GLADSTONE LAND CorpLAND

GLADSTONE LAND Corp Commitments Disclosure

10-KFiled Feb 24, 20263 min read
COMMITMENTS AND CONTINGENCIES
Operating Obligations
In connection with the execution of certain lease agreements, we have committed to provide capital improvements on certain of our farms. Below is a summary of certain of those projects for which we have incurred or accrued costs as of December 31, 2025 (dollars in thousands):
Farm
Locations		Farm
Acreage		Total
Commitment
Obligated
Completion
Date(1)
Amount Expended
or Accrued as of December 31, 2025
Hartley, TX2,219$1,300 
(2)
Q4 2030$1,190 
Franklin & Grant, WA, & Umatilla, OR1,1264,447 
(2)
Q4 20323,603 
Wicomico & Caroline, MD, and Sussex, DE833155 Q3 203447 
(1)Our obligation to provide capital to fund these improvements does not extend beyond these respective dates.
(2)Pursuant to contractual agreements, we will earn additional rent on the cost of these capital improvements as the funds are disbursed by us.
Ground Lease Obligations
In connection with certain farms acquired through leasehold interests, we assumed certain ground lease arrangements under which we are the lessee. These operating ground leases have lease expiration dates ranging from June 2028 through December 2041, and none of these leases contain any extension, renewal, or termination options. At lease commencement, the net present value of the minimum lease payments was determined by discounting the respective future minimum lease payments using a discount rate equivalent to our fully-collateralized borrowing rate ranging from 6.37% to 8.72%.
As of December 31, 2025 and 2024, we recorded the following as a result of these operating ground leases (dollars in thousands, except for footnotes):
December 31, 2025December 31, 2024
Operating lease right-of-use assets(1)
$764 $521 
Operating lease liabilities(2)
$702 $498 
Weighted-average remaining lease term (years)12.414.9
Weighted-average incremental borrowing rate7.68 %8.35 %
(1)Operating lease right-of-use assets are shown net of prepaid lease payments of approximately $62,000 and $23,000 as of December 31, 2025 and 2024, respectively, and are included within Other assets, net on the accompanying Consolidated Balance Sheets.
(2)Included within Other liabilities, net on the accompanying Consolidated Balance Sheets.
Future minimum lease payments due under the remaining non-cancelable terms of these leases as of December 31, 2025, are as follows (dollars in thousands):
Period
Future Lease Payments(1)
For the fiscal years ending December 31:2026$45 
2027100 
2028100 
2029100 
2030100 
Thereafter657 
Total undiscounted lease payments1,102 
Less: imputed interest(400)
Present value of lease payments$702 
(1)Certain annual lease payments are set at the beginning of each year to then-current market rates (as determined by the lessor). The amounts shown above represent estimated amounts based on the lease rates currently in place.
As a result of these ground leases, we recorded lease expense (included within Property operating expenses on the accompanying Consolidated Statement of Operations and Comprehensive Income) of approximately $105,000, $105,000, and $103,000 during the years ended December 31, 2025, 2024, and 2023, respectively.
Litigation
In the ordinary course of business, we may be involved in legal proceedings from time to time. We are not currently subject to any material known or threatened litigation.

Historical Timeline

Fiscal YearFiled
2025Feb 24, 2026Showing above
2024Feb 19, 2025
2023Feb 20, 2024
2022Feb 21, 2023
2021Feb 22, 2022
2020Feb 24, 2021
2019Feb 19, 2020
2018Feb 26, 2019
2017Feb 20, 2018
2016Feb 21, 2017
2015Feb 23, 2016

About Commitments Disclosures

Commitments and contingencies disclosures catalog a company's off-balance-sheet obligations and legal exposures — purchase commitments, guarantee arrangements, pending litigation, and regulatory proceedings. These items represent potential future cash outflows that may not appear as liabilities on the balance sheet until they become probable and estimable.

Key signals: litigation reserves and disclosed loss ranges quantify management's estimate of legal exposure, but unquantified "reasonably possible" losses often represent the larger risk. Watch for changes in language around pending cases — shifts from "remote" to "reasonably possible" or increases in estimated loss ranges signal deteriorating outcomes. Unconditional purchase obligations and take-or-pay contracts create fixed cost structures that reduce operational flexibility. Guarantee arrangements for subsidiaries or joint ventures can create cascading obligations. Compare the total commitment schedule against projected free cash flow to assess whether the company can meet its obligations without additional financing.

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