GLADSTONE LAND Corp Q4 FY2024 earnings call

• Ownership: Holds ~103,000 acres of farmland on 150 farms and over 55,000 acre feet of water assets, valued at ~$1.3 billion, in 15 states and 29 growing regions.
• Farm Sales: Sold 11 blueberry farms in Michigan, 5 farms in Florida, and 2 farms in the Midwest. Adjusted lease structures on some farms to help tenants grow produce in exchange for increased participation rent.
• Lease Activity: Adjusted lease structures on 5 farms in the West, eliminating base rent or providing cash allowances for produce growth, with participation rents recognized in later periods. Renewed 12 annual row crop leases, expecting a $556,000 increase in annual net operating income.
• Tenancy Issues: 5 vacant farms, 1 direct-operated via third-party, revenue from 3 tenants on cash basis; working to resolve tenancy issues, with potential for listing farms for sale if unresolved.

Gladstone Land Corporation owns approximately 103,000 acres of farmland on 150 farms and over 55,000 acre feet of water assets, with a total value of about $1.3 billion. The land is spread across 15 states and 29 growing regions. The financial performance is centered around farmland and water assets, with farm sales and lease structure adjustments being key operational aspects.

• Lease Structure: Expect a $3 million to $3.5 million year-over-year swing in fixed base rent in 2025, with participation rents recognized in the second half of 2025 and remaining portion in 2026.
• Dividend: Declared $4.67 per share per month for Q1 2025, will reassess based on 2025 harvest results.
• Acquisition: Cautious on acquisitions due to high cost of capital, waiting for interest rates to decrease before considering new investments.

• Market Conditions: Lower crop prices, higher input costs, and high borrowing costs impacting permanent crop farms.
• Tenant Issues: Vacant farms, direct operation, and tenancy-related issues leading to potential loss in net operating income.
• Interest Rates: Uncertainty in interest rate cuts, affecting cost of capital and acquisition plans.

Q: Clarification on participation and fixed base rent amendments A: There's a $3 million to $3.5 million year-over-year swing in fixed base rent, majority recovered in 2025 with participation rents recognized in 2025 and 2026, and leases may revert to traditional structure upon lease expiration Q: Expectations on interest patronage A: About 10% less due to loan repayments made over the past year Q: Lease expirations A: Most expiring leases are row crop, some permanent crop with hybrid structures, with half of permanent crop leases having hybrid structures and the other half under traditional leases Q: Real estate expenses A: Related to vacant, direct-operated, and non-accrual properties, expected to decrease in 2025 due to resolved issues with Michigan blueberry farms Q: NAV discontinuation A: Cost of appraisals was too high, will reassess NAV calculation in April, with no future voluntary quarterly NAV disclosures