08c5807895f8c811b897758c5f9dd36de06c8faca9adbb50d0fb62f3c786012d

| Metric | Q4 2022 | Q1 2023 | Q2 2023 | Q3 2023 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
|--------|---------|---------|---------|---------|---------|---------|---------|---------|
| Participation Rents ($ million) | 4.7 **[0001495240-23-000006_land_12312022x8kxexhx991.htm:2]** **[LAND_3229185_2]** **[LAND_3229185_5]** | 0 **[0001495240-23-000012_land-20230331.htm:28]** | 0 **[0001495240-23-000020_land-20230630.htm:32]** | 2.4 **[0001495240-23-000027_land-20230930.htm:32]** | 0 **[0001495240-24-000013_land-20240331.htm:28]** | 1.1 **[0001495240-24-000020_land-20240630.htm:32]** | 3.5 **[0001495240-24-000028_land-20240930.htm:34]** |
| Acre-feet of Water Assets | 45,000 **[0001495240-23-000005_land-20221231.htm:131]** **[0001495240-23-000012_land-20230331.htm:9]** | 45,000 **[0001495240-23-000012_land-20230331.htm:12]** **[0001495240-23-000012_land-20230331.htm:9]** | 45,016 **[0001495240-23-000020_land-20230630.htm:12]** | 45,000 **[0001495240-23-000027_land-20230930.htm:16]** | 46,400 **[0001495240-24-000004_land-20231231.htm:139]** | 49,076 **[0001495240-24-000013_land-20240331.htm:9]** | 53,975 **[0001495240-24-000020_land-20240630.htm:40]** | 53,787 **[0001495240-24-000028_land-20240930.htm:12]** |
| Total Portfolio Fair Value ($ thousand) | 1,568,272 **[0001495240-23-000005_land-20221231.htm:99]** | 1,579,927 **[0001495240-23-000012_land-20230331.htm:57]** | 1,578,166 **[0001495240-23-000020_land-20230630.htm:66]** | 1,579,331 **[0001495240-23-000027_land-20230930.htm:66]** | 1,566,474 **[0001495240-24-000004_land-20231231.htm:104]** | 1,497,919 **[0001495240-24-000013_land-20240331.htm:58]** | 1,485,653 **[0001495240-24-000020_land-20240630.htm:65]** | 1,462,362 **[0001495240-24-000028_land-20240930.htm:69]** |
| Carrying Value of Damaged Structures ($ thousand) | 855 **[0001495240-23-000012_land-20230331.htm:13]** **[0001495240-23-000012_land-20230331.htm:35]** **[LAND_3250116_3]** | 855 **[0001495240-23-000020_land-20230630.htm:17]** | 855 **[0001495240-23-000027_land-20230930.htm:17]** | 855 **[0001495240-24-000013_land-20240331.htm:15]** **[0001495240-24-000004_land-20231231.htm:79]** **[0001495240-24-000004_land-20231231.htm:140]** **[0001495240-23-000027_land-20230930.htm:17]** **[0001495240-24-000020_land-20240630.htm:18]** | 855 **[0001495240-24-000013_land-20240331.htm:15]** | 855 **[0001495240-24-000020_land-20240630.htm:18]** | 855 **[0001495240-24-000028_land-20240930.htm:20]** **[0001495240-24-000020_land-20240630.htm:18]** **[0001495240-24-000013_land-20240331.htm:15]** |
| Farm Acres | 96,138 **[0001495240-23-000005_land-20221231.htm:57]** **[0001495240-23-000005_land-20221231.htm:124]** | 96,138 **[0001495240-23-000012_land-20230331.htm:56]** | 96,138 **[0001495240-23-000020_land-20230630.htm:65]** | 96,138 **[0001495240-23-000027_land-20230930.htm:65]** **[0001495240-23-000027_land-20230930.htm:12]** | 96,145 **[0001495240-24-000004_land-20231231.htm:103]** | 92,397 **[0001495240-24-000013_land-20240331.htm:57]** | 92,397 **[0001495240-24-000020_land-20240630.htm:64]** | 92,397 **[0001495240-24-000028_land-20240930.htm:68]** **[0001495240-24-000028_land-20240930.htm:12]** |
| Total Acres | 115,731 **[0001495240-23-000006_land_12312022x8kxexhx991.htm:5]** | 115,731 **[0001495240-23-000012_land-20230331.htm:9]** | 115,593 **[0001495240-23-000020_land-20230630.htm:12]** | 115,593 **[0001495240-23-000027_land-20230930.htm:12]** | 115,584 **[0001495240-24-000004_land-20231231.htm:63]** **[0001495240-24-000004_land-20231231.htm:132]** | 111,836 **[0001495240-24-000013_land-20240331.htm:57]** | 111,836 **[0001495240-24-000020_land-20240630.htm:12]** | 111,836 **[0001495240-24-000028_land-20240930.htm:12]** |

1dff80c44f5c343548f0f8508319b75563c0ea876efbdda0f425a4ca1903352d

| State       | Q4 2022 ($ thousands) | Q1 2023 ($ thousands) | Q2 2023 ($ thousands) | Q3 2023 ($ thousands) | Q4 2023 ($ thousands) | Q1 2024 ($ thousands) | Q2 2024 ($ thousands) | Q3 2024 ($ thousands) |
|-------------|-----------------------|-----------------------|-----------------------|-----------------------|-----------------------|-----------------------|-----------------------|-----------------------|
| California  | **N/A**               | **13,606**  **[0001495240-23-000012_land-20230331.htm:32]**       | **27,100**  **[0001495240-23-000020_land-20230630.htm:36]**       | **42,900**  **[0001495240-23-000027_land-20230930.htm:17]**       | **N/A**               | **13,180**  **[0001495240-24-000013_land-20240331.htm:32]**      | **27,600**  **[0001495240-24-000020_land-20240630.htm:37]**       | **43,331**  **[0001495240-24-000028_land-20240930.htm:39]**      |
| Florida     | **N/A**               | **3,713**  **[0001495240-23-000012_land-20230331.htm:32]**        | **7,500**  **[0001495240-23-000020_land-20230630.htm:36]**        | **11,300**  **[0001495240-23-000027_land-20230930.htm:17]**       | **N/A**               | **3,086**  **[0001495240-24-000013_land-20240331.htm:32]**       | **6,100**  **[0001495240-24-000020_land-20240630.htm:37]**        | **9,120**  **[0001495240-24-000028_land-20240930.htm:39]**       |
| Washington  | **N/A**               | **1,162**  **[0001495240-23-000012_land-20230331.htm:32]**        | **2,300**  **[0001495240-23-000020_land-20230630.htm:36]**        | **N/A**               | **N/A**               | **1,062**  **[0001495240-24-000013_land-20240331.htm:32]**       | **2,100**  **[0001495240-24-000020_land-20240630.htm:37]**        | **3,205**  **[0001495240-24-000028_land-20240930.htm:39]**       |
| Colorado    | **N/A**               | **597**  **[0001495240-23-000012_land-20230331.htm:32]**          | **1,200**  **[0001495240-23-000020_land-20230630.htm:36]**        | **N/A**               | **N/A**               | **661**  **[0001495240-24-000013_land-20240331.htm:32]**         | **1,300**  **[0001495240-24-000020_land-20240630.htm:37]**        | **1,984**  **[0001495240-24-000028_land-20240930.htm:39]**       |
| Arizona     | **N/A**               | **563**  **[0001495240-23-000012_land-20230331.htm:32]**          | **1,100**  **[0001495240-23-000020_land-20230630.htm:36]**        | **N/A**               | **N/A**               | **569**  **[0001495240-24-000013_land-20240331.htm:32]**         | **1,100**  **[0001495240-24-000020_land-20240630.htm:37]**        | **1,706**  **[0001495240-24-000028_land-20240930.htm:39]**       |
| Oregon      | **N/A**               | **518**  **[0001495240-23-000012_land-20230331.htm:32]**          | **1,100**  **[0001495240-23-000020_land-20230630.htm:36]**        | **N/A**               | **N/A**               | **566**  **[0001495240-24-000013_land-20240331.htm:32]**         | **1,100**  **[0001495240-24-000020_land-20240630.htm:37]**        | **1,650**  **[0001495240-24-000028_land-20240930.htm:39]**       |
| Michigan    | **N/A**               | **246**  **[0001495240-23-000012_land-20230331.htm:32]**          | **487**  **[0001495240-23-000020_land-20230630.htm:36]**          | **N/A**               | **N/A**               | **240**  **[0001495240-24-000013_land-20240331.htm:32]**         | **495**  **[0001495240-24-000020_land-20240630.htm:37]**          | **746**  **[0001495240-24-000028_land-20240930.htm:39]**         |
| Nebraska    | **N/A**               | **369**  **[0001495240-23-000012_land-20230331.htm:32]**          | **693**  **[0001495240-23-000020_land-20230630.htm:36]**          | **N/A**               | **N/A**               | **25**  **[0001495240-24-000013_land-20240331.htm:32]**          | **314**  **[0001495240-24-000020_land-20240630.htm:37]**          | **603**  **[0001495240-24-000028_land-20240930.htm:39]**         |
| Maryland    | **N/A**               | **115**  **[0001495240-23-000012_land-20230331.htm:32]**          | **230**  **[0001495240-23-000020_land-20230630.htm:36]**          | **N/A**               | **N/A**               | **115**  **[0001495240-24-000013_land-20240331.htm:32]**         | **230**  **[0001495240-24-000020_land-20240630.htm:37]**          | **345**  **[0001495240-24-000028_land-20240930.htm:39]**         |
| Texas       | **N/A**               | **112**  **[0001495240-23-000012_land-20230331.htm:32]**          | **225**  **[0001495240-23-000020_land-20230630.htm:36]**          | **N/A**               | **N/A**               | **112**  **[0001495240-24-000013_land-20240331.htm:32]**         | **225**  **[0001495240-24-000020_land-20240630.htm:37]**          | **344**  **[0001495240-24-000028_land-20240930.htm:39]**         |
| South Carolina | **N/A**            | **61**  **[0001495240-23-000012_land-20230331.htm:32]**           | **122**  **[0001495240-23-000020_land-20230630.htm:36]**          | **N/A**               | **N/A**               | **61**  **[0001495240-24-000013_land-20240331.htm:32]**          | **122**  **[0001495240-24-000020_land-20240630.htm:37]**          | **183**  **[0001495240-24-000028_land-20240930.htm:39]**         |
| Georgia     | **N/A**               | **56**  **[0001495240-23-000012_land-20230331.htm:32]**           | **112**  **[0001495240-23-000020_land-20230630.htm:36]**          | **N/A**               | **N/A**               | **56**  **[0001495240-24-000013_land-20240331.htm:32]**          | **112**  **[0001495240-24-000020_land-20240630.htm:37]**          | **168**  **[0001495240-24-000028_land-20240930.htm:39]**         |
| North Carolina | **N/A**            | **33**  **[0001495240-23-000012_land-20230331.htm:32]**           | **30**  **[0001495240-23-000020_land-20230630.htm:36]**           | **N/A**               | **N/A**               | **42**  **[0001495240-24-000013_land-20240331.htm:32]**          | **84**  **[0001495240-24-000020_land-20240630.htm:37]**           | **126**  **[0001495240-24-000028_land-20240930.htm:39]**         |
| New Jersey  | **N/A**               | **32**  **[0001495240-23-000012_land-20230331.htm:32]**           | **64**  **[0001495240-23-000020_land-20230630.htm:36]**           | **N/A**               | **N/A**               | **32**  **[0001495240-24-000013_land-20240331.htm:32]**          | **66**  **[0001495240-24-000020_land-20240630.htm:37]**           | **100**  **[0001495240-24-000028_land-20240930.htm:39]**         |
| Delaware    | **N/A**               | **19**  **[0001495240-23-000012_land-20230331.htm:32]**           | **37**  **[0001495240-23-000020_land-20230630.htm:36]**           | **N/A**               | **N/A**               | **19**  **[0001495240-24-000013_land-20240331.htm:32]**          | **38**  **[0001495240-24-000020_land-20240630.htm:37]**           | **56**  **[0001495240-24-000028_land-20240930.htm:39]**          |

4a002989a9bb067abecc9e10d5e3ae5fb4e4cc1e5891a914faddf600fb1d63d6

77839fcd1bb09779d098d8f955277fb74e94b839e0f16e05383a7da90e27298d

Adjustments for Non-Cash Items (USD, thousands)

Stock-Based Compensation (USD, thousands)

Changes in Working Capital (USD, thousands)

Capital Expenditures (CapEx) (USD, thousands)

Proceeds from / Repayments of Debt (USD, thousands)

Share Repurchases (USD, thousands)

Dividend Payments (USD, thousands)

Net Change in Cash (USD, thousands)

abb1cbcc159f1657f881429aa098eb45598fac43ed661c493ac52503bd1c0a76

1. **NAV Decline Due to Permanent Crops**  
   **Q:** What caused the decline in NAV this quarter?  
   **A:** The **$4.76 decline in NAV** year-over-year was **entirely due to permanent crops**. About **$2 was from portfolio valuation declines** in permanent crops, and **$2 from changes in market rates and preferred stock and debt valuation**. Our row crop lands are still appreciating at **2–4% per year**.  **[LAND_3406688_10]** 

2. **Lease Restructuring Impact on Fixed Rent**  
   **Q:** How will lease restructurings affect fixed rent income?  
   **A:** We restructured leases on **four properties**—two pistachio and two wine grape farms—removing participation rent and providing tenants with cash allowances. This will decrease our fixed base rents by **about $20 million over the next five quarters**, starting in Q4 2024, with a quarterly decrease of **$3.5 million to $4.5 million**.  **[LAND_3406688_14]** 

3. **Sale of Michigan Blueberry Farms**  
   **Q:** What's the impact of selling the Michigan blueberry farms?  
   **A:** The farms were an **NOI drag of about $165,000 per quarter**, including **$125,000 in NOI loss** and **$40,000 in interest expense**. Selling them relieves us of this drag, and we're receiving enough to pay off the associated debt.  **[LAND_3406688_13]** 

4. **Participation Rent from Pistachios**  
   **Q:** How did participation rent perform, and what crops contributed?  
   **A:** Participation rent strengthened due to **higher production on our pistachio farms**. While we can't yet fully compare year-over-year pricing, early indications are positive, and we hope for participation rent in Q4 to be **40–60% higher than in Q3**, similar to prior years.  **[LAND_3406688_12]** 

5. **Lease Expirations in 2025**  
   **Q:** How many leases are expiring in 2025, and what's the crop mix?  
   **A:** In 2025, **17 leases are expiring**, representing about **20% of our revenue**. Approximately **60%** are on annual row crops and **40%** on permanent crops. We are in contact with tenants and working on renewals.  **[LAND_3406688_7]** 

6. **Nonaccrual Properties and Rent Collectibility**  
   **Q:** Are there concerns about more properties going to nonaccrual?  
   **A:** We are comfortable with rent collectibility from other tenants. Only **two tenants on five farms** have had issues. Some leases expiring later this year may have base rent moved to participation rent, but we don't expect them to go on nonaccrual.  **[LAND_3406688_9]** 

7. **Impact of Water Sources on Land Value**  
   **Q:** How does water availability affect land values in California?  
   **A:** Water is key in California. Farms with **dual-source water** hold their values better. We're investing in additional water assets and infrastructure for our **single-source water properties** to enhance value and resilience.  **[LAND_3406688_16]** 

27972b2f6dc11e996d4b0b8e00fb7c2f96ae6d69aa90eeb29c5c42f7dbd0f3cd

- **Net Asset Value Decline and Stock Trading at a Discount**: The company's net asset value (NAV) per share declined by **$1.27**, with **$0.80** due to changes in long-term financing and **$0.40** from valuation changes.  **[LAND_3374509_10]**  Despite the stock trading at more than a **30% discount** to NAV, management is unwilling to consider stock buybacks, potentially not addressing shareholder value concerns.  **[LAND_3374509_12]**
- **Vacant Farms and Tenant Issues Impacting Revenue**: The company has **15 vacant farms**, mostly blueberry farms in Michigan and Washington, due to tenant issues where previous tenants failed to manage their funds adequately.  **[LAND_3374509_7]**  This situation is impacting revenue and may not be resolved quickly.
- **Challenges in Acquisitions Due to High Interest Rates and Land Prices**: High interest rates and high land prices are hindering the company's ability to make new acquisitions, as farmers are reluctant to sell at prices that make financial sense for the company.  **[LAND_3374509_15]**  Management suggests that unless interest rates decrease to previous levels, acquisition activity will remain slow.

122ea98294dc79143fc29e737fecaf9951822b8b2c022b7a18ba0e543b41bfb2

- *1. Upcoming Lease Expirations Represent a Significant Portion of Revenue**
- **17 leases are set to expire in 2025, accounting for about 20% of total lease revenue**.  **[LAND_3406688_7]**
- **Approximately 40% of these expiring leases are on permanent crop farms**, which have faced challenges in the current market.  **[LAND_3406688_7]**

f2baad71db19ab4725681e26500c7ce4989e2a3d833b6e7a61753f9d83f20f0e

- **Strong expected participation rents from pistachio farms due to higher production and positive pricing trends**.  **[LAND_3406688_11]** **[LAND_3406688_7]**  Higher production is leading to increased participation rents, and prices are trending in the right direction.
- **Disposition of underperforming assets eliminates NOI drag and improves financials**.  **[LAND_3406688_13]**  Sale of Michigan blueberry farms, which were causing an NOI drag of approximately **$165,000 per quarter**, will relieve the company of this burden and reduce interest expense.
- **Row crop farmland continues to appreciate at 2%-4% annually, supporting NAV**.  **[LAND_3406688_10]**  Despite decreases in permanent crop valuations, the company's row crop farmland is appreciating at historical rates of **2%-4% per year**.

b3582a743f49842ee41e617a4b6fdcf9dbbadae6191f8d83e02e382cc63571f0

- **Gladstone Land Corporation successfully leased a previously vacant farm in California**, reducing the number of non-accrual properties.  **[LAND_3398307_8]**
- **The company maintains strong credit relationships, indicating "tremendous credit ability with the farm credits,"** which helps navigate higher interest rate environments.  **[LAND_3398307_13]**
- **Management expects that improvements in almond and pistachio prices will positively impact participation rents in 2025**, potentially enhancing future revenues.  **[LAND_3398307_12]**

fd88d71f57efd68ce55f9cb3406fbf3ac8a0095081d084cbf2158df020755df9

- **Effective water management enhances farm value**: The company secured an additional 2,676 acre-feet of water credits in California at approximately $129 per acre-foot, significantly below market rates, strengthening water security and increasing the value of their farms.  **[LAND_3387715_12]** **[LAND_3387715_13]**
- **Demonstrated ability to realize significant gains on asset sales**: LAND sold a Florida farm for $66 million, resulting in a $10 million gain, showcasing their capability to monetize assets and unlock shareholder value.  **[LAND_3387715_2]** **[LAND_3387715_8]**
- **Stable income stream through proactive lease management**: With only 5 leases, representing about 9% of annualized revenues, expiring over the next 6 months, the company is in discussions to renew or lease these properties, expecting minimal impact on income.  **[LAND_3387715_15]** **[LAND_3387715_14]**

0f1aa0c35389fbc9145fb3fa36bf0e73156adfb3fd6cbe6edeea119d33354871

- The company is **facing operational challenges with several farms**, including **14 blueberry farms in Michigan**, **5 nut farms in California**, and a **farm in Washington**, leading to **tenant issues, vacancies, and potential sales**, which negatively impact income.  **[LAND_3387715_7]**
- **High interest rates and inflation are adversely affecting small farmers**, particularly in **California**, causing **uncertainty in the company's ability to lease out properties** and generate consistent rental income.  **[LAND_3387715_16]**
- Expected **minimal revenue from farms under operating management agreements** in the next few quarters, indicating potential **declines in income and profitability**.  **[LAND_3387715_13]**

63791a81005f837f4dc78cc9e4adf409c76416930bf23e5e472e4b9fd8fb3d17

- **Operating expenses have increased due to terminated leases and farms on nonaccrual status**, with the company having to pay real estate taxes on behalf of tenants and incurring management fees for direct-operated farms. This indicates **difficulties in finding tenants** and increased costs associated with vacant properties.  **[LAND_3398307_14]**
- **The company is facing challenges with vacant, nonaccrual farms in California, all related to nut crops**, specifically almonds and pistachios, which have depressed prices. This has resulted in a difficult period for these crop types and is impacting the company's revenue and ability to lease these farms.  **[LAND_3398307_13]** **[LAND_3398307_8]**
- **Upcoming debt maturities may lead to higher interest expenses**, as the current weighted-average interest rate is about **3.4%**, but if they were to reprice today, rates would be **approximately 200 basis points higher**. This could increase financing costs and affect profitability if the company needs to refinance its debt.  **[LAND_3398307_7]**

7f1d1771ce98dde9b67479e4cfe9d026d8ddb13c08294382e5fb81911ede1ecf

- The company **sold a farm for $66 million**, resulting in a cash gain of about **$10 million**, which was used to **reduce debt by $16 million** and increase cash reserves earning **4.5% interest**, strengthening liquidity for future opportunities.  **[LAND_3374509_11]**
- **Crop markets have recovered**, with the **almond oversupply cleared**, and demand strong across their crops; the company expects **2024 to be a great year**, returning to pre-pandemic levels.  **[LAND_3374509_9]** **[LAND_3374509_13]**
- The company has strategically **secured 15 billion gallons of water**, continues to acquire more, and employs unique water management practices, providing a **competitive advantage** in regions where water is critical for farming.  **[LAND_3374509_16]**

2a209218e2cce8bd45d3bde776d060279fa2e9285cffb79ffb66a0d4fda717f4

Gladstone Land Corp (LAND)

Financials