Gladstone LAND (LAND) risk factors, FY2025 10-K

Risks Relating to Our Business and Operations

1. 01Our real estate portfolio is concentrated across a limited number of states, which subjects us to an increased risk of significant loss if adverse weather, economic, or regulatory changes or developments in the markets in which our properties are located occur
2. 02We may operate farms on certain of our properties, which will increase our operating costs and expose us to additional farming and related operational risks63% rewritten
3. 03We may not be successful in identifying and consummating additional suitable acquisitions that meet our investment criteria, which may impede our growth and negatively affect our results of operations
4. 04We currently lease many of our properties to medium-sized, independent farming operations and agricultural businesses, which may have limited financial and personnel resources and, therefore, may be less stable than larger companies, which could impact our ability to generate rental revenue
5. 05Furthermore, the success of a medium-sized business may also depend on the management talents and efforts of one or a small group of persons. The death, disability or resignation of one or more of these persons could have a material adverse impact on our tenant and, in turn, on us
6. 06Our cash available for distribution to stockholders may not be sufficient to pay anticipated distributions, nor can we assure you of our ability to make distributions in the future, and we may need to borrow to make such distributions or may not be able to make such distributions at all82% rewritten
7. 07generated by our assets to pay the distributions set by our Board of Directors, or if cash available for distribution decreases in future periods, the market price of our common stock could decreaseNew
8. 08Some of our tenants may be unable to pay rent, which could adversely affect our cash available to make distributions to our stockholders or otherwise impair the value of your investment
9. 09Adverse changes in government policies related to farming could affect the prices of crops and the profitability of farming operations, which could materially and adversely affect the value of our properties and our results of operations
10. 10Tariffs may adversely affect us or our tenantsNew
11. 11Some of our tenants could be susceptible to bankruptcy, which would affect our ability to generate rents from them and therefore negatively affect our results of operations52% rewritten
12. 12Because we expect to continue to enter into some short-term leases, we may continue to be more susceptible to any decreases in prevailing market rental rates than would be the case with long-term leases, which could have a material adverse effect on our results of operations35% rewritten
13. 13Our investments in farmland used for permanent crops have a higher risk profile than farmland used for annual row crops
14. 14Market conditions for certain permanent crops may continue at depressed levels for the foreseeable future
15. 15Our real estate investments will consist of agricultural properties that may be difficult to sell or re-lease upon tenant defaults or early lease terminations, either of which would adversely affect returns to stockholders
16. 16Illiquidity of our farmland investments may make it difficult for us to sell properties in response to market conditions and could harm our financial condition and ability to make distributions to our stockholders
17. 17If we sell properties and provide financing to purchasers, defaults by the purchasers would decrease our cash flows and limit our ability to make distributions
18. 18If our properties do not have access to adequate water supplies, it could harm our ability to lease the properties for farming, thereby adversely affecting our ability to generate returns on our properties
19. 19Our agricultural properties are subject to adverse weather conditions, seasonal variability, crop disease and other contaminants, which may affect our tenants’ ability to pay rent and thereby have an adverse effect on our results of operations and our ability to make distributions to stockholders
20. 20Our operating results and the value of our properties may be impacted by future climate changes, adversely impacting the value of our properties and our ability to generate rental revenue60% rewritten
21. 21Because we must distribute a substantial portion of our net income to maintain our qualification as a REIT, we will be largely dependent on third-party sources of capital to fund our future capital needsNew
22. 22We may not be able to raise sufficient capital or borrow money in sufficient amounts or on sufficiently favorable terms necessary to attain the optimal degree of leverage to operate our business, which may have an adverse effect on our operations and ability to pay distributions
23. 23Our income from operations may not be enough to cover our debt service obligations, which may affect distributions to stockholders or cause us to incur losses
24. 24We have secured borrowings, which would have a risk of loss of the property securing such loan upon foreclosure
25. 25As we consider additional debt financing from third-party lenders, our assets may become highly leveraged, which may result in losses
26. 26We face a risk from the fact that certain of our properties are cross-collateralized
27. 27Competition for the acquisition of agricultural real estate may impede our ability to make acquisitions, increase the cost of these acquisitions or decrease or prevent increases in the occupancy and rental rates of our current properties
28. 28We operate as a holding company dependent upon the assets and operations of our subsidiaries, and because of our structure, we may not be able to generate the funds necessary to make distributions on our common stock
29. 29Some state laws prohibit or restrict the ownership of agricultural land by business entities, which could impede the growth of our portfolio and our ability to diversify geographically
30. 30Failure to succeed in new markets may have adverse consequences
31. 31We may not ultimately be able to sell our agricultural real estate to developers in connection with the conversion of such properties to urban or suburban uses, especially in light of the current uncertain market for real estate development
32. 32Liability for uninsured or underinsured losses could adversely affect our financial condition
33. 33Potential liability for environmental matters could adversely affect our financial condition
34. 34If our tenants fail to comply with applicable labor regulations, it could have an adverse effect on our ability to make distributions to our stockholders
35. 35The presence of endangered or threatened species on or near our acquired farmland could restrict the activities of our agricultural tenants, which could in turn have a material adverse impact on the value of our assets and our results of operations
36. 36We may be required to permit the owners of the mineral rights to our properties to enter and occupy parts of the properties for the purposes of drilling and operating oil or gas wells, which could adversely impact the rental value of our properties
37. 37Interest rate fluctuations may adversely affect our results of operations
38. 38We cannot predict the impact future actions by regulators or government bodies, including the U.S. Federal Reserve, will have on real estate debt markets, the market value of our capital stock or on our business, and any such actions may negatively impact us84% rewritten
39. 39which could potentially reduce future cash flow available for distributions. It is difficult to predict future legislation, regulation, and executive actions, and we cannot predict or control the impact future actions by regulators or government bodies, such as the Federal Reserve, will have on our businessNew
40. 40Our business may be adversely affected by public health emergenciesNew
41. 41We are dependent upon our key management personnel who are employees of our Adviser and Administrator for our future success, particularly David Gladstone, Bill Reiman, Lewis Parrish, and Jay Beckhorn33% rewritten
42. 42Our success will continue to depend on the performance of our Adviser and if our Adviser makes inadvisable investment or management decisions, our operations could be materially adversely impacted
43. 43We may have conflicts of interest with our Adviser and other affiliates, which could result in investment decisions that are not in the best interests of our stockholders
44. 44Our financial condition and results of operations will depend on our Adviser’s ability to effectively manage our future growth
45. 45Our Adviser is not obligated to provide a waiver of the incentive fee, which could negatively impact our earnings and our ability to maintain our current level of, or increase, distributions to our stockholders
46. 46We may be obligated to pay our Adviser quarterly incentive compensation even if we incur a net loss during a particular quarter
47. 47Certain provisions contained in our charter and bylaws and under Maryland law may prohibit or restrict attempts by our stockholders to change our management and hinder efforts to effect a change of control of us, and the market price of our common stock may be lower as a result27% rewritten
48. 48Our rights and the rights of our stockholders to take action against our directors and officers are limitedNew
49. 49We may enter into tax protection agreements in the future in connection with the issuance of OP Units to acquire additional properties, which could limit our ability to sell or otherwise dispose of certain properties
50. 50Our redemption of OP Units could result in the issuance of a large number of new shares of our common stock and/or force us to expend significant cash, which may limit our funds necessary to make distributions on our common stock
51. 51Our charter grants our Board of Directors the right to classify or reclassify any unissued shares of capital stock, increase or decrease the authorized number of shares and establish the preference and rights of any preferred stock without stockholder approval
52. 52We may not have sufficient earnings and profits to pay distributions on our currently-designated preferred securities or common stock to be treated as dividends
53. 53We may not be able to maintain our qualification as a REIT for federal income tax purposes, which would subject us to federal income tax on our taxable income at regular corporate rates, thereby reducing the amount of funds available for paying distributions to stockholders
54. 54Complying with REIT requirements may cause us to forgo or liquidate otherwise attractive investments
55. 55Failure to make required distributions, both prior to and following our REIT election, would jeopardize our REIT status, which could require us to pay taxes and negatively impact our cash available for future distribution
56. 56Dividends payable by REITs do not qualify for the reduced tax rates available for some dividends
57. 57If we fail to meet stock ownership diversification requirements, we would fail to maintain our qualification as a REIT, which could require us to pay taxes and negatively impact our cash available for future distribution
58. 58We will not seek to obtain a ruling from the Internal Revenue Service (the “IRS”) that we qualify as a REIT for federal income tax purposes
59. 59The IRS may treat sale-leaseback transactions as loans, which could jeopardize our REIT status
60. 60Investments in our common stock may not be suitable for pension or profit-sharing trusts, Keogh Plans or individual retirement accounts (“IRAs”)
61. 61If our Operating Partnership fails to maintain its status as a partnership for federal income tax purposes, its income may be subject to taxation
62. 62Our ownership of, and relationship with, TRSs will be limited, and our failure to comply with the limits would jeopardize our REIT status and could result in the application of a 100% excise tax
63. 63Legislative or regulatory income tax changes related to REITs could materially and adversely affect us26% rewritten

Risks Relating to the Market for our Common Stock and our Currently-Designated Preferred Securities

1. 64Future issuances and sales of shares of our common stock, our currently-designated preferred securities, future series of preferred securities, or the perception that such issuances will occur, may have adverse effects on the trading prices of our shares
2. 65An increase in market interest rates may have an adverse effect on the market price of our common stock
3. 66Shares of our currently-designated preferred securities are subordinated to existing and future debt, and your interests could be diluted by the issuance of additional preferred stock or by other transactions
4. 67We operate as a holding company dependent upon the assets and operations of our subsidiaries, and because of our structure, we may not be able to generate the funds necessary to make distributions on our currently-designated preferred securities59% rewritten
5. 68will be satisfied only after all of our and the Operating Partnership’s and its subsidiaries’ liabilities and obligations have been paid in fullNew
6. 69Our currently-designated preferred securities all bear a risk of redemption by us66% rewritten