Strawberry Fields REIT, Inc.

Good morning. My name is Ali, and I will be your conference operator today. At this time, I would like to welcome everyone to the Strawberry Fields REIT third quarter 2024 earnings conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, you have to press the star key followed by the number one on your telephone keypad. I would now like to turn the conference over to Jeff Beitner, our Chief Investment Officer. Sir, please go ahead.

Thank you, and welcome to Strawberry Fields REIT's third quarter 2024 earnings call. I am the Chief Investment Officer of the company, and I focus on acquisitions of new deals, growing our operator base, and investor relations. On the call with me today are Maish Gubin, our Chairman and CEO, and Greg Flamian, our CFO. On Friday, the company issued its 2024 third quarter results, which is 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 Field's REITs 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 an explanation and reconciliation of these measures to the comparable GAAP results included on the Non-Gap Measure Reconciliation page in our investment presentation. And now on to discussing Strawberry Fields REIT. While there are many current shareholders on the call, we also have new and prospective shareholders, and I'd like to share a little bit of background about the company. The story began 21 years ago when Maish Gubin, our chairman and CEO, and Michael Bliscoe, one of our directors, purchased their first skilled nursing facility in Indiana. Once they found success with that first facility, they quickly bought a second and a third. Over the next nine years, they grew from that one facility to 33 facilities in Illinois and Indiana. In 2015, with those 33 facilities, Strawberry Fields REIT was created, and the company has grown significantly since then. As of September 30th, the company owns and leases 114 facilities in nine states with over 12,800 beds. And as we get closer to year end, we look forward to growing this number. As it relates to this past quarter, I wanted to share some key highlights. The company collected 100% of contractual rents. In July, the company filed a registration statement on Form S3 with the Securities and Exchange Commission. In August, the SEC declared the registration statement effective and the company established an ATM program. Through this program, the company began selling shares to the public for the first time as we initially went public through a direct listing. These shares will be sold at the company's discretion, and the ATM program is expected to provide the company with additional financing flexibility by increasing the stock's liquidity and facilitating growth. In August, the company completed the acquisition for two skilled nursing facilities with 254 licensed beds near San Antonio, Texas. The acquisition was for $15.25 million. The facilities are leased to the Tide Health Group, a new third-party tenant and consultant. These properties will increase the company's annual base rents by $1.525 million and include annual escalators of 3%. In September, the company completed the acquisition of a property near Nashville, Tennessee comprised of an 83-bed skilled nursing facility and a 23-bed assisted living facility. The acquisition was for $6.7 million. The property was added to an existing Tennessee master lease and will increase the company's annual rent by $670,000. As part of this deal, the company issued the sellers $3.1 million of Strawberry Fields REIT stock as consideration for the deal. Subsequent to quarter end, the company acquired an 86-bed skilled nursing facility in Indianapolis, Indiana, marking our 115th facility. The acquisition was for $6 million. The facility was added to an existing Indiana master lease and will increase annual rents by $600,000. The company also entered into a purchase and sale agreement to acquire eight skilled nursing facilities with 1,111 licensed beds located in Missouri for $87.5 million. The facilities are currently leased under a master lease agreement to a group of third-party tenants. Lastly, our board of directors authorized a cash dividend of $0.14 a share, which is an increase of $0.01 a share from the prior quarter's dividends. The dividend will be payable on December 30th, 2024 to shareholders of record on Monday, December 16th, 2024. This dividend will be our ninth consecutive quarter of paying dividends, and in that time will be our fourth increase. This represents the philosophy of the company to teach the market that our dividends can be relied upon. I would now like to have Greg Flamian, our Chief Financial Officer, discuss the quarterly financials.

Thank you, Jeff. good morning and welcome again to the strawberry fields third third quarter earnings call starting off we will discuss a quarterly comparison of the balance sheet as of september 30th 2024 versus the balance sheet as of the prior quarter june 30th 2024. total assets are 661.5 million dollars which is 25.7 million dollars or four percent higher than june 30th 2024. this increase is driven by real estate investments from from the five properties we acquired during the quarter, as well as higher cash balances from the Series A bond raise that occurred in August 2024. This was offset by lower right-of-use assets, as well as lower restricted cash and equivalents. Liabilities are $606.3 million, which is an increase of $21.1 million, or 3.6% from the prior quarter. The increase is due to the Series A bond raise that was mentioned earlier. The liability increase was offset by lower accounts payable and lower operating lease liabilities. Equity for the quarter was $55.2 million. This is a 4.6 million or 9.4% higher than the previous quarter. The increase is due to the higher third quarter net income and the sale of additional common stock offset by third quarter dividend distributions. Moving to our next comparison, we are reviewing an analysis of the balance sheet as of September 24 versus September 2023. Total assets are $31.7 million higher or 5% higher than the prior year. This increase is due to the cash and cash equivalents as well as higher goodwill, other intangible assets, and lease rights. The lease right increase is due to the purchase of the Indiana Master Lease II lease rights in February of this year. Liabilities increased $30.4 million or 5.3% from September 30th, 2023. The higher liability balance is driven by an increase of 46.6 in net bonds offset by lower notes payable and other debt as well as lower accounts payable and accrued liabilities. Equity is $55.2 million as of September 24. This is 1.3 million or 2.5% higher than September 30th, 2023. The increase is driven by higher net income, a net increase in common stock, and these increases were offset by higher dividend distributions and negative foreign currency related adjustments. Moving on to the next comparison, we are now discussing the quarter-to-date income statement comparison of Q3 2024 versus Q2 2024. The third quarter net income is $6.9 million, which is marginally lower than the net income from the prior quarter. Third quarter revenues and expenses were mostly in line with the second quarter. However, the quarterly change is due to a slightly higher interest expense that was offset by lower G&A expenses. Moving to the year-to-date P&L comparison, September 24 year-to-date net income is $19.9 million, which is $5.5 million, or 37.8% higher than the year-to-date net income in September 2023. This increase is driven by higher revenue due to new properties acquired in the trailing 12 months, offset by higher operating expenses and higher interest expenses. This concludes the review of the financial statements in the presentation. Jeff Baitner will now discuss our current investment strategy. Jeff?