Strawberry Fields REIT Announces Acquisition of Skilled Nursing/Assisted Living Facility for $6.7 Million

Rhea-AI Summary

Strawberry Fields REIT (NYSE AMERICAN:STRW) has announced the completion of a $6.7 million acquisition of a healthcare facility in Gainesboro, Tennessee. The property includes an 83-bed Skilled Nursing Facility and a 28-room Assisted Living Facility. This acquisition has been incorporated into an existing Infinity of Tennessee Master Lease and is expected to increase the Company's annual rents by $670,000, with a 3% annual increase provision. This marks Strawberry Fields REIT's 15th facility in Tennessee, further expanding its presence in the state's healthcare real estate market.

Positive

• Acquisition of a healthcare facility for $6.7 million
• Annual rent increase of $670,000
• 3% annual rent increase provision
• Expansion to 15 facilities in Tennessee

Negative

• None.

Insights

Financial Analyst

The acquisition of this skilled nursing and assisted living facility for $6.7 million is a strategic move for Strawberry Fields REIT. It expands their portfolio in Tennessee, now reaching 15 facilities in the state. This growth demonstrates a focused regional expansion strategy.

The deal structure is noteworthy. By adding the facility to an existing master lease with Infinity of Tennessee, STRW streamlines operations and potentially reduces administrative overhead. The $670,000 increase in annual rents, subject to 3% yearly increases, provides a steady, growing income stream. This represents a cap rate of about 10%, which is attractive in the current market.

For investors, this acquisition signals continued growth and a focus on stable, inflation-protected income. The 3% annual rent escalation helps hedge against inflation, while the essential nature of skilled nursing facilities offers some recession resistance. However, investors should monitor the company's debt levels and overall portfolio performance as it continues to expand.

SOUTH BEND, IN / ACCESSWIRE / September 26, 2024 / Strawberry Fields REIT, Inc. (NYSE AMERICAN:STRW) (the "Company") today announced, it completed the acquisition of an 83-bed Skilled Nursing Facility and 28-room Assisted Living Facility for $6.7 million located in Gainesboro, Tennessee.

The facility was added to an existing Infinity of Tennessee Master Lease. The acquisition will increase the Company's annual rents by $670 thousand and is subject to 3% annual increases.

This acquisition marks the 15^th facility for the Company in Tennessee.

About Strawberry Fields REIT

Strawberry Fields REIT, Inc., is a self-administered real estate investment trust engaged in the ownership, acquisition, development and leasing of skilled nursing and certain other healthcare-related properties. The Company's portfolio includes 113 healthcare facilities with an aggregate of 12,800+ beds, located throughout the states of Arkansas, Illinois, Indiana, Kentucky, Michigan, Ohio, Oklahoma, Tennessee and Texas. The 113 healthcare facilities comprise 103 skilled nursing facilities, eight assisted living facilities, and two long-term acute care hospitals.

Safe Harbor Statement

Certain statements in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Those forward-looking statements include all statements that are not historical statements of fact and those regarding our intent, belief or expectations, including, but not limited to, statements regarding: future financing plans, business strategies, growth prospects and operating and financial performance; expectations regarding the making of distributions and the payment of dividends; and compliance with and changes in governmental regulations.

Words such as "anticipate(s)," "expect(s)," "intend(s)," "plan(s)," "believe(s)," "may," "will," "would," "could," "should," "seek(s)" and similar expressions, or the negative of these terms, are intended to identify such forward-looking statements. These statements are based on management's current expectations and beliefs and are subject to a number of risks and uncertainties that could lead to actual results differing materially from those projected, forecasted or expected. Although we believe that the assumptions underlying the forward-looking statements are reasonable, we can give no assurance that our expectations will be attained. Factors which could have a material adverse effect on our operations and future prospects or which could cause actual results to differ materially from our expectations include, but are not limited to: (i) the COVID-19 pandemic and the measures taken to prevent its spread and the related impact on our business or the businesses of our tenants; (ii) the ability and willingness of our tenants to meet and/or perform their obligations under the triple-net leases we have entered into with them, including, without limitation, their respective obligations to indemnify, defend and hold us harmless from and against various claims, litigation and liabilities; (iii) the ability of our tenants to comply with applicable laws, rules and regulations in the operation of the properties we lease to them; (iv) the ability and willingness of our tenants to renew their leases with us upon their expiration, and the ability to reposition our properties on the same or better terms in the event of nonrenewal or in the event we replace an existing tenant, as well as any obligations, including indemnification obligations, we may incur in connection with the replacement of an existing tenant; (v) the availability of and the ability to identify (a) tenants who meet our credit and operating standards, and (b) suitable acquisition opportunities, and the ability to acquire and lease the respective properties to such tenants on favorable terms; (vi) the ability to generate sufficient cash flows to service our outstanding indebtedness; (vii) access to debt and equity capital markets; (viii) fluctuating interest rates; (ix) the ability to retain our key management personnel; (x) the ability to maintain our status as a real estate investment trust ("REIT"); (xi) changes in the U.S. tax law and other state, federal or local laws, whether or not specific to REITs; (xii) other risks inherent in the real estate business, including potential liability relating to environmental matters and illiquidity of real estate investments; and (xiii) any additional factors included under "Risk Factors" in our Annual Report Form 10-K dated March 19, 2024, including in the section entitled "Risk Factors" in Item 1A of Part I of such report, as such risk factors may be amended, supplemented or superseded from time to time by other reports we file with the SEC.

Forward-looking statements speak only as of the date of this press release. Except in the normal course of our public disclosure obligations, we expressly disclaim any obligation to release publicly any updates or revisions to any forward-looking statements to reflect any change in our expectations or any change in events, conditions or circumstances on which any statement is based.

Investor Relations:
Strawberry Fields REIT, Inc.
IR@sfreit.com
+1 (773) 747-4100 x422

SOURCE: Strawberry Fields REIT, Inc.

View the original press release on accesswire.com

FAQ

What is the value of Strawberry Fields REIT's recent acquisition in Tennessee?

Strawberry Fields REIT (STRW) acquired a healthcare facility in Gainesboro, Tennessee for $6.7 million on September 26, 2024.

How will the new acquisition affect Strawberry Fields REIT's annual rents?

The acquisition will increase Strawberry Fields REIT's (STRW) annual rents by $670,000, subject to 3% annual increases.

What type of healthcare facility did Strawberry Fields REIT (STRW) acquire in Tennessee?

Strawberry Fields REIT acquired an 83-bed Skilled Nursing Facility and a 28-room Assisted Living Facility in Gainesboro, Tennessee.

How many facilities does Strawberry Fields REIT now own in Tennessee after this acquisition?

After this acquisition, Strawberry Fields REIT (STRW) now owns 15 facilities in Tennessee.