Concentration Risk

9 Months Ended

Sep. 30, 2017

Note 3—Concentration Risk

Credit Risk

For the three and nine months ended September 30, 2017, the Company had one significant tenant representing a tenant concentration as presented in the table below. If the Company’s significant tenant fails to make rental payments to the Company or elects to terminate its leases, and the land cannot be re-leased on satisfactory terms, there could be a material adverse effect on the Company’s financial performance and the Company’s ability to continue operations. Rental income received is recorded on a straight-line basis over the applicable lease term. The following table presents the amount of the rental income and percentage of the Company’s total rental income received from the Company’s significant tenant.


	Rental income recognized								Rental income recognized
	For the three months ended September 30,								For the nine months ended September 30,
($ in thousands)	2017				2016				2017				2016
Tenant A(1)	$	2,091	18.8	%	$	—	—	%	$	4,071	14.3	%	$	—	—	%

(1)

Tenant A is a tenant who is currently leasing a number of permanent crop farms in California.

Geographic Risk

The following table summarizes the percentage of approximate total acres owned as of September 30, 2017 and 2016 and the percentage of rental income recorded by the Company for the three and nine months ended September 30, 2017 and 2016 by region:


	Approximate %				Rental Income(1)
	of total acres				For the three months ended				For the nine months ended
	As of September 30,				September 30,				September 30,
Location of Farm(2)	2017		2016		2017		2016		2017		2016
Corn belt	30.8	%	29.3	%	33.7	%	40.2	%	35.5	%	37.5	%
Delta and South	18.8	%	21.8	%	9.3	%	11.4	%	10.0	%	11.7	%
High Plains	20.4	%	24.1	%	8.6	%	15.8	%	9.3	%	15.6	%
Southeast	25.8	%	24.8	%	18.3	%	32.6	%	21.2	%	35.2	%
West Coast	4.2	%	—	%	30.1	%	—	%	24.0	%	—	%
	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%	100.0	%

(1)

Due to regional disparities in the use of leases with crop share components and seasonal variations in the recognition of crop share revenue, regional comparisons by rental income are not fully representative of each region's income producing capacity until a full year is taken into account.

(2)

Corn Belt includes farms located in Illinois, Michigan, and eastern Nebraska. Delta and South includes farms located in Arkansas, Louisiana, and Mississippi. High Plains includes farms located in Colorado, Kansas, western Nebraska, and Texas. Southeast includes farms located in Florida, Georgia, North Carolina, South Carolina, and Virginia. West Coast includes farms located in California.