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]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

12 Months Ended

Dec. 31, 2025

Commitments and Contingencies Disclosure [Abstract]

Operating 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, 2025 (dollars in thousands):


Farm Locations	Farm Acreage	Total Commitment			Obligated Completion Date(1)	Amount Expended or Accrued as of December 31, 2025





Hartley, TX	2,219	$	1,300	(2)	Q4 2030	$	1,190
Franklin & Grant, WA, & Umatilla, OR	1,126	4,447		(2)	Q4 2032	3,603
Wicomico & Caroline, MD, and Sussex, DE	833	155			Q3 2034	47

(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.

Ground Lease Obligations

In connection with certain farms acquired through leasehold interests, we assumed certain ground lease arrangements under which we are the lessee. These operating ground leases have lease expiration dates ranging from June 2028 through December 2041, and none of these leases contain any extension, renewal, or termination options. At lease commencement, the net present value of the minimum lease payments was determined by discounting the respective future minimum lease payments using a discount rate equivalent to our fully-collateralized borrowing rate ranging from 6.37% to 8.72%.

As of December 31, 2025 and 2024, we recorded the following as a result of these operating ground leases (dollars in thousands, except for footnotes):


	December 31, 2025			December 31, 2024
Operating lease right-of-use assets(1)	$	764		$	521
Operating lease liabilities(2)	$	702		$	498

Weighted-average remaining lease term (years)	12.4			14.9
Weighted-average incremental borrowing rate	7.68		%	8.35		%

(1)Operating lease right-of-use assets are shown net of prepaid lease payments of approximately $62,000 and $23,000 as of December 31, 2025 and 2024, respectively, 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.

Future minimum lease payments due under the remaining non-cancelable terms of these leases as of December 31, 2025, are as follows (dollars in thousands):


Period		Future Lease Payments(1)
For the fiscal years ending December 31:	2026	$	45
	2027	100
	2028	100
	2029	100
	2030	100
	Thereafter	657
Total undiscounted lease payments		1,102
Less: imputed interest		(400)
Present value of lease payments		$	702

(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.

As a result of these ground leases, we recorded lease expense (included within Property operating expenses on the accompanying Consolidated Statement of Operations and Comprehensive Income) of approximately $105,000, $105,000, and $103,000 during the years ended December 31, 2025, 2024, and 2023, respectively.

Litigation

In the ordinary course of business, we may be involved in legal proceedings from time to time. We are not currently subject to any material known or threatened litigation.