Company: LANDO
Filing Date: 2025-05-12
Form Type: 10-Q
Source: 0001495240-25-000012
Chunk: 110

Company: GLADSTONE LAND Corp
Filing Date: 2025-05-12
Form: 10-Q
Item: Part I, Item 8
Chunk 110
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8,846 52.7%Other(3)1131—%127 0.8%Terminated/expired leases and sold properties(4)—6,5836.4%3,954 23.5%Totals103103,001100.0%$16,803 100.0%

(1)Certain lease agreements encompass multiple farms.

(2)Reflects the net impact of cash lease incentives we granted to tenants on certain of our farms in exchange for increasing the participation rent components in the respective leases, the results of which will not be known until the fourth quarter of 2025 or later.

(3)Primarily consists of ancillary leases (e.g., renewable energy leases; oil, gas, and mineral leases; telecommunications leases; etc.) with varying expirations on certain of our farms.

(4)Includes lease revenues of approximately $3.9 million from nine farms on which the respective leases expired and which are currently either direct-operated or vacant, and approximately $7,000 from seven farms sold during the three months ended March 31, 2025.

We are currently exploring a variety of options with certain of our 2025 lease expirations, including negotiating lease terms with existing and prospective new tenants and discussing sale options with prospective buyers.  In addition, while we seek to lease all properties under traditional leases that involve a certain level of fixed base rent, with respect to expirations on certain western permanent crop farms, we may decide to continue with an adjusted lease structure that involves a reduced base rent amount (or none) and/or, in certain cases, a cash lease incentive, in exchange for increasing the participation rent components, or we may decide to continue to operate certain of these properties ourselves via third-party management agreements.  Regarding all vacancies and upcoming lease expirations, there can be no assurance that we will be able to renew the existing leases or execute new leases at rental rates favorable to us, if at all, or be able to find replacement tenants, if necessary.

Business Environment

Impact of Inflation, Interest Rates, and Tariffs

Inflation

According to the U.S. Bureau of Labor Statistics, the consumer price index (“CPI”) rose at an annual rate of 2.4% through March 31, 2025, continuing the downward trend from the inflation peak in mid-2022.  Food price increases have also slowed but remain elevated, with the overall food category rising at an annual rate of 3.