Gladstone Land Corporation Quarterly report [Sections 13 or 15(d)]

Quarterly report [Sections 13 or 15(d)]

REAL ESTATE AND INTANGIBLE ASSETS

REAL ESTATE AND INTANGIBLE ASSETS

9 Months Ended

Sep. 30, 2025

All of our properties are wholly-owned on a fee-simple basis, except where noted. The following table summarizes certain information about the 148 farms we owned as of September 30, 2025 (dollars in thousands, except for footnotes):


Location	No. of Farms	Total Acres	Farm Acres	Acre-feet of Water Assets	Net Cost Basis(1)		Encumbrances(2)
California(3)(4)(5)	63	34,845	32,321	55,532	$	817,677	$	358,574
Florida	18	10,412	8,635	0	113,363		46,112
Washington	6	2,520	2,004	0	52,055		14,843
Arizona(6)	6	6,320	5,333	0	48,701		11,642
Colorado	12	32,773	25,577	0	45,312		13,225
Oregon(7)	6	898	736	0	29,315		10,575
Nebraska	7	5,223	4,949	0	19,757		9,466
Michigan	12	1,245	778	0	14,810		8,455
Texas	1	3,667	2,219	0	9,386		—
Maryland	6	987	863	0	7,876		4,086
South Carolina	3	597	447	0	3,384		2,051
Georgia	2	230	175	0	2,275		1,553
North Carolina	2	310	295	0	2,044		—
New Jersey	3	116	101	0	2,039		1,166
Delaware	1	180	140	0	1,270		656
	148	100,323	84,573	55,532	$	1,169,264	$	482,404

(1)Consists of the initial acquisition price (including the costs allocated to both tangible and intangible assets acquired and liabilities assumed), plus subsequent improvements and other capitalized costs associated with the properties, and adjusted for accumulated depreciation and amortization. Specifically, includes Total real estate, net and Lease intangibles, net; plus long-term water assets and related acquisition costs, net above-market lease values, net lease incentives, and net 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 $2.0 million of debt issuance costs related to notes and bonds payable, included in Notes and bonds payable, net on the accompanying Condensed Consolidated Balance Sheets.

(3)Includes ownership in a special-purpose LLC that owns a pipeline conveying water to certain of our properties. As of September 30, 2025, this investment had a net carrying value of approximately $872,000 and is included within Other assets, net on the accompanying Condensed Consolidated Balance Sheets.

(4)Includes eight acres in which we own a leasehold interest via a ground lease with a private individual that expires in December 2040 and five acres in which we own a leasehold interest via a ground sublease with a California municipality that expires in December 2041. As of September 30, 2025, these two ground leases had a net cost basis of approximately $622,000 and are included in Lease intangibles, net on the accompanying Condensed Consolidated Balance Sheets.

(5)Includes 48,309 acre-feet of water stored with Semitropic Water Storage District, located in Kern County, California, and 7,223 surplus water credits in certain of our accounts with Westlands Water District, located in Fresno County, California. See Note 4, “Investments in Water Assets,” for additional information.

(6)Includes two farms consisting of 1,368 total acres and 1,221 farm acres in which we own leasehold interests via two ground leases with the State of Arizona that expire in February 2032 and February 2035, respectively. As of September 30, 2025, the aggregate net cost basis of these ground leases was zero.

(7)Includes ownership in a special-purpose LLC that owns certain irrigation infrastructure that provides water to two of our farms. As of September 30, 2025, this investment had a net carrying value of approximately $4.8 million and is included within Other assets, net on the accompanying Condensed Consolidated Balance Sheets.

Real Estate

The following table sets forth the components of our investments in tangible real estate assets as of September 30, 2025, and December 31, 2024 (dollars in thousands):


	September 30, 2025		December 31, 2024
Real estate:
Land and land improvements	$	728,591	$	743,141
Permanent plantings	347,398		349,761
Irrigation and drainage systems	171,292		169,098
Farm-related facilities	49,049		49,063
Other site improvements	15,009		13,569
Real estate, at cost	1,311,339		1,324,632
Accumulated depreciation	(190,214)		(167,782)
Total real estate, net	$	1,121,125	$	1,156,850

Real estate depreciation expense on these tangible assets was approximately $8.3 million and $24.8 million for the three and nine months ended September 30, 2025, respectively, and approximately $8.5 million and $25.6 million for the three and nine months ended September 30, 2024, respectively.

Intangible Assets and Liabilities

The following table summarizes the carrying values of certain lease intangible assets and the related accumulated amortization as of September 30, 2025, and December 31, 2024 (dollars in thousands):


	September 30, 2025		December 31, 2024
Lease intangibles:
Leasehold interest – land	$	797	$	3,372
In-place lease values	1,744		1,798
Leasing costs	2,199		2,280
Other(1)	117		117
Lease intangibles, at cost	4,857		7,567
Accumulated amortization	(1,625)		(3,979)
Lease intangibles, net	$	3,232	$	3,588

(1)Other includes tenant relationships and acquisition-related costs allocated to miscellaneous lease intangibles.

Total amortization expense related to these lease intangible assets was approximately $103,000 and $357,000 for the three and nine months ended September 30, 2025, respectively, and approximately $318,000 and $838,000 for the three and nine months ended September 30, 2024, respectively.

The following table summarizes the carrying values of certain lease intangible assets or liabilities (excluding those related to real estate held for sale) 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 September 30, 2025, and December 31, 2024 (dollars in thousands):


	September 30, 2025				December 31, 2024
Intangible Asset or Liability	Deferred Rent Asset (Liability)		Accumulated (Amortization) Accretion		Deferred Rent Asset (Liability)		Accumulated (Amortization) Accretion
Above-market lease values(1)	$	695	$	(255)	$	695	$	(198)
Below-market lease values(2)	(1,371)		662		(1,371)		561
Lease incentives and other deferred revenue, net(3)	13,512		(11,148)		14,192		(3,691)
	$	12,836	$	(10,741)	$	13,516	$	(3,328)

(1)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, net on the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income.

(2)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, net on the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income.

(3)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, net on the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income. Other deferred revenue is primarily attributable to tenant-funded improvements and is 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, net on the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income.

Total amortization related to above-market lease values was approximately $19,000 and $58,000 for the three and nine months ended September 30, 2025, respectively, and approximately $19,000 and $58,000 for the three and nine months ended

September 30, 2024, respectively. Total accretion related to below-market lease values was approximately $34,000 and $101,000 for the three and nine months ended September 30, 2025, respectively, and approximately $203,000 and $392,000 for the three and nine months ended September 30, 2024, respectively. Total net (amortization) accretion related to lease incentives and other deferred revenue, net was approximately $(3.0) million and $(9.1) million for the three and nine months ended September 30, 2025, respectively, and approximately $456,000 and $(201,000) for the three and nine months ended September 30, 2024, respectively.

Acquisitions

We did not acquire any new farms during either of the three or nine months ended September 30, 2025 or 2024.

Property Sales

2025 Property Sales

In January 2025, we completed the sale of five farms in Florida totaling 5,630 gross acres for an aggregate sales price of approximately $52.5 million. Including closing costs, we recognized a net gain on the sale of approximately $14.1 million.

In February 2025, we completed the sale of two farms in Nebraska totaling 2,559 gross acres for an aggregate sales price of $12.0 million. Including closing costs, we recognized an aggregate net gain on these sales of approximately $1.6 million.

In August 2025, we completed the sale of two farms in Florida totaling 2,678 gross acres for an aggregate sales price of $21.5 million. Including closing costs, we recognized an aggregate net gain on these sales of approximately $6.0 million.

2024 Property Sales

In January 2024, we completed the sale of a 3,748-acre farm in Florida for approximately $65.7 million. Including closing costs, we recognized a net gain on the sale of approximately $10.4 million.

Real Estate Held for Sale

As of December 31, 2024, we had three properties (consisting of seven farms) that were classified as held for sale. Each of these properties were sold during the three months ended March 31, 2025, as noted above.

Investments in Unconsolidated Entities

In connection with the acquisition of certain farmland located in Fresno County, California, we also acquired partial ownership of a related limited liability company (the “Fresno LLC”), the sole purpose of which is to own and maintain a pipeline conveying water to our and other neighboring properties. In addition, in connection with the acquisition of certain farmland located in Umatilla County, Oregon, we also acquired partial ownership of a related limited liability company (the “Umatilla LLC”), the sole purpose of which is to own and maintain an irrigation system providing water to our and other neighboring properties.

As of September 30, 2025, our aggregate ownership interest in the Fresno LLC and the Umatilla LLC was 50.0% and 20.5%, respectively. As our investments in the Fresno LLC and Umatilla LLC are both deemed to constitute “significant influence,” we have accounted for these investments under the equity method.

We recorded an aggregate gain (loss) of approximately $58,000 and $(128,000) during the three and nine months ended September 30, 2025, respectively, and approximately $28,000 and $(143,000) during the three and nine months ended September 30, 2024, respectively (included in Loss from investments in unconsolidated entities on our Condensed Consolidated Statements of Operations and Comprehensive Income), which represents our pro-rata share of the aggregate gain (loss) recognized by the Fresno LLC and Umatilla LLC. As of September 30, 2025, and December 31, 2024, our combined ownership interest in the Fresno LLC and the Umatilla LLC had an aggregate carrying value of approximately $5.6 million and $5.7 million, respectively, and is included within Other assets, net on the accompanying Condensed Consolidated Balance Sheets.

Portfolio Concentrations

Credit Risk

As of September 30, 2025, our farms were leased to various different, unrelated third-party tenants, with certain tenants leasing more than one farm. One unrelated third-party tenant (“Tenant A”) leases six of our farms under leases expiring in 2030 or later, and another third-party tenant (“Tenant B”) leases two of our farms under leases expiring in 2027. During the nine

months ended September 30, 2025, aggregate lease revenue attributable to Tenant A and Tenant B accounted for approximately $5.6 million (12.0%) and $4.7 million (10.1%), respectively, of the total lease revenue. If either Tenant A or Tenant B fails to make rental payments or elects to terminate their leases prior to their expirations (and we cannot re-lease the farms on satisfactory terms), there could be a material adverse effect on our financial performance. No other individual tenant represented greater than 10% of the total lease revenue recorded during the nine months ended September 30, 2025.

Geographic Risk

Farms located in California and Florida accounted for approximately $28.8 million (61.5%) and $6.8 million (14.6%), respectively, of the total lease revenue recorded during the nine months ended September 30, 2025. We seek to continue to further diversify geographically, as may be desirable or feasible. If an unexpected natural disaster (such as an earthquake, wildfire, flood, or hurricane) occurs or climate change impacts the regions where our properties are located, there could be a material adverse effect on our financial performance and ability to continue our operations. To date, none of our farms have been materially impacted by natural disasters, including the January 2025 wildfires that occurred in southern California. See “—Southeastern U.S. Hurricanes” below for a discussion on damage caused on certain of our farms by the hurricanes that occurred in the Southeastern U.S. in September and October 2024. Besides California and Florida, no other single state accounted for more than 10.0% of the total lease revenue recorded during the nine months ended September 30, 2025.

Southeastern U.S. Hurricanes

In September and October 2024, Hurricanes Helene and Milton caused widespread destruction across many states in the Southeastern U.S., including areas where several of our farms are located.

As a result of Hurricane Helene in September 2024, one of our farms in Georgia suffered damage to certain permanent plantings on the farm. At the time, we estimated the carrying value of such plantings to be approximately $275,000, and during the three months ended September 30, 2024, we wrote down the carrying value of these plantings and also recorded a corresponding property and casualty loss. During the three months ended March 31, 2025, after further inspection of the property, it was determined that the damage was not as extensive as originally estimated, and we recorded an adjustment to our original estimate, which is included within Property and casualty (loss) recovery, net on our Condensed Consolidated Statements of Operations and Comprehensive Income. Certain of our other farms in the region suffered minor damage as a result of Hurricanes Helene and Milton, but none of our other farms were materially impacted.

Impairment

We evaluate our entire portfolio each quarter for any impairment indicators and perform an impairment analysis on those select properties that have an indication of impairment. If this analysis indicates that the carrying value may not be recoverable, an impairment loss is recorded in earnings equal to the amount by which the carrying value exceeds the fair value of the asset. During the three months ended September 30, 2025, as a result of shortening our assumed holding period, we recognized an impairment charge of approximately $316,000 on one property (encompassing two farms) located in St. Lucie County, Florida, due to the estimated fair value being lower than the carrying value. Our estimate of fair value was determined based on the expected sales price per an agreement entered into subsequent to September 30, 2025. During the three months ended September 30, 2024, we recognized an aggregate impairment charge of approximately $2.1 million on portions of four properties (encompassing a total of 11 farms) located in Allegan and Van Buren, Michigan, due to the estimated fair values being lower than the respective carrying values.

INVESTMENTS IN WATER ASSETS

Semitropic Water Storage District Banked Water

In connection with the acquisition of certain farmland located in Kern County, California, in 2021, we also acquired three contracts providing the right to purchase an aggregate of 45,000 acre-feet of banked water held by Semitropic Water Storage District (“SWSD”), a water storage district located in Kern County, California, at a fixed price. At the time of acquisition, we allocated approximately $31.3 million of aggregate value to these contracts. Subsequently in 2021, we executed all three contracts and purchased the full 45,000 acre-feet of banked water for an additional aggregate cost of approximately $2.8 million.

In addition, since the initial acquisition, additional contracts to purchase banked water held by SWSD were conveyed to us by one of our tenants as partial consideration for rent payments owed. The following table summarizes the total acre-feet of banked water obtained through exercising these contracts as of September 30, 2025 (dollars in thousands):


Period Acquired	Acre-feet of Banked Water Available to Purchase per Contract	Acre-feet of Banked Water Purchased(1)	Value Attributed to Contract(2)		Cost to Exercise Contract		Total Carrying Value of Banked Water Purchased
Three months ended December 31, 2023	1,003	1,003	$	401	$	62	$	463
Three months ended March 31, 2024	2,306	2,306	923		141		1,064
Total	3,309	3,309	$	1,324	$	203	$	1,527

(1)All contracts to purchase additional banked water were exercised in the same quarter in which the respective contract was conveyed to us.

(2)Represents noncash income received during the respective periods. The straight-line impact of these receipts is included within Lease revenue, net on the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income.

All banked water acquired was recognized at cost, including the subsequent cost to execute the contracts and any administrative fees necessary to transfer the water to our banked water account. As of September 30, 2025, the 48,309 acre-feet of banked water held by SWSD was recognized as a long-term water asset and had an aggregate carrying value of approximately $35.5 million.

Westlands Water District Groundwater Credits

In addition, from May 2023 through March 2024, we elected to participate in a groundwater recharge program established by Westlands Water District (“WWD”), a water district located in Fresno County, California. Under the program, WWD paid for surplus surface water to be delivered to individual landowners’ properties with district-approved groundwater recharge facilities, also known as “water banks.” The landowner was allowed to keep 50% of the net amount of groundwater credits generated under the program (after allowing for certain leave-behind and evaporative losses), and the remaining 50% was used to recharge the aquifer and retained by WWD. Delivery of water under this program was subject to surplus water availability at WWD’s discretion. WWD terminated the program for the 2024 water year effective March 5, 2024. As a result of the program, we recognized 2,660 acre-feet of water credits, which represents 50% of the total net water credits generated and confirmed by WWD under the program. As a result of being granted these water credits in exchange for transferring and storing this surplus water on behalf of WWD, we recognized approximately $0 and $453,000 of non-cash revenue during the three and nine months ended September 30, 2024, respectively, which represents the estimated fair value of the water credits obtained during the periods. As of September 30, 2025, these water credits were recognized as a long-term water asset and had an aggregate carrying value of approximately $746,000.

Other Groundwater Credits

Since 2023, we have also entered into various other agreements with third parties, including local water districts and private individuals, to (i) purchase water directly, (ii) acquire portions of other water districts’ surface water allocations in future years in which allocations are granted, or (iii) store surface water on behalf of others in our groundwater recharge facilities in exchange for a portion of the net groundwater credits generated and recognized by the respective water district. Through September 30, 2025, we have obtained 4,563 acre-feet of water credits under these agreements, which have been recognized as a long-term water asset with an aggregate carrying value of approximately $884,000. During each of the three and nine months ended September 30, 2025, we recognized approximately $48,000 of revenue, representing the estimated fair value of water credits received in exchange for storing water on behalf of third parties (included within Other operating revenue on our Condensed Consolidated Statements of Operations and Comprehensive Income).

Total Long-term Water Assets

As of September 30, 2025, we owned a total of 55,532 acre-feet of long-term water assets, and our investments in these assets had an aggregate carrying value of approximately $37.2 million and are included within Investments in water assets on our Condensed Consolidated Balance Sheets.

In addition, we have invested approximately $1.5 million to construct and maintain groundwater recharge facilities on two of our farms, which is included within Real estate, at cost on our Condensed Consolidated Balance Sheets. Through September 30, 2025, we have also invested an additional $4.4 million in the aggregate in connection with certain agreements that are expected to result in additional groundwater credits in the future; however, the amount and timing of these credits, if any, is currently unknown and is dependent upon and subject to the recognition of such credits by the respective water districts, in their sole discretion. Such costs are held in a deferred asset account (also included within Investments in water assets on our Condensed Consolidated Balance Sheets) until the related net water credits become estimable and are recognized by the respective water district, at which time the costs would be considered a long-term water asset within Investments in water assets.

Impairment

We evaluate our entire portfolio each quarter for any impairment indicators and perform an impairment analysis on those select water assets that have an indication of impairment. If this analysis indicates that the carrying value may not be recoverable, an impairment loss is recorded in earnings equal to the amount by which the carrying value exceeds the fair value of the asset. As of September 30, 2025, and December 31, 2024, we concluded that none of our water assets were impaired.