GLADSTONE LAND Corp

Previous wording

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,” 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” and “Risk Factors” in this report and/or our Annual Report on Form 10-K for the year ended December 31, 2024 (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.

Current wording

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,” “provide,” “anticipate,” “future,” “could,” “growth,” “plan,” “intend,” “expect,” “should,” “would,” “if,” “seek,” “possible,” “potential,” “likely,” “appear,” 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” and “Risk Factors” in this report and/or our Annual Report on Form 10-K for the year ended December 31, 2024 (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 (this “Quarterly Report”), except as required by law.

Previous wording

We are an externally-managed, agricultural real estate investment trust (“REIT”) that is primarily in the business of owning and leasing farmland, occasionally through lease structures that include a variable rent component based on the gross revenues generated from certain farms in lieu of fixed base rent. We are not generally a grower of crops, nor do we typically farm the properties we own; however, from time to time, and on a temporary basis, we may also directly operate certain of our farms via management agreements with third-party operators and/or through a taxable REIT subsidiary (“TRS”) of ours. We currently own 150 farms totaling 103,001 acres across 15 states in the U.S. and 55,350 acre-feet of water assets in California. We also own several farm-related facilities, such as cooling facilities, packinghouses, processing facilities, and various storage facilities. In addition, two of our properties (comprising four farms) are currently being directly operated.

Current wording

We are an externally-managed, agricultural real estate investment trust (“REIT”) that is primarily engaged in owning and leasing farmland, including through lease structures that occasionally include a variable rent component based on the gross revenues generated from certain farms in lieu of fixed base rent. From time to time, and on a temporary basis, we may also directly operate certain of our farms via management agreements with third-party operators and/or through a taxable REIT subsidiary (“TRS”). We currently own 150 farms totaling 103,001 acres across 15 states in the U.S. and 55,306 acre-feet of water assets in California. In addition, two of our properties (comprising four farms) are currently being directly operated.

Previous wording

The following table summarizes the different geographic locations (by state) of our farms owned as of and during the three months ended March 31, 2025 and 2024 (dollars in thousands):

Current wording

The following table summarizes the different geographic locations (by state) of our farms owned as of and during the six months ended June 30, 2025 and 2024 (dollars in thousands):

Previous wording

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). Our lease agreements will generally include one of the following rental structures: (i) fixed base cash rents, (ii) fixed base cash rents, plus a variable component, referred to as “participation rents,” based on the gross revenues generated from the respective farms, or, to a lesser extent, (iii) no fixed base cash rents (or, in certain cases, a cash allowance to cover certain operating or capital costs), in exchange for a significantly higher share of participation rents. Fixed base cash 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 as set forth within the lease, while participation rent is generally payable to us annually, often in the fourth quarter of each fiscal year. Currently, 92 of our farms are leased on a pure, triple-net basis, 46 farms are leased on a partial-net basis (with us, as landlord, responsible for all or a portion of the related property taxes), 3 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), 4 farms are direct-operated, and 5 farms are vacant. Additionally, 24 of our farms are leased under agreements that include a variable rent component, called “participation rents,” that are based on the gross revenues earned on the respective farms (though such leases often include a guarantee of a minimum amount of rental income).

Current wording

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). Our lease agreements will generally include one of the following rental structures: (i) fixed base cash rents, (ii) fixed base cash rents, plus a variable component, referred to as “participation rents,” based on the gross revenues generated from the respective farms, or, to a lesser extent, (iii) no fixed base cash rents (or, in certain cases, a cash allowance to cover certain operating or capital costs), in exchange for a significantly higher share of participation rents. Fixed base cash rent is generally payable to us in advance on an annual, semi-annual, or quarterly basis, with such rent typically subject to periodic escalation clauses as set forth within the lease, while participation rent is generally payable to us annually, with the majority of it coming in the fourth quarter of each fiscal year. Currently, 92 of our farms are leased on a pure, triple-net basis, 46 farms are leased on a partial-net basis (with us, as landlord, responsible for all or a portion of the related property taxes), 3 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), 4 farms are direct-operated, and 5 farms are vacant. Additionally, 24 of our farms are leased under agreements that include participation rents, though such leases often include a guarantee of a minimum amount of rental income.

Previous wording

(4)Includes lease revenues of approximately $3.9 million from nine farms on which the respective leases expired and which are currently either direct-operated or vacant, and approximately $7,000 from seven farms sold during the three months ended March 31, 2025.

Current wording

(4)Includes lease revenues of approximately $3.9 million from nine farms on which the respective leases expired and which are currently either direct-operated or vacant, approximately $526,000 from two farms that were held for sale at June 30, 2025, and are expected to be sold during the three months ending September 30, 2025, and approximately $7,000 from seven farms sold during the three months ended March 31, 2025.

Previous wording

We are currently exploring a variety of options with certain of our 2025 lease expirations, including negotiating lease terms with existing and prospective new tenants and discussing sale options with prospective buyers. In addition, while we seek to lease all properties under traditional leases that involve a certain level of fixed base rent, with respect to expirations on certain western permanent crop farms, we may decide to continue with an adjusted lease structure that involves a reduced base rent amount (or none) and/or, in certain cases, a cash lease incentive, in exchange for increasing the participation rent components, or we may decide to continue to operate certain of these properties ourselves via third-party management agreements. Regarding all vacancies and 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.

Current wording

We are currently exploring a variety of options with certain of our 2025 lease expirations, including negotiating lease terms with existing and prospective new tenants and discussing sale options with prospective buyers. In addition, while we seek to lease all properties under traditional leases that involve a certain level of fixed base rent, with respect to expirations on certain western permanent crop farms, we may decide to continue with an adjusted lease structure that involves a reduced base rent amount (or none) and/or, in certain cases, a cash lease incentive, in exchange for an increased level of participation rents, or we may decide to continue to operate certain of these properties ourselves via third-party management agreements. Regarding all vacancies and 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.

Previous wording

Impact of Inflation, Interest Rates, and Tariffs

Current wording

Impact of Inflation, Interest Rates, and Tariffs and Trade

Previous wording

According to the U.S. Bureau of Labor Statistics, the consumer price index (“CPI”) rose at an annual rate of 2.4% through March 31, 2025, continuing the downward trend from the inflation peak in mid-2022. Food price increases have also slowed but remain elevated, with the overall food category rising at an annual rate of 3.0% over the same period. Notably, over the past three years, food prices have risen by 14.2%, outpacing the overall CPI increase of 11.2%. While high input costs remain a concern for farm operators, we believe these costs will be somewhat offset if food prices continue to match or exceed the inflation rate.

Current wording

According to the U.S. Bureau of Labor Statistics, the consumer price index (“CPI”) rose at an annual rate of 2.7% through June 30, 2025, continuing the downward trend from the inflation peak in mid-2022. Food price increases have also slowed but remain elevated, with the overall food category rising at an annual rate of 3.0% over the same period. Notably, over the past three years, food prices have risen by 11.3%, outpacing the overall CPI increase of 8.9%. While high input costs remain a concern for farm operators, we believe these costs will be somewhat offset if food prices continue to match or exceed the inflation rate.

Previous wording

After holding rates steady since July 2023, the Federal Reserve initiated its first rate cut in over four years in September 2024, lowering the benchmark federal funds rate by 50 basis points and signaling a potential shift toward an easing of monetary policy. However, since that initial cut, the Federal Reserve has held off on further reductions, as stronger-than-anticipated economic data (particularly in the labor and consumer spending sectors), along with growing uncertainty around the duration and impact of newly-imposed tariffs, have renewed inflationary concerns. As a result, U.S. Treasury yields have remained elevated, with the 10-year Treasury consistently trading above 4.3% in recent months. Furthermore, despite earlier expectations of multiple rate cuts, the timing and pace of any future easing remains highly uncertain. The ongoing volatility in the interest rate environment continues to affect the cost of long-term financing, constraining our ability to pursue new farmland acquisitions at favorable terms.

Current wording

The Federal Reserve initiated a brief rate-cutting cycle in September 2024—its first in over four years—lowering the benchmark federal funds rate by a total of 100 basis points before pausing in December 2024. Since then, stronger-than-anticipated economic data, particularly in the labor market and consumer spending, combined with ongoing uncertainty regarding the scope and impact of newly-imposed tariffs, have reignited inflationary concerns. As a result, the Federal Reserve has held rates steady, and U.S. Treasury yields have remained elevated, with the 10-year Treasury consistently trading above 4.4% in recent months. Although earlier expectations called for multiple rate cuts in 2025, the timing and pace of any future monetary easing remain highly uncertain. Continued volatility in the interest rate environment has sustained upward pressure on long-term financing costs, which may constrain our ability to pursue new farmland acquisitions on favorable terms.

Previous wording

Currently, over 99.9% of our borrowings are at fixed rates, and on a weighted-average basis, these rates are fixed at an effective interest rate of 3.41% for another 3.4 years. As a result, our existing debt portfolio has been largely insulated from the sharp rise in interest rates over the past couple of years, and we believe we are well-protected against the potential for prolonged elevated interest rates or any future rate increases.

Current wording

Currently, over 99.9% of our borrowings are at fixed rates, and on a weighted-average basis, these rates are fixed at an effective interest rate of 3.39% for another 3.3 years. As a result, our existing debt portfolio has been largely insulated from the rise in interest rates in recent years, and we believe we are well-protected against the potential for prolonged elevated interest rates and future rate increases.

Previous wording

The 2024-2025 water year has aligned with a typical “La Niña” weather pattern, bringing increased precipitation to Northern California and drier conditions in the southern part of the state. Northern regions experienced significant rainfall and snow from multiple atmospheric river events during the winter, while portions of Southern California remain affected by varying levels of drought conditions. Overall, this marks the third consecutive year of average or above-average precipitation statewide.

Current wording

The 2024-2025 water year has followed a typical “La Niña” weather pattern, bringing above-average precipitation to Northern California and drier conditions in the southern part of the state. Northern California experienced multiple atmospheric river events during the winter, resulting in substantial rainfall and snowpack accumulation. In contrast, portions of Southern California continue to experience varying degrees of drought.

Previous wording

Notably, late-season rain and snow events have led to peak snowpack levels occurring after the April 1 historical average, supporting strong snowmelt runoff through the spring and into early summer. In addition, statewide reservoir levels remain above historical norms, which is expected to support favorable surface water allocations from both State and Federal water projects. During periods of abundant surface water flows, water purveyors often have surplus water supplies that can be acquired at lower prices. We continue to monitor these opportunities to strengthen our long-term water strategy.

Current wording

This marks the third consecutive year of average or above-average precipitation statewide. Notably, late-season storms extended peak snowpack accumulation beyond the historical April 1 benchmark, providing strong snowmelt runoff through the spring and into early summer. Reservoir levels across the state remain above historical norms, contributing to favorable surface water allocations from both State and Federal water systems. Periods of surplus surface water often result in increased availability of lower-cost water from purveyors, and we continue to monitor such opportunities as part of our long-term water procurement strategy.

Previous wording

The extended wet period has also benefited our permanent crop assets by contributing to groundwater recharge and improving root zone moisture content. We are currently observing no signs of water stress in our permanent plantings that often occur during drought periods. As we move into the spring and early summer, our permanent crop assets appear healthy and well-positioned for the growing season.

Current wording

The sustained wet conditions have also positively impacted our permanent crop assets by contributing to groundwater recharge and improving root zone moisture content. To date, we have not observed any signs of water-related stress in our permanent plantings, which appear healthy and well-positioned for the upcoming growing season.

Previous wording

Meanwhile, the ongoing phased implementation of California’s Sustainable Groundwater Management Act (“SGMA”) continues to impose groundwater pumping restrictions across the state. In response, many farmland owners and operators have turned to supplemental water initiatives and projects that allow for the capture or importation of surplus surface water. Looking ahead, we continue to actively evaluate new projects and programs aimed at offsetting the effects of SGMA-related pumping curtailments, including floodwater capture and storage initiatives, fallowing programs, and investments in infrastructure to improve overall water management.

Current wording

At the same time, the ongoing phased implementation of California’s Sustainable Groundwater Management Act (“SGMA”) continues to impose groundwater pumping restrictions across the state. In response, we are actively evaluating and participating in supplemental water initiatives aimed at mitigating the impact of SGMA-related curtailments. These initiatives include floodwater capture and storage projects, voluntary fallowing programs, and strategic investments in water infrastructure to ensure long-term access to reliable water supplies.

Previous wording

During a portion of the three months ended March 31, 2025, we had 15 farms that were either vacant, direct-operated through third-party management agreements, or on which lease revenues were recognized on a cash basis (due to credit issues with certain tenants leading us to determine that full collectability of the remaining rental payments under the respective leases was not probable). During the three months ended March 31, 2025, we recorded lease revenue from these farms of approximately $3.7 million (including a lease termination fee of approximately $2.4 million and accelerated rental revenue of approximately $629,000 due to an early lease termination), as compared to approximately $1.7 million during the prior-year period.

Current wording

During all or a portion of the six months ended June 30, 2025, we had 17 farms that were either vacant, direct-operated through third-party management agreements, or on which lease revenues were recognized on a cash basis (due to credit issues with certain tenants leading us to determine that full collectability of the remaining rental payments under the respective leases was not probable). During the six months ended June 30, 2025, we recorded lease revenue from these farms of approximately $3.5 million (including a lease termination fee of approximately $2.4 million and accelerated rental revenue of approximately $629,000 due to an early lease termination), as compared to approximately $3.9 million during the prior-year period.

Previous wording

During and since the three months ended March 31, 2025, we have entered into new lease agreements on certain of these farms. As such, currently, five farms remain vacant, four farms are direct-operated, and five farms (leased to three different tenants) are on non-accrual status. For the vacant and direct-operated farms, we are exploring both leasing and sale options and are in discussions with both potential tenants and buyers; however, there can be no guarantee that we will be able to secure agreements at favorable terms, or at all.

Current wording

During and since the six months ended June 30, 2025, we entered into new agreements on certain of these farms. As such, currently, five farms remain vacant, four farms are direct-operated, and seven farms (leased to four different tenants) are on non-accrual status.

Previous wording

Regarding the farms currently on non-accrual status, we continue to work with each of the tenants to resolve the outstanding rent amounts and will seek to reach agreements on the remaining payments where 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 a termination, we estimate that we would be able to find a new tenant to lease these properties at market rental rates within 1 to 12 months.

Current wording

For the vacant and direct-operated farms, we are exploring both leasing and sale options and are in discussions with both potential tenants and buyers; however, there can be no guarantee that we will be able to secure agreements at favorable terms, or at all. Regarding the farms currently on non-accrual status, we continue to work with each of the tenants to resolve the outstanding rent amounts and will seek to reach agreements on the remaining payments where 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.

Previous wording

From January 1, 2025, through the date of this filing, we repaid approximately $19.4 million of loans that were scheduled to reprice later this year. On a weighted-average basis, these borrowings bore interest at a stated rate of 5.38% and an effective rate (after interest patronage, where applicable) of 4.51%.

Current wording

In addition, from April 1, 2025, through the date of this filing, we repaid approximately $20.7 million of maturing loans that, on a weighted-average basis, bore interest at a stated rate of 4.15%.

Previous wording

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 termination fee, refer to Note 6, “Related-Party Transactions—Our

Current wording

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 termination fee, refer to Note 7, “Related-Party Transactions—Our Adviser and Administrator—Advisory Agreement,” within the accompanying notes to our condensed consolidated financial statements.

Previous wording

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

Current wording

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

Previous wording

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. 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.

Current wording

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, co-general counsels and co-secretaries (Mr. LiCalsi also serves as our Administrator’s president, co-general counsel, and co-secretary), and their respective staffs. 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.

Previous wording

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 Form 10-K. There were no material changes to our critical accounting policies during the three months ended March 31, 2025.

Current wording

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 Form 10-K. There were no material changes to our critical accounting policies during the six months ended June 30, 2025.

Previous wording

For the purposes of the following discussions on certain operating revenues and expenses, same-property basis represents properties we owned for the entirety of the comparative periods presented.

Current wording

For the purposes of the following discussions on certain operating revenues and expenses, same-property basis represents properties we owned for the entirety of the respective comparative periods presented.

Previous wording

With regard to the comparison between the three months ended March 31, 2025 and 2024:

Current wording

With regard to the comparison between both the three and six months ended June 30, 2025 and 2024:

Previous wording

•We owned 150 farms as of March 31, 2025, that are considered our same-property portfolio. Same-property occupancy (including farms that were direct-operated or on non-accrual status) decreased approximately 3.0% to 95.9% as of March 31, 2025, compared to 98.9% as of March 31, 2024.

Current wording

•We owned 150 farms as of June 30, 2025, that are considered our same-property portfolio. Same-property occupancy (including farms that were direct-operated or on non-accrual status) decreased approximately 3.4% to 95.9% as of June 30, 2025, compared to 99.3% as of June 30, 2024.

Previous wording

◦Included within our same-property portfolio are farms that were vacant, direct-operated, or on non-accrual status during all or a portion of the periods presented. For the three months ended March 31, 2025, we had 15 farms that were either vacant, direct-operated, or on non-accrual status, as compared to 9 farms in the prior-year period.

Current wording

▪For the three months ended June 30, 2025, we had 16 farms that were vacant, direct-operated, or on non-accrual status, as compared to 8 farms in the prior-year period.

Previous wording

A comparison of results of components comprising our operating income for the three months ended March 31, 2025 and 2024 is below (dollars in thousands):

Current wording

A comparison of results of components comprising our operating income for the three and six months ended June 30, 2025 and 2024 is below (dollars in thousands):

Previous wording

The following table provides a summary of our lease revenues during the three months ended March 31, 2025 and 2024 (dollars in thousands):

Current wording

The following table provides a summary of our lease revenues during the three and six months ended June 30, 2025 and 2024 (dollars in thousands):

Previous wording

Lease revenues from fixed lease payments decreased primarily due to the execution of certain lease agreements pursuant to which we agreed to reduce or eliminate the fixed base rent amounts or, in certain cases, provide the tenant with a cash lease incentive, in exchange for significantly increasing the participation rent components in the leases, the majority of which is expected to be realized in the fourth quarter of 2025.

Current wording

Lease revenues from fixed lease payments decreased primarily due to the execution of certain lease agreements pursuant to which we agreed to reduce or eliminate the fixed base rent amounts or, in certain cases, provide the tenant with a cash lease incentive, in exchange for significantly increasing the participation rent components in the leases, the majority of which is expected to be realized in the fourth quarter of 2025. The year-over-year decreases in lease revenues were further impacted by certain of our farms that were vacant, direct-operated through third party management agreements, or on which lease revenues were recognized on a cash basis (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 all or a portion of the three and six months ended June 30, 2025 and 2024.

Previous wording

The increase in lease revenues from participation rents was primarily attributable to additional cash collections from wine grape sales during the three months ended March 31, 2025.

Current wording

The decrease in lease revenues from participation rents was primarily attributable to the earlier recognition of amounts related to the 2023 harvest on certain farms, as additional information became available during the three months ended June 30, 2024. This timing shift resulted in the accelerated recognition of certain revenue amounts into the first half of 2024. This decrease was partially offset by increased cash collections from wine grape sales during the six months ended June 30, 2025. We continue to anticipate increased participation rents in the second half of 2025 as a result of modifications to lease structures on certain farms.

Previous wording

During the three months ended March 31, 2025, we received a lease termination payment from an outgoing tenant who leased three of our farms. After applying a portion of the amount towards certain outstanding receivables owed by the same tenant, we recognized additional lease revenue of approximately $2.4 million upon receipt.

Current wording

During the six months ended June 30, 2025, we received a lease termination payment from an outgoing tenant who leased three of our farms. After applying a portion of the amount towards certain outstanding receivables owed by the same tenant, we recognized additional lease revenue of approximately $2.4 million upon receipt.

Previous wording

Other operating revenue consists of non-lease revenue generated as a result of activities performed on certain of our properties. During the three months ended March 31, 2024, we recognized approximately $426,000 of non-cash revenue associated with the transfer and storing of surplus water on behalf of a government municipality using a groundwater recharge facility constructed on one of our farms. See Note 3, “Real Estate and Intangible Assets—Investments in Water Assets,” within the accompanying notes to our condensed consolidated financial statements for further discussion.

Current wording

Other operating revenue consists of non-lease revenue generated as a result of activities performed on certain of our properties. During the three and six months ended June 30, 2024, we recognized approximately $27,000 and $453,000, respectively, of non-cash revenue associated with the transfer and storing of surplus water on behalf of a government municipality using a groundwater recharge facility constructed on one of our farms. See Note 4, “Investments in Water Assets,” within the accompanying notes to our condensed consolidated financial statements for further discussion.

Previous wording

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 months ended March 31, 2025 and 2024 (dollars in thousands):

Current wording

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, 2025 and 2024 (dollars in thousands):

Previous wording

Property operating expenses increased primarily due to additional costs incurred related to certain farms that were vacant, direct-operated, or on non-accrual status. These costs included additional property taxes (for which the prior tenants were previously responsible), legal fees incurred in connection with rent collection and lease termination efforts, and legal and other costs related to setting up direct farming operations on certain of our farms. During the three months ended March 31, 2025, we also incurred additional legal fees and other costs in connection with protecting water rights on certain farms in California.

Current wording

Property operating expenses increased primarily due to additional costs incurred related to certain farms that were vacant, direct-operated, or on non-accrual status. These costs included additional property taxes and other operating expenses (for which the prior tenants were previously responsible), legal fees incurred in connection with rent collection and lease termination efforts, and legal and other costs related to setting up direct farming operations on certain of our farms. During both the three and six months ended June 30, 2025, we also incurred additional legal fees and other costs in connection with protecting water rights on certain farms in California.

Previous wording

The following table provides the calculations of the base management, incentive, and capital gains fees (as applicable) due to our Adviser pursuant to the Advisory Agreement for the three months ended March 31, 2025 and 2024 (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):

Current wording

The following table provides the calculations of the base management, incentive, and capital gains fees (as applicable) due to our Adviser pursuant to the Advisory Agreement for the three and six months ended June 30, 2025 and 2024 (dollars in thousands; for further discussion on certain defined terms used below, refer to Note 7, “Related-Party Transactions,” within the accompanying notes to our condensed consolidated financial statements):

Previous wording

(5)The capital gains fee is due annually in arrears and is subject to further adjustment throughout the remainder of 2025 as additional assets are disposed of.

Current wording

(5)The capital gains fee is due annually in arrears and is subject to further adjustment throughout the remainder of 2025 if and when we dispose of additional assets. During the second quarter of 2025, we incurred additional losses associated with the disposition of certain assets, resulting in a reversal of the capital gains fee recognized during the first quarter.

Previous wording

The base management fee decreased primarily due to the disposition of 12 farms during 2024.

Current wording

The base management fee decreased primarily due to the disposition of 19 farms since December 31, 2023.

Previous wording

No incentive fee was earned by our Adviser during either of the three months ended March 31, 2025 or 2024, as our Pre-Incentive Fee FFO did not surpass the required hurdle rate in either period.

Current wording

No incentive fee was earned by our Adviser during the three or six months ended June 30, 2025 or 2024, as our Pre-Incentive Fee FFO did not exceed the required hurdle rate in any period.

Previous wording

Our Adviser earned a capital gains fee during the three months ended March 31, 2025, driven by gains recognized on the sale of seven farms completed during the quarter (see “Recent Developments—Portfolio Activity—Existing Properties—Property Sales” above for further discussion on these sales). The capital gains fee, net of any credits that may be granted by our Adviser, is due in arrears at the end of each fiscal year and is subject to further adjustment throughout the remainder of 2025 as additional assets are disposed of.

Current wording

During the three months ended March 31, 2025, our Adviser earned a capital gains fee, driven by the gains recognized on the sale of seven farms completed during the first quarter. During the three months ended June 30, 2025, we incurred additional capital losses associated with the disposition of certain assets, resulting in a reversal of the capital gains fee recorded during the first quarter. The capital gains fee, net of any credits that may be granted by our Adviser, is due in arrears at the end of each fiscal year and is subject to further adjustment throughout the remainder of 2025 if and when we dispose of additional assets.

Previous wording

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 the three months ended March 31, 2025, primarily due to an increase in professional fees (driven by higher legal fees) and additional stockholder-related expenses related to the annual stockholders’ meeting.

Current wording

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 decreased during each of the three and six months ended June 30, 2025, primarily due to a decrease in professional fees (driven by lower consulting fees) and, for the three months ended June 30, 2025, a decrease in stockholder-related expenses related to the annual stockholders’ meeting.