| SUBSEQUENT EVENTS |
SUBSEQUENT EVENTS
Acquisition Activity
Subsequent to September 30, 2019, through the date of this filing, we have acquired six farms, which are summarized in the table below (dollars in thousands, except for footnotes):
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Property
Name |
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Property
Location |
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Acquisition
Date |
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Total
Acreage |
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No. of
Farms |
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Primary
Crop(s) |
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Lease
Term |
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Renewal
Options |
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Total
Purchase
Price |
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Acquisition
Costs(1)
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Annualized
Straight-line
Rent(2)
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Highway 17(3)
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Hayes, NE |
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10/7/2019 |
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2,561 |
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3 |
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Corn, soybeans,
& edible beans |
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0.2 years |
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None |
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$ |
9,690 |
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$ |
39 |
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$ |
489 |
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Indian Highway(4)
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Hayes & Hitchcock, NE |
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10/7/2019 |
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1,289 |
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2 |
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Corn, soybeans,
& edible beans |
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0.3 years |
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None |
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5,000 |
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39 |
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788 |
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Sutter Avenue II |
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Fresno, CA |
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11/1/2019 |
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1,098 |
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1 |
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Pistachios |
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8.0 years |
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2 (5 Years) |
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37,000 |
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68 |
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2,365 |
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4,948 |
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6 |
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$ |
51,690 |
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$ |
146 |
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$ |
3,642 |
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(1) |
Acquisitions 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. |
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(2) |
Annualized straight-line rent is based on the minimum cash rental payments guaranteed under the applicable lease, as required under GAAP, and excludes contingent rental payments, such as participation rents. |
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(3) |
In connection with the acquisition of this property, we executed a 10-year, follow-on lease with a new, unrelated third-party tenant that will commence upon the expiration of the 3-month lease executed on the date of acquisition. The follow-on lease provides for minimum annualized straight-line rents of approximately $630,000, plus a participation rent component based on the gross revenues earned on the farm. In addition, the farm is expected to be converted to organic farmland by 2021.
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(4) |
In connection with this acquisition, we executed a 4-month leaseback agreement with the seller that provides for a fixed rental payment of $250,000. In addition, we also executed a 10-year, follow-on lease with a new tenant that will commence upon the expiration of the 4-month leaseback agreement. The follow-on lease provides for minimum annualized straight-line rents of approximately $372,000, plus a participation rent component based on the gross revenues earned on the farm. In addition, the farm is expected to be converted to organic farmland by 2021.
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Leasing Activity
The following table summarizes certain leasing activity that occurred on our existing properties subsequent to September 30, 2019, through the date of this filing (dollars in thousands, except footnotes):
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PRIOR LEASES |
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NEW LEASES |
Farm
Locations |
Number
of
Leases
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Total
Farm
Acres
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Total
Annualized
Straight-line
Rent(1)
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# of Leases
with
Participation
Rents
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Lease
Structures
(# of NNN
/ NN)(2)
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Total
Annualized
Straight-line
Rent(1)
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Wtd. Avg.
Term
(Years)
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# of Leases
with
Participation
Rents |
Lease
Structures
(# of NNN
/ NN)(2)
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AZ, CA, FL |
5 |
5,177 |
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$ |
5,104 |
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None |
1 / 4 |
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$ |
5,850 |
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7.0 |
None |
0 / 5 |
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(1) |
Annualized straight-line rent is based on the minimum cash rental payments guaranteed under the applicable leases (presented on an annualized basis), as required under GAAP, and excludes contingent rental payments, such as participation rents. |
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(2) |
“NNN” refers to leases under triple-net lease arrangements, and “NN” refers to leases under partial-net lease arrangements. For a description of each of these types of lease arrangements, see “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview—Leases—General.”
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Subsequent to the quarter ended September 30, 2019, we replaced 17 irrigation pivots on one of our properties in Colorado at a total cost of approximately $1.1 million. Pursuant to a lease amendment executed subsequent to the three months ended September 30, 2019, in connection with this project, we will earn additional straight-line rental income of approximately $80,000 per year throughout the remaining term of the lease, which expires on February 28, 2021.
Financing Activity
Debt Activity
Subsequent to September 30, 2019, through the date of this filing, we have secured the following new financings (dollars in thousands):
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Issuer |
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Date of
Issuance
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Amount |
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Maturity
Date
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Principal
Amortization
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Interest Rate Terms |
Rabo AgriFinance, LLC |
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10/16/2019 |
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$ |
5,739 |
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10/1/2029 |
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25.0 years |
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1-Month LIBOR + 1.75%(1)
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Rabo AgriFinance, LLC |
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10/16/2019 |
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3,045 |
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10/1/2029 |
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25.0 years |
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1-Month LIBOR + 1.75%(1)
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Diversified Financial Services, LLC |
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10/17/2019 |
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976 |
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10/17/2026 |
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7.0 years |
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4.75%, fixed throughout its term |
Metropolitan Life Insurance Company(2)
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11/1/2019 |
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25,500 |
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1/5/2029 |
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28.6 years |
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3.81%, fixed through January 4, 2027 (variable thereafter) |
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(1) |
In connection with each of these loans, we entered into interest rate swap agreements in which we will pay a fixed interest rate to our counterparty of 3.67% through October 1, 2029.
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(2) |
Loan was issued under the MetLife Credit Facility, as defined in Note 4, “Borrowings,” in these notes to our condensed consolidated financial statements.
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Gladstone Securities earned total financing fees of approximately $47,000 in connection with securing the above financings.
Equity Activity
The following table provides information on equity sales that have occurred subsequent to September 30, 2019 (dollars in thousands, except per-share amounts):
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Type of Issuance |
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Number of
Shares Sold
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Weighted Average Offering Price
Per Share
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Gross Proceeds |
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Net Proceeds(1)
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Series B Preferred Stock |
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244,778 |
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$ |
24.82 |
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$ |
6,076 |
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$ |
5,508 |
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Common Stock – ATM Program |
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48,583 |
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12.01 |
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583 |
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574 |
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(1) |
Net of Selling Commissions and Dealer-Manager Fees or underwriting commissions and discounts (in each case, as applicable) |
In addition, subsequent to September 30, 2019, 400 shares of the Series B Preferred Stock were tendered for redemption at a cash redemption price of $22.50 per share. As a result, we paid a total redemption cost of $9,000 to redeem and retire these shares.
Distributions
On October 8, 2019, our Board of Directors declared the following monthly cash distributions to holders of our preferred and common stock:
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Issuance |
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Record Date |
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Payment Date |
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Distribution per Share |
Series A Term Preferred Stock: |
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October 22, 2019 |
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October 31, 2019 |
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$ |
0.1328125 |
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November 19, 2019 |
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November 29, 2019 |
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0.1328125 |
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December 19, 2019 |
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December 31, 2019 |
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0.1328125 |
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Total Series A Term Preferred Stock Distributions: |
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$ |
0.3984375 |
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Series B Preferred Stock: |
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October 23, 2019 |
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October 31, 2019 |
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$ |
0.125 |
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November 27, 2019 |
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December 5, 2019 |
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0.125 |
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December 26, 2019 |
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January 3, 2020 |
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0.125 |
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Total Series B Preferred Stock Distributions: |
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$ |
0.375 |
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Common Stock: |
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October 22, 2019 |
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October 31, 2019 |
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$ |
0.04460 |
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November 19, 2019 |
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November 29, 2019 |
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0.04460 |
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December 19, 2019 |
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December 31, 2019 |
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0.04460 |
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Total Common Stock Distributions: |
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$ |
0.13380 |
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The same amounts paid to common stockholders will be paid as distributions on each OP Unit held by non-controlling limited partners as of the above record dates.
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