Gladstone Land Corporation Annual report [Section 13 and 15(d), not S-K Item 405]

Annual report [Section 13 and 15(d), not S-K Item 405]

REAL ESTATE AND INTANGIBLE ASSETS

REAL ESTATE AND INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2025

All of our properties are wholly-owned on a fee-simple basis, except where noted. The following table provides certain summary information about the 144 farms we owned as of December 31, 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	$	816,801	$	356,838
Florida	18	10,412	8,635	—	112,960		45,824
Washington	6	2,520	2,004	—	51,162		14,489
Arizona(6)	6	6,320	5,333	—	48,225		11,642
Colorado	10	31,448	24,513	—	38,077		8,924
Oregon(7)	6	898	736	—	29,180		10,421
Nebraska	7	5,223	4,949	—	19,743		9,466
Michigan	12	1,245	778	—	14,676		8,455
Texas	1	3,667	2,219	—	9,329		—
Maryland	6	987	863	—	7,843		4,086
South Carolina	3	597	447	—	3,362		2,051
Georgia	2	230	175	—	2,247		1,553
New Jersey	3	116	101	—	2,025		1,147
Delaware	1	180	140	—	1,265		656

Totals	144	98,688	83,214	55,532	$	1,156,895	$	475,552

(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 Consolidated Balance Sheets.

(2)Excludes approximately $1.9 million of debt issuance costs related to notes and bonds payable, included in Notes and bonds payable, net on the accompanying Consolidated Balance Sheets.

(3)Includes ownership in a special-purpose LLC that owns a pipeline conveying water to certain of our properties. As of December 31, 2025, this investment had a net carrying value of approximately $974,000 and is included within Other assets, net on the accompanying Consolidated Balance Sheet.

(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 December 31, 2025, these two ground leases had a net cost basis of approximately $613,000 and are included in Lease intangibles, net on the accompanying 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 our account with Westlands Water District, located in Fresno County, California. See Note 5, “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 December 31, 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 December 31, 2025, this investment had a net carrying value of approximately $4.8 million and is included within Other assets, net on the accompanying Consolidated Balance Sheets.

Real Estate

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


	December 31, 2025		December 31, 2024
Real estate:
Land and land improvements	$	717,407	$	743,141
Permanent plantings	345,508		349,761
Irrigation and drainage systems	170,294		169,098
Farm-related facilities	48,789		49,063
Other site improvements	15,015		13,569
Real estate, at cost	1,297,013		1,324,632
Accumulated depreciation	(198,261)		(167,782)
Real estate, net	$	1,098,752	$	1,156,850

Real estate depreciation expense on these tangible assets was approximately $34.1 million, $34.0 million, and $36.1 million for the years ended December 31, 2025, 2024, and 2023, respectively.

Intangible Assets and Liabilities

The following table summarizes the carrying value of certain lease intangible assets (excluding those related to real estate held for sale) and the related accumulated amortization as of December 31, 2025 and 2024, (dollars in thousands):


	December 31, 2025		December 31, 2024
Lease intangibles:
Leasehold interest – land	$	797	$	3,372
In-place lease values	1,744		1,798
Leasing costs	2,139		2,280
Other(1)	117		117
Lease intangibles, at gross cost	4,797		7,567
Accumulated amortization	(1,668)		(3,979)
Lease intangibles, net	$	3,129	$	3,588

(1)Other consists primarily of acquisition-related costs allocated to miscellaneous lease intangibles.

Total amortization expense related to these lease intangible assets was approximately $0.5 million, $1.1 million, and $1.0 million for the years ended December 31, 2025, 2024, and 2023, 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 Consolidated Balance Sheets and the related accumulated amortization or accretion, respectively, as of December 31, 2025 and 2024 (dollars in thousands):


	December 31, 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	$	(274)	$	695	$	(198)
Below-market lease values(2)	(1,371)		697		(1,371)		561
Lease incentives and other deferred revenue, net(3)	13,365		(1,012)		14,192		(3,691)
	$	12,689	$	(589)	$	13,516	$	(3,328)

(1)Included as part of Other assets, net on the accompanying Consolidated Balance Sheets, and the related amortization is recorded as a reduction of Lease revenue, net on the accompanying Consolidated Statements of Operations and Comprehensive Income.

(2)Included as a part of Other liabilities, net on the accompanying Consolidated Balance Sheets, and the related accretion is recorded as an increase to Lease revenue, net on the accompanying Consolidated Statements of Operations and Comprehensive Income.

(3)Lease incentives are included as part of Other assets, net on the accompanying Consolidated Balance Sheets, and the related amortization is recorded as a reduction of Lease revenue, net on the accompanying 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 Consolidated Balance Sheets, and the related accretion is recorded as an increase to Lease revenue, net on the accompanying Consolidated Statements of Operations and Comprehensive Income.

For the years ended December 31, 2025, 2024, and 2023, total amortization related to above-market lease values was approximately $77,000 in each year; total accretion related to below-market lease values was approximately $135,000, $511,000, and $172,000 respectively; and total net amortization related to lease incentives and other deferred revenue, net was approximately $11.3 million, $2.5 million, and $0.6 million, respectively.

The estimated aggregate amortization expense to be recorded related to in-place lease values, leasing costs, and tenant relationships and the estimated net impact on lease revenue from the amortization of above-market lease values and lease incentives or accretion of below-market lease values and other deferred revenues for each of the five succeeding fiscal years and thereafter is as follows (dollars in thousands):


Period		Estimated Amortization Expense		Estimated Net Increase (Decrease) to Lease Revenue
For the fiscal years ending December 31:	2026	$	458	$	(11,503)
	2027	458		(26)
	2028	457		(82)
	2029	452		(44)
	2030	487		(133)
	Thereafter	817		(312)
		$	3,129	$	(12,100)

Property Acquisitions

We did not acquire any new farms during either of the years ended December 31, 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 $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.

In December 2025, we completed the following sale transactions:

•the sale of two farms in North Carolina totaling 310 gross acres for an aggregate sales price of approximately $1.0 million. Including closing costs, we recognized an aggregate net loss on these sales of approximately $1.2 million.

•the sale of two farms in Colorado totaling 1,325 gross acres for an aggregate sales price of approximately $8.5 million. Including closing costs, we recognized a net gain on the sale of approximately $0.8 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.

In December 2024, we completed the sale of 11 farms (consisting of 647 gross acres of farmland) in Michigan for approximately $5.0 million. In the third quarter of 2024, we recognized an impairment charge of approximately $2.1 million related to these farms and, upon completing the sale of these farms in December 2024, recognized an aggregate net loss (inclusive of closing costs) of approximately $0.4 million.

Real Estate Held for Sale

No properties were classified as held for sale as of December 31, 2025.

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 an 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 December 31, 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.

During the years ended December 31, 2025, 2024, and 2023, we recorded an aggregate loss of approximately $26,000, $60,000, and $59,000, respectively (included in Loss from investments in unconsolidated entities on our Consolidated Statements of Operations and Comprehensive Income), which represents our pro-rata share of the aggregate loss recognized by the Fresno LLC and Umatilla LLC. As of December 31, 2025 and 2024, our combined ownership interest in the Fresno LLC and Umatilla LLC had an aggregate carrying value of approximately $5.7 million and $5.7 million, respectively, and is included within Other assets, net on the accompanying Consolidated Balance Sheets.

Future Minimum Lease Payments

We account for all of our leasing arrangements in which we are the lessor as operating leases. The majority of our leases are subject to fixed rental increases, and a small subset of our lease portfolio includes lease payments based on an index, such as the consumer price index (“CPI”). In addition, several of our leases contain participation rent components based on the gross revenues earned on the respective farms. Most of our leases also include tenant renewal options; however, these renewal options are generally based on then-current market rental rates and are therefore typically excluded from the determination of the minimum lease term. The majority of our leases generally do not include tenant termination options.

The following tables summarize the future net lease payments to be received under noncancellable leases as of December 31, 2025 (dollars in thousands):


Period		Tenant Lease Revenue(1)
For the fiscal years ending December 31,	2026	$	48,814
	2027	49,368
	2028	43,974
	2029	39,592
	2030	36,482
	Thereafter	104,303
		$	322,533

(1)Amounts are net of fixed lease incentive payments owed to tenants under certain lease agreements and excludes contingent rental payments, such as participation rents.

Portfolio Concentrations

Credit Risk

As of December 31, 2025, our farms were leased to various different, unrelated third-party tenants, with certain tenants leasing more than one farm. One unrelated tenant (“Tenant A”) leases nine of our farms under leases expiring in 2027. During the year ended December 31, 2025, aggregate lease revenue attributable to Tenant A accounted for approximately $8.1 million (10.7%) of the total lease revenue. If Tenant A fails to make rental payments or elects to terminate their lease prior to its expiration (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 10.0% of the total lease revenue recorded during the year ended December 31, 2025.

Geographic Risk

Farms located in California and Florida accounted for approximately $50.0 million (65.6%) and $9.0 million (11.8%), respectively, of the total lease revenue recorded during the year ended December 31, 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 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 “—California Floods” and “—Southeastern U.S. Hurricanes” below for a discussion on damage caused on certain of our farms by the January 2023 floods that occurred in California and 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 rental revenue recorded during the year ended December 31, 2025.

California Floods

In January 2023, periods of heavy rainfall in California resulted in floods that impacted several areas of the state, including regions where certain of our farms are located. As a result of the flooding, one of our farms in the Central Valley suffered damage to certain structures located on the farm, and we estimated the carrying value of such structures to be approximately $855,000. As such, during the year ended December 31, 2023, we wrote down the carrying value of these structures and also recorded a corresponding property and casualty loss, included within Property and casualty loss, net on our Consolidated Statements of Operations and Comprehensive Income. Certain of our other farms in California suffered minor damage as a result of the floods, but no other farms were materially impacted.

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 year ended December 31, 2024, we wrote down the carrying value of these plantings and also recorded a corresponding property and casualty loss. During the year ended December 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 recovery (loss), net on our 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 no 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 year ended December 31, 2025, we recognized an aggregate impairment charge of approximately $3.9 million on one property (encompassing two farms) located in St. Lucie County, Florida, and one farm located in Santa Barbara County, California, due to the estimated fair values being lower than the respective carrying values. During the year ended December 31, 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

The following table sets forth the components of our investments in water assets as of December 31, 2025 and 2024, (dollars in thousands; see the description that follows for certain defined terms and additional information on each component):


	As of December 31, 2025			As of December 31, 2024
	Acre-feet	Cost Basis		Acre-feet	Cost Basis
SWSD banked water	48,309	$	35,537	48,309	$	35,537
WWD groundwater credits – 50/50 Program	2,660	746		2,660	753
WWD groundwater credits – Other agreements	4,563	884		4,418	653
Long-term water assets	55,532	37,167		55,387	36,943
Deferred water assets(1)	(1)	4,382		(1)	3,287
Investments in water assets(2)	55,532	$	41,549	55,387	$	40,230

(1)The amount of water credits to be granted under these agreements is not yet known; see “—Deferred Water Assets” below for additional information.

(2)As shown on the accompanying Consolidated Balance Sheets.

SWSD 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 exercised 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 the exercise of these contracts (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
Fourth quarter of 2023	1,003	1,003	$	401	$	62	$	463
First quarter of 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 non-cash income received during the respective periods. The straight-line impact of these receipts is included within Lease revenue, net in the accompanying Consolidated Statements of Operations and Comprehensive Income.

All banked water acquired was recognized at cost as a long-term water asset, including the subsequent costs to exercise the contracts and any administrative fees necessary to transfer the water to our banked water account.

WWD Groundwater Credits

50/50 Program

From May 2023 through March 2024, we participated in a groundwater recharge program established by Westlands Water District (“WWD”), a water district located in Fresno County, California (the “50/50 Program”). Under the program, WWD funded the delivery of surplus surface water to properties owned by participating landowners with district-approved groundwater recharge facilities (also known as “water banks”). Participating landowners were entitled to retain 50% of the net groundwater credits generated from recharge activities under the program (after accounting for required leave-behind volumes and evaporative losses), with the remaining 50% retained by WWD for aquifer recharge. Deliveries of water under the program were subject to surplus water availability, as determined by WWD in its discretion.

WWD terminated the program for the 2024 water year effective March 5, 2024, and has not renewed it. As a result of the 50/50 Program, we recognized 2,660 acre-feet of water credits as a long-term water asset, representing 50% of the total net water credits generated and confirmed by WWD under the program. In addition, in exchange for recharging and storing surplus water on behalf of WWD, we recognized approximately $0, $453,000, and $79,000 of non-cash revenue for the years ended December 31, 2025, 2024, and 2023, respectively, included within Other operating revenue in our Consolidated Statements of Operations and Comprehensive Income. These amounts represent the estimated fair value of the water credits obtained during the respective periods.

Other Agreements

Since 2023, we have entered into various agreements with third parties, including local water districts and private parties, 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 applicable water district.

To date, water delivered under these agreements has been stored in our water bank located within the WWD service area, and the resulting water credits have been recognized as a long-term water asset at cost. During the years ended December 31, 2025, 2024, and 2023, we recognized approximately $49,000, $0, and $0, respectively, included within Other operating revenue on our Consolidated Statements of Operations and Comprehensive Income. These amounts represent the estimated fair value of water credits received in exchange for storing water on behalf of third parties during the respective periods.

Deferred Water Assets

We have also invested in certain other programs and agreements that are expected to result in additional groundwater credits in the future; however, the amount and timing of any such credits are currently unknown and are dependent upon, and subject to, recognition by the applicable water districts in their sole discretion. The related costs are recorded in a deferred asset account (included within Investments in water assets on our Consolidated Balance Sheets) until the related net water credits become estimable and are recognized by the applicable water district, at which time such costs will be reclassified as long-term water assets (also within Investments in water assets on our Consolidated Balance Sheets).