Company: LANDO
Filing Date: 2025-08-07
Form Type: 10-Q
Source: 0001495240-25-000021
Chunk: 150

Company: GLADSTONE LAND Corp
Filing Date: 2025-08-07
Form: 10-Q
Item: Part I, Item 8
Chunk 150
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) the capital gains fee and subsequent adjustment recorded during the six months ended June 30, 2025, which is not due until after the end of the fiscal year and is subject to further adjustment throughout the remainder of the year.

(4)Consists of (i) the net (gain) loss recognized as a result of shares of cumulative redeemable preferred stock that were redeemed, which were non-cash (gains) charges, (ii) our remaining pro-rata share of (income) loss recorded from investments in unconsolidated entities, and (iii) plus (less) net non-cash expense (income) recorded as a result of additional water assets used (received) in certain transactions.

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ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk includes risks that arise from changes in interest rates, foreign currency exchange rates, commodity prices, equity prices, and other market changes that affect market-sensitive instruments.  The primary market risk that we believe we are and will be exposed to is interest rate risk.  Certain of our existing leases contain escalations based on market indices, such as the consumer price index (“CPI”), and while very little of our existing borrowings are subject to variable interest rates, the interest rates on the majority of our fixed-rate borrowings are fixed for a finite period before converting to variable rate.  Although we seek to mitigate this risk by including certain provisions in many of our leases, such as escalation clauses or adjusting the rent to prevailing market rents at various intervals, these features do not eliminate this risk.

Currently, over 99.9% of our borrowings are at fixed rates, and on a weighted-average basis, these rates are fixed at an effective interest rate (after interest patronage) of 3.39% for another 3.3 years.  As such, with respect to our current borrowings, we believe fluctuations in interest rates would have a minimal impact on our net income.  However, interest rate fluctuations may affect the fair value of our fixed-rate borrowings.  As of June 30, 2025, the fair value of our fixed-rate borrowings outstanding (excluding our Series D Term Preferred Stock) was approximately $469.5 million.

The following table summarizes the hypothetical change in fair value of our fixed-rate borrowings at June 30, 2025, if market interest rates had been one or two percentage points lower or higher than those rates in place as of June