Strawberry Fields REIT, Inc.

Good morning. My name is Tom and I will be your conference operator today. I would like to welcome everyone to the Strawberry Fields REIT year end 2024 earnings 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, Chief Investment Officer. Sir, please go ahead.

Thank you and welcome to Strawberry Fields REIT's year-end 2024 earnings call. I am the Chief Investment Officer of the company, and I focus on acquisitions, growing a company's operator base, and investor relations. On the call with me today are Marge Rubin, our Chairman and CEO, and Greg Flanagan, our CFO. On Thursday, the company issued its year-end 2024 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 streets. dividends, acquisitions, investments, returns financing, 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 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 Week and our 2024 performance. As we look back at 2024, a big takeaway is the work the team completed and growing the portfolio. also working with existing tenants on renewing existing leases to the company as stable cash flows into the foreseeable future. I'd like to point out some of the numbers which detail this growth. During the year, the company acquired $130.3 million of real estate, growing the portfolio from 109 facilities in nine states to 124 facilities in 10 states. Fed-wise, this translates from 12,449 beds to 14,186 beds, which is approximately a 14% increase. Through these acquisitions, the company has grown its tenant base from 10 operators to 14. Additionally, the company's base rents increased from $84 million in 2023 to $104 million in 2024. We expect that number to be around $130 million in 2025. As it relates to our existing tenants' leases, master leases were renegotiated for new 10-year terms, which will ensure rents into 2034. We also had a few individual leases that matured and were re-tenanted by an existing tenant into their master lease. Currently, 88% of our facilities are tied to master leases. For 2025, the company has six leases that mature, four in Ohio and two in Illinois. We are pleased to announce that the tenant for the Ohio facilities has exercised the renewal option for the next five years. With these renewed leases and new acquisitions, our average lease term has increased from 4.6 years at the beginning of 2024 to a healthy 7.4 years at the end of the year. It is important to note that this average lease term is based on the initial 10-year lease term of the lease. Almost all of our leases include at least two five-year options to extend. As it relates to this past year, I wanted to share some key highlights. During the year, the company collected 100% of its contractual rents. As we discussed in last quarter's earnings call, in July, the company filed a registration statement on Form S3 with the Securities and Exchange Commission. In August, the company established an ATM program. Due to this program, the company began selling shares to the public for the first time as we initially went public through a direct listing. In December, the company followed up to the ATM program with their first underwritten public offering of approximately 3.34 million shares of pound stock for total gross proceeds of $35 million. In December, the company completed an acquisition with an unaffiliated seller with respect to eight healthcare facilities located in Missouri, our 10th state. The purchase price for the facilities was $87.5 million. The facilities are currently leased Under the master lease, the tenants currently pay annual rent on a triple net basis. The eight facilities are comprised of 1,111 beds. In December, the company entered into a personal agreement for six healthcare facilities with 354 licensed beds located in Kansas. The purchase price of the facilities was $34 million. The facilities are leased under a triple net master lease agreement to a group of third-party tenants. The initial restart is for 10 years and includes two five-year options. The company closed the acquisition on January 2, 2025. This acquisition brought the company into its 11th state and increased the overall portfolio to 130 facilities and 14,540 beds. Subsequent to quarter end, our board of directors authorized a cash dividend of $0.14 a share. The dividend will be payable on March 31st, 2025 to shareholders of record on Monday, March 17th, 2025. This dividend will be our 10th consecutive quarter of paying dividends and continues to represent the company's philosophy of showing the market that our dividends can be relied upon. I would now like to have Greg Flamian, our Chief Financial Officer, discuss the year-end financials.

Hello, and thank you for attending our end of year earnings call. 2024 has been a year of significant portfolio expansion for Strawberry Fields Reef, including the acquisition of our Kansas properties on January 2nd, 2025. We have increased our portfolio by 19.3%, bringing the overall facility count to 130 facilities. This expansion has strengthened our financial position, driving substantial growth in net fixed asset-related accounts and increasing total assets by 27.7% to $170 million. In addition to the financial growth, this expansion has enhanced our risk diversification across states and operators as we have entered into two new states and established partnerships with new operators. Additionally, cash and cash equivalents, both restricted and unrestricted, increased due to the financing of the Kansas acquisition and higher reserves associated with financing activities.