The following analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the notes included elsewhere in this Quarterly Report, as well as the information contained in our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the Securities Exchange Commission ("SEC") on March 19, 2021, which is accessible on the SEC's website at www.sec.gov.


 References to "we," ."our," "us" and "our company" refer to Farmland Partners
Inc., a Maryland corporation, together with our consolidated subsidiaries,
including Farmland Partners Operating Partnership, L.P., a Delaware limited
partnership (the "Operating Partnership"), of which we are the sole member

of
the sole general partner.

Special Note Regarding Forward-Looking Statements





We make statements in this Quarterly Report on Form 10-Q that are
forward-looking statements within the meaning of the Private Securities
Litigation Reform Act of 1995 (set forth in Section 27A of the Securities Act of
1933, as amended (the "Securities Act"), and Section 21E of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")). These forward-looking
statements include, without limitation, statements concerning pending
acquisitions and dispositions, projections, predictions, expectations, estimates
or forecasts as to our business, financial and operational results, future stock
repurchases, our dividend policy, future economic performance, crop yields and
prices and future rental rates for our properties, ongoing litigation, as well
as statements of management's goals and objectives and other similar expressions
concerning matters that are not historical facts. When we use the words "may,"
"should," "could," "would," "predicts," "potential," "continue," "expects,"
"anticipates," "future," "intends," "plans," "believes," "estimates" or similar
expressions or their negatives, as well as statements in future tense, we intend
to identify forward-looking statements. Although we believe that the
expectations reflected in such forward-looking statements are based upon
reasonable assumptions, beliefs and expectations, such forward-looking
statements are not predictions of future events or guarantees of future
performance, and our actual results could differ materially from those set forth
in the forward-looking statements.  Some factors that might cause such a
difference include the following: the impact of the COVID-19 pandemic and
efforts to reduce its spread on our business and on the economy and capital
markets generally, general volatility of the capital markets and the market
price of our common stock, changes in our business strategy, availability, terms
and deployment of capital, our ability to refinance existing indebtedness at or
prior to maturity on favorable terms, or at all, availability of qualified
personnel, changes in our industry, interest rates or the general economy, the
degree and nature of our competition, the outcomes of ongoing litigation, our
ability to identify new acquisitions or dispositions and close on pending
acquisitions or dispositions and the other factors described in the risk factors
described in Item 1A, "Risk Factors" of our Annual Report on Form 10-K for the
year ended December 31, 2020, and in other documents that we file from time to
time with the SEC. Given these uncertainties, undue reliance should not be
placed on such statements.  We assume no obligation to update forward-looking
statements to reflect actual results, changes in assumptions or changes in other
factors affecting forward-looking information, except to the extent required by
law.



Overview and Background



We are an internally managed real estate company that owns and seeks to acquire
high-quality farmland located in agricultural markets throughout North America.
As of the date of this Quarterly Report on Form 10-Q, we own farms with an
aggregate of approximately 149,000 acres in Alabama, Arkansas, California,
Colorado, Florida, Georgia, Illinois, Kansas, Louisiana, Michigan, Mississippi,
Nebraska, North Carolina, South Carolina, South Dakota and Virginia. As of the
date of this Quarterly Report on Form 10-Q, approximately 70% of our portfolio
(by value) is used to grow primary crops, such as corn, soybeans, wheat, rice
and cotton, and approximately 30% is used to produce specialty crops, such as
blueberries, vegetables, citrus, nuts and edible beans. We believe our portfolio
gives investors exposure to the increasing global food demand trend in the face
of growing scarcity of high quality farmland and will reflect the approximate
breakdown of U.S. agricultural output between primary crops and animal protein
(whose production relies principally on primary crops as feed), on one hand, and
specialty crops, on the other.



In addition, under the FPI Loan Program, we make loans to third-party farmers
(both tenant and non-tenant) to provide financing for working capital
requirements and operational farming activities, farming infrastructure projects
and for other farming and agricultural real estate related purposes.



                                       30

  Table of Contents


We were incorporated in Maryland on September 27, 2013, and we are the sole
member of the general partner of the Operating Partnership, which is a Delaware
limited partnership that was formed on September 27, 2013. All of our assets are
held by, and our operations are primarily conducted through, the Operating
Partnership and its wholly owned subsidiaries. As of March 31, 2021,
we owned 95.4% of the Common units and none of the Series A preferred units nor
the Series B Participating Preferred Stock. See "Note 9 - Stockholders' Equity
and Non-controlling Interests" within the notes to the consolidated financial
statements included in this Quarterly Report on Form 10-Q for additional
information regarding the non-controlling interests.

We have elected to be taxed as a real estate investment trust ("REIT") under Sections 856 through 860 of the Internal Revenue Code of 1986, as amended, commencing with our short taxable year ended December 31, 2014.





The following table sets forth our ownership of acreage by region as of March
31, 2021:




Region (1)        Total Acres
Corn Belt              42,960
Delta and South        23,924
High Plains            29,566
Southeast              41,041
West Coast             11,586
                      149,077

Corn Belt includes farms located in Illinois, Michigan and eastern Nebraska.

Delta and South includes farms located in Arkansas, Louisiana and (1) Mississippi. High Plains includes farms located in Colorado, Kansas, western

Nebraska, and South Dakota. Southeast includes farms located in Florida,

Georgia, North Carolina, South Carolina and Virginia. West Coast includes


    farms located in California.




When we are able to access sufficient additional capital, we intend to continue
to acquire additional farmland to achieve scale and further diversify our
portfolio by geography, crop type and tenants. We also may continue to
selectively dispose of assets when we believe a disposition is in the Company's
best interest. We also may acquire, and make loans secured by mortgages on,
properties related to farming, such as grain storage facilities, grain
elevators, feedlots, processing plants and distribution centers, as well as
livestock farms or ranches. In addition, we engage directly in farming through
FPI Agribusiness Inc., our taxable REIT subsidiary (the "TRS" or "FPI
Agribusiness"). The TRS provides volume purchasing services to our tenants,
operates a small-scale custom farming business, and occasionally provides our
tenants with small operating loans. As of March 31, 2021, the TRS performs these
custom farming operations on 1,232 acres of farmland located in Michigan and
California.



Our principal source of revenue is rent from tenants that conduct farming
operations on our farmland. The majority of the leases that are in place as of
the date of this Quarterly Report on Form 10-Q have fixed annual rental
payments. Some of our leases have variable rents based on the revenue generated
by our farm-operator tenants. We believe that this mix of fixed and variable
rents will help insulate us from the variability of farming operations and
reduce our credit-risk exposure to farm-operator tenants while making us an
attractive landlord in certain regions where variable leases are customary.
However, we may be exposed to tenant credit risk and farming operation risks,
particularly with respect to leases that do not require advance payment of 100%
of the annual rent, leases for which the rent is based on a percentage of a
tenant's farming revenues and leases with terms greater than one year.



In addition, an increasing number of our leases provide for crop share lease
payments, through which we only recognize revenue to the amount of the crop
insurance minimum. The excess cannot be recognized as revenue until the tenant
enters into a contract to sell their crop. Generally, we expect tenants to enter
into contracts to sell their crop following the harvest of the crop.

Impact of COVID-19 on Our Business





As the vaccine for the coronavirus ("COVID-19") becomes widely available across
the United States, we are gaining a better understanding of the impact of the
COVID-19 pandemic on our business. We expect the impact of the COVID-19 pandemic
to lessen in the 2021 crop marketing cycle. However, we are unable to quantify
what the ultimate impact of the

                                       31

Table of Contents



pandemic on our business will be, as there are still significant uncertainties
around the social and economic impact of the pandemic, and the size and timing
of additional economic relief measures.



So far, the pandemic has significantly affected only certain sectors of the U.S.
agricultural industry, such as fresh food production marketed to the hospitality
industry, and meat packing. In particular, we have experienced a decrease in
demand - and therefore price - for lemons and blueberries, among other crops
during 2020. Related revenue declines have had a transient, yet significant,
impact on our profitability. Other permanent crops in our farm portfolio -
almonds in particular - have suffered in 2020 due to a mix of the COVID-19
pandemic and trade war related disruptions, which caused a combination of price
weakness and longer sales cycles. Lower gasoline demand has affected demand for
ethanol and therefore corn, however the negative impact on commodity prices was
offset by a recent tightening of supply. We expect that the impact of the
COVID-19 pandemic on our profitability will be temporary, but not necessarily
limited to 2020; for example, we do not expect that demand from the restaurant
and hospitality industries will approach pre-pandemic levels until mid- to
late-2021 at the earliest.



Despite short- and medium-term disruptions in the U.S. agricultural industry, we
do not expect global demand for food, feed, fuel and fiber to be materially
affected by the COVID-19 pandemic and its related economic turmoil. We expect
the industry to experience some degree of long-term transformation, but to
outperform in comparison to other industries. As of the date of this Quarterly
Report, farm values have largely stayed consistent, or slightly increased
portfolio-wide, throughout the pandemic. As owners of essential long-term assets
in an essential industry, we also expect our business to perform relatively
well, although the demand and pricing disruption in selected specialty crops
that we have seen so far might not be the only negative impact of the pandemic
on our business. We expect certain farmers' profitability to be impacted,
however a combination of the high quality of our tenant base and the financial
support measures implemented by the U.S. federal government should prevent a
material degradation in our tenants' creditworthiness. So far, the impact of the
pandemic on our financial performance has been largely limited to our exposure
to the pricing of certain permanent crops through participating leases and
direct operation of farms, as a result of our tenants' ability to maintain

their
financial commitments.



The direct impact of the COVID-19 pandemic on our operations has been limited as
of the date of this Quarterly Report. Even though we operate in an essential
industry and therefore have been largely exempted from stay-at-home orders, we
have prioritized the health and well-being of our employees. We asked our office
staff to work from home whenever possible even before the City and County of
Denver and the State of Colorado implemented stay-at-home orders. Our technology
infrastructure was already well suited to remote working conditions, and the
layout of our offices allows us to substantially observe social distancing
guidelines when staff need to be present in the office. We have asked our field
personnel to limit travel to only those trips required to monitor and maintain
the farms we already own, and to substantially lessen direct contact with our
tenants and suppliers. As a result of these worker health measures, we have
experienced a perceptible degradation in operating efficiency, but not to such
an extent as to materially affect our financial results or internal controls. As
of the second quarter of 2021, both in-person office attendance and frequency of
travel have increased as compared to the beginning of the pandemic, and are
expected to return to pre-pandemic levels later in the year. We do not expect
the pandemic to have a material impact on our 2021 business and operations going
forward, especially as broader segments of the U.S. population become eligible
for vaccination.




Factors That May Influence Future Results of Operations and Farmland Values



The principal factors affecting our operating results and the value of our
farmland include global demand for food relative to the global supply of food,
farmland fundamentals and economic conditions in the markets in which we own
farmland and our ability to increase or maintain rental revenues while
controlling expenses. Although farmland prices may show a decline from time to
time, we believe that any reduction in U.S. farmland values overall is likely to
be short-lived as global demand for food and agricultural commodities typically
exceeds global supply.



Demand



Notwithstanding any impacts from the ongoing COVID-19 pandemic, we expect that
global demand for food, driven primarily by significant increases in the global
population and GDP per capita, will continue to be the key driver of farmland
values. We further expect that global demand for most crops will continue to
grow to keep pace with global

                                       32

Table of Contents



population growth, which we anticipate will lead to either higher prices and/or
higher yields and, therefore, higher rental rates on our farmland, as well as
sustained growth in farmland values over the long term. We also believe that
growth in global GDP per capita, particularly in developing nations, will
contribute significantly to increasing demand for primary crops. As global GDP
per capita increases, the composition of daily caloric intake is expected to
shift away from the direct consumption of primary crops toward animal-based
proteins, which is expected to result in increased demand for primary crops as
feed for livestock. According to the United Nations' Food and Agriculture
Organization ("UN FAO"), these factors are expected to require more than one
billion additional tons of global annual grain production by 2050, a 43%
increase from 2005-2007 levels and more than two times the 446 million tons of
grain produced in the United States in 2014.  Furthermore, we believe that, as
GDP per capita grows, a significant portion of additional household income is
allocated to food and that once individuals increase consumption of, and
spending on, higher quality food, they will strongly resist returning to their
former dietary habits, resulting in greater inelasticity in the demand for food.
As a result, we believe that, as global demand for food increases, rental rates
on our farmland and the value of our farmland will increase over the long term.
Global demand for corn and soybeans as inputs in the production of biofuels such
as ethanol and soy diesel also could impact the prices of corn and soybeans,
which, in the long term, could impact our rental revenues and our results of
operations. As described above, the COVID-19 pandemic and efforts to reduce its
spread have impacted demand for corn. However, the success of our long-term
business strategy is not dependent on growth in demand for biofuels, and we do
not believe that demand for corn and soybeans as inputs in the production of
biofuels will materially impact our results of operations or the value of our
farmland, primarily because we believe that growth in global population and GDP
per capita will be more significant drivers of global demand for primary crops
over the long term.



Supply




Global supply of agricultural commodities is driven by two primary factors, the
number of tillable acres available for crop production and the productivity of
the acres being farmed. Although the amount of global cropland in use has
gradually increased over time, growth has plateaued over the last 20 years.
Cropland area continues to increase in developing countries, but after
accounting for expected continuing cropland loss, the UN FAO projects only 173
million acres will be added from 2005-2007 to 2050, an approximate 5% increase.
In comparison, world population is expected to grow over the same period to 9.1
billion, a nearly 40% increase. According to the World Bank Group arable land
per capita has decreased by approximately 50% from 1961 to 2015. While we expect
growth in the global supply of arable land, we also expect that landowners will
only put that land into production if increases in commodity prices and the
value of farmland cause landowners to benefit economically from using the land
for farming rather than alternative uses. We also believe that decreases in the
amount of arable land in the United States and globally as a result of
increasing urbanization will partially offset the impact of additional supply of
farmland. Additionally, we believe that farmland lost to urban development
disproportionately impacts higher quality farmland. According to a study
published in 2017 in the Proceedings of the National Academy of Sciences, urban
expansion is expected to take place on cropland that is 1.77 times more
productive than the global average. The global supply of food is also impacted
by the productivity per acre of tillable land. Historically, productivity gains
(measured by average crop yields) have been driven by advances in seed
technology, farm equipment, irrigation techniques, improvements in soil health,
and chemical fertilizers and pesticides. Furthermore, we expect the increasing
shortage of water in many irrigated growing regions in the United States and
other growing regions around the globe, often as a result of new water
restrictions imposed by laws or regulations, to lead to decreased productivity
growth on many acres and, in some cases, cause yields to decline on those acres.

Conditions in Our Existing Markets





Our portfolio spans numerous farmland markets and crop types, which provides us
broad diversification across conditions in these markets. Across all regions,
farmland acquisitions continue to be dominated by buyers who are existing farm
owners and operators; institutional and investor acquirors remain a small
fraction of the industry. We generally see firm demand for high quality
properties across all regions and crop types.



Farmland values are typically very stable, often showing modest increases even
in years of commodity price weakness. We expect this trend to continue, with
modest but consistent annual increases compounding into significant appreciation
in the long term.



                                       33

  Table of Contents


With regard to leasing dynamics, we believe quality farmland in the United
States has a near-zero vacancy rate as a result of the supply and demand
fundamentals discussed above. Our view is that rental rates for farmland are a
function of farmland operators' view of the long-term profitability of farmland,
and that many farm operators will compete for farmland even during periods of
decreased profitability due to the scarcity of farmland available to rent. In
particular, we believe that due to the relatively high fixed costs associated
with farming operations (including equipment, labor and knowledge), many farm
operators in some circumstances will rent additional acres of farmland when it
becomes available in order to allocate their fixed costs over additional acres.
Furthermore, because it is generally customary in the industry to provide the
existing tenant with the opportunity to re-lease the land at the end of each
lease term, we believe that many farm operators will rent additional land that
becomes available in order to control the ability to farm that land in future
periods. As a result, in our experience, many farm operators will aggressively
pursue rental opportunities in their operable geographic area, even when the
farmer anticipates lower current returns or short-term losses.



In our primary row crop farmland, we have realized modest rent increases in
connection with 2021 lease renewals, and we expect to benefit from rent growth
into 2022. This is consistent with robust prices in primary crop markets and
tenant demand for leasing high quality farmland. Across specialty crops,
operator profitability is under some pressure. Participating lease structures
are common in many specialty crops, and base lease rates are consistent with or
somewhat lower than 2020.



Lease Expirations




Farm leases are generally three to five years in duration. As of March 31, 2021,
our portfolio had the following lease expirations as a percentage of approximate
acres leased and annual minimum cash rents:




($ in thousands)
                                                                                        % of
                                                        % of                           Annual
                                                     Approximate                        Cash
Year Ending December 31,        Approximate Acres       Acres         Annual Rents      Rents
2021 (remaining nine months)               45,522           30.9 %   $       11,343       39.4 %
2022                                       36,132           24.5 %            7,000       24.3 %
2023                                       34,789           23.6 %            6,330       22.0 %
2024                                       12,020            8.2 %            1,328        4.6 %
2025                                       10,786            7.3 %            1,042        3.6 %
2026 and beyond                             8,126            5.5 %            1,716        6.0 %
                                          147,375          100.0 %   $       28,759      100.0 %




As of March 31, 2021, we had approximately 42,000 acres for which lease payments
are at least partially based on a percentage of farming revenues and 1,232 acres
that are leased to our TRS. Acres leased to our TRS are not included in the
table above.  From time to time, we may enter into recreational leases on our
farms.  Since lease renewal periods are exercisable at the option of the lessee,
the preceding table presents future lease expirations during the initial lease
term only.



Rental Revenues




Our revenues are primarily generated from renting farmland to operators of
farming businesses. Our leases have terms ranging from one to forty years, with
three years being the most common.  Although the majority of our leases do not
provide the tenant with a contractual right to renew the lease upon its
expiration, we believe it is customary to provide the existing tenant with the
opportunity to renew the lease, subject to any increase in the rental rate that
we may establish. If the tenant elects not to renew the lease at the end of the
lease term, the land will be offered to a new tenant.



The leases for the majority of the properties in our portfolio provide that
tenants must pay us at least 50% of the annual rent in advance of each spring
planting season.  As a result, we collect a significant portion of total annual
rents in the first calendar quarter of each year.  We believe our use of leases
pursuant to which at least 50% of the annual rent is payable in advance of each
spring planting season mitigates the tenant credit risk associated with the
variability of farming operations that could be adversely impacted by poor crop
yields, weather conditions, mismanagement, undercapitalization or other factors
affecting our tenants. Tenant credit risk is further mitigated by usually
requiring that our tenants maintain crop insurance and by our claim on a portion
of the related proceeds, if any, as well as by our security interest in the
growing crop. Prior to acquiring farmland property, we take into consideration
the competitiveness of the local farm-operator tenant

                                       34

Table of Contents

environment in order to enhance our ability to quickly replace a tenant that is unwilling to renew a lease or is unable to pay a rent payment when it is due.

Some of our leases provide for a reimbursement of the property taxes we pay.


As described above, we are continually assessing the impact, if any, on our
ability to collect rent from our tenants as a result of the COVID-19 pandemic.
At this time, we expect to continue to be able to collect rents in full and on
time, but will continue to assess the pandemic's impact on our tenants on an
ongoing basis.



Expenses



Substantially all of our farm leases are structured in such a way that we are
responsible for major maintenance, certain insurance and taxes (which are
sometimes reimbursed to us by our tenants), while our tenant is responsible for
minor maintenance, water usage and all of the additional input costs related to
farming operations on the property, such as seed, fertilizer, labor and fuel. We
expect that substantially all of the leases for farmland we acquire in the
future will continue to be structured in a manner consistent with substantially
all of our existing leases. As the owner of the land, we generally only bear
costs related to major capital improvements permanently attached to the
property, such as irrigation systems, drainage tile, grain storage facilities,
permanent plantings or other physical structures customary for farms. In cases
where capital expenditures are necessary, we typically seek to offset, over a
period of multiple years, the costs of such capital expenditures by increasing
rental rates. We also incur the costs associated with maintaining liability

and
casualty insurance.



We incur costs associated with running a public company, including, among
others, costs associated with employing our personnel and compliance costs. We
incur costs associated with due diligence and acquisitions, including, among
others, travel expenses, consulting fees and legal and accounting fees. We also
incur costs associated with managing our farmland. The management of our
farmland, generally, is not labor or capital intensive because farmland
generally has minimal physical structures that require routine inspection and
maintenance, and our leases, generally, are structured to require the tenant to
pay many of the costs associated with the property. Furthermore, we believe that
our platform is scalable, and we do not expect the expenses associated with
managing our portfolio of farmland to increase significantly as the number of
farm properties we own increases over time.



Crop Prices



We believe short-term crop price changes have had little effect historically on
farmland values. They also have a limited impact on our rental revenue, as most
of our leases provide for a fixed cash rental rate, a common approach in
agricultural markets, especially with respect to row crops, for several reasons.
This approach simplifies the administrative requirements for the landlord and
the tenant significantly. This approach supports the tenants' desire to maintain
access to their leased farms, which are in short supply, a concept expanded upon
below, by providing the landlord consistent rents. Crop price exposure is also
limited because tenants also benefit from the fundamental revenue hedging that
occurs when large crop yields mitigate the effect of lower crop prices.
Similarly, lower crop yields have a tendency to trigger higher crop prices and
help increase revenue even when confronted by lower crop yields. Such hedging
effect also limits the impact of short-term crop price changes on revenues
generated by leases with a bonus component based on farm revenues. Further risk
mitigation is available to tenants, and indirectly to us, via crop insurance and
hedging programs implemented by tenants. Our TRS also takes advantage of these
risk mitigation programs and strategies.

We believe quality farmland in the United States has a near-zero vacancy rate as
a result of supply and demand fundamentals. Our view is that rental rates for
farmland are a function of farmland operators' view of the long-term
profitability of farmland and that many farm operators will compete for farmland
even during periods of decreased profitability due to the scarcity of farmland
available to rent. In particular, we believe that due to the relatively high
fixed costs associated with farming operations (including equipment, labor and
knowledge), many farm operators in some circumstances will rent additional acres
of farmland when they become available in order to allocate their fixed costs
over additional acres. Furthermore, because it is generally customary in the
industry to provide the existing tenant with the opportunity to re-lease the
land at the end of each lease term, we believe that many farm operators will
rent additional land that becomes available in order to control the ability to
farm that land in future periods. As a result, in our experience, many farm
operators will aggressively pursue rental opportunities in their operable
geography, even when the farmer anticipates lower current returns or short-term
losses.

                                       35

  Table of Contents


The value of a crop is affected by many factors that can differ on a yearly
basis. Weather conditions and crop diseases in major crop production regions
worldwide create a significant risk of price volatility, which may either
increase or decrease the value of the crops that our tenants produce each year.
Other material factors adding to the volatility of crop prices are changes in
government regulations and policy, fluctuations in global prosperity,
fluctuations in foreign trade and export markets and eruptions of military
conflicts or civil unrest. In addition, although prices for many crops
experienced significant declines in 2014 and 2015, in late 2020 and early 2021
prices rebounded to or near prior highs, driven by increased demand expectations
from China and modest adverse weather conditions around the world. We expect
that continued long-term growth trends in global population and GDP per capita
will result in increased revenue per acre for primary crops over time.
Furthermore, the COVID-19 pandemic has impacted certain specialty crops. We do
not believe such declines represent a trend over the long term, but rather a
reaction to the decline in economic activity as a result of the pandemic. We
expect pricing across specialty crops to strengthen in 2021 as economic
disruptions due to the COVID-19 pandemic gradually abate. Although annual rental
payments under the majority of our leases are not based expressly on the quality
or profitability of our tenants' harvests, any of these factors could adversely
affect our tenants' ability to meet their obligations to us and our ability to
lease or re-lease properties on favorable terms.



Interest Rates



We expect that future changes in interest rates will impact our overall
operating performance by, among other things, affecting our borrowing costs.
While we may seek to manage our exposure to future changes in rates through
interest rate swap agreements or interest rate caps, portions of our overall
outstanding debt will likely remain at floating rates. In addition, a sustained
material increase in interest rates may cause farmland prices to decline if the
rise in real interest rates (which is defined as nominal interest rates minus
the inflation rate) is not accompanied by rises in the general levels of
inflation. However, our business model anticipates that over time the value of
our farmland will increase, as it has in the past, at a rate that is equal to or
greater than the rate of inflation, which may in part offset the impact of
rising interest rates on the value of our farmland, but there can be no
guarantee that this appreciation will occur to the extent that we anticipate or
at all.



International Trade



Following the trade tensions between China and the U.S. that started developing
in 2018, the two countries reached a "Phase 1" trade deal in late 2019. At this
point, we believe that China and the U.S. will endeavor to largely comply with
the Phase 1 trade deal, leading to increased purchases by China of many U.S.
agricultural exports. While logistical disruptions introduced by the COVID-19
pandemic slowed China's compliance with its Phase 1 commitments, U.S.
agricultural exports to China have rebounded in recent months.



Trade tensions have impacted our business mostly in the area of tree nuts;
especially almonds, a crop for which certain of our tenants have allocated
significant acreage and to which we are exposed through participating rents. For
example, a combination of trade tensions and logistical disruptions caused by
the COVID-19 pandemic have affected the timing of pricing and sale of the 2020
almond crop, leading to a shift of revenues to the following fiscal year and
potentially lower overall revenues.

Critical Accounting Policies and Estimates





Except as set forth in Note 1 to the consolidated financial statements included
in this Quarterly Report on Form 10-Q, there have been no changes to our
critical accounting policies disclosed in our Annual Report on Form 10-K for the
year ended December 31, 2020.

New or Revised Accounting Standards





For a summary of the new or revised accounting standards, please refer to "Note
1 - Organization and Significant Accounting Policies" within the notes to the
consolidated financial statements included in this Quarterly Report on Form

10-Q.



                                       36

  Table of Contents

Results of Operations



Comparison of the three months ended March 31, 2021 to the three months ended
March 31, 2020




                                               For the three months ended March 31,
($ in thousands)                                   2021                     2020           $ Change     % Change
OPERATING REVENUES:
Rental income                               $            10,259       $          10,073    $     186        1.8 %
Tenant reimbursements                                       938                     861           77        8.9 %
Crop sales                                                  216                     335        (119)     (35.5) %
Other revenue                                               162                     381        (219)     (57.5) %
Total operating revenues                                 11,575                  11,650         (75)      (0.6) %

OPERATING EXPENSES

Depreciation, depletion and amortization                  1,935                   2,000         (65)      (3.3) %
Property operating expenses                               1,931                   1,861           70        3.8 %
Cost of goods sold                                          250                     566        (316)     (55.8) %
General and administrative expenses                       1,617            

      1,451          166       11.4 %
Legal and accounting                                      2,742                     482        2,260         NM
Other operating expenses                                      2                       1            1      100.0 %
Total operating expenses                                  8,477                   6,361        2,116       33.3 %
OPERATING INCOME                                          3,098                   5,289      (2,191)     (41.4) %

OTHER (INCOME) EXPENSE:
Other income                                               (43)                     121        (164)         NM

(Gain) loss on disposition of assets                    (3,392)                      86      (3,478)         NM
Interest expense                                          4,056                   4,663        (607)     (13.0) %
Total other expense                                         621

4,870 (4,249) (87.2) %


Net income before income tax expense                      2,477            

        419        2,058         NM

Income tax expense                                            -                       -            -         NM

NET INCOME                                  $             2,477       $             419    $   2,058         NM




NM=Not Meaningful



Our rental income for the three months ended March 31, 2021 was impacted
partially by six dispositions consisting of fourteen farms during the three
months ended March 31, 2021. To highlight the effect of changes due to
acquisitions and dispositions, we have separately discussed the rental income
for the same-property portfolio, which includes only properties owned and
operated for the entirety of both periods presented. The same-property portfolio
for the three months ended March 31, 2021 includes approximately 141,000 acres,
representing 95% of our current portfolio on an acreage basis. Additionally,
upon renewal in 2021, a number of leases transitioned to higher percentages of
variable rents relative to fixed rents, which variable rents have yet to be
received.



On a same-property basis, total rental income increased $0.1 million, or 1.2%,
for the three months ended March 31, 2021 as compared to the three months ended
March 31, 2020. Management does not believe that same-property rent comparisons
for periods shorter than the full year are necessarily indicative of the
expected full year comparison because the majority of bonus and crop share rent
payments are expected to be received in the fourth quarter.



Rental income increased $0.2 million, or 1.8%, for the three months ended March
31, 2021 as compared to the three months ended March 31, 2020, resulting from
asset dispositions and the timing of crop share revenue recognition in
connection with certain permanent crops.



Revenues recognized from tenant reimbursement of property taxes increased $0.1
million, or 8.9%, during the three months ended March 31, 2021 as compared to
the three months ended March 31, 2020. This increase is the result of higher
tenant reimbursement revenues on properties in the state of California.



                                       37

  Table of Contents

Crop sales totaled $0.2 million during the three months ended March 31, 2021 as
compared to $0.3 million in the comparative three-month period ended March 31,
2020. The decrease in crop sales is due to our TRS operating fewer farms during
the three months ended March 31, 2021.



Other revenues totaled $0.2 million during the three months ended March 31, 2021
as compared to $0.4 million in the comparative three-month period ended March
31, 2020. The decrease primarily relates to a reduction of interest income on
loans due to the settlement of principal balances on several notes receivable.



Depreciation, depletion and amortization expense remained relatively flat for
the three months ended March 31, 2021 as compared to the three months ended
March 31, 2020 as a result of asset dispositions and the decrease of the
amortization of in-place leases acquired as part of the AFCO acquisition that
were fully amortized in prior periods.

Property operating expenses increased $0.1 million, or 3.8%, for the three months ended March 31, 2021 as compared to the three months ended March 31, 2020. The increase is largely due to slightly higher property tax expenses and increased property insurance rates, offset by reduced acreage due to farms sold.

General and administrative expenses increased $0.2 million or 11.4% for the three months ended March 31, 2021 as compared to the three months ended March 31, 2020. The increase was largely driven by higher payroll taxes and fees.


Cost of goods sold decreased $0.3 million for the three months ended March 31,
2021 as compared to the three months ended March 31, 2020. This was largely due
to timing of citrus sales year over year and a decrease in the number of acres
operated by our TRS.



Legal and accounting expenses increased $2.3 million for the three months ended
March 31, 2021 as compared to the three months ended March 31, 2020, which was
primarily the result legal fees incurred in relation to a "short and distort"
attack against the Company conducted by anonymous parties, including Quinton
Mathews, under the pseudonym Rota Fortunae, and his co-conspirators, as
discussed above under Part I, Item 1 "Note 8-Commitments and
Contingencies-Litigation,". The Company is pursuing litigation against Quinton
Mathews and his co-conspirators (collectively "Wheel of Fortune"), and is
defending stockholder class action lawsuits that are related to the claims made
by Wheel of Fortune. Amounts incurred to defend the stockholder claims are no
longer covered by the Company's insurance policies because legal and other costs
to defend such claims exceeded the Company's coverage amounts. Accordingly, the
Company has not recognized any receivable for insurance recoveries that the
Company believes it will be entitled to. The Company does not expect insurance
proceeds to cover a substantial portion of the costs related to the lawsuit it
filed against Wheel of Fortune.

Other operating expenses were $0.0 million for the three months ended March 31, 2021 and March 31, 2020.





Other income increased $0.2 million for the three months ended March 31, 2021 as
compared to the three months ended March 31, 2020, resulting primarily from
losses in commodity futures that occurred in the three months ended March 31,
2020. The Company incurred no such losses during the three months ended March
31, 2021.



Gain on disposition of assets increased $3.5 million for the three months ended
March 31, 2021 as compared to the three months ended March 31, 2020 due primarly
to the gain on sale of fourteen properties during the three months ended March
31, 2021 as opposed to no dispositions occurring during the three months ended
March 31, 2020.



Interest expense decreased $0.6 million, or 13.0%, for the three months ended
March 31, 2021 as compared to the three months ended March 31, 2020. This
decrease is the result of a decrease in interest rates on floating rate debt and
the lower outstanding balance of debt.



                                       38

  Table of Contents

Liquidity and Capital Resources





Overview

Liquidity is a measure of our ability to meet potential cash requirements, including ongoing commitments to repay any outstanding borrowings, fund and maintain our assets and operations, make distributions to our stockholders and

unitholders, and other general business needs.


Our short-term liquidity requirements consist primarily of funds necessary to
acquire additional farmland, make other investments consistent with our
investment strategy, make principal and interest payments on outstanding
borrowings, make distributions on our Series A preferred units and Series B
Participating Preferred Stock, make distributions necessary to qualify for
taxation as a REIT, fund our operations, and pay legal fees in relation to the
Rota Fortunae litigation in excess of the Company's insurance coverage. Our
sources of funds primarily will be cash on hand, operating cash flows and
borrowings from prospective lenders.



Our long-term liquidity needs consist primarily of funds necessary to acquire
additional farmland, make other investments and certain long-term capital
expenditures, make principal and interest payments on outstanding borrowings,
and make distributions necessary to qualify for taxation as a REIT. In light of
the levels at which our common stock has traded in recent years, we have elected
not to access the equity capital markets in order to fund our liquidity needs.
Furthermore, because of the trading price of our common stock, we have been
unable to fund acquisitions of farmland with Common units. We may consider
raising equity capital or acquiring farmland with Common units if we can do so
in a way that causes minimal dilution to our existing stockholders. We expect to
meet our long-term liquidity requirements through various sources of capital,
including net cash provided by operations, long-term mortgage indebtedness and
other secured and unsecured borrowings, asset dispositions and, given the recent
recovery in our stock price, future equity issuances (including issuances of
Common units).

Our ability to incur additional debt will depend on a number of factors, including our degree of leverage, the value of our unencumbered assets, compliance with the covenants under our existing debt agreements, borrowing restrictions that may be imposed by lenders and the conditions of debt markets. Our ability to access the equity capital markets will depend on a number of factors as well, including general market conditions for REITs and market perceptions about us.





We manage our liquidity position and expected liquidity needs taking into
consideration current cash balances and reasonably expected cash receipts. Our
business model, and the business model of real estate investment companies in
general, relies on debt as a structural source of financing. When debt becomes
due, it is generally refinanced rather than repaid using our cash flow from
operations. When material debt repayments are due within the following 12
months, we work with current and new lenders and other potential sources of
capital to ensure that all of our obligations are satisfied in a timely manner.
We have a history of being able to refinance our debt obligations to manage our
debt maturities. Furthermore, we have a large portfolio of high-quality real
estate assets which we believe could be selectively and readily liquidated if
necessary to fund our immediate liquidity needs. Our first course of action is
to work with our lenders to refinance debt which is coming due on terms
acceptable to us. In the event that we are unsuccessful in refinancing our debt
on terms acceptable to us, we would look to liquidate certain assets to fund our
liquidity shortfall. On January 29, 2021, the Company entered into an amendment
to extend the maturity dates of its five Rutlege Promissory Notes from January
1, 2022 to April 1, 2022.



During the three months ended March 31, 2021, we used $0.2 million to repurchase
an aggregate of 8,291 shares of Series B Participating preferred stock at a
weighted average price of $25.82. We currently have authority to repurchase up
to an aggregate of $40.9 million in additional shares of our common stock or
shares of our Series B participating preferred Stock.



Consolidated Indebtedness




For further details relating to our consolidated indebtness, refer to "Note 7 -
Mortgage Notes, Line of Credit and Bonds Payable" in the financial statements
included elsewhere in this Quarterly Report on Form 10-Q.



                                       39

  Table of Contents

Sources and Uses of Cash



The following table summarizes our cash flows for the three months ended March
31, 2021 and 2020:




                                                               For the three months ended March 31,
(in thousands)                                                     2021                    2020
Net cash provided by operating activities                   $            11,406      $          12,867
Net cash provided by (used in) investing activities         $            25,019      $           (545)
Net cash used in financing activities                       $          (27,572)      $         (9,889)

Comparison of the three months ended March 31, 2021 to the three months ended March 31, 2020

As of March 31, 2021, we had $36.1 million of cash compared to $15.0 million at March 31, 2020.

Cash Flows from Operating Activities

Net cash provided by operating activities decreased by $1.5 million primarily as a result of the following:

Receipt of $20.6 million in cash rents for the three months ended March 31,

? 2021 as compared to receiving $21.4 million in cash rents in the three months

ended March 31, 2020;

? A decrease of $0.6 million in cash interest payments as compared to the three

months ended March 31, 2020;

? Increase in gain on disposition of assets of $3.5 million as compared to the

three months ended March 31, 2020; and

? A decrease in deferred revenue of $2.4 million as compared to the three months


   ended March 31, 2020.

Cash Flows from Investing Activities

Net cash provided by investing activities increased $25.6 million primarily as a result of the following:

Property dispositions during the three months ended March 31, 2021 for cash

? consideration of $28.5 million and $2.4 million of convertible notes

receivable, as opposed to the completion of no property dispositions during the

three months ended March 31, 2020;

? A decrease of $0.6 million in investments in real estate improvements as

compared to the three months ended March 31, 2020;

Property acquisition during the three months ended March 31, 2021 for $2.9

? million as compared to no property acquisitions during the three months ended

March 31, 2020; and

? A $0.4 million decrease in principal repayments on notes receivable received by


   the Company as compared to the three months ended March 31, 2020.

Cash Flows from Financing Activities

Net cash used in financing activities increased $17.7 million primarily as a result of the following:

? Mortgage note repayments increased $19.9 million as compared to the three

months ended March 31, 2020;

? Common stock repurchases decreased $1.4 million as compared to the three months

ended March 31, 2020;

? A decrease of $0.1 million in debt issuance costs as compared to the three

months ended March 31, 2020; and

? A decrease of $0.8 million in participating preferred stock repurchased as


   compared to the three months ended March 31, 2020.

Off-Balance Sheet Arrangements

As of March 31, 2021, we did not have any off-balance sheet arrangements.



                                       40

  Table of Contents

Non-GAAP Financial Measures

Funds from Operations ("FFO") and Adjusted Funds from Operations ("AFFO")





We calculate FFO in accordance with the standards established by the National
Association of Real Estate Investment Trusts, or Nareit. Nareit defines FFO as
net income (loss) (calculated in accordance with GAAP), excluding gains (or
losses) from sales of depreciable operating property, plus real estate related
depreciation, depletion and amortization (excluding amortization of deferred
financing costs), and after adjustments for unconsolidated partnerships and
joint ventures. FFO is a supplemental non-GAAP financial measure. Management
presents FFO as a supplemental performance measure because it believes that FFO
is beneficial to investors as a starting point in measuring our operational
performance. Specifically, in excluding real estate related depreciation and
amortization and gains and losses from sales of depreciable operating
properties, which do not relate to or are not indicative of operating
performance, FFO provides a performance measure that, when compared year over
year, captures trends in occupancy rates, rental rates and operating costs. We
believe that, as a widely recognized measure of the performance of REITs, FFO
will be used by investors as a basis to compare our operating performance with
that of other REITs.



However, because FFO excludes depreciation and amortization and captures neither
the changes in the value of our properties that result from use or market
conditions nor the level of capital expenditures necessary to maintain the
operating performance of improvements on our properties, all of which have real
economic effects and could materially impact our results from operations, the
utility of FFO as a measure of our performance is limited. In addition, other
equity REITs may not calculate FFO in accordance with the Nareit definition as
we do, and, accordingly, our FFO may not be comparable to such other REITs' FFO.
Accordingly, FFO should be considered only as a supplement to net income as a
measure of our performance. FFO should not be used as a measure of our
liquidity, nor is it indicative of funds available to fund our cash needs,
including our ability to pay dividends or service indebtedness. FFO also should
not be used as a supplement to or substitute for cash flow from operating
activities computed in accordance with GAAP.



We do not, however, believe that FFO is the only measure of the sustainability
of our operating performance. Changes in GAAP accounting and reporting rules
that were put in effect after the establishment of Nareit's definition of FFO in
1999 result in the inclusion of a number of items in FFO that do not correlate
with the sustainability of our operating performance. Therefore, in addition to
FFO, we present AFFO and AFFO per share, fully diluted, both of which are
non-GAAP measures. Management considers AFFO a useful supplemental performance
metric for investors as it is more indicative of the Company's operational
performance than FFO. AFFO is not intended to represent cash flow or liquidity
for the period and is only intended to provide an additional measure of our
operating performance. Even AFFO, however, does not properly capture the timing
of cash receipts, especially in connection with full-year rent payments under
lease agreements entered into in connection with newly acquired
farms. Management considers AFFO per share, fully diluted to be a supplemental
metric to GAAP earnings per share. AFFO per share, fully diluted provides
additional insight into how our operating performance could be allocated to
potential shares outstanding at a specific point in time. Management believes
that AFFO is a widely recognized measure of the operations of REITs, and
presenting AFFO will enable investors to assess our performance in comparison to
other REITs. However, other REITs may use different methodologies for
calculating AFFO and AFFO per share, fully diluted, and, accordingly, our AFFO
and AFFO per share, fully diluted may not always be comparable to AFFO and AFFO
per share amounts calculated by other REITs. AFFO and AFFO per share, fully
diluted should not be considered as an alternative to net income (loss) or
earnings per share (determined in accordance with GAAP) as an indication of
financial performance or as an alternative to net income (loss) earnings per
share (determined in accordance with GAAP) as a measure of our liquidity, nor
are they indicative of funds available to fund our cash needs, including our
ability to make distributions.



                                       41

  Table of Contents

AFFO is calculated by adjusting FFO to exclude or include the income and expenses that we believe are not reflective of the sustainability of our ongoing operating performance, as further explained below:

Real estate related acquisition and due diligence costs. Acquisition (including

audit fees associated with these acquisitions) and due diligence costs are

incurred for investment purposes and, therefore, do not correlate with the

ongoing operations of our portfolio. We believe that excluding these costs from

AFFO provides useful supplemental information reflective of the realized

economic impact of our leases, which is useful in assessing the sustainability

? of our operating performance. Acquisition and due diligence costs totaled $0.0

million for the three months ended March 31, 2021 and 2020, respectively. We

believe that excluding these costs from AFFO provides useful supplemental

information reflective of the realized economic impact of our current

acquisition strategy, which is useful in assessing the sustainability of our

operating performance. These exclusions also improve the comparability of our

results over each reporting period and of our Company with other real estate


   operators.

Stock based compensation. Stock based compensation is a non-cash expense and,

? therefore, does not correlate with the ongoing operations. We believe that

excluding these costs from AFFO improves the comparability of our results over

each reporting period and of our Company with other real estate operators.

Deferred impact of interest rate swap terminations. When an interest rate swap

is terminated and the related termination fees are rolled into a new swap, the

terminated swap's termination fees are amortized over what would have been the

remaining life of the terminated swap, while the related contractual and

? financial obligations extend over the life of the new swap. As a result, the

net impact on interest expense is uneven throughout the life of the swap, which

is inconsistent with the purpose of an interest rate swap. We believe that,

with this adjustment, AFFO better reflects the actual cash cost of the fixed

interest rate we are obligated to pay under the new swap agreement, and results


   in improved comparability of our results across reporting periods.

Distributions on Series A preferred units. Dividends on Series A preferred

units, which are convertible into Common units on or after February 10, 2026,

? have a fixed and certain impact on our cash flow, and therefore are subtracted

from FFO. We believe this improves the comparability of our Company with other


   real estate operators.




   Dividends on Series B Participating Preferred Stock. Dividends on Series B

Participating Preferred Stock, which may be redeemed for cash or converted into

? shares of common stock on or after September 30, 2021, have a fixed and certain

impact on our cash flow, and therefore are subtracted from FFO. We believe this

improves the comparability of our Company with other real estate operators.

Common shares fully diluted. In accordance with GAAP, common shares used to

calculate earnings per share are presented on a weighted average basis. Common

shares on a fully diluted basis includes shares of common stock, Common units,

and unvested shares of restricted stock outstanding at the end of the period on

? a share equivalent basis, because all shares are participating securities and

thus share in the performance of the Company. The conversion of Series A

preferred units is excluded from the calculation of common shares fully diluted

as they are not participating securities, and therefore do not share in the

performance of the Company and their impact on shares outstanding is uncertain.






                                       42

  Table of Contents

The following table sets forth a reconciliation of net income (loss) to FFO,
AFFO and net (loss) income available to common stockholders per share to AFFO
per share, fully diluted, the most directly comparable GAAP equivalents,
respectively, for the periods indicated below as previously reported
(unaudited):




                                                            For the three months ended
                                                                    March 31,

(in thousands except per share amounts)                        2021

2020


Net income (loss)                                           $    2,477      $      419
(Gain) loss on disposition of assets                           (3,392)

86


Depreciation, depletion and amortization                         1,935     

     2,000
FFO                                                              1,020           2,505

Stock based compensation                                           251             242

Deferred impact of interest rate swap terminations                 184

-


Real estate related acquisition and due diligence costs              -

-


Distributions on Preferred units                               (3,064)

(3,115)


AFFO                                                        $  (1,609)

$ (368)

AFFO per diluted weighted average share data:


AFFO weighted average common shares                             32,202

31,767

Net loss per share available to common stockholders $ (0.02) $ (0.09) Income available to redeemable non-controlling interest and non-controlling interest in operating partnership

             0.10

0.10


Depreciation and depletion                                        0.06

0.06


Stock based compensation                                          0.01

0.01


(Gain) loss on disposition of assets                            (0.11)

-


Distributions on Preferred units                                (0.10)

(0.10)


AFFO per diluted weighted average share                     $   (0.05)
$   (0.01)




The following table sets forth a reconciliation of AFFO share information to
basic weighted average common shares outstanding, the most directly comparable
GAAP equivalent, for the periods indicated below (unaudited):




                                                                For the three months
                                                                  ended March 31,
(in thousands)                                                  2021            2020

Basic weighted average shares outstanding                       30,418

29,545


Weighted average OP units on an as-if converted basis            1,512

1,904


Weighted average unvested restricted stock                         272

318


AFFO weighted average common shares                             32,202     

    31,767






EBITDAre



The Company calculates Earnings Before Interest Taxes Depreciation and
Amortization for real estate ("EBITDAre") in accordance with the standards
established by NAREIT in its September 2017 White Paper. NAREIT defines EBITDAre
as net income (calculated in accordance with GAAP) excluding interest expense,
income tax, depreciation and amortization, gains or losses on disposition of
depreciated property (including gains or losses on change of control),
impairment write-downs of depreciated property and of investments in
unconsolidated affiliates caused by a decrease in value of depreciated property
in the affiliate, and adjustments to reflect the entity's pro rata share of
EBITDAre of unconsolidated affiliates. EBITDAre is a key financial measure used
to evaluate the Company's operating performance but should not be construed as
an alternative to operating income, cash flows from operating activities or net
income, in each case as determined in accordance with GAAP.  The Company
believes that EBITDAre is a useful performance measure commonly reported and
will be widely used by analysts and investors in the Company's industry.
However, while EBITDAre is a performance measure widely used across the
Company's industry, the Company does not believe that it correctly captures the
Company's business operating performance because it includes non-cash expenses
and recurring adjustments that are necessary to better understand the Company's
business operating performance.  Therefore, in addition to EBITDAre, management
uses Adjusted EBITDAre, a non-GAAP measure.



                                       43

  Table of Contents


We further adjust EBITDAre for certain additional items such as stock based
compensation, indirect offering costs, real estate acquisition related audit
fees and real estate related acquisition and due diligence costs (for a full
discussion of these adjustments, see AFFO adjustments discussed above) that we
consider necessary to understand our operating performance.  We believe that
Adjusted EBITDAre provides useful supplemental information to investors
regarding our ongoing operating performance that, when considered with net
income and EBITDAre, is beneficial to an investor's understanding of our
operating performance.



EBITDAre and Adjusted EBITDAre have limitations as analytical tools, and you
should not consider them in isolation or as a substitute for analysis of our
results as reported under GAAP. Some of these limitations are:

? EBITDAre and Adjusted EBITDAre do not reflect our cash expenditures, or future

requirements, for capital expenditures or contractual commitments;

? EBITDAre and Adjusted EBITDAre do not reflect changes in, or cash requirements

for, our working capital needs;

? EBITDAre and Adjusted EBITDAre do not reflect the interest expense, or the cash

requirements necessary to service interest or principal payments, on our debt;

Although depreciation and amortization are non-cash charges, the assets being

? depreciated and amortized will often have to be replaced in the future, and

EBITDAre and Adjusted EBITDAre do not reflect any cash requirements for these

replacements; and

? Other companies in our industry may calculate EBITDAre and Adjusted EBITDAre

differently than we do, limiting the usefulness as a comparative measure.


Because of these limitations, EBITDAre and Adjusted EBITDAre should not be
considered as a measure of discretionary cash available to us to invest in the
growth of our business. We compensate for these limitations by relying primarily
on our GAAP results of operations and using EBITDAre and Adjusted EBITDAre only
as a supplemental measure of our performance.

The following table sets forth a reconciliation of our net income to our EBITDAre and Adjusted EBITDAre for the periods indicated below (unaudited):






                                                              For the three months ended
                                                                       March 31,
(in thousands)                                                  2021                2020
Net Income (loss)                                          $         2,477      $        419
Interest expense                                                     4,056             4,663
Income tax expense                                                       -                 -

Depreciation, depletion and amortization                             1,935             2,000
(Gain) loss on disposition of assets                               (3,392) 

              86
EBITDAre                                                   $         5,076      $      7,168

Stock based compensation                                               251               242

Real estate related acquisition and due diligence costs                  - 

               -
Adjusted EBITDAre                                          $         5,327      $      7,410




Inflation




Most of our farming leases are two to three years for row crops and one to seven
years for permanent crops, pursuant to which each tenant is responsible for
substantially all of the operating expenses related to the property, including
maintenance, water usage and insurance. As a result, we believe that the effect
on us of inflationary increases in operating expenses may be offset in part by
the operating expenses that are passed through to our tenants and by contractual
rent increases because our leases will be renegotiated every one to five
years. We do not believe that inflation has had a material impact on our
historical financial position or results of operations.



                                       44

  Table of Contents

Seasonality



Because the leases for many of the properties in our portfolio require
significant payments in advance of the spring planting season (for row crops),
we receive a significant portion of our cash rental payments in the first
calendar quarter of each year, although we recognize rental revenue from these
leases on a pro rata basis over the non-cancellable term of the lease in
accordance with GAAP.

© Edgar Online, source Glimpses