Company: LANDO
Filing Date: 2025-05-12
Form Type: 10-Q
Source: 0001495240-25-000012
Chunk: 115

Company: GLADSTONE LAND Corp
Filing Date: 2025-05-12
Form: 10-Q
Item: Part I, Item 8
Chunk 115
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 Credit”).  During the three months ended March 31, 2025, we recorded interest patronage of approximately $1.7 million related to interest accrued on the Farm Credit Notes Payable during the year ended December 31, 2024, and during the three months ended September 30, 2024, we received approximately $108,000 of interest patronage, as certain Farm Credit associations paid a portion of the 2024 interest patronage (which relates to interest accrued during 2024 but typically would be paid during the first half of 2025) early.  In total, 2024 interest patronage resulted in a 21.9% reduction (approximately 101 basis points) to the interest rates on such borrowings.  For further discussion on interest patronage, refer to Note 4, “Borrowings—Farm Credit Notes Payable—Interest Patronage,” in the accompanying notes to our condensed consolidated financial statements.

Our Adviser and Administrator

We are externally managed pursuant to contractual arrangements with our Adviser and our Administrator (both affiliates of ours), which collectively employ all of our personnel and pay their salaries, benefits, and general expenses directly.  The current investment advisory agreement with our Adviser (the “Advisory Agreement”) and the current administration agreement with our Administrator (the “Administration Agreement”) were each approved unanimously by our board of directors, including, specifically, our independent directors.

A summary of certain compensation terms within the Advisory Agreement and a summary of the Administration Agreement is below.

Advisory Agreement

Pursuant to the Advisory Agreement, our Adviser is compensated in the form of a base management fee and, each as applicable, an incentive fee, a capital gains fee, and a termination fee.  Our Adviser does not charge acquisition or disposition fees when we acquire or dispose of properties, as is common in other externally-managed REITs.  The base management and incentive fees are described below.  For information on the termination fee, refer to Note 6, “Related-Party Transactions—Our 

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Adviser and Administrator—Advisory Agreement,” within the accompanying notes to our condensed consolidated financial statements.

Base Management Fee

Pursuant to the Advisory Agreement, a base management fee is paid quarterly and is calculated at an annual rate of 0.60% (0.15% per quarter) of the prior calendar quarter’s “Gross Tangible Real Estate,” defined as the gross cost of tangible real estate owned by us (