Strawberry Fields REIT, Inc.

Good day and welcome to the Strawberry Fields REIT first quarter 2026 earnings call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone keypad. I will now hand the call over to Jeff Beidner, Chief Investment Officer. You may begin.

Thank you and welcome to Strawberry Fields REIT's Q1 2026 earnings call. I am the chief investment officer and joining me today on the call are Maish Gubin, our chairman and CEO, and Greg Flamian, our CFO. Earlier today, the company issued its Q1 2026 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 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 being controlled. Additionally, references will be made during the 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 REIT and our Q1 2026 performance. I wanted to start by sharing some key highlights for the quarter. During the quarter, the company collected 100% of its contractual rents. The company signed a term sheet for a corporate credit facility with availability of up to $300 million. The facility will be comprised of a $100 million term loan and a $200 million revolving line of credit, both having initial three-year terms and two one-year options. Proceeds from the facility will be used to refinance our existing secured bank debt, and the remainder will be available to support acquisition growth. The rates on the facility will be sold for a plus 275. The company expects to close on the facility during Q2 2026. Deal-wise, while we did not close on any deals during the quarter, we were quite busy underwriting deals. As we have detailed in past presentations and investor calls, we have our disciplined acquisition model of 10-cap acquisitions that we have been true to over time and expect to stay on this course for the foreseeable future. I am pleased to report that subsequent to quarter end, a company entered into a contract for the acquisition of a hospital campus comprising of a licensed 60-bed hospital, licensed 99-bed nursing facility, and ancillary medical office buildings near Kansas City, Missouri. The purchase price will be $8.6 million and the company expects to fund the acquisition from the balance sheet. The hospital campus will be added to an existing master lease of a tenant in Missouri with initial base rents of $860,000 a year and subject to 3% annual rent increases. Yesterday, the Board of Directors approved the Q2 2026 dividend, which will be $0.17 a share and will be paid on June 30th to shareholders of record on June 16th. Lastly, I'd like to point out that Strawberry Fields REIT remains the closest pure place skilled nursing REIT in the market, with 91.5% of our facilities being skilled nursing facilities. Additionally, we have not changed our investment approach, of all our investments being triple net leases subject to annual rent increases. I would now like to have Greg Flaman, our Chief Financial Officer, discuss the quarter-end financials.

Thank you, Jeff. And welcome, everyone, to the Strawberry Field's first quarter earnings call. Let's begin with a look at our balance sheet. Told assets are $878.6 million, an increase of $43.8 million, or 5.2%, compared to March 31, 2025. Our asset growth was driven primarily by recent real estate acquisitions, including $112 million of acquisitions completed in 2025. 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, these factors contributed to an overall growth in our debt balances. Equity declined, reflecting lower other comprehensive income driven again by foreign currency translation adjustments. Continuing now to the consolidated statement of income. 2026 revenue was $40 million. of 2.7 million compared to March 31st, 2025. This represents a 7.1% increase, which was driven by the timing and integration of properties acquired in 2025. While we experienced higher revenues, the income growth was offset by higher depreciation in interest expense, which was driven by the new property acquisitions. General administrative expenses were also higher due to professional fees, corporate salaries, and other operating expenses. These increases were offset by lower amortization expense. The results in the year-to-date net income of $9.4 million, or 17 cents per share, compared to 6.9 million, or 13 cents a share, in Q1 2025. Finally, I would like to end my presentation with some financial highlights. Our 2026 projected AFFO is $75.4 million, representing an 11.4% compound annual growth rate. The 2026 projected AFFO per share growth is 10.7%. The 2026 projected adjusted EBITDA is $128.1 million, representing a 13.5% compound annual growth rate. Our yield on leases is 14.2%. The company's net debt to net asset ratio currently sits at 49.0%. As of March 31st, 2026, our dividend was 16 cents a share, representing a 5.4% yield and an AFFO payout of 47.3%. The company recently increased the dividend for Q2 to 17 cents a share. This concludes the financial portion of the earnings call presentation. I'll now turn it back over to Jeff Batner, who will walk us through the additional portfolio highlights.

Thank you, Greg. As it relates to our portfolio highlights, our portfolio currently has 143 facilities located in 10 states. This is comprised of 131 skilled nursing facilities, 10 assisted living facilities, and two long-term care acute hospitals. Also, these 143 facilities equate to 15,602 licensed beds. The total value of our portfolio at acquisition is $1.1 billion. Our portfolio currently has 17 consultants advising the operators. The weighted average lease term is 7.1 years. I'm proud to report that our tenants continue to do well, and their rent coverage is 2.1. The net debt to EBITDA of the portfolio is 5.6. We continue to collect 100% of our rents. And as I mentioned earlier in my remarks, our pipeline remains strong, and it's in excess of $325 million. And with that, I'd like to pass it on to Maish Gubin, our chairman and CEO, to continue the presentation.

Okay, thank you, Jeff, and thank you, Greg. As they both have alluded to, really, we are on a nice trajectory in our business. This slide here reflects the last five years and projection of 2026 AFFO growth, which gives you a cumulative growth rate of 11.4%. We're particularly proud of that. The slide after that is base rent and just similar timeframe, similar trajectory, 13.4% growth rate. Our stock price over last year and we've seen highs and we're currently trading, I mean, we're trading too low, but we're, We're up from how we ended the quarter, and that was right when I think all that Iran stuff started. Comparatively, between us and our peers, strawberry is right in the middle. We're 26% on our stock. If you would have bought the stock a year ago until March 31st, 26.4% return, and our trading multiples, are still the laggard in the marketplace. I'm still dumbfounded on why that is. We're at nine and a half times when the average is right around 14 or so, and Care Trust is leading the pack at 21.4%. Our AFFO payout ratio continues to be the lowest from everybody else. And that's even I'm sure with the increase of our dividend that we announced today, our 47% payout ratio, And, you know, that's the lowest of our peers. We find that our best use of our money is staying within the REIT standards, the REIT rules, and using the rest of it, the rest of the cash that we're generating to grow our portfolio. Our dividend yield, this is at March 31st at the 16th census, 4.9%. Obviously, with an increase, that should be somewhere in the fives, maybe closer to six. Like Jeff said earlier, we remain the pure play, sniff real estate, you know, sniff reap. And we're going to stay and stick with that because that's really where our comfort zone is, doing exactly what we're doing, staying very disciplined. We've been preaching this for years and years and years. And we're going to continue to do exactly what we do. And in years where there are less deals, we'll just continue to stockpile cash, pay down debt, and save our money for when we get the deals. I think this year we'll still meet our target of between 100, 150 million, maybe exceed it. It's been a slow start, but we expect this quarter to really pick up and then actually have a bunch of closings in third quarter. The next slide just shows our rent coverage from our tenants. That continues to grow. Again, every time we close on deals, We're starting every deal at a one and a quarter coverage ratio. And so therefore we're our own worst enemy. Where last year we closed 112 million or so or something in 19 properties. So you take that, it weights us down. And as every quarter goes by, our attendance results improve. Our growth rate per share, we're beating everybody in the marketplace. And that's, you know, it's almost inverse to the payout ratio. And we should continue to do that. I mean, collectively between the payout ratio, I mean, the dividend yield and the AFFO per share growth, we're at the end of the day, better return than our peers, averaging out about a 16% return a year. The next slide is probably one of the most important slides. And that basically shows you really how you know, the math of what we do. So the projected 26 revenue of AFFO is over $75 million. Again, this is before deals. This is not projected anything out. This is just what we have running today. So $75 million, the payout ratio for that is 47%. We take cash flow close to $40 million. We then take that $40 million and then we're able to buy. We want to stay at right now at a 49% leverage. So if we want to stay at 49%, that basically gives us the ability to borrow about 50 million on that. So we could buy 90 million without changing our leverage at all. Reality is, you know, we have other cash sitting that we should be able to, you know, get more money out the door. And that's what we've done until now. And we expect that to continue. The next slide is probably one of the biggest focuses we have right now. We should be announcing in the next little bit We intend on refinancing a good portion of this money that's maturing this year. We expect to refinance half of it probably in the next couple of weeks, and then we'll do the other half probably sometime in August. Most of this, where we end up in this situation is that once 26 ends, we should have almost divided up equally over four or five years, laddered debt insuring so that every year we could be with a year's runway, be able to be sit there and refinance our debts. And that should be really good for having a business that can perpetuate long-term. It's interesting to note over here, really, I made a mistake a few years ago and I made all the maturity dates right around the same, and it was intentional. The one thing that I missed is that there was a prepayment penalty all the way to the end. And to avoid paying prepayment penalties, we've gone down this road where now we have about five months left maturing on most of this debt, and so we're going to refinance most of it soon. and the rest of it in probably a few months. So that's this slide. The next slide really just shows how diversified our portfolio is. At this point, the only really large consultant or state is Indiana, which happens to be our best state, which is sitting at 25% of the portfolio and 25% of the base rent. Um, that being said, everything else is pretty even wedges, you know, and high single digits, middle double digits. And, and, you know, that's for an investor that's wanting to have a diversified risk. You know, our portfolio is not subject to, we don't have a bunch of single assets that where something goes wrong in one asset would hurt us. Most of our stuffs are in master leases, as most of you probably know. And, um, and, you know, if we had a problem in one specific state, right, we'd be able to get through everything without there being anything, you know, anything really big as a risk. Next slide, this really talks about where we're located. As you can tell, we've stayed mainly in the Midwest, and we, God willing, will be announcing a deal for a new state in the Midwest in the next, in hopefully the next couple of weeks. It's good. Business is good. We're collecting all of our rents, like I think Jeff said earlier. And business is good. We have no issues. On our last slide for today, and after this, we'll hand it off to the moderator to take questions from the audience. This really is one of my favorites because it's in simple, simple, simple English. You look at three months ended March 31st of 26 versus 25. And you see our net income went up $2.5 million, and FFO, 2.7, and AFFO, $2 million or so. And that's what it's all about, really showing at the end of the day, they had about 75 million of annualized AFFO expected. The graph to the right, the financial to the right is EBITDA. Again, same story. Just adding back to appreciation, amortization and interest to come up with EBITDA number. You know, we went up, you know, $2.3 million or so and adjusted EBITDA a little bit less than two million bucks. And I'm super, super proud of all this. And with that, I will pass this back to the moderator to take on your questions.

Thank you. Ladies and gentlemen, as a reminder, to ask a question at this time, you will need to press star one, one on your telephone keypad and wait for your name to be announced. Please stand by while we compile the Q&A roster. Our first question will come from the line of Richard Anderson with Cancer Fitzgerald. Your line is now open.

Hey, good morning, everyone. Good morning. Good afternoon, depending on where you are. Um, so I, in, in mentioning the pipeline growing, I do see last quarter it was, excuse me, it was two 50. Now it's three 25. Um, I'm, I'm curious what the, what the additions were, um, not just the 75 million, but in, in form, like you, you did something this in the second quarter with, you know, a hospital campus and some medical office. I'm curious if, if that will be more of the, the mix of stuff that you do going forward rather than just, you know, pure play skilled nursing. I'm just curious, you know, your mindset along that line.

So Rich, Rich, thank you for your question. Happy to hear your voice. Hope to see you at Nereid. I would say that, no, we're going to stick with nursing homes. All of the, not all, most of our deals that were close to getting, getting offers accepted on, are skilled nursing facilities, and a few of them are new states for us. And, yeah, the increase of the pipeline is deals that are just slow to get done. You know, a lot of times, you know, people would get disinterested, but we sit there and we just keep working it and we follow up with people, you know, to the testament of Jeff here on the call. You know, it's just persistency and staying with them. And there's some deals and just lately seem like deals are taking slower. We had a deal that we signed up and actually Care Trust came and stole it from us. And that would have been a nice, nice deal for us. And they offered like $25 million more than us, which is crazy because the other people had already accepted our offer. That being said, no, so we don't want to change what we're doing. this hospital MOB deal comes with a nursing home and we found value that, that the purchase price we're paying the hospital and the MOB basically are a throw in and the nursing home itself had more value than what we're paying. So we feel like, we feel like we got a, we got a, we're getting a great deal on our operator. That's taking it from us as somebody that has experience, a doctor practice, a physician practice. And, We feel it's going to be a nice addition to our portfolio.

Okay. I would add to Marcia's point there that, I mean, this number, it's almost like a living and breathing number. It's constantly, we evaluate the pipeline every week. And the only items that are really being included with this are just deals that we think there is an opportunity to complete. So, As Mike said, I mean, this has been some deals that have been sitting there over time, but also, I mean, the SNF deal market has been picking up steam in the past, I'd say in the past month. So we're looking at deals, as Mike said, in new states, existing states, and we're excited to see what we can do the rest of this year.

Okay. And then my second question, you mentioned CareTrust. How typical are you running into REIT peers in terms of competitive deals?

processes to get deals done is that sort of an anomaly or or is there are you seeing you know some some name brand folks that we all know and love uh out there with you that you're competing with yeah you know historically um we never ran up against them um but but in the last um like year or two um as we're trying to um i mean we look at every deal but but as we're trying to do you know, bigger deals just so that, you know, we figured, you know, the marketplace maybe would be more excited about our stock and who we are, if we can announce, you know, bigger deals and do bigger deals, you know, all with the same metrics, exactly how we buy the same 10 cap, you know, you know, 10% cash on cash return day one, our regular routine and rules of how we buy. And so, and so, When it gets to these bigger deals, which was our original thought, which was years ago, that's where the competitive bids are coming in. We lost one deal to Well Tower and we lost one deal to Care Trust. That was after we basically had a handshake with a seller. He spent so much time on these things and then someone else comes in and says, okay, I'll just throw more money at it. we're just going to keep doing what we're doing. I, I don't, I don't, we're not changing our model to, to pay more. So, um, and I'm not going to get disinterested to stop looking at the bigger deals. I think, um, I think there's a benefit. Um, and I love care trust and I love Dave Sedgewick, but I could say, and I've said that probably a thousand times, but I, but, but I, um, I just think that we're just, you know, we, we offer something on a personal level with a lot of the sellers. And so we, we, um, we should be able to pull down these deals. And I would say that it's hopefully will be an anomaly that we've lost a few deals to the bigger boys.

Yeah. Okay. Thanks for the honesty as always, Moish. Always, Rich. That's how I roll.

Thank you.

Thank you. Our next question coming from the line of Gaurav Mehta with Alliance Global Partners. Your line is now open.

Yeah, thank you. I wanted to ask you on the acquisition pipeline, I think on the last earning call, you had mentioned the target of $100 to $150 million of acquisition this year. Given that you had a slow start in 1Q, are you still hoping to hit that target?

Yeah, yeah, 100%. I'm hopeful that the third quarter will close soon. somewhere in the 90, 90 million to close to a hundred million dollar range. And I'm hoping that in the fourth quarter, um, we'll have another 15 to like 30 or 40, unless something else pops up. Um, so right now we're looking at everything's going to get loaded into third quarter and fourth quarter, and we should hit easily the hundred and hopefully we should, you know, do and break 150. Okay.

And so for the third quarter, $90 to $100 million, are you guys looking at like a portfolio?

Yeah, we're looking at, we have one deal. We have a deal that we didn't announce yet that should be in the 80s for a group of homes in a new state. And then we have this deal in Missouri that we've announced. We have another deal that we also didn't announce that's going to also add to a master lease in a state we're already in. That'll be at a $15 million deal. And so between those three deals alone, you're looking at $107, $108 million. And we have some other things. We got a portfolio elsewhere with a newish, but as someone who's a tenant of ours or will be a tenant of ours real soon, another package that we're looking at with them. And so if that deal hits, that'll get us like about $145 or $150 or so. So the good news is we will have our line of credit up and running by the end of this month. We're going to have a new bond issued next week or in the next two weeks in Israel to basically kick the can down the road on some of our debt. And we'll have availability between the line of credit without doing an ATM, without doing a fundraise, without taking on any other additional debt. We have the ability based on our just available borrowings besides the cash in our books, we'll have about 150 million or so of availability right around. So we have the cash to be able to do all this stuff and keep ourselves in the same leverage band that we're in right now. Right now we're at 49%, which is right basically in the middle of where we want to be. And I think we're in a good spot. I would have liked, I got to kind of plan it out better for future years that we have stuff that we push into first quarter. So So when we come to the first quarter call, you know, I could say, hey, we closed at least this, that, or the other thing. Sounds a little better than, well, we had a great quarter. We made a lot of money. We're doing great. We're collecting 100% of our – which also sounds good, by the way. It just doesn't sound – I think it would sound more, you know, better if I would add a deal, you know, closing in the first quarter that I could be able to, you know, walk around like a peacock about. But it is what it is.

All right, thanks for those details. As a follow-up, I wanted to ask you, in the earning release, you talked about investing some time in different processes within the company in this quarter. Can you even provide some color on what those processes were?

Yeah, what we were trying to refer to is, I think, referring to the refinancing and cleaning up our debt. A lot of effort goes into, you know, a big portion of our debt is sitting in Israeli bonds. which I'm proud of. I like the relationship we have with the Israeli market. And so our time and effort has been on creating a couple new series that we'll have in Israel to clean up the three series that we're having that mature this year. The other thing has been creating the line of credit with the bank. which is something that all the other, our peers all have. And we thought maybe that that was one of the issues that maybe investors maybe think about is that when they look at our company, they go, well, we don't have the dry powder to be able to close on certain deals. And we wanted to be able to have these lines of credit so we could be able to tell potential investors, no, we have plenty of dry powder. I mean, everyone who knows me and knows our business knows that there hasn't been a deal that we've made that we couldn't close. But but, you know, maybe an investor doesn't know that it doesn't hadn't hadn't had a chance to speak to me or one of my guys that they might not have known that. And therefore, we want to be able to have that so that when we put that into the queue and future press releases, we're able to say, yeah, we just have this line of credit that we could draw on. And then we went to the public, you know, sold, sold, sold stock to pay down debt and keep ourselves, you know, between 45 and 55 percent on the leverage side. So that's basically what we've been working on outside of, you know, I'm always looking at deals. But it was just cleaning up our debt stack and the fundamentals of our balance sheet so that going forward, we'll have a normal laddered, you know, debt maturity and we'll have a line of credit that's just there for us to be able to use when we need to buy something.

All right. Thanks for those details. That's all I have.

Thanks, Gaurav. Hopefully we'll see you at NERID as well. Please go ahead.

Thank you. Our next question coming from the lineup, John Massasoka would be Riley Securities. Your line is now open.

Hi, everyone. Good afternoon or good morning. Going back to term loan, post-closing, what's the appetite for, on the term loan side, swapping out any of that for a fixed rate versus leaving draws on that floating?

That's an interesting question. I like it. Well done, John. You didn't stump me. I just haven't thought about it. You know, I think when you're in an interest rate environment that most people expect to be either, at this point, I mean, the way the economy is running, it seems like it's going to remain stable. Interest rates are definitely not going up. usually when you have that, you usually don't want to lock in fixed. From my perspective, I hadn't given it a thought, so maybe it's something I'm going to think about. But I think that at this point in a declining rate environment, I think it's probably not wise for me to do fixed. But it's something that I appreciate the question. In years past, we relied on HUD to being the exit for our debt. And then, you know, that's long-term 40-year money. But in the last few years since Corona, you know, the way HUD's been as far as lending and our relationship specifically with HUD has been, you know, I don't know the right word. I don't want to put an adjective on it that makes anyone nervous, but it's just like, it's just been, we're not going anywhere. It's stagnant, that relationship. So historically, I didn't have to think about, you know, where to place the long-term debt and to lock things in for a fixed rate. But, yeah, but that's a great question because that's something now that has to be in the forefront for us to think about. I think we're kind of hedged because of the declining rate environment, which is – that's my prognosis. I could be completely wrong. I mean, of course, I could always be completely wrong. But that's my thought. You know, my background is a little bit banking as well. So in the banking world, we're thinking that it's the same thing, stable to declining rate environment. I think I answered your question, John.

I don't know. That's a helpful comment. And maybe with the, it sounds like still in the market, you know, with potentially new Israeli bonds or at least refinancing the existing Israeli bonds, what's pricing look like on that today as you kind of work through those? And I guess, how would you think about maturity dates or term on that debt? Because it sounds like, you know, probably break out the refinancing into a couple of different tranches. Just kind of curious how, that shaping out as you start the process or work through the process, I should say today.

Yeah, no. Yeah. When we're towards the end of the process and it's a great question. Very astute. I love it. It's where it's about four and a half year money. And the pricing today is about six, six 85 or so. And, and, you know, you got to add in a little bit in the fees, but I don't think anyone ever mentions that on any of these calls. So I'm not sure if I'm supposed to talk about that or not, but like, But the actual interest rate is going to be about 685, four and a half year money expiring the end of 30. And then when we do the second tranche in August, September, that'll be expiring sometime in maybe June 30th or 31. And the idea for all of this is the corrective measure from my mistake that I made a few years ago is all of it's going to have a prepayment holiday for like the last six months. for me to be able to refinance it, you know, instead of going closer to the wire, to be able to refinance it earlier in the mix. And just on that topic, the line of credit and term loan that we created for, you know, with the conventional bank, those are going to have two one-year extensions at the end of them, so that during those two one-year extensions, So during the first one-year extension, that'll be the time that we work on the extension or the new debt to replace that. And that also, that ends in five years. So kind of the way we're positioning it is we're kicking the can of 26 money and part of 28 money, and we're ending up with half in 30 and half in 31, basically. And then, you know, comes the 20, the stuff that's going to mature in 27, we could start working on now to kind of push to 32. And then we'll start on a rolling, a rolling, you know, maturity ladder of one year at a time that we could just keep, kick the can five years down on each thing. And then, and as we grow and what we do, then that tranche will just have the additional of the new stuff together with that and kind of push it down five years. Hope that makes sense. But that's, I think I, my, my, my idea is, my idea and I'm not planning on going anywhere. God willing, God keeps me alive and healthy and that the shareholders want me to keep leading them and keep doing this is that, is that, is that I want to create all these processes that the businesses be able to be perpetuated longterm, you know, so that the normal, the normal maturities every year becomes the process we have to, we have to refinance, you know, this year's batch of debt that's maturing, push it down five years and have that rolling every year as a normal routine and, Same thing with, you know, with all the other processes that we have in place with, you know, how we buy and, you know, just even IR, how we deal with the public and all these things. I want the process to be so clear and clean that we should be able to perpetuate it on a regular routine, not to be robotic, but to be able to be reliable and credible. I think that answers it.

And I'm going to be switching gears a little bit later. And then maybe switching gears a little bit, in terms of potential acquisition in a new state, is that with an existing consultant relationship or a new one? And I guess, what's the appetite for some of the existing consultant relationships to try to grow here in the current market?

So, the starting point of that question is that our relationships with our tenants are amazing. We don't have any... negative communication or relationships. They're all, they're all fantastic. I mean, all of us, I consider everybody part of the family and it's really, really, it's really good. The, so like, so from our current, our current roster of, of tenants to the folks in Oklahoma, we're growing with them. There's deals, we've consistently been buying more deals in Oklahoma and Texas, we're growing with current operators. Missouri, we're growing with current operators. Ohio, over the years, we haven't grown. And believe me, I love those tenants. We just renewed. They've been tenants already now more than 10 years. The relationship hasn't grown, unfortunately. And we're very, very close. We're close friends. But But the newer things for the newer packages are all brand new operators that are not new to me as human beings. Some of them are borrowers at my bank. Some of them are just people that have been industry that we know for many years. And so we have two new relationships in two different states that we're starting with now, God willing, that we're going to start with a decent sized business. know you know between five and ten homes um at each each portfolio and um and god willing it should it should it should it should be great and again if you know any deals that come along i you know we have a commitment between our our tenant and us that we're looking in so so out of the 10 states we're in there's there's probably five or six of them that we want to grow in um and we don't want to grow with you know the related party stuff that's been diminishing And that's down to 46 percent of the portfolio. And we should be announcing something soon that's going to then further dilute that down. But, yeah, we I guess that's something that we don't really we should we should bring up in our presentations. I mean, our relationships with our tenants are fantastic. And and yes, we would grow with almost all of them if we if we could.

And I would add to that that 90% of our facilities are in master leases right now. And it's been, I mean, the best way to grow is just once you have the, once the table's set with that master lease, it's just very easy to keep on adding facilities. As we've been doing that, as Maish said, in Oklahoma, Missouri, the past year, it's been very good to both us and the tenant.

I appreciate all that detail. That's it for me. Thank you very much. Thank you, Tom. Thank you.

Thank you. Our next question, coming from the lineup, Mark Smith with Lake Street Capital Partners. Your line is now open.

Hey, guys. I just wanted to go back a little bit about what you're seeing here for deals. You know, it sounds like a lot of work in Q1, but, you know, some that just didn't get across the finish line, you know, outside of competition, uh, for some of these deals, is there anything else that that's kind of changed or that that's made it harder to, uh, to close on some of these?

No, no, absolutely not. Um, um, we don't have any issues with cash. Um, we don't have any issues, um, regulatory wise. I know there's some stories out there a little bit, you know, Senator Warren and, uh, and a couple of others are on this issue about healthcare REITs, owning nursing homes, but that really has been a lot of talk. I actually called both senators' offices to say, hey, let me talk to you and explain it to you, and they didn't really have time or want to talk to me. But that being said, there's no real, there's nothing blocking us from doing any deals other than the competitive of the price And if a deal doesn't underwrite, we remain very disciplined. And we, you know, we're not looking to risk our portfolio, you know, on, you know, on just, what do they call that? A wish, whatever it is, a prayer and a wish, whatever it is, wish and a prayer. We're not looking to do any of that. We're looking to, you know, stuff that makes sense, that the math is there, continue with our process and do things the way we do it. And it's worked and should continue to work. It's just, You know, it was just a slow first quarter for us, unfortunately, as far as portfolio growth.

Okay. And then I just wanted to ask about just geographical expansion. I know we've talked about the Southeast and some other markets. It does sound like we'll likely see a new state added here soon, but it sounds like that's still in the Midwest. Just kind of curious your appetite around more geographic expansion.

Yeah, we got close on a couple of deals. Georgia and, you know, if we found deals, which we haven't even seen any deals, Alabama, Mississippi would be great to get down to or South Carolina. But, yeah, where the deals and where we're growing are both going to be Midwest deals. And the increases to our portfolio are most likely going to be Texas, Oklahoma, maybe a little bit Tennessee. And always, if we could find anything in Indiana, we've particularly not wanted to grow in Illinois for many years, because when we started, we were just top heavy there. And, you know, we want to make sure that we have a diversified portfolio. So that's kind of our own you know, internal, internal control, um, as far as growing there. But yeah, no, I would love to grow the next, in the next few years, certainly Iowa. Um, if, if we can get a deal in Michigan, we looked at a deal in Michigan at one point, um, Wisconsin stick with that, um, stick with that and see, and see, uh, see where it goes.

Okay. Great. Thank you guys. Welcome. Thank you.

Thank you. Our next question coming from the lineup. Ken Billingsley with Compass Point Research and Trading. Your line is now open.

Thank you. Good afternoon. Hi, Ken. Thank you. I just want to follow up on this kind of comment you were just making. On the competition, you have a big deal that you announced likely is coming. Of the ones that you lost, what was What kind of made them go with the competitors? Anything in specific? Anything that you're able to maybe manage in the future with some of these larger deals you're looking at?

Yeah, you know, it's actually an interesting thing. That deal, what made that difference and why we lost that deal was that was a broker deal. Different than a lot of our deals. A lot of our deals, we know the sellers and they specifically want to work with us and they chase us down and and we work with them and deals get made. The brokers rightfully are looking for top dollar and they get more of a commission if it's a bigger deal. And that deal that we lost was a deal that we spent time working with the broker and the brokers were very friendly with. These are good people. But at the end of the day, until the ink is dry, you know, on those deals when it's a broker-based deal, right? Someone else could come in with a bigger dollar amount and the broker calls the client and says, hey, you know, you could probably still get out of your deal if you want to go take a different deal. And in that case, we didn't know the seller at all. And the seller took, you know, the last minute, you know, this is, you know, 11.59 and 58 seconds and a much higher offer and they took it. And that's, The only thing we could do differently there is somehow earlier in the process, get to know the sellers. But in our world, the sellers that we buy from are sellers that we've known for 20 years or 10 years. And, you know, we're known in the industry. We go to all the events. We spend a lot of time talking to people. And so I don't know if we could have done anything different there, you know, other than give a little guilt trip to the broker saying, you know, You got to be a little nicer and not pull a deal away from us in the last minute. But I don't think we could have done anything differently there.

Do you have a sense of what the cap rate went out at on that deal?

Yeah, you know, that's actually the, I guess, not the saving grace or whatever, is that in theory, our portfolio is way undervalued because we If everything would trade at the 8.5 cap that someone else is willing to buy these things at, if you repriced my whole portfolio at 8.5 cap, you'd say that I have another couple hundred million dollars of equity. So, yeah, no, I think it traded at an 8.5 cap.

Okay. Last question I have is on the 255 million that's maturing through the remainder of this year, How much of this is going to be refinanced with the Israeli bond tranches that you mentioned versus the $300 million in financing?

You know, if I commit to one thing, the pricing is going to go up. So I don't really want to answer that, you know, but I would say that from my point of view, my primary desire would be two Israeli bonds to replace the three Israeli bonds. So I would do the bond we're doing next week, God willing. And then, and then, you know, assuming, I mean, the last two bonds we did, we were oversubscribed by like 50%. So assuming we have the same oversubscription and people want it, we would probably take, you know, we would probably take the most we can take and then pay down early one of the other, you know, bond debts. So What that does for us is that it locks in our currency for four or five years, which is a hedge. Today, the dollar versus the shekel, the shekel's strong. So we have built-in tariff financial statements, a sizable allowance for currency. And I don't want to realize that. So if we kick the can down the road, four or five years on the currency, then I don't have to realize a loss that we've already expensed. It's OCI, so no one looks at it, but it's, but nevertheless, it's there. So my desire is most likely to go to the Israeli market, assuming they want, you know, to, you know, that they're going to stay competitive on the pricing, which they should.

Okay. So the follow-up on that was, it looked like you have 25, 50 basis points of spread improvement, depending on how you structured this. Yes. Would that be fair to assume?

Yes. Yes. Yes. We're going to go from we're going to go from an average rate between the nine point one, the six point nine and the five point seven, which are the three tranches that have to get refinanced. It'll end up all being at six, six and three quarters, six point eight five. If we do the the commercial loan, we end up being like six point four, something like that. Six point four, six point five. And either way, you're talking about an improvement of at least a half a point on a couple hundred million dollars of debt.

And then leaving you with $150 million of dry powder. When all is said and done, $150 million of dry powder to work with. Yeah, $150, $140, yeah, 100%.

I think it's a good spot to be in at the end of the day. Agreed.

Thank you. I'm not showing any further questions in the Q&A queue at this time. I will now turn the call back over to Jeff for any closing comments.

No, thank you so much. Thank you, everyone, for joining us. It's always a pleasure hearing everybody's questions. If you have any further questions, please feel free to reach out to Maish, myself, or Greg. I'd also like to further add, if anyone is interested in listening to the recording from yesterday's annual shareholder meeting, it's up on our website, strawberryfieldsrete.com. And once again, thank you and have a wonderful weekend.

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