NOTE 3. REAL ESTATE AND INTANGIBLE ASSETS

All of our properties are wholly-owned on a fee-simple basis. The following table provides certain summary information about our 29 farms as of September 30, 2014:

 

						Number												Lease
				Date		of				Total				Farmable				Expiration		Net Cost
Property Name		Location		Acquired		Farms				Acres				Acres				Date		Basis(1)				Encumbrances
San Andreas		Watsonville, CA		6/16/1997			1				307				237			12/31/2020		$	4,836,147			$	3,250,940
West Gonzales		Oxnard, CA		9/15/1998			1				653				502			6/30/2020			12,241,930				16,539,852
West Beach		Watsonville, CA		1/3/2011			3				196				195			12/31/2023			8,406,970				3,166,864
Dalton Lane		Watsonville, CA		7/7/2011			1				72				70			10/31/2015			2,706,126				1,049,269
Keysville Road		Plant City, FL		10/26/2011			2				59				50			7/1/2016			1,230,757				—
Colding Loop		Wimauma, FL		8/9/2012			1				219				181			6/14/2018			3,924,951				—
Trapnell Road		Plant City, FL		9/12/2012			3				124				110			6/30/2017			4,146,807				2,655,000
38th Avenue		Covert, MI		4/5/2013			1				119				89			4/4/2020			1,451,684				501,093
Sequoia Street		Brooks, OR		5/31/2013			1				218				206			5/31/2028			3,156,674				1,158,381
Natividad Road		Salinas, CA		10/21/2013			1				166				166			10/31/2024			7,417,364				2,615,699
20th Avenue		South Haven, MI		11/5/2013			3				151				94			11/4/2018			1,901,569				747,343
Broadway Road		Moorpark, CA		12/16/2013			1				60				60			12/15/2023			2,957,471				1,121,014
Oregon Trail		Echo, OR		12/27/2013			1				1,895				1,640			12/31/2023			14,011,872				5,231,398
East Shelton		Willcox, AZ		12/27/2013			1				1,761				1,320			2/29/2024			7,798,747				2,503,597
Collins Road		Clatskanie, OR		5/30/2014			2				200				157			9/30/2024			2,560,286				—
Spring Valley		Watsonville, CA		6/13/2014			1				145				110			9/30/2016			5,914,002				2,204,660
McIntosh Road		Dover, FL		6/20/2014			2				94				78			6/30/2017			2,560,062				1,599,600
Naumann Road		Oxnard, CA		7/23/2014			1				68				64			7/31/2017			6,879,182				2,574,595
Sycamore Road		Arvin, CA		7/25/2014			1				326				322			10/31/2024			5,954,079				2,167,293
Wauchula Road		Duette, FL		9/29/2014			1				808				590			9/30/2024			13,888,500				8,259,000
							29				7,641				6,241					$	113,945,180			$	57,345,598

 

(1)	Consists of the initial acquisition price (including the costs allocated to both tangible and intangible assets), plus subsequent improvements and other capitalized costs associated with the properties, and adjusted for depreciation and amortization accumulated through September 30, 2014.

Real Estate

The following table sets forth the components of our investments in tangible real estate assets as of September 30, 2014, and December 31, 2013:

 

		September 30, 2014				December 31, 2013
Real estate:
Land and land improvements		$	93,340,610			$	63,944,307
Irrigation system			11,592,166				6,007,845
Buildings and improvements			10,626,156				7,487,051
Horticulture			1,559,339				1,038,850
Real estate, gross			117,118,271				78,478,053
Accumulated depreciation			(3,934,269	)			(3,166,870	)
Real estate, net		$	113,184,002			$	75,311,183

 

New Real Estate Activity

2014 New Real Estate Activity

During the nine months ended September 30, 2014, we acquired eight new farms in six separate transactions, which are summarized in the table below.

 

										Number														Total								Annualized
Property		Property		Acquisition		Total				of				Primary				Lease				Renewal		Purchase				Acquisition				Straight-line
Name		Location		Date		Acreage				Farms				Crop(s)				Term				Options		Price				Costs				Rent(1)
Collins Road		Clatskanie, OR		5/30/2014			200				2				Blueberries				10.3 years			3 (5 years each)		$	2,591,333			$	60,870	(4)		$	181,172
Spring Valley		Watsonville, CA		6/13/2014			145				1				Strawberries				2.3 years			None			5,900,000				50,896	(4)			270,901	(6)
McIntosh Road		Dover, FL		6/20/2014			94				2				Strawberries				3.0 years			1 (3 years) / None(2)			2,666,000				60,676	(4)			133,154	(7)
Naumann Road		Oxnard, CA		7/23/2014			68				1				Strawberries				3.0 years			1 (3 years)			6,888,500				91,103	(4)			329,668	(6)
Sycamore Road		Arvin, CA		7/25/2014			326				1				Vegetables				1.3 years			None(3)			5,800,000				44,434	(4)			184,304	(6)
Wauchula Road		Duette, FL		9/29/2014			808				1				Strawberries				10.0 years			2 (5 years each)			13,765,000				123,500	(5)			888,439	(7)
							1,641				8													$	37,610,833			$	431,479			$	1,987,638

 

(1)	Annualized straight-line amount is based on the minimum rental payments required per the lease and includes the amortization of any above-market and below-market lease values recorded.

(2)	This property has separate tenants leasing each of the two farms. One lease provides for one 3-year renewal option, while the other does not include a renewal option.

(3)

Upon acquisition of this property, we assumed the in-place lease, which expires October 31, 2015. In addition, we executed a 9-year, follow-on lease with a new tenant that commences November 1, 2015. Under the terms of the follow-on lease, the tenant has one 3-year renewal option, and annualized, straight-line rents will be $311,760.

(4)	Acquisition accounted for as a business combination under ASC 805. As such, all acquisition-related costs were expensed as incurred, other than direct leasing costs, which were capitalized. We incurred $17,558 of direct leasing costs in connection with these acquisitions.

(5)	Acquisition accounted for as an asset acquisition under ASC 360. As such, all acquisition-related costs were capitalized and allocated among the identifiable assets acquired.

(6)	Acquisition funded through a draw on our New MetLife Credit Facility. Amount represents property’s proportionate share of the total borrowings outstanding under the New MetLife Credit Facility in relation to all properties pledged as collateral under the facility.

(7)	Represents new debt issued from Farm Credit (as defined in Note 5, “Borrowings—Farm Credit Notes Payable”).

As noted in the table above, certain acquisitions during the nine months ended September 30, 2014, were accounted for as business combinations in accordance with ASC 805, as there was a leasing history on the property or a lease in place that we assumed upon acquisition. As such, the fair value of all assets acquired and liabilities assumed were determined in accordance with ASC 805, and all acquisition-related costs were expensed as incurred, other than those costs that directly related to reviewing or assigning leases we assumed upon acquisition, which were capitalized as part of leasing costs. For acquisitions accounted for as asset acquisitions under ASC 360, the acquisition-related costs were capitalized and included as part of the fair value allocation of the identifiable tangible assets acquired. Further, for those transactions treated as asset acquisitions, none of the purchase price was allocated to intangible assets; however, direct costs we incurred in connection with originating the new leases on the properties were capitalized.

We determined the fair value of acquired assets and liabilities assumed related to the properties acquired during the nine months ended September 30, 2014, to be as follows:

 

Property Name		Land and Land Improvements				Buildings				Irrigation System				Site Improvements				Horticulture(1)				In-place Leases				Leasing Commissions(2)				Customer Relationships				Above (Below)- Market Leases				Total Acquisition Cost
Collins Road		$	1,252,387			$	555,667			$	—			$	126,719			$	520,993			$	45,086			$	71,085			$	24,796			$	—			$	2,596,733
Spring Valley			5,576,138				5,781				200,855				—				—				83,487				17,998				66,217				(49,976	)			5,900,500
McIntosh Road			1,970,074				30,745				537,254				2,846				—				34,674				18,041				27,966				45,675				2,667,275
Naumann Road			6,219,293				416,148				71,586				16,939				—				75,520				41,011				54,786				—				6,895,283
Sycamore Road			5,840,750				—				67,000				—				—				48,670				7,364				—				(160,184	)			5,803,600
Wauchula Road			8,460,516				1,790,922				3,519,032				112,830				—				—				5,200				—				—				13,888,500
		$	29,319,158			$	2,799,263			$	4,395,727			$	259,334			$	520,993			$	287,437			$	160,699			$	173,765			$	(164,485	)		$	37,751,891

 

(1)	Horticulture acquired on Collins Road consists of various types of blueberry bushes.

(2)

Leasing commissions represent the allocable portion of the purchase price, as well as direct costs that were incurred related to reviewing and assigning leases we assumed upon acquisition. Direct leasing costs incurred in connection with properties acquired during the nine months ended September 30, 2014, that were accounted for as business combinations under ASC 805 totaled $17,558.

 

Below is a summary of the total revenue and earnings recognized on the properties acquired during the three and nine months ended September 30, 2014:

 

				For the Three Months Ended								For the Nine Months Ended
				September 30, 2014								September 30, 2014
Property Name		Acquisition Date		Rental Revenue(1)				Earnings (2)				Rental Revenue(1)				Earnings(2)
Collins Road		5/30/2014		$	45,293			$	10,662			$	61,365			$	18,940
Spring Valley		6/13/2014			67,725				36,366				81,270				44,700
McIntosh Road		6/20/2014			20,549				(41,294	)(3)			24,733				(40,343	)(3)
Naumann Road		7/23/2014			62,920				44,514				62,920				44,514
Sycamore Road		7/25/2014			34,252				22,052				34,252				22,052
Wauchula Road		9/29/2014			4,868				4,868				4,868				4,868
				$	235,607			$	77,168			$	269,408			$	94,731

 

(1)	Includes the amortization of any above- and below-market lease values recorded.

(2)	Earnings are calculated as net income less interest expense (if debt was issued to acquire the property), income taxes and any acquisition-related costs that are required to be expensed if the acquisition is treated as a business combination under ASC 805.

(3)	Includes $43,328 of lease intangibles that were written off during the three months ended September 30, 2014, related to the termination of a lease in September 2014 that we had assumed upon acquisition.

2013 New Real Estate Activity

During the nine months ended September 30, 2013, we acquired two new farms in two separate transactions, which are summarized in the table below.

 

Number

Total

Annualized

Property

Property

Acquisition

Total

of

Primary

Lease

Renewal

Purchase

Acquisition

Straight-line

Name

Location

Date

Acreage

Farms

Crop(s)

Term

Options

Price

Costs

Rent(1)

38th Avenue

Covert, MI

4/5/2013

119

1

Blueberries

7.0 Years

1 (7 years)

$

1,341,000

$

38,200

(2)

$

87,286

Sequoia Street

Brooks, OR

5/31/2013

218

1

Blueberries

15.0 Years

3 (5 years each)

3,100,000

108,210

(2)

193,617

337

2

$

4,441,000

$

146,410

$

280,903

 

(1)	Annualized straight-line amount is based on the minimum rental payments required per the lease and includes the amortization of any above-market or below-market lease values recorded.

(2)	Transaction accounted for as an asset acquisition under ASC 360; therefore, acquisition-related costs were capitalized and allocated among the assets acquired.

Both of the acquisitions in the table above were purchased using proceeds from the January 2013 IPO (as defined in Note 6, “Stockholders’ Equity—2013 Initial Public Offering”); thus, no additional debt was issued to finance either transaction.

As noted in the above table, both acquisitions during the nine months ended September 30, 2013, were accounted for as asset acquisitions in accordance with ASC 360, as there was no leasing history on the property or a lease in place that we assumed upon acquisition. Accordingly, all acquisition-related costs were capitalized and allocated pro-ratably to the fair value of all identifiable tangible assets. In addition, none of the purchase price was allocated to intangible assets; however, the costs we incurred in connection with originating the new leases on the properties were capitalized.

 

We determined the fair value of acquired assets and liabilities assumed related to the properties acquired during the nine months ended September 30, 2013, to be as follows:

 

Property Name		Land and Land Improvements				Buildings				Irrigation System				Horticulture(1)				Leasing Commissions(2)				Total Assets Acquired
38th Avenue		$	647,431			$	42,720			$	240,105			$	447,035			$	3,842			$	1,381,133
Sequoia Street			2,494,911				279,496				424,268				—				9,535				3,208,210
		$	3,142,342			$	322,216			$	664,373			$	447,035			$	13,377			$	4,589,343

 

(1)	Horticulture acquired on the 38th Avenue property consists of various types of high-bush variety blueberry bushes.

(2)	None of the purchase price was allocated to any intangibles; however, we incurred $ 13,377 of direct leasing costs in connection with the properties acquired during the nine months ended September 30, 2013.

Below is a summary of the total revenue and earnings recognized on the properties acquired during the nine months ended September 30, 2013:

 

								For the Three Months Ended September 30, 2013								For the Nine Months Ended September 30, 2013
Property Name		Acquisition Date						Rental Revenue				Earnings(1)				Rental Revenue				Earnings(1)
38th Avenue			4/5/2013					$	21,821			$	12,377			$	42,673			$	23,674
Sequoia Street			5/31/2013						48,404				37,587				64,539				49,645
								$	70,225			$	49,964			$	107,212			$	73,319

 

(1)	Earnings are calculated as net income less interest expense (if debt was issued to acquire the property), income taxes and any acquisition-related costs that are required to be expensed if the acquisition is treated as a business combination under ASC 805.

Acquired Intangibles and Liabilities

For acquisitions treated as business combinations, the purchase price was allocated to the identifiable intangible assets and liabilities in accordance with ASC 805. No purchase price was allocated to any intangible assets related to acquisitions treated as asset acquisitions under ASC 360; however, the direct costs we incurred in connection with originating new leases or reviewing existing leases were capitalized over the lives of the respective leases. The following table shows the weighted-average amortization period, in years, for the intangible assets acquired and liabilities assumed in connection with the new properties acquired during the nine months ended September 30, 2014 and 2013:

 

Intangible Assets and Liabilities		2014				2013
In-place leases			3.7				—
Leasing commissions			6.3				12.7
Customer relationships			6.9				—
Above-market leases			3.0				—
Below-market leases			1.5				—
All intangible assets and liabilities			4.2				12.7

 

Pro-Forma Financials

We acquired eight farms during the nine months ended September 30, 2014, and two farms during the nine months ended September 30, 2013. The following table reflects pro-forma consolidated statements as if the properties were acquired at the beginning of the previous period. The table below reflects pro-forma financials for all farms acquired, regardless of whether they were treated as asset acquisitions or business combinations.

 

		For the Nine Months Ended September 30,
		2014				2013
		(Unaudited)				(Unaudited)
Operating Data:
Total operating revenue		$	6,113,996			$	4,466,815
Total operating expenses			(4,023,811	)			(2,605,718	)
Other expenses			(1,770,316	)			(1,463,264	)
Net income before income taxes			319,869				397,833
Provision for income taxes			(20,103	)			(262,746	)
Net income		$	299,766			$	135,087
Share and Per Share Data:
Earnings per share of common stock—basic and diluted		$	0.05			$	0.02
Weighted average common shares outstanding—basic and diluted			6,555,539				6,182,088

Significant Existing Real Estate Activity

On January 20, 2014, we completed the work for the expansion and upgrade of the cooling facility on Trapnell Road, for which we agreed to incur the costs, up to a maximum of $450,000. We expended a total of $446,108 in connection with this project, and, in accordance with the lease amendment executed on October 21, 2013, we will earn additional rental income on the costs incurred related to this project at an initial annual rate of 8.5% of the total cost, with prescribed rental escalations provided for in the lease.

On March 27, 2014, we executed a lease with a new tenant to occupy West Beach that commences on November 1, 2014, as the lease term with the current tenants on the property will expire on October 31, 2014. The new lease term is for 9 years, through December 31, 2023, and provides for prescribed rent escalations over its life, with minimum annualized straight-line rental income of $540,469, representing a 20.7% increase over that of the current lease.

On June 17, 2014, we extended the lease with the tenant occupying San Andreas, which was originally set to expire in December 2014. The lease was extended for an additional 6 years, through December 2020, and provides for rent escalations over its life, with minimum annualized, straight-line rental income of $566,592, representing a 31.3% increase over that of the previous lease.

In July 2014, we completed an irrigation upgrade project on East Shelton, for which we rehabilitated several of the 13 existing wells on the property, in addition to adding two new wells. The total cost of this project was approximately $1.2 million.

Involuntary Conversions and Property and Casualty Recovery

In April 2014, two separate fires occurred on two of our properties, partially damaging a structure on each property. One occurred on 20^th Avenue, on which the majority of a residential house was destroyed by a fire. We determined the carrying value of the portion of the residential house damaged by the fire to be approximately $94,000. The second fire occurred on West Gonzales and damaged a portion of the cooling facility on the property. As of June 30, 2014, we estimated the carrying value of the portion of the cooler damaged by the fire to be approximately $156,000. However, during the three months ended September 30, 2014, as additional information became available to us through the repair process, we adjusted this estimate to approximately $139,000. Thus, we wrote down the carrying value of these properties on the accompanying Condensed Consolidated Balance Sheets by these respective amounts, and, in accordance with ASC 605, we also recorded a corresponding property and casualty loss during the three months ended June 30, 2014, included in Property and casualty recovery, net on the accompanying Condensed Consolidated Statements of Operations.

 

Both of the assets were insured, either by us or the tenant, at the time of the fires, and at least partial recovery of these costs is considered probable. As a result of the fire on 20^th Avenue, we expect to receive insurance proceeds of at least $47,000, and collection of such recovery is considered to be probable as of September 30, 2014. Thus, in accordance with ASC 450, during the three months ended September 30, 2014, we recorded this expected recovery as an offset to the property and casualty loss we recorded during the three months ended June 30, 2014, and such recovery is included as part of Property and casualty recovery, net on the accompanying Condensed Consolidated Statements of Operations. In connection with the fire on West Gonzales, insurance proceeds of $231,710 were recovered during the three months ended September 30, 2014; thus, we recorded this amount as an offset to the property and casualty loss we recorded during the three months ended June 30, 2014, and such recovery is included as part of Property and casualty recovery, net on the accompanying Condensed Consolidated Statements of Operations. However, of the $231,710 of insurance proceeds recovered during the three months ended September 30, 2014, $106,943 was deposited into the account of one of our affiliates in error, and this amount was remitted to us in full on October 2, 2014. We expect to recover an additional $124,767 for these repairs during the three months ending December 31, 2014, and we have received confirmation from the insurer regarding payment of this amount. Thus, we have recorded this expected recovery as a receivable and a corresponding liability, included in Other assets and Other liabilities, respectively, on the accompanying Condensed Consolidated Balance Sheets. We will recognize this amount and any other insurance recoveries as a gain upon receipt. We are still in the process of assessing the total amount expected to be recovered for each of these events, as well as the collectability of such amounts; thus, no further offsets to the property and casualty loss we recorded during the three months ended June 30, 2014, have been recorded at this time.

Repairs are currently ongoing on West Gonzales, and, during the three months ended September 30, 2014, we expended $231,709 to repair the portion of the cooler damaged by the fire. Of this amount, $166,935 was capitalized as a real estate addition, and $64,774 was recorded as repairs and maintenance expense, included in Property operating expense on the accompanying Condensed Consolidated Statements of Operations. Repairs have not yet begun on 20^th Avenue.

Intangible Assets

The following table summarizes the carrying value of lease intangible assets and the accumulated amortization for each intangible asset class as of September 30, 2014, and December 31, 2013:

 

		September 30, 2014								December 31, 2013
		Lease Intangibles				Accumulated Amortization				Lease Intangibles				Accumulated Amortization
In-place leases		$	664,603			$	(321,993	)		$	397,728			$	(241,697	)
Leasing costs			303,917				(66,866	)			146,558				(34,727	)
Customer relationships			250,371				(68,854	)			93,187				(49,985	)
		$	1,218,891			$	(457,713	)		$	637,473			$	(326,409	)

 

The aggregate amortization expense for the remainder of 2014 and each of the five succeeding fiscal years and thereafter is as follows:

 

Period				Estimated Amortization Expense
For the remaining three months ending December 31:		2014		$	76,130
For the fiscal years ending December 31:		2015			283,854
		2016			162,905
		2017			74,354
		2018			32,269
		2019			29,350
		Thereafter			102,316
				$	761,178

Lease Expirations

The following table summarizes the lease expirations by year for our properties with leases in place as of September 30, 2014:

 

Year		Number of Expiring Leases				Expiring Leased Acreage				% of Total Acreage				Rental Revenue for the Nine Months Ended September 30, 2014				% of Total Rental Revenue
2014 (1)			1				0				0.0	%		$	22,980				0.5	%
2015			1				72				0.9	%			106,875				2.2	%
2016			2				204				2.7	%			132,522				2.7	%
2017			3				286				3.8	%			297,611				6.2	%
2018			2				370				4.8	%			192,669				4.0	%
2019			0				0				0.0	%			—				0.0	%
Thereafter			12				6,709				87.8	%			4,075,376				84.4	%
Totals			21				7,641				100.0	%		$	4,828,033				100.0	%

 

(1)	Includes a surface area lease on a portion of one property leased to an oil company that is renewed on a year-to-year basis.

Future Lease Payments

Future operating lease payments from tenants under all non-cancelable leases, excluding tenant reimbursement of expenses, for the remainder of 2014 and each of the five succeeding fiscal years and thereafter as of September 30, 2014, are as follows:

 

Period				Tenant Lease Payments
For the remaining three months ending December 31:		2014		$	1,823,917
For the fiscal years ending December 31:		2015			7,234,704
		2016			7,861,282
		2017			7,305,647
		2018			6,848,874
		2019			6,885,678
		Thereafter			19,447,671
				$	57,407,773

 

In accordance with the lease terms, substantially all operating expenses are required to be paid by the tenant; however, we would be required to pay real estate property taxes on the respective parcels of land in the event the tenants fail to pay them. The aggregate annual real estate property taxes for all parcels of land owned by us as of September 30, 2014, are approximately $652,000. As of September 30, 2014, due to the terms of certain of our leases, we are responsible for approximately $215,000 of this annual amount.

Portfolio Diversification and Concentrations

Diversification

The following table summarizes the geographic locations of our properties with leases in place as of September 30, 2014 and 2013:

 

		As of and For the Nine Months Ended September 30, 2014																				As of and For the Nine Months Ended September 30, 2013
State		Number of Farms				Total Acres				% of Total Acres				Rental Revenue				% of Total Rental Revenue				Number of Farms				Total Acres				% of Total Acres				Rental Revenue				% of Total Rental Revenue
California			11				1,993				26.1	%		$	3,260,272				67.5	%			6				1,228				62.4	%		$	2,408,110				84.2	%
Oregon			4				2,313				30.3	%			775,438				16.1	%			1				218				11.1	%			64,539				2.2	%
Florida			9				1,304				17.1	%			384,861				8.0	%			6				402				20.4	%			345,113				12.1	%
Arizona			1				1,761				23.0	%			217,899				4.5	%			0				0				0.0	%			—				0.0	%
Michigan			4				270				3.5	%			189,563				3.9	%			1				119				6.1	%			42,673				1.5	%
			29				7,641				100.0	%		$	4,828,033				100.0	%			14				1,967				100.0	%		$	2,860,435				100.0	%

Concentrations

Credit Risk

All of our farms are leased to unrelated, third-party tenants. Two of our farms are leased to the same tenant, Dole Food Company (“Dole”). As of September 30, 2014, 960 acres were leased to Dole, representing 12.6% of the total acreage we owned. Furthermore, aggregate rental income attributable to Dole accounted for approximately $2.2 million, or 44.7%, of the rental income recorded during the nine months ended September 30, 2014. Rental income from Dole accounted for 68.6% of the total rental income recorded during the nine months ended September 30, 2013. If Dole fails to make rental payments or elects to terminate either of its leases, and the land cannot be re-leased on satisfactory terms, there would be a material adverse effect on our financial performance and ability to continue operations. No other individual tenant represented greater than 20.0% of the total rental income recorded during the nine months ended September 30, 2014 or 2013.

Geographic Risk

11 of our 29 farms owned as of September 30, 2014, are located in California. As of September 30, 2014, our farmland in California accounted for 1,993 acres, or 26.1% of the total acreage we owned. Furthermore, these farms accounted for approximately $3.3 million, or 67.5%, of the rental income recorded during the nine months ended September 30, 2014. Rental income from our farms in California accounted for 84.2% of the total rental income recorded by us during the nine months ended September 30, 2013. Our other farms, located in Arizona, Florida, Michigan and Oregon, were purchased between October 2011 and September 2014. Though we seek to continue to further diversify geographically, as may be desirable or feasible, should an unexpected natural disaster occur where our properties are located, there could be a material adverse effect on our financial performance and ability to continue operations. No other single state accounted for more than 20.0% of the total rental income recorded during the nine months ended September 30, 2014 or 2013.

Active Purchase and Sale Agreements

On July 25, 2014, we entered into an agreement to purchase 64 acres of farmland in California (the “64-Acre California Property”) for approximately $6.1 million. The 64-Acre California Property is irrigated cropland that is farmed primarily for strawberries. The prospective purchase of the 64-Acre California Property is expected to close during the three months ending December 31, 2014, subject to customary conditions and termination rights for transactions of this type, including a due diligence inspection period. However, there can be no assurance that this prospective acquisition will be consummated by that time, on the terms currently anticipated, or at all.

 

On August 11, 2014, we entered into an agreement to purchase 332 acres of farmland in California (the “332-Acre California Property”) for approximately $24.6 million. The 332-Acre California Property is irrigated cropland that is farmed for berries and vegetables. The prospective purchase of the 332-Acre California Property is expected to close during the three months ending December 31, 2014, subject to customary conditions and termination rights for transactions of this type, including a due diligence inspection period. However, there can be no assurance that this prospective acquisition will be consummated by that time, on the terms currently anticipated, or at all.

On September 29, 2014, we entered into an agreement to purchase 63 acres of farmland in California (the “63-Acre California Property”) for approximately $3.8 million. The 63-Acre California Property is irrigated cropland that is farmed primarily for strawberries. The prospective purchase of the 63-Acre California Property is expected to close during the three months ending December 31, 2014, subject to customary conditions and termination rights for transactions of this type, including a due diligence inspection period. However, there can be no assurance that this prospective acquisition will be consummated by that time, on the terms currently anticipated, or at all.