Quarterly report pursuant to Section 13 or 15(d)

Real Estate and Intangible Assets (Tables)

v3.21.1
Real Estate and Intangible Assets (Tables)
 3 Months Ended
Mar. 31, 2021
Real Estate [Abstract]  
Summary Information of Farms The following table provides certain summary information about the 140 farms we owned as of March 31, 2021 (dollars in thousands, except for footnotes):
Location No. of Farms Total
Acres		 Farm Acres
Net Cost Basis(1)
Encumbrances(2)
California(3)(4)
56 25,202 23,531 $ 622,177  $ 383,829 
Florida 23 20,770 16,256 209,525  129,527 
Arizona(5)
6 6,280 5,228 57,368  19,575 
Colorado 12 32,773 25,577 48,023  30,147 
Washington 3 1,384 1,001 39,006  25,425 
Nebraska 9 7,782 7,050 30,601  19,296 
Michigan 15 962 682 11,832  7,011 
Texas 1 3,667 2,219 8,306  5,117 
Maryland 6 987 863 7,939  4,644 
Oregon 3 418 363 6,091  3,839 
South Carolina 3 597 447 3,790  2,259 
North Carolina 2 310 295 2,235  1,206 
Delaware 1 180 140 1,272  744 
140 101,312 83,652 $ 1,048,165  $ 632,619 
(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. Specifically, includes Investments in real estate, net (excluding improvements paid for by the tenant) and Lease intangibles, net; plus net above-market lease values, lease incentives, and investments in special-purpose LLCs included in Other assets, net; and less net below-market lease values and other deferred revenue included in Other liabilities, net; each as shown on the accompanying Condensed Consolidated Balance Sheets.
(2)Excludes approximately $3.6 million of debt issuance costs related to notes and bonds payable, included in Notes and bonds payable, net on the accompanying Condensed Consolidated Balance Sheet.
(3)Includes ownership in a special-purpose LLC that owns a pipeline conveying water to certain of our properties. As of March 31, 2021, this investment had a net carrying value of approximately $1.1 million and is included within Other assets, net on the accompanying Condensed Consolidated Balance Sheet.
(4)Includes one farm in which we own a leasehold interest via a ground sublease with a California municipality that expires in December 2041. The farm subject to this sublease consists of approximately five acres and had an aggregate net cost basis of approximately $784,000 as of March 31, 2021 (included in Lease intangibles, net on the accompanying Condensed Consolidated Balance Sheet).
(5)Includes two farms in which we own a leasehold interest via ground leases with the State of Arizona that expire in February 2022 and February 2025, respectively. In total, these two farms consist of 1,368 total acres and 1,221 farm acres and had an aggregate net cost basis of approximately $2.3 million as of March 31, 2021 (included in Lease intangibles, net on the accompanying Condensed Consolidated Balance Sheet).
Summary of Components of Investments in Real Estate The following table sets forth the components of our investments in tangible real estate assets as of March 31, 2021, and December 31, 2020 (dollars in thousands):
March 31, 2021 December 31, 2020
Real estate:
Land and land improvements $ 714,676  $ 713,333 
Permanent Plantings 202,443  202,420 
Irrigation and drainage systems 140,855  141,408 
Farm-related facilities 32,812  28,146 
Other site improvements 10,285  10,132 
Real estate, at gross cost 1,101,071  1,095,439 
Accumulated depreciation (54,700) (49,236)
Real estate, net $ 1,046,371  $ 1,046,203 
Carrying Value of Lease Intangibles and Accumulated Amortization for Each Intangible Asset or Liability Class
The following table summarizes the carrying values of certain lease intangible assets and the related accumulated amortization as of March 31, 2021, and December 31, 2020 (dollars in thousands):
March 31, 2021 December 31, 2020
Lease intangibles:
Leasehold interest – land $ 4,285  $ 3,498 
In-place leases 1,824  1,968 
Leasing costs 1,616  1,640 
Tenant relationships 127  127 
Lease intangibles, at cost 7,852  7,233 
Accumulated amortization (3,462) (3,501)
Lease intangibles, net $ 4,390  $ 3,732 
The following table summarizes the carrying values of certain lease intangible assets or liabilities included in Other assets, net or Other liabilities, net, respectively, on the accompanying Condensed Consolidated Balance Sheets and the related accumulated amortization or accretion, respectively, as of March 31, 2021, and December 31, 2020 (dollars in thousands):
  March 31, 2021 December 31, 2020
Intangible Asset or Liability Deferred
Rent Asset
(Liability)		 Accumulated
(Amortization)
Accretion		 Deferred
Rent Asset
(Liability)		 Accumulated
(Amortization)
Accretion
Above-market lease values and lease incentives(1)
$ 255  $ (110) $ 308  $ (154)
Below-market lease values and other deferred revenue(2)
(2,229) 372  (908) 336 
$ (1,974) $ 262  $ (600) $ 182 
(1)Net above-market lease values and lease incentives are included as part of Other assets, net on the accompanying Condensed Consolidated Balance Sheets, and the related amortization is recorded as a reduction of Lease revenue on the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income.
(2)Net below-market lease values and other deferred revenue are included as a part of Other liabilities, net on the accompanying Condensed Consolidated Balance Sheets, and the related accretion is recorded as an increase to Lease revenue on the accompanying Condensed Consolidated Statements of Operations and Comprehensive Income.
Schedule of Asset Acquisitions, by Acquisition
During the three months ended March 31, 2021, we acquired three new farms, which are summarized in the table below (dollars in thousands, except for footnotes):
Property
Name		 Property
Location		 Acquisition
Date		 Total
Acres		 No. of
Farms		 Primary
Crop(s) / Use		 Lease
Term		 Renewal
Options		 Total
Purchase
Price
Acquisition
Costs(1)
Annualized
Straight-line
Rent(2)
Palmer Mill Road Dorchester, MD 3/3/2021 228 2 Sod 10.0 years
2 (5 years)
 $ 1,600  $ 48  $ 89 
Eight Mile Road - Port Facility San Joaquin, CA 3/11/2021 5 1 Cooling Facility & Storage 9.8 years
3 (5 years)
 3,977  30  189 
233 3 $ 5,577  $ 78  $ 278 
(1)Includes approximately $4,000 of external legal fees associated with negotiating and originating the leases associated with these acquisitions, which costs were expensed in the period incurred.
(2)Based on the minimum cash rental payments guaranteed under the respective leases, as required under GAAP, and excludes contingent rental payments, such as participation rents.
During the three months ended March 31, 2020, we acquired two new farms, which are summarized in the table below (dollars in thousands, except for footnotes):
Property
Name		 Property
Location		 Acquisition
Date		 Total
Acres		 No. of
Farms		 Primary
Crop(s)		 Lease
Term		 Renewal
Options		 Total
Purchase
Price
Acquisition
Costs(1)
Annualized
Straight-line
Rent(2)
County Road 18 Phillips, CO 1/15/2020 1,325 2 Sugar beets, edible beans, potatoes, & corn 6.0 years None $ 7,500  $ 39  $ 417 
1,325 2 $ 7,500  $ 39  $ 417 
(1)Includes approximately $4,000 of aggregate external legal fees associated with negotiating and originating the leases associated with these acquisitions, which costs were expensed in the period incurred.
(2)Unaudited; based on the minimum cash rental payments guaranteed under the applicable leases, as required under GAAP, and excludes contingent rental payments, such as participation rents.
Subsequent to March 31, 2021, we acquired one new farm, which is summarized in the table below (dollars in thousands, except for footnotes):
Property
Name		 Property
Location		 Acquisition
Date		 Total
Acres		 No. of
Farms		 Primary
Crop(s)		 Lease
Term		 Renewal
Options		 Total
Purchase
Price
Acquisition
Costs(1)
Annualized
Straight-line
Rent(2)
South Avenue Corning Tehama, CA 4/5/2021 2,285 1 Olives for Olive Oil 14.7 years
1 (5 years)
 $ 37,800  $ 83  $ 2,541 
2,285 1 $ 37,800  $ 83  $ 2,541 
(1)Acquisition will be accounted for as asset acquisitions in accordance with ASC 360. The figures above represent only costs paid or accrued for as of the date of this filing.
(2)Annualized straight-line rent is based on the minimum cash rental payments guaranteed under the applicable leases, as required under GAAP, and excludes contingent rental payments, such as participation rents.
Recognized Identified Assets Acquired and Liabilities Assumed In Asset Acquisitions
The allocation of the aggregate purchase price for the farms acquired during each of the three months ended March 31, 2021 and 2020 is as follows (dollars in thousands):
Assets (Liabilities) Acquired 2021 Acquisitions 2020 Acquisitions
Land and Land Improvements $ 1,341  $ 6,843 
Irrigation & Drainage Systems 209  657 
Farm-related Facilities 4,218  — 
Other Site Improvements 88  — 
Leasehold Interest—Land 787 
In-Place Leases 110  — 
Leasing Costs 145  — 
Below-market Lease Values(1)
(1,321) — 
Total Purchase Price $ 5,577  $ 7,500 
(1)Included within Other liabilities, net on the accompanying Condensed Consolidated Balance Sheets.