Company: LANDO
Filing Date: 2025-11-05
Form Type: 10-Q
Source: 0001495240-25-000028
Chunk: 175

Company: GLADSTONE LAND Corp
Filing Date: 2025-11-05
Form: 10-Q
Item: Part I, Item 2
Chunk 175
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4)%$46,835 $63,667 $(16,832)(26.4)%

(1)Tenant reimbursements generally represent tenant-reimbursed property operating expenses on certain of our farms, including property taxes, insurance premiums, and other property-related expenses.  Similar amounts are also recorded as property operating expenses during the respective periods. 

Same-property Basis – 2025 compared to 2024

Lease revenues from fixed lease payments decreased primarily due to the execution of certain lease agreements pursuant to which we agreed to reduce or eliminate the fixed base rent amounts or, in certain cases, provide the tenant with a cash lease incentive, in exchange for significantly increasing the participation rent components in the leases, the majority of which is expected to be realized in the fourth quarter of 2025.  The year-over-year decreases in lease revenues were further impacted by certain of our farms that were vacant, direct-operated, or on which lease revenues were recognized on a cash basis (rather than a straight-line basis), due to full collectability of future rental payments under the respective leases deemed not to be probable as a result of tenant credit issues during all or a portion of the three and nine months ended September 30, 2025 and 2024.

The increase in lease revenues from participation rents was primarily driven by the earlier recognition of amounts related to the 2024 harvest on certain farms, as additional information became available during the three months ended September 30, 2025, together with improved year-over-year pistachio pricing.  We continue to expect higher participation rent revenues in the fourth quarter of 2025 as a result of modifications to lease structures on certain farms.

During the nine months ended September 30, 2025, we received a lease termination payment from an outgoing tenant who leased three of our farms.  After applying a portion of the amount towards certain outstanding receivables owed by the same tenant, we recognized additional lease revenue of approximately $2.4 million upon receipt.

Other – 2025 compared to 2024

Lease revenue from properties acquired or disposed of decreased due to the sale of 21 farms subsequent to December 31, 2023.

The fluctuations in tenant reimbursement revenue are primarily driven by payments made by certain tenants on our behalf (pursuant to the lease agreements) to unconsolidated entities of ours that convey water to the respective properties.  As such, the timing of tenant reimbursement revenue fluctuates as payments are made by our tenants.  Amounts