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Real Estate and Intangible Assets | 12 Months Ended
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Dec. 31, 2022
Real Estate [Abstract] |
Real Estate and Intangible Assets | REAL ESTATE AND INTANGIBLE ASSETS All of our properties are wholly-owned on a fee-simple basis, except where noted. The following table provides certain summary information about the 169 farms we owned as of December 31, 2022 (dollars in thousands, except for footnotes):
Location |  | No. of Farms |  | Total Acres |  | Farm Acres |  | Net Cost Basis(1) |  | Encumbrances(2)
California(3)(4)(5) |  | 63 |  | 34,844 |  | 32,321 |  | $ | 868,539 |  |  | $ | 405,014 |
Florida |  | 26 |  | 22,606 |  | 17,639 |  | 223,974 |  |  | 109,931 |
Washington |  | 6 |  | 2,529 |  | 1,997 |  | 64,903 |  |  | 21,059 |
Arizona(6) |  | 6 |  | 6,320 |  | 5,333 |  | 54,290 |  |  | 12,789 |
Colorado |  | 12 |  | 32,773 |  | 25,577 |  | 46,429 |  |  | 27,935 |
Nebraska |  | 9 |  | 7,782 |  | 7,050 |  | 30,815 |  |  | 12,118 |
Oregon(7) |  | 6 |  | 898 |  | 736 |  | 29,445 |  |  | 11,705 |
Michigan |  | 23 |  | 1,892 |  | 1,245 |  | 23,928 |  |  | 14,204 |
Texas |  | 1 |  | 3,667 |  | 2,219 |  | 8,175 |  |  | 4,877 |
Maryland |  | 6 |  | 987 |  | 863 |  | 8,098 |  |  | 4,467 |
South Carolina |  | 3 |  | 597 |  | 447 |  | 3,632 |  |  | 2,193 |
Georgia |  | 2 |  | 230 |  | 175 |  | 2,743 |  |  | 1,689 |
North Carolina |  | 2 |  | 310 |  | 295 |  | 2,161 |  |  | — |
New Jersey |  | 3 |  | 116 |  | 101 |  | 2,124 |  |  | 1,256 |
Delaware |  | 1 |  | 180 |  | 140 |  | 1,308 |  |  | 717 |
Totals |  | 169 |  | 115,731 |  | 96,138 |  | $ | 1,370,564 |  |  | $ | 629,954 |
(1)Consists of the initial acquisition price (including the costs allocated to both tangible and intangible assets acquired and liabilities assumed), plus subsequent improvements and other capitalized costs associated with the properties, and adjusted for accumulated depreciation and amortization. Specifically, includes Total real estate, net (excluding improvements paid for by the tenant) and Lease intangibles, net; plus long-term water assets, net above-market lease values, net lease incentives, and net investments in special-purpose LLCs included in Other assets, net; and less net below-market lease values and other deferred revenue included in Other liabilities, net; each as shown on the accompanying Consolidated Balance Sheets. (2)Excludes approximately $3.5 million of debt issuance costs related to notes and bonds payable, included in Notes and bonds payable, net on the accompanying Consolidated Balance Sheets. (3)Includes ownership in a special-purpose LLC that owns a pipeline conveying water to certain of our properties. As of December 31, 2022, this investment had a net carrying value of approximately $1.0 million and is included within Other assets, net on the accompanying Consolidated Balance Sheet. (4)Includes five acres in which we own a leasehold interest via a ground sublease with a California municipality that expires in December 2041. The ground sublease had a net cost basis of approximately $725,000 as of December 31, 2022 (included in Lease intangibles, net on the accompanying Consolidated Balance Sheets). (5)Includes 45,000 acre-feet of water stored with Semitropic Water Storage District, located in Kern County, California. See “—Investments in Water Assets” below for additional information on this water. (6)Includes two farms in which we own a leasehold interest via ground leases with the State of Arizona that expire in February 2025 and February 2032, respectively. In total, these two farms consist of 1,368 total acres and 1,221 farm acres and had an aggregate net cost basis of approximately $710,000 as of December 31, 2022 (included in Lease intangibles, net on the accompanying Consolidated Balance Sheets). (7)Includes ownership in a special-purpose LLC that owns certain irrigation infrastructure that provides water to two of our farms. As of December 31, 2022, this investment had a net carrying value of approximately $4.8 million and is included within Other assets, net on the accompanying Consolidated Balance Sheets. Real Estate The following table sets forth the components of our investments in tangible real estate assets as of December 31, 2022 and 2021 (dollars in thousands):
|  | December 31, 2022 |  | December 31, 2021
Real estate: |  |  |  |
Land and land improvements |  | $ | 845,779 |  |  | $ | 812,830 |
Permanent plantings |  | 358,249 |  |  | 331,969 |
Irrigation and drainage systems |  | 165,438 |  |  | 153,688 |
Farm-related facilities |  | 48,690 |  |  | 46,804 |
Other site improvements |  | 14,238 |  |  | 12,509 |
Real estate, at cost |  | 1,432,394 |  |  | 1,357,800 |
Accumulated depreciation |  | (106,966) |  |  | (74,002) |
Real estate, net |  | $ | 1,325,428 |  |  | $ | 1,283,798 |
Real estate depreciation expense on these tangible assets was approximately $34.3 million, $25.9 million and $14.9 million for the years ended December 31, 2022, 2021, and 2020, respectively. Included in the figures above are amounts related to improvements made on certain of our properties paid for by our tenants but owned by us, or tenant improvements. December 31, 2022 and 2021, we recorded tenant improvements, net of accumulated depreciation, of approximately $3.0 million and $2.5 million, respectively. We recorded both depreciation expense and additional lease revenue related to these tenant improvements of approximately $877,000, $406,000, and $304,000 during the years ended December 31, 2022, 2021, and 2020, respectively. Intangible Assets and Liabilities The following table summarizes the carrying value of certain lease intangible assets and the related accumulated amortization as of December 31, 2022 and 2021 (dollars in thousands):
| December 31, 2022 |  | December 31, 2021
Lease intangibles: |  |  |
Leasehold interest – land | $ | 4,295 |  |  | $ | 4,295 |
In-place lease values | 2,763 |  |  | 2,174 |
Leasing costs | 3,088 |  |  | 1,808 |
Other(1) | 133 |  |  | 130 |
Lease intangibles, at gross cost | 10,279 |  |  | 8,407 |
Accumulated amortization | (4,577) |  |  | (3,951) |
Lease intangibles, net | $ | 5,702 |  |  | $ | 4,456 |
(1)Other consists primarily of acquisition-related costs allocated to miscellaneous lease intangibles. Total amortization expense related to these lease intangible assets was approximately $1.0 million, $1.3 million, and $1.7 million for the years ended December 31, 2022, 2021, and 2020, respectively. The following table summarizes the carrying values of certain lease intangible assets or liabilities included in Other assets, net or Other liabilities, net, respectively, on the accompanying Consolidated Balance Sheets and the related accumulated amortization or accretion, respectively, as of December 31, 2022 and 2021 (dollars in thousands):
|  | December 31, 2022 |  | December 31, 2021
Intangible Asset or Liability |  | Deferred Rent Asset (Liability) |  | Accumulated (Amortization) Accretion |  | Deferred Rent Asset (Liability) |  | Accumulated (Amortization) Accretion
Above-market lease values and lease incentives(1) |  | $ | 4,702 |  |  | $ | (585) |  |  | $ | 65 |  |  | $ | (12) |
Below-market lease values and other deferred revenues(2) |  | (2,010) |  |  | 518 |  |  | (2,010) |  |  | 340 |
|  | $ | 2,692 |  |  | $ | (67) |  |  | $ | (1,945) |  |  | $ | 328 |
(1)Net above-market lease values and lease incentives are included as part of Other assets, net on the accompanying Consolidated Balance Sheets, and the related amortization is recorded as a reduction of Lease revenue, net on the accompanying Consolidated Statements of Operations and Comprehensive Income. (2)Net below-market lease values and other deferred revenue are included as a part of Other liabilities, net on the accompanying Consolidated Balance Sheets, and the related accretion is recorded as an increase to Lease revenue, net on the accompanying Consolidated Statements of Operations and Comprehensive Income. Total amortization related to above-market lease values and lease incentives was approximately $573,000, $48,000 and $203,000 for the years ended December 31, 2022, 2021, and 2020, respectively. Total accretion related to below-market lease values and other deferred revenues was approximately $178,000, $224,000 and $113,000 for the years ended December 31, 2022, 2021, and 2020, respectively. The estimated aggregate amortization expense to be recorded related to in-place lease values, leasing costs, and tenant relationships and the estimated net impact on lease revenue from the amortization of above-market lease values and lease incentives or accretion of above-market lease values and other deferred revenues for each of the five succeeding fiscal years and thereafter is as follows (dollars in thousands):
Period |  | Estimated Amortization Expense |  | Estimated Net Increase (Decrease) to Lease Revenue
For the fiscal years ending December 31: | 2023 |  | $ | 764 |  |  | $ | (612) |
| 2024 |  | 707 |  |  | (612) |
| 2025 |  | 621 |  |  | (394) |
| 2026 |  | 536 |  |  | (323) |
| 2027 |  | 535 |  |  | (322) |
| Thereafter |  | 2,539 |  |  | (362) |
|  |  | $ | 5,702 |  |  | $ | (2,625) |
Acquisitions 2022 Acquisitions During the year ended December 31, 2022, we completed the following acquisitions, which are summarized in the table below (dollars in thousands, except for footnotes):
Property Name |  | Property Location |  | Acquisition Date |  | Total Acres |  | No. of Farms |  | Primary Crop(s) / Use |  | Lease Term |  | Renewal Options |  | Total Purchase Price |  | Acquisition Costs(1) |  | Annualized Straight-line Rent(2)
Farm Road(3) |  | Charlotte, FL |  | 5/20/2022 |  | 15 |  | 0 |  | Adjacent parcel |  | N/A |  | None |  | $ | 54 |  |  | $ | 15 |  |  | $ | — |
County Road 35 |  | Glenn, CA |  | 6/16/2022 |  | 1,374 |  | 1 |  | Olives for Olive Oil |  | 14.5 years |  | 1 (5 years) |  | 24,500 |  |  | 55 |  |  | 1,714 |
Reagan Road(4) |  | Cochise, AZ |  | 7/13/2022 |  | 40 |  | 0 |  | Corn |  | 12.5 years |  | None |  | 120 |  |  | 17 |  |  | 39 |
North Columbia River Road(5)(7) |  | Franklin & Grant, WA |  | 7/21/2022 |  | 1,145 |  | 3 |  | Wine Grapes |  | 8.4 years |  | None |  | 30,320 |  |  | 146 |  |  | 2,296 |
Prunedale Road(6)(7) |  | Umatilla, OR |  | 7/21/2022 |  | 172 |  | 1 |  | Wine Grapes |  | 10.4 years |  | None |  | 7,008 |  |  | 36 |  |  | 286 |
Phelps Avenue(8) |  | Fresno, CA |  | 12/29/2022 |  | 443 |  | 0 |  | Open ground and water credits |  | 5.0 years |  | 1 (5 years) |  | 3,100 |  |  | 72 |  |  | 25 |
|  |  |  |  |  | 3,189 |  | 5 |  |  |  |  |  |  |  | $ | 65,102 |  |  | $ | 341 |  |  | $ | 4,360 |
(1)Includes approximately $27,000 of external legal fees associated with negotiating and originating the leases associated with these acquisitions, which were expensed in the period incurred. (2)Unaudited; based on the minimum cash rental payments guaranteed under the respective leases, as required under GAAP, and excludes contingent rental payments, such as participation rents. (3)Represents the acquisition of a parcel of land adjacent to an existing farm, providing additional road access to such farm. No new lease was executed related to this acquisition. (4)Represents the acquisition of a parcel of farmable land adjacent to an existing farm. Subsequent to acquisition, we spent approximately $153,000 to install certain improvements on this property. (5)Upon acquisition, we executed three new leases with the existing tenants on these farms. The lease terms above represent the weighted-average lease term and aggregate annualized straight-line rent of these three leases. (6)In connection with the acquisition of this property, we also acquired an ownership interest in a related LLC, the sole purpose of which is to own and maintain an irrigation system providing water to this and other neighboring properties. Our acquired ownership, which equated to an 11.3% interest in the LLC, was valued at approximately $2.7 million at the time of acquisition and is included within Other assets, net on the accompanying Consolidated Balance Sheets. See “—Investments in Unconsolidated Entities” below for additional information on our aggregate ownership interest in this and other LLCs. (7)These two properties were acquired as part of a single transaction. In connection with the acquisition of these vineyards, we committed to provide up to an aggregate amount of $2.2 million for certain irrigation and vineyard improvements on these farms, for which we will earn additional rent as the funds are disbursed by us. (8)Represents the acquisition of three parcels of land adjacent to an existing farm that will initially be utilized for its water rights (including additional surface water rights and groundwater pumping rights) to be used on nearby farms. In addition, a portion of this acquisition was leased back to the seller. During the year ended December 31, 2022, in the aggregate, we recognized operating revenues of approximately $2.1 million and net income of approximately $244,000 related to the above acquisitions. 2021 Acquisitions During the year ended December 31, 2021, we completed the following acquisitions, which are summarized in the table below (dollars in thousands, except for footnotes):
Property Name |  | Property Location |  | Acquisition Date |  | Total Acres |  | No. of Farms |  | Primary Crop(s) / Use |  | Lease Term |  | Renewal Options |  | Total Purchase Price |  | Acquisition Costs(1) |  | Annualized Straight-line Rent(2)
Palmer Mill Road |  | Dorchester, MD |  | 3/3/2021 |  | 228 |  | 2 |  | Sod |  | 10.0 years |  | 2 (5 years) |  | $ | 1,600 |  |  | $ | 56 |  |  | $ | 89 |
Eight Mile Road – Port Facility |  | San Joaquin, CA |  | 3/11/2021 |  | 5 |  | — |  | Cooling facility and storage |  | 9.8 years |  | 3 (5 years) |  | 3,977 |  |  | 50 |  |  | 189 |
South Avenue |  | Tehama, CA |  | 4/5/2021 |  | 2,285 |  | 1 |  | Olives for olive oil |  | 14.7 years |  | 1 (5 years) |  | 37,800 |  |  | 149 |  |  | 2,555 |
Richards Avenue |  | Atlantic, NJ |  | 6/3/2021 |  | 116 |  | 3 |  | Blueberries |  | 14.9 years |  | 2 (5 years) |  | 2,150 |  |  | 63 |  |  | 129 |
Lerdo Highway (Phase I)(3)(4) |  | Kern, CA |  | 6/4/2021 |  | 639 |  | 1 |  | Conventional & organic almonds and banked water |  | 10.4 years |  | 3 (10 years) |  | 26,492 |  |  | 111 |  |  | 974 |
Almena Drive |  | Van Buren & Eaton, MI |  | 6/9/2021 |  | 930 |  | 8 |  | Blueberries |  | 14.7 years |  | 2 (5 years) |  | 13,300 |  |  | 51 |  |  | 785 |
Maricopa Highway |  | Kern, CA |  | 8/11/2021 |  | 277 |  | 1 |  | Organic blueberries |  | 14.9 years |  | 3 (5 years) |  | 30,000 |  |  | 63 |  |  | 2,262 |
Wallace Road |  | Yamhill, OR |  | 8/11/2021 |  | 143 |  | 1 |  | Organic blueberries |  | 10.1 years |  | 3 (5 years) |  | 12,320 |  |  | 39 |  |  | 768 |
West Orange |  | St. Lucie, FL |  | 8/18/2021 |  | 617 |  | 2 |  | Lemons and oranges |  | 12.0 years |  | None |  | 5,241 |  |  | 184 |  |  | 367 |
Lerdo Highway (Phase II)(3)(5) |  | Kern, CA |  | 8/20/2021 |  | 479 |  | 1 |  | Conventional & organic almonds and banked water |  | 10.2 years |  | 3 (10 years) |  | 14,772 |  |  | 53 |  |  | 735 |
Lerdo Highway (Phase III)(3)(6) |  | Kern, CA |  | 10/8/2021 |  | 1,291 |  | 1 |  | Conventional & organic almonds, conventional & organic pistachios, and banked water |  | 10.1 years |  | 3 (10 years) |  | 42,959 |  |  | 90 |  |  | 1,981 |
Raymond Road(3) |  | Madera, CA |  | 10/21/2021 |  | 219 |  | 1 |  | Almonds |  | 10.0 years |  | 1 (5 years) |  | 3,300 |  |  | 78 |  |  | 183 |
Cogdell Highway |  | Atkinson, GA |  | 11/12/2021 |  | 230 |  | 2 |  | Blueberries |  | 14.8 years |  | None |  | 2,850 |  |  | 45 |  |  | 224 |
Chuckhole Lane(7) |  | Umatilla, OR |  | 11/23/2021 |  | 165 |  | 1 |  | Wine grapes |  | 9.9 years |  | 2 (10 years) |  | 2,383 |  |  | 117 |  |  | 139 |
West Lerdo Highway(3)(8) |  | Kern, CA |  | 12/3/2021 |  | 2,635 |  | 1 |  | Pistachios |  | 2.9 years |  | None |  | 88,000 |  |  | 97 |  |  | 4,395 |
Farm Road |  | Charlotte, FL |  | 12/16/2021 |  | 1,204 |  | 1 |  | Sod, watermelons, and cattle |  | 5.0 years |  | 1 (5 years) |  | 7,350 |  |  | 94 |  |  | 388 |
|  |  |  |  |  | 11,463 |  | 27 |  |  |  |  |  |  |  | $ | 294,494 |  |  | $ | 1,340 |  |  | $ | 16,163 |
(1)Includes approximately $78,000 of external legal fees associated with negotiating and originating the leases associated with these acquisitions, which were expensed in the period incurred. (2)Unaudited; based on the minimum cash rental payments guaranteed under the respective leases, as required under GAAP, and excludes contingent rental payments, such as participation rents. (3)Lease provides for an annual participation rent component based on the gross crop revenues earned on the farm. The rent figure above represents only the minimum cash guaranteed under the lease. (4)As part of the acquisition of this property, we acquired a contract to purchase 20,330 acre-feet of water stored with Semitropic Water Storage District, located in Kern County, California, at a fixed price. We executed this contract on June 25, 2021, at an additional cost of approximately $1.2 million, which is included in the total purchase price for this property in the table above. Income is not currently being earned on the value attributable to the water. See “—Investments in Water Assets” below for additional information on this water. (5)As part of the acquisition of this property, we acquired a contract to purchase 5,000 acre-feet of water stored with Semitropic Water Storage District, located in Kern County, California, at a fixed price. We executed this contract on August 23, 2021, at an additional cost of approximately $306,000, which is included in the total purchase price for this property in the table above. Income is not currently being earned on the value attributable to the water. See “—Investments in Water Assets” below for additional information on this water. (6)As part of the acquisition of this property, we acquired a contract to purchase 19,670 acre-feet of water stored with Semitropic Water Storage District, located in Kern County, California, at a fixed price. We executed this contract on October 11, 2021, at an additional cost of approximately $1.2 million, which is included in the total purchase price for this property in the table above. Income is not currently being earned on the value attributable to the water. See “—Investments in Water Assets” below for additional information on this water. (7)In connection with the acquisition of this property, we also acquired an ownership interest in a related LLC, the sole purpose of which is to own and maintain an irrigation system providing water to this and other neighboring properties. Our acquired ownership, which equated to a 9.1% interest in the LLC, was valued at approximately $2.1 million at the time of acquisition and is included within Other assets, net on the accompanying Consolidated Balance Sheets. See “—Investments in Unconsolidated Entities” below for further information for our aggregate ownership interest in this and other LLCs. (8)Lease provides for an initial term of 9.9 years but also includes an annual tenant termination option, effective as of the end of the lease year (as defined within the lease) following the exercise of such termination option. The lease term stated above represents the term through the first available termination option, and the annualized straight-line rent amount represents the rent guaranteed through the noncancellable term of the lease. During the year ended December 31, 2021, in the aggregate, we recognized operating revenues of approximately $6.4 million and net income of approximately $2.4 million related to the above acquisitions. Purchase Price Allocations The allocation of the aggregate purchase price for the farms acquired during each of the years ended December 31, 2022 and 2021 is as follows (dollars in thousands):
Assets (Liabilities) Acquired |  | 2022 Acquisitions |  | 2021 Acquisitions
Land and land improvements |  | $ | 30,353 |  |  | $ | 98,403 |
Permanent plantings |  | 24,706 |  |  | 129,677 |
Irrigation & drainage systems |  | 3,102 |  |  | 11,277 |
Farm-related facilities |  | 1,287 |  |  | 17,521 |
Other site improvements |  | — |  |  | 984 |
Leasehold interest—land |  | — |  |  | 790 |
In-place lease values |  | 909 |  |  | 688 |
Leasing costs |  | 1,355 |  |  | 511 |
Above-market lease values(1) |  | 641 |  |  | — |
Below-market lease values(2) |  | — |  |  | (1,321) |
Investment in LLC(1) |  | 2,749 |  |  | 2,054 |
Water purchase contracts(1)(3) |  | — |  |  | 33,910 |
Total Purchase Price |  | $ | 65,102 |  |  | $ | 294,494 |
(1)Included within Other assets, net on the accompanying Consolidated Balance Sheets. (2)Included within Other liabilities, net on the accompanying Consolidated Balance Sheets. (3)Includes the value attributable to the water purchase contracts acquired as part of the acquisition of Lerdo Highway, plus approximately $2.8 million paid to execute the contracts subsequent to the acquisition. Acquired Intangibles and Liabilities The following table shows the weighted-average amortization periods (in years) for the intangible assets acquired and liabilities assumed in connection with new real estate acquired during the years ended December 31, 2022 and 2021:
|  | Weighted-Average Amortization Period (in Years)
Intangible Assets and Liabilities |  | 2022 |  | 2021
Leasehold interest – land |  | 0.0 |  | 20.8
In-place lease values |  | 10.9 |  | 13.9
Leasing costs |  | 11.7 |  | 13.3
Above-market lease values and lease incentives |  | 9.1 |  | 0.0
Below-market lease values and other deferred revenue |  | 0.0 |  | 9.8
All intangible assets and liabilities |  | 10.6 |  | 13.8
Investments in Unconsolidated Entities In connection with the acquisition of certain farmland located in Fresno County, California, we also acquired an ownership in a related limited liability company (the “Fresno LLC”), the sole purpose of which is to own and maintain a pipeline conveying water to our and other neighboring properties. In addition, in connection with the acquisition of certain farmland located in Umatilla County, Oregon, we also acquired an ownership in a related limited liability company (the “Umatilla LLC”), the sole purpose of which is to own and maintain an irrigation system providing water to our and other neighboring properties. As of December 31, 2022, our aggregate ownership interest in the Fresno LLC and the Umatilla LLC was 50.00% and 20.4%, respectively. As our investments in the Fresno LLC and Umatilla LLC are both deemed to constitute “significant influence,” we have accounted for these investments under the equity method. During the years ended December 31, 2022, 2021, and 2020, we recorded an aggregate loss of approximately $73,000, $61,000, and $4,000, respectively (included in Loss from investments in unconsolidated entities on our Consolidated Statements of Operations and Comprehensive Income), which represents our pro-rata share of the aggregate loss recognized by the Fresno LLC and Umatilla LLC. As of December 31, 2022 and 2021, our combined ownership interest in the Fresno LLC and Umatilla LLC had an aggregate carrying value of approximately $5.8 million and $3.1 million, respectively, and is included within Other assets, net on the accompanying Consolidated Balance Sheets. Investments in Water Assets In connection with the acquisition of certain farmland located in Kern County, California, we also acquired three contracts to purchase an aggregate of 45,000 acre-feet of banked water held by Semitropic Water Storage District (“SWSD”), a water storage district located in Kern County, California, at a fixed price. The contracts to purchase the banked water could not readily be net settled by means outside of the contracts, and all rights and obligations associated with the purchase contracts were transferred to us at acquisition of the related farmland. We were not required to purchase a specific amount, or any, of the 45,000 acre-feet of water. Upon acquisition, we recognized the contracts at their relative fair value in accordance with ASC 805. During the year ended December 31, 2021, we executed all three contracts to purchase all 45,000 acre-feet of banked water for an aggregate additional cost of approximately $2.8 million. The purchased banked water was recognized at cost, including any administrative fees necessary to transfer the water to our banked water account. While we may, in the future, sell the banked water to an unrelated third party for a profit, our current intent is to hold the water for the long-term for future use on our own farms. There is no amount of time by which we must use the water held by SWSD. As of December 31, 2022, the investment in banked water had a carrying value of approximately $34.0 million, which includes the subsequent cost to execute the contract, and is included within Other assets, net on our Consolidated Balance Sheets. Each quarter, we will review the investment in banked water for any indicators of impairment in accordance with ASC 360, “Property, Plant, and Equipment,” and perform an impairment analysis if there are any such indicators. As of December 31, 2022, we concluded that there were no such indicators and that the water was not impaired. Future Minimum Lease Payments We account for all of our leasing arrangements in which we are the lessor as operating leases. The majority of our leases are subject to fixed rental increases, and a small subset of our lease portfolio includes lease payments based on an index, such as the consumer price index (“CPI”). In addition, several of our leases contain participation rent components based on the gross revenues earned on the respective farms. Most of our leases also include tenant renewal options; however, these renewal options are generally based on then-current market rental rates and are therefore typically excluded from the determination of the minimum lease term. The majority of our leases generally do not include tenant termination options. The following tables summarize the future lease payments to be received under noncancellable leases as of December 31, 2022 (dollars in thousands):
Period |  | Tenant Lease Revenue
For the fiscal years ending December 31, | 2023 |  | $ | 82,273 |
| 2024 |  | 73,890 |
| 2025 |  | 67,409 |
| 2026 |  | 62,234 |
| 2027 |  | 58,031 |
| Thereafter |  | 195,711 |
|  |  | $ | 539,548 |
Leases—Cash Basis Recognition As of December 31, 2022, due to credit issues with two of our tenants, we determined that the full collectability of the remaining rental payments under the respective leases with these two tenants was not deemed to be probable. As such, during the three months ended December 31, 2022, we began recognizing lease revenues from the six leases with these two tenants (three on farms in California and three on farms in Michigan) on a cash basis. We are continuing to work with the current tenants and will seek to come to an agreement for the remaining rental payments, if possible. Such agreement, if one can be reached, may include placing these tenants on payment plans, deferring a portion of the rent owed to us, or agreeing to terminate the respective leases. In the event of a termination, we estimate that we would be able to find new tenants to lease each of these properties to at market rental rates within 1 to 12 months. During the year ended December 31, 2022, we recorded lease revenues from these six leases of approximately $258,000 (including approximately $31,000 of participation rents), as compared to approximately $1.7 million (including approximately $121,000 of participation rents) and approximately $1.5 million (including approximately $221,000 of participation rents) during the years ended December 31, 2021 and 2020, respectively. Portfolio Concentrations Credit Risk As of December 31, 2022, our farms were leased to various different, unrelated third-party tenants, with certain tenants leasing more than one farm. No individual tenant represented greater than 10.0% of the total lease revenue recorded during the year ended December 31, 2022. Geographic Risk Farms located in California and Florida accounted for approximately $61.1 million (68.5%) and $14.5 million (16.3%), respectively, of the total lease revenue recorded during the year ended December 31, 2022. Though we seek to continue to further diversify geographically, as may be desirable or feasible, should an unexpected natural disaster (such as an earthquake, wildfire, or flood) occur or climactic change impact the regions where our properties are located, there could be a material adverse effect on our financial performance and ability to continue operations. None of our farms in California or Florida have been materially impacted by the recent wildfires, droughts, or hurricanes that occurred in those respective regions. See Note 11, “Subsequent Events—California Floods,” for a discussion on damage caused on certain of our farms by the recent floods that occurred in California. No other single state accounted for more than 10.0% of the total rental revenue recorded during the year ended December 31, 2022.

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