Strawberry Fields REIT Wraps up 2024 and Begins 2025 With Strong Deal Flow

Rhea-AI Summary

Strawberry Fields REIT (NYSE AMERICAN:STRW) has completed multiple healthcare facility acquisitions totaling $116.5 million across December 2024 and early January 2025. The transactions include:

- Six healthcare facilities in Kansas with 354 licensed beds for $24 million, generating $2.4 million in initial annual rents
- A 100-bed skilled nursing facility in Oklahoma for $5 million, with $0.5 million in initial annual rents
- Eight skilled nursing facilities in Missouri for $87.5 million

All properties are leased on a triple net basis. These acquisitions mark the company's entry into new states, reflecting their strategic expansion with a disciplined investment approach.

Positive

• Significant portfolio expansion with $116.5M in new acquisitions
• Expected annual rental income of $2.9M from Kansas and Oklahoma properties
• Geographic diversification into new states
• All properties secured with triple net lease agreements

Negative

• None.

Insights

REIT Investment Analyst

The triple acquisition package totaling $116.5 million represents a significant expansion for Strawberry Fields REIT, demonstrating robust growth execution. The Kansas portfolio acquisition at $24 million yields a 10% cap rate based on $2.4 million initial annual rent, while the Oklahoma facility at $5 million generates a similar 10% cap rate with $0.5 million annual rent. The Missouri portfolio at $87.5 million marks their largest single transaction. These triple-net lease structures protect the REIT from operating expense inflation while providing stable cash flows. Geographic diversification into Kansas and Oklahoma reduces market concentration risk and creates new growth corridors. For a REIT with a $112 million market cap, these acquisitions effectively double their asset base, indicating aggressive but calculated expansion. The 10% cap rates are attractive in the current market, suggesting accretive deals that should enhance shareholder value and FFO per share.

Healthcare Facility Expert

This strategic expansion adds 454 licensed beds across multiple states, significantly boosting Strawberry Fields' healthcare portfolio footprint. The mix of facilities, predominantly skilled nursing facilities (SNFs), positions them well in the growing post-acute care sector. SNFs typically maintain high occupancy rates due to demographic trends and increasing demand for rehabilitation services. The triple-net lease structure with existing operators minimizes operational risk while ensuring steady income streams. The average per-bed acquisition cost of approximately $67,800 for the Kansas facilities ($24 million / 354 beds) represents competitive pricing in today's market. The geographic diversification into Kansas and Oklahoma, combined with the Missouri facilities, creates operational synergies and potential network effects that could attract larger healthcare systems as future tenants.

SOUTH BEND, IN / ACCESSWIRE / January 6, 2025 / Strawberry Fields REIT, Inc. (NYSE AMERICAN:STRW) (the "Company") announced that on January 2, 2025 it completed the acquisition of six Healthcare Facilities, comprised of 354 licensed beds, located in Kansas (the "Facilities") for $24,000,000.

The Facilities are currently leased under an existing master lease agreement to a group of third-party tenants. Under the master lease, the tenants initial annual rents are $2.4 million on a triple net basis.

In addition to the Kansas deal, on December 31,2024 the Company completed the acquisition of a 100 bed Skilled Nursing Facility in Oklahoma for $5.0 million. Under the lease, the tenants initial annual rents are $0.5 million on a triple net basis. Additionally, as the Company previously announced, it closed the acquisition of eight skilled nursing facilities in Missouri for $87.5 million. Total deal-flow for December and January is $116.5 million.

Moishe Gubin, the Company's Chairman & CEO, noted: "The end of December and early January have been very busy for Strawberry Fields REIT. Completing the acquisition of 15 facilities for over $115 million and entering into two new states is very exciting. As we head into 2025, we look forward to continuing to grow the Company in existing and new states with our disciplined investment approach."

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 130 healthcare facilities with an aggregate of 14,500+ beds, located throughout the states of Arkansas, Illinois, Indiana, Kansas, Kentucky, Michigan, Missouri, Ohio, Oklahoma, Tennessee and Texas. The 130 healthcare facilities comprise 118 skilled nursing facilities, 10 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 facilities 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 facilities 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 facilities 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

How much did Strawberry Fields REIT (STRW) spend on acquisitions in December 2024 and January 2025?

Strawberry Fields REIT spent a total of $116.5 million on acquisitions during December 2024 and January 2025, including $87.5M in Missouri, $24M in Kansas, and $5M in Oklahoma.

What is the expected annual rental income from STRW's January 2025 Kansas acquisition?

The Kansas facilities are expected to generate $2.4 million in initial annual rents on a triple net basis.

How many healthcare facilities did STRW acquire in Kansas in January 2025?

Strawberry Fields REIT acquired six healthcare facilities with 354 licensed beds in Kansas.

What was the purchase price of STRW's Oklahoma skilled nursing facility acquisition?

Strawberry Fields REIT acquired the 100-bed skilled nursing facility in Oklahoma for $5.0 million.

How many new states did Strawberry Fields REIT (STRW) expand into with these acquisitions?

Strawberry Fields REIT expanded into two new states with these acquisitions.