land-20210331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)


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

For the quarterly period ended March 31, 2021


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

For the transition period from _______________ to _______________

Commission file number: 001-35795

GLADSTONE LAND CORPORATION

(Exact name of registrant as specified in its charter)


Maryland		54-1892552
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

1521 Westbranch Drive,	Suite 100
McLean,	Virginia	22102
(Address of principal executive offices)		(Zip Code)

(703) 287-5800

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

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

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.001 par value per share

LAND

The Nasdaq Stock Market, LLC

6.00% Series B Cumulative Redeemable Preferred Stock, $0.001 par value per share

LANDO

The Nasdaq Stock Market, LLC

5.00% Series D Cumulative Redeemable Term Preferred Stock, $0.001 par value per share

LANDM

The Nasdaq Stock Market, LLC

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted 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 such files). Yes ☒ 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 growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☐

Accelerated filer

☐

Non-accelerated filer

☒

Smaller reporting company

☒

Emerging growth company

☐

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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 ☒

The number of shares of the registrant’s Common Stock, $0.001 par value per share, outstanding as of May 11, 2021, was 29,357,403.

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GLADSTONE LAND CORPORATION

FORM 10-Q FOR THE QUARTER ENDED

MARCH 31, 2021

TABLE OF CONTENTS


		PAGE
PART I	FINANCIAL INFORMATION

ITEM 1.	Financial Statements (Unaudited):

	Condensed Consolidated Balance Sheets as of March 3 1 , 202 1 , and December 31, 20 20	3

	Condensed Consolidated Statements of Operations and Comprehensive Income for the three months ended March 3 1 , 202 1 and 2 02 0	4

	Condensed Consolidated Statements of Equity for the three months ended March 3 1 , 202 1 and 20 20	5

	Condensed Consolidated Statements of Cash Flows for the three months ended March 3 1 , 202 1 and 2 0 2 0	6

	Notes to Condensed Consolidated Financial Statements	8

ITEM 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26

ITEM 3.	Quantitative and Qualitative Disclosures About Market Risk	45

ITEM 4.	Controls and Procedures	45

PART II	OTHER INFORMATION

ITEM 1.	Legal Proceedings	46

ITEM 1A.	Risk Factors	46

ITEM 2.	Unregistered Sales of Equity Securities and Use of Proceeds	46

ITEM 3.	Defaults Upon Senior Securities	46

ITEM 4.	Mine Safety Disclosures	46

ITEM 5.	Other Information	46

ITEM 6.	Exhibits	48

SIGNATURES		49

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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)


	March 31, 2021		December 31, 2020
ASSETS
Investments in real estate, net	$	1,046,371	$	1,046,203
Lease intangibles, net	4,390		3,732
Cash and cash equivalents	72,894		9,218
Other assets, net	10,811		8,136
TOTAL ASSETS	$	1,134,466	$	1,067,289

LIABILITIES AND EQUITY
LIABILITIES:
Borrowings under lines of credit	$	100	$	100
Notes and bonds payable, net	628,912		623,961
Series A cumulative term preferred stock, $0.001 par value, $25.00 per share liquidation preference; 850,000 shares authorized, 0 shares issued or outstanding as of March 31, 2021; 2,000,000 shares authorized, 1,150,000 shares issued and outstanding as of December 31, 2020, net	—		28,594
Series D cumulative term preferred stock, $0.001 par value, $25.00 per share liquidation preference; 3,600,000 shares authorized, 2,415,000 shares issued and outstanding as of March 31, 2021; 0 shares authorized, issued, or outstanding as of December 31, 2020, net	58,372		—
Accounts payable and accrued expenses	8,573		9,081
Due to related parties, net	3,146		2,484
Other liabilities, net	17,696		19,279
Total liabilities	716,799		683,499
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 March 31, 2021, and December 31, 2020	6		6
Series C cumulative redeemable preferred stock, $0.001 par value, $25.00 per share liquidation preference; 25,999,862 shares authorized, 1,624,113 shares issued and outstanding as of March 31, 2021; 25,999,862 shares authorized, 1,088,435 shares issued and outstanding as of December 31, 2020	2		1
Common stock, $0.001 par value; 63,094,073 shares authorized, 27,531,951 shares issued and outstanding as of March 31, 2021; 65,544,073 shares authorized, 26,219,019 shares issued and outstanding as of December 31, 2020	27		26
Additional paid-in capital	476,996		440,470
Accumulated other comprehensive loss	(133)		(1,500)
Distributions in excess of accumulated earnings	(61,066)		(55,213)
Total stockholders’ equity	415,832		383,790
Non-controlling interests in Operating Partnership	1,835		—
Total equity	417,667		383,790

TOTAL LIABILITIES AND EQUITY	$	1,134,466	$	1,067,289

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 March 31,
		2021		2020
OPERATING REVENUES:
Lease revenue, net		$	16,034	$	15,280

Total operating revenues		16,034		15,280
OPERATING EXPENSES:
Depreciation and amortization		6,051		4,257
Property operating expenses		429		521
Base management fee		1,369		1,034
Incentive fee		1,162		1,334

Administration fee		357		384
General and administrative expenses		539		553



Total operating expenses		9,907		8,083
OTHER INCOME (EXPENSE):
Other income		2,235		1,324
Interest expense		(6,193)		(4,963)
Dividends declared on Series A and Series D cumulative term preferred stock		(804)		(458)
Loss on dispositions of real estate assets, net		(798)		(99)
Property and casualty recovery, net		—		66

(Loss) income from investments in unconsolidated entities		(13)		34
Total other expense, net		(5,573)		(4,096)
NET INCOME		554		3,101
Net income attributable to non-controlling interests		(1)		(42)
NET INCOME ATTRIBUTABLE TO THE COMPANY		553		3,059
Dividends declared on Series B and Series C cumulative redeemable preferred stock		(2,764)		(2,125)

NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS		$	(2,211)	$	934

(LOSS) INCOME PER COMMON SHARE:
Basic and diluted		$	(0.08)	$	0.04
WEIGHTED-AVERAGE SHARES OF COMMON STOCK OUTSTANDING:
Basic and diluted		26,874,630		21,262,080

COMPREHENSIVE INCOME:
Net income attributable to the Company		$	553	$	3,059
Change in fair value related to interest rate hedging instruments		1,367		(1,257)
COMPREHENSIVE INCOME ATTRIBUTABLE TO THE COMPANY		$	1,920	$	1,802

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

(In thousands, except share data)

(Unaudited)





















	Three months ended March 31, 2021
	Series B Preferred Stock			Series C Preferred Stock			Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Distributions in Excess of Accumulated Earnings		Total Stockholders’ Equity		Non- Controlling Interests		Total Equity
	Number of Shares	Par Value		Number of Shares	Par Value		Number of Shares	Par Value
Balance at December 31, 2020	5,956,065	$	6	1,088,435	$	1	26,219,019	$	26	$	440,470	$	(1,500)	$	(55,213)	$	383,790	$	—	$	383,790


Issuance of preferred C stock, net	—	—		535,678	1		—	—		12,170		—		—		12,171		—		12,171

Issuance of OP Units as consideration in real estate acquisitions, net	—	—		—	—		—	—		—		—		—		—		3,970		3,970

Issuance of common stock, net	—	—		—	—		1,312,932	1		22,229		—		—		22,230		—		22,230
Net income	—	—		—	—		—	—		—		—		553		553		1		554
Dividends—Series B Preferred Stock and Series C Preferred Stock	—	—		—	—		—	—		—		—		(2,764)		(2,764)		—		(2,764)
Distributions—OP Units and common stock	—	—		—	—		—	—		—		—		(3,642)		(3,642)		(9)		(3,651)
Comprehensive income attributable to the Company	—	—		—	—		—	—		—		1,367		—		1,367		—		1,367
Adjustment to non-controlling interests resulting from changes in ownership of the Operating Partnership	—	—		—	—		—	—		2,127		—		—		2,127		(2,127)		—
Balance at March 31, 2021	5,956,065	$	6	1,624,113	$	2	27,531,951	$	27	$	476,996	$	(133)	$	(61,066)	$	415,832	$	1,835	$	417,667





















	Three months ended March 31, 2020
	Series B Preferred Stock			Series C Preferred Stock			Common Stock			Additional Paid-in Capital		Accumulated Other Comprehensive Loss		Distributions in Excess of Accumulated Earnings		Total Stockholders’ Equity		Non- Controlling Interests		Total Equity
	Number of Shares	Par Value		Number of Shares	Par Value		Number of Shares	Par Value
Balance at December 31, 2019	4,755,869	$	5	—	—		20,936,658	$	21	$	315,770	$	(390)	$	(38,785)	$	276,621	$	2,349	$	278,970
Issuance of Series B Preferred Stock, net	1,229,531	1		—	—		—	—		27,115		—		—		27,116		—		27,116
Redemptions of Series B Preferred Stock	(7,753)	0		—	—		—	—		(185)		—		—		(185)		—		(185)




Issuance of common stock, net	—	—		—	—		409,800	0		5,324		—		—		5,324		—		5,324
Net income	—	—		—	—		—	—		—		—		3,059		3,059		42		3,101
Dividends—Series B Preferred Stock and Series C Preferred Stock	—	—		—	—		—	—		—		—		(2,125)		(2,125)		—		(2,125)
Distributions—OP Units and common stock	—	—		—	—		—	—		—		—		(2,850)		(2,850)		(39)		(2,889)
Comprehensive loss attributable to the Company												(1,257)		—		(1,257)		—		(1,257)
Adjustment to non-controlling interests resulting from changes in ownership of the Operating Partnership	—	—		—	—		—	—		(4)		—		—		(4)		4		—
Balance at March 31, 2020	5,977,647	$	6	—	$	—	21,346,458	$	21	$	348,020	$	(1,647)	$	(40,701)	$	305,699	$	2,356	$	308,055

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 Three Months Ended March 31,
	2021		2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	554	$	3,101
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	6,051		4,257
Amortization of debt issuance costs	388		179
Amortization of deferred rent assets and liabilities, net	(179)		(69)
Amortization of right-of-use assets from operating leases and operating lease liabilities, net	(33)		—
Loss (income) from investments in unconsolidated entities	13		(34)
Bad debt expense	—		12
Loss on dispositions of real estate assets, net	798		99


Changes in operating assets and liabilities:
Other assets, net	(924)		(1,857)
Accounts payable and accrued expenses and Due to related parties, net	1,099		(1,243)
Other liabilities, net	(1,111)		(949)
Net cash provided by operating activities	6,656		3,496
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of new real estate assets	(1,579)		(7,436)
Capital expenditures on existing real estate assets	(3,027)		(2,682)



Deposits on prospective real estate acquisitions and investments	(800)		(50)
Net cash used in investing activities	(5,406)		(10,168)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of preferred and common equity	35,868		35,589
Offering costs	(1,447)		(2,523)
Redemptions of cumulative redeemable preferred stock (Series B and Series C)	—		(185)

Proceeds from issuance of mandatorily-redeemable preferred stock (Series D)	60,375		—
Redemption of mandatorily-redeemable preferred stock (Series A)	(28,750)		—
Borrowings from notes and bonds payable	9,903		—
Repayments of notes and bonds payable	(4,973)		(4,388)


Payments of financing fees	(2,223)		(263)
Dividends paid on cumulative redeemable preferred stock (Series B and Series C)	(2,676)		(2,125)
Distributions paid on non-controlling common interests in Operating Partnership	(9)		(39)
Distributions paid on common stock	(3,642)		(2,850)

Net cash provided by financing activities	62,426		23,216
NET INCREASE IN CASH AND CASH EQUIVALENTS	63,676		16,544
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD	9,218		13,688
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	72,894	$	30,232

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 (Continued)

(In thousands)

(Unaudited)


	For the Three Months Ended March 31,
	2021		2020
NON-CASH OPERATING, INVESTING, AND FINANCING INFORMATION:
Issuance of non-controlling interests in Operating Partnership in conjunction with acquisitions, net	$	3,970	$	—
Operating lease right-of-use assets included in Other assets, net	683		168
Operating lease liabilities included in Other liabilities, net	644		127
Real estate additions included in Accounts payable and accrued expenses and Due to related parties, net	692		2,699


Stock offering and OP Unit issuance costs included in Accounts payable and accrued expenses and Due to related parties, net	—		28
Financing fees included in Accounts payable and accrued expenses and Due to related parties, net	165		77

Lender holdback on loan issuance	—		498
Unrealized loss related to interest rate hedging instrument	(133)		(1,647)
Dividends paid on Series C Preferred Stock via additional share issuances	21		—

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

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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”) is an agricultural real estate investment trust (“REIT”) that was re-incorporated in Maryland on March 24, 2011, 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. 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 interest in the Operating Partnership (“OP Units”), the financial position and results of operations of the Operating Partnership are consolidated within our financial statements. As of March 31, 2021 and December 31, 2020, the Company owned approximately 99.3% and 100.0%, respectively, of the outstanding OP Units (see Note 8, “Equity,” for additional discussion regarding OP Units).

Gladstone Land Advisers, Inc. (“Land Advisers”), a Delaware corporation and a 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”) 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 three months ended March 31, 2021, and for the tax year ended December 31, 2020, 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 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, 2020, as filed with the U.S. Securities and Exchange Commission (the “SEC”) on February 24, 2021 (the “Form 10-K”). The results of operations for the three months ended March 31, 2021, 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, including the impact of extraordinary events, such as the novel coronavirus (“COVID-19”) pandemic, the results of which form the basis for making certain judgments. Actual results may materially differ from these estimates.

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Recently-Issued Accounting Pronouncements

In April 2020, the FASB issued a staff question-and-answer document, “Topic 842 and Topic 840: Accounting for Lease Concessions Related to the Effects of the COVID-19 Pandemic” (the “COVID-19 Q&A”), to address certain frequently-asked questions pertaining to lease concessions arising from the effects of the COVID-19 pandemic. Existing lease guidance requires entities to determine if a lease concession is a result of a new arrangement reached with the tenant (which would be addressed under the lease modification accounting framework) or if a lease concession is under the enforceable rights and obligations within the existing lease agreement (which would not fall under the lease modification accounting framework). The COVID-19 Q&A clarifies that entities may elect to not evaluate whether lease-related relief granted in light of the effects of COVID-19 is a lease modification, provided that the concession does not result in a substantial increase in rights of the lessor or obligations of the lessee. This election is available for concessions that result in the total payments required by the modified contract being substantially the same as or less than the total payments required by the original contract.

NOTE 3. REAL ESTATE AND INTANGIBLE ASSETS

All of our properties are wholly-owned on a fee-simple basis, except where noted. The following table provides certain summary information about the 140 farms we owned as of March 31, 2021 (dollars in thousands, except for footnotes):


Location	No. of Farms	Total Acres	Farm Acres	Net Cost Basis(1)		Encumbrances(2)
California(3)(4)	56	25,202	23,531	$	622,177	$	383,829
Florida	23	20,770	16,256	209,525		129,527
Arizona(5)	6	6,280	5,228	57,368		19,575
Colorado	12	32,773	25,577	48,023		30,147
Washington	3	1,384	1,001	39,006		25,425
Nebraska	9	7,782	7,050	30,601		19,296
Michigan	15	962	682	11,832		7,011
Texas	1	3,667	2,219	8,306		5,117
Maryland	6	987	863	7,939		4,644
Oregon	3	418	363	6,091		3,839
South Carolina	3	597	447	3,790		2,259
North Carolina	2	310	295	2,235		1,206
Delaware	1	180	140	1,272		744
	140	101,312	83,652	$	1,048,165	$	632,619

(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 Investments in real estate, net (excluding improvements paid for by the tenant) and Lease intangibles, net; plus 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.

(2)Excludes approximately $3.6 million of debt issuance costs related to notes and bonds payable, included in Notes and bonds payable, net on the accompanying Condensed Consolidated Balance Sheet.

(3)Includes ownership in a special-purpose LLC that owns a pipeline conveying water to certain of our properties. As of March 31, 2021, this investment had a net carrying value of approximately $1.1 million and is included within Other assets, net on the accompanying Condensed Consolidated Balance Sheet.

(4)Includes one farm in which we own a leasehold interest via a ground sublease with a California municipality that expires in December 2041. The farm subject to this sublease consists of approximately five acres and had an aggregate net cost basis of approximately $784,000 as of March 31, 2021 (included in Lease intangibles, net on the accompanying Condensed Consolidated Balance Sheet).

(5)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 an aggregate net cost basis of approximately $2.3 million as of March 31, 2021 (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 March 31, 2021, and December 31, 2020 (dollars in thousands):

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	March 31, 2021		December 31, 2020
Real estate:
Land and land improvements	$	714,676	$	713,333
Permanent Plantings	202,443		202,420
Irrigation and drainage systems	140,855		141,408
Farm-related facilities	32,812		28,146
Other site improvements	10,285		10,132
Real estate, at gross cost	1,101,071		1,095,439
Accumulated depreciation	(54,700)		(49,236)
Real estate, net	$	1,046,371	$	1,046,203

Real estate depreciation expense on these tangible assets was approximately $5.7 million and $3.4 million for the three months ended March 31, 2021 and 2020, 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 tenant improvements. As of both March 31, 2021, and December 31, 2020, we recorded tenant improvements, net of accumulated depreciation, of approximately $2.0 million. We recorded both depreciation expense and additional lease revenue related to these tenant improvements of approximately $98,000 and $75,000 for the three months ended March 31, 2021 and 2020, respectively.

Intangible Assets and Liabilities

The following table summarizes the carrying values of certain lease intangible assets and the related accumulated amortization as of March 31, 2021, and December 31, 2020 (dollars in thousands):


	March 31, 2021		December 31, 2020
Lease intangibles:
Leasehold interest – land	$	4,285	$	3,498
In-place leases	1,824		1,968
Leasing costs	1,616		1,640
Tenant relationships	127		127
Lease intangibles, at cost	7,852		7,233
Accumulated amortization	(3,462)		(3,501)
Lease intangibles, net	$	4,390	$	3,732

Total amortization expense related to these lease intangible assets was approximately $383,000 and $826,000 for the three months ended March 31, 2021 and 2020, respectively.

The following table summarizes the carrying values of certain lease intangible assets or liabilities included in Other assets, net or Other liabilities, net, respectively, on the accompanying Condensed Consolidated Balance Sheets and the related accumulated amortization or accretion, respectively, as of March 31, 2021, and December 31, 2020 (dollars in thousands):


	March 31, 2021				December 31, 2020
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)	$	255	$	(110)	$	308	$	(154)
Below-market lease values and other deferred revenue(2)	(2,229)		372		(908)		336
	$	(1,974)	$	262	$	(600)	$	182

(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.

(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.

Total amortization related to above-market lease values and lease incentives was approximately $(44,000) and $31,000 for the three months ended March 31, 2021 and 2020, respectively. Total accretion related to below-market lease values and other deferred revenue was approximately $36,000 and $25,000 for the three months ended March 31, 2021 and 2020, respectively.

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Acquisitions

2021 Acquisitions

During the three months ended March 31, 2021, we acquired three new farms, 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(1)		Annualized Straight-line Rent(2)
Palmer Mill Road	Dorchester, MD	3/3/2021	228	2	Sod	10.0 years	2 (5 years)	$	1,600	$	48	$	89
Eight Mile Road - Port Facility	San Joaquin, CA	3/11/2021	5	1	Cooling Facility & Storage	9.8 years	3 (5 years)	3,977		30		189
			233	3				$	5,577	$	78	$	278

(1)Includes approximately $4,000 of external legal fees associated with negotiating and originating the leases associated with these acquisitions, which costs were expensed in the period incurred.

(2)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.

During the three months ended March 31, 2021, in the aggregate, we recognized operating revenues of approximately $25,000 and a net loss of approximately $4,000 related to the above acquisitions.

2020 Acquisitions

During the three months ended March 31, 2020, we acquired two new farms, 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)	Lease Term	Renewal Options	Total Purchase Price		Acquisition Costs(1)		Annualized Straight-line Rent(2)
County Road 18	Phillips, CO	1/15/2020	1,325	2	Sugar beets, edible beans, potatoes, & corn	6.0 years	None	$	7,500	$	39	$	417
			1,325	2				$	7,500	$	39	$	417

(1)Includes approximately $4,000 of aggregate external legal fees associated with negotiating and originating the leases associated with these acquisitions, which costs were expensed in the period incurred.

(2)Unaudited; based on the minimum cash rental payments guaranteed under the applicable leases, as required under GAAP, and excludes contingent rental payments, such as participation rents.

During the three months ended March 31, 2020, we recognized operating revenues of approximately $88,000 and net income of approximately $70,000 related to the above acquisition.

Purchase Price Allocations

The allocation of the aggregate purchase price for the farms acquired during each of the three months ended March 31, 2021 and 2020 is as follows (dollars in thousands):


Assets (Liabilities) Acquired	2021 Acquisitions		2020 Acquisitions
Land and Land Improvements	$	1,341	$	6,843
Irrigation & Drainage Systems	209		657

Farm-related Facilities	4,218		—
Other Site Improvements	88		—
Leasehold Interest—Land	787
In-Place Leases	110		—
Leasing Costs	145		—

Below-market Lease Values(1)	(1,321)		—

Total Purchase Price	$	5,577	$	7,500

(1)Included within Other liabilities, net on the accompanying Condensed Consolidated Balance Sheets.

Investments in Unconsolidated Entities

In connection with the acquisition of certain farmland located in Fresno County, California, we also acquired an ownership in a related LLC, the sole purpose of which is to own and maintain a pipeline conveying water to our and other neighboring

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properties. As of March 31, 2021, our aggregate ownership interest in the LLC was 50.0%. As our investment in the LLC is deemed to constitute “significant influence,” we have accounted for this investment under the equity method.

During the three months ended March 31, 2021 and 2020, we recorded (loss) income of approximately $(13,000) and $34,000, respectively (included on our Condensed Consolidated Statements of Operations and Comprehensive Income as (Loss) income from investments in unconsolidated entities), which represents our pro-rata share of the (loss) income recognized by the LLC. Our combined ownership interest in the LLC, which had an aggregate carrying value of approximately $1.1 million and $1.2 million, as of March 31, 2021, and December 31, 2020, respectively, is included within Other assets, net on the accompanying Condensed Consolidated Balance Sheets.

Portfolio Concentrations

Credit Risk

As of March 31, 2021, our farms were leased to various different, unrelated third-party tenants, with certain tenants leasing more than one farm. No individual tenant represented greater than 10.0% of the total lease revenue recorded during the three months ended March 31, 2021.

Geographic Risk

Farms located in California and Florida accounted for approximately $9.9 million (61.9%) and $3.4 million (20.9%), respectively, of the total lease revenue recorded during the three months ended March 31, 2021. 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 climactic 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. No other single state accounted for more than 10.0% of our total lease revenue recorded during the three months ended March 31, 2021.

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 March 31, 2021, and December 31, 2020, 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 March 31, 2021, and December 31, 2020, are summarized below (dollars in thousands):

Carrying Value as of

As of March 31, 2021

March 31, 2021

December 31, 2020

Stated Interest

Rates(1)

(Range; Wtd. Avg)

Maturity Dates
(Range; Wtd. Avg)

Notes and bonds payable:

Fixed-rate notes payable

536,015

492,182

2.45%–5.70%; 3.72%

2/14/2022–11/1/2045; December 2031

Variable-rate notes payable(2)

4,410

45,525

2.11%–2.11%; 2.11%

12/1/2022–12/1/2030; October 2029

Fixed-rate bonds payable

92,094

89,883

2.13%–4.57%; 3.49%

8/17/2021–10/31/2028; July 2024

Total notes and bonds payable

632,519

627,590

Debt issuance costs – notes and bonds payable

(