Quarterly report pursuant to Section 13 or 15(d)

Real Estate and Intangible Assets (Tables)

v2.4.0.8
Real Estate and Intangible Assets (Tables)
 6 Months Ended
Jun. 30, 2013
Property Plant And Equipment [Abstract]  
Summary Information of Fourteen Farm Properties

The following table provides certain summary information about our 14 farm properties as of June 30, 2013.

 

Property Name

    Location    Date
Acquired		    Encumbrances     Gross  Cost
Basis(1)		      Number
of
Farms		      Number
of
Leases		      Farmable
Acres		      Total
Acres 		     Lease
Expiration
Date

San Andreas

    Watsonville, CA    6/16/1997    $ 100,000 (2)    $ 4,929,307         1         1         237         306       12/31/2014

West Gonzales

    Oxnard, CA    9/15/1998      13,473,792        15,185,928         1         2         501         653       12/31/2013

West Beach

    Watsonville, CA    1/3/2011      5,068,800        8,472,073         3         1         195         198       10/31/2013

Dalton Lane

    Watsonville, CA    7/7/2011      2,587,853        2,808,000         1         1         70         72       10/31/2015

Keysville Road

    Plant City, FL    10/26/2011      1,152,000        1,230,758         2         1         50         59       7/1/2016

Colding Loop

    Wimauma, FL    8/9/2012      3,366,720        3,597,421         1         1         181         219       6/14/2018

Trapnell Road

    Plant City, FL    9/12/2012      3,840,000        4,000,000         3         1         110         124       6/30/2017

38th Avenue

    Covert, MI    4/5/2013      —          1,381,133         1         1         89         119       4/4/2020

Sequoia Street

    Brooks, OR    5/31/2013      —          3,201,019         1         1         206         209       5/31/2028
        

 

 

    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     
         $ 29,589,165      $ 44,805,639         14         10         1,639         1,959      
        

 

 

    

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

(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.
(2) 

Represents borrowings outstanding on our line of credit with MetLife as of June 30, 2013, under which the San Andreas Farm is pledgd as collateral.
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 June 30, 2013, and December 31, 2012:

 

     As of
June 30, 2013		     As of
December 31, 2012		  

Real estate:

     

Land

    $ 33,965,058      $ 30,828,325   

Building

      1,640,615        1,311,027   

Cooler

      4,963,243        4,963,243   

Drain system

      3,307,591        2,576,373   

Horticulture

      447,035        —     
  

 

 

    

 

 

  

Real estate, gross

      44,323,542        39,678,968   

Accumulated depreciation

      (2,818,185 )      (2,535,084 ) 
  

 

 

    

 

 

  

Real estate, net

    $ 41,505,357      $ 37,143,884   
  

 

 

    

 

 

  
Summarized Information of Acquisition of Properties

During the six months ended June 30, 2013, we acquired two farms in two separate transactions, which are summarized in the table below. There were no properties acquired during the six months ended June 30, 2012.

 

Property

Name

   

Property
Location

    Acquisition
Date		      Total
Acreage		      Number
of
Farms		     

Crop

Grown

    Lease
Term		    Renewal
Options		      Total
Purchase
Price		      Acquisition
Expenses		     Annualized
Straight-
line
Rent(1)		  

38th Avenue

    Covert, MI      4/5/2013         119         1       Blueberries    7 Years      1 (7 years)       $ 1,341,000       $ 40,133 (2)    $ 87,286   

Sequoia Street

    Brooks, OR      5/31/2013         209         1       Blueberries    15 Years      3 (5 years each)         3,100,000         101,019 (2)      193,617   
        

 

 

     

 

 

              

 

 

     

 

 

    

 

 

  
           328         2                $ 4,441,000       $ 141,152      $ 280,903   
        

 

 

     

 

 

              

 

 

     

 

 

    

 

 

  

 

(1) 

Annualized straight-line amount is based on the minimum rental payments required per the lease.
(2) 

Transaction accounted for as an asset acquisition instead of a business combination under ASC 805; therefore, related costs associated with the acquisition were capitalized and included as part of the fair value allocation of the identifiable tangible assets acquired.
Fair Value of Acquired Assets and Liabilities Assumed Related to Properties Acquired

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

 

Property
Name

    Land      Building      Drain
System		      Horticulture(1)      Leasing
Commissions(2)		      Total
Purchase
Price		  

38th Avenue

    $ 647,431       $ 42,720       $ 240,105       $ 447,035       $ 3,842       $ 1,381,133   

Sequoia Street

      2,489,302         278,868         423,314         —           9,535         3,201,019   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  
   $ 3,136,733       $ 321,588       $ 663,419       $ 447,035       $ 13,377       $ 4,582,152   
  

 

 

     

 

 

     

 

 

     

 

 

     

 

 

     

 

 

  

 

(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; leasing commissions above represent direct costs incurred in connection with originating new leases on the properties.
Weighted Average Amortization Period for Intangible Assets Acquired and Liabilities Assumed

The weighted-average amortization period, in years, for the intangible assets acquired and liabilities assumed during the six months ended June 30, 2013, is shown in the table below. There were no intangible assets acquired or liabilities assumed during the six months ended June 30, 2012.

 

Intangible Assets and Liabilities

    Six Months Ended
June 30, 2013		  

Leasing commissions

      13.7   
  

 

 

  

All intangible assets and liabilities

      13.7   
  

 

 

  
Future Operating Lease Payments from Tenants under Non-Cancelable Leases

Future operating lease payments from tenants under all non-cancelable leases, excluding tenant reimbursement of expenses, for the remainder of 2013 and each of the five succeeding fiscal years and thereafter as of June 30, 2013, are as follows:

 

Period

    Tenant Lease
Payments		  

For the remaining six months ending December 31:

    2013    $ 1,352,580   

For the fiscal years ending December 31:

    2014      1,237,200   
   2015      791,289   
   2016      752,580   
   2017      568,986   
   2018      280,232   
   Thereafter      2,060,236   
Value of Intangible Assets and Accumulated Amortization

The following table summarizes the carrying value of intangible assets and the accumulated amortization for each intangible asset class as of June 30, 2013, and December 31, 2012:

 

     June 30, 2013     December 31, 2012  
     Lease
Intangibles		      Accumulated
Amortization		     Lease
Intangibles		      Accumulated
Amortization		  

In-place leases

    $ 286,975       $ (220,717 )    $ 286,975       $ (186,843 ) 

Leasing commissions

      101,935         (24,067 )      63,638         (17,627 ) 

Customer relationships

      93,187         (45,214 )      93,187         (31,270 ) 
  

 

 

     

 

 

    

 

 

     

 

 

  
   $ 482,097       $ (289,998 )    $ 443,800       $ (235,740 ) 
  

 

 

     

 

 

    

 

 

     

 

 

  
Aggregate Amortization Expense

The aggregate amortization expense for the remainder of 2013 and each of the five succeeding fiscal years and thereafter is as follows:

 

Period

    Estimated
Amortization Expense		  

For the remaining six months ending December 31:

    2013    $ 22,852   

For the fiscal years ending December 31:

    2014      45,787   
   2015      43,585   
   2016      32,129   
   2017      20,519   
   2018      7,057   
   Thereafter      20,170   
Summary of Geographic Locations of Properties

The following table summarizes the geographic locations of our properties with leases in place as of June 30, 2013 and 2012:

 

     As of and For the Six Months Ended June 30, 2013     As of and For the Six Months Ended June 30, 2012  

State

    Number
of
Farms		      Number
of
Leases		      Total
Acres		      % of
Total
Acres		     Rental
Revenue		      % of Total
Rental
Revenue		     Number
of
Farms		      Number
of
Leases		      Total
Acres		      % of
Total
Acres		     Rental
Revenue		      % of Total
Rental
Revenue		  

California

      6         5         1,229         62.7 %    $ 1,591,082         85.3 %      6         5         1,229         95.4 %    $ 1,591,208         97.9 % 

Florida

      6         3         402         20.5 %      236,271         12.7 %      2         1         59         4.6 %      34,167         2.1 % 

Michigan

      1         1         119         6.1 %      20,851         1.1 %      0         0         0         0.0 %      —           0.0 % 

Oregon

      1         1         209         10.7 %      16,135         0.9 %      0         0         0         0.0 %      —           0.0 % 
  

 

 

     

 

 

     

 

 

     

 

 

    

 

 

     

 

 

    

 

 

     

 

 

     

 

 

     

 

 

    

 

 

     

 

 

  
     14         10         1,959         100.0 %    $ 1,864,339         100.0 %      8         6         1,288         100.0 %    $ 1,625,375         100.0 %