Analyst’s Disclosure: I/we have a beneficial long position in the shares of STRW either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article. While this article may sound like financial advice, please observe that the author is not a CFA or in any way licensed to give financial advic ...

Financial Performance - Rental revenues for the year ended December 31, 2024, increased by 17.3% to $117.1 million compared to $99.8 million in 2023[212] - Net income for 2024 was $26.5 million, reflecting a 30.9% increase from $20.2 million in 2023[212] - Rental revenues increased by $17.2 million or 17.3% in 2024 compared to 2023, driven by lease renegotiations and acquisitions of 15 properties[215] - Net income rose from $20.2 million in 2023 to $26.5 million in 2024, attributed to higher rental revenue and lower losses on real estate[220] - Funds from Operations (FFO) for the year ended December 31, 2024, were $60.2 million, up from $49.5 million in 2023, indicating a year-over-year increase of approximately 21.5%[257] - The Company reported a net income of $26.5 million for the year ended December 31, 2024, compared to $20.2 million in 2023, reflecting a year-over-year increase of approximately 31.5%[257] Expenses and Indebtedness - Total expenses rose by 6.5% to $55.8 million, with significant increases in depreciation (10.8%) and general and administrative expenses (21.0%)[212] - Depreciation increased by $2.8 million or 10.8% due to new real estate investments totaling $119.8 million in 2024[216] - Interest expense increased by $8.1 million or 33.4% due to larger bond balances and a new commercial bank loan[219] - Total indebtedness as of December 31, 2024, was approximately $673.9 million, including $262.2 million in HUD guaranteed debt[226] - The total gross notes payable and other debt increased to $673.9 million as of December 31, 2024, up from $539.1 million in 2023, representing an increase of approximately 24.9%[253] Acquisitions and Investments - The Company completed the acquisition of two skilled nursing facilities for $15.25 million, with an annual base rent of $1.5 million and 3% annual rent increases[204] - A purchase agreement for a property in Indiana was closed for $5.83 million, with a first-year base rent of $15.5 million and 3% annual escalations[200] - The Company acquired six healthcare facilities in Kansas for $24 million, which will be leased under a new 10-year master lease agreement[209] - Cash used in investing activities rose by $30.4 million, mainly due to a $29.8 million increase in property acquisitions[231] Financing and Capital Structure - The Company established an at-the-market equity program to enhance financing flexibility and support growth initiatives[202] - The Company issued Series A Bonds worth approximately $37.1 million at a fixed interest rate of 6.97%[203] - The Company closed a mortgage loan facility on December 19, 2024, borrowing approximately $59 million, with monthly interest payments starting January 2026 and a balloon payment due in December 2029[238] - As of December 31, 2024, the company had $88.5 million in Series A Bonds at a fixed interest rate of 6.97%, $73.3 million in Series C Bonds at 5.7%, $51.5 million in Series D Bonds at 9.1%, and $460.6 million in senior debt notes, with 29.03% of total debt ($195.7 million) bearing a variable interest rate[283] Tenant Performance and Compliance - As of the report date, none of the Company's tenants are delinquent on rent payments, indicating strong lease compliance[210] - The company actively monitors key factors affecting tenant performance, including cash flow, operating margins, and the quality of management teams[279] - The company evaluates tenant creditworthiness through periodic financial statements and operational data, ensuring ongoing monitoring of credit quality[277] - The company determined that no allowance for doubtful accounts was necessary to cover potential rent losses from tenants as of December 31, 2024 and 2023[269] Risk Management and Future Outlook - The company expects to meet long-term liquidity needs through various capital sources, including future equity issuances and debt offerings[225] - The company aims to reduce dependence on related party tenants to diversify its tenant base while still considering leasing to qualified operators in various markets[276] - The company is exposed to interest rate risk primarily due to long-term debt used for property acquisitions[282] - If one-month SOFR increases by 100 basis points, the company's annual cash flow would decrease by approximately $2.0 million[283] - The company expects to be protected from inflation through provisions in the majority of its long-term leases, which may include rent escalators[281] - The company assesses real estate asset impairment when cash flows generated by the asset are less than its carrying amount[273] - The company utilizes independent appraisals and market data to estimate fair values for real estate acquisitions, impacting depreciation and amortization[271] Dividend Policy - The Company expects to make quarterly dividend payments in cash, with an annual dividend amount no less than 90% of its annual REIT taxable income[260]

Forward-looking statements involve inherent uncertainty and may ultimately prove to be incorrect or false. You are cautioned to not place undue reliance on forward-looking statements. Except as otherwise may be required by law, we undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or actual operating results. Factors that may cause actual results to differ materially from current expectations include, but are not limi ...

Core Viewpoint - Strawberry Fields REIT held its year-end 2024 earnings call, highlighting its financial performance and strategic focus on acquisitions and investor relations [2]. Group 1: Company Overview - The call featured key participants including the Chief Investment Officer, Chairman and CEO, and CFO, indicating a strong leadership presence [2]. - The company released its year-end 2024 results, which are accessible on its investor relations website, suggesting transparency and accessibility of information for investors [2]. Group 2: Financial Performance - The earnings call is part of the company's routine to discuss financial performance, including projections regarding future financial metrics and operational strategies [3]. - Non-GAAP financial results will be referenced during the call, indicating a focus on alternative performance measures that may provide additional insights into the company's financial health [4].

Financial Data and Key Metrics Changes - The company reported a total asset increase of 27.7% to $170 million, driven by significant portfolio expansion [16] - Total liabilities rose by 23.6% to $134.5 million, while equity increased by 76.8% year-over-year, amounting to $36 million [17] - Revenue grew by $17.3 million or 17.3%, resulting in a net income of $26.5 million, which is a 30.9% increase compared to the previous year [19] - Adjusted AFFO reached $55.8 million, and adjusted EBITDA was $90.6 million, reflecting year-over-year growth rates of 12.6% and 8.2% respectively [20] Business Line Data and Key Metrics Changes - The company expanded its portfolio from 109 to 130 facilities, increasing the number of beds from 12,449 to 14,540, a 14% increase [7][13] - Base rents increased from $84 million in 2020 to $104 million in 2024, with expectations to reach around $130 million in 2025 [8][25] - The average lease term improved from 4.6 years to 7.4 years by the end of 2024 [9] Market Data and Key Metrics Changes - The company has grown its tenant base from ten operators to forty, indicating a diversification in its operational partnerships [7] - The company collected 100% of its contractual rents during the year, showcasing strong operational performance [10] Company Strategy and Development Direction - The company aims to continue its growth trajectory by focusing on acquisitions that fit its operational model, emphasizing disciplined investment strategies [22][24] - The management expressed a commitment to maintaining a strong dividend policy, increasing the dividend from $0.12 to $0.14 per share, representing a 16.6% increase [21] - The company is looking to improve its market presence and stock liquidity by engaging with institutional investors and participating in conferences [26][28] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about the future, expecting to close approximately $150 million in acquisitions in 2025, with a focus on controlled growth [45] - Concerns regarding reimbursement rates and regulatory environments were acknowledged, but management expressed confidence in the ability to navigate these challenges [84][85] Other Important Information - The company has authorized a cash dividend of $0.14 per share, marking its tenth consecutive quarter of dividend payments [14] - The company has established an ATM program and completed its first underwritten public offering, raising $35 million [11] Q&A Session Summary Question: Can you provide details on the transaction market and deal flow? - Management indicated that they are seeing consistent deal flow but will only pursue opportunities that fit their investment criteria [41][42] Question: What are the leverage expectations for 2025? - Management expects to maintain a debt-to-equity ratio between 45% and 55%, aiming for the lower end of that range [46][47] Question: What is the forecast for 2025 AFFO per share? - Management anticipates an AFFO per share in the range of $1.20, with expectations to potentially exceed that figure [50][51] Question: Can you discuss the status of lease expirations for 2025? - Management confirmed that most leases have renewed, with only two remaining, one of which is expected to renew and the other is being actively marketed for a new tenant [58][60] Question: How significant was the ATM issuance in the fourth quarter? - The ATM issuance in the fourth quarter involved approximately 71,000 shares, raising around $161,000 [70] Question: Are there any concerns about tenants moving out? - Management expressed confidence in their tenant relationships, noting that only one tenant is expected to move out, and they are actively pursuing a new tenant for that asset [88][90]

Revenue and Income Growth - 2024 rental revenues increased by $17.3 million or 17.3% compared to fiscal year 2023, totaling $104.4 million[4] - Net income rose from $20.2 million in 2023 to $26.5 million in 2024, reflecting increased rental revenue and lower losses on real estate[11] - Rental revenues increased to $117,058,000 in 2024 from $99,805,000 in 2023, representing a growth of 17.2%[22] - Net income rose to $26,505,000 in 2024, compared to $20,244,000 in 2023, an increase of 31.0%[22] - Funds from Operations (FFO) for 2024 were $60,193,000, up from $49,479,000 in 2023, reflecting a growth of 21.5%[25] - Adjusted Funds from Operations (AFFO) increased to $55,825,000 in 2024 from $52,668,000 in 2023, a rise of 5.4%[25] - Basic and diluted income per common share improved to $0.57 in 2024, compared to $0.39 in 2023, an increase of 46.2%[22] - Comprehensive income attributable to common stockholders was $3,906,000 in 2024, compared to $2,639,000 in 2023, an increase of 48.0%[22] Expenses and Liabilities - General and administrative expenses increased by $1.2 million or 20.9% compared to fiscal year 2023[7] - Interest expense increased by $8.1 million or 30.5% compared to fiscal year 2023, primarily due to additional interest payments on bonds[8] - Total expenses increased to $55,755,000 in 2024 from $52,366,000 in 2023, a rise of 6.6%[22] - Interest expense increased to $34,808,000 in 2024, compared to $26,674,000 in 2023, an increase of 30.5%[22] - Total liabilities rose to $704.0 million in 2024 from $569.5 million in 2023[21] Assets and Acquisitions - Total assets increased to $787.6 million in 2024 from $616.8 million in 2023[21] - The company acquired 15 facilities (1,985 beds) for $130.3 million in 2024, expanding into Missouri[3] - The company closed the acquisition of six healthcare facilities in Kansas for $24 million in January 2025[2] Rent Collection and Dividends - The company collected 100% of its contractual rents for the year ended December 31, 2024[2] - The company declared a cash dividend of $0.14 per share, payable on March 31, 2025[12] Stock and Shareholder Information - The weighted average number of common stock outstanding increased to 7,124,158 in 2024 from 6,365,196 in 2023, an increase of 11.9%[22] - The company recognized a loss on real estate investment impairment of $2,451,000 in 2023, which was not present in 2024[22][26]

Core Insights - The article compares Strawberry Fields REIT, Inc. (STRW) and National Health Investors (NHI) to determine which stock is more attractive to value investors [1] Valuation Metrics - STRW has a Zacks Rank of 2 (Buy), indicating a more favorable earnings estimate revision activity compared to NHI, which has a Zacks Rank of 3 (Hold) [3] - STRW's forward P/E ratio is 9.15, significantly lower than NHI's forward P/E of 14.96, suggesting STRW may be undervalued [5] - STRW has a PEG ratio of 1.14, while NHI's PEG ratio is 4.42, indicating STRW's expected earnings growth is more favorable [5] - STRW's P/B ratio is 1.44, compared to NHI's P/B of 2.44, further supporting STRW's valuation attractiveness [6] - Based on these metrics, STRW holds a Value grade of A, while NHI has a Value grade of D, highlighting STRW's superior valuation profile [6] Earnings Outlook - STRW is currently experiencing an improving earnings outlook, which enhances its attractiveness in the Zacks Rank model [7]

Core Viewpoint - Strawberry Fields, Inc. has announced its affiliation with Devereux Advanced Behavioral Health, enhancing its ability to provide services to individuals and families with intellectual and developmental disabilities, autism, and mental health challenges while maintaining its independence and community roots [1][2][4]. Company Benefits - As an affiliate of Devereux, Strawberry Fields will retain its name, employee base, and community partnerships while gaining access to Devereux's national model of clinical and evidence-based best practices, quality and safety programs, and technological and financial infrastructure [2][3][5]. - The ASCEND Career Accelerator Program will provide transformative benefits, including tuition assistance of up to $15,000 for undergraduate and $25,000 for graduate classes annually, along with student loan repayment options [7][8]. Industry Impact - The partnership aims to strengthen community-based supports and specialty mental health services in central Pennsylvania, leveraging Strawberry Fields' expertise in Early Intervention and Fairweather Lodge services [9]. - The affiliation is expected to evolve over the next 12 to 18 months, with an interlocking board model to oversee the partnership, ensuring continued impact and sustainability for both organizations [10].

Company Overview - Strawberry Fields REIT, Inc. is a self-administered real estate investment trust focused on the ownership, acquisition, development, and leasing of skilled nursing and healthcare-related properties [2] - The company's portfolio consists of 130 healthcare facilities with over 14,500 beds across multiple states including Arkansas, Illinois, Indiana, Kansas, Kentucky, Michigan, Missouri, Ohio, Oklahoma, Tennessee, and Texas [2] - The facilities include 118 skilled nursing facilities, 10 assisted living facilities, and 2 long-term acute care hospitals [2] Event Participation - Strawberry Fields REIT will present at the Sequire Investor Summit 2025, scheduled for January 21st-23rd, 2025, at the Condado Vanderbilt Hotel in San Juan, Puerto Rico [1] - The event aims to provide exciting opportunities for funds, companies, and investors [1][2] - The company expresses enthusiasm about sharing its knowledge and expertise during the summit [2] Related Companies - SRAX Inc. is a financial technology company that provides data and insights for publicly traded companies through its Sequire platform [3] - DNA Holdings Venture Inc. focuses on financial innovation through the integration of Web 3, cryptocurrency, AI, and capital markets [3]

Financial Data and Key Metrics Changes - Total assets increased to $661.5 million, up $25.7 million or 4% from the previous quarter [17] - Liabilities rose to $606.3 million, an increase of $21.1 million or 3.6% from the prior quarter [18] - Equity reached $55.2 million, which is $4.6 million or 9.4% higher than the previous quarter [19] - Year-to-date net income for September 2024 was $19.9 million, a $5.5 million or 37.8% increase compared to the same period in 2023 [23] Business Line Data and Key Metrics Changes - The company collected 100% of contractual rents during the quarter [9] - Acquired two skilled nursing facilities in Texas for $15.25 million, expected to increase annual base rents by $1.525 million [11] - Acquired a property in Tennessee for $6.7 million, expected to increase annual rents by $670,000 [12] - Subsequent acquisition of an 86-bed facility in Indiana for $6 million, expected to increase annual rents by $600,000 [13] Market Data and Key Metrics Changes - The company operates 114 facilities across nine states with over 12,800 beds as of September 30, 2024 [8] - Occupancy rates were reported at 70.4%, with expectations for improvement in 2025 [40] Company Strategy and Development Direction - The company aims to grow its asset base, with expectations to close on an additional $110 million of assets in Q4 [25] - Focus on acquiring properties under master leases with third-party operators [29] - The company plans to maintain a consistent dividend policy, with a recent increase to $0.14 per share [14] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about occupancy rates improving due to demographic trends and regulatory changes [42][43] - The company anticipates continued growth in net income and funds from operations (FFO), projecting $125 million in revenue for the next year [28] - Management highlighted the stability of the nursing home business, emphasizing consistent rent collection [49] Other Important Information - The company has established an ATM program to enhance liquidity and financing flexibility [10] - The board authorized a cash dividend increase, marking the fourth increase in nine consecutive quarters of dividend payments [14] Q&A Session Summary Question: Is there a difference in cap rates between regions? - Management indicated that they do not see a significant difference in cap rates across regions, focusing on consistent financial metrics regardless of location [36][38] Question: What are the expectations for occupancy rates in 2025? - Management believes occupancy rates could improve, particularly in urban areas, while rural facilities may take longer to recover [41][42] Question: Will the dividend grow in line with FFO? - Management confirmed that as FFO increases, the dividend is likely to grow correspondingly, maintaining a conservative payout ratio [45]