Gladstone Land Announces Third Quarter 2024 Results
Gladstone Land reported Q3 2024 financial results with net income of $6,000, compared to $3.1 million in Q3 2023. The company executed 21 lease agreements, with row crop farms showing an 11% increase in annual net operating income, while permanent crop farms saw a 15% decrease. AFFO was $4.5 million ($0.13 per share), down from $5.4 million ($0.15 per share) year-over-year. Total cash lease revenues decreased due to lower fixed base rents, partially offset by higher participation rents. The company's NAV per share decreased by $4.76 to $15.57, primarily due to valuation decreases in certain farms and increased fair value of borrowings.
Gladstone Land ha riportato i risultati finanziari del terzo trimestre 2024 con un utile netto di 6.000 dollari, rispetto a 3,1 milioni di dollari nel terzo trimestre 2023. L'azienda ha stipulato 21 contratti di locazione, con le aziende agricole di coltivazione in pieno campo che mostrano un aumento dell'11% nel reddito operativo netto annuale, mentre le aziende agricole a coltivazione permanente hanno registrato una diminuzione del 15%. AFFO è stato di 4,5 milioni di dollari (0,13 dollari per azione), in calo rispetto a 5,4 milioni di dollari (0,15 dollari per azione) su base annua. I ricavi totali da locazione in contante sono diminuiti a causa di affitti fissi più bassi, parzialmente compensati da affitti di partecipazione più elevati. Il NAV dell'azienda per azione è diminuito di 4,76 dollari arrivando a 15,57 dollari, principalmente a causa delle diminuzioni di valutazione in alcune fattorie e dell'aumento del fair value dei prestiti.
Gladstone Land reportó los resultados financieros del tercer trimestre de 2024 con un ingreso neto de 6,000 dólares, en comparación con 3.1 millones de dólares en el tercer trimestre de 2023. La empresa ejecutó 21 contratos de arrendamiento, con las granjas de cultivos en hileras mostrando un aumento del 11% en el ingreso operativo neto anual, mientras que las granjas de cultivos permanentes vieron una disminución del 15%. AFFO fue de 4.5 millones de dólares (0.13 dólares por acción), por debajo de 5.4 millones de dólares (0.15 dólares por acción) en comparación año con año. Los ingresos totales por arrendamiento en efectivo disminuyeron debido a menores rentas base fijas, parcialmente compensados por mayores rentas de participación. El NAV por acción de la empresa disminuyó en 4.76 dólares, quedando en 15.57 dólares, principalmente debido a disminuciones de valoración en ciertas granjas y un aumento en el valor razonable de los préstamos.
글래드스톤 랜드는 2024년 3분기 재무 실적을 보고하며 순이익이 6,000달러에 달했다고 전했습니다. 이는 2023년 3분기의 310만 달러에 비해 감소한 수치입니다. 이 회사는 21건의 임대 계약을 체결했으며, 일반 작물 농장은 연간 순 운영 수익이 11% 증가한 반면, 영구 작물 농장은 15% 감소했습니다. AFFO는 450만 달러(주당 0.13달러)로, 전년 대비 540만 달러(주당 0.15달러)에서 줄어들었습니다. 총 현금 임대 수익은 고정 기본 임대료가 감소하여 줄어들었으나, 일부 참여 임대료가 증가하면서 부분적으로 상쇄되었습니다. 회사의 NAV는 4.76달러 감소하여 15.57달러가 되었으며, 이는 특정 농장의 가치 하락과 차입금의 공정 가치 증가에 주로 기인합니다.
Gladstone Land a annoncé ses résultats financiers pour le troisième trimestre 2024, avec un revenu net de 6 000 dollars, contre 3,1 millions de dollars au troisième trimestre 2023. L’entreprise a signé 21 contrats de location, avec les exploitations agricoles en culture de rang affichant une augmentation de 11 % du revenu d’exploitation net annuel, tandis que les exploitations agricoles permanentes ont enregistré une baisse de 15 %. AFFO s’élevait à 4,5 millions de dollars (0,13 dollar par action), en baisse par rapport à 5,4 millions de dollars (0,15 dollar par action) d'une année sur l'autre. Les revenus totaux des baux en espèces ont diminué en raison de loyers fixes plus bas, partiellement compensés par des loyers de participation plus élevés. Le NAV par action de l’entreprise a diminué de 4,76 dollars pour atteindre 15,57 dollars, principalement en raison de baisses de valorisation dans certaines fermes et d’une augmentation de la juste valeur des emprunts.
Gladstone Land hat die finanziellen Ergebnisse für das 3. Quartal 2024 bekannt gegeben, mit einem Nettoergebnis von 6.000 Dollar, verglichen mit 3,1 Millionen Dollar im 3. Quartal 2023. Das Unternehmen hat 21 Mietverträge abgeschlossen, wobei die Ackerbauflächen einen Anstieg des jährlichen Netto-Betriebsergebnisses von 11% verzeichneten, während die Dauerkulturen einen Rückgang von 15% erlebten. AFFO betrug 4,5 Millionen Dollar (0,13 Dollar pro Aktie), im Vergleich zu 5,4 Millionen Dollar (0,15 Dollar pro Aktie) im Vorjahr. Die Gesamteinnahmen aus Barleasing sanken aufgrund niedrigerer fester Basisbeträge, was teilweise durch höhere Teilhabermieten ausgeglichen wurde. Der NAV pro Aktie des Unternehmens fiel um 4,76 Dollar auf 15,57 Dollar, hauptsächlich aufgrund von Bewertungsrückgängen in bestimmten Farmen und einem Anstieg des Fair Values der Darlehen.
- Increased annual net operating income by 11% on row crop farm lease renewals
- Participation rents increased by $1.1 million due to stronger pistachio production
- Related-party fees decreased by $800,000
- Repurchased preferred stock resulting in $231,000 gain
- Increased common stock distribution rate by 0.21%
- Net income decreased significantly from $3.1M to $6,000 year-over-year
- AFFO decreased from $0.15 to $0.13 per share
- NAV per share declined by $4.76 to $15.57
- 15% decrease in annual net operating income from permanent crop farm leases
- Fixed base cash rents decreased by $2.6 million
- 20 farms were either vacant, direct-operated, or on cash basis recognition
Insights
The Q3 2024 results reveal significant challenges and strategic shifts for Gladstone Land. Net income dropped dramatically to just
Key concerns include:
- Fixed base cash rents declined by
$2.6 million due to property sales and vacant properties - 20 farms were either vacant, direct-operated, or on cash-basis recognition
- NAV per share declined significantly by
$4.76 to$15.57
The company's shift to participation-based lease structures on permanent crop farms, while potentially beneficial in 2025, creates near-term revenue uncertainty. The planned sale of 11 blueberry farms and ongoing vacancy issues signal portfolio restructuring efforts, though execution risks remain.
The divergence between row crops and permanent crops performance is notable. Row crop farms showed strength with
The acquisition of 2,260 gross acre-feet of water at
Please note that the limited information that follows in this press release is a summary and is not adequate for making an informed investment decision.
MCLEAN, VA / ACCESSWIRE / November 6, 2024 / Gladstone Land Corporation (Nasdaq:LAND) ("Gladstone Land" or the "Company") today reported financial results for the third quarter ended September 30, 2024. A description of funds from operations ("FFO"), core FFO ("CFFO"), adjusted FFO ("AFFO"), and net asset value ("NAV"), all non-GAAP (generally accepted accounting principles in the United States) financial measures, appear at the end of this press release. All per-share references are to fully-diluted, weighted-average shares of common stock, unless noted otherwise. For further detail, please refer to the Quarterly Report on Form 10-Q (the "Form 10-Q"), which is available on the Investors section of the Company's website at www.GladstoneLand.com.
Third Quarter 2024 Activity:
Portfolio Activity:
Lease Activity: Executed 21 amended or new lease agreements during the quarter as follows:
On annual row crop farms, we renewed or amended eight different leases that are expected to result in an aggregate increase in annual net operating income of approximately
$309,000 , or11% , over that of the prior leases.On permanent crop farms, we renewed or amended 13 different leases. With four of these leases, we changed the lease structure whereby we eliminated the base rent, and in some cases, provided the tenants with a cash allowance, in exchange for significantly increasing the participation rent component in these leases, the majority of which will be recognized in the second half of 2025. The remaining nine leases are expected to result in an aggregate decrease in annual net operating income of approximately
$441,000 , or15% , from that of the prior leases.
Vacant, Direct-operated, and Non-accrual Properties: During all or a portion of the quarter, we had 20 farms (5 in California, 13 in Michigan, 1 in Oregon, and 1 in Washington) that were either vacant, direct-operated (via management agreements with unrelated third parties), or on which lease revenues were recognized on a cash basis. The year-over-year impact on our operations (Q3 2024 versus Q3 2023) as a result of these properties was a decrease in net operating income of approximately
$638,000. California Water Activity: Purchased 2,260 gross acre-feet (over 736 million gallons) of water at a cost of approximately
$883,000 , or approximately$391 per gross acre-foot.
Debt Activity-Loan Repayments: Repaid approximately
$13.3 million of loans that were scheduled to either mature or reprice.Equity Activity:
Series E Preferred Stock: Sold 3,595 shares of our
5.00% Series E Cumulative Redeemable Preferred Stock (the "Series E Preferred Stock") for net proceeds of approximately$81,000. Repurchase Program: Repurchased a total of 176,045 shares of our
6.00% Series B Cumulative Redeemable Preferred Stock (the "Series B Preferred Stock") and our6.00% Series C Cumulative Redeemable Preferred Stock (the "Series C Preferred Stock") at an average repurchase price of$21.22 per share for a total gain on repurchase of approximately$231,000.
Increased and Paid Distributions: Increased the distribution run rate on our common stock by
0.21% and paid monthly cash distributions totaling$0.14 01 per share of common stock during the quarter ended September 30, 2024.
Third Quarter 2024 Results:
Net income for the quarter was approximately
Total cash lease revenues decreased, driven by lower fixed base cash rents on certain properties, partially offset by additional participation rents recorded during the current quarter. Fixed base cash rents decreased by approximately
Aggregate related-party fees decreased by approximately
Cash flows from operations for the current quarter decreased by approximately
Subsequent to September 30, 2024:
Portfolio Activity:
Disposition Activity: In October 2024, we entered into agreements to sell 11 blueberry farms located in Allegan and Van Buren, Michigan, for total consideration of approximately
$5.0 million , exclusive of closing costs. We currently expect these sales to be completed during the three months ending December 31, 2024.
Equity Activity:
Common Stock-ATM Program: Issued and sold 346,216 shares of our common stock for net proceeds of approximately
$4.6 million under our "at-the-market" program (the "ATM Program").
Fourth Quarter Distributions: Declared monthly cash distributions of
$0.04 67 per share of common stock for each of October, November, and December.
Comments from David Gladstone, President and CEO of Gladstone Land: "Our annual row crop farms, including both those in California and Florida, continue to perform, both in terms of value appreciation and rent growth. The market for many permanent crop farms in the west has been negatively impacted by lower crop prices, higher input costs, and water uncertainty. As such, we've decided to take a different approach with the leases on a few of these farms, whereby we will grant the tenants a cash allowance to cover a portion of their costs in return for receiving a larger portion of the gross crop proceeds on the farms. While we intend for this to be a temporary structure, we believe this arrangement is the most profitable structure for this specific set of farms due to the history of high yields on these farms, which allows for strong crop insurance, and we continue to see prices of these crops trending upwards. Regarding the continuing tenancy issues on certain of our farms, we currently have six properties (encompassing 7 of our 168 farms) that are either vacant or being direct-operated via agreements with third-party management groups, and we have portions of four properties (encompassing 11 farms) that are held for sale. We expect these sales to close during the fourth quarter, and we also continue to be in discussions with various groups to either lease or buy certain other farms in our portfolio. We hope to have these remaining issues resolved by the end of the year, and such solutions may include listing certain farms at auction if not leased or sold beforehand. In the meantime, we continue to acquire more water at below-market prices, providing additional water security to our farms and those growers who lease them. Our balance sheet remains strong, with nearly
Quarterly Summary Information
(Dollars in thousands, except per-share amounts)
|
| For and As of the Quarters Ended |
|
| Change |
|
| Change |
| |||||||
|
| 9/30/2024 |
|
| 9/30/2023 |
|
| ($/#) |
|
| (%) |
| ||||
Operating Data: |
|
|
|
|
|
|
|
|
|
|
|
| ||||
Total operating revenues |
| $ | 22,571 |
|
| $ | 23,534 |
|
| $ | (963 | ) |
|
| (4.1 | )% |
Total operating expenses |
|
| (15,699 | ) |
|
| (14,136 | ) |
|
| (1,563 | ) |
|
| 11.1 | % |
Other (expenses), net |
|
| (6,866 | ) |
|
| (6,257 | ) |
|
| (609 | ) |
|
| 9.7 | % |
Net income |
| $ | 6 |
|
| $ | 3,141 |
|
| $ | (3,135 | ) |
|
| (99.8 | )% |
Less: Aggregate dividends declared on and gain (loss) recognized on extinguishment of cumulative redeemable preferred stock, net(1) |
|
| (5,793 | ) |
|
| (6,105 | ) |
|
| 312 |
|
|
| (5.1 | ) % |
Net (loss) income attributable to common stockholders and non-controlling OP Unitholders |
|
| (5,787 | ) |
|
| (2,964 | ) |
|
| (2,823 | ) |
|
| 95.2 | % |
Plus: Real estate and intangible depreciation and amortization |
|
| 8,805 |
|
|
| 9,244 |
|
|
| (439 | ) |
|
| (4.7 | )% |
Plus: Losses on dispositions of real estate assets, net |
|
| 832 |
|
|
| 4 |
|
|
| 828 |
|
|
| 20,700.0 | % |
Plus: Impairment charges |
|
| 2,106 |
|
|
| - |
|
|
| 2,106 |
|
|
| - | % |
Adjustments for unconsolidated entities(2) |
|
| 14 |
|
|
| 22 |
|
|
| (8 | ) |
|
| (36.4 | )% |
FFO available to common stockholders and non-controlling OP Unitholders |
|
| 5,970 |
|
|
| 6,306 |
|
|
| (336 | ) |
|
| (5.3 | )% |
Plus: Acquisition- and disposition-related expenses, net |
|
| 10 |
|
|
| 33 |
|
|
| (23 | ) |
|
| (69.7 | )% |
Plus: Other nonrecurring charges, net(3) |
|
| 288 |
|
|
| 50 |
|
|
| 238 |
|
|
| 476.0 | % |
CFFO available to common stockholders and non-controlling OP Unitholders |
|
| 6,268 |
|
|
| 6,389 |
|
|
| (121 | ) |
|
| (1.9 | )% |
Net adjustment for normalized cash rents(4) |
|
| (1,229 | ) |
|
| (1,268 | ) |
|
| 39 |
|
|
| (3.1 | )% |
Plus: Amortization of debt issuance costs |
|
| 221 |
|
|
| 247 |
|
|
| (26 | ) |
|
| (10.5 | )% |
(Less) plus: Other (receipts) non-cash charges, net(5) |
|
| (734 | ) |
|
| 1 |
|
|
| (735 | ) |
|
| (73,500.0 | )% |
AFFO available to common stockholders and non-controlling OP Unitholders |
| $ | 4,526 |
|
| $ | 5,369 |
|
| $ | (843 | ) |
|
| (15.7 | )% |
|
|
|
|
|
|
|
|
|
|
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|
|
|
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| |
Share and Per-Share Data: |
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|
|
|
Weighted-average common stock outstanding |
|
| 35,838,442 |
|
|
| 35,822,123 |
|
|
| 16,319 |
|
|
| - | % |
Weighted-average common non-controlling OP Units outstanding |
|
| - |
|
|
| - |
|
|
| - |
|
|
| - | % |
Weighted-average shares of common stock outstanding, fully diluted |
|
| 35,838,442 |
|
|
| 35,822,123 |
|
|
| 16,319 |
|
|
| - | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Diluted net loss per weighted-average common share |
| $ | (0.161 | ) |
| $ | (0.083 | ) |
| $ | (0.079 | ) |
|
| 95.2 | % |
Diluted FFO per weighted-average common share |
| $ | 0.167 |
|
| $ | 0.176 |
|
| $ | (0.009 | ) |
|
| (5.4 | )% |
Diluted CFFO per weighted-average common share |
| $ | 0.175 |
|
| $ | 0.178 |
|
| $ | (0.003 | ) |
|
| (1.9 | )% |
Diluted AFFO per weighted-average common share |
| $ | 0.126 |
|
| $ | 0.150 |
|
| $ | (0.024 | ) |
|
| (15.7 | )% |
Cash distributions declared per common share |
| $ | 0.140 |
|
| $ | 0.139 |
|
| $ | 0.001 |
|
|
| 0.8 | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Balance Sheet Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net investments in real estate, at cost(6) |
| $ | 1,273,579 |
|
| $ | 1,348,510 |
|
| $ | (74,931 | ) |
|
| (5.6 | )% |
Total assets |
| $ | 1,317,935 |
|
| $ | 1,406,112 |
|
| $ | (88,177 | ) |
|
| (6.3 | )% |
Total indebtedness(7) |
| $ | 593,635 |
|
| $ | 647,672 |
|
| $ | (54,037 | ) |
|
| (8.3 | )% |
Total equity |
| $ | 691,204 |
|
| $ | 731,486 |
|
| $ | (40,282 | ) |
|
| (5.5 | )% |
Total common shares outstanding (fully diluted) |
|
| 35,838,442 |
|
|
| 35,838,442 |
|
|
| - |
|
|
| - | % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Other Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operations |
| $ | (1,367 | ) |
| $ | 80 |
|
| $ | (1,447 | ) |
|
| (1,808.8 | )% |
Farms owned |
|
| 168 |
|
|
| 169 |
|
|
| (1 | ) |
|
| (0.6 | )% |
Acres owned |
|
| 111,836 |
|
|
| 115,593 |
|
|
| (3,757 | ) |
|
| (3.3 | )% |
Occupancy rate(8) |
|
| 99.5 | % |
|
| 100.0 | % |
|
| (0.5 | )% |
|
| (0.5 | )% |
Farmland portfolio value |
| $ | 1,462,362 |
|
| $ | 1,579,331 |
|
| $ | (116,969 | ) |
|
| (7.4 | )% |
NAV per common share |
| $ | 15.57 |
|
| $ | 20.33 |
|
| $ | (4.76 | ) |
|
| (23.4 | )% |
(1) | Includes cash dividends paid on our cumulative redeemable preferred stock and the net (gain) loss recognized as a result of shares of cumulative redeemable preferred stock that were redeemed. |
(2) | Represents our pro-rata share of depreciation expense recorded in unconsolidated entities. |
(3) | Consists primarily of (i) net property and casualty losses (recoveries) recorded and the cost of related repairs expensed as a result of the damage caused to certain improvements by natural disasters on certain of our farms and (ii) costs related to the amendment, termination, and listing of shares from the offering of our Series C Preferred Stock that were expensed. |
(4) | This adjustment removes the effects of straight-lining rental income, as well as the amortization related to above-market lease values and certain noncash lease incentives and accretion related to below-market lease values, deferred revenue, and tenant improvements, resulting in rental income reflected on a modified accrual cash basis. The effect to AFFO is that cash rents received pertaining to a lease year are normalized over that respective lease year on a straight-line basis, resulting in cash rent being recognized ratably over the period in which the cash rent is earned. During the three months ended December 31, 2023, we adjusted our definition of AFFO to exclude from this adjustment the removal of lease incentives that were a result of previous cash disbursements made by us to or on behalf of our tenants. The results of all periods presented, including those of prior periods, have been adjusted to conform with this new definition. |
(5) | Consists of (i) the net (gain) loss recognized as a result of shares of cumulative redeemable preferred stock that were redeemed, which were noncash (gains) charges, (ii) our remaining pro-rata share of (income) loss recorded from investments in unconsolidated entities, and (iii) less non-cash income recorded as a result of additional water assets received as consideration in certain transactions. |
(6) | Consists of the initial acquisition price (including the costs allocated to both tangible and intangible assets acquired and liabilities assumed), plus subsequent improvements and other capitalized costs associated with the properties, and adjusted for accumulated depreciation and amortization. |
(7) | Consists of the principal balances outstanding of all indebtedness, including our lines of credit, notes and bonds payable, and our Series D Term Preferred Stock. |
(8) | Based on farmable acreage. |
Conference Call for Stockholders: The Company will hold a conference call on Thursday, November 7, 2024, at 8:30 a.m. (Eastern Time) to discuss its earnings results. Please call (866) 424-3437 to join the conference call. An operator will monitor the call and set a queue for any questions. A conference call replay will be available after the call and will be accessible through November 14, 2024. To hear the replay, please dial (877) 660-6853, and use playback conference number 13748841. The live audio broadcast of the Company's conference call will also be available online on the Investors section of the Company's website, www.GladstoneLand.com.
About Gladstone Land Corporation:
Founded in 1997, Gladstone Land is a publicly traded real estate investment trust that acquires and owns farmland and farm-related properties located in major agricultural markets in the U.S. The Company currently owns 168 farms, comprised of approximately 112,000 acres in 15 different states and nearly 54,000 acre-feet of water assets in California, valued at a total of approximately
Owners or brokers who have farmland for sale in the U.S. should contact:
Western U.S. - Bill Reiman at (805) 263-4778 or Bill.R@GladstoneLand.com;
Midwestern U.S. and Mid-Atlantic U.S. - Joey Van Wingerden at (703) 287-5914 or Joe.V@GladstoneLand.com; or
Southeastern U.S. - Brett Smith at (904) 687-5284 or Brett.S@GladstoneLand.com.
Lenders who are interested in providing us with long-term financing on farmland should contact Jay Beckhorn at (703) 587-5823 or Jay.Beckhorn@Gladstone.com.
For stockholder information on Gladstone Land, call (703) 287-5893. For Investor Relations inquiries related to any of the monthly dividend-paying Gladstone funds, please visit www.GladstoneCompanies.com.
Non-GAAP Financial Measures:
FFO: The National Association of Real Estate Investment Trusts ("NAREIT") developed FFO as a relative non-GAAP supplemental measure of operating performance of an equity REIT in order to recognize that income-producing real estate historically has not depreciated on the basis determined under GAAP. FFO, as defined by NAREIT, is net income (computed in accordance with GAAP), excluding gains (or losses) from sales of property and impairment losses on property, plus depreciation and amortization of real estate assets, and after adjustments for unconsolidated partnerships and joint ventures. The Company believes that FFO per share provides investors with an additional context for evaluating its financial performance and as a supplemental measure to compare it to other REITs; however, comparisons of its FFO to the FFO of other REITs may not necessarily be meaningful due to potential differences in the application of the NAREIT definition used by such other REITs.
CFFO: CFFO is FFO, adjusted for items that are not indicative of the results provided by the Company's operating portfolio and affect the comparability of the Company's period-over-period performance. These items include certain non-recurring items, such as acquisition- and disposition-related expenses, the net incremental impact of operations conducted through our taxable REIT subsidiary, income tax provisions, and property and casualty losses or recoveries. Although the Company's calculation of CFFO differs from NAREIT's definition of FFO and may not be comparable to that of other REITs, the Company believes it is a meaningful supplemental measure of its sustainable operating performance. Accordingly, CFFO should be considered a supplement to net income computed in accordance with GAAP as a measure of our performance. For a full explanation of the adjustments made to arrive at CFFO, please read the Form 10-Q, filed today with the SEC.
AFFO: AFFO is CFFO, adjusted for certain non-cash items, such as the straight-lining of rents and amortizations into or against rental income (resulting in cash rent being recognized ratably over the period in which the cash rent is earned). Although the Company's calculation of AFFO differs from NAREIT's definition of FFO and may not be comparable to that of other REITs, the Company believes it is a meaningful supplemental measure of its sustainable operating performance on a cash basis. Accordingly, AFFO should be considered a supplement to net income computed in accordance with GAAP as a measure of our performance. For a full explanation of the adjustments made to arrive at AFFO, please read the Form 10-Q, filed today with the SEC.
A reconciliation of FFO (as defined by NAREIT), CFFO, and AFFO (each as defined above) to net income (loss), which the Company believes is the most directly-comparable GAAP measure for each, and a computation of fully-diluted net income (loss), FFO, CFFO, and AFFO per weighted-average share is set forth in the Quarterly Summary Information table above. The Company's presentation of FFO, CFFO, or AFFO, does not represent cash flows from operating activities determined in accordance with GAAP and should not be considered an alternative to net income as an indication of its performance or to cash flow from operations as a measure of liquidity or ability to make distributions.
NAV: Pursuant to a valuation policy approved by our board of directors, our valuation team, with oversight from the chief valuation officer, provides recommendations of value for our properties to our board of directors, who then review and approve the fair values of our properties. Per our valuation policy, our valuations are derived based on either the purchase price of the property; values as determined by independent, third-party appraisers; or through an internal valuation process, which process is, in turn, based on values as determined by independent, third-party appraisers. In any case, we intend to have each property valued by an independent, third-party appraiser at least once every three years, or more frequently in some instances. Various methodologies are used, both by the appraisers and in our internal valuations, to determine the fair value of our real estate, including the sales comparison, income capitalization (or a discounted cash flow analysis), and cost approaches of valuation. NAV is a non-GAAP, supplemental measure of financial position of an equity REIT and is calculated as total equity available to common stockholders and non-controlling OP Unitholders, adjusted for the increase or decrease in fair value of our real estate assets and encumbrances relative to their respective cost bases. Further, we calculate NAV per share by dividing NAV by our total shares outstanding (inclusive of both our common stock and OP Units held by non-controlling third parties). A reconciliation of NAV to total equity, to which the Company believes is the most directly-comparable GAAP measure, is provided below (dollars in thousands, except per-share amount):
Total equity per balance sheet |
|
|
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| $ | 691,204 |
| |
Fair value adjustment for long-term assets: |
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|
|
|
|
|
| |
Less: net cost basis of real estate holdings and related assets(1) |
| $ | (1,273,579 | ) |
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|
|
|
Plus: estimated fair value of real estate holdings(2) |
|
| 1,462,362 |
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|
|
|
|
Net fair value adjustment for real estate holdings |
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|
|
|
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| 188,783 |
|
Fair value adjustment for long-term liabilities: |
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|
|
|
|
|
|
|
Plus: book value of aggregate long-term indebtedness(3) |
|
| 593,435 |
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|
|
|
|
Less: fair value of aggregate long-term indebtedness(3)(4) |
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| (559,136 | ) |
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|
|
|
Net fair value adjustment for long-term indebtedness |
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|
|
|
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| 34,299 |
|
Estimated NAV |
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|
|
|
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| 914,286 |
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Less: aggregate fair value of cumulative redeemable preferred stock(5) |
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|
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| (356,302 | ) |
Estimated NAV available to common stockholders and non-controlling OP Unitholders |
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|
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| $ | 557,984 |
|
Total common shares and non-controlling OP Units outstanding |
|
|
|
|
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| 35,838,442 |
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Estimated NAV per common share and non-controlling OP Unit |
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| $ | 15.57 |
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(1) | Consists of the initial acquisition price (including the costs allocated to both tangible and intangible assets acquired and liabilities assumed), plus subsequent improvements and other capitalized costs associated with the properties, and adjusted for accumulated depreciation and amortization. |
(2) | As determined by the Company's valuation policy and approved by its board of directors. |
(3) | Includes the principal balances outstanding of all long-term borrowings (consisting of notes and bonds payable) and the Series D Term Preferred Stock. |
(4) | Long-term notes and bonds payable were valued using a discounted cash flow model. The Series D Term Preferred Stock was valued based on its closing stock price as of September 30, 2024. |
(5) | The Series B Preferred Stock and Series C Preferred Stock were each valued based on their respective closing stock prices as of September 30, 2024, while the Series E Preferred Stock was valued at its liquidation value. |
Comparison of our estimated NAV and estimated NAV per share to similarly-titled measures for other REITs may not necessarily be meaningful due to possible differences in the calculation or application of the definition of NAV used by such REITs. In addition, the trading price of our common shares may differ significantly from our most recent estimated NAV per share calculation. The Company's independent auditors have neither audited nor reviewed our calculation of NAV or NAV per share. For a full explanation of our valuation policy, please read the Form 10-Q, filed today with the SEC.
CAUTION CONCERNING FORWARD-LOOKING STATEMENTS:
Certain statements in this press release, including, but not limited to, the Company's ability to maintain or grow its portfolio and FFO, expected increases in capitalization rates, benefits from increases in farmland values, increases in operating revenues, and the increase in NAV per share, are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements inherently involve certain risks and uncertainties, although they are based on the Company's current plans that are believed to be reasonable as of the date of this press release. Factors that may cause actual results to differ materially from these forward-looking statements include, but are not limited to, the Company's ability to procure financing for investments, downturns in the current economic environment, the performance of its tenants, the impact of competition on its efforts to renew existing leases or re-lease real property, and significant changes in interest rates. Additional factors that could cause actual results to differ materially from those stated or implied by its forward-looking statements are disclosed under the caption "Risk Factors" within the Company's Form 10-K for the fiscal year ended December 31, 2023, as filed with the SEC on February 20, 2024, and certain other documents filed with the SEC from time to time. The Company cautions readers not to place undue reliance on any such forward-looking statements, which speak only as of the date made. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law.
Gladstone Land Corporation, (703) 287-5893
SOURCE: Gladstone Land Corporation
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