Commitments and Contingencies (Tables)
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12 Months Ended |
Dec. 31, 2019 |
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| Commitments and Contingencies Disclosure [Abstract] |
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| 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, which are summarized in the table below (dollars in thousands):
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Farm
Location
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Farm
Gross
Acreage
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Total
Commitment
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Obligated
Completion
Date(1)
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Amount Expended
or Accrued as of
December 31, 2019
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Ventura, CA |
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413 |
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$ |
1,000 |
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Q1 2020 |
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$ |
664 |
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Madera, CA |
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928 |
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500 |
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(2) |
Q1 2020 |
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402 |
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Hillsborough, FL |
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55 |
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2,250 |
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(2) |
Q2 2021 |
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— |
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Cochise, AZ |
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1,761 |
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1,820 |
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(2)(3) |
Q4 2021 |
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— |
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Cochise, AZ |
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1,239 |
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1,360 |
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(2)(4) |
Q4 2021 |
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— |
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Van Buren, MI |
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119 |
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150 |
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Q4 2021 |
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— |
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Columbia, OR |
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200 |
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1,800 |
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(2) |
Q3 2024 |
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1,146 |
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Collier & Hendry, FL |
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5,630 |
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2,000 |
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(2) |
Q2 2025 |
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— |
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Salinas, CA |
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324 |
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100 |
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Q4 2025 |
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1 |
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(1) |
Our obligation to provide capital to fund these improvements does not extend beyond these respective dates. |
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(2) |
Pursuant to contractual agreements, we will earn additional rent on the cost of these capital improvements as the funds are disbursed by us. |
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(3) |
Pursuant to the agreement, we will only earn additional rent if the total amount of capital improvements exceeds $1.3 million
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(4) |
Pursuant to the agreement, we will only earn additional rent if the total amount of capital improvements exceeds $860,000
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| Schedule of Operating Ground Leases |
As of December 31, 2019, we recorded the following as a result of these operating ground leases (dollars in thousands, except for footnotes):
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Operating lease right-of-use assets(1)
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$ |
178 |
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Operating lease liabilities(2)
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$ |
172 |
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Weighted-average remaining lease term (years) |
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4.6 |
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Weighted-average discount rate |
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4.20 |
% |
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(1) |
Operating lease right-of-use assets are shown net of accrued lease payments of approximately $6,000 and are included within Other assets, net on the accompanying Consolidated Balance Sheet.
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(2) |
Included within Other liabilities, net on the accompanying Consolidated Balance Sheet. |
The following table sets forth the components of our lease revenue for the years ended December 31, 2019 and 2018 (dollars in thousands, except for footnotes):
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For the Years Ended December 31, |
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2019 |
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2018 |
Fixed lease payments(1)
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$ |
38,168 |
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$ |
28,112 |
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Variable lease payments(2)
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2,524 |
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1,250 |
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Lease revenue, net(3)
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$ |
40,692 |
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$ |
29,362 |
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(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. |
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(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, 2019 and 2018, we recorded participation rents of approximately $2.3 million and $1.2 million respectively, and reimbursements of certain property operating expenses by tenants of approximately $198,000 and $40,000, respectively.
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(3) |
Reflected as a line item on our accompanying Consolidated Statements of Operations and Comprehensive Income. |
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| Schedule of Future Lease Payments |
Future lease payments due under the remaining non-cancelable terms of these leases as of December 31, 2019 and 2018, are as follows (dollars in thousands):
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Future Lease Payments(1)
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Period |
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December 31, 2019 |
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December 31, 2018 |
2019 |
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$ |
— |
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$ |
47 |
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2020 |
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47 |
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47 |
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2021 |
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47 |
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47 |
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2022 |
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30 |
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30 |
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2023 |
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30 |
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30 |
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Thereafter |
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31 |
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31 |
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Total undiscounted lease payments |
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185 |
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232 |
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Less: imputed interest |
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(13 |
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— |
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Present value of lease payments |
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$ |
172 |
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$ |
232 |
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(1) |
Annual lease payments are set at the beginning of each year to then-current market rates (as determined by the State of Arizona). The amounts shown above represent estimated amounts based on the lease rates currently in place. |
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| Schedule of Future Lease Payments |
Future lease payments due under the remaining non-cancelable terms of these leases as of December 31, 2019 and 2018, are as follows (dollars in thousands):
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Future Lease Payments(1)
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Period |
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December 31, 2019 |
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December 31, 2018 |
2019 |
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$ |
— |
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$ |
47 |
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2020 |
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47 |
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47 |
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2021 |
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47 |
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47 |
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2022 |
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30 |
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30 |
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2023 |
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30 |
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30 |
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Thereafter |
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31 |
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31 |
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Total undiscounted lease payments |
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185 |
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232 |
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Less: imputed interest |
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(13 |
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— |
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Present value of lease payments |
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$ |
172 |
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$ |
232 |
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(1) |
Annual lease payments are set at the beginning of each year to then-current market rates (as determined by the State of Arizona). The amounts shown above represent estimated amounts based on the lease rates currently in place. |
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