Q4 2025 Strawberry Fields Reit Inc Earnings Call

February 20, 2026

Speaker #1: Good day, and thank you for standing by. Welcome to the Strawberry Fields Fourth Quarter and Year End 2025 Earnings Conference Call. At this time, all participants are in listen-only mode.

Speaker #1: After the speakers presentation , there will be a question and answer session . To ask a question during the session , you will need to press star one on your telephone keypad .

Speaker #1: I will now hand the call over to Jeff Wagner, Chief Investment Officer. You may begin. All over to Jeff Weiner, Chief Investment Officer.

Speaker #1: You may begin .

Speaker #2: Thank you . And welcome to Strawberry Fields REIT, Inc. year end 2025 Earnings Call . I am the Chief Investment Officer , and joining me today on the call are Mike Shubin , our chairman and CEO .

Jeffrey Bajtner: Thank you, and welcome to Strawberry Fields REIT's year-end 2025 earnings call. I am the Chief Investment Officer, and joining me today on the call are Moishe Gubin, our Chairman and CEO, and Greg Flamion, our CFO. Yesterday, the company issued its year-end 2025 earnings results, which are available on the company's investor relations website. Participants should be aware that this call is being recorded, and listeners are advised that any forward-looking statements made on today's call are based on management's current expectations, assumptions, and beliefs about Strawberry Fields REIT's business and the environment in which it operates. These statements may include projections regarding future financial performance, dividends, acquisitions, investments, returns, financings, and may or may not reference other matters affecting the company's business or the businesses of its tenants, including factors that are beyond its control. Additionally, references will be made during this call to non-GAAP financial results.

Speaker #2: And Greg Flamion , our CFO Yesterday , the company issued its year end 2020 earnings results , which are available on the company's investor relations website Participants should be aware that this call is being recorded and listeners are advised that any forward looking statements made on today's call are based on management's current expectations , assumptions and beliefs about Strawberry Fields REIT, Inc. business and the environment in which it operates These statements may include projections regarding future financial performance , dividends , acquisitions , investments , returns , financings , and may or may not reference other matters affecting the company's business or the businesses of its tenants , including factors that are beyond its control Additionally , references will be made during this call to non-GAAP financial results Investors are encouraged to review these non-GAAP financial measures , as well as the explanation and reconciliation of these measures to the comparable GAAP results included on the non-GAAP measure reconciliation page in our investor presentation And now on to discussing Strawberry Fields REIT, Inc. and our 2025 performance .

Jeffrey Bajtner: Investors are encouraged to review these non-GAAP financial measures, as well as the explanation and reconciliation of these measures to the comparable GAAP results included on the non-GAAP measure reconciliation page in our investor presentation. Now on to discussing Strawberry Fields REIT and our 2025 performance. I wanted to start by sharing some key highlights for the year. Throughout 2025, the company collected 100% of its contractual rents. This is something we are very proud of, as collecting our rents year in, year out, shows our disciplined investment approach works. On 1 January 2025, the company re-tenanted its 10 Kentucky properties, formerly part of the Landmark Master Lease. The new tenant, Hill Valley, has a strong background in operating skilled nursing facilities and was a great fit for this portfolio.

Speaker #2: I wanted to start by sharing some key highlights for the year Throughout 2025 , the company collected 100% of its contractual rents . This is something we are very proud of as collecting our rents year in and year out shows our disciplined investment approach works On January 1st , 2025 , the company ended its ten Kentucky properties , formerly part of the landmark master lease .

Speaker #2: The new tenant, Hill Valley, has a strong background in operating skilled nursing facilities and was a great fit for this portfolio.

Speaker #2: The new rents , the new base rents are $23.3 million a year and are subject to annual increases of 2.5% . The initial lease term is ten years , with 4 or 5 year extension options Also in January , the company entered the state of Kansas by acquiring six facilities consisting of 354 beds for $24 million .

Jeffrey Bajtner: The new rents, the new base rents are $23.3 million a year and are subject to annual increases of 2.5%. The initial lease term is 10 years, with four 5-year extension options. Also in January, the company entered the state of Kansas by acquiring 6 facilities consisting of 354 beds for $24 million. The company entered into a new triple-net master lease with Willie and Michelle Novotny of Advena Care for an initial 10-year term that included two 5-year extension options. In June, the company issued ILS 312 million in Series B bonds on the Tel Aviv Stock Exchange, which is approximately $89.5 million. The bonds are unsecured and were issued at par with a fixed interest rate of 6.7%.

Speaker #2: The company entered into a new triple net master lease with Willie and Michelle Novotny of Advena Care for an initial ten year term that included two five year extension options In June , the company issued a 312 million shekels in series B bands on the Tel Aviv Stock Exchange , which is approximately $89.5 million .

Speaker #2: The bonds are unsecured and were issued at par, with a fixed interest rate of 6.7%. This was the company's sixth series. It completed on the Tel-Aviv Stock Exchange.

Jeffrey Bajtner: This was the company's sixth series it completed on the Tel Aviv Stock Exchange since the company was founded in 2015, and we look forward to maintaining this long-standing relationship that Marsh has grown into future series. In July, the company completed a $59 million acquisition of 9 skilled nursing facilities, comprised of 686 beds located in Missouri. Eight of the facilities were leased to The Tide Group, led by Brian Ramos, and were added to its existing master lease the company entered into in August 2024. The ninth facility was leased to an affiliate of Reliant Care Group, led by Rick and Nick Destefani, and were added to their master lease the company assumed in December 2024. This deal highlights the company's goal to grow its master leases.

Speaker #2: Since the company was founded in 2015 , and we look forward to maintaining this long standing relationship that has grown into future series In July , the company completed the $59 million acquisition of nine skilled nursing facilities comprised of 686 beds located in Missouri Eight of the facilities were leased to the Tai Group , led by Brian Ramos , and were added to its existing master lease .

Speaker #2: The company entered into, in August of 2020, a lease for the facility to an affiliate of Reliant Care Group, led by Rick and Nick DiStefano, and it was added to their master lease.

Speaker #2: The company assumed in December 2024 . This deal highlights the company's goal to grow its master leases when there is a deal , and an existing state , or with an existing operator .

Jeffrey Bajtner: When there is a deal in an existing state or with an existing operator, it is very easy for the company to get the deal done. It's almost like plug-and-play, as we do not need to renegotiate the lease or other terms with our tenant. We can simply add the new facility to the existing master lease, and business goes on as usual. During 2025, the company continued to pay a dividend of around 5%. We started in Q1 with a dividend of $0.14 per share, and in August, the board of directors increased the dividend by $0.02 to $0.16, to $0.16 per share, which represented a 14% increase.

Speaker #2: It is very easy for the company to get the deal done. It's almost like plug and play, as we do not need to renegotiate the lease or other terms with our tenant.

Speaker #2: We can simply add the new facility to the existing master lease and business goes on as usual. During 2025, the company continued to pay a dividend of around 5%.

Speaker #2: We started in Q1 with a dividend of $0.14 a share , and in August the board of directors increased the dividend by $0.02 to $0.16 to $0.16 a share , which represented a 14% increase .

Speaker #2: As a final point, as we detailed in our earnings release yesterday, and as both Mike and Greg will discuss further, 2025 was the best year the company has had since.

Jeffrey Bajtner: As a final point, as we detailed in our earnings release yesterday, and as both Marsh and Greg will discuss further, 2025 was the best year the company has had since its inception. Over the last five years, the company has had 13+% growth of the adjusted FFO, adjusted EBITDA, and the average base rents. I believe that these numbers reflect the success of the company's disciplined investment approach and our ability to close on deals that are accretive to the balance sheet. I would now like to have Greg Flamion, our Chief Financial Officer, discuss the year-end financials.

Speaker #2: Since its inception Over the last five years , the company has the company has had 13 plus percent growth of the adjusted FFO , adjusted EBITDA and the average base rents .

Speaker #2: I believe that these numbers reflect the success of the company's disciplined investment approach, and our ability to close on deals that are accretive to the balance sheet.

Speaker #2: I would now like to have Greg Fleming on our chief Financial officer discuss the year end financials

Speaker #3: Thank you and welcome , everyone to the Strawberry Fields fourth quarter earnings call . Let's begin with a look at our balance sheet Total assets are $885 million , an increase of $97.9 million or 12.4% , compared to December 31st , 2020 .

Greg Flamion: Thank you, Jeff, and welcome everyone to the Strawberry Fields REIT's fourth quarter earnings call. Let's begin with a look at our balance sheet. Total assets are $885 million, an increase of $97.9 million, or 12.4%, compared to 31 December 2024. Our asset growth was driven by a couple of key factors. First is our recent real estate acquisitions. This includes $112 million of acquisitions in 2025. Second is the retenanting of key leases, namely the Landmark Master Lease into the Kentucky Master Lease. On the liabilities and equity side, increases were driven by financing activity associated with our acquisitions, along with the impact of foreign currency translation adjustments. Together, both of these factors contributed to the overall growth in our debt balances.

Speaker #3: For our asset growth, it was driven by a couple of key factors. First is our recent real estate acquisitions. This includes $112 million of acquisitions in 2025.

Speaker #3: Second is the retention of key leases, namely the landmark master lease into the Kentucky Master Lease, and the liabilities and equity side increases were driven by financing activity associated with our acquisitions, along with the impact of foreign currency translation adjustments. Together, both of these factors contributed to the overall growth in our debt balances.

Speaker #3: Equity declined , reflecting lower other comprehensive income , driven again by the foreign currency translation adjustments Continuing now to the consolidated statement of income 2025 , revenue was $155 million , up $37.9 million compared to December 31st , 2024 .

Greg Flamion: Equity declined, reflecting lower other comprehensive income, driven again by the foreign currency translation adjustments. Continuing now to the consolidated statement of income. 2025 revenue was $155 million, up $37.9 million compared to 31 December 2024. This represents a 32.4% increase, which was driven by the timing and integration of properties acquired in 2024 and 2025, and the Landmark to Kentucky Master Lease retenanting that began in January 2025. While we experienced higher revenues, the income growth was offset by higher depreciation, amortization, and interest expense, which is driven by new property acquisitions. This results in a year-to-date net income of $33.3 million, or $0.60 per share, compared to $26.5 million, or $0.57 per share in 2024.

Speaker #3: This represents a 32.4% increase, which was driven by the timing and integration of properties acquired in 2024 and 2025, and the landmark Kentucky Master Lease retention team that began in January 2025.

Speaker #3: While we experienced higher revenues , the income growth was was offset by higher depreciation , amortization and interest expense , which is driven by new property acquisitions This results in a year to date net income of $33.3 million , or $0.60 per share , compared to 26.5 million , or $0.57 per share , in 2024 .

Speaker #3: Finally , I would like to end my presentation with some financial highlights . Our 2025 AFO is $72.5 million . This is a growth of 29.8% versus 2024 , and represents a 13.3% compound annual growth rate The 2025 adjusted EBITDA is $125.3 million .

Greg Flamion: Finally, I'd like to end my presentation with some financial highlights. Our 2025 AFFO is $72.5 million. This is a growth of 29.8% versus 2024 and represents a 13.3% compound annual growth rate. The 2025 adjusted EBITDA is $125.3 million. This represents a 38.2% increase compared to 2024, and a 13.5% compound annual growth rate. Our net debt to net asset ratio currently sits at 49.5%. As of 31 December 2025, our dividend was $0.16 a share, representing a 4.9% yield and an AFFO payout of 46%. This concludes the financial portion of the earnings call presentation. I'll now turn it back to Jeff, who will walk us through additional portfolio highlights.

Speaker #3: This represents a 38.2% increase compared to 2024, and a 13.5% compound annual growth rate. Our net debt to net asset ratio currently sits at 49.5% as of December 31, 2025.

Speaker #3: Our dividend was $0.16 a share, representing a 4.9% yield, and an FFO payout of 46%. This concludes the financial portion of the earnings call presentation.

Speaker #3: I'll now turn it back to Jeff, who will walk us through additional portfolio highlights.

Speaker #2: Thank you Greg . Our portfolio highlights are as follows . Currently , our portfolio has 143 facilities located in ten states , which comprises 16,602 licensed beds .

Jeffrey Bajtner: Thank you, Greg. Our portfolio highlights are as follows. Currently, our portfolio has 143 facilities located in 10 states, which comprises 16,602 licensed beds. The total value of our portfolio to acquisition is $1.1 billion, but if you take the value of our portfolio based on the leases, that amount is closer to $1.5 billion. There are 17 consultants advising to our operators. Our weighted average lease term is 7.2 years. I am happy to report that our tenants continue to do well, and our EBITDA on rent coverage as of 30 November was 2.07. Our net debt to EBITDA is 5.7. As I mentioned earlier, we continued to collect 100% of our rents.

Speaker #2: The total value of our of our portfolio at acquisition is $1.1 billion . But if you take the value of our portfolio based on the leases , that amount is closer to $1.5 billion .

Speaker #2: There are 17 consultants advising tour operators . Our weighted average lease term is 7.2 years . I am happy to report that our tenants continue to do well in our EBITDA and rent coverage .

Speaker #2: As of November 30th was 2.07 . Our net debt to EBITDA is 5.7 . As I mentioned earlier , our we continue to collect 100% of our rents .

Speaker #2: And as a final point , our acquisition pipeline remains strong at $250 million . As Mike and I have mentioned in the past , for us to close on a deal , it has to meet .

Jeffrey Bajtner: And as a final point, our acquisition pipeline remains strong at $250 million. As Marsh and I have mentioned in the past, for us to close on a deal, it has to meet, it has to meet our disciplined investment approach, which is a 10, a 10 cap at acquisition. And with that, I pass it on to Moishe Gubin, our Chairman and CEO, to continue the presentation.

Speaker #2: It has to meet our disciplined investment approach , which is , again , a ten cap at acquisition . And with that , I pass it on to Mike , our chairman and CEO , to continue the presentation

Speaker #4: Okay . Thank you . Thank you , Jeff , as Jeff mentioned , this was a great year for our best year we've ever had .

Moishe Gubin: Okay. Thank you. Thank you, Jeff. As Jeff mentioned, this was a great year for our best year we've ever had, and it was a great year for our AFFO growth, where we had a 13.3, which is the average growth rate over the last six years, but proudly from $38 million to $72 million. These are good, these are really good numbers that we're very proud of. On the next slide, we got base rent. Again, 13.4% growth rate, almost double like the last one. Very similar numbers, from $75 million in 2020 to $142.675 million. These are, these are good numbers that we're very happy with.

Speaker #4: And it was a great year for our AFFO growth, where we had a 13.3%, which is the average growth rate over the last six years.

Speaker #4: But proudly from 38 million to 72 million . These are good . These are really good numbers that we're very proud of . The next slide we got base rent again 13.4% growth rate almost double like the last one .

Speaker #4: Very similar numbers from 75,000,000 in 20 20 to 142 million 675 . These are these are good numbers that we're very happy with .

Moishe Gubin: And on the next slide, we talk about our stock price, which in December, we hit an all-time high. We've got to $14 a share, and we're still way undervalued. We believe that our stock value is, you know, closer to 18, 19, 20 per share. Our stock is still, is still straggling behind our peers. But, you know, we figure we'll keep doing what we're doing. Fundamentally, strong business, and God willing, eventually everything will get caught up, get caught up to us. You could see on the next slide how the AFFO multiples, for us, we're at the lowest of everybody at 9.5x. And CareTrust, or even Sabra is at 12.8, and CareTrust is at almost 20x. They're doing really good. They're happy for them.

Speaker #4: And on the next slide, we talk about our stock price, which in December we hit an all-time high. We got to $14 a share.

Speaker #4: And we're still way undervalued . We believe that our stock value is , you know , close to 18 , 19 , 20 .

Speaker #4: Share . Our stock is still is still straggling behind our peers . But you know we figure we'll keep doing what we're doing fundamentally strong business .

Speaker #4: And God willing , eventually everything will get caught up , get caught up to us . You could see on the next slide how the AFFO multiples for us .

Speaker #4: We're at the lowest of everybody, at nine and a half times, and Care or even Sabra is at 12.8, and CareTrust is at almost 20 times.

Speaker #4: They're doing real good . I'm happy for them . They're good people . The return on the stock , you know , 30% return this year , that's pretty good .

Moishe Gubin: They're good people. The return on the stock, you know, 30% return this year, that's pretty good. We're happy about that. Though we feel that when the market truly gets to where we're supposed to be, we'll see a nicer pop than 30%. That being said, the next slide, our AFFO payout ratio continues to be the lowest, where we're paying out 47%, or close to 47% of our AFFO, using the rest of the money to pay down debt as a placeholder, but to be able to use it to buy more assets.

Speaker #4: We're happy about that , though . We feel that when when the market truly gets to where we're supposed to be , we'll see a nicer pop than 30% .

Speaker #4: That being said , the next slide our AFFO payout ratio continues to be the lowest we're paying out of 47% or close to 47% of our AFO .

Speaker #4: Using the rest of the money to pay down debt as placeholder . But to be able to use it to buy more assets or dividend yield , because we're still , you know , there the package care , trust and us about 5% .

Moishe Gubin: Our dividend yield, because we're still, you know, the pack at CareTrust, HI and us, at 5%, and we feel that that's a good place to be, especially when we're able to go take the money and put the money out the door at a 10 cap, where we get to get a blended return. At this point, we're a blended return of about 17 to 18%, which is what it's been, and we're very happy about that. Really, it's a very calm portfolio, collecting our rents, doing what we're doing, growing when we can. We're still anticipating guidance of being able to grow $100 to $150 million a year.

Speaker #4: And we feel that that's a good place to be, especially when we're able to go take the money and put the money out the door at a 10 cap, where we get to get a blended return.

Speaker #4: At this point , we're blended . Return of about 17 to 18% , which is what it's been . And we're very happy about that .

Speaker #4: Really . It's a very calm Calm portfolio , collecting our rents , doing what we're doing , growing when we can . We still we're still we're still anticipating guidance of being able to grow 100 to $150 million a year .

Speaker #4: We hope to beat that . And we had a deal that we that that fell through , that we were we were going to announce that $890 million deal .

Moishe Gubin: We hope to beat that, and we had a deal that fell through, that we were going to announce an $8 to 9 million deal. I was so happy to go get that and get it out of the way earlier in the year, but that fell apart unfortunately. But God willing, we will be able to hit our targets of between $100 and 150 million this year. The next slide really just talks about how we're still the pure play skilled nursing facility healthcare REIT. We were recently at a convention, and we asked, you know, investors and others if they thought we were doing the right thing, and everybody across the board said, "No, you keep doing what you're doing.

Speaker #4: I was so happy to go get that and get it out of the way, earlier in the year. But that fell apart.

Speaker #4: Unfortunately . But God willing , God willing , we will . We will be able to hit our targets of 200 , $150 million this year .

Speaker #4: The next slide really just talks about how we're still the pure play skilled nursing facility , healthcare REIT . We were recently at a convention and we asked , you know , investors and others if they thought we were doing the right thing And everybody across the board said , no , you keep doing what you're doing as the pure play .

Moishe Gubin: As the pure play, people will gravitate towards you." So we feel like we're gonna just keep sticking with our guns and how we do things and what we're buying, and we should be able to continue staying above 90%, in skilled nursing facilities. The next slide really just talks about the coverage. Our rent coverage is over 2x. Rent is pretty good. We're happy with that, and hopefully, that'll continue. Our AFFO focus share growth, you can see we're the highest. Proud of that as well, 12.8% over the last 5 years. It's good. We're, we're running a nice, clean business, as you guys know, and we expect things to be able to stay the same or improve going forward.

Speaker #4: People will gravitate towards you. So we feel like we're going to just keep sticking with our guns and how we do things and what we're buying, and we should be able to continue staying above 90%.

Speaker #4: And skilled nursing facilities. The next slide really just talks about the coverage. Our rent coverage is over two times. Rent is pretty good.

Speaker #4: We're happy with that, and hopefully that'll continue our FFO share growth. You can see we're the highest—proud of that as well.

Speaker #4: 12.8% over the last five years . It's good . We're we're running a nice clean business . As you guys know , and we expect things to be able to stay the same or improve going forward .

Speaker #4: On on this slide 12 , we're just showing how our debt maturities schedule is , is currently in the next few weeks . Me and the team are heading to Israel .

Moishe Gubin: On this slide 12, we're just showing how our debt maturity schedule is currently. In the next few weeks, me and the team are heading to Israel, and at the same time, we should be announcing that we are entering into a term sheet with a bank for the unsecured line of credit and term loan, which we've talked about over the last few years. So we expect in the next 45 to 60 days to be able to have most of our debt cleaned up and pushed off to have almost equal maturities over the next four or five years. And so we're really happy about that and pushing that for a while.

Speaker #4: And at the same time, we should be announcing that we are entering into a term sheet with a bank for the unsecured line of credit and term loan, which we talked about over the last few years.

Speaker #4: So we expect, in the next 45 to 60 days, to be able to have most of our debt cleaned up and pushed off, to have almost equal maturities over the next four or five years.

Speaker #4: And so we're really happy about that. I've been pushing that for a while. We will have a bunch of availability under our line of credit once it's done to, you know, over $100 million.

Moishe Gubin: We will have a bunch of availability under our line of credit once it's done to, you know, over $100 million, so it'll help us... Actually, the most important thing that it'll probably help us with is that, it'll be able to tell, you know, potential investors that, you know, we'll tell them that, "Look, we have cash. We're able to get a deal done." And so if you're worried about our growth, besides looking at our previous history, where we've been growing nicely year-over-year, they'd be able to say, "Okay, they have the cash to be able to grow." I want to try to get rid of all these impediments that the stock will have less, you know, pressure to not improve. Slide 13 has become my favorite slide.

Speaker #4: So, it'll help us. Actually, the most important thing that it will probably help us with is that it'll be able to tell, you know, potential investors that, you know.

Speaker #4: Will tell them that , look , we have cash . We're able to get a deal done . And so if you're worried about our growth , besides looking at our previous history where we've been growing nicely year over year , they'd be able to say , okay , they have the cash to be able to grow .

Speaker #4: I want to try to get rid of all these impediments that the stock will have less , less , you know , pressure to to not to not improve .

Speaker #4: Slide 13 has become my favorite slide. This just shows how diversified we are by state, where the largest concentration is Indiana, which is our best state, which is good.

Moishe Gubin: This just shows how diversified we are by state, where the largest concentration is Indiana, which is our best state, which is good, good situation to be in. Everybody else is in the low double digits. And you see it's pretty evenly dispersed throughout the states, and by consultants in the states. So this is good. Hopefully, this is the year we'll add maybe one or two more states, and that'll be great, and we'll continue to diversify this pie graph.

Speaker #4: Good situation to be in . Everybody else is in the is in the low double digits . And you see it's pretty evenly dispersed throughout the States .

Speaker #4: And by by consultants in the States . So this is good . Hopefully , hopefully this is the year we'll add maybe 1 or 2 more states and that'll be that'll be great .

Speaker #4: And we'll continue to diversify this pie graph . Lastly for me slide 14 . This just just shows you I'm colorblind . But I know that basically what we do has been where we bring in regional operators .

Moishe Gubin: Lastly, for me, slide 14, this just, just shows you—I'm colorblind, but I know that basically what we do has been where we bring in regional operators, and the colors should indicate that, you know, through all of our operators and, and portfolios, we're growing and we're staying in, you know, little pockets of by each state. And hopefully, that'll continue. And things are going great. The bottom, bottom, bottom pie graph just continues to drive home the point of how we're the pure play SNF, healthcare REIT, and we're gonna continue to stay the same way that we are. Okay, and with that, and with that, I'll hand it back to the operator for any questions. I wanna thank everybody again for, for joining us today, and I will answer whatever questions that anybody has.

Speaker #4: And the color should indicate that , you know , through all of our operators and , and portfolios , we're growing and we're staying in , you little pockets of by each state .

Speaker #4: And hopefully that will continue . And things are going great . The bottom , bottom bottom graph just continues to drive home the point of how we're the pure play sniff healthcare REIT .

Speaker #4: And we're going to continue to stay the same way that we are . Okay . And with that and with that , I'll hand it back to the operator for any questions .

Speaker #4: I want to thank everybody again for joining us today. And I will answer whatever questions that anybody has.

Speaker #1: Thank you. So, a reminder to ask a question at this time: you will need to press *11 on your telephone keypad.

Operator: Thank you. As a reminder, to ask a question at this time, you will need to press star one one on your telephone keypad. Please stand by while we compile the queue faster. First question will come from the line of Richard Anderson with Cantor Fitzgerald. Your line is now open.

Speaker #1: Please stand by while we compile the Kinemaster. The first question will come from the line of Richard Anderson with Cantor Fitzgerald. Your line is now open.

Speaker #5: Hey , good morning everyone . Great great quarter . So if I could ask a sort of mathematical question first , the the EBITDA with an M coverage of 2.07 times , what does that equate to on a daily basis in your mind

Richard Anderson: Hey, good morning, everyone. Great, great quarter. So, if I could ask a sort of mathematical question first. The EBITDARM with an M coverage of 2.07 times, what does that equate to on a EBITDAR basis in your mind?

Moishe Gubin: So one of you guys want to answer that, or you want me to answer that?

Speaker #4: So, what do you guys want to answer that you want me to answer that?

Moishe Gubin: So one of you guys want to answer that, or you want me to answer that?

Jeffrey Bajtner: I could get you that in one second. Do you want to go to the next question? I'll get that for you.

Speaker #2: I could get you that in one second . If you want to go to the next question , I'll get that .

Jeffrey Bajtner: I could get you that in one second. Do you want to go to the next question? I'll get that for you.

Speaker #5: For you . Sure . Another mathematical one . And then I'll get a bigger picture . One for Moshe . But what with , you know , the very attractive payout ratio of 47% .

Richard Anderson: Sure. Another mathematical one, and then I'll—I got a bigger picture one for Moishe. But, with a, you know, the very attractive payout ratio of 47%, what does that equate to from a free cash flow available to you after dividend, which is, you know, zero cost of capital, essentially? And, you know, where do you see, you know, that sort of growing to over the course of time? And, you know, what are the pressures on you to have to raise the dividend, to maintain some sort of REIT, you know, standard, as it relates to dividend payout?

Speaker #5: What does that equate to from a free cash flow available to you after dividend , which is , you know , zero cost of , of capital , essentially .

Speaker #5: And you know , where do you where do you see , you know , that sort of growing to over the course of time .

Speaker #5: And you know, what are the pressures on you to have to raise the dividend to maintain some sort of, you know, standard as it relates to dividend payout?

Speaker #4: So, the number is right around $40 million after everything is said and done that we are stockpiling. But you know, the pressure is based on REIT rules.

Moishe Gubin: So, the number is right around $40 million after everything is said and done that we are stockpiling. But you know, the pressure based on REIT rules, I mean, we're at about 100% of distribution, so like, we have room if we wanted to hold back. But you know, as we make more money, you know, we're trying to build up a following in the marketplace that says, "Okay, we could trust these guys, that every year they're the same or more." And so we want to have an annual increase every year. The bigger fights in the board meetings have been how much the increase should be, whether it be one cent, two cent, or more.

Speaker #4: I mean we're at about 100% of of distribution . So like we have room if we wanted to hold back . But you know , as we make more money , you know , we're trying to build up a , a a following in the marketplace that says , okay , we could trust these guys that every year they're the same or more .

Speaker #4: And so we want to have an annual increase every year. The bigger fights in the board meetings have been how much the increase should be, whether it be $0.01, two cents, or more.

Moishe Gubin: And again, you know, I'm actually the one who's pushing not to, you know, go crazy on the dividend from the point of view of... Because if, God forbid, we're not able to meet it one time, I don't want to be erratic and then lower it. And I want to be able to always be relied upon, that you'll know that my, that the dividend, if you're investing in our company, you know you're gonna get at least this or more, going forward annually. And so that's what I've been protective of, and so far, we've been, you know, you know, doing it exactly that way for four years at this point, almost, I think, and it's been good.

Speaker #4: And again , you know , I'm I'm actually the one who's pushing not to not to , you know , go crazy on on the dividend from the point of view of because if , God forbid , we're not able to meet it one time , I don't want to be erratic and then lower it .

Speaker #4: And I want to be able to always be relied upon that you'll know that my that the dividend , if you're investing in our company , you know you're going to get at least this or more going forward annually .

Speaker #4: And so that's what I've been protective of . And so far we've been we've been , you know , you know , doing it exactly that way for four years at this point almost I think and and it's been good .

Speaker #4: And so , you know , that that 40 , you know , equates to being able to buy , you know , you know , easily $80 million and , you know , and whatever else we need to supplement with , we could we could supplement .

Moishe Gubin: And so, you know, that, that 40, you know, equates to being able to buy, you know, easily $80 million and, you know, and whatever else we need to supplement with, we could, we could supplement. Well, first of all, since we're paying down a bunch of debt every year, we could draw on, on the debt to keep our-- because our leverage stay is below 50 or right around 50%, and we could then still draw on, draw on the, those lines and, you know, ratchet back up to 50 and draw on that to be able to close deals. So I think I answered, and it's good to hear your voice, Rich.

Speaker #4: Well , first of all , since we're paying down a bunch of debt every year , we could draw on on the debt to keep our because our leverage today is below 50 or right around 50% .

Speaker #4: And we could then still draw on draw on those lines . And you know , ratchet back up to 50 and draw on that to be able to close deals .

Speaker #4: So I think I answered, and good to hear your voice, Rich.

Speaker #5: Yeah. And Jeff, do you have an answer for the DA?

Richard Anderson: Yeah. And, Jeff, you got an answer for the EBITDAR?

Speaker #6: Yes .

Jeffrey Bajtner: Yes.

Richard Anderson: Yeah.

Speaker #2: Our EBITDA coverage is 1.6.

Jeffrey Bajtner: Our EBITDAR coverage is 1.6x.

Richard Anderson: 1.6. Okay, and then last for me, Moishe, you know, the news out there today on Medicare Advantage, sort of flat, for next year. Wondering, you know, what your exposure is to MA in the portfolio and what concerns you might have that fee for service Medicare, to the extent you have any, you know, major exposure, is kind of a risk to the industry, if not necessarily directly at you. Thanks.

Speaker #5: Okay . And then last for me , the the you know , the news out there today on Medicare Advantage sort of flat for next year Wondering you know what your exposure is to Ma in the portfolio and what concerns you might have that fee for service Medicare to the extent you have any you know , major exposure is is kind of a risk to the industry .

Speaker #5: If not necessarily directly at you . Thanks .

Speaker #4: Yeah . So that's a good question . If it talking about context of strawberry , you know , we don't have any shop in our portfolio .

Moishe Gubin: Yeah. So that's a good question. If, in, in talking about context of Strawberry, you know, we don't have any shop in our portfolio. We don't have any of our rents that are, you know, predicated on results of our tenants and our rent changing up or down as bonus rent or not bonus rent. So we don't have-- we don't suffer from that at all. And the fact that, you know, the coverage, is a 1.6, like Jeff said, is an EBITDAR, and I would have thought it was, it was, would have been a little bit lower, but actually, I'm happy that's 1.6. 2.07 is the number we're actually, you know, looking at.

Speaker #4: We don't have any of our rents that are predicated on results of our tenants, and our rent isn't changing up or down as bonus rent or not.

Speaker #4: Bonus rent . So we don't have we don't suffer from that at all . And the fact that , you know , the coverage is a 1.6 , like Jeff said , is an EBITDA .

Speaker #4: And I would have thought it was it was would have been a little bit lower . But actually I'm happy that it's 1.6 , 2.07 is the number we're actually , you looking at .

Speaker #4: But the point is , is that , you know , we don't we don't have any of those risks in our portfolio . And and because of the master leases , you know , individual facilities that might be marginal , you know , the overall portfolio of everyone of our tenants are doing well .

Moishe Gubin: But the point is that, you know, we don't have any of those risks in our portfolio, and because of the master leases, you know, individual facilities that might be marginal, you know, the overall portfolio of every one of our tenants are doing well. So, you know, a lot of these things, you know, are just. They happen one year, and then next year, they'll raise the number for the increase, you know, to make up for the year before. So I'm not too worried about it.

Speaker #4: So , you know , a lot of these things , you know , are just they they happen in one year . And then next year they'll they'll raise the number for the increase , you know , to make up for , for the year before .

Speaker #4: So I'm not I'm not too worried about it . You know , some of the other rates that are out there , you know , they , they , they're more they're more connected to the operator as far as operator results .

Moishe Gubin: You know, some of the other REITs that are out there, you know, they-- they're more, they're more connected to the operator as far as the operator results, and they all-- they'll probably suffer a little bit, but in the grand scheme of things, it'll bounce back. You know, this has been, this has been the way it's gone, you know, not even administration to administration, year to year in the same administration that's gone, because then they realize, you know, the operators can't live.

Speaker #4: And they they'll probably suffer a little bit . But in the grand scheme of things , it'll bounce back . You know , this has been this has been the way it's gone .

Speaker #4: You know , not even administrator administration to administration year to year in the same administration . That's gone because then they realize , you know , the the operators can't live .

Speaker #4: They rely on Medicare to help supplement the shortfall that Medicaid has . And , you know , as time has gone on , they've squeezed that the that the operator makes , you know , less and the operators are okay with that .

Moishe Gubin: They rely on Medicare to help supplement the shortfall that Medicaid has, and, you know, as time has gone on, they've squeezed that the operator makes, you know, less, and the operators are okay with that, I guess, today where it is, but it's still, you know, they work in tandem, and when the nursing homes get squeezed too much from the government, they're not, you know, where it's short, right? They go back, and then the government fixes it. And so I'm not too worried in the grand scheme of things.

Speaker #4: I guess today where it is . But it's still you know , it's they they work in tandem . And when the nursing homes get squeezed too much from the from the government , they're not , you know , where it's short , right .

Speaker #4: They go back and then the government fixes it . And so I'm not too worried in the grand scheme of things . Again , you know , we're we're in an industry .

Moishe Gubin: Again, you know, we're in an industry, you know, we've talked about the Silver Tsunami, that we're in an industry where we're a necessary business, that, you know, the nursing homes need to take care of people, and people need to be taken care of. The nursing homes are the least expensive model to be able to take care of people. And so, and we provide the role as the REIT to be the landlord and provide the capital, so somebody that's an operator doesn't have to put the money in and buy the real estate and, you know, we have a very simple model that's been working so effectively for so many years, and that should hopefully continue.

Speaker #4: We you know , we've talked about the silver tsunami that in an industry where we're a necessary business that , you know , the nursing homes need to take care of people and people need to be taken care of .

Speaker #4: The nursing homes are the least expensive model to be able to take care of people . And so and we provide the role as the REIT to to be the landlord and provide the capital .

Speaker #4: So somebody that's that's an operator doesn't have to put the money in and buy the real estate . And , you know , we have a very simple model that's been working so effectively for so many years .

Speaker #4: And that should hopefully continue.

Speaker #5: Okay. Great. Thanks very much.

Jeffrey Bajtner: Okay, great. Thanks very much.

Speaker #4: Thank you .

Moishe Gubin: Thank you.

Speaker #6: You

Speaker #1: My next question, coming from the line of Cara Minum with Alliance Global Partners, the line is now open.

Operator: Our next question coming from the line of Gaurav Mehta with Alliance Global Partners. The line is now open.

Speaker #7: Yeah . Thank you . Good morning . I wanted to ask us balance sheet for the 2026 debt maturing . We do expect the new rates to be compared to the maturing debt .

Gaurav Mehta: Yeah, thank you. Good morning. I wanted to-

Moishe Gubin: Good morning.

Gaurav Mehta: to the balance sheet for the 2026 debt maturing. Would you expect the new rates to be compared to the maturing debt?

Speaker #4: So . So we modeled out that that the line of credit debt is going to come back in at Sofr 270 about . So for 265 275 , right around there and that the bond debt is going to come in around six and a quarter .

Moishe Gubin: So we modeled out that the line of credit debt is gonna come back in at SOFR 270 about, SOFR 265, 275, right around there, and that the bond debt's gonna come in around 6.25. So assuming we pay off the conventional that today is sitting at three, SOFR 3, 3.25, let's say, is a blended. So that'll go from SOFR 3, 3.25 to, you know, we'll say probably 50 basis points about that on that. Was it like $160 million or so, or whatever the number is? And then for the bond debt, we'll see a savings of a drop. It's not gonna be a big...

Speaker #4: So assuming assuming we we we pay off the conventional that today is sitting at three . So for three , three and a quarter , let's say is a blended .

Speaker #4: So that go—that'll go from, you know, say, three, three and a quarter, to, you know, we'll say probably 50 basis points above that.

Speaker #4: On that was like 160 million or so or whatever . That number is . And and then for the , for the bond debt , we'll see .

Speaker #4: We'll see a savings of a drop . It's not going to be a big not a big savings . But it'll extend the maturity out , you know , 4 or 5 years .

Moishe Gubin: Not a big savings, but it'll extend the maturity out, you know, 4 or 5 years, and nice and clean. And it also, at this point, it'll be helpful for refinancing that, because then I don't have to deal with the currency. Right now, the US dollar is weak, and the shekel is strong, and so I need to kick that can down the road so that I'm not stuck using dollars to pay off, pay off, shekel debt. And so, because in the grand scheme of things, the shekel will drop at some point, and the US dollar will strengthen. It's inevitable. And when that happens, we'll make a bunch of money on the currency exchange too.

Speaker #4: And nice and clean. And also, at this point, it'll be helpful for refinancing that, because then I don't have to deal with the currency. Right now, the dollar is weak and the shekel is strong.

Speaker #4: And so I need to kick that can down the road so that I'm not stuck using dollars to pay off—pay off shekel debt.

Speaker #4: And so because in the grand scheme of things , the shekel will will drop at some point and the dollar will strengthen its inevitable .

Speaker #4: And when that happens, we'll make a bunch of money on the currency exchange too.

Speaker #7: All right . That's that's great . Great color . Second question on the for Q . In the PNA , was there any one time items that you guys reported and then going forward , the run rate for AFFO per share is for Q the right number

Gaurav Mehta: All right, that's great, great color. Second question on the Q4 financials. In the G&A, was there any one-time items that you guys reported? And then going forward, the run rate for AFFO per share, is Q4 the right number?

Speaker #4: Greg, you want to answer that?

Moishe Gubin: Greg, you want to answer that?

Speaker #3: Sure . So , yeah , in the in the we did have I let's just say a one time item . We had and some additional payroll that came through in Q4 due to additional executive compensation .

Greg Flamion: Sure. So yeah, in the G&A, we did have, I think this is a one-time item. We had and some additional payroll that came through in Q4 due to additional executive compensation. So that was a little bit higher than what we were expecting to come in, I guess, from earlier on in the year. However, looking, I guess, looking at the payroll going forward, we think that it's not gonna be, we don't expect any further increases going into 2026. So-

Speaker #3: So, that was a little bit higher than what we were expecting to come in, I guess, from early on in the year.

Speaker #3: However , looking I guess looking at the payroll , going forward , it we think that we think that that it's it's it's not going to be we don't expect any further increases going into 2026 .

Speaker #4: So basically what what the one time event is , I finally got a raise . I've been paid $300,000 a year for the last 15 years or something like that .

Moishe Gubin: So basically, Gaurav, what the one-time event is I finally got a raise. I've been paid $300,000 a year for the last 15 years or something like that. They finally gave me a compensation committee decided to give me a raise to $700,000, which I think I'm still way underpaid. Doesn't make a difference to me. But the reality is I think that in the Q4, they recorded somewhere between. And it went back, they did retroactively to, like, 18 months. So I think they recorded about $1 million or a million one in a one-time thing. Our running go-forward, you know, we ended up the year with an AFFO of $1.30.

Speaker #4: And they finally gave me a compensation committee , decided to give me a raise to 700,000 , which I think I'm still way underpaid , doesn't make a difference to me , but reality is , is I think in in fourth quarter , they recorded they recorded somewhere between and it went back .

Speaker #4: They did retroactively to like 18 months . So I think they recorded about $1 million or 1,000,001 in , in a one time thing .

Speaker #4: Our running our go forward and we ended up the year with , with an with with an O of $1.30 . We should we should we should be dead easily and in 26 .

Moishe Gubin: We should beat that easily in 2026.

Speaker #7: All right . Thank you . That's all I had .

Gaurav Mehta: All right. Thank you. That's all I had.

Speaker #4: Thank you. Have a good weekend.

Moishe Gubin: Thank you. Have a good weekend.

Speaker #1: Our next question comes from the line of Mark Smith with Lake Street . Is now open .

Operator: Our next question coming from the line of Mark Smith with Lake Street. Your line is now open.

Speaker #8: Hi , guys . I wanted to ask first about the acquisition pipeline . You know , have you seen any changes in this pipeline either in volume or valuations and , you know , is the only real potential impediment to continued growth through acquisitions ?

Mark Smith: Hi, guys. I wanted to ask first about the acquisition pipeline. You know, have you seen any changes in this pipeline, either in volume or valuations? And, you know, is the only real potential impediment to continued growth through acquisitions really just access to capital? Or, you know, any thoughts on kind of continued growth through acquisitions in your pipeline would be great.

Speaker #8: Really, just access to capital or any thoughts on kind of continued growth through acquisitions in your pipeline would be great.

Speaker #4: So so I'll answer that . And then and then Jeff will add to it . Give him a little time to think because he's not as fast and as speed as I am .

Moishe Gubin: ... So I'll answer that, and then Jeff will add to it. Give him a little time to think because he's not as fast on his feet as I am. So the starting point is we've never had an impediment as far as cash. We are confident, and we know that, you know, debt markets and, you know, I don't wanna sell equity at such a cheap price, but reality is, you know, we have we keep track of what our NAV is, and worst-case scenario, if we had to sell equity, you know, above NAV, it's still it's still accretive. It's just it doesn't feel right doing it, but the point is, we could always do that.

Speaker #4: So the , the , the starting point is we've never had an impediment as far as , as far as cash . We we are confident and we know that , you know , debt markets and and you know , I don't want to sell equity at such a cheap price .

Speaker #4: But reality is , is , you know , we have we keep track of what our , what nav is . And worst case scenario , if we had to sell equity , you know , above nav , it still it's still accretive .

Speaker #4: It's just not it doesn't feel right doing it . But but the point is we could always do that . We we've we've over the years you know , we've stayed very disciplined as you guys know .

Moishe Gubin: We've, we've over the years, you know, we've stayed very disciplined, as you guys know, and lately, the deals that I'm seeing personally are sale-leaseback deals. Seems to be a ton of that. And so this year, most likely, which will be a little bit different, it's the same math, but a little bit different of an operator, where it's gonna be the same operator in a spot that we could tell you—we could tell somebody historically, this is what they're doing, and this is how they're operating, this is how much money they're making, and then we're gonna rebalance them to, you know, 1.25, which is how we underwrite to.

Speaker #4: And lately the deals that I'm seeing personally are sale sale leaseback deals seems to be a ton of that . And so this year , most likely , which will be a little bit different , it's the same math , but a little bit different of an operator where it's going to be the same operator in a spot that we could tell you .

Speaker #4: We could tell somebody, historically, this is what they're doing, and this is how they're operating. This is how much money they're making.

Speaker #4: And then we're going to read , rebalance them to , you know , a one and a quarter , which is how we underwrite to and then and then , you know , as opposed to what we typically had done , that's what we where we were adverse to .

Moishe Gubin: And then, you know, as opposed to what we typically had done, not that we were adverse to sale leasebacks, we typically were just buying and then re-tenanting. In this case, it's gonna be a little bit easier on one side and the fact that you'll have people that have been the operators there for many years, it's... That's what I'm seeing. Jeff, do you want to add to that?

Speaker #4: Sadly , specs we typically were just buying . And then returning . In this case , it's going to be a little bit easier on one side .

Speaker #4: And the fact that you'll have people that will that have been the operators there for many years , it's that's , that's that's what I'm seeing .

Speaker #4: Jeff, do you want to add to that?

Speaker #2: I mean , I think most is dead on with his view on it . I mean , it's it's not an issue with access to capital .

Jeffrey Bajtner: I mean, I think Moishe is dead on with his view on it. I mean, it's not an issue of access to capital. I mean, the deals are coming in day in, day out. I mean, they're coming in from across the country. But as we said in the past, we're in our 10 states. I mean, to add to our existing 10 states, it's very easy to grow the master lease, but finding a new state to go into, we may need a sizable acquisition. And valuation right now, it's prices have gone up significantly. I mean, especially, I mean, I'd say last year it was on the East Coast, this year we're seeing in the heartland of the country. I mean, you're seeing prices per bed go to their highest levels that they may have ever been.

Speaker #2: I mean , the deals are coming in day in , day out . I mean , they're coming in from across the country .

Speaker #2: But as we said in the past , we're in our ten states . I mean , to add to our existing ten states , it's very easy to grow the master lease , but finding a new state to go into , I mean , we need a sizable acquisition and valuation right now .

Speaker #2: It's prices have gone up significantly . I mean , especially I mean , I'd say last year I was on the East Coast .

Speaker #2: This year, we're seeing it in the heartland of the country. I mean, you're seeing prices per bed go to their highest levels that they may have ever been.

Speaker #2: And for us , with our disciplined approach , I mean , we were sticking to our guns . And if the deal makes sense , deal makes sense , I mean , Mike is always said if a deal pencils out , we're going to close it .

Jeffrey Bajtner: For us, with our disciplined approach, I mean, we're sticking to our guns, and if the deal makes sense, the deal makes sense. I mean, Moishe has always said, "If a deal pencils out, we're gonna close it." So that's been the approach that we've been going at. I mean, since I've been with Moishe for about 5 years now, and there hasn't been a deal we haven't closed. So we're always looking, and we're always looking at different ways we can grow, but it all goes back to basics. 10-cap acquisition, 1 to 5 coverage on day one. So, I mean, as we enter 2026, we're excited to see what's gonna come our way.

Speaker #2: So that's been the approach that we've been going at . I mean , since I've been with Mike for about five years now , and there hasn't been a deal , we haven't closed .

Speaker #2: So we're always looking, and we're always looking at different ways we can grow. But it all goes back to the basics: ten cap acquisition, 1.25 coverage on day one.

Speaker #2: So I mean , as we enter 2026 , we're excited to see what's going to come our way . The sale Leasebacks have been very front and center for us .

Jeffrey Bajtner: The sale leasebacks have been very front and center for us, and we look forward to seeing everyone next quarter, and we'll hopefully have some deals to report then as well.

Speaker #2: And we look forward to seeing everyone next quarter, and we'll hopefully have some deals to report then as well.

Speaker #8: Perfect . The other question that I had was really around occupancy , you know , sitting here like , I think you guys said like 76% .

Mark Smith: Perfect. The other question that I had was really around occupancy, you know, sitting here at, like, I think you guys said, like, 76%. Just kind of curious, your, your comfort level at, at that rate and, and where you maybe see that moving and, and impact to the model as, as occupancy maybe moves up or down.

Speaker #8: Just kind of curious—your comfort level at that rate, and where you maybe see that moving and the impact to the model as occupancy maybe moves up or down.

Speaker #4: Yeah . So I'll answer that . I mean , we've talked about this before . You know , we we I know that there's there's , you know , read analysts and folks that , you know , look at a bunch of different , you know , multifamily and other things across the board .

Moishe Gubin: Yeah. So I'll, I'll answer that. I mean, we've talked about this before. You know, we, I know that there's, you know, REIT analysts and folks that, you know, look at a bunch of different, you know, multifamily and other things across the board. In the healthcare space, you know, the occupancy is not a great gauge of, of how, of how a portfolio is doing. You know, we're in states, and I talked about this before, like, we're in Oklahoma. In Oklahoma, the average occupancy for the whole state is, like, 50%. And, you know, and rightfully or wrongfully, they want it in Oklahoma, that they should have a nursing home local for, you know, like, every county, as an example. Similar to Indiana, same way. But Indiana, the average occupancy is, like, 70%, compared to 50% in Oklahoma.

Speaker #4: And the healthcare space , you know , the occupancy is not a great gauge of of how of how a portfolio is doing .

Speaker #4: You know , we're in states and I talked about this before , like , we're in Oklahoma and Oklahoma . The average occupancy for the whole state is like 50% .

Speaker #4: And , you know , and rightfully or wrongfully , they wanted in Oklahoma that they should have a nursing home local for , you know , like every county , as an example , similar to Indiana , same way , but Indiana , the average occupancy is like 70% compared to 50 in Oklahoma .

Speaker #4: But they did it because , you know , they didn't want people that they wanted to visit their mother in nursing home , that they should be driving an hour every day , you know , to go visit mom .

Moishe Gubin: But they did it because, you know, they didn't want people that they have wanted to visit their mother in a nursing home, that they should be driving an hour every day, you know, to go visit mom. And so you have certain states in the Midwest that are known as low occupancy places. Now, Illinois occupancy, you know, averages, like, in the 90% and, you know, or high 80s. Same thing with Kentucky, 85%, but Arkansas is a low number, and our operators are doing great there. They're way beating the trend and the state average. Indiana is right around, right around how Indiana runs is how our... maybe a little bit lower actually, and our tenants operations.

Speaker #4: And so so you have certain states , so we're in states where in the Midwest that are , that are known as low occupancy places .

Speaker #4: Now , Illinois occupancy , you know , averages like in the 90% . And , you know , or 80s , same thing with 85% .

Speaker #4: But Arkansas is low number . And our operators are doing great . They're they're way beating the trend . And the state average Indiana is right around right around how Indiana runs is how our maybe a little bit lower , actually .

Speaker #4: And now our tenants operations . So that being said , you know , and again , our revenue is not based on on on our case , you know , our , our group showing 100% occupied because every building that we have has been leased out and we get paid a rent , you know , no matter how , how , how full they are .

Moishe Gubin: So that being said, you know, and now again, our revenue is not based on... Because in our case, you know, our-- we're showing 100% occupied because every building that we have has been leased out, and we get paid a rent, you know, no matter how full they are. But, that's just a color I just wanted to provide you. I don't know if that helps you or hurts you, but that's, you know, we expect our portfolio is now probably right around or, you know, the same or higher than it was before COVID. So it's taken a bunch of years to recover.

Speaker #4: But that's just a color . I just want to provide data . I don't know if that helps you or hurts you , but that's we expect our portfolio is is now probably right around or , you know , the same or higher than it was before Covid .

Speaker #4: So it's taken a bunch of years to recover and and we're okay with it . I mean , we're we're really looking more at rent coverage more than occupancy .

Speaker #4: And I would add to that regarding Q4.

Speaker #9: The first ,

Speaker #2: I would add that as we're underwriting the portfolio , so they are intending their occupancy may have been in the 60s and now 4 or 5 years later , their occupancies gone up , which is ultimately I mean , it's helping their bottom line , giving higher rent coverage , but it's not .

Speaker #2: You're saying I mean , the likelihood of it them being in other verticals in real estate , Natalie's multifamily 100% is very important in this particular case , it's a little less important .

Speaker #2: It's more just—it goes down to the operations.

Jeffrey Bajtner: ... And we're okay with it. I mean, we're really looking more at rent coverage more than the occupancy of the ten. I would add to that, as we're underwriting the portfolio, so they aren't. I mean, their occupancy may have been in the 60s, and now, 4 or 5 years later, their occupancy has gone up, which is ultimately, I mean, it's helping their bottom line, giving higher rent coverage. But as Mike was saying, I mean, the likelihood of it, them being in other, I'd say, verticals of real estate, net lease, multifamily, 100% is very important. In this particular case, it's a little less important. It's more just, it goes down to the operations.

Speaker #8: Okay. It sounds like the big thing to look at is really the rent collected at 100%. And if you can continue to do that even at occupancy in some states as low as 50%.

Speaker #2: Yes .

Speaker #4: Yeah , yeah . Because when we buy it , we're not buying it off of off of , we're not buying it off of what could be .

Speaker #4: We're buying it off of today. Where does the deal play out as far as, as far as you know, coverage?

Speaker #4: And , you know , I guess that's the difference between us and maybe multifamily or multifamily . You know , they want they want to charge market rents and they're assuming something .

Speaker #4: And they're giving a vacancy rate of 5% or something . And then they're buying off of that . And then they have to build into that .

Speaker #4: We're not buying into that . We're we're we're charging the rent . That's a mathematical formula off of what we're paying . And we're , we're praying every day that our tenants do great .

Speaker #4: And raise occupancy , because the more the more coverage they have , the more certainty we have . We'll get our rent more certain , more certainty we have that we're going to get our rent .

Speaker #4: The more certain we are that we can pay a dividend and buy more assets, and the more we do that, the more we know that we're going to make more money.

Speaker #4: And , you know , you know , wash , rinse , repeat , wash , rinse , repeat and keep doing it . And and that's been what we've done .

Speaker #4: And that's been effective and successful, and we want to keep doing that.

Mark Smith: It sounds like the big thing to look at is really the rent collected at 100%, and if it—you can continue to do that even at occupancy in some states, it's as low as 50%.

Speaker #8: Excellent. And I know from your presentation, it seems like the demographic trends that you guys call out give us a long runway before we need to really worry about occupancy dropping off because of just demographic trends and aging out.

Speaker #4: Yeah , the transcripts , the transcripts are not going to catch the fact that all three of us started bobbing your head . Yeah , exactly .

Jeffrey Bajtner: Yes.

Speaker #4: Exactly what you just said, I was—I was

Moishe Gubin: Yeah. Yeah, because when we buy it, we're not buying it off of what could be. We're buying it off of today, where does the deal play out as far as coverage? And, you know, I guess that's the difference between us and maybe multifamily, where multifamily, you know, they want, they wanna charge market rents, and they're assuming something, and they're giving a vacancy rate of 5% or something, and then they're buying off of that, and then they have to build into that. We're, we're not buying into that.

Speaker #2: Silver tsunami, they say.

Speaker #4: It's it's , you know , reality is if if if you're really a prognosticator . Right . Our tenants should as long as the government doesn't decide to start being anti , you know , geriatric folks , you know , there there is absolutely no reason why our tenants won't like , you know , have coverages like way in excess of , two , three , four times because ten years from now , you know , we're still making our ten cap return with , you know , annual inflation , inflationary increases .

Speaker #4: And they're going to be making , you know , you know , outside of what , you know , the cost of the work is , you know , but their cost of capital , their cost of , you know , occupancy to be able to have the space to be able to run the nursing home , right .

Speaker #4: That's going to stay relatively flat other than , you know , small inflationary increases . But they should have their occupancy go up , you know , through the roof .

Moishe Gubin: We're charging the rent that's a mathematical formula off of what we're paying, and we're praying every day that our tenants do great and raise occupancy, because the more coverage they have, the more certainty we have we'll get our rent. The more certainty we have that we're gonna get our rent, the more certain we are that we can pay a dividend and buy more assets, and the more we do that, the more we know that we're gonna make more money and, you know, you know, wash, rinse, repeat, wash, rinse, repeat, and keep doing it. And that's been what we've done, and that's been effective and successful, and we wanna keep doing that.

Speaker #4: Certainly in bigger cities . You know , I don't know if I don't know if Bardstown , Kentucky is going to now happens to be that building is like relatively well , you know , that's maybe a bad example .

Speaker #4: Like Elkhorn County , you know , like places full . But the other places where they're running 60 , 70 , 80% or 50 in Oklahoma , you know , that number ratchets up to 70 , 80 , 90% .

Speaker #4: You know , our coverage is going to be through the roof . And that's really what we want . We want everyone . We want the we want the country to have nursing homes that take care of the residents .

Speaker #4: And they're able take care of the residents when they make money . And for them to make money , they need a landlord that's not too onerous and takes , you know , buys properties effectively at the right pricing and gives them a rent that they can live with .

Mark Smith: Excellent. And I know from your presentation, it seems like the demographic trends that you guys call out gives us a long runway before we need to really worry about occupancy dropping off because of just demographic trends and aging out.

Speaker #4: And that's the model we have.

Speaker #8: Excellent . That's helpful . Thank you . You guys .

Moishe Gubin: Yeah, the transcript's, the transcript's not gonna catch the fact that all three of us started bobbing our head. Yeah, exactly, exactly what you just said.

Speaker #4: You're welcome

Speaker #1: Thank you. Now, showing no further questions in the Q&A queue at this time, I will now turn the call back over to Jeff for any closing comments.

Jeffrey Bajtner: I would say Silver Tsunami, we say.

Moishe Gubin: You know, reality is if you're really a prognosticator, right, our tenants should, as long as the government doesn't decide to start being anti, you know, geriatric folks, you know, there is absolutely no reason why our tenants won't like, you know, have coverages, like, way in excess of, you know, two, three, four times, because 10 years from now, you know, we're still making our 10 cap return with, you know, annual inflationary increases. And they're gonna be making, you know, you know, outside of what, you know, cost of the work is, you know, but their cost of cap or their cost of, you know, occupancy to be able to have the space, to be able to run the nursing home, right?

Speaker #2: I'd like to thank everyone for joining us on this call . We appreciate you joining us . We appreciate your support . And if anybody has any questions or would like to reach out , send us an email IR at sfgate.com .

Speaker #2: And we look forward to seeing you again next quarter. Have a great weekend.

Speaker #4: Thank you .

Speaker #3: Thank you

Moishe Gubin: That's gonna stay relatively flat other than, you know, small inflationary increases, but they should have their occupancy go up, you know, through the roof. Certainly in bigger cities. You know, I don't know if, I don't know if Bardstown, you know, Kentucky, is gonna now... It happens that that building is, like, relatively, well, you know, that's maybe a bad example. Like, Elkhorn County, you know, like, the place is full, but the other places where they're running 60, 70, 80% or 50% in Oklahoma, you know, that number ratchets up to 70, 80, 90%. You know, our coverages are gonna be through the roof, and, and that's really what we want.

Moishe Gubin: We want the country to have nursing homes that take care of the residents, and they're able to take care of the residents when they make money, and for them to make money, they need a landlord that's not too onerous and takes, you know, buys properties effectively at the right pricing and gives them a rent that they can live with, and that's the model we have.

Mark Smith: Excellent. That's helpful. Thank you, guys.

Moishe Gubin: You're welcome.

Operator: Thank you. Now I'm showing no further questions in the Q&A queue at this time. I will now turn the call back over to Jeff for any closing comments.

Jeffrey Bajtner: I'd like to thank everyone for joining us on this call. We appreciate you joining us. We appreciate your support. If anybody has any questions or would like to reach out, send us an email at ir@sfreit.com, and we look forward to seeing you again next quarter. Have a great weekend.

Moishe Gubin: Thank you.

Mark Smith: Thank you.

Operator: ...This concludes today's conference call. Thank you for your participation. You may now disconnect.

Q4 2025 Strawberry Fields Reit Inc Earnings Call

Request a DemoDemo

STRW

Strawberry Fields Reit

Earnings