Company: LANDO
Filing Date: 2025-02-19
Form Type: 10-K
Source: 0001495240-25-000005
Chunk: 103

Company: GLADSTONE LAND Corp
Filing Date: 2025-02-19
Form: 10-K
Item: Item 7
Chunk 103
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accrual properties decreased primarily due to revenue from certain of our leases being recognized on a cash basis during a portion of the year ended December 31, 2024 (rather than a straight-line basis), due to the full collectability of future rental payments under the respective leases being deemed not to be probable as a result of tenant credit issues.  In addition, certain of our farms were direct-operated (on a temporary basis via management agreements with unrelated third-parties) or vacant for portions of each of the years ended December 31, 2024 and 2023.  The decrease in lease revenue from vacant, direct-operated, or non-accrual properties was partially offset by the accelerated recognition of certain deferred rent asset balances attributable to the shortening of the expected lease terms associated with leases on three of our farms.  No revenue has been recognized as a result of operations at farms that were direct-operated during any period presented.

The fluctuation in tenant reimbursement and other revenue is 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 recorded during the current year include increased reimbursements from certain tenants for costs to delivery water to their farms via a pipeline owned by an unconsolidated entity of ours.

Other Operating Revenue

Other operating revenue consists of non-lease revenue generated as a result of activities performed on certain of our properties.  During the years ended December 31, 2024 and 2023, we recognized approximately $453,000 and $79,000, respectively, of non-cash revenue associated with the transfer and storing of surplus water on behalf of a government municipality using a groundwater recharge facility constructed on one of our farms.  See Note 2, “Summary of Significant Accounting Policies—Other Operating Revenue,” and Note 3, “Real Estate and Intangible Assets—Investments in Water Assets,” within the accompanying notes to our consolidated financial statements for further discussion.

Operating Expenses

Depreciation and Amortization

Depreciation and amortization expense decreased primarily due to the disposition of certain assets, including the sale of a 3,748-acre farm in Florida in the first quarter of 2024 and certain other assets reaching the end of their useful lives.  The decrease was partially offset by additional depreciation expense associated with new capital improvements made