Annual report pursuant to Section 13 and 15(d)

Commitments and Contingencies (Tables)

Commitments and Contingencies (Tables)
12 Months Ended
Dec. 31, 2023
Commitments and Contingencies Disclosure [Abstract]  
Schedule of Operating Lease Obligations
In connection with the execution of certain lease agreements, we have committed to provide capital improvements on certain of our farms. Below is a summary of certain of those projects for which we have incurred or accrued costs as of December 31, 2023 (dollars in thousands):
Amount Expended
or Accrued as of
December 31, 2023
Columbia, OR 157 1,800 
Q3 2024 1,146 
St. Lucie, FL 549 230  Q3 2025 185 
Atkinson, GA 175 175  Q3 2025 30 
Ventura, CA 402 1,000 
Q4 2025 448 
Napa, CA 270 1,635 
Q4 2029 1,158 
Wicomico & Caroline, MD, and Sussex, DE 833 115  Q3 2030 49 
Franklin & Grant, WA, & Umatilla, OR 1,126 2,169 
Q4 2032 1,997 
(1)Our obligation to provide capital to fund these improvements does not extend beyond these respective dates.
(2)Pursuant to contractual agreements, we will earn additional rent on the cost of these capital improvements as the funds are disbursed by us.
Summary of Leasing Activity
As of December 31, 2023 and 2022, we recorded the following as a result of these operating ground leases (dollars in thousands, except for footnotes):
December 31, 2023 December 31, 2022
Operating lease right-of-use assets(1)
$ 574  $ 623 
Operating lease liabilities(2)
$ 568  $ 617 
Weighted-average remaining lease term (years) 15.0 15.3
Weighted-average incremental borrowing rate 8.12  % 7.93  %
(1)Operating lease right-of-use assets are shown net of prepaid lease payments of approximately $6,000 for each of the years ended December 31, 2023 and 2022 and are included within Other assets, net on the accompanying Consolidated Balance Sheets.
(2)Included within Other liabilities, net on the accompanying Consolidated Balance Sheets.
The following table sets forth the components of our lease revenue for the years ended December 31, 2023, 2022, and 2021 (dollars in thousands, except for footnotes):
For the Years Ended December 31,
2023 2022 2021
Fixed lease payments(1)
$ 83,695  $ 81,423  $ 69,998 
Variable lease payments(2)
6,624  7,813  5,320 
Lease revenue, net(3)
$ 90,319  $ 89,236  $ 75,318 
(1)Fixed lease payments include contractual rents under lease agreements with tenants recognized on a straight-line basis over the respective lease terms and includes the amortization of above-market lease values and lease incentives and the accretion of below-market lease values and other deferred revenue.
(2)Variable lease payments include participation rents, which are generally based on a percentage of the gross crop revenues earned on the farm, and reimbursements of certain property operating expenses by tenants. Participation rents are generally recognized when all contingencies have been resolved and when actual results become known or estimable, enabling us to estimate and/or measure our share of such gross revenues. During the years ended December 31, 2023, 2022, and 2021, we recorded participation rents of approximately $5.9 million, $7.7 million, and $5.2 million, respectively, and reimbursements of certain property operating expenses by tenants of approximately $688,000, $110,000, and $101,000, respectively. In addition, during the year ended December 31, 2023, we recorded late fees of approximately $46,000.
(3)Reflected as a line item on our accompanying Consolidated Statements of Operations and Comprehensive Income.
Schedule of Future Lease Payments
Future minimum lease payments due under the remaining non-cancelable terms of these leases as of December 31, 2023, are as follows (dollars in thousands):
Future Lease Payments(1)
For the fiscal years ending December 31: 2024 $ 92 
2025 62 
2026 62 
2027 62 
2028 62 
Thereafter 631 
Total undiscounted lease payments 971 
Less: imputed interest (403)
Present value of lease payments $ 568 
(1)Certain annual lease payments are set at the beginning of each year to then-current market rates (as determined by the lessor). The amounts shown above represent estimated amounts based on the lease rates currently in place.