Gladstone Land Agrees to Sell About $30 Million in Assets to Reduce Debt and Repurchase Preferred Stock
Key Facts
Gladstone Land announced two agreements to sell real estate assets for nearly $30 million, and its chief executive said the company intends to direct most of the proceeds toward debt repayment and preferred stock repurchases. Neither deal has closed; management expects to complete one in the fourth quarter of 2026 and the other in the first quarter of 2027. The CEO said, "In each case, we look forward to using most of the proceeds to pay down debt and repurchase preferred stock." The move is part of the company's management of its financing obligations, as it approaches the repricing of some of its loans. Shares also rose in premarket trading on November 11, after closing at $6.88 in the previous session.
The chief financial officer said the company took out no new loans in the third quarter of 2026, but repaid two mortgages totaling about $5 million. That provides immediate context for the plan to use the sale proceeds to reduce debt, as the company faces a financing obligation whose terms require discussion. The loans involved include about $130 million under the MetLife facility, which is scheduled to be repriced in January 2027. The CFO said the company is discussing resetting rates and exploring financing alternatives for those loans. The expected closings are spread across the next two quarters, bringing the arrival of proceeds partly in line with those discussions. The company did not specify the value of each deal or the amount of debt and preferred stock that will be addressed with the proceeds.
The asset-sale announcement came alongside stronger third-quarter operating results: net income was $11.0 million, compared with $2.1 million in the same period of 2025. AFFO also rose to $15.1 million, or $0.35 per share, from $1.4 million and $0.04 per share a year earlier. The company attributed a substantial part of the improvement to crop-related participation revenue. Participation rental revenue increased $11.4 million year over year, including a bonus for an agricultural partner tied to the 2025 pistachio crop and higher pistachio and almond prices. By contrast, fixed base cash rents fell by about $433,000, reflecting lower revenue from vacant or non-revenue-producing properties, as well as properties sold during the previous year.
The company said the initial base price for in-shell pistachios from the 2026 crop was $2.50 per pound, up 67% from the initial price for the 2025 crop. Management said, however, that pistachio yields in 2026 declined because of a naturally weak year, alongside a warm spell in California in March that affected pollination statewide. It added that stronger prices could offset some of the impact of the lower crop, and that limited supply could support prices in the near term. Current almond prices are generally 18% to 25% higher than in the same period a year earlier. These factors reflect the company's mix of income sources: fixed base rents and crop- and price-linked participation returns. The jump in annual income therefore came alongside agricultural and pricing factors, rather than a uniform increase across all rental items.
Gladstone Land sold two Florida farms during the third quarter, totaling 617 acres, for about $3.2 million, and recorded a combined net loss of about $169,000. After quarter-end, it also entered into two agreements granting a solar company options to buy up to 5,638 acres in California to develop solar projects. The agreements run for five and six years, respectively, and their combined annual payments start at about $331,000 in the first year. These agreements are separate from the two sale deals at the center of the announcement of about $30 million in proceeds. Management expects one deal to close in the fourth quarter of 2026 and the other in the first quarter of 2027, with the proceeds arriving over the next two quarters.