Good day ladies and gentlemen and welcome to the Gladstone Land Corporation Second Quarter Earnings and June 30, 2016 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 be given at that time. [Operator Instructions] As a reminder, this conference call is being recorded. I would now like to conference over to David Gladstone. You may begin.

Thank you, and welcome to the quarterly conference call for Gladstone Land. This is David Gladstone, and thank you Nicole for that nice introduction. And thanks to all of you for coming on the line today, we appreciate you calling in; we always enjoy these times with you and hope we have a lot of good questions at the end of this presentation. We wish we had more time like this than thinking about ways to talk to you but unfortunately we don't have one, so this is your chance to ask some good questions. By the way, if you're ever in the Washington DC area, we say this every time, we're located in a nearby suburb called McLean Virginia, and if you have a chance come by and say hello, you'll see a great team that work here; we have over 60 people in the team now we manage almost $2 billion in assets across all four of our public companies. Now we're going to start with Michael LiCalsi, he is our General Counsel and Secretary; he also serves as the President of Gladstone Administration, which is the administrator for all the Gladstone funds, including this one. Michael, go ahead.

Good morning, everyone. Our report today may include forward-looking statements within the meaning of the Securities Act of 1933, and Securities Exchange Act of 1934, including those regarding the Company's future performance. These forward-looking statements involve certain risks and uncertainties that are based on our current plan which we believe to be reasonable, and 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 the Risk Factors listed in our 10-K and 10-Q that we file with the SEC and these can be found on our website 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 except as required by law. And in our report today, as a Real Estate Investment Trust, we will 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. The National Association of REITs has endorsed FFO as one of the non-GAAP accounting standards that can be used in discussing REITs. We'll also discuss core FFO or CFFO, which adjusts FFO for certain non-recurring charges such as acquisition-related costs. And adjusted FFO or AFFO, which further adjusts CFFO for certain non-cash items such as converting GAAP rents to cash rents. And we believe these metrics improve comparability of our results period-over-period. Another real estate term we will discuss is capitalization or just cap rate which is the annual overturn yield on an investment and is calculated by dividing the annual net income by the purchase price. And to stay up-to-date on the latest news involving Gladstone Land and our other related publically funds, please follow us on Twitter; username GladstoneComps and Facebook, keywords, The Gladstone Companies; and please go to our general website to see more information about this company and the other our affiliated publicly traded funds at www.gladstone.com. Now today's reports from our President and CFO will be an overview of our operations and performance. So we encourage everyone to read yesterday's press release and Form 10-Q filing which include a wealth of information for our investors, and you can find them all at our website, www.gladstoneland.com. Now, I will turn the presentation back to our President, David Gladstone.

Okay. Thank you, Michael that was good information for everybody. As you saw from the filing yesterday, 2016 continues to be a strong year for this company but before we get to results I was like to give a brief overview of the nature of our business and the overall market environment. Our business consists solely of owning high quality and I want to emphasize that over and over again, high quality farm landing and leasing at what we consider top tier farmers. We don't farm any of the farm land ourselves and thus we don't take direct farming risks, and many of the farms that we rent out -- these farm land by crop insurance are from the Federal Government that protects them against potential losses and by the way indirectly protect us and our rents. The farmers release their farms too are usually in the top 20% of the largest and best farmers in any of the farming regions that we're in, and we generally prefer to keep the same farming group of farmer on the property for as long as possible as they tend to know the nuances of operating a particular farm. Our objective is to be the long-term real estate partner for all of our farmers so they know that they have the farm for the long-term. Most of our farms are located where farmers are able to grow high value annual row crops such as berries and vegetables, that's where our investment focus continues to be. However, over the past year we've taken advantage of some of the favorable circumstances in the Midwest where we found some excellent investment opportunities. We also further our expansion into permanent crops such as Ahmanson, pistachios, orchards out west, but you should expect the large majority of our…

Thank you, David. Good morning, everybody. I'll begin by discussing our balance sheet. During the second quarter, our total assets increased by about $18 million or 7%, mainly due to new farm acquisitions which refunded primarily with new fixed rate debt. In connection with the purchase of the pistachio farm in California, we obtained an additional $9 million of new long-term borrowings and an expected effective interest rate of 2.79% which is fixed for the next five years. We borrowed these funds from a new source expanding our lending base to four different lenders now. In connection with the Florida farm, we acquired subsequent a quarter end, we obtain an additional $3 million of new long term borrowing an expected effective interest rate of 3.17% which is fixed for the next seven years. From an overall leverage standpoint our loan-to-value ratio based on the fair value of our portfolio was just under 54% of June 30 and we are comfortable of this level given the relatively low risk of farmland as an overall asset class. While interest rate volatility remains a concern as of June 30 about 91% of our total indebtedness was a fixed rate, and on a weighted average basis these rates are fixed for another four years out. We believe we are pretty well protected against any near term interest rate heights. The weighted average effective interest rate on these borrowings as of June 30 was 3.11%, down from 3.35% a year ago. We continue to decrease our overall borrowing costs and further diversifying our lending base has provided us with even greater access to cheaper sources of capital. And regarding upcoming debt maturities only 1.3% of our total debt outstanding about $2.5 million is coming due throughout the remainder of 2016. And now move on to…

Very nice report Lewis, the Company just continues to get better every quarter as we continue to execute our plans. We've invested now over $244 million in new farm assets since our IPO in 2013 and we expect to add to that figure during the remainder of 2016. Our backlog of possible farm purchases remains very strong, we currently have over $60 million of farms that are either under signed purchase agreement or signed letter of intent, and we expect all of these acquisitions to close in the second half of the year, and we currently have the ability to close on all of them without a need for additional capital. As some of the purchases will involve issuance of OPI units as consideration, that's a very tax advantageous to the farmers who are selling. As you know, with the increase in the portfolio comes greater diversification and that protects us all, investors, and yours truly, as big investor that we expect better earnings out of it as well. As most people know, our fund specializes in farms that grow fresh fruits and vegetables, and now a few nut farms and we have historically avoided investing heavily in farmland that grows traditional commodity crops such as corn and wheat. One reason for this is we believe investing in farmland growing crops that contribute to a healthier lifestyle such as fruits, and vegetables, and nuts. Now that's one reason we like that area is that it has strong growth, in addition, more than 90% of the rents from our farms is farms that do not have GMO crops on them; and we are continuing expanding our ownership of organic farmland through both new acquisitions -- and like some of the farms are being converted from existing farms to organic ground. However,…

Thank you. [Operator Instructions] Our first question comes from the line of Rob Stevenson of Jenny [ph]. Your line is now open.

Good morning. Can you talk a little bit about what's going on that you're terminating the lease in Florida and releasing it?

The person there is retiring, and so we're going to find somebody -- he will stay on, he has a lease for two more years but he wants to retire. So we're getting a new tenant there.

Okay. And then you talked about $60 million of farms under contract or letters of intent with a healthy OP unit mix to that consideration. When you're issuing OP units these days, I mean where are they being issued? Are they being issued at market prices or they being issued above where the stock is currently trading, given the tax protection? Can you help frame that for us?

Yes, we usually start out at about 15% premium to the current price and try to start at that price. And sometimes we're above that, sometimes were below but that's generally where we are.

Okay. And then just in terms of that $60 million. I mean is that -- how much of that is being governed by what you see out there that you're finding attractive from a valuation standpoint and from actual farm standpoint versus the restrictions on you from a capital perspective? I mean, if your stock price was higher -- than $60 million go to $100 million in a pipeline to $200 million in a pipeline? I mean is it -- how scalable is that today given your acquisitions people on the ground and what you're seeing from availability and attractiveness from a pricing standpoint on assets that you want to own?

We'll think about it this way as a funnel and at the top of the funnel there are really -- I don't know, $800 million worth of stuff that we have that's coming through the funnel. It's come down to this point in time where there is $60 million that we feel pretty comfortable about -- that we're going to close. And you're exactly right, if somebody -- if some of these farmers think their farm is worth more than we do and the yield is pushed down to 2% or 3% in some cases; now we were looking at some farms in Delmarva which is really near Baltimore; there are too many gentleman farmers over there; so farm prices go for very steep amounts and very low yields. So you're right on target; if we somehow could have a stock price that was yielding 1% because of -- obviously, we could sell a lot of stock and buy a lot of these very high priced farms. Most of the farms we look at are not going to fit our basic requirements which are high quality, and then high quality tenants. And so as a result we are very peculiar at this point in time; and I know I've said this to you before but we cannot afford at this point in time to have farms that needs a lot of work; we're not out there in the marketplace trying to redo things, there are lot of opportunities for us to buy farms that needs lots of work done to them in order to make them -- and we do some of that; we'll buy a farm and drill a well or drill two wells, the wells that we probably drilled -- I don't know, 20 or 30 wells in our history. So we know how to do that and it makes the farm much more valuable. So yes, if you gave me a very high priced stock; sure, I could buy some properties that I can't afford to buy now because the yield is far too low. And so that's one of the governing factors but I'd say that's not the big governing factor; the major driver governing factor is that we want high quality farms as opposed to farms that would be sort of in the middle or maybe even lower part of the farms out there today.

Okay, and then just -- Lewis; you said about the dry powder, there was 8 million and then there was a 20 million number, which one of those is the total buying power? Is the 8 equity and the 20 the total buying power?

20 is the buying power, yes.

Okay, perfect. Thanks guys.

Okay, Next question? [Operator Instructions] And I'm showing no further questions at this time. I'd like to hand the call back over to David for any closing remarks?

Alright, we thank you all for calling in. We wish we had more questions because those are more fun but as a result we'll have to hold out until next quarter. So thank you all for calling and that's the end of this conference call.

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