one lease that was extended subsequent to June 30, 2023 (see “Recent Developments—Portfolio Activity—Existing Properties—Leasing Activity” below for a summary of this and certain other recent leasing activities).
26

  As of and For the As of and For the 
Annualized GAAP
Rental Revenue as of
  Nine Months Ended September 30, 2017 Nine Months Ended September 30, 2016 
September 30, 2017(1)
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
California(2)
 7,921 12.8% $8,749
 47.8% 6,516 19.3% $6,986
 56.4% $12,356
 45.6%
Florida 11,225 18.2% 4,839
 26.5% 5,567 16.5% 2,408
 19.4% 7,000
 25.8%
Colorado 30,170 48.8% 2,018
 11.0% 13,575 40.1% 951
 7.7% 2,691
 9.9%
Arizona 6,280 10.2% 1,114
 6.1% 3,000 8.9% 544
 4.4% 2,414
 8.9%
Oregon 2,313 3.7% 887
 4.8% 2,313 6.8% 877
 7.1% 1,202
 4.4%
Nebraska 2,559 4.2% 435
 2.4% 2,559 7.6% 435
 3.5% 580
 2.2%
Michigan 270 0.4% 187
 1.0% 270 0.8% 187
 1.5% 250
 0.9%
North Carolina 310 0.5% 42
 0.2% — —% —
 —% 127
 0.5%
Washington 746 1.2% 31
 0.2% — —% —
 —% 492
 1.8%
  61,794 100.0% $18,302
 100.0% 33,800 100.0% $12,388
 100.0% $27,112
 100.0%
(4)Primarily consists of ancillary leases (e.g., renewable energy leases; oil, gas, and mineral leases; telecommunications leases; etc.) with varying expirations on certain of our farms. Also includes one farm that was self-operated as of June 30, 2023, for which we recorded approximately $77,000 of lease revenues attributable to the former tenant during the three months ended March 31, 2023.
(1)
Annualized GAAP rental revenue is based on the minimum rental payments required per the leases in place as of September 30, 2017, and includes the amortization of any above-market lease values and lease incentives or accretion of any below-market lease values, deferred revenue, and tenant improvements.
(2)
According to the California Chapter of the American Society of Farm Managers and Rural Appraisers, there are eight distinct growing regions within California; our farms are spread across four of these growing regions.

Aside from two early termination options available to the tenant on two of our farms (neither of which we currently expect to be exercised), we currently have eight agricultural leases scheduled to expire within the next six months. We are currently in negotiations with the existing tenants on each of the farms, as well as other potential tenants, and we anticipate being able to renew the leases at their respective current market rental rates without incurring any downtime on any of the farms. Overall, we currently anticipate the rental rates on these lease renewals to be relatively flat compared to that of the existing leases. Regarding all upcoming lease expirations, there can be no assurance that we will be able to renew the existing leases or execute new leases at rental rates favorable to us, if at all, or be able to find replacement tenants, if necessary.
Recent Developments
Portfolio Activity—Existing Properties
Leasing Activity
The following table summarizes certain leasing activity that has occurred on our existing properties since April 1, 2023, through the date of this filing (dollars in thousands, except for footnotes):
PRIOR LEASES(1)
NEW LEASES(2)
Farm
Locations		Number
of
Leases		Total
Farm
Acres
Total
Annualized
Straight-line
Rent(3)
# of Leases
with
Participation
Rents
Lease
Structures
(# of NNN
/ NN / N)(4)
Total
Annualized
Straight-line
Rent(3)
Wtd. Avg.
Term
(Years)		# of Leases
with
Participation
Rents
Lease
Structures
(# of NNN
/ NN / N)(4)
CA, CO, FL, MI, & NC1318,408$7,802 29 / 2 / 2$7,400 5.116 / 7 / 0
(1)Prior leases include five leases that were terminated early during the three months ended June 30, 2023. Upon termination of these leases, we entered into new leases with new tenants, effective immediately, which are included in the above table.
(2)In connection with certain of these leases, we committed to provide capital for certain improvements on these farms. See “Liquidity and Capital Resources—Operating Commitments and Obligations—Operating Obligations” below for additional information on these and other commitments.
(3)Based on the minimum cash rental payments guaranteed under the applicable leases (presented on an annualized basis), as required under GAAP, and excludes contingent rental payments, such as participation rents.
(4)“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.”
Self-operated and Non-accrual Properties
As of and during a portion of the six months ended June 30, 2023, we had one farm in California that was self-operated (via a management agreement with an unrelated third-party). We are in discussions with potential tenants to lease this farm and currently expect to come to an agreement within the next three months; however, there can be no guarantee that we will be able to reach a lease agreement with a tenant at favorable terms to us, or at all.
Additionally, due to credit issues with three of our tenants, we determined that the full collectability of the remaining rental payments under the respective leases with these tenants was not deemed to be probable. As such, during a portion of the six months ended June 30, 2023, we recognized lease revenues from the seven leases with these three tenants (four leases on farms in Michigan and three leases on farms in California) on a cash basis. During the three months ended June 30, 2023, we terminated the lease agreements with the prior tenant occupying the four farms in Michigan and entered into new, short-term lease agreements on each of the farms with a new tenant. The tenant occupying two of the three California farms is current in their rental payments to us and may be placed back on full accrual status later in the year if certain conditions (including, but not limited to, timely receipt of rental payments) continue to be met. We are continuing to work with the current tenant on the third farm in California and will seek to come to an agreement for the remaining rental payments, if possible. Such agreement, if one can be reached, may include placing the tenant on a payment plan, deferring a portion of the rent owed to us, or agreeing to terminate the lease. In the event of an early termination of any of the aforementioned farms, we estimate that we would be able to find new tenants to lease each of these properties at market rental rates within 1 to 12 months.
During the three and six months ended June 30, 2023, we recorded aggregate lease revenues related to the aforementioned properties of approximately $263,000 and $625,000, respectively, as compared to approximately $545,000 and $1.0 million during the respective prior-year periods.
Financing Activity
Debt Activity
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Farmer Mac Facility
On June 2, 2023, we amended our agreement with Federal Agricultural Mortgage Corporation (“Farmer Mac”), which provides for bond issuances up to an aggregate amount of $225.0 million (the “Farmer Mac Facility”). Pursuant to the amendment, the date through which we may issue new bonds under the Farmer Mac Facility was extended to December 31, 2026, and the final maturity date for new bonds issued under the facility will be the date that is ten years from the applicable issuance date.
Loan Repayments
From April 1, 2023, through the date of this filing, we repaid approximately $5.7 million of maturing loans. On a weighted-average basis, these borrowings bore interest at a stated rate of 2.86% and an effective interest rate (after interest patronage, where applicable) of 2.52%.
Equity Activity
Series C Preferred Stock
On April 3, 2020, we filed a prospectus supplement with the SEC for a continuous public offering (the “Series C Offering”) of our 6.00% Series C Cumulative Redeemable Preferred Stock (the “Series C Preferred Stock”). Under the Series C Offering, as amended, we were permitted to sell up to 10,200,000 shares of our Series C Preferred Stock on a “reasonable best efforts” basis through Gladstone Securities at an offering price of $25.00 per share (the “Primary Series C Offering”) and up to 200,000 additional shares of our Series C Preferred Stock pursuant to our dividend reinvestment plan (the “DRIP”) at a price of $22.75 per share. The Primary Series C Offering terminated on December 31, 2022, and the DRIP was terminated effective March 22, 2023.
From April 1, 2023, through the date of this filing, we redeemed 39,093 shares that were tendered for optional redemption, which we satisfied with an aggregate cash payment of approximately $951,000.
During the three months ended June 30, 2023, we listed the Series C Preferred Stock on Nasdaq under the ticker symbol “LANDP.” Trading of the Series C Preferred Stock on Nasdaq commenced on June 8, 2023.
SeriesEPreferredStock
On November 9, 2022, we filed a prospectus supplement with the SEC for a continuous public offering (the “Series E Offering”) of up to 8,000,000 shares of our newly-designated 5.00% Series E Cumulative Redeemable Preferred Stock, par value $0.001 per share (the “Series E Preferred Stock”), on a “reasonable best efforts” basis through Gladstone Securities at an offering price of $25.00 per share. See Note 6, “Related-Party Transactions—Gladstone Securities—Dealer-Manager Agreements,” for a discussion of the commissions and fees to be paid to Gladstone Securities in connection with the Series E Offering.
The following table summarizes the sales of our Series E Preferred Stock that occurred from April 1, 2023, through the date of this filing (dollars in thousands):
Number of
Shares Sold		Weighted-average
Offering Price Per Share		Gross Proceeds
Net Proceeds(1)
116,809$24.95 $2,915 $2,628 
(1)Net of underwriting discounts, 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 $287,000.
The Series E Offering will terminate on the date (the “Series E Termination Date”) that is the earlier of (i) December 31, 2025 (unless terminated or extended by our Board of Directors) and (ii) the date on which all 8,000,000 shares of Series E Preferred Stock offered in the Series E Offering are sold. There is currently no public market for shares of Series E Preferred Stock. We intend to apply to list the Series E Preferred Stock on Nasdaq or another national securities exchange within one calendar year of the Series E Termination Date; however, there can be no assurance that a listing will be achieved in such timeframe, or at all.
Common Stock—At-the-Market Program
On May 12, 2020, we entered into equity distribution agreements with Virtu Americas, LLC, and Ladenburg Thalmann & Co., Inc. (each a “Sales Agent”), that, as subsequently amended, permitted us to issue and sell, from time to time and through the Sales Agents, shares of our common stock having an aggregate offering price of up to $260.0 million (the “ATM Program”). On April 13, 2023, we entered into separate amended and restated equity distribution agreements with the Sales Agents to allow us to sell shares of our common stock having an aggregate offering price of up to $500.0 million.
The following table summarizes the activity under the ATM Program from April 1, 2023, through the date of this filing (dollars in thousands):
28

Number of Shares SoldWeighted-average
Offering Price
Per Share		Gross Proceeds
Net Proceeds(1)
124,460$17.33 $2,156 $2,135 
(1)Net of underwriting commissions.
Impact of Inflation and Rising Interest Rates
According to the U.S. Bureau of Labor Statistics, the consumer price index (“CPI”) grew at an annual rate of 3.0% through June 30, 2023, as overall inflation continued to ease from the peak levels experienced in the summer of 2022, when it reached the highest rates seen in over 40 years. Food prices have continued to outpace the rate of inflation, with the overall food segment increasing at an annual rate of 5.7% through June 30, 2023, and the food at home segment (which encompasses over 90% of the crops grown on our farms) growing by 4.7%. In addition, according to the NCREIF Farmland Index, which, as of June 30, 2023, consisted of approximately $16.2 billion of farms across the U.S., the total return on U.S. farmland (including appreciation and income) was 8.2% for the 12 months ended June 30, 2023. If the increases in food prices continue to outpace inflation, we believe this will help mitigate any increase in input costs experienced by our farm operators.
To combat inflation, the Federal Reserve has raised its benchmark funds rate 11 times since March 2022, resulting in the highest target rate seen since January 2001. While slowing down significantly from its peak levels, overall inflation, and particularly “core inflation” (which excludes transitory costs, such as food and energy), remains above the Federal Reserve’s target long-term rate of 2.0%, leading many to believe additional rate increases remain possible through the rest of 2023. As such, interest rates remain volatile in response to competing concerns regarding inflationary pressures, coupled with the continued threat of a near-term recession. The yield on the 10-year U.S. Treasury Note has increased substantially over the past 12 months, again surpassing 4% (a level that, prior to a year ago, had not been seen since 2008), which adversely affects interest rates on long-term financing. In addition, while waning somewhat recently, the threat of global recessionary conditions continues to persist, caused in part by inflation, the potential emergence of new public health emergencies, and geopolitical conditions, although the actual timeline, impact, and duration, if any such conditions materialize, are unknown.
Over 99.9% of our borrowings are currently at fixed rates, and on a weighted-average basis, these rates are fixed at an effective interest rate of 3.35% for another 4.6 years. As such, with respect to our current borrowings, we have experienced minimal impact from the recent increases in interest rates, and we believe we are well-protected against further interest rate increases, which seem likely to continue in the near term.
LIBOR Transition
The majority of our debt is at fixed rates, and we currently have very limited exposure to variable-rate debt. Previously, our variable-rate debt was based upon the London Interbank Offered Rate (“LIBOR”), which was phased out in June 2023. LIBOR has since transitioned to a new standard rate, the Secured Overnight Financing Rate (“SOFR”), which was formally adopted by the Alternative Reference Rates Committee in July 2021 as a benchmark interest rate that incorporates certain overnight repo market data collected from multiple data sets. The intent was to adjust the SOFR to minimize the differences between the interest that a borrower was paying using LIBOR versus what it will be paying SOFR. Our lines of credit with MetLife and four term loans with Rabo AgriFinance LLC (which are effectively fixed through our entry into interest swap agreements) were previously indexed based on LIBOR, and all have since transitioned to SOFR, resulting in a minimal impact to our overall operations.
Our Adviser and Administrator
We are externally managed pursuant to a 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 current investment advisory arrangementagreement with our Adviser (the “Advisory Agreement”) with our Adviser, under which our Adviser directly employs certain of our personnel and pays their payroll, benefits and general expenses directly, and our Administrator provides administrative services to us pursuant to a separatethe current administration agreement with our Administrator (the “Administration Agreement”). Both our Adviser and Administrator are affiliates of ours, as their parent company is owned and controlled by Mr. David Gladstone, our chairman and chief executive officer. In addition, two of our executive officers, Mr. Gladstone and Mr. Terry Brubaker (our vice chairman and chief operating officer), serve as directors and executive officers of were each of our Adviser and Administrator. Mr. Michael LiCalsi, our general counsel and secretary, also serves as our Administrator’s president. On April 11, 2017, we entered into a Second Amended and Restated Investment Advisory Agreement (the "Amended Advisory Agreement") with our Adviser that became effective beginning with the three months ended June 30, 2017. Our entrance into the Amended Advisory Agreement was approved unanimously by our board of directors, including, specifically, our independent directors.
A summary of each ofcertain compensation terms within the Advisory Agreement and a summary of the Administration Agreement is providedbelow.
Advisory Agreement
Pursuant to the Advisory Agreement, our Adviser is compensated in the form of a base management fee and, each as applicable, an incentive fee, a capital gains fee, and a termination fee. Our Adviser does not charge acquisition or disposition fees when we acquire or dispose of properties, as is common in other externally-managed REITs. The base management and incentive fees are described below. For information on the capital gains and termination fees, refer to Note 6, “Related-Party
29

Transactions—Our Adviser and Administrator—Advisory Agreements,” within the accompanying notes to our condensed consolidated financial statements in our 2016 Form 10-K. A summary of the compensation terms for the Amended Advisory Agreement is below.statements.
Amended Advisory AgreementBase Management Fee
Pursuant to the Amended Advisory Agreement, effective beginning with the three months ended June 30, 2017, our Adviser is compensated as follows:
Aa base management fee is paid quarterly and will beis calculated as 2.0% per annum (0.50%at an annual rate of 0.60% (0.15% per quarter) of the prior calendar quarter's total adjusted equity, which isquarter’s “Gross Tangible Real Estate,” defined as total equity plus total mezzanine equity, ifthe gross cost of tangible real estate owned by us (including land and land improvements, permanent plantings, irrigation and drainage systems, farm-related facilities, and other tangible site improvements), prior to any eachaccumulated depreciation, and as reportedshown on our balance sheet adjustedor the notes thereto for the applicable quarter.
Incentive Fee
Pursuant to exclude unrealized gains and losses and certain other one-time events and non-cash items ("Total Adjusted Equity").
Anthe Advisory Agreement, an incentive fee is calculated and payable quarterly in arrears if the Pre-Incentive Fee FFO (as defined below) for a particular quarter exceedsexceeded a hurdle rate of 1.75% (7.0% annualized) of the prior calendar quarter'squarter’s Total Adjusted Common Equity.
For purposes of this calculation, Pre-Incentive Fee FFO is defined in the Amended Advisory Agreement as FFO (as(also as defined in the Amended Advisory Agreement) accrued by the Company during the current calendar quarter (prior to any incentive fee calculation for the current calendar quarter), less any dividends paiddeclared on preferred stock securities that arewere not treated as a liability for GAAP purposes. In addition, Total Adjusted Common Equity is defined as common stockholders’ equity plus non-controlling common interests in our Operating Partnership, if any (each as reported on our balance sheet), adjusted to exclude unrealized gains and losses and certain other one-time events and non-cash items.
Our Adviser willwould receive: (i) no Incentive Fee in any calendar quarter in which the Pre-Incentive Fee FFO doesdid not exceed the hurdle rate; (ii) 100% of the Pre-Incentive Fee FFO with respect to that portion of such Pre-Incentive Fee FFO, if any, that exceedsexceeded the hurdle rate but iswas less than 2.1875% in any calendar quarter (8.75% annualized); and (iii) 20% of the amount of the Pre-Incentive Fee FFO, if any, that exceeds 2.1875% in any calendar quarter (8.75% annualized).
A capital gains-based incentive fee is calculated and payable in arrears atAdministration Agreement
Pursuant to the end of each fiscal year (or upon terminationAdministration Agreement, we pay for our allocable portion of the Amended Advisory Agreement). The capital gains fee shall equal (i) 15%Administrator’s expenses incurred while performing its obligations to us, including, but not limited to, rent and the salaries and benefits expenses of our Administrator’s employees, including our chief financial officer, treasurer, chief compliance officer, general counsel and secretary (who also serves as our Administrator’s president, general counsel, and secretary), and their respective staffs. Our allocable portion of the cumulative aggregate realized capital gains minus the cumulative aggregate realized capital losses, minus (ii) any aggregate capital gains fees paid in prior periods. For purposes of this calculation, realized capital gains and losses will be calculated as (x) the sales price of the property minus (y) any costs to sell the property and the then-current gross value of the property (which includes the property's original acquisition price plus any subsequent, non-reimbursed capital improvements). At the end of each fiscal year, if this figureAdministrator’s expenses is negative, no capital gains fee shall be paid.
In the event ofgenerally derived by multiplying our termination of the Amended Advisory Agreement (or in the event of non-renewal by us) for any reason (with 120 days’ prior written notice and the vote of at least two-thirds of our independent directors), a termination fee would be payable to the Adviser equal to three times the sum of the average annual base management fee and incentive fee earnedAdministrator’s total expenses by the Adviser duringapproximate percentage of time the 24-month period priorAdministrator’s employees perform services for us in relation to such termination.
We expect this amendment to result in an increase totheir time spent performing services for all companies serviced by our base management fee in future periods, as the previous base management fee calculation did not include non-controlling interests in our Operating Partnership. In addition, if, in the future, we choose to issue either securities that are classified as mezzanine equity or preferred stock that is required to be treated as permanent equityAdministrator under GAAP, these amounts will increase the base on which our base management fee is calculated, whereas they were excluded in the from the calculation of our base management fee before the Amended Advisory Agreement went into effect. However, we expect our overall incentive fee (including the capital gains-based incentive fee) to be lower in future periods due to: (i) a higher base management fee (which will result in a lower Pre-Incentive Fee FFO) and (ii) a lower fee on any capital gains we may realize, as the previous incentive fee calculation essentially included a 20% fee on realized capital gains.

similar contractual agreements.
Critical Accounting Policies
The preparation of our financial statements in accordance with U.S. generally accepted accounting principles (“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 our significant accounting policies is provided in Note 2 to our consolidated financial statements in our 2016 Form 10-K. There were no material changes to our critical accounting policies during the ninesix months ended SeptemberJune 30, 2017.2023.
RESULTS OF OPERATIONS
For the purposes of the following discussions on certain operating revenues and expenses:
•With regard to the comparison between the three months ended SeptemberJune 30, 2017 versus 2016:2023 and 2022:
◦Same-property basis represents properties that were owned as of June 30, 2016, and were not vacant at any point during either period presented;
◦Properties acquired during the prior-year period are properties acquired during the three months ended September 30, 2016;
◦Properties acquired subsequent to prior-year period are properties acquired subsequent to September 30, 2016; and
◦Properties with vacancy represent properties that were vacant at any point during either period presented (we had one property that was vacant for a portion of the three months ended September 30, 2016).
◦Same-property basis represents farms owned as of March 31, 2022, which were not vacant at any point during either period presented and full collectability of future rental payments under the respective leases was deemed probable during the entirety of both periods;
◦Properties acquired or disposed of are farms that were either acquired or disposed of at any point subsequent to March 31, 2022. From April 1, 2022, through June 30, 2023, we acquired five new farms and had one partial farm disposition; and
◦Vacant, self-operated, or non-accrual properties are:
30

*Farms that were vacant (either wholly or partially) at any point during either period presented. We did not have any vacant farms during either of the three months ended June 30, 2023 or 2022;
*Farms that were self-operated at any point during either period presented. One of our farms was self-operated (via a management agreement with an unrelated third-party) during the three months ended June 30, 2023; and
*Farms with leases where revenue was recognized on a cash basis during either period presented (rather than a straight-line basis) due to full collectability of future rental payments under the respective leases deemed not to be probable as a result of tenant credit issues. During a portion of the three months ended June 30, 2023, we recognized revenue from 7 different leases with 3 separate tenants (encompassing 17 different farms) on a cash basis.
•With regard to the comparison between the ninesix months ended SeptemberJune 30, 2017 versus 2016:2023 and 2022:
◦Same-property basis represents properties that were owned as of December 31, 2015, and were not vacant at any point during either period presented;
◦Properties acquired during the prior-year period are properties acquired during the nine months ended September 30, 2016;
◦Properties acquired subsequent to prior-year period are properties acquired subsequent to September 30, 2016; and
◦Properties with vacancy represent properties that were vacant at any point during either period presented (we had one property that was vacant for a portion of the nine months ended September 30, 2016).

◦Same-property basis represents farms owned as of December 31, 2021, which were not vacant at any point during either period presented and full collectability of future rental payments under the respective leases was deemed probable during the entirety of both periods;
◦Properties acquired or disposed of are farms that were either acquired or disposed of at any point subsequent to December 31, 2021. From January 1, 2022, through June 30, 2023, we acquired five new farms and had one partial farm disposition; and
◦Vacant, self-operated, or non-accrual properties are:
◦Farms that were vacant (either wholly or partially) at any point during either period presented. We did not have any vacant farms during either of the six months ended June 30, 2023 or 2022;
◦Farms that were self-operated at any point during either period presented. One of our farms was self-operated (via a management agreement with an unrelated third-party) during a portion of the six months ended June 30, 2023; and
◦Farms with leases where revenue was recognized on a cash basis during either period presented (rather than a straight-line basis) due to full collectability of future rental payments under the respective leases deemed not to be probable as a result of tenant credit issues. During a portion of the six months ended June 30, 2023, we recognized revenue from 7 different leases with 3 separate tenants (encompassing 17 different farms) on a cash basis.
A comparison of results of components comprising our operating resultsincome for the three and ninesix months ended SeptemberJune 30, 20172023 and 20162022 is below (dollars in thousands):
  For the Three Months Ended September 30,    
  2017 2016 $ Change % Change
Operating revenues:        
Rental revenues $6,561
 $4,467
 $2,094
 46.9%
Tenant recovery revenue 3
 2
 1
 50.0%
Total operating revenues 6,564
 4,469
 2,095
 46.9%
Operating expenses:        
Depreciation and amortization 2,051
 1,432
 619
 43.2%
Property operating expenses 257
 161
 96
 59.6%
Acquisition-related expenses 22
 123
 (101) (82.1)%
Management and incentive fees, net of fee credits 730
 407
 323
 79.4%
Administration fee 211
 184
 27
 14.7%
General and administrative 374
 356
 18
 5.1%
Total operating expenses 3,645
 2,663
 982
 36.9%
Operating income 2,919
 1,806
 1,113
 61.6%
Other income (expense)        
Other income 4
 2
 2
 100.0%
Interest expense (2,634) (1,554) (1,080) 69.5%
Distributions on Term Preferred Stock (458) (219) (239) 109.1%
Loss on disposal of real estate asset (78) —
 (78) NM
Total other expense (3,166) (1,771) (1,395) 78.8%
Net (loss) income (247) 35
 (282) (805.7)%
Plus (less) net loss (income) attributable to non-controlling interests 26
 (3) 29
 (966.7)%
Net (loss) income attributable to the Company $(221) $32
 $(253) (790.6)%
 For the Three Months Ended June 30,  
 20232022$ Change% Change
Operating revenues:
Lease revenues:
Fixed lease payments$21,118 $20,273 $845 4.2 %
Variable lease payments – participation rents— 20 (20)(100.0)%
Variable lease payments – tenant reimbursements92 — 92 NM
Total operating revenues21,210 20,293 917 4.5 %
Operating expenses:
Depreciation and amortization9,044 8,392 652 7.8 %
Property operating expenses887 695 192 27.6 %
Base management and incentive fees2,148 2,043 105 5.1 %
Administration fee514 463 51 11.0 %
General and administrative expenses790 567 223 39.3 %
Total operating expenses13,383 12,160 1,223 10.1 %
Operating income$7,827 $8,133 $(306)(3.8)%
NM = Not Meaningful


31

  For the Nine Months Ended September 30,    
  2017 2016 $ Change % Change
Operating revenues:        
Rental revenues $18,302
 $12,388
 $5,914
 47.7%
Tenant recovery revenue 8
 8
 —
 —%
Total operating revenues 18,310
 12,396
 5,914
 47.7%
Operating expenses:        
Depreciation and amortization 5,123
 3,744
 1,379
 36.8%
Property operating expenses 747
 545
 202
 37.1%
Acquisition-related expenses 68
 243
 (175) (72.0)%
Management and incentive fees, net of fee credits 2,080
 1,339
 741
 55.3%
Administration fee 656
 575
 81
 14.1%
General and administrative 1,208
 1,150
 58
 5.0%
Total operating expenses 9,882
 7,596
 2,286
 30.1%
Operating income 8,428
 4,800
 3,628
 75.6%
Other income (expense)        
Other income 190
 106
 84
 79.2%
Interest expense (6,984) (4,297) (2,687) 62.5%
Distributions on Term Preferred Stock (1,375) (219) (1,156) 527.9%
Loss on disposal of real estate asset (78) —
 (78) NM
Total other expense (8,247) (4,410) (3,837) 87.0%
Net income 181
 390
 (209) (53.6)%
Less net income attributable to non-controlling interests (23) (16) (7) 43.8%
Net income attributable to the Company $158
 $374
 $(216) (57.8)%
 For the Six Months Ended June 30,  
 20232022$ Change% Change
Operating revenues:
Lease revenues:
Fixed lease payments$42,078 $40,210 $1,868 4.6 %
Variable lease payments – participation rents195 20 175 875.0 %
Variable lease payments – tenant reimbursements139 6 133 2,216.7 %
Total operating revenues42,412 40,236 2,176 5.4 %
Operating expenses:
Depreciation and amortization18,163 16,738 1,425 8.5 %
Property operating expenses2,015 1,398 617 44.1 %
Base management and incentive fees4,296 5,210 (914)(17.5)%
Administration fee1,090 926 164 17.7 %
General and administrative expenses1,577 1,253 324 25.9 %
Total operating expenses27,141 25,525 1,616 6.3 %
Operating income$15,271 $14,711 $560 3.8 %
Operating Revenues
Lease revenues
The following table provides a summary of our lease revenues during the three and six months ended June 30, 2023 and 2022 (dollars in thousands):
For the Three Months Ended June 30,For the Six Months Ended June 30,
20232022$ Change% Change20232022$ Change% Change
Same-property basis:
Fixed lease payments$19,795 $19,687 $108 0.5%$39,400 $39,155 $245 0.6%
Participation rents— (10)10 (100.0)%123 (10)133 (1,330.0)%
Total – Same-property basis19,795 19,677 118 0.6%39,523 39,145 378 1.0%
Properties acquired or disposed of:
Fixed lease payments1,077 71 1,006 1,416.9%2,152 71 2,081 2,931.0%
Participation rents— — — NM— — — NM
Total – Properties acquired or disposed of1,077 71 1,006 1,416.9%2,152 71 2,081 2,931.0%
Vacant, self-operated, or non-accrual, properties:
Fixed lease payments246 514 (268)(52.1)%526 983 (457)(46.5)%
Participation rents— 31 (31)(100.0)%72 31 41 132.3%
Total – Vacant, self-operated, or non-accrual properties246 545 (299)(54.9)%598 1,014 (416)(41.0)%
Tenant reimbursements and other(1)
92 — 92 NM139 6 133 2,216.7%
Total Lease revenues$21,210 $20,293 $917 4.5%$42,412 $40,236 $2,176 5.4%
NM = Not Meaningful
Operating Revenues(1)Tenant reimbursements and other primarily consist of tenant-reimbursed property operating expenses on certain of our farms, including property taxes, insurance premiums, and other property-related expenses. Similar amounts are also recorded as property operating expenses during the respective periods.
Same-property Analysis (dollars in thousands)
Rental Revenues:For the Three Months Ended September 30, For the Nine Months Ended September 30,
 2017 2016 $ Change % Change 2017 2016 $ Change % Change
Same-property basis$4,337
 $4,278
 $59
 1.4% $11,197
 $10,845
 $352
 3.2%
Properties acquired during prior-year period492
 178
 314
 176.4% 3,288
 1,475
 1,813
 122.9%
Properties acquired subsequent to prior-year period1,712
 —
 1,712
 — 3,760
 —
 3,760
 —
Property with vacancy20
 11
 9
 81.8% 57
 68
 (11) (16.2)%
 $6,561
 $4,467
 $2,094
 46.9% $18,302
 $12,388
 $5,914
 47.7%
Rental revenues on a same-property basis increased for both the three and nine months ended September 30, 2017, asBasis – 2023 compared to the respective prior-year periods, by 1.4% and 3.2%, respectively. These increases were2022
Lease revenues from fixed lease payments increased primarily due to our general ability to renew existing leases at higher rates and earn additional revenuerents earned on capital improvements constructedcompleted on certain properties; however, these increases wereof our farms and a one-time payment received for easement access across a portion of one of our farms. This increase was partially offset (particularlyby the execution of one lease agreement in the fourth quarter of 2022, pursuant to which we agreed to reduce the fixed base rent amount in exchange for increasing the participation rent components in the lease, the result of which will not be known until later in 2023.
32

Lease revenues from participation rents increased primarily due to additional information being made available to us during the three months ended September 30, 2017) by the recent renewals of two leases on two of our California farmsMarch 31, 2023, that resulted in a 12.5% decreaseallowed such amounts to the aggregate rental rate on the two farms. Rental revenues from acquired properties increased for both the threebe reasonably determinable and nine months ended September 30, 2017, as comparedthus recorded. These amounts were originally scheduled to the respective prior-year periods, due to the additional revenues recorded from owning the 9 and 13 farms we acquiredbe paid during the three and nine months ended September 30, 2016, respectively, forDecember 31, 2022; however, sufficient information to record such amounts were not known at the full three- and nine-month periods ended September 30, 2017, coupled with thetime.
Other – 2023 compared to 2022
Lease revenue from properties acquired or disposed of increased primarily due to additional revenues earned from the 16on new farms we acquired subsequent to September 30, 2016. We had one farm in Florida that wasDecember 31, 2021.
Fixed lease payments from vacant, forself-operated, or non-accrual properties decreased primarily due to revenue from certain of our leases being recognized on a cash basis during a portion of the three and ninesix months ended SeptemberJune 30, 2016. Rental2023 (rather than a straight-line basis), due to full collectability of future rental payments under the respective leases deemed not to be probable as a result of tenant credit issues. During the three months ended June 30, 2023, we entered into new short-term lease agreements with a new tenant on four of these properties and began recognizing such revenues from this farm increasedon a straight-line basis. The remaining leases will continue to be recognized on a non-accrual basis until we deem full collectability of future rental payment under the leases to be probable. In addition, one of our farms was self-operated (via a management agreement with an unrelated third-party) for the three months ended SeptemberJune 30, 2017,2023, and decreased fora portion of the ninesix months ended SeptemberJune 30, 2017, as compared2023. The decrease in lease revenues from vacant, self-operated, or non-accrual properties was partially offset by cash collections (in part or in whole) from tenants occupying certain of these properties during the three and six months ended June 30, 2023.
The fluctuations in tenant reimbursement revenue are primarily driven by payments made by certain tenants on our behalf (pursuant to the lease agreements) to unconsolidated entities of ours that convey water to the respective prior-year periods. In June 2016,properties. As such, the leasetiming of revenue fluctuates as payments are made by our tenants.
Operating Expenses
Depreciation and amortization
Depreciation and amortization expense increased primarily due to additional depreciation and amortization expense incurred on the

farm was terminated early, and the farm was subsequently re-leased at a lower rental rate, which drove the decrease for the nine months ended September 30, 2017. However, we were ablenew farms acquired subsequent to renew the lease at an increased rental rate in August 2017, which led toDecember 31, 2021, as well as an increase for the three months ended September 30, 2017.
Other Operating Revenues
Tenant recovery revenue represents real estate taxes and insurance premiums paidin depreciation associated with additional capital expenditures on certain of our propertiesfarms. This increase was partially offset by a decrease attributable to certain assets reaching the end of their useful lives.
Property operating expenses
Property operating expenses consist primarily of real estate taxes, repair and maintenance expenses, insurance premiums, and other miscellaneous operating expenses paid for certain of our properties. The following table provides a summary of the property-operating expenses recorded during the three and six months ended June 30, 2023 and 2022 (dollars in thousands):
For the Three Months Ended June 30,For the Six Months Ended June 30,
20232022$ Change% Change20232022$ Change% Change
Same-property basis$750 $574 $176 30.7%$1,604 $1,229 $375 30.5%
Properties acquired or disposed of2 — 2 NM6 — 6 NM
Vacant, self-operated, or non-accrual properties67 109 (42)(38.5)%295 146 149 102.1%
Tenant-reimbursed property operating expenses(1)
68 12 56 466.7%110 23 87 378.3%
Total Property operating expenses$887 $695 $192 27.6%$2,015 $1,398 $617 44.1%
NM = Not Meaningful
(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. CorrespondingSimilar amounts wereare also recorded as propertylease revenue when earned in accordance with the lease.
Same-property Basis – 2023 compared to 2022
Property operating expenses during the respective periods.
Operating Expenses
Same-property Analysis (dollarsincreased primarily due to higher legal fees and other costs incurred in thousands)
Depreciation and amortization:For the Three Months Ended September 30, For the Nine Months Ended September 30,
 2017 2016 $ Change % Change 2017 2016 $ Change % Change
Same-property basis$1,455
 $1,365
 $90
 6.6% $2,844
 $2,682
 $162
 6.0%
Properties acquired during prior-year period43
 31
 12
 38.7% 1,428
 970
 458
 47.2%
Properties acquired subsequent to prior-year period526
 —
 526
 — 770
 —
 770
 —
Property with vacancy27
 36
 (9) (25.0)% 81
 92
 (11) (12.0)%
 $2,051
 $1,432
 $619
 43.2% $5,123
 $3,744
 $1,379
 36.8%
Depreciationconnection with protecting water rights on certain farms in California and amortization expenseconsulting fees incurred on a same-property basis increased for both the threecertain farms in Florida. We also recorded additional repair and nine months ended September 30, 2017, as compared to the respective prior-year periods, primarilymaintenance expenses as a result of additional depreciation on site improvements completed onnatural disasters at certain properties subsequentof our farms and increased legal fees related to September 30, 2016, partially offset by the expiration of certaindrafting new lease intangible amortization periods subsequent to September 30, 2016. Depreciation and amortization expense on acquired properties increased for both the three and nine months ended September 30, 2017, asagreements.
Other – 2023 compared to the respective prior-year periods, due to the additional depreciation and amortization expense recorded from owning the 9 and 13 farms we acquired during the three and nine months ended September 30, 2016, respectively, for the full three- and nine-month periods ended September 30, 2017, coupled with the additional depreciation and amortization expense incurred on the 16 new farms we acquired subsequent to September 30, 2016. For our one property with vacancy, the decrease in depreciation and amortization for the three and nine months ended September 30, 2017, as compared to the respective prior-year periods, was due to an early lease termination, which resulted in the recognition of the remaining unamortized balance of the related lease intangibles directly into amortization expense.2022
33
Property operating expenses:For the Three Months Ended September 30, For the Nine Months Ended September 30,
 2017 2016 $ Change % Change 2017 2016 $ Change % Change
Same-property basis$189
 $154
 $35
 22.7% $618
 $531
 $87
 16.4%
Properties acquired during prior-year period4
 4
 —
 — 21
 6
 15
 250.0%
Properties acquired subsequent to prior-year period62
 —
 62
 — 100
 —
 100
 —
Property with vacancy2
 3
 (1) (33.3) 8
 8
 —
 —
 $257
 $161
 $96
 59.6% $747
 $545
 $202
 37.1%

Property operating expenses consist primarily of real estate taxes, insurance expense, and other overhead expenses paid for certain of our properties. Property operating expenses on a same-property basis increased by approximately $35,000 and $87,000 for the three and nine months ended September 30, 2017, respectively, as comparedattributable to the respective prior-year periods. These increases were 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 leasevacant, self-operated, or non-accrual properties decreased 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), as well as additional expenses incurred related to obtaining certain permits on one of our California properties. Property operating expenses on acquired properties increased for both the three and nine months ended September 30, 2017, as compared to the respective prior-year periods, primarily due to additional property taxes and other operating expenses owed on certain of the new farms we acquired during the three and nine months ended September 30, 2016, and subsequent to September 30, 2016. On our overall portfolio, for the three and nine months ended September 30, 2017, we accrued approximately $177,000 and $501,000,

respectively, of aggregate real estate taxes related to certain of our farms, as compared to approximately $111,000 and $355,000 for the respective prior-year periods.
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 both the three and nine months ended September 30, 2017, as compared to the respective prior-year periods, primarily due to the differences 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 early 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 condensed 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 September 30, 2017, we have capitalized approximately $21,000 of acquisition-related costs (which costs were incurred during the nine months ended September 30, 2017) related to farms we expect to acquire during the three months ending December 31, 2017, 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 Condensed Consolidated Balance Sheet as of September 30, 2017.
The aggregate net fees to our Adviser, including both the management and incentive fees and any credits to those fees, increased for each of the three and nine months ended September 30, 2017, as compared to the respective prior-year periods. For the three and nine months ended September 30, 2017, the gross management fee increased by approximately $138,000 and $288,000, respectively, as compared to the respective prior-year periods, primarily due to additional common equity raised since January 1, 2016. From January 1, 2016, through September 30, 2017, we have raised approximately $38.8 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 on which the management fee is calculated, which, until March 31, 2017, was the book value of our common stockholders' equity. Pursuant to the Amended Advisory Agreement, which became effective beginning with the three months ended June 30, 2017,2023, and increased during the six months ended June 30, 2023. The decrease during the three months ended June 30, 2023, was primarily due to lower repair and maintenance expenses incurred on certain of our farms, while the increase during the six months ended June 30, 2023, was primarily due to additional legal fees incurred in connection with rent collection or lease termination efforts for those tenants on farms that were placed on non-accrual status.
The fluctuations in tenant-reimbursed property operating expenses are primarily driven by miscellaneous property operating costs incurred by us in connection with our ownership interests in certain unconsolidated entities, for which our tenants are contractually obligated to reimburse us under the terms of the respective leases. Such expenses will fluctuate commensurate with the timing and amount of miscellaneous operating costs incurred by the underlying entities.
Related-Party Fees
The following table provides the calculations of the base on whichmanagement and incentive fees due to our Adviser pursuant to 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 recordedAdvisory Agreement for the three and ninesix months ended SeptemberJune 30, 2017. 2023 and 2022 (dollars in thousands; for further discussion on certain defined terms used below, refer to Note 6, “Related-Party Transactions,” within the accompanying notes to our condensed consolidated financial statements):

34

Quarter EndedYear to Date
March 31June 30
FY 2023 Fee Calculations:
Base Management Fee:
Gross Tangible Real Estate(1)(2)
$1,432,394 $1,431,761 
Quarterly rate0.150 %0.150 %
Base management fee(3)
$2,148 $2,148 $4,296 
Incentive Fee:
Total Adjusted Common Equity(1)(2)
$358,689 $362,411 
First hurdle quarterly rate1.750 %1.750 %
First hurdle threshold$6,277 $6,342 
Second hurdle quarterly rate2.1875 %2.1875 %
Second hurdle threshold$7,846 $7,928 
Pre-Incentive Fee FFO(1)
$5,303 $4,400 
100% of Pre-Incentive Fee FFO in excess of first hurdle threshold, up to second hurdle threshold$— $— 
20% of Pre-Incentive Fee FFO in excess of second hurdle threshold— — 
Total Incentive fee(3)
$— $— $— 
Total fees due to Adviser$2,148 $2,148 $4,296 
FY 2022 Fee Calculations:
Base Management Fee:
Gross Tangible Real Estate(1)(2)
$1,357,800 $1,361,757 
Quarterly rate0.150 %0.150 %
Base management fee(3)
$2,036 $2,043 $4,079 
Incentive Fee:
Total Adjusted Common Equity(1)(2)
$378,299 $381,201 
First hurdle quarterly rate1.750 %1.750 %
First hurdle threshold$6,620 $6,671 
Second hurdle quarterly rate2.1875 %2.1875 %
Second hurdle threshold$8,275 $8,339 
Pre-Incentive Fee FFO(1)
$7,751 $4,819 
100% of Pre-Incentive Fee FFO in excess of first hurdle threshold, up to second hurdle threshold$1,131 $— 
20% of Pre-Incentive Fee FFO in excess of second hurdle threshold— — 
Total Incentive fee(3)
$1,131 $— $1,131 
Total fees due to Adviser$3,167 $2,043 $5,210 
(1)As defined in the Advisory Agreement.
(2)As of the end of the respective prior quarters.
(3)Reflected as a line item on our accompanying Condensed Consolidated Statements of Operations and Comprehensive Income.
35

The base management fee increased primarily due to additional assets acquired and improvements made on certain of our farms since December 31, 2021.
Our Adviser also earned an incentive feesfee during each of the periods presented,three months ended March 31, 2022, due to our pre-incentive fee funds from operationsPre-Incentive Fee FFO (as defined in the Advisory Agreement) exceeding the required hurdle rate of the applicable equity base applicable to each period (whichduring the first quarter of fiscal year 2022. No incentive fee was total stockholders' equity through March 31, 2017, as stipulated in our Advisory Agreement; and, beginning with the three months ended June 30, 2017, was Total Adjusted Equity (which includes non-controlling interests in the Operating Partnership), as stipulated in our Amended Advisory Agreement). The incentive fees earned by our Adviser (net of credits) for the three and nine months ended September 30, 2017, increased by approximately $185,000 and $453,000, respectively, compared to the respective prior-year periods, primarily due to increased rental revenues earned on properties acquired during and subsequent to the nine months ended September 30, 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 eacheither of the three and nine months ended September 30, 2017, represents an irrevocable waiver granted byfirst or second quarters of fiscal year 2023 or during the second quarter of 2022, as our Adviser. See "Our Adviser and Administrator—Amended Advisory Agreement" above for further discussion on changes toPre-Incentive Fee FFO did not surpass the compensation terms stipulated in the Amended Advisory Agreement.required hurdle rate.
The administration fee paid to our Administrator increased for both the three and nine months ended September 30, 2017, as compared to the respective prior-year periods, primarily due to higher overall costs incurred by our Administratorhiring additional personnel and us using a higher overall share of our Administrator’s resources in relation to those used by other funds and affiliated companies serviced by our AdministratorAdministrator.
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 during each of the three and nine months ended September 30, 2017.
General and administrative expenses increased for each of the three and nine months ended September 30, 2017, as compared to the respective prior-year periods. These increases were primarily driven by increased accounting fees (due to additional expenses related to new acquisitions and higher tax preparation fees), along with additional costs associated with the implementation of a new accounting system (which was completed during the threesix months ended June 30, 2016)2023, primarily due to an increase in acquisition-related costs for investments no longer being pursued and increased marketing and advertising effortshigher audit fees. The increase during the current year. These increases were largelysix months ended June 30, 2023, was further driven by additional stockholder-related expenses incurred related to the annual stockholders’ meeting and the listing of the Series C Preferred Stock on Nasdaq, partially offset by a decrease in bad debt expense, as we wrote off approximately $21,000 and $85,000directors fees.
A comparison of deferred rent asset balances duringresults of other components contributing to net loss attributable to common stockholders for the three and ninesix months ended SeptemberJune 30, 2016, respectively, related to a lease on one of our Florida farms that was terminated prior to its expiration. In addition, during the three months ended March 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.2023 and 2022 is below (dollars in thousands):

 For the Three Months Ended June 30,  
 20232022$ Change% Change
Operating income$7,827 $8,133 $(306)(3.8)%
Other income (expense):
Other income364 63 301 477.8%
Interest expense(5,942)(6,523)581 (8.9)%
Dividends declared on cumulative term preferred stock(755)(755)— —%
Gain (loss) on dispositions of real estate assets, net6,394 (305)6,699 (2,196.4)%
Loss from investments in unconsolidated entities(33)— (33)NM
Total other income (expense), net28 (7,520)7,548 (100.4)%
Net income7,855 613 7,242 1,181.4%
Net loss attributable to non-controlling interests— 3 (3)(100.0)%
Net income attributable to the Company7,855 616 7,239 1,175.2%
Aggregate dividends declared on and charges related to extinguishment of cumulative redeemable preferred stock(6,128)(4,489)(1,639)36.5%
Net income (loss) attributable to common stockholders$1,727 $(3,873)$5,600 (144.6)%
36

 For the Six Months Ended June 30,
 20232022$ Change% Change
Operating income$15,271 $14,711 $560 3.8%
Other income (expense):
Other income2,984 2,829 155 5.5%
Interest expense(11,979)(12,971)992 (7.6)%
Dividends declared on cumulative term preferred stock(1,509)(1,509)— —%
Gain (loss) on dispositions of real estate assets, net5,914 (1,280)7,194 (562.0)%
Property and casualty (loss) recovery, net(1,016)49 (1,065)(2,173.5)%
Loss from investments in unconsolidated entities(60)(29)(31)106.9%
Total other expense, net(5,666)(12,911)7,245 (56.1)%
Net income9,605 1,800 7,805 433.6%
Net income attributable to non-controlling interests— (6)6 (100.0)%
Net income attributable to the Company9,605 1,794 7,811 435.4%
Aggregate dividends declared on and charges related to extinguishment of cumulative redeemable preferred stock(12,198)(8,404)(3,794)45.1%
Net loss attributable to common stockholders$(2,593)$(6,610)$4,017 (60.8)%
NM = Not Meaningful
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 condensed consolidated financial statements) and interest earned on short-term investments, increased for each of the three and nine months ended September 30, 2017, as compared to the respective prior-year periods. The increase in other income during the nine months ended September 30, 2017, was primarily due to additional income earned on short-term investments due to higher interest rates, partially offset by less interest patronage received from Farm Credit. Credit (primarily due to decreased borrowings from Farm Credit).
During the three months ended March 31, 2017,2023, we recorded approximately $183,000$2.3 million of interest patronage from Farm Credit related to interest accrued during 2016,2022, as compared to $94,000approximately $2.8 million of interest patronage receivedrecorded during the prior-year period. The receiptperiod that related to interest accrued during 2021. In addition, during the three months ended September 30, 2022, we received approximately $113,000 of thisinterest patronage related to interest accrued during 2022, as certain Farm Credit associations paid a portion of 2022 interest patronage (which is typically paid during the first half of 2023) early. In total, 2022 interest patronage resulted in a 17.2% decrease24.1% reduction (approximately 61109 basis points) in our effectiveto the interest rate on our aggregate borrowings from Farm Credit during the year ended December 31, 2016.of such borrowings.
Interest expense increased for both the three and nine months ended September 30, 2017, as compared to the respective prior-year periods,decreased, primarily due to increaseda decrease in overall borrowings. The weighted-average principal balance of our aggregate borrowings (excluding our 6.375% Series A Cumulative Term Preferred Stock, par value $0.001 per share (the "Term Preferred Stock"))cumulative term preferred stock) outstanding for the three and ninesix months ended SeptemberJune 30, 2017,2023, was approximately $291.3$600.1 million and $265.2$606.1 million, respectively, as compared to $181.1approximately $666.9 million and $169.5$665.6 million respectively, for the respective prior-year periods. IncludingExcluding interest patronage received on certain of our Farm Credit borrowings and the overall effectiveimpact of debt issuance costs, the weighted-average interest rate charged on our aggregate borrowings (excluding the impact of deferred financing costs) was 3.44% and 3.24% for the three and ninesix months ended SeptemberJune 30, 2017,2023, was 3.79% and 3.78%, respectively, as compared to 3.29%3.75% and 3.20%, respectively,3.73% for the respective prior-year periods.
During the three and ninesix months ended SeptemberJune 30, 2017,2023, we paid aggregate distributions on our Term Preferred Stock (which distributions are treated similar to interest expense)recorded a net capital gain, driven by the sale of a 138-acre parcel of unfarmed land in Florida for $9.6 million, which, after accounting for closing costs, resulted in a net gain of approximately $458,000 and $1.4 million, respectively, as compared to approximately $219,000 for$6.4 million. The net losses recorded during each of the three and ninesix months ended SeptemberJune 30, 2016. 2022, related to the disposals of certain irrigation and other improvements on certain of our farms.
The offeringnet property and casualty (loss) recovery related to net expenses incurred and insurance recoveries received for certain improvements that were damaged due to natural disasters. The property and casualty loss recorded during the six months ended June 30, 2023, was the result of the Term Preferred Stock was completedheavy rainfall that occurred in August 2016.
In connection with an ongoing projectCalifornia in early 2023 and the resulting flooding, which damaged certain structures located on one of our farms in Oregon, for which we are providing the capitalCentral Valley. We continue to fund, among other improvements, irrigation upgradeswork with our tenant on this farm to assess the damage and come to a solution regarding the planting of new blueberry bushes, certain blueberry bushes owned by us were removed during the three months ended September 30, 2017, to allow for the planting of new varieties of blueberry bushes. repairs.
The bushes that were removed (and that were owned by us) had a net cost basis of approximately $55,000 at the time of their removal. In addition, we incurred approximately $23,000 of removal costs. As such, we recorded a total loss of approximately $78,000 related to the removal of these bushes, which is recorded as Loss on disposal of real estate assetaggregate dividends paid on our Condensed Consolidated Statementcumulative redeemable preferred stock increased due to additional shares of Operations for the threeSeries C Preferred Stock and nine months ended September 30, 2017.Series E Preferred Stock issued and outstanding during each of the current-year periods.
LIQUIDITY AND CAPITAL RESOURCES
Overview
Since our IPO in January 2013, we have invested approximately $406.6 million into 61 new farms, and we have expended or accrued an additional $19.2 million for improvements on existing properties.
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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)our credit facility with Metropolitan Life Insurance Company (“MetLife”)), and issuances of additional equity securities. Our current available liquidity is approximately $15.0$185.4 million, consisting of $3.1approximately $35.7 million in cash on hand and, based on the current level of collateral pledged, $11.9approximately $149.7 million of availability under theour credit facility with MetLife Facility, subject(subject to compliance with covenants.covenants) and other undrawn notes or bonds. In addition, we currently have certain properties valued at a total of approximately $145.4 million that are unencumbered and eligible to be pledged as collateral.
AsOver 99.9% of September 30, 2017, our total-debt-to-total-capitalization ratio (including our Term Preferred Stock as debt),borrowings are currently at book value, was 73.3%, compared to 72.8% as of December 31, 2016. However,fixed rates, and on a fair valueweighted-average basis, our total-debt-to-total capitalization ratio (including our Term Preferred Stock as debt) asthese rates are fixed at an effective interest rate of September 30, 2017, was 60.7%, which is up from 59.3% as of December 31, 2016 (see “Non-GAAP Financial Information—Net Asset Value” below3.35% for an explanationanother 4.6 years. In addition, the weighted-average remaining term of our fair value process).notes and bonds payable is approximately 9.3 years. As such, with respect to our current borrowings, we have experienced minimal impact from the recent increases in interest rates, and we believe we are well-protected against any future interest rate increases. Despite ongoing volatility in the markets, based on discussions with our lenders, we do not believe there will be a credit freeze on agricultural lending in the near term. We are in compliance with all of our debt covenants under our respective credit facilities and borrowings, and we believe we currently have adequate liquidity to cover all near- and long-term debt obligations and operating expenses.
Future Capital Needs
Our short- and long-term liquidity requirements consist primarily of making principal and interest payments on outstanding borrowings; funding our general operating costs; making dividend payments on our cumulative term preferred stock and cumulative redeemable preferred stock; 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 Term Preferred StockREIT; and, as capital is available, funding capital improvements on existing farms and new farmland and farm-related acquisitions consistent with our investment strategy.
WeIn the near term, we believe that our current and short-term cash resources will be sufficient to service our debt; fund our current operating costs; pay dividends on our cumulative term preferred stock and cumulative redeemable preferred stock; and fund our distributions to stockholders (including non-controlling OP Unitholders), service our debt, pay dividends on our Term Preferred Stock 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 long-term mortgage indebtedness and bond issuances, future equity issuances (including, but not limited to, shares of our Series E Preferred Stock, OP Units through our Operating Partnership as consideration for future

acquisitions, and shares of common stock through our ATM Program), 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 propertiesfacilities that satisfy our investment criteria, and our pipeline of potential acquisitions remains healthy. We currentlywe have two properties under signed purchase and sale agreements for an aggregate proposed purchase price of approximately $8.6 million (a portion of which is expected to be paid in OP Units), which we expect to be consummated during the three months ending December 31, 2017. 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. We also have many otherseveral 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.
Operating Commitments and Obligations
Operating Obligations
In connection with the execution of certain lease agreements, we have committed to provide capital improvements on certain of our farms. Below is a summary of certain of those projects for which we have incurred or accrued costs as June 30, 2023 (dollars in thousands):
Farm
Location(s)		Farm
Acreage		Total
Commitment
Obligated
Completion
Date(1)
Amount Expended
or Accrued as of
June 30, 2023
St. Lucie, FL549$230 Q3 2023$185 
Umatilla, OR1352,750 (2)Q4 20232,308 
Columbia, OR1571,800 (2)Q3 20241,146 
Ventura, CA4021,000 (2)Q4 2025448 
Napa, CA2701,635 (2)Q4 2029920 
Wicomico & Caroline, MD, and Sussex, DE833115 Q3 203049 
Yuma, AZ3,033941 (2)Q4 2031784 
Franklin & Grant, WA, & Umatilla, OR1,1262,169 (2)Q4 20321,675 
(1)Our obligation to provide capital to fund these improvements does not extend beyond these respective dates.
(2)Pursuant to contractual agreements, we will earn additional rent on the cost of these capital improvements as the funds are disbursed by us.
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Ground Lease Obligations
In connection with certain farms acquired through a leasehold interest, we assumed certain ground lease arrangements under which we are the lessee. Future minimum lease payments due under the remaining non-cancelable terms of these leases as of June 30, 2023, is as follows (dollars in thousands):
Period
Future Lease Payments(1)
For the remaining six months ending December 31:2023$40 
For the fiscal years ending December 31:202492 
202562 
202662 
202762 
202862 
Thereafter631 
Total undiscounted lease payments1,011 
Less: imputed interest(425)
Present value of lease payments$586 
(1)Certain annual lease payments are set at the beginning of each year to then-current market rates (as determined by the lessor). The amounts shown above represent estimated amounts based on the lease rates currently in place.
As a result of these ground leases, we recorded lease expense (included within Property operating expenses on the accompanying Condensed Consolidated Statement of Operations and Comprehensive Income) of approximately $26,000 and $51,000 during the three and six months ended June 30, 2023, respectively, and approximately $23,000 and $46,000 during the three and six months ended June 30, 2022, respectively.
Cash Flow Resources
The following table summarizes total net cash flows forfrom operating, investing, and financing activities for the ninesix months ended SeptemberJune 30, 20172023 and 20162022 (dollars in thousands):
For the Nine Months Ended September 30,     For the Six Months Ended June 30,  
2017 2016 $ Change % Change 20232022$ Change% Change
Net change in cash from:      Net change in cash from:
Operating activities$7,671
 $7,912
 $(241) (3.0)%Operating activities$22,577 $19,355 $3,222 16.6%
Investing activities(125,288) (79,761) (45,527) 57.1%Investing activities3,101 (35,147)38,248 (108.8)%
Financing activities118,937
 71,713
 47,224
 65.9%Financing activities(38,611)47,528 (86,139)(181.2)%
Net change in Cash and cash equivalents$1,320
 $(136) $1,456
 (1,070.6)%Net change in Cash and cash equivalents$(12,933)$31,736 $(44,669)(140.8)%
Operating Activities
The majority of cash from operating activities is generated from the rental payments we receive from our tenants, which is first used to fund our property-level operating expenses, with any excess cash being primarily used for principal and interest payments on our borrowings, management fees to our Adviser, administrative fees to our Administrator, and other corporate-level expenses. The decrease in cashCash provided by operating activities during the nine months ended September 30, 2017, as compared to the prior-year period, wasincreased primarily due to the receipt of two years of prepaid rent upon the closing of the three farms we acquired during the three months ended March 31, 2016, largely offset by additional rental payments received from farms we have acquired since September 30, 2016.
Investing Activities
The increaserecent acquisitions and a decrease in cash used in investing activitiesaggregate fees paid to our Adviser during the ninesix months ended SeptemberJune 30, 2017, as compared to the prior-year period, was primarily due to an increase in cash paid for acquisitions of new farms during the nine months ended September 30, 2017, which exceeded that of the prior-year period by approximately $51.8 million.2023. This increase was partially offset by a decreasedue to the timing of approximately $6.7 million in cash paid for capital improvementscertain interest payments made on existing properties during the ninesix months ended SeptemberJune 30, 2017,2023, as compared to the prior-year period.
FinancingInvesting Activities
The increasechange in cash provided by financingfrom investing activities during the nine months ended September 30, 2017, as compared to the prior-year period, was primarily due to increased net borrowings, as our net borrowingsproceeds received from the sale of a 138-acre parcel of unfarmed land in Florida for $9.6 million during the ninesix months ended SeptemberJune 30, 2017, were2023, which resulted in a net gain of approximately $39.7$6.4 million, more than thatand a decrease in the amount of cash paid for capital improvements on existing farms during the prior-year period, as well as the $38.5 million ofcurrent-year period.
Financing Activities
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The change in cash from financing activities was primarily due to a decrease in aggregate net cash proceeds received from two overnightpreferred and common stockequity offerings and additional issuances of common stock under our ATM Program during the nine months ended September 30, 2017. These increases were partially offset by the receipt of approximately $27.6$62.0 million and a decrease in aggregate net borrowings of net proceeds from the issuance of our Term Preferred Stock during the prior-year period.

approximately $27.0 million.
Debt Capital
MetLife Facility
As amended on October 5, 2016, in aggregate,February 2022, our facility with Metropolitan Life Insurance Company ("MetLife")MetLife currently consists of $150.0 million of term notes and $50.0$75.0 million of revolving equity lines of credit and an aggregate of $175.0 million of term notes (the "MetLife Facility"“MetLife Facility”). In aggregate, weWe currently have approximately $131.2 million outstanding under the term notes that bear interest at a blended fixed rate of 3.30% per annum (which is fixed until January 5, 2027) and $6.1 million$100,000 outstanding under the lines of credit that currently bear interest at 3.60% (which is variable).and $36.9 million outstanding on the term notes. While approximately $57.4$213.0 million of the full commitment amount under the MetLife Facility remains undrawn, (including approximately $5.3 million of aggregate amortizing principal payments made on the term notes), based on the current level of collateral pledged, we currently have approximately $11.9$110.3 million of availability under the facility.MetLife Facility. The draw period for both term notes expires on December 31, 2024, after which MetLife has no obligation to disburse any additional undrawn funds under the term notes.
Farmer Mac Facility
As amended onin June 16, 2016, our agreement with Federal Agricultural Mortgage Corporation ("2023, the Farmer Mac")Mac Facility provides for bond issuances up to an aggregate amount of $125.0$225.0 million (the "Farmerby December 31, 2026, after which Farmer Mac Facility").has no obligation to purchase additional bonds under this facility. To date, we have issued aggregate bonds of approximately $85.9$100.1 million under the Farmer Mac Facility, and we currently have $84.5 million of bonds outstanding that bears interest at a weighted-average interest rate of 3.13% (which rates are fixed throughout the bonds' respective terms) and have a weighted-average maturity date of June 2021. While approximately $39.1 million of the full commitment balance remains undrawn, we currently have no additional availability under the Farmer Mac Facility based on the current level of collateral pledged. However, we expect to pledge certain additional potential new property acquisitions as collateral under the Farmer Mac Facility to utilize some or all of this remaining commitment balance. If we have not issued bonds such that the aggregate bond issuances total $125.0 million by December 11, 2018, Farmer Mac has the option to be relieved of its obligation to purchase additional bonds under this facility.Facility.
Farm Credit and Other Lenders
Since September 19, 2014, we have closed on 15 separatemultiple loans with fivevarious different Farm Credit associations (including Farm Credit CFL, Farm Credit West, CF Farm Credit, Farm Credit FL, and NW Farm Credit, each as defined in(for additional information on these associations, see Note 4, "Borrowings," in“Borrowings,” within the accompanying notes to our accompanying condensed consolidated financial statements) for an aggregate amount of approximately $64.7 million (the "Farm Credit Notes Payable"). We currentlyalso have approximately $60.6 million outstanding under the Farm Credit Notes Payable that bear interest at an expected weighted-average effective interest rate (net of expected interest patronage) of 3.36% (which ratesborrowing relationships with several other agricultural lenders and are fixed, on a weighted-average basis, until January, 2023) and have a weighted-average maturity date of December, 2030. While we do not currently have any additional availability under any of our Farm Credit programs based on the properties currently pledged as collateral,continuously reaching out to other lenders to establish prospective new relationships. As such, we expect to enter into additional borrowing agreements with existing and new Farm Credit associationslenders in connection with certain potential new acquisitions in the future.
Equity Capital
During 2017, through the date of this filing, weThe following table provides information on equity sales that have completed two separate overnight common stock offerings and have also issuedoccurred since January 1, 2023 (dollars in thousands, except per-share amounts; excludes shares of common stock through our ATM Program. InSeries C Preferred Stock issued pursuant to the aggregate, through these transactions, we have issuedDRIP):
Type of IssuanceNumber of
Shares Sold		Weighted-average
Offering Price
Per Share		Gross Proceeds
Net Proceeds(1)
Series E Preferred Stock177,009$24.96 $4,418 $3,983 
Common Stock – ATM Program788,04519.34 15,240 15,087 
(1)Net of selling commissions and sold a total of 3,441,188 shares of our common stock for gross proceeds of approximately $40.8 million and net proceeds, after deductingdealer-manager fees or underwriting discounts and offering expenses borne by us, of approximately $38.8 million. We usedcommissions (in each case, as applicable).
Our 2023 Registration Statement (as defined in Note 8, “Equity—Registration Statement,” within the proceeds received from these offeringsaccompanying notes to fund new acquisitions, repay existing indebtedness (which, in turn, was used to fund future farmland acquisitions), and for other general corporate purposes.
The 2017 Registration Statementour condensed consolidated financial statements) permits us to issue up to an aggregate of $300.0 million$1.5 billion in securities, (including approximately $29.3 million originally reserved for issuance under our ATM Program), consisting of common stock, preferred stock, warrants, debt securities, depository shares, subscription rights, and units, including through separate, concurrent offerings of two or more of such securities. To date, we have issued approximately $20.1$2.5 million of Series E Preferred Stock and $2.2 million of common stock under the 20172023 Registration Statement (including approximately $6.0 million through our ATM Program).Statement.
In addition, we have the ability to, and mayexpect to in the future, issue additional OP Units to third parties as consideration in future property acquisitions.

Contractual Obligations
The following table reflects our material contractual obligations as of September 30, 2017 (dollars in thousands):
    Payments Due During the
    
Remaining Three
Months of
 Fiscal Years Ending December 31,
Contractual Obligation Total 2017 2018 – 2019 2020 – 2021 2022+
Debt obligations(1)
 $297,236
 $601
 $34,493
 $33,726
 $228,416
Interest on debt obligations(2)
 79,522
 1,132
 19,813
 17,382
 41,195
Term Preferred Stock(3)
 28,750
 —
 —
 28,750
 —
Term Preferred Stock dividends(3)
 3,671
 458
 1,836
 1,377
 —
Operating obligations(4)
 6,647
 1,093
 5,380
 174
 —
Operating lease obligations(5)
 284
 —
 96
 96
 92
Total $416,110
 $3,284
 $61,618
 $81,505
 $269,703
(1)
Debt obligations include all borrowings (consisting of mortgage notes and bonds payable and our lines of credit) outstanding as of September 30, 2017. Maturity dates of these debt obligations range from July 2018 to November 2041.
(2)
Interest on debt obligations includes estimated interest on our MetLife Lines of Credit. The balances and interest rates on our MetLife Lines of Credit are variable, thus the amounts of interest calculated for purposes of this table were based upon the balances and interest rates in place as of September 30, 2017.
(3)
Our Term Preferred Stock has a mandatory redemption date of September 30, 2021, and the related dividend payments are treated similar to interest expense in the accompanying Condensed Consolidated Statements of Operations.
(4)
Operating obligations represent commitments outstanding as of September 30, 2017. See Note 8, “Commitments and Contingencies,” in the notes to our accompanying condensed consolidated financial statements for further discussion on each of these operating obligations.
(5)
Operating lease obligations represent ground lease payments due on two of our Arizona farms (1,368 total acres), which are leased from the State of Arizona under leases expiring in February 2022 and February 2025, respectively.
Off-Balance Sheet Arrangements
As of SeptemberJune 30, 2017,2023, we did not have any material off-balance sheet arrangements.
NON-GAAP FINANCIAL INFORMATION
Funds from Operations, Core Funds from Operations, and Adjusted Funds from Operations
The National Association of Real Estate Investment Trusts (“NAREIT”) developed funds from operations (“FFO”) as a relative non-GAAP supplemental measure of operating performance of an equity REIT to recognize that income-producing real estate historically has not depreciated on the same basis as determined under GAAP. FFO, as defined by NAREIT, is net income (computed in accordance with GAAP), excluding gains or losses from sales of property and impairment losses on property, plus
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depreciation and amortization of real estate assets, and after adjustments for unconsolidated partnerships and joint ventures. We further present core FFO (“CFFO”) and adjusted FFO (“AFFO”) as additional non-GAAP financial measures of our operational performance, as we believe both CFFO and AFFO improve comparability on a period-over-period basis and are more useful supplemental metrics for investors to use in assessing our operational performance on a more sustainable basis than FFO. We believe that these additional performance metrics, along with the most directly-comparable GAAP measure, provide investors with additionalhelpful insight toregarding how management measures our ongoing performance, as each of CFFO and AFFO (and their respective per-share amounts) are used by management and our board of directors, as appropriate, in assessing overall performance, as well as in certain decision-making analysis, including, but not limited to, the timing of acquisitions and potential equity raises (and the type of securities to offer in any such equity raises), the determination of any fee credits, and declarations of distributions on our common stock. The non-GAAP financial measures presented herein have limitations as analytical tools and should not be considered in isolation or as a substitute for an analysis of our results calculated in accordance with GAAP. We believe that net income is the most directly-comparable GAAP measure to each of FFO, CFFO, and AFFO.
Specifically, we believe that FFO is helpful to investors in better understanding our operating performance, primarily because its calculation excludes depreciation and amortization expense on real estate assets, as we believe that GAAP historical cost depreciation of real estate assets is generally not correlated with changes in the value of those assets, particularly with farmland real estate, the value of which does not diminish in a predictable manner over time, as historical cost depreciation implies. Further, we believe that CFFO and AFFO are helpful in understanding our operating performance in that it removes certain items that, by their nature, are not comparable on a period-over-period basis and therefore tend to obscure actual operating performance. In addition, we believe that providing CFFO and AFFO as additional performance metrics allows investors to gauge our overall performance in a manner that is more similar to how our performance is measured by management (including their respective per-share amounts), as well as by analysts and the overall investment community.

We calculate CFFO by adjusting FFO for the following items:
 
Acquisition-related•Acquisition- and disposition-related expenses. Acquisition-relatedAcquisition- and disposition-related expenses (i.e.,(including due diligence costs)costs on acquisitions not consummated and certain auditing and accounting fees incurred that were directly related to completed acquisitions or dispositions) are incurred for investment purposes and do not correlate with the ongoing operations of our existing portfolio. Further, duecertain auditing and accounting fees incurred vary depending on the number and complexity of acquisitions or dispositions completed during the period. Due to the inconsistency in which these costs are incurred and how they have historically been treated for accounting purposes, we believe the exclusion of these expenses improves comparability of our operating results on a period-to-period basis.
Acquisition-related accounting fees. Certain auditing and accounting fees we incur are directly related to acquisitions and vary depending on the number and complexity of acquisitions completed during a period. Due to the inconsistency in which these costs are incurred, we believe the exclusion of these expenses improves comparability of our results on a period-to-period basis.
Other adjustments. We will adjust for certain non-recurring charges and receipts and will explain such adjustments accordingly.
We believe the exclusion of these amounts improves comparability of our operating results on a period-to-period basis and will apply consistent definitions of CFFO for all prior-year periods presented to provide consistency and better comparability.
Further, we calculate AFFO by adjusting CFFO for the following items:
 
•Rent adjustments. This adjustment removes the effects of straight-lining rental income, as well as the amortization related to above-market lease values and lease incentives and accretion related to below-market lease values, other deferred revenue, and tenant improvements, resulting in rental income reflected on a modified accrual cash basis. In addition to these adjustments, we also modify ourthe calculation inof cash rents within our definition of AFFO to provide greater consistency and comparability due to the period-to-period volatility in which cash rents are received. To coincide with our tenants’ harvest seasons, our leases typically provide for cash rents to be paid at various points throughout the lease year, usually annually or semi-annually. As a result, cash rents received during a particular period may not necessarily be comparable to other periods or represent the cash rents indicative of a given lease year. Therefore, we further adjust AFFO to normalize the cash rent received pertaining to a lease year over that respective lease year on a straight-line basis, resulting in cash rent being recognized ratably over the period in which the cash rent is earned.
•Amortization of deferred financingdebt issuance costs. The amortization of costs incurred to obtain financing is excluded from AFFO, as it is a non-cash expense item that is not directly related to the operating performance of our properties.
•Other adjustments. We will adjust for certain non-cash charges and receipts and will explain such adjustments accordingly. We believe the exclusion of such non-cash amounts improves comparability of our operating results on a period-to-period basis and will apply consistent definitions of AFFO for all prior-year periods presented to provide consistency and better comparability.
We believe the foregoing adjustments aid our investors'investors’ understanding of our ongoing operational performance.
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FFO, CFFO and AFFO do not represent cash flows from operating activities in accordance with GAAP, which, unlike FFO, CFFO, and AFFO, generally reflects all cash effects of transactions and other events in the determination of net income, and should not be considered an alternative to net income as an indication of our performance or to cash flows from operations as a measure of liquidity or ability to make distributions. Comparisons of FFO, CFFO, and AFFO, using the NAREIT definition for


FFO and the definitions above for CFFO and AFFO, to similarly-titled measures for other REITs may not necessarily be meaningful due to possible differences in the definitions used by such REITs.
Diluted funds from operations ("(“Diluted FFO"FFO”), diluted core funds from operations ("(“Diluted CFFO"CFFO”), and diluted adjusted funds from operations ("(“Diluted AFFO"AFFO”) per share are FFO, CFFO, and AFFO, respectively, divided by the weighted-average number of total shares (including shares of our common stock and OP Units held by non-controlling limited partners) outstanding on a fully-diluted basis during a period. We believe that diluted earnings (loss) per share is the most directly-comparable GAAP measure to each of Diluted FFO, CFFO, and AFFO per share. Because many REITs provide Diluted FFO, CFFO, and AFFO per share information to the investment community, we believe these are useful supplemental measures when comparing us to other REITs.
We believe that FFO, CFFO, and AFFO and Diluted FFO, CFFO, and AFFO per share are useful to investors because they provide investors with a further context for evaluating our FFO, CFFO, and AFFO results in the same manner that investors use net income and EPS in evaluating net income.

The following table provides a reconciliation of our FFO, CFFO, and AFFO for the three and ninesix months ended SeptemberJune 30, 20172023 and 20162022 to the most directly-comparable GAAP measure, net income, and a computation of diluted FFO, CFFO, and AFFO per share, using the weighted-average number of total shares (including shares of our common stock and OP Units held by non-controlling limited partners)OP Unitholders) outstanding during the respective periods (dollars in thousands, except per-share amounts):
 For the Three Months Ended June 30,For the Six Months Ended June 30,
 2023202220232022
Net income$7,855 $613 $9,605 $1,800 
Less: Aggregate dividends declared on and charges related to extinguishment of cumulative redeemable preferred stock(1)
(6,128)(4,489)(12,198)(8,404)
Net income (loss) attributable to common stockholders and non-controlling OP Unitholders1,727 (3,876)(2,593)(6,604)
Plus: Real estate and intangible depreciation and amortization9,044 8,392 18,163 16,738 
(Less) plus: (Gains) losses on dispositions of real estate assets, net(6,394)305 (5,914)1,280 
Adjustments for unconsolidated entities(2)
23 (2)47 25 
FFO available to common stockholders and non-controlling OP Unitholders4,400 4,819 9,703 11,439 
Plus: Acquisition- and disposition-related expenses, net74 (88)92 21 
Plus: Other nonrecurring charges, net(3)
142 — 1,279 (49)
CFFO available to common stockholders and non-controlling OP Unitholders4,616 4,731 11,074 11,411 
Net rent adjustment(1,101)(731)(2,003)(1,450)
Plus: Amortization of debt issuance costs259 277 519 548 
Plus: Other non-cash charges, net(4)
55 192 278 342 
AFFO available to common stockholders and non-controlling OP Unitholders3,829 4,469 9,868 10,851 
Weighted-average common stock outstanding—basic and diluted35,722,83634,520,06835,635,60134,403,184
Weighted-average common non-controlling OP Units outstanding—45,006—124,451
Weighted-average total common shares outstanding35,722,83634,565,07435,635,60134,527,635
Diluted FFO per weighted-average total common share$0.12 $0.14 $0.27 $0.33 
Diluted CFFO per weighted-average total common share$0.13 $0.14 $0.31 $0.33 
Diluted AFFO per weighted-average total common share$0.11 $0.13 $0.28 $0.31 
Distributions declared per total common share$0.14 $0.14 $0.28 $0.27 
(1)Includes (i) cash dividends paid on our Series B Preferred Stock, Series C Preferred Stock, and Series E Preferred Stock, (ii) the value of additional shares of Series C Preferred Stock issued pursuant to the DRIP, and (iii) the pro-rata write-off of offering costs related to shares of Series C Preferred Stock that were redeemed during the respective periods.
(2)Represents our pro-rata share of depreciation expense recorded in unconsolidated entities during the respective periods.
42

  For the Three Months Ended September 30, For the Nine Months Ended September 30,
  2017 2016 2017 2016
Net income $(247) $35
 $181
 $390
Plus: Real estate and intangible depreciation and amortization 2,051
 1,432
 5,123
 3,744
Plus: Loss on disposal of asset 78
 —
 78
 —
FFO available to common stockholders and OP Unitholders 1,882
 1,467
 5,382
 4,134
Plus: Acquisition-related expenses 22
 123
 68
 243
Plus: Acquisition-related accounting fees 47
 50
 82
 78
CFFO available to common stockholders and OP Unitholders 1,951
 1,640
 5,532
 4,455
Net rent adjustment (174) (146) (465) (316)
Plus: Amortization of deferred financing costs 130
 66
 366
 135
AFFO available to common stockholders and OP Unitholders $1,907
 $1,560
 $5,433
 $4,274
         
Weighted-average common shares outstanding – basic and diluted 12,271,925
 10,018,331
 11,512,968
 10,001,466
Weighted-average OP Units outstanding(1)
 1,444,435
 854,116
 1,447,632
 613,446
Weighted-average total shares outstanding 13,716,360
 10,872,447
 12,960,600
 10,614,912
         
Diluted FFO per weighted-average total share $0.14
 $0.13
 $0.42
 $0.39
Diluted CFFO per weighted-average total share $0.14
 $0.15
 $0.43
 $0.42
Diluted AFFO per weighted-average total share $0.14
 $0.14
 $0.42
 $0.40
(3)Consists primarily of (i) net property and casualty losses (recoveries) recorded and the cost of related repairs expensed as a result of the damage caused to certain improvements by natural disasters on certain of our farms, (ii) costs related to the amendment, termination, and listing of shares from the Series C Offering that were expensed, and (iii) the write-off of certain unallocated costs related to a prior universal registration statement.
(1)
(4)Consists of (i) the amount of dividends on the Series C Preferred Stock paid via issuing new shares (pursuant to the DRIP), (ii) the pro-rata write-off of offering costs related to shares of Series C Preferred Stock that were redeemed, which were noncash charges, and (iii) our remaining pro-rata share of (income) loss recorded from investments in unconsolidated entities during the respective periods.
Includes only OP Units held by third parties. As of September 30, 2017 and 2016, there were 1,227,383 and 1,215,306, respectively, OP Units held by non-controlling limited partners, representing 8.3% and 10.8%, respectively, of all OP Units issued and outstanding.
Net Asset Value
Real estate companies are required to record real estate using the historical cost basis of the real estate, adjusted for accumulated depreciation and amortization, and, as a result, the carrying value of the real estate does not typically change as the fair value of the assets change. Thus, a difficulty in owning shares of a real estate-based companyone challenge is determining the fair value of the real estate so thatin order to allow stockholders canto see the value of the real estate increase or decrease over time. For this reason,time, which we believe determining the fair value of our real estate assets is useful to our investors.
Determination of Fair Value
Our Board of Directors reviews and approves the valuations of our properties pursuant to a valuation policy approved by our Board of Directors (the “Valuation Policy”). Such review and approval occurs in three phases: (i) prior to its quarterly meetings, the Board of Directors receives written valuation recommendations and supporting materials that are provided by professionals of the Adviser and Administrator, with oversight and direction from the chief valuation officer, who is also employed by the Administrator (collectively, the “Valuation Team”); (ii) the valuation committee of the Board of Directors (the “Valuation Committee”), which is comprised entirely of independent directors, meets to review the valuation recommendations and supporting materials; and (iii) after the Valuation Committee concludes its meeting, it and the chief valuation officer present the Valuation Committee’s findings to the entire Board of Directors so that the full Board of Directors may review and approve the fair values of our properties in accordance with the Valuation Policy. Further, on a quarterly basis, the Board of Directors reviews the Valuation Policy to determine if changes thereto are advisable and also reviews whether the Valuation Team has applied the Valuation Policy consistently.
Per the Valuation Policy, our valuations are generally derived based on the following:
•For properties acquired within 12 months prior to the date of valuation, the purchase price of the property will generally be used as the current fair value unless overriding factors apply. In situations where OP Units are issued as partial or whole consideration in connection with the acquisition of a property, the fair value of the property will generally be the lower of: (i) the agreed-upon purchase price between the seller and the buyer (as shown in the purchase and sale agreement or contribution agreement and using the agreed-upon pricing of the OP Units, if applicable), or (ii) the value as determined by an independent, third-party appraiser.

•For real estate we acquired more than one year prior to the date of valuation, we determine the fair value either by relying on estimates provided by independent, third-party appraisers or through an internal valuation process. In addition, if significant capital improvements take place on a property, we will typically have those properties reappraised upon completion of the project by an independent, third-party appraiser. In any case, we intend to have each property valued by an independent, third-party appraiser via a full appraisal at least once every three years, with interim values generally being determined by either: (i) a restricted appraisal (a “desk appraisal”) performed by an independent, third-party appraiser, or (ii) our internal valuation process.
Various methodologies were used, both by the appraisers and in our internal valuations, to determine the fair value of our real estate, on a fee simple, “As Is” basis, including the sales comparison, income capitalization (or a discounted cash flow analysis), and cost approaches of valuation. In performing their analyses, the appraisers typically (i) performedconducted site visits to the properties (where full appraisals were performed), (ii) discussed each property with our Adviser and reviewed property-level information, including, but not limited to, property operating data, prior appraisals (as available), existing lease agreements, farm acreage, location, access to water and water rights, potential for future development, and other property-level information, and (iii) reviewed information from a variety of sources about regional market conditions applicable to each of our properties, including, but not limited to, recent sale prices of comparable farmland, market rents for similar farmland, estimated marketing and exposure time, market capitalization rates, and the current economic environment, among others. In performing our internal valuations, we will consider the most recent appraisal available and use similar methodologies in determining an updated fair value. We will also obtain updated market data related to the property, such as updated sales and market rent comparisons and market capitalization rates, and perform an updated assessment of the tenants’ credit risk profiles, among others. Sources of this data may come from market inputs from recent acquisitions of our own portfolio of real estate, recent appraisals of properties we own that are similar in nature and in the same region (as applicable) as the property being valued, market conditions and trends we observe in our due diligence process, and conversations with appraisers, brokers, and farmers.
A breakdown of the methodologies used to value our properties and the aggregate value as of SeptemberJune 30, 2017,2023, determined by each method is shown in the table below (dollars in thousands, except in footnotes):
43

Valuation Method 
Number of
Farms
 
Total
Acres
 
Farm
Acres
 
Net Cost
Basis(1)
 
Current
Fair Value
 
% of Total
Fair Value
Valuation MethodNumber of
Farms		Total
Acres		Farm
Acres		Acre-feet
of Water
Net Cost
Basis(1)
Current
Fair Value		% of Total
Fair Value
Purchase Price 16 27,994 21,709 $140,051
 $139,947
  26.3%Purchase Price41,3171,12616$35,650 $37,332 2.4%
Internal Valuation 14 12,853 10,071 93,354
 143,560
(2) 
27.0%Internal Valuation36,1894,730—20,230 36,000 2.3%
Third-party Appraisal(3)(2)
 42 20,947 17,887 213,927
 248,157
  46.7%162108,08790,28245,0001,298,276 1,504,834 95.3%
Total 72 61,794 49,667 $447,332
 $531,664
  100.0%Total169115,59396,13845,016$1,354,156 $1,578,166 100.0%
(1)
(1)Consists of the initial acquisition price (including the costs allocated to both tangible and intangible assets acquired and liabilities assumed), plus subsequent improvements and other capitalized costs paid for by us that were associated with the properties, and adjusted for accumulated depreciation and amortization.
(2)Appraisals performed between July 2022 and June 2023.
Consists of the initial acquisition price (including the costs allocated to both tangible and intangible assets acquired and liabilities assumed), plus subsequent improvements and other capitalized costs paid for by us that were associated with the properties, and adjusted for accumulated depreciation and amortization.
(2)
98.1% of this valuation, or approximately $140.8 million, is supported by values as determined by third-party appraisals performed between October 2014 and June 2016. The difference of approximately $2.8 million represents the net appreciation of those properties since the time of such appraisals, as determined in accordance with our Valuation Policy.
(3)
Appraisals performed between March 2017 and October 2017.
Some of the significant assumptions used by appraisers and the Valuation Team in valuing our portfolio as of SeptemberJune 30, 2017,2023, include land values per farmable acre, market rental rates per farmable acre and the resulting net operating income (“NOI”) at the property level, and capitalization rates, among others. These assumptions were applied on a farm-by-farm basis and were selected based on several factors, including comparable land sales, surveys of both existing and current market rates, discussions with other brokers and farmers, soil quality, size, location, and other factors deemed appropriate. A summary of these significant assumptions as of June 30, 2023, is provided in the following table:
 Appraisal Assumptions Internal Valuation AssumptionsAppraisal AssumptionsInternal Valuation Assumptions
 
Range
(Low - High)
 Weighted
Average		 
Range
(Low - High)
 Weighted
Average
Range
(Low - High)
Weighted
Average
Range
(Low - High)
Weighted
Average
Land Value (per farmable acre) $815 – $103,000 $39,325
 $4,123 – $105,000 $51,376
Land Value (per farmable acre)$708 – $123,280$34,905 $5,512 – $5,512$5,512 
Market Rent (per farmable acre) $261 – $4,864 $1,858
 $215 – $4,500 $1,996
Market NOI (per farmable acre)Market NOI (per farmable acre)$230 – $3,536$1,519 N/AN/A
Market Capitalization Rate 3.44% – 5.49% 4.47% 3.12% – 5.87% 4.04%Market Capitalization Rate3.30% – 6.50%4.89%N/AN/A
Note: Figures in the table above apply only to the farmland portion of our portfolio and exclude assumptions made relating to farm-related property, such asfacilities (e.g., cooling facilities and box barns,facilities), and other structures on our properties including(e.g., residential housing and horticulture,housing), as their aggregate value was considered to be insignificant in relation to that of the farmland.
Our Valuation Team reviews the appraisals, including the significant assumptions and inputs used in determining the appraised values, and considers any developments that may have occurred since the time the appraisals were performed. Developments considered that may have an impact on the fair value of our real estate include, but are not limited to, changes in tenant credit

profiles; profiles, changes in lease terms such(such as expirations and notices of non-renewals or to vacate;vacate), and potential asset sales particularly(particularly those at prices different from the appraised values of our properties.properties).
Management believes that the purchase prices of the farms acquired during the previous 12 months and the most recent appraisals available for the farms acquired prior to the previous 12 months that were not valued internally and the farms that were valued internally during the previous 12 months fairly represent the current market values of the properties as of SeptemberJune 30, 2017,2023, and, accordingly, did not make any adjustment to these values.
A quarterly roll-forward of the change in our portfolio value for the three months ended SeptemberJune 30, 2017,2023, from the prior value basis as of June 30, 2017,March 31, 2023, is provided in the table below (dollars in thousands):
Total portfolio fair value as of June 30, 2017 $492,972
Plus: Acquisition of seven new farms during the three months ended September 30, 2017 38,178
Plus net value appreciation (depreciation) during the three months ended September 30, 2017:  
13 farms valued via third-party appraisals$514
 
Total net appreciation for the three months ended September 30, 2017 514
Total portfolio fair value as of September 30, 2017 $531,664
Total portfolio fair value as of March 31, 2023$1,579,927
Plus: Acquisition of water credits during the three months ended June 30, 20234 
Less: Partial sale of one farm during the three months ended June 30, 2023(2,610)
Change in value of farms during the three months ended June 30, 2023
Farms valued via third-party appraisals$845 
Net change in value of farms during the three months ended June 30, 2023845 
Total portfolio fair value as of June 30, 2023$1,578,166
Management also determined fair values of all of its long-term borrowings.borrowings and preferred stock. Using a discounted cash flow analysis, management determined that the fair value of all long-term encumbrances on our properties as of SeptemberJune 30, 2017,2023, was approximately $286.3$541.2 million, as compared to a carrying value (excluding unamortized related debt issuance costs) of $292.1approximately $596.9 million. In addition,The fair values of our Series B Preferred Stock, Series C Preferred Stock, and Series D Term Preferred Stock were determined using the closing stock priceprices as of SeptemberJune 30, 2017,2023, of $20.75 per share, $20.27 per share, and $23.55 per share, respectively. Finally, pursuant to Financial Industry Regulatory Authority Rule 2310(b)(5), with the fairassistance of a third-party valuation expert, we determined the estimated value of the Termeach of our Series E Preferred stock was determinedStock to be approximately $29.8 million,$25.00 per share as comparedof June 30, 2023 (see Exhibit 99.1 to a carrying value (excluding unamortized related issuance costs) of $28.8 million.this Form 10-Q).
Calculation of Estimated Net Asset Value
44

To provide our stockholders with an estimate of the fair value of our real estate assets, we intend to estimate the fair value of our farmfarms and farm-related properties expressed in terms ofand provide an estimated net asset value (“NAV”), and provide that to our stockholders on a quarterly basis. NAV is a non-GAAP, supplemental measure of financial position of an equity REIT and is calculated as total equity, adjusted for the increase or decrease in fair value of our real estate assets and long-term borrowings (including any preferred stock required to be treated as debt for GAAP purposes) relative to their respective costscost bases. Further, we calculate NAV per common share by dividing NAV by our total common shares outstanding (consisting of our common stock and OP Units held by non-controlling limited partners). A reconciliation of NAV to total equity, which the Company believes is the most directly-comparable GAAP measure, is provided below.
The fair values presented above and their usage in the calculation of net asset value per share presented below have been prepared by and isare the responsibility of management. PricewaterhouseCoopers LLP has neither examined, compiled, nor performed any procedures with respect to the fair values or the calculation of net asset value per common share, which utilizes information that is not disclosed within the financial statements, and, accordingly, does not express an opinion or any other form of assurance with respect thereto.

As of SeptemberJune 30, 2017,2023, we estimate ourthe NAV per common share to be $14.15, as detailed$19.15. A reconciliation of NAV to total equity, which we believe is the most directly-comparable GAAP measure, is provided below (dollars in thousands, except per-share amount)data):
Total equity per balance sheet   $118,986
Fair value adjustment for long-term assets:    
Less: net cost basis of tangible and intangible real estate holdings(1)
 $(447,332)  
Plus: estimated fair value of real estate holdings(2)
 531,664
  
Net fair value adjustment for real estate holdings   84,332
Fair value adjustment for long-term liabilities:    
Plus: book value of aggregate long-term indebtedness(3)
 320,886
  
Less: fair value of aggregate long-term indebtedness(3)(4)
 (316,086)  
Net fair value adjustment for long-term indebtedness   4,800
Estimated NAV   $208,118
Total shares outstanding(5)
   14,712,408
Estimated NAV per common share   $14.15
Total equity per balance sheet$734,934
Fair value adjustment for long-term assets:
Less: net cost basis of tangible and intangible real estate holdings(1)
Per Net Cost Basis as presented in the table above.$

(1,354,156)
Plus: estimated fair value of real estate holdings(2)
Per Current 1,578,166 
Net fair value adjustment for real estate holdings224,010 
Fair Value as presented in the table above.value adjustment for long-term liabilities:
Plus: book value of aggregate long-term indebtedness(3)
Includes the principal balances outstanding of all long-term borrowings (consisting of mortgage notes and bonds payable) and the Term Preferred Stock.657,242 
Less: fair value of aggregate long-term indebtedness(3)(4)
Long-term mortgage notes and bonds payable were valued using a discounted cash flow model. The Term Preferred Stock was valued based on its closing stock price as of September 30, 2017.(598,068)
Net fair value adjustment for long-term indebtedness59,174 
Estimated NAV1,018,118
Less: aggregate fair value of cumulative redeemable preferred stock(5)
Includes 13,485,025(332,846)
Estimated NAV available to common stockholders and non-controlling OP Unitholders$685,272
Total common shares of common stock and 1,227,383non-controlling OP Units held by non-controlling limited partners (representing 8.3% of alloutstanding35,780,082
Estimated NAV per common share and OP Units issued and outstanding as of September 30, 2017).Unit$19.15
(1)Per Net Cost Basis as presented in the table above.
(2)Per Current Fair Value as presented in the table above.
(3)Includes the principal balances outstanding of all long-term borrowings (consisting of notes and bonds payable) and the Series D Term Preferred Stock.
(4)Long-term notes and bonds payable were valued using a discounted cash flow model. The Series D Term Preferred Stock was valued based on its closing stock price as of June 30, 2023.
(5)The Series B Preferred Stock and Series C Preferred Stock were valued based on their respective closing stock prices as of June 30, 2023, while the Series E Preferred Stock was valued at its liquidation value, as discussed above.
A quarterly roll-forward in the estimated NAV per common share for the three months ended SeptemberJune 30, 2017,2023, is provided below:
Estimated NAV per common share as of June 30, 2017   $14.46
Plus net income   (0.02)
Plus change in valuations:    
Net change in unrealized appreciation of farmland portfolio(1)
 $—
  
Net change in unrealized fair value of long-term indebtedness 0.10
  
Net change in valuations   0.10
Less distributions   (0.13)
Less dilutive effect of equity issuances(2)
   (0.26)
Estimated NAV per common share as of September 30, 2017   $14.15
Estimated NAV per common share and non-controlling OP Unit as of March 31, 2023$17.12
Plus net income attributable to common stockholders and non-controlling OP Unitholders0.05 
Adjustments for net change in valuations:
(1)
The netNet change in unrealized appreciationfair value of farmland portfolio consists of three components: (i) an increase of $0.04 due to the net appreciation in value of 13 farms that were valued during the three months ended September 30, 2017, (ii) an increase of $0.15 due to the aggregate depreciation and amortization expense recorded during the three months ended September 30, 2017, and (iii) a decrease of $0.19 due to capital improvements made on certain properties that have not been considered in the determination of the respective properties’ estimated fair values.(1)
$0.14 
(2)
Net change in unrealized fair value of long-term indebtedness		Reflective0.23 
Net change in unrealized fair value of the September 2017 Follow-on Offering and shares ofpreferred equity securities1.77 
Net change in valuations2.14 
Less distributions on common stock sold under the ATM Program during the three months ended Septemberand non-controlling OP Units(0.14)
Less net dilutive effect of equity issuances and redemptions, net(0.02)
Estimated NAV per common share and non-controlling OP Unit as of June 30, 2017.2023$19.15
(1)The net change in unrealized fair value of our farmland portfolio consists of three components: (i) an increase of $0.02 per share due to the net appreciation in value of the farms that were valued during the three months ended June 30, 2023, (ii) an increase of $0.25 per share due to the decrease in net book value of our real estate holdings as a result of the aggregate depreciation and amortization expense recorded during the three months ended June 30, 2023, and (iii) a decrease of $0.13 per share due to net capital improvements made on certain farms that have not yet been considered in the determination of the respective farms’ estimated fair values.
45

Comparison of estimated NAV and estimated NAV per common share, using the definitions above, to similarly-titled measures for other REITs may not necessarily be meaningful due to possible differences in the calculation or application of the definition of NAV used by such REITs. In addition, the trading price of our common shares may differ significantly from our most recent estimated NAV per common share calculation. For example, while we estimated theour NAV per common share to be $19.15 as of SeptemberJune 30, 2017, to be $14.15 per2023, based on the calculation above, the closing price of our common stock on SeptemberJune 30, 2017,2023, was $13.62, and it has subsequently traded between $13.01 and $14.29$16.27 per share.
While management believes the values presented reflect current market conditions, the ultimate amount realized on any asset will be based on the timing of such dispositions and the then-current market conditions. There can be no assurance that the ultimate realized value upon disposition of an asset will approximate the estimated fair value above.
We intend to report any adjustments to the estimated NAV, as well as to the values of our properties, in this section on a quarterly basis, but in no case less than annually. However, theThe determination of estimated NAV is subjective and involves a number of assumptions, judgments, and estimates, and minor adjustments to these assumptions, judgments, or estimates may have a material impact on our overall portfolio valuation. In addition, many of the assumptions used are sensitive to market conditions and can change frequently. Changes in the market environment and other events that may occur during our ownership of these properties may cause the values reported above to vary from the actual fair value that may be obtained in the open market.

Further, while management believes the values presented reflect current market conditions, the ultimate amount realized on any asset will be based on the timing of such dispositions and the then-current market conditions. There can be no assurance that the ultimate realized value upon disposition of an asset will approximate the estimated fair value above.
46

ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Market risk includes risks that arise from changes in interest rates, foreign currency exchange rates, commodity prices, equity prices, and other market changes that affect market-sensitive instruments. The primary market risk that we believe we are and will be exposed to is interest rate risk. Certain of our existing leases contain escalations based on market indices, such as the consumer price index (“CPI”), and certainwhile very little of our existing borrowings are subject to variable interest rates. Further,rates, the interest rates on certainthe majority of our fixed-rate borrowings are either fixed for a finite period before converting to variable rate or are subject to periodic adjustments.rate. Although we seek to mitigate this risk by structuringincluding certain provisions intoin many of our leases, such as escalation clauses or adjusting the rent to prevailing market rents at two- to three-yearvarious intervals, these features do not eliminate this risk. To date, we have not entered into any derivative contracts to attempt to manage
Currently, over 99.9% of our exposure toborrowings are at fixed rates, and on a weighted-average basis, these rates are fixed at an effective interest rate fluctuations.
(after interest patronage) of 3.35% for another 4.6 years. As of September 30, 2017, excludingsuch, with respect to our Term Preferred Stock, the fair value ofcurrent borrowings, we believe fluctuations in interest rates would have a minimal impact on our fixed-rate borrowings outstanding, which accounted for approximately 98.3% of our total indebtedness, at cost, as of September 30, 2017, was approximately $286.3 million.net income. However, interest rate fluctuations may affect the fair value of our fixed-rate borrowings. IfAs of June 30, 2023, the fair value of our fixed-rate borrowings outstanding (excluding our Series D Term Preferred Stock) was approximately $541.2 million.
The following table summarizes the hypothetical change in fair value of our fixed-rate borrowings at June 30, 2023, if market interest rates had been one or two percentage pointpoints lower or higher than those rates in place as of SeptemberJune 30, 2017,2023 (dollars in thousands):
Change in Market Interest Rates
Carrying Value(1)
Fair ValueDifference
2% decrease$596,867 $577,191 $(19,676)
1% decrease596,867 558,702 (38,165)
No change596,867 541,195 (55,672)
1% increase596,867 524,607 (72,260)
2% increase596,867 508,881 (87,986)
(1)Includes the principal balances outstanding of all long-term borrowings (consisting of notes and bonds payable), excluding unamortized debt issuance costs.
In the future, we may be exposed to additional effects of interest rate changes, primarily as a result of additional borrowings used to maintain liquidity and fund expansion of our farmland investment portfolio and operations. Our interest rate risk management objectives are to limit the impact of interest rate changes on earnings and cash flows and to lower overall borrowing costs. To achieve these objectives, we will borrow primarily at fixed rates or, in limited cases, at variable rates with the lowest margins available and, where available, with the ability to convert to fixed rates in the future. We may also enter into derivative financial instruments, such as interest rate swaps and caps, to mitigate the interest rate risk on a related financial instrument. We will not enter into derivative or interest rate transactions for speculative purposes.
In addition to changes in interest rates, the fair value of our fixed-rate borrowings would have increased or decreased by approximately $13.8 million or $12.8 million, respectively.
There have been no materialfarmland portfolio is subject to fluctuations based on changes in local and regional economic conditions and changes in the quantitative and qualitative market risk disclosures forcreditworthiness of our tenants. Materially adverse changes in the nine months ended September 30, 2017, from that disclosed infair value of our Form 10-K.real estate may affect our ability to refinance our debt, if necessary.
ITEM 4.CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
As of SeptemberJune 30, 2017,2023, our management, including our chief executive officer and chief financial officer, evaluated the effectiveness of the design and operation of our disclosure controls and procedures. Based on that evaluation, the chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective as of SeptemberJune 30, 2017,2023, in providing a reasonable level of assurance that information we are required to disclose in reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in applicable SEC rules and forms, including providing a reasonable level of assurance that information required to be disclosed by us in such reports is accumulated and communicated to our management, including our chief executive officer and our chief financial officer, as appropriate to allow timely decisions regarding required disclosure. However, in evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of necessarily achieving the desired control objectives, and management was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
Changes in Internal Control over Financial Reporting
47

There were no changes in our internal control over financial reporting that occurred during the quarter ended SeptemberJune 30, 2017,2023, that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.



48

PART II – OTHER INFORMATION
 
Item 1.Legal Proceedings
We are not currently subject to any material legal proceedings, nor, to our knowledge, are any such material legal proceedings threatened against us.
Item 1A.Risk Factors
Our business is subject to certain risks and events that, if they occur, could adversely affect our financial condition and results of operations and the trading price of our securities. For a discussion of these risks, please refer to the section captioned, "Item“Item 1A. Risk Factors,"” in our Annual Report on Form 10-K.10-K for the year ended December 31, 2022. There have been no material changes to risks associated with our business or investment in our securities from those previously set forth in the report described above. The risks in our Form 10-K are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial may materially and adversely affect our business, financial condition, and/or operating results in the future.
Item 2.Unregistered Sales of Equity Securities and Use of Proceeds
Sales of Unregistered Securities
During the three months ended September 30, 2017, we issued 50,000 shares of common stock in exchange for 50,000 OP Units that were held by certain limited partners of our Operating Partnership in connection with certain of our prior acquisitions. OP Units are generally redeemable for cash or, at our discretion, exchangeable into shares of our common stock on a one-for-one basis. The cash redemption amount per OP Unit is based on the market price of a shares of our common stock at the time of redemption. These shares of common stock were issued in reliance on an exemption from registration under Section 4(a)(2) of the Securities Act of 1933, as amended. We relied on the exemption under Section 4(a)(2) based upon factual representations received from the limited partners who received the shares of common stock.
Issuer Purchases of Equity Securities
None.
Item 3.Defaults Upon Senior Securities
Not applicable.
Item 4.Mine Safety Disclosures
Not applicable.
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Item 5.Other Information
None.

Without limiting the generality of the foregoing, during the three months ended June 30, 2023, no officer or director of the Company adopted or terminated any “Rule 10b5-1 trading arrangement” or any “non-Rule 10b5-1 trading arrangement,” as such terms are defined in Item 408(a) of Regulation S-K.
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Item 6.Exhibits
EXHIBIT INDEX
Exhibit

Number
Exhibit Description
3.1
3.2
3.3
3.4
3.5
3.43.6
3.7
4.13.8
3.9
4.1
4.2
4.3
4.4
114.5
31.14.6
10.1
10.2
10.3
31.1
31.2
32.1
32.2
99.1
101.INS***XBRL Instance Document
101.SCH***XBRL Taxonomy Extension Schema Document
101.CAL***XBRL Taxonomy Extension Calculation Linkbase Document
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101.LAB***XBRL Taxonomy Extension Label Linkbase Document
101.PRE***XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF***XBRL Definition Linkbase
104Cover Page Interactive Data File (formatted in iXBRL and contained in Exhibit 101)
***Attached as Exhibit 101 to this Quarterly Report on Form 10-Q are the following materials, formatted in Inline eXtensible Business Reporting Language (XBRL)(iXBRL): (i) the Condensed Consolidated Balance Sheets as of SeptemberJune 30, 2017,2023, and December 31, 2016,2022; (ii) the Condensed Consolidated Statements of Operations and Comprehensive Income for the three and ninesix months ended SeptemberJune 30, 20172023 and 2016,2022; (iii) the Condensed Consolidated Statements of Equity for the ninethree and six months ended SeptemberJune 30, 20172023 and 2016,2022; (iv) the Condensed Consolidated Statements of Cash Flows for the ninesix months ended SeptemberJune 30, 20172023 and 2016,2022; and (v) the Notes to the Condensed Consolidated Financial Statements.

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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
 
Gladstone Land Corporation
Date: NovemberAugust 7, 20172023By:/s/ Lewis Parrish
Lewis Parrish
Chief Financial Officer and

Assistant Treasurer
Date: NovemberAugust 7, 20172023By:/s/ David Gladstone
David Gladstone
Chief Executive Officer and

Chairman of the Board of Directors



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