Strawberry Fields REIT, Inc. Announces Launch of Public Offering of Common Stock

Rhea-AI Summary

Strawberry Fields REIT (NYSE American:STRW) has announced the launch of an underwritten public offering of its common stock. The company will grant underwriters a 30-day option to purchase up to an additional 15% of offered shares. Net proceeds will be contributed to Strawberry Fields Realty, LP, to finance new investments, reduce existing debt, and for general corporate purposes. Janney Montgomery Scott leads as book-running manager, with Lake Street Capital Markets, Wedbush Securities, and Compass Point Research & Trading as joint book-running managers, and Colliers Securities as co-manager.

Positive

• Potential for additional capital through 15% overallotment option
• Proceeds will be used to finance new investments and acquisitions
• Debt reduction strategy through offering proceeds

Negative

• Potential dilution of existing shareholders' equity
• Stock price pressure due to increased share supply

Insights

Financial Analyst

This public offering marks a significant capital-raising initiative for Strawberry Fields REIT. The structure, including a 15% overallotment option, suggests confidence in market demand. The proceeds' allocation strategy is threefold: new acquisitions, debt reduction and general corporate purposes, indicating a balanced approach to growth and financial health.

The involvement of multiple reputable underwriters, led by Janney Montgomery Scott, adds credibility to the offering. However, the absence of pricing details and share volume makes it challenging to assess the immediate dilutive impact on existing shareholders. The timing aligns with the company's recently effective S-3 shelf registration from August 2024, suggesting this move was strategically planned.

Market Research Analyst

The REIT sector's current market dynamics make this offering particularly noteworthy. With interest rates potentially stabilizing, the timing for debt refinancing and new acquisitions could be opportunistic. The company's strategy to diversify funding sources through public markets rather than relying solely on debt financing demonstrates financial prudence.

The multi-manager syndicate structure, including regional and national firms, suggests a broad distribution strategy targeting diverse investor bases. This could enhance trading liquidity and institutional ownership, potentially benefiting long-term shareholders despite near-term dilution concerns.

SOUTH BEND, IN / ACCESSWIRE / December 2, 2024 / Strawberry Fields REIT, Inc. (NYSE American:STRW) (the "Company") today announced that it has commenced an underwritten public offering of its common stock. The Company also intends to grant the underwriters a 30-day option to purchase up to an additional 15% of the shares offered in the offering. If exercised, all additional shares will be offered at the public offering price per share of common stock in the offering.

The Company intends to contribute the net proceeds to Strawberry Fields Realty, LP, its operating partnership, which will in turn use the proceeds from this offering to finance acquisitions of new investments, pay down existing debt, and for general corporate purposes.

Janney Montgomery Scott is acting as lead book-running manager. Lake Street Capital Markets, Wedbush Securities, and Compass Point Research & Trading are acting as joint book-running managers. Colliers Securities is acting as co-manager.

Copies of the preliminary prospectus supplement and accompanying prospectus related to these securities may be obtained from: Janney Montgomery Scott, Attention: Syndicate Department, 1717 Arch Street, Philadelphia, PA 19109, by telephone at (617) 557-2975 or by email at prospectus@janney.com.

The offering is being made pursuant to a shelf registration statement (including prospectus) on Form S-3, which was filed with the Securities and Exchange Commission and declared effective on August 1, 2024. The prospectus supplement related to this offering will also be filed with the Securities and Exchange Commission. Prospective investors should read the prospectus forming a part of that registration statement and the prospectus supplement related to the offering, when available, and the other documents that the Company has filed with the Securities and Exchange Commission for more complete information about the Company and the offering. This press release shall not constitute an offer to sell or the solicitation of an offer to buy any of these securities, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or other jurisdiction.

About Strawberry Fields REIT, Inc.

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 115 healthcare facilities with an aggregate of 12,900+ beds, located throughout the states of Arkansas, Illinois, Indiana, Kentucky, Michigan, Ohio, Oklahoma, Tennessee, and Texas. The 115 healthcare facilities comprise 104 skilled nursing facilities, nine assisted living facilities, and two long-term acute care hospitals.

Forward-Looking Statements

Certain matters within this press release are discussed using forward-looking language as specified in the Private Securities Litigation Reform Act of 1995, and, as such, may involve known and unknown risks, uncertainties and other factors that may cause the actual results or performance to differ from those projected in the forward-looking statement. These statements relate to the Company's offering of common stock and the anticipated use of the net proceeds. No assurance can be given that the offering will be completed on the terms described, or at all, or that the net proceeds from the offering will be used as indicated. Completion of the offering on the terms described and the application of net proceeds are subject to numerous conditions, many of which are beyond the control of the Company, including, market conditions, general economic conditions and other factors, including those set forth under the heading "Risk Factors" in the Company's Annual Report on Form 10-K for the year ended December 31, 2023, and those set forth in other documents filed by the Company from time to time with the Securities and Exchange Commission.

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 purpose of Strawberry Fields REIT's (STRW) 2024 public offering?

The offering's proceeds will be used to finance new investments, pay down existing debt, and for general corporate purposes through its operating partnership, Strawberry Fields Realty, LP.

Who are the underwriters for STRW's December 2024 public offering?

Janney Montgomery Scott is the lead book-running manager, with Lake Street Capital Markets, Wedbush Securities, and Compass Point Research & Trading as joint book-running managers, and Colliers Securities as co-manager.

What is the overallotment option in STRW's 2024 stock offering?

The underwriters have a 30-day option to purchase up to an additional 15% of the shares offered in the public offering at the same public offering price.