Good day, ladies and gentlemen, and welcome to the Gladstone Land Corporation's Third Quarter ending September 30, 2014 Earnings Call and Webcast. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. (Operator Instructions) As a reminder, this conference call is being recorded. I would now like introduce your host for today's conference David Gladstone, Chairman. You may begin.

All right. Thank you, Nicole for that nice introduction. And we thank all you people who have called in and online today. We always enjoy this time with shareholders. We wish there are more but that's what we do once a quarter. Please come and visit us if you're ever in the Washington D.C. area, we are located in a suburb Washington D.C. called McLean, Virginia, and you have an open invitation to stop by and say hello. You'll see some of the team here, many of them on the road of course as over 60 members of the team now. And we are no longer small. We have about $1.5 billion in assets under management, under our company. And Gladstone Land is one of the smallest. So we are growing that one fast to catch up with the others. Also, some of the people here like to bring their dogs to work, we’re very dog friendly, and so you will get to introduce yourself to few of those if you stop by. We'll begin now with Michael LiCalsi. He's our General Counsel and Secretary, also serves as President of our Administrator. Michael?

Good morning, everyone. This report you are about to hear may include forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934, including statements with regard to the future performance of the Company. These forward-looking statements involve certain risks and uncertainties that are based on our current plan, which we believe to be reasonable. There are many factors that may cause our actual results to be materially different from any future results expressed or implied by these forward-looking statements, including all of the items listed under the caption Risk Factors in our Forms 10-K and 10-Q that we file with the Securities and Exchange Commission. These forms can be found on our website at www.gladstoneland.com and on the SEC's website at www.sec.gov. The Company undertakes no obligation to publicly update or revise any of these forward-looking statements, whether as a result of new information, future events or otherwise. And in our report today as Real Estate Investment Trust or REIT, we plan to discuss funds from operations or FFO. FFO is a non-GAAP accounting term defined as net income, excluding the gains or losses from the sale of real estate and any impairment losses, plus depreciation and amortization of real estate assets. And The National Association of REITs or NAREIT has endorsed FFO as one of the non-accounting standards that we may use in discussion of REITs. And please review our Form 10-Q filed yesterday with the SEC for more detailed description of FFO. And the report from our President and CFO, you are about to hear is an overview of our operations and performance. And we encourage all listeners to read yesterday's press release and the quarterly report on Form 10-Q that we filed yesterday, which includes a wealth of information for our investors. You can find them all at our website, www.gladstoneland.com and on the SEC's website www.sec.gov. To stay up-to-date on the latest news involving Gladstone Land and our other affiliated public funds, please follow us on Twitter, username GladstoneComps; and on Facebook, keywords The Gladstone Companies. And you can go to our general website to see more information about this Company and our other affiliated publicly traded funds as well at www.gladstone.com. Now, I'll turn the presentation back over to David Gladstone.

All right. Thank you, Michael. Before we go into the numbers, let me do this for the last time briefly recount, for the newcomers on the call, about the history. And first we started as a private company and then we became a public one and began our operations as a private company in 1997, as a fully integrated berry and vegetable grower, shipper, marketer. So we grew it, sold it, shipped it, marketed it, so fully integrated. We had about 2,500 workers and farmed thousands of acres that we either rented or owned. And then in 2004, we sold the agricultural operation business to Dole, but we kept the farmland that we owned today. And since then our business has consisted solely of owning farmland and leasing it to independent and of course corporate farmers like Dole. We don't farm the land at all. We are just the landlord. Most of the farms we own are concentrated in locations where the farms are able to grow high value annual row crops such as berries and vegetables. However, we also have some farmland that's farmed for blueberries which are permanent crops rather than annual crops and blueberry bushes may last for up to 40 years where strawberries and vegetables are planted every year. Typically blueberries are grown by the same farmers that grow fresh vegetables and berries. And they share a similar distribution channel. We also acquired some farm related properties such as coolers. These are used to cool the products before they are shipped, and box barns that house thousands of boxes that are needed for shipping of fresh produce to the marketplace. But investors should expect the bulk of our assets to be farmland that are leased to farmers to grow fresh food. As of September 30, 2014,…

All right. Good morning, everybody. I'll start with an update on our REIT status that David touched on. In September, we filed our 2013 tax return on which we have officially elected REIT status. As a result, we are now REIT effective as of January 1, 2013. We are very pleased to finally have this long and expensive process behind us. As a REIT, we generally will not be subject to income taxes so long as we distribute at least 90% of our taxable income to our stockholders. And now I'll discuss the financial results beginning with our portfolio and the balance sheet. We acquired three new farms during the quarter, adding about $27 million of new assets to our books. With the current lease terms ranging between 3 and 10 years, these new properties will provide us with approximately $1.5 million of additional revenue per year over these periods. As David mentioned, the new acquisitions have a combined cap rate of about 5.6% with the first year being at 5.1%. We are continuing to diversify our portfolio of properties with the tenants on our farms. Over the past 12 months, we've increased our tenant base from 11 different growers to 25 today, all of which are unrelated to us. And while the majority of our farms in rental operations remained concentrated in California, our reliance on income from those farms continues to decrease as we become more geographically diverse. A year ago over 60% of our total acreage and 84% of our revenues came from California farms. However, as of September 30, the percentage of total acreage in California was down to 26% and 61% of annualized revenues now come from California. However, investors should remember that California is very large. There are several different growing regions in the…

All right. Good report, Lewis. The main point at this report is to tell you that we are executing the plan that we told you about at the beginning. We use the proceeds from the IPO and our follow on offering to acquire new properties and pay down debt. And we have more availability under MetLife due to follow on offering. And now we are also using Farm Credit to buy farms. We have very nice list of potential properties that we are interested in acquiring. And through that list we hoped to be able to grow the farm portfolio significantly during 2014 and 2015. I noticed that we have four properties again at $35 million which I think we'll close before December. We also have the indication of interest; we are working on about $73 million in our list of items that are farms that we are looking at. With an increase in the portfolio of farms comes greater diversification and protection for investors, and we also expect better earnings. We anticipate that many of the farms that we purchase will be acquired from farmers or agriculture companies and they or an independent farmer will simultaneously lease the farm from us. We also expected many other farms we acquire will be purchased from farm owners that really don't farm that farm or any other property, and rather they just turn around and lease it to a farmer. About 38% of all the farms in the US are owned but not farmed by the owner. In situations like these, we intend to put our lease in place, prior to or simultaneously when we acquired the farms that's what we have been able to do in the past. Now people ask us about drought in California, since they come up in…

(Operator Instructions) Our first question comes or comment from Daniel Donlan of Ladenburg Thalmann. Your line is now open.

Hi, this is actually John Massocca on for Daniel. Just a question, you mentioned on the call you are looking for -- to hire someone out on the Midwest, and how big do you think the opportunity is for acquisitions in the Midwest? Especially if you guys stay away from grain as or primary stay away from grain as you stated in the past?

Yes. It is fairly large. We don't know the numbers. We are just finishing up with our analysis where the US government keeps up with production of each crop by county. And so we are going through that analysis now and just to make sure if there is a big enough market place, and so John our goal is to make sure that we can find enough obviously. What happens in the Midwest, it's very different from the two coasts with regard to vegetables, and that is most of those guys are tied into a large canning company. For example, and I don't know anybody that's using this but there are number of big canners out in the Midwest that just negotiate with the farmer to buy all of their crop. If they are growing broccoli, they will buy all of the broccoli they come to offer that farm and so it's almost fully integrated with the canner. For example, DelMonte might tie up with a farmer to grow sweet corn and that sweet corn is used to make soups or whatever for DelMonte. So it is a lot lower risk profile when you do that because now you are not talking about anything other than what can you grow on the farm. That is how many bushels of this or bushels of that can you actually grow. And you are not worried about price because you've already locked in everything. So we like that idea. We just need to do to finish the survey and then see what we can find out there.

So absolutely makes sense. And then going a little more to the balance sheet here, is there a reason you guys decided to utilize Farm Credit for those three mortgages you did during the quarter, was it just to maintain kind of availability on the MetLife mortgage now you have or is just the pricing is very attractive that you could find out there from Farm Credit?

It was both of those. The Farm Credit folks charge a little less and in addition they have this rebate that is during the year they will come up with what their numbers are. And then they rebate part of the interest that was paid by us to them. And so that lowers your return obviously – I mean your cost. And so as a result, we looked and said we should do some of that. They are very active in Florida, so we wanted to use them at least once and maybe a few more times. And then we are talking with two or three other lenders. One of them is coming very close, so we may be able to announce that in the next few months. The idea of having variable mortgage provider is very key to being able to reduce risk. Not that I think MetLife will do anything to be detrimental to our mortgage business, but you just never know and so as a result we just need to diversify our mortgages. So both on the fact that it was cheaper and second of the fact that we want diversification and want to establish our relationship with others. So once you’ve established the relationship the first one goes very difficult and then the second and third and fourth becomes easier. So you want to maintain that relationship. Farm Credit probably has a much stronger balance sheet and if they are related to the United States government, I guess I say that lightly because the US government seems to be going to hell in a handbasket in terms of its credit rating. But the bottom line is we just need to be with -- as you know in our other REIT which is industrial and commercial properties, we probably have 10 or 12 different mortgage lenders that we go to when we buy a property. We wanted to do the same thing here. So that's the overview of what we are trying to do on the balance sheet.

So you guys are probably looking to continue to expand the list of borrowers you are utilizing going forward.

Yes. I think we need to be up around 5 or 6 just to be able to first of all keep everybody honest. You farm it out to three or four different mortgage lenders and say, okay, here is the property, what will you give me in terms of rate and term and all of those? And each of those companies of all the ones we are dealing with, all have changes, if you are bank you may be filled up with all of the mortgages you want to do on farmland at some point in time. And so therefore you just stop or you price it a much higher price. So our goal is to get good variety of mortgage lenders out there. And I think we are going down that path pretty quick. And I would expect sometime next year we will have -- we have made it to the point that we wanted to be of having enough mortgage lenders.

All right. That absolutely makes sense. And then one last question. For the income tax provision, given you guys attained REIT status in September, is this the last time we are going to see any kind of income tax provision on the income statement or is there some kind of taxes and state taxes that might continue into 2015 and beyond?

2014 is the last year we expect. These are all related to California state taxes that we owe as a result of prior year land transfers but those taxes will be fully paid off in 2014.

Sometimes and just to piggyback on that, sometimes we have a property in which it’s not triple net. We have one property in which we pay the taxes on but they pay a higher price in terms of what the market would bear. So you may see a little one now and then on those, but it would be very small.

Your next question comes from the line of John [Specce] [ph] of the DCAP. Your line is now open.

Hi, guys. With regards to the drought, I understand you guys are primarily on with water and California in the difficult areas and that's great. But if you were to see some negative effect from this drought either land values or not enough water from your wells because you can't access other water, or California regulating ground water, what might be the negative effect that you might expect to see or we might expect to see going forward from this extreme drought that you are suffering through?

Yes. I think the extreme drought will -- the only thing it will do is require you to draw less water out of the ground which saw Jerry Brown in California implement that and I think all of our farms complied with -- all the farmers complied with that request. And so as a result I don't think-- I mean California has been through this drought over and over again. It's not unusual for them. And just my perception of the world and some other people I talked to, California has plenty of water. The problem is the distribution of the water. It is done by politicians and not done in a way you and I would probably do it. That is just to mention few things, some of the environmentalists intent on keeping certain fish and other animals alive and therefore good water that could be used to irrigate farms would not be used for that purpose. I doubt that I would make that decision. And so as a result of the way the water is distributed, that's what happens. And what happens then since some of the waters being taken for environmental purposes that mean that others don't get it. And for example in the Central valley where we have one farm and a good well, two good wells on that property, and the environmentalists have taken some of the water for their purposes. And that means the person that really gets hurt here is the farmer of annual crop. And they have a number of farms now in California that just don't get any water and so as a result they are not growing anything. And farms that have gotten the water had to be tree farms and vines and so if you are growing grapes or…

Thank you. (Operator Instructions) Our next question comes from Michelle Stein; Neuberger Berman Your line is now open.

Hi, David. It's Michelle, Neuberger Berman, we will get there, I wanted to just ask maybe it's little bit off but do avocados have any interest in terms of when you look at farmland sort of farm repurchase?

Sure. We have small avocados group in Oxnard. We bought a farm there and which the farmer wanted to continue with few of the avocados, he actually has a lemon trees as well. He will eventually -- once the lemons sort of reach the end of their time which is probably in the next couple of years, cut those down and turned it not berries. I don't know when the avocados trees would come down, the problem with avocados is that it's a tree, it costs a lot of money to stick those in the ground. So if we are buying today, we would only buy avocados farm that are up and running. It takes about three years for an avocados tree to produce anything. So any farmer who is renting from us and planting avocados trees has got a three year wait before they had any income at all. So it's very difficult for them to do that as you can imagine. And very difficult for us. We look at that as development much like a real estate developer would buy a piece of property and a build building on it. It is a same thing for a farmer to take a farm that might be a dairy farm today and could convert it to an avocados farm. Not much of that going on, although there is a lot of change in the nut business. The nut trees are producing record amount these days because they plant it more and more of those. It seems like the Chinese and the Asians have fallen in love with almonds and walnut. And so as a result they just can't get enough prices of sky high, and so as a result the nut farmers are making a lot of money today. And…

Thank you. Also when you talk about water preference, do certain vegetable get preference then state wise or when you say water preference? And does that affect your farms at all?

Water preference is primarily in the Central Valley. And there the preference is towards permanent crops because they don't want to spend one year and which all those die out and then they don't have anything. So they have given preference to those guys and the folks that are growing peppers or something more mundane, I don't think there is any preference among ground vegetables or annual crops. I may be wrong. I have never heard of anybody saying, well, I am going to grow peppers because they will give me water as opposed to lettuce. And all of those take a lot of water. So as a result I think the government just trying to make sure that they don't blot out some of the permanent crops at this point in time. It has been going on for a long time. If you get a big snow pack up in North California, everybody gets water, if it doesn't snow very much then they start lending who gets water and it is a very unfortunate that so much water is put towards environmental purposes. Not that I am against environmentalists, it is just that I think food is -- should get the preference. Anyway that's my story. Any other questions?

(Operator Instructions) And I am showing no further question at this time. I would like to hand the call back over to Mr. Gladstone for any closing remarks.

All right. Thank you all for showing up and listening to the story again. And I hope to have a lot of good news for you when we due to one sort of the end of -- well probably February sometime because that will be our 10-K and it always takes us a longer time get through that. So we might not have a call until sometime in February, but I am hopeful our Board in mid January will give us up, our fingers up on increasing the dividend. Thank you all for calling. And we will see you then.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program. You may all disconnect. Have a great day everyone.