Note 3—Concentration Risk

Credit Risk

For the three months ended March 31, 2020, 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
	For the three months ended March 31,
($ in thousands)	2020				2019
Tenant C	$	1,198	11.6	%	$	163	1.7	%

(1)

Tenant C 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 March 31, 2020 and 2019 and the percentage of rental income recorded by the Company for the three months ended March 31, 2020 and 2019 by region:


	Approximate %				Rental Income (1)
	of total acres				For the three months ended
	As of March 31,				March 31,
Location of Farm (2)	2020		2019		2020		2019
Corn Belt	27.7	%	28.0	%	32.1	%	36.1	%
Delta and South	17.6	%	17.3	%	10.2	%	11.5	%
High Plains	20.0	%	19.2	%	7.8	%	6.6	%
Southeast	27.4	%	28.4	%	23.5	%	25.7	%
West Coast	7.3	%	7.1	%	26.4	%	20.1	%
	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, South Dakota and Texas. Southeast includes farms located in Alabama, Florida, Georgia, North Carolina, South Carolina and Virginia. West Coast includes farms located in California.