EDGAR 10-K Filing

Company CIK: 1782430
Filing Year: 2025
Filename: 1782430_10-K_2025_0001493152-25-010144.json

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ITEM 1. BUSINESS
ITEM 1. Business
We are a self-managed and self-administered real estate company that specializes in the acquisition, ownership and triple-net leasing of skilled nursing facilities and other post-acute healthcare properties. As of the date of this Form 10-K, our portfolio consisted of 120 healthcare properties with an aggregate of 14,540 licensed beds. We hold fee title to 119 of these properties and hold one property under a long-term lease. These properties are located across Arkansas, Illinois, Indiana, Kansas, Kentucky, Michigan, Missouri, Ohio, Oklahoma, Tennessee and Texas. Our 120 properties comprise 130 healthcare facilities, consisting of 118 skilled nursing facilities, 10 assisted living facilities and 2 long-term acute care hospitals.
We generate substantially all of our revenues by leasing our properties to tenants under long-term leases primarily on a triple-net basis, under which the tenant pays the cost of real estate taxes, insurance and other operating costs of the facility and capital expenditures. Our properties are currently leased to 130 tenants under 31 lease agreements. Approximately 87.7% of our properties are held under a master lease which provides for cross default provisions, cross collateralization and diversification of risk. As of the date of this Form 10-K, our average remaining initial lease term is 7.2 years with average annual rent escalators of 2.8%. Most of our leases include two 5-year renewal options to extend the term.
We are entitled to monthly rent paid by the tenants and we do not receive any income or bear any expenses from the operation of such facilities. As of the date of this Form 10-K, the aggregate annualized average base rent for the expected life of the leases for our properties was approximately $134.8 million.
Each healthcare facility located at our properties is managed by a qualified operator with an experienced management team. As of the date of this Form 10-K, 67 facilities representing 52.9% of our annualized base rent are leased to and operated by related parties that are affiliates of Moishe Gubin, who is our Chairman and Chief Executive Officer and Michael Blisko, who is one of our directors. These properties are operated by affiliates of Infinity Healthcare Management (“Infinity Healthcare”), a healthcare consulting business, beneficially owned by Mr. Gubin and Mr. Blisko/. Infinity Healthcare and its affiliates are one of the largest groups of operators of skilled nursing facilities in the Midwest with over 9,000 beds. Our relationship with Infinity Healthcare provides us with unmatched insight into operating trends and industry developments. Additionally, our relationship with Infinity Healthcare provides us with operating flexibility with regard to evaluating potential new acquisitions or better understanding of operational issues pertaining to underperforming tenants.
Since January 2019 we have grown significantly through acquisitions, having purchased 59 properties, with an aggregate purchase price of approximately $414.0 million and weighted average lease yield of 15.6%. The weighted average lease yield is calculated as the annualized average annual base rent for the expected life of the leases divided by total purchase price. Since 2019, our aggregate annualized average base rent for the expected life of the leases for our properties has grown at an approximate 13.1% CAGR from $72.8 million in fiscal year 2019 to $134.8 million as of the date of this Form 10-K. In addition, our Adjusted EBITDA and FFO from 2019 to 2024 grew at an approximate 8.4% and 12.8% CAGR, respectively. During that period, we expanded our geographic footprint from nine states to eleven states.
From January 1, 2024, through March 13, 2025, we acquired 21 skilled nursing and 2 assisted living facilities for a total cost of $154.3 million (including leasehold improvements), which includes capitalized acquisition costs. These acquisitions are expected to generate initial annual cash revenues of approximately $17.7 million.
Our management team has extensive experience in acquiring, owning, financing, operating and leasing skilled nursing facilities and other types of healthcare properties. The team is led by Moishe Gubin, our Chief Executive Officer and Chairman of our Board of Directors, Greg Flamion, our Chief Financial Officer, and Jeffrey Bajtner who serves as our Chief Investment Officer. Combined, this team has over 50 years of experience investing in real estate and particularly in healthcare related real estate and operating companies. Mr. Gubin began his career working at a skilled nursing operator in 1998 and developed in-depth knowledge of the business before purchasing his first skilled nursing facility in 2003. Mr. Gubin has successfully raised equity and debt capital to facilitate over 140 real estate related/healthcare related acquisitions totaling over $1.5 billion in gross investment. In addition, our management team has extensive experience as operators of, and healthcare consultants to, skilled nursing facilities, having managed and operated over 90 skilled nursing facilities, including 67 of our current tenants. We believe our management team’s unique experience across both skilled nursing operations and real estate and its extensive knowledge of the skilled nursing industry position us favorably to take advantage of healthcare investment opportunities. Additionally, our deep and broad relationships with industry operators have allowed us to identify and acquire skilled nursing facilities to which many of our competitors do not have access.
We have assembled a high quality and diversified portfolio of skilled nursing and other healthcare related facilities and we plan to continue to invest primarily in skilled nursing facilities and other healthcare facilities that primarily provide services to the elderly. We believe these asset classes provide potential for higher risk-adjusted returns compared to other forms of net-leased real estate assets due to the specialized expertise necessary to acquire, own, finance and operate these properties, which are factors that tend to limit competition among investors, owners, operators and finance companies. Additionally, our management team’s strong relationships in the industry have allowed us to acquire healthcare-related properties at valuations that achieve attractive lease yields, with the goal of generating strong returns for our stockholders over the long-term. As we continue to acquire additional properties and expand our portfolio, we expect to continue diversifying our portfolio by geography and by tenant, while also maintaining balance sheet strength and liquidity.
We elected to be taxed as a REIT for U.S. federal income tax purposes commencing with our taxable year ending December 31, 2022. We believe that we have been organized and have operated, and we intend to continue to operate, in a manner to qualify for taxation as a REIT. We operate through an umbrella partnership, commonly referred to as an UPREIT structure, in which substantially all of our properties and assets are held through Strawberry Fields Realty, L.P. (the “Operating Partnership”). We are the general partner of the Operating Partnership and as of December 31, 2024 we own approximately 21.7% of the outstanding OP units. To maintain REIT status, we must meet certain organizational and operational requirements, including a requirement that we annually distribute to our stockholders at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction and excluding any net capital gains.
We generate revenues primarily by leasing healthcare-related properties to healthcare operators in triple-net lease arrangements, under which the tenant is solely responsible for the costs related to the property (including property taxes, insurance, maintenance and repair costs and capital expenditures). From time to time, we also extend loans to healthcare operators, generally secured by their receivables. We conduct and manage our business as one operating segment for internal reporting and internal decision-making purposes. We expect to grow our portfolio by pursuing opportunities to acquire additional properties that will be leased to a diverse group of local, regional and national healthcare providers, which may include new or existing skilled nursing operators. We also anticipate diversifying our portfolio over time, including by acquiring properties in different geographic markets, and in different asset classes. In addition, we actively monitor the clinical, regulatory, and financial operating results of our tenants, and work to identify opportunities within their operations and markets that could improve their operating results at our facilities. We communicate such observations to our tenants; however, we have no contractual obligation to do so. Moreover, our tenants have sole discretion with respect to the day-to-day operation of the facilities they lease from us, and how and whether to implement any observation we may share with them. We also actively monitor the overall occupancy, skilled mix, and other operating metrics of our tenants monthly.
We have replaced tenants in the past, and may elect to replace tenants in the future, if they fail to meet the terms and conditions of their leases with us. The replacement tenants may include tenants with whom we have had no prior landlord-tenant relationship as well as current tenants with whom we are comfortable expanding our relationships. In addition, we periodically reassess the investments we have made and the tenant relationships we have entered, and have selectively disposed of facilities or investments, or terminated such relationships, and we expect to continue making such reassessments and, where appropriate, taking such actions.
Our Industry
The skilled nursing industry has evolved to meet the growing demand for post-acute and custodial healthcare services generated by an aging population, increasing life expectancies and the trend toward shifting patient care to lower cost settings. We believe this evolution has led to a number of favorable improvements in the industry, as described below:
● Shift of Patient Care to Lower Cost Alternatives. The growth of the senior population in the United States continues to increase healthcare costs. In response, federal and state governments have adopted cost-containment measures that encourage the treatment of patients in more cost-effective settings such as SNFs, for which the staffing requirements and associated costs are often significantly lower than acute care hospitals, inpatient rehabilitation facilities and other post-acute care settings. As a result, SNFs are generally serving a larger population of higher-acuity patients than in the past. The same trend is impacting ALFs, which are now generally serving some patients who previously would have received services at SNFs.
● Significant Acquisition and Consolidation Opportunities. The skilled nursing industry is large and highly fragmented, characterized predominantly by numerous local and regional providers. We believe this fragmentation provides significant acquisition and consolidation opportunities.
● Widening Supply and Demand Imbalance. The number of SNFs has declined modestly over the past several years. According to the Valuation & Information Group, which provides appraisal and market reports for the industry, the nursing home industry is currently comprised of approximately 14,800 facilities, as compared with over 16,700 facilities as of December 2000. Supply of new facilities is limited due to certificate of need restrictions. 71% of states have certificate of need restrictions., We expect that the supply/demand imbalance in the skilled nursing industry will increasingly favor skilled nursing providers due to the shift of patient care to lower cost settings and an aging population to meet the growing need for post-acute healthcare.
● Increased Demand Driven by Aging Populations. As seniors account for a higher percentage of the total U.S. population, we believe the overall demand for skilled nursing services will increase. At present, the primary market demographic for skilled nursing services is individuals aged 75 and older. The 2020 U.S. Census reported that there were over 56 million people in the United States in 2020 over the age of 65. The U.S. Census estimates this group to be one of the fastest growing segments of the United States population, projecting that it will almost double between 2020 and 2060. According to the Centers for Medicare & Medicaid Services, nursing home care facilities and continuing care retirement expenditures are projected to grow from approximately $196.8 billion in 2020, which includes federal expenditures in response to the COVID-19 pandemic, to approximately $266 billion in 2028. Although skilled nursing and seniors housing occupancy rates have declined during the COVID-19 pandemic, we believe that these trends in population will support an increasing demand for skilled nursing services in the long-term, which in turn will likely support an increasing demand for the services provided within our properties.
Tenants and Operators
Our properties are currently leased to 130 tenants under 31 lease agreements. Our leases include 15 master lease agreements that cover 114 facilities leased to 114 tenants, with the remaining 16 leases each covering a single facility leased to one tenant. 67 of our tenants are related parties.
Each property is operated as a healthcare facility by a licensed operator, which may be the tenant or a separate operator. Each operator holds a license granted by state regulators to operate a specific type of facility. All the operators have experienced management teams and senior healthcare staff with substantial knowledge of their respective local markets. We target healthcare operators that are owned by principals with a history of quality care, and the demonstrated ability to successfully navigate in a changing healthcare operating environment. Certain operators are related parties.
We believe that each of the operators of our properties is primarily focused on serving the needs of the local community. Unlike operators that are part of a large national healthcare conglomerate, we believe the operators at our properties can manage their facilities more efficiently because they are not burdened by costly infrastructure and have the flexibility to rapidly adjust their cost structure to respond to changes in the reimbursement environment.
In order to operate efficiently and improve profitability, most of the operators at our facilities have engaged large consulting firms that specialize in healthcare and skilled nursing operations. These consulting firms provide advice and assistance on marketing, operating policies and procedures, billing, collections and regulatory compliance. The operators and consultants work together to develop and standardize best practices in the facilities, while operating in a cost-efficient manner. The operators at our properties primarily use one of nine principal consulting firms, including three firms that are part of Infinity Healthcare, a healthcare consulting business that is owned by the Moishe Gubin, who is our Chairman and Chief Executive Officer and Michael Blisko, who is one of our directors.
The tenants and operators of our properties have demonstrated the ability to generate consistent profitability despite the challenging markets in which they operate. In many cases, these tenants and operators have successfully optimized and stabilized underperforming skilled nursing facilities. While these tenants and operators have been successful, we expect to seek opportunities to diversify our tenant/operator mix through future acquisitions that will be leased to new operators.
The following table contains information regarding our healthcare facility portfolio by tenant, as of March 13, 2025.
Lessor/Company Subsidiary Manager/
Tenant/
Operator City State Property type Number of licensed beds Tenant Lease Expiration Year (1) Rentable square feet Percent leased Annualized Lease Income
(in $) % of total Annualized Lease Income Annualized lease income per SQF
(in $)
Master Lease Indiana 1
1020 West Vine St, LLC The Waters of Princeton II, LLC Princeton IN SNF 32,571 100 % 1,224,215 0.9 % 37.59
12803 Lenover Street Realty, LLC The Waters of Dillsboro - Ross II, LLC Dillsboro IN SNF 67,851 100 % 1,585,037 1.2 % 23.36
1350 North Todd St, LLC The Waters of Scottsburg II, LLC Scottsburg IN SNF 28,050 100 % 1,275,761 0.9 % 45.48
1600 East Liberty Street Realty, LLC The Waters of Covington II, LLC Covington IN SNF 40,821 100 % 1,533,491 1.1 % 37.57
1601 Hospital Dr Realty, LLC The Waters of Greencastle II, LLC Greencastle IN SNF 31,245 100 % 1,288,648 1.0 % 41.24
1712 Leland Drive Realty, LLC The Waters of Huntingburg II, LLC Huntingburg IN SNF 45,156 100 % 1,224,215 0.9 % 27.11
2055 Heritage Dr Realty, LLC The Waters of Martinsville II, LLC Martinsville IN SNF 30,060 100 % 1,327,307 1.0 % 44.16
3895 Keystone Ave Realty, LLC The Waters of Indianapolis II, LLC Indianapolis IN SNF 25,469 100 % 1,043,805 0.8 % 40.98
405 Rio Vista Lane Realty, LLC The Waters of Rising Sun II, LLC Rising Sun IN SNF 16,140 100 % 747,416 0.6 % 46.31
950 Cross Ave Realty, LLC The Waters of Clifty Falls II, LLC Madison IN SNF 39,438 100 % 1,778,334 1.3 % 45.09
958 East Highway 46 Realty, LLC The Water of Batesville II, LLC Batesville IN SNF 59,582 100 % 1,108,237 0.8 % 18.6
2400 Chateau Drive Realty LLC The Waters of Muncie II, LLC Muncie IN SNF 22,350 100 % 927,826 0.7 % 41.51
Big H2O The Waters of Newcastle II, LLC (2) New Castle IN SNF 24,860 100 % 850,507 0.6 % 34.21
1316 North Tibbs Avenue Realty LLC West Park a water community Indianapolis IN SNF 26,572 100 % 1,146,896 0.9 % 43.16
0.7 %
1002 SISTER BARBARA WAY, LLC Waters of Georgetown Georgetown IN SNF 50,948 100 % 1,005,145 0.8 % 19.73
2640 Cold Spring Road Realty, LLC Alpha A Waters Community, LLC Indianapolis IN SNF 37,054 100 % 1,108,237 0.9 % 29.91
Master Lease Illinois 1
253 Bradington Drive, LLC Bria of Columbia Columbia IL SNF 43,189 100 % 410,821 0.3 % 9.51
3523 Wickenhauser, LLC Bria of Alton Alton IL SNF 44,840 100 % 624,862 0.5 % 13.94
727 North 17th St, LLC Bria of Belleville Belleville IL SNF 50,650 100 % 621,410 0.5 % 12.27
Master Lease Illinois 2
1623 West Delmar Ave, LLC Bria of Godfrey Godfrey IL SNF 15,740 100 % 234,755 0.2 % 14.91
393 Edwardsville Road LLC Bria of Wood River Wood River IL SNF 29,491 100 % 365,941 0.3 % 12.41
Master Lease Landmark
8200 National Ave Realty, LLC Landmark of Midwest City Nursing and Rehab Midwest City OK SNF 39,789 100 % 550,631 0.4 % 13.84
8200 National Ave Realty, LLC Landmark of Midwest City Hospital Midwest City OK LTACH 49,319 100 % 161,034 0.1 % 3.27
911 South 3rd St Realty LLC Chalet Of Niles Niles MI SNF 31,895 100 % 519,463 0.4 % 16.29
Oak Lawn Nursing Realty, LLC Oak Lawn Respiratory and Rehab center, LLC Oak Lawn IL SNF 37,854 100 % 742,833 0.6 % 19.62
Forest View Nursing Realty, LLC Forest View Rehab and Nursing center, LLC Itasca IL SNF 34,152 100 % 748,027 0.6 % 21.90
Parkshore Estates Nursing Realty, LLC Parkshore Estates Nursing & Rehab Center, LLC Chicago IL SNF 94,018 100 % 1,651,893 1.2 % 17.57
Master Lease Kentucky
1015 Magazine Street, LLC Landmark of River City Rehabilitation and Nursing Center Louisville KY SNF 36,050 100 % 2,060,536 1.5 % 57.16
900 Gagel Avenue, LLC Landmark of Iroquois Park Rehabilitation and Nursing Center Louisville KY SNF 36,374 100 % 2,687,656 2.0 % 73.89
308 West Maple Avenue, LLC Landmark of Lancaster Rehabilitation and Nursing Center Lancaster KY SNF 42,438 100 % 2,150,125 1.6 % 50.67
1155 Eastern Parkway, LLC Landmark of Louisville Rehabilitation and Nursing Center Louisville KY SNF 106,250 100 % 5,644,077 4.2 % 53.12
203 Bruce Court, LLC Landmark of Danville Rehabilitation and Nursing Center Danville KY SNF 26,000 100 % 2,015,742 1.5 % 77.53
203 Bruce Court, LLC Goldenrod Village Assisted Living Center Danville KY ALF 19,500 100 % 358,354 0.3 % 18.38
203 Bruce Court, LLC Hillside Suites Independent Living Center Danville KY Independent Living 1,000
- 0.0 %
120 Life Care Way, LLC Landmark of Bardstown Rehabilitation and Nursing Center Bardstown KY SNF 36,295 100 % 2,239,713 1.7 % 61.71
1033 North Highway 11, LLC Landmark of Laurel Creek Rehabilitation and Nursing Center Manchester KY SNF 32,793 100 % 2,374,096 1.8 % 72.40
945 West Russell Street, LLC Landmark of Elkhorn City Rehabilitation and Nursing Center Elkhorn City KY SNF 31,637 100 % 2,374,096 1.8 % 75.04
420 Jett Drive, LLC Landmark of Breathitt County Rehabilitation and Nursing Center, LLC Jackson KY SNF 32,581 100 % 2,687,656 2.0 % 82.49
1253 Lake Barkley Drive, LLC Landmark of Kuttawa, A Rehabilitation & Nursing Center Kuttawa KY SNF 37,892 100 % 1,455,813 1.1 % 38.42
Lessor/Company Subsidiary Manager/
Tenant/
Operator City State Property type Number of licensed beds Tenant Lease Expiration Year (1) Rentable square feet Percent leased Annualized Lease Income
(in $) % of total Annualized Lease Income Annualized lease income per SQF
(in $)
Master Lease Ohio
-
3090 Five Points Hartford Realty, LLC Continent Healthcare Co - Hartford Fowler OH SNF 15,504 100 % 196,012 0.1 % 12.64
3121 Glanzman Rd Realty, LLC Continent Healthcare Co - Toledo Toledo OH SNF 24,087 100 % 304,908 0.2 % 12.66
620 West Strub Rd Realty, LLC Continent Healthcare Co - Sandusky Sandusky OH SNF 18,984 100 % 181,493 0.1 % 9.56
4250 Sodom Hutchings Road Realty, LLC Continent Healthcare Co - Cortland Cortland OH SNF 14,736 100 % 181,493 0.1 % 12.32
Master Lease Tennessee 1
115 Woodlawn Drive, LLC Lakebridge a Waters Community, LLC Johnson City TN SNF 37,734 100 % 1,263,854 0.9 % 33.49
146 Buck Creek Road, LLC Waters of Roan Highlands, LLC Roan Mountain TN SNF 30,139 100 % 927,600 0.7 % 30.78
704 5th Avenue East, LLC Waters of Springfield, LLC Springfield TN SNF 19,900 100 % 765,270 0.6 % 38.46
2501 River Road, LLC Waters of Cheatham, LLC Ashland City TN SNF 37,953 100 % 927,600 0.7 % 24.44
202 Enon Springs East, LLC Waters of Smyrna, LLC Smyrna TN SNF 34,070 100 % 1,055,145 0.8 % 30.97
140 Technology Lane, LLC Waters of Johnson City, LLC Johnson City TN SNF 34,814 100 % 973,980 0.7 % 27.98
835 Union Street, LLC Waters of Shelbyville, LLC Shelbyville TN SNF 44,327 100 % 1,113,120 0.8 % 25.11
1340 North Grundy Quarles Highway, LLC Waters of Gainesboro, LLC Gainesboro TN SNF 254,585 100 % 962,385 0.7 % 3.78
1340 North Grundy Quarles Highway, LLC Waters of Gainesboro, LLC Gainesboro TN ALF 80,315 100 % 289,875 0.2 % 3.61
100 Netherland Lane, LLC Waters of Kingsport Kingsport TN SNF 28,140 100 % 776,865 0.6 % 27.61
2648 Sevierville Road, LLC Waters of Maryville Maryville TN SNF 49,810 100 % 302,646 0.2 % 6.08
Master Lease Tennessee 2
505 North Roan Street, LLC Agape Rehabilitation & Nursing Center, A Water’s Community Johnson City TN SNF 27,100 100 % 1,628,910 1.2 % 60.11
14510 Highway 79, LLC Waters of McKenzie, A Rehabilitation & Nursing Center McKenzie TN SNF 22,454 100 % 1,279,858 0.9 % 57.00
6500 Kirby Gate Boulevard, LLC Waters of Memphis, A Rehabilitation & Nursing Center Memphis TN SNF 51,565 100 % 1,745,261 1.3 % 33.85
978 Highway 11 South, LLC Waters of Sweetwater, A Rehabilitation & Nursing Center Sweetwater TN SNF 30,312 100 % 1,745,261 1.3 % 57.58
2830 Highway 394, LLC Waters of Bristol, A Rehabilitation & Nursing Center Bristol TN SNF 53,913 100 % 2,327,014 1.7 % 43.16
Master Lease Arkansas 1
5301 Wheeler Avenue, LLC The Blossoms at Fort Smith Fort Smith AR SNF 41,490 100 % 821,950 0.6 % 19.81
414 Massey Avenue, LLC The Blossoms at Mountain View Assisted Living Mountain View AR ALF 12,548 100 % 224,807 0.2 % 17.92
706 Oak Grove Street, LLC The Blossoms at Mountain View Mountain View AR SNF 31,586 100 % 681,445 0.5 % 21.57
8701 Riley Drive, LLC The Blossoms at Woodland Hills Little Rock AR SNF 61,543 100 % 983,530 0.7 % 15.98
1516 Cumberland Street, LLC The Blossoms at Cumberland Little Rock AR SNF 82,328 100 % 843,025 0.6 % 10.24
5720 West Markham Street, LLC The Blossoms at Midtown Little Rock AR SNF 56,176 100 % 1,081,883 0.8 % 19.26
2501 John Ashley Drive, LLC The Blossoms at North Little Rock Little Rock AR SNF 65,149 100 % 983,530 0.7 % 15.10
1513 South Dixieland Road, LLC The Blossoms at Rogers Rogers AR SNF 32,962 100 % 772,773 0.6 % 23.44
826 North Street, LLC The Blossoms at Stamps Stamps AR SNF 30,924 100 % 660,370 0.5 % 21.35
Lessor/Company Subsidiary Manager/
Tenant/
Operator City State Property type Number of licensed beds Tenant Lease Expiration Year (1) Rentable square feet Percent leased Annualized Lease Income
(in $) % of total Annualized Lease Income Annualized lease income per SQF
(in $)
Master Lease Arkasnas 2
326 Lindley Lane, LLC The Blossoms at Newport Newport AR SNF 49,675 100 % 850,639 0.6 % 17.12
2821 West Dixon Road, LLC The Blossoms at West Dixon Little Rock AR SNF 42,825 100 % 992,412 0.7 % 23.17
2821 West Dixon Road, LLC The Blossoms at West Dixon Assisted Living Little Rock AR ALF 7,557 100 % 226,837 0.2 % 30.02
552 Golf Links Road, LLC The Blossoms at Hot Springs Hot Springs AR SNF 30,372 100 % 1,077,476 0.8 % 35.48
Master Lease Indiana 2
8400 Clearvista Place LLC The Waters of Castleton SNF, LLC Indianapolis IN SNF 41,400 100 % 1,023,207 0.8 % 24.72
524 Anderson Road LLC The Waters of Chesterfield SNF, LLC Chesterfield IN SNF 21,900 100 % 538,530 0.4 % 24.59
640 West Ellsworth Street LLC The Waters of Columbia City SNF, LLC Columbia City IN SNF 30,462 100 % 753,942 0.6 % 24.75
11563 West 300 South LLC The Waters of Dunkirk SNF, LLC Dunkirk IN SNF 19,800 100 % 412,873 0.3 % 20.85
5544 East State Boulevard LLC The Waters of Fort Wayne SNF, LLC Ft. Wayne IN SNF 31,500 100 % 691,113 0.5 % 21.94
548 South 100 West LLC The Waters of Hartford City SNF, LLC Hartford City IN SNF 22,400 100 % 583,407 0.4 % 26.04
2901 West 37th Avenue LLC The Waters of Hobart SNF, LLC Hobart IN SNF 43,854 100 % 987,305 0.7 % 22.51
1500 Grant Street LLC The Waters of Huntington SNF, LLC Huntington IN SNF 44,957 100 % 762,917 0.6 % 16.97
787 North Detroit Street LLC The Waters of LaGrange SNF, LLC Lagrange IN SNF 31,133 100 % 897,550 0.7 % 28.83
981 Beechwood Avenue LLC The Waters of Middletown SNF, LLC Middletown IN SNF 18,500 100 % 538,530 0.4 % 29.11
317 Blair Pike LLC The Waters of Peru SNF, LLC Peru IN SNF 60,230 100 % 1,166,815 0.9 % 19.37
815 West Washington Street LLC The Waters of Rockport SNF Rockport IN SNF 25,000 100 % 538,530 0.4 % 21.54
612 East 11th Street LLC The Waters of Rushville SNF Rushville IN SNF 16,572 100 % 879,599 0.7 % 53.08
505 West Wolfe Street LLC The Waters of Sullivan SNF Sullivan IN SNF 15,600 100 % 834,721 0.6 % 53.51
500 East Pickwick Drive LLC The Waters of Syracuse SNF Syracuse IN SNF 26,000 100 % 592,383 0.4 % 22.78
300 Fairgrounds Road LLC The Waters of Tipton SNF Tipton IN SNF 30,970 100 % 1,346,325 1.0 % 43.47
1900 Alber Street LLC The Waters of Wabash SNF East Wabash IN SNF 29,762 100 % 753,942 0.6 % 25.33
1720 Alber Street LLC The Waters of Wabash SNF West Wabash IN SNF 12,956 100 % 394,922 0.3 % 30.48
300 North Washington Street LLC The Waters of Wakarusa SNF Wakarusa IN SNF 48,000 100 % 1,193,741 0.9 % 24.87
8400 Clearvista Place LLC The Waters of Castleton ALF, LLC Indianapolis IN ALF 43,900 100 % 484,677 0.4 % 11.04
787 North Detroit Street LLC The Waters of LaGrange ALF, LLC Lagrange IN ALF 20,756 100 % 152,583 0.1 % 7.35
612 East 11th Street LLC The Waters of Rushville ALF, LLC Rushville IN ALF 11,048 100 % 260,289 0.2 % 23.56
505 West Wolfe Street LLC The Waters of Sullivan ALF, LLC Sullivan IN ALF 10,400 100 % 287,216 0.2 % 27.62
300 North Washington Street LLC The Waters of Wakarusa ALF, LLC Wakarusa IN ALF 48,630 100 % 547,505 0.4 % 11.26
Master Lease Texas 1
1621 Coit Road Realty, LLC Landmark of Plano Nursing and Rehab Plano TX SNF 74,718 100 % 723,520 0.5 % 9.68
5601 Plum Creek Drive Realty, LLC Landmark of Amarillo Nursing and Rehab Amarillo TX SNF 90,046 100 % 447,678 0.3 % 4.97
2301 North Oregon Realty, LLC Grace Point Wellness Center El Paso TX SNF 19,895 100 % 823,004 0.6 % 41.37
Master Lease Texas 2
2001 Avenue E, LLC Community Care Center of Hondo Hondo TX SNF 18,572 100 % 516,213 0.4 % 27.80
1213 Water Street, LLC Waterside Nursing and Rehabilitation Kerrville TX SNF 37,012 100 % 1,232,029 0.9 % 33.29
Master Lease Missouri
11515 Troost Avenue LLC Bridgewood Health Care Center Kansas City MO SNF 75,045 100 % 1,501,056 1.1 % 20.00
902 Manor Drive LLC Chariton Park Healthcare Center Salisbury MO SNF 33,675 100 % 1,085,101 0.8 % 32.22
11400 Mehl Avenue LLC Crestwood Health Care Center Florissant MO SNF 39,346 100 % 1,356,376 1.0 % 34.47
1622 East 28th Street LLC Eastview Manor Care Center Trenton MO SNF 24,667 100 % 813,826 0.6 % 32.99
2800 Hwy TT LLC Four Seasons Living Center Sedalia MO SNF 112,191 100 % 2,161,160 1.6 % 19.26
52435 Infirmary Road LLC Milan Healthcare Center Milan MO SNF 27,425 100 % 904,251 0.7 % 32.97
2041 Silva Lane LLC North Village Park Moberly MO SNF 22,500 100 % 1,654,779 1.2 % 73.55
649 South Walnut LLC St. Elizabeth Care Center St. Elizabeth MO SNF 20,927 100 % 569,678 0.4 % 27.22
Master Lease Kansas
520 E Morse Avenue LLC Advena Living of Bonner Springs Bonner Springs KS SNF 13,456 100 % 349,745 0.3 % 25.99
440 N 4th Street LLC Clearwater Assisted and Independent Living Clearwater KS SNF 20,260 100 % 357,518 0.3 % 17.65
620 Wood Avenue LLC Advena Living of Clearwater Clearwater KS ALF 25,577 100 % 427,467 0.3 % 16.71
601 N Rose Hill Road LLC Advena Living of Fountainview Rose Hill KS SNF 33,360 100 % 528,504 0.4 % 15.84
2015 SE 10th Avenue LLC Advena Living on 10th Topeka KS SNF 22,877 100 % 466,327 0.3 % 20.38
1600 S Woodlawn Boulevard LLC Advena Living of Woodlawn Wichita KS SNF 29,164 100 % 621,770 0.5 % 21.32
Lessor/Company Subsidiary Manager/
Tenant/
Operator City State Property type Number of licensed beds Tenant Lease Expiration Year (1) Rentable square feet Percent leased Annualized Lease Income
(in $) % of total Annualized Lease Income Annualized lease income per SQF
(in $)
Individual Leases
Ambassador Nursing Realty, LLC Ambassador Nursing and Rehab, LLC Chicago IL SNF 37,100 100 % 1,005,313 0.7 % 27.10
Momence Meadows Realty, LLC Momence Meadows Nursing & Rehab Center, LLC Momence IL SNF 37,139 100 % 1,038,000 0.8 % 27.95
Lincoln Park Holdings, LLC Lakeview Rehab and Nursing center, LLC Chicago IL SNF 34,362 100 % 1,260,000 0.9 % 36.67
Continental Realty, LLC Continental Nursing and Rehab, LLC Chicago IL SNF 53,653 100 % 1,575,348 1.2 % 29.36
Westshire Realty, LLC City View Multi care Center LLC Cicero IL SNF 124,020 100 % 1,788,365 1.3 % 14.42
Belhaven Realty, LLC Belhaven Nursing and Rehab, LLC Chicago IL SNF 60,000 100 % 2,134,570 1.6 % 35.58
West Suburban Nursing Realty, LLC West Suburban Nursing & Rehab Center, LLC Bloomingdale IL SNF 70,314 100 % 1,961,604 1.5 % 27.90
Niles Nursing Realty, LLC Niles Nursing & Rehab, LLC Niles IL SNF 46,480 100 % 2,409,998 1.8 % 51.85
Midway Neurological and Rehab Realty, LLC Midway Neurological and Rehab Center, LLC Bridgeview IL SNF 120,000 100 % 2,547,713 1.9 % 21.23
516 West Frech St, LLC Parker Nursing and Rehab, LLC Streator IL SNF 24,979 100 % 498,351 0.4 % 19.95
4343 Kennedy Drive, LLC Hope Creek Nursing and Rehabilitation Center, LLC East Moline IL SNF 104,000 100 % 478,959 0.4 % 4.61
1585 Perry Worth Rd, LLC Waters of Lebanon LLC Lebanon IN SNF 32,650 100 % 116,678 0.1 % 3.57
2301 North Oregon Realty, LLC Specialty Hospital Management El Paso TX LTACH 24,660 100 % 1,050,853 0.8 % 42.61
9209 Dollarway Road, LLC The Blossoms at White Hall White Hall AR SNF 45,771 100 % 843,022 0.6 % 18.42
9300 Ballard Rd Realty, LLC Zahav of Des Plaines Des Plaines IL SNF 70,556 100 % 1,302,479 1.0 % 18.46
103 Har-Ber Road LLC Grand Lake Villa Grove OK SNF 31,691 100 % 573,809 0.4 % 18.11
Total/Average
14,540 5,307,309 100 % 134,751,524 100.0 % 25.39
(1) The tenant and the operator are the same for each facility other than the 32 SNF’s leased under the two Indiana master lease agreements and five SNF’s leased in Texas. In the case of these other facilities, the tenants are county hospitals which have entered into management agreements with the operators listed in the table. These arrangements permit the facilities to participate in a CMS program that pays higher Medicaid reimbursement rates for facilities associated with hospitals in underserved areas.
(2) The expiration dates do not reflect the exercise of any renewable options.
Related Party Tenants
As of March 13, 2025, we leased 67 of our facilities to tenants that are affiliates of: (i) Moishe Gubin who serves as Chairman of the Board and our Chief Executive Officer and (ii) Michael Blisko, who serves as one of our directors. As of March 13, 2025, approximately 55.2% of our annualized base rent is received from such related-party tenants. The failure of these tenants to fulfill their obligations under their leases or renew their leases upon expiration could have a material adverse effect on our business, financial condition and results of operations.
Rental income from leases with these related party tenants represented 55.2% of all rental income for the year ended December 31, 2024. We believe these affiliated relationships provide a strong alignment of interests between us and our tenants and offers us increased operating flexibility with regards to potentially replacing underperforming tenants or evaluating acquisitions in new states. As we continue to grow and expand our portfolio, we intend to develop new relationships with unrelated party tenants and operators in order to diversify our tenant base and reduce our dependence on related party and operators.
The following table contains information regarding tenant/operators that are related parties of the Company as March 13, 2025:
Manager/Tenant/Operators that are Related Parties
Lessor/Company Subsidiary Manager/Tenant/Operator Beneficial Owner Percentage in
Tenant/Operator by Related Party
Moishe
Gubin/Gubin
Enterprises LP Michael
Blisko/Blisko
Enterprises LP
Master Lease Indiana 1
1020 West Vine Street Realty, LLC The Waters of Princeton II LLC 49.49 % 50.1 %
12803 Lenover Street Realty LLC The Waters of Dillsboro - Ross Manor II LLC 49.49 % 50.51 %
1350 North Todd Drive Realty, LLC The Waters of Scottsburg II LLC 49.49 % 50.1 %
1600 East Liberty Street Realty LLC The Waters of Covington II, LLC 49.49 % 50.51 %
1601 Hospital Drive Realty LLC The Waters of Greencastle II LLC 49.49 % 50.51 %
1712 Leland Drive Realty, LLC The Waters of Huntingburg II LLC 49.49 % 50.1 %
2055 Heritage Drive Realty LLC The Waters of Martinsville II LLC 49.49 % 50.51 %
3895 South Keystone Avenue Realty LLC The Waters of Indianapolis II LLC 49.49 % 50.51 %
405 Rio Vista Lane Realty LLC The Waters of Rising Sun II LLC 49.49 % 50.51 %
950 Cross Avenue Realty LLC The Waters of Clifty Falls II LLC 49.49 % 50.51 %
958 East Highway 46 Realty LLC The Water of Batesville II LLC 49.24 % 50.51 %
2400 Chateau Drive Realty, LLC The Waters of Muncie II LLC 49.49 % 50.51 %
The Big H2O, LLC The Waters of New Castle II LLC 49.49 % 50.51 %
1316 North Tibbs Avenue Realty LLC Westpark A Waters Community, LLC 50.00 % 50.00 %
1002 Sister Barbara Way, LLC The Waters of Georgetown LLC 49.49 % 50.51 %
2640 Cold Spring Road Realty, LLC Alpha, A Waters Community, LLC 49.49 % 50.51 %
Master Lease Tennessee 1
115 Woodlawn Drive, LLC Lakebridge, a Waters Community, LLC 50.00 % 50.00 %
146 Buck Creek Road, LLC The Waters of Roan Highlands, LLC 50.00 % 50.00 %
704 5TH Avenue East, LLC The Waters of Springfield, LLC 50.00 % 50.00 %
2501 River Road, LLC The Waters of Cheatham, LLC 50.00 % 50.00 %
202 Enon Springs Road East, LLC The Waters of Smyrna, LLC 50.00 % 50.00 %
140 Technology Lane, LLC The Waters of Johnson City, LLC 50.00 % 50.00 %
835 Union Street, LLC The Waters of Shelbyville, LLC 50.00 % 50.00 %
1340 North Grundy Quarles Highway, LLC Waters of Gainesboro, LLC 50.00 % 50.00 %
100 Netherland Lane, LLC Waters of Kingsport, LLC 50.00 % 50.00 %
2648 Sevierville Road, LLC Waters of Maryville, LLC 50.00 % 50.00 %
Master Lease Tennessee 2
505 North Roan Street, LLC Agape Rehabilitation & Nursing Center, A Water’s Community, LLC 50.00 % 50.00 %
14510 Highway 79, LLC Waters of McKenzie, A Rehabilitation & Nursing Center, LLC 50.00 % 50.00 %
6500 Kirby Gate Boulevard, LLC Waters of Memphis, A Rehabilitation & Nursing Center, LLC 50.00 % 50.00 %
978 Highway 11 South, LLC Waters of Sweetwater, A Rehabilitation & Nursing Center, LLC 50.00 % 50.00 %
2830 Highway 394, LLC Waters of Bristol, A Rehabilitation & Nursing Center, LLC 50.00 % 50.00 %
Master Lease Indiana 2
8400 Clearvista Place LLC The Waters of Castleton SNF, LLC 50.00 % 50.00 %
524 Anderson Road LLC The Waters of Chesterfield SNF, LLC 50.00 % 50.00 %
640 West Ellsworth Street LLC The Waters of Columbia City SNF, LLC 50.00 % 50.00 %
11563 West 300 South LLC The Waters of Dunkirk SNF, LLC 50.00 % 50.00 %
5544 East State Boulevard LLC The Waters of Fort Wayne SNF, LLC 50.00 % 50.00 %
548 South 100 West LLC The Waters of Hartford City SNF, LLC 50.00 % 50.00 %
2901 West 37th Avenue LLC The Waters of Hobart SNF, LLC 50.00 % 50.00 %
1500 Grant Street LLC The Waters of Huntington SNF, LLC 50.00 % 50.00 %
787 North Detroit Street LLC The Waters of LaGrange SNF, LLC 50.00 % 50.00 %
981 Beechwood Avenue LLC The Waters of Middletown SNF, LLC 50.00 % 50.00 %
317 Blair Pike LLC The Waters of Peru SNF, LLC 50.00 % 50.00 %
815 West Washington Street LLC The Waters of Rockport SNF 50.00 % 50.00 %
612 East 11th Street LLC The Waters of Rushville SNF 50.00 % 50.00 %
505 West Wolfe Street LLC The Waters of Sullivan SNF 50.00 % 50.00 %
500 East Pickwick Drive LLC The Waters of Syracuse SNF 50.00 % 50.00 %
300 Fairgrounds Road LLC The Waters of Tipton SNF 50.00 % 50.00 %
1900 Alber Street LLC The Waters of Wabash SNF East 50.00 % 50.00 %
1720 Alber Street LLC The Waters of Wabash SNF West 50.00 % 50.00 %
300 North Washington Street LLC The Waters of Wakarusa SNF 50.00 % 50.00 %
8400 Clearvista Place LLC The Waters of Castleton ALF, LLC 50.00 % 50.00 %
787 North Detroit Street LLC The Waters of LaGrange ALF, LLC 50.00 % 50.00 %
612 East 11th Street LLC The Waters of Rushville ALF, LLC 50.00 % 50.00 %
505 West Wolfe Street LLC The Waters of Sullivan ALF, LLC 50.00 % 50.00 %
300 North Washington Street LLC The Waters of Wakarusa ALF, LLC 50.00 % 50.00 %
Individual Leases
Ambassador Nursing Realty, LLC Ambassador Nursing and Rehabilitation Center II, LLC 40.00 % 40.00 %
Momence Meadows Realty, LLC Momence Meadows Nursing and Rehabilitation Center, LLC 50.00 % 50.00 %
Lincoln Park Holdings, LLC Lakeview Rehabilitation and Nursing Center, LLC 40.00 % 40.00 %
Continental Nursing Realty, LLC Continental Nursing and Rehabilitation Center, LLC 40.00 % 40.00 %
Westshire Nursing Realty, LLC City View Multicare Center LLC 50.00 % 50.00 %
Belhaven Realty, LLC Belhaven Nursing and Rehabilitation Center, LLC 50.00 % 50.00 %
West Suburban Nursing Realty, LLC West Suburban Nursing and Rehabilitation Center, LLC 40.00 % 40.00 %
Niles Nursing Realty LLC Niles Nursing & Rehabilitation Center, LLC 50.00 % 50.00 %
Midway Neurological and Rehabilitation Realty, LLC Midway Neurological and Rehabilitation Center, LLC 50.00 % 50.00 %
516 West Frech Street, LLC Parker Rehab & Nursing Center, LLC 50.00 % 50.00 %
1585 Perry Worth Road LLC The Waters of Lebanon LLC 50.00 % 50.00 %
We monitor the creditworthiness of our tenants by evaluating the ability of the tenants to meet their lease obligations to us based on the tenants’ financial performance, including the evaluation of any guarantees of tenant lease obligations. The primary basis for our evaluation of the credit quality of our tenants (and more specifically the tenants’ ability to pay their rent obligations to us) is the tenants’ lease coverage ratios. These coverage ratios compare (i) earnings before interest, income taxes, depreciation, amortization and rent (“EBITDAR”) to rent coverage, and (ii) earnings before interest, income taxes, depreciation, amortization, rent and management fees (“EBITDARM”) to rent coverage. We utilize a standardized 5% management fee when we calculate lease coverage ratios. We obtain various financial and operational information from our tenants each month. We regularly review this information to calculate the above-described coverage metrics, to identify operational trends, to assess the operational and financial impact of the changes in the broader industry environment (including the potential impact of government reimbursement and regulatory changes), and to evaluate the management and performance of the tenants’ operations. These metrics help us identify potential areas of concern relative to our tenants’ credit quality and ultimately the tenants’ ability to generate sufficient liquidity to meet their ongoing obligations, including their obligations to continue paying contractual rents due to us and satisfying other financial obligations to third parties, as prescribed by our triple-net leases.
Geographic Diversification
As of March 13, 2025, our portfolio of 120 properties is broadly diversified by geographic location across eleven U.S. states, comprising Arkansas, Illinois, Indiana, Kansas, Kentucky, Michigan, Missouri, Ohio, Oklahoma, Tennessee and Texas.
The following table contains information regarding our healthcare facility portfolio by geography, as of March 13, 2025:
State Number
of
Properties
Facility Type Licensed Bed
Count
Annualized
Average Base
Rent (Amounts
in $000s)
% of Total
Annualized
Average
Base Rent
Indiana 36 SNFs 5 ALFs 3,404 $ 35,914 26.65 %
Illinois 20 SNFs 4,226 23,401 17.37 %
Tennessee 14 SNFs 1 ALF 1,412 18,085 13.42 %
Arkansas 12 SNFs 2 ALFs 1,568 11,044 8.20 %
Kentucky 10 SNFs 1 ALF 1,163 26,048 19.33 %
Missouri 8 SNFs 1,111 10,046 7.46 %
Kansas 5 SNFs 1 ALF 2,751 2.04 %
Texas 5 SNFs 1 LTACH 4,793 3.56 %
Oklahoma 2 SNFs 1 LTACH 1,286 0.95 %
Ohio 4 SNFs 0.64 %
Michigan 1 SNF 0.39 %
Totals 117 SNFs 10 ALFs 2 LTACHs 14,540 $ 134,751 100.0 %
Competitive Strengths
We believe that the following competitive strengths provide a solid foundation for the sustained growth of our business and successful execution of our business strategies:
Diversified Portfolio. We have a portfolio that is diversified in terms of both geography and tenant composition. As of March 13, 2025, our portfolio is comprised of 120 healthcare-related properties with a total of 14,540 licensed beds located throughout Arkansas, Illinois, Indiana, Kansas, Kentucky, Michigan, Missouri, Ohio, Oklahoma, Tennessee and Texas. We believe that our geographic diversification limits the potential impact of any regulatory, reimbursement, competitive dynamic or other changes in any single market on the overall performance of our portfolio. We lease our properties to 130 tenants, with no single tenant accounting for more than 4.2% of our annualized base rent. This diversification limits our exposure for any single tenant that encounters financial or operational difficulties.
Protected Markets. In nine of the eleven states in which we operate, we benefit from CON laws that require state approval for the construction and expansion of certain types of healthcare facilities. These laws represent significant barriers to entry and limit competition in these markets.
Demonstrated Ability to Identify and Structure Accretive Acquisition Opportunities. Our management team has long-standing relationships in the skilled nursing and post-acute industries. Through their experience in acquiring these types of facilities, we have the proven ability to identify and complete complex and accretive transactions. Additionally, because many of our acquisitions are off-market opportunities sourced through our management team’s network of industry relationships, we believe we do not typically compete with larger healthcare-focused real estate companies for acquisitions as they tend to focus on larger, platform acquisition opportunities. As a result, we have consistently acquired assets at attractive valuations and believe we can continue to identify these types of opportunities to expand our portfolio.
Significant Experience Acquiring Underperforming Assets. Although we primarily seek to acquire properties that have had consistent profitability, we may also acquire underperforming properties if we believe that the underlying facilities can become successful through better management. Our management team’s prior experience as operators gives it the ability to evaluate these types of facilities and their potential for improved revenue enhancement and increased operating efficiencies. We will consider the acquisition of underperforming properties if they are available at attractive valuations and provide us with significant upside potential once their new operators have successfully stabilized and optimized their operations. If we acquire underperforming properties, we would expect to lease them to tenants and operators that have significant turnaround experience and support from experienced consultants.
Experienced and Adept Operators. We have strong and long-standing relationships with operators and their principals who have significant experience in operating successful skilled nursing facilities. These operators and their principals have a strong track record of operating in challenging markets where operators are subject to increased regulatory issues and significant competition. Additionally, these operators and their principals have learned to successfully operate facilities in which most of the revenue is earned from providing services to patients covered by Medicaid which are subject to lower reimbursement rates than other revenue sources.
Consulting Firms Provide Additional Resources for the Operators of our Facilities. Most of the operators of our facilities utilize the services of experienced healthcare consulting firms to provide them with expert advice and assistance with their operations. We believe these consulting firms provide the operators with additional expertise and resources that materially enhance their ability to operate efficiently and to meet applicable regulatory requirements.
Close Relationships with Tenants, Operators and Consultants Provide Enhanced Oversight, Market Intelligence and Strong Alignment of Interests. The nature of our close relationships with the tenants and operators of our properties and their consulting firms allows us to maintain close communication and obtain early knowledge of potential issues faced by our tenants, enabling us to address those issues that affect us as the lessor. These relationships also provide us with intelligence on the markets in which we own properties and assistance in locating new and replacement tenants. Additionally, the consulting firms assist us without charge in evaluating potential acquisitions and operators. This assistance provides us with insight into local market trends, which is particularly valuable for new markets. These relationships also provide a strong alignment of interests between our interests as a property owner and our tenants’ interests.
Well-Structured, Long-Term, Triple-Net Leases Generate Predictable and Growing Rental Income Streams. Most of our owned properties are leased to tenants under long-term, non-cancellable, triple-net leases, pursuant to which the tenants are responsible for all maintenance and repairs, insurance and taxes associated with the leased properties and the business conducted at the properties. As of December 31, 2024, 100% of the gross leasable area of our facilities was leased with an average remaining lease term of 7.2 years. Our leases generally have an initial term of 10 years with two five-year extensions, and annual rent escalators of 1% to 3% per year, which provides us with a steady and growing cash rental stream. Additionally, our leases are structured to provide us with key credit support and have credit enhancement provisions that may include non-refundable security deposits of up to 6 months, personal and corporate guarantees and cross-default provisions under our master leases. Approximately 84.1% of our total annualized rental revenue is generated through our 15 master leases that have cross-default and cross-collateralization provisions.
Seasoned Management Team with Significant Experience. Moishe Gubin, our Chairman and Chief Executive Officer, has over 25 years of operating and real estate experience in the skilled nursing and long-term care industries. Prior to founding the Predecessor Company, Mr. Gubin worked as an operator of skilled nursing facilities and built a strong operational knowledge base that has been incorporated into the day-to-day management of our current portfolio. Additionally, Mr. Gubin has significant acquisition experience having completed over 140 healthcare-related facilities with an aggregate investment amount of over $1.5 billion since 2003. Mr. Gubin also has significant experience accessing debt capital markets to fund growth, having raised over $350 million of publicly traded bonds that are listed on the Tel Aviv Stock Exchange. We believe that the diverse operational and financial background and expertise of our management team gives us the ability to successfully manage our portfolio and sustain our growth.
Our Business and Growth Strategies
Our objective is to generate attractive returns for our stockholders over the long term through dividends and capital appreciation. Key elements of our strategy include the following:
Acquire Additional Healthcare Properties in Concentrated Geographic Areas. We plan to invest primarily in real estate used as skilled nursing facilities and other healthcare facilities that provide services to the elderly, where our management team has substantial experience and relationships. We believe these facilities have the potential to provide higher risk-adjusted returns compared to other forms of net-leased real estate assets due to the specialized expertise necessary to acquire, own, finance and manage these properties, which are factors that tend to limit competition among investors, owners, operators and finance companies. We will seek to acquire properties in states where we believe we can build regional density in order to create competitive advantages and drive operational and cost efficiencies.
Negotiate Well-Structured Net Leases. Our primary ownership structure is a facility purchase with a long-term triple-net lease with the healthcare operator. We seek to structure our leases with initial lease terms of 10 years with tenant options to extend the lease for an additional period of 5 to 10 years and rent escalators that provide a steadily growing cash rental stream. Our lease structures are designed to provide us with credit support for our rents, including, in certain cases, lease deposits, covenants regarding liquidity, and various provisions for cross-default. We believe these features help insulate us from variability in operator cash flows and enable us to minimize our expenses while we continue to build our portfolio.
Leverage Existing and Develop New Operator Relationships. relationships in the healthcare industry through which we have sourced our existing portfolio, and we intend to continue to expand our portfolio by leveraging these existing relationships. Sixty-seven of our properties are leased to related parties. One of our goals is to reduce our dependence on related party tenants in order to diversify our tenant base. Although we expect to continue to lease properties to related party tenants in markets in which the related party tenants have substantial experience and operations, we intend to lease properties in other markets to unrelated tenants if we are able to identify qualified operators. Additionally, we will consider leasing properties to unrelated parties in markets in which related parties operate if we are able to identify qualified operators that are willing to lease properties on terms that are no less favorable than those available from related parties.
Utilize Prudent Investment Underwriting Criteria. We have adopted what we believe to be a thorough investment underwriting process based on careful analysis and due diligence with respect to both the healthcare real estate and the healthcare service operations. We seek to make investments in healthcare properties that have the following attributes: well-located, visible to traffic, in good physical condition with predictable future capital improvement needs and with attractive prospects for future profitability.
Monitor the Performance of our Facilities and Industry Trends. We carefully monitor the financial and operational performance of our tenants and of the specific facilities in which we invest through a variety of methods, such as reviews of periodic financial statements, and regular meetings with the facility operators. Pursuant to the terms of our leases, our tenants are required to provide us with certain periodic financial statements and operating data.
Utilize Targeted Leverage in Our Investing Activities. We seek to utilize a targeted level of leverage that is appropriate in light of market conditions, future cash flows, the creditworthiness of tenants and future rental rates. We will seek to achieve a ratio of debt to asset fair market value in the range of 45% to 55%. However, our charter and bylaws do not limit the amount of debt that we may incur and our board of directors has not adopted a policy limiting the total amount of our borrowings.
Policy for the Acquisition and Sale of Properties
In considering these performance targets, readers should bear in mind that targeted performance for each acquisition is not a guarantee, projection, forecast or prediction and is not necessarily indicative of future results. These performance targets are as of the date hereof and may change in the future. The performance targets are based on an assumption that economic, market and other conditions will not deteriorate and, in some cases, will improve. These performance targets are also based on estimates and assumptions about performance believed to be reasonable under the circumstances, but actual realized returns of our investments will depend on, among other factors, the ability to consummate attractive investments, future operating results, the value of the assets and market conditions at the time of disposition, any related transaction costs and the timing and manner of sale, all of which may differ from the assumptions and circumstances on which targeted returns are based. We believe the performance targets are reasonable, but readers should keep in mind that this investment involves a high degree of risk and they should purchase these securities only if they can afford a complete loss of their investment.
We believe our management team’s depth of experience in healthcare real estate, operations and finance provides us with unique perspective in underwriting potential investments. Our real estate underwriting process focuses on both real estate and healthcare operations. The process includes a detailed analysis of the facility and the financial strength and experience of the tenant and its management. Key factors that we consider in the underwriting process include the following:
● the current, historical and projected cash flow and operating margins of each tenant and at each facility;
● the ratio of our tenants’ operating earnings both to facility rent and to facility rent plus other fixed costs, including debt costs;
● the quality and experience of the tenant and its management team;
● construction quality, condition, design and projected capital needs of the facility and property condition assessments;
● competitive landscape;
● drivers of healthcare-related needs;
● the location of the facility;
● local economic and demographic factors and the competitive landscape of the market;
● licensure and accreditation;
● the effect of evolving healthcare legislation and other existing and future regulations and compliance with such regulations on our tenants’ profitability and liquidity; and
● the payor mix of private, Medicare and Medicaid patients at the facility.
We also require tenants to furnish property and operator-level financials, among other data, on a monthly basis; we evaluate individual and portfolio property performance, liquidity metrics, lease and debt coverage, occupancy, planned capital expenditures, and other measures; and we conduct in- person visits to each facility in the portfolio at least two times per year. We believe our underwriting process enables us to acquire desirable properties with strong tenants that will support our ability to deliver attractive risk-adjusted returns to our stockholders.
The policy does not limit the authority of our board of directors to change or deviate from the policy as it sees fit from time to time. Changes to the policy do not require stockholder approval.
Our management does not have a fixed policy relating to the sale of properties. Accordingly, each potential sale opportunity will be examined on its merits in view of the business opportunity involved.
Our Leases
As of March 13, 2025, all of our healthcare properties were subject to lease agreements. Our leases have a weighted-average annualized lease income per leased square foot of $25.39, and a weighted-average remaining lease term of approximately 7.2 years.
To our knowledge, except as noted below, none of our current tenants are in default under any of the leases.
Each of our properties is leased under a separate lease agreement, although 15 groups of properties, covering a total of 114 facilities, are subject to 15 master lease agreements. Each master lease agreement provides that the tenants under the master lease are jointly and severally liable for the obligations of all of the other tenants under such master lease. We entered into these master lease agreements in order to facilitate financing the underlying properties. Rental income under these master leases represents a substantial portion of our rental income.
The following table summarizes information concerning the master lease agreements as of March 13, 2025 (dollars in thousands):
Master Lease Agreements
Master Lease Name States Facilities
Count
GLA Annualized
Average
Base Rent
($000s)
% of Total
Annualized Average
Base Rent
Master Lease Indiana 1 (1) IN 578,167 $ 19,175 14.2 %
Master Lease Indiana 2 (1) IN 705,730 $ 16,623 12.3 %
Master Lease Central Illinois 1 IL 138,678 $ 1,657 1.2 %
Master Lease Central Illinois 2 IL 45,231 $ 601 0.5 %
Master Lease Landmark TX/OK/ MI/IL 287,028 $ 4,374 3.3 %
Master Lease Ohio OH 73,311 $ 864 0.6 %
Master Lease Tennessee 1 (1) TN 348,030 $ 9,358 6.9 %
Master Lease Tennessee 2 (1) TN 185,344 $ 8,726 6.5 %
Master Lease Arkansas 1 AR 414,706 $ 7,053 5.2 %
Master Lease Arkansas 2 AR 130,429 $ 3,147 2.3 %
Master Lease Kentucky KY 438,810 $ 26,048 19.3 %
Master Lease Missouri MO 355,776 $ 10,046 7.5 %
Master Lease Kansas KS 144,694 $ 2,752 2.1 %
Master Lease Texas 1 TX 55,584 $ 1,994 1.5 %
Master Lease Texas 2 TX 184,659 $ 1,748 1.3 %
Total (15)
4,086,177 $ 114,166 84.7 %
(1) The tenants under the two master leases in Indiana and the two Tennessee master leases are affiliated with Moishe Gubin, who is our Chairman and Chief Executive Officer and Michael Blisko, who is one of our directors. See “Item 1. Business-Our Leases.”
The following table summarizes information concerning the lease agreements that are not subject to a master lease agreement as of March 13, 2025 (dollars in thousands):
Individual Leases
Lessor State Facility
Type
Rentable
Sq. Ft.
Annualized
Average
Base Rent
($000s)
% of Total
Annualized
Average
Base Rent
Ambassador Nursing Realty, LLC Illinois SNF 37,100 $ 1,005 0.7 %
Momence Meadows Realty, LLC Illinois SNF 37,139 $ 1,038 0.8 %
Lincoln Park Holdings, LLC Illinois SNF 34,362 $ 1,260 0.9 %
Continental Nursing Realty, LLC Illinois SNF 53,653 $ 1,575 1.2 %
Westshire Nursing Realty, LLC Illinois SNF 124,020 $ 1,788 1.3 %
Belhaven Realty, LLC Illinois SNF 60,000 $ 2,135 1.5 %
West Suburban Nursing Realty, LLC Illinois SNF 70,314 $ 1,962 1.5 %
Niles Nursing Realty LLC Illinois SNF 46,480 $ 2,410 1.8 %
Midway Neurological and Rehabilitation Realty, LLC Illinois SNF 120,000 $ 2,548 1.9 %
516 West Frech Street, LLC Illinois SNF 24,979 $ 498 0.4 %
4343 Kennedy Drive, LLC Illinois SNF 104,000 $ 479 0.4 %
1585 Perry Worth Rd, LLC Indiana SNF 32,650 $ 117 0.1 %
9300 Ballard Rd Realty, LLC Illinois SNF 70,556 $ 1,302 1.0 %
2301 North Oregon Realty, LLC Texas LTACH 24,660 $ 1,050 0.8 %
9209 Dollarway Road, LLC Arkansas SNF 45,771 $ 843 0.6 %
103 Har-Ber Road, LLC Oklahoma SNF 31,691 0.4 %
Total (16)
917,375 $ 20,584 15.3 %
Investment and Financing Policies
Our properties are located in 11 states and we intend to continue to acquire properties in other states throughout the United States. Our investment objectives are to increase cash flow, provide quarterly cash dividends, maximize the value of our properties and acquire properties with cash flow growth potential. We intend to invest primarily in SNFs and seniors housing, including ALFs and we may determine in the future to expand our investments to include medical office buildings, long-term acute care hospitals and inpatient rehabilitation facilities. Although our portfolio currently consists primarily of owned real property, future investments may include first mortgages, mezzanine debt and other securities issued by, or joint ventures with, REITs or other entities that own real estate consistent with our investment objectives.
Competition
The market for making investments in healthcare properties is highly fragmented, and increased competition makes it more challenging for us to identify and successfully capitalize on opportunities that meet our investment objectives. In acquiring and leasing healthcare properties, we compete with private equity funds, real estate developers, REITs, other public and private real estate companies and private real estate investors, many of whom have greater financial resources than we have. We also face competition in leasing or subleasing available facilities to prospective tenants.
Regulation
Healthcare Regulatory Matters
The following discussion describes certain material healthcare laws and regulations that may affect our operations and those of our tenants/operators. Although there is presently no Federal regulation on the lessor itself from Federal government agencies that regulate and inspect the operators and no regulation of the lessor in the States in which we own real property, our tenants (the operators of skilled nursing facilities, long-term acute care hospitals and other healthcare providers) are subject to extensive federal, state and local government healthcare laws and regulations. These laws and regulations include requirements related to licensure, conduct of operations, ownership of the facilities operation, addition or expansion of facilities and services, prices for services, billing for services and the confidentiality and security of health-related information. Different properties within our portfolio may be more or less subject to certain types of regulation, some of which are specific to the type of facility or provider. These laws and regulations are wide-ranging and complex, may vary or overlap from jurisdiction to jurisdiction, and are subject frequently to change. Compliance with these regulatory requirements can increase operating costs and, thereby, adversely affect the financial viability of our tenants/operators’ businesses. Our tenants/operators’ failure to comply with these laws and regulations could adversely affect their ability to successfully operate our properties, or receive reimbursement for services rendered within them, which could negatively impact their ability to satisfy their contractual obligations to us. Our leases will require the tenants/operators to comply with all applicable laws, including healthcare laws.
Our tenants are subject directly to healthcare laws and regulations, because of the broad nature of some of these restrictions, such as the Anti-Kickback Statute discussed below. We intend for all of our business activities and operations to conform in all material respects with all applicable laws and regulations, including healthcare laws and regulations. We expect that the healthcare industry will continue to face increased regulation and pressure in the areas of fraud, waste and abuse, cost control, healthcare management and provision of services.
Healthcare Reform Measures. The Affordable Care Act changed how healthcare services are covered, delivered and reimbursed through expanded coverage of uninsured individuals, reduced growth in Medicare program spending, reductions in Medicare and Medicaid reimbursement, including but not limited to, Disproportionate Share Hospital, or DSH payments, and expanding efforts by governmental and private third party payors to tie reimbursement to quality and efficiency. In addition, the law reformed certain aspects of health insurance, contains provisions intended to strengthen fraud and abuse enforcement, and encourage the development of new payment models, including the creation of Accountable Care Organizations, or ACOs. The status of the Affordable Care Act is subject to substantial uncertainty due to proposals to terminate or modify its provisions. We are not able to predict the effect of such changes on our business since the nature of any changes is undetermined. However, any changes that result in a decrease in payments made on behalf of patients are likely to reduce the income that our tenants receive from the operation of facilities at our properties.
Sources of Revenue and Reimbursement. Our tenants and operators receive payments for patient services from the federal government under the Medicare program, state governments under their respective Medicaid or similar programs, managed care plans, private insurers and directly from patients. Medicare is a federal program that provides certain hospital and medical insurance benefits to persons age 65 and over, some disabled persons, persons with end-stage renal disease and persons with Lou Gehrig’s Disease. Medicaid is a federal-state program, administered by the states pursuant to certain conditions imposed by the Federal government, which provides hospital and medical benefits to qualifying individuals who are unable to afford healthcare. Generally, revenues for services rendered to Medicare patients are determined under a prospective payment system, or PPS. CMS annually establishes payment rates for the PPS for each applicable facility type and level of care provided.
Amounts received under Medicare and Medicaid programs are generally significantly less than established facility gross charges for the services provided and may not reflect the provider’s costs. Healthcare providers generally offer discounts from established charges to certain group purchasers of healthcare services, including private insurance companies, employers, health maintenance organizations, or HMOs, preferred provider organizations, or PPOs and other managed care plans. These discount programs generally limit a provider’s ability to increase revenues in response to increasing costs. Patients are generally not responsible for the total difference between established provider gross charges and amounts reimbursed for such services under Medicare, Medicaid, HMOs, PPOs and other managed care plans, but are responsible to the extent of any exclusions, deductibles or coinsurance features of their coverage. The amount of such exclusions, deductibles and coinsurance continues to increase. Collection of amounts due from individuals is typically more difficult than from governmental or third-party payers takes considerably longer and often requires the involvement of, and payment to, third parties to collect.
Payments to providers are being increasingly tied to quality and efficiency. These initiatives include requirements to report clinical data and patient satisfaction scores, reduced Medicare payments to hospitals based on “excess” readmission rates as determined by CMS, denial of payments under Medicare, Medicaid and some private payors for services resulting from a hospital or facility-acquired condition, or HAC, and reduced Medicare payments to hospitals with high risk-adjusted HAC rates. Certain provider types, including, but not limited to, inpatient rehabilitation facilities and long-term acute care hospitals, are subject to specific limits and restrictions on eligibility for admissions which, in turn, affect reimbursement at these facilities.
The amounts of program payments received by our tenants/operators can be changed from time to time by legislative or regulatory actions and by determinations by agents for the programs. Level of payment has also been impacted by the Federal budget sequestration which automatically reduces payments as a result of funding limitations. The Medicare and Medicaid statutory framework is subject to administrative rulings, interpretations and discretion that affect the amount and timing of reimbursement made under Medicare and Medicaid. Federal healthcare program reimbursement changes may be applied retroactively under certain circumstances. In recent years, the federal government has enacted various measures to reduce spending under federal healthcare programs. In April 2018, CMS announced as part of its patient driven payment model (“PDPM”) a skilled-nursing preferred payor system (“SNF-PPS”) intended to reduce administrative burden, and foster innovation to improve care and quality for patients.
In addition, many states have enacted, or are considering enacting, measures designed to reduce their Medicaid expenditures and change private healthcare insurance, and states continue to face significant challenges in maintaining appropriate levels of Medicaid funding due to state budget shortfalls. Many States have also sought to control costs by implementing a variety of alternative care and payment models authorized under Federal Medicaid waivers and such models often impose new or enhanced administrative requirements on health care providers as a condition of payment. Further, non-government payers may reduce their reimbursement rates in accordance with payment reductions by government programs or for other reasons. Healthcare provider operating margins may continue to be under significant pressure due to the deterioration in pricing flexibility and payor mix, as well as increases in operating expenses that exceed increases in payments under the Medicare and Medicaid programs.
Anti-Kickback Statute. A section of the Social Security Act known as the “Anti-Kickback Statute” prohibits, among other things, the offer, payment, solicitation or acceptance of remuneration, directly or indirectly, in return for referring an individual to a provider of services for which payment may be made in whole or in part under a federal healthcare program, including the Medicare or Medicaid programs. Courts have interpreted this statute broadly and held that the Anti-Kickback Statute is violated if just one purpose of the remuneration is to generate referrals, even if there are other lawful purposes. The Affordable Care Act provides that knowledge of the Anti-Kickback Statute or specific intent to violate the statute is not required in order to violate the Anti-Kickback Statute. Violation of the Anti-Kickback Statute is a crime, punishable by fines of up to $25,000 per violation, five years imprisonment, or both. Violations may also result in civil and administrative liability and sanctions, including civil penalties of up to $50,000 per violation, liability under the False Claims Act, exclusion from participation in federal and state healthcare programs, including Medicare and Medicaid, and additional monetary penalties in amounts treble to the underlying remuneration.
There are a limited number of statutory exceptions and regulatory safe harbors for categories of activities deemed protected from prosecution under the Anti-Kickback Statute. Currently, there are statutory exceptions and safe harbors for various activities, including the following: certain investment interests, space rental, equipment rental, practitioner recruitment, personnel services and management contracts, sale of practice, referral services, warranties, discounts, employees, managed care arrangements, investments in group practices, freestanding surgery centers, ambulance replenishing and referral agreements for specialty services. The safe harbor for space rental arrangements requires, among other things, that the aggregate rental payments be set in advance, be consistent with fair market value and not be determined in a manner that takes into account the volume or value of any referrals. The fact that conduct or a business arrangement does not fall within a safe harbor does not necessarily render the conduct or business arrangement illegal under the Anti-Kickback Statute. However, such conduct and business arrangements may lead to increased scrutiny by government enforcement authorities.
Many states have laws similar to the Anti-Kickback Statute that regulate the exchange of remuneration in connection with the provision of healthcare services, including prohibiting payments to physicians for patient referrals. The scope of these state laws is broad because they can often apply regardless of the source of payment for care. These statutes typically provide for criminal and civil penalties, as well as potential loss of facility licensure and eligibility for reimbursement by government payors.
We intend to use commercially reasonable efforts to structure our arrangements, including any lease/operating arrangements involving facilities in which local physicians are investors, so as to satisfy, or meet as closely as possible, safe harbor requirements. The safe harbors are narrowly structured, and there are not safe harbors available for every type of financial arrangement that we or our tenants/operators may enter. Although it is our intention to fully comply with the Anti-Kickback Statue, as well as all other applicable state and federal laws, we cannot assure you that all of our arrangements or the arrangements of our tenants/operators will meet all the conditions for a safe harbor. There can be no assurance regulatory authorities enforcing these laws will determine our financial arrangements or the financial relationships of our tenants/operators comply with the Anti-Kickback Statute or other similar laws and such regulatory authorities or private qui tam relators bringing actions on behalf of government entities in exchange for a portion of any recovery may allege non-compliance and seek financial or other penalties.
Stark Law. The Social Security Act also includes a provision commonly known as the “Stark Law.” The Stark Law is a strict liability statute that prohibits a physician from making a referral to an entity furnishing “designated health services” paid by Medicare or Medicaid if the physician or a member of the physician’s immediate family has a financial relationship with that entity unless an exception to the law is met. Designated health services include, among other services, inpatient and outpatient hospital services, clinical laboratory services, physical therapy services and radiology services. The Stark Law also prohibits entities that provide designated health services from billing the Medicare and Medicaid programs for any items or services that result from a prohibited referral and requires the entities to refund amounts received for items or services provided pursuant to the prohibited referral. Sanctions for violating the Stark Law are imposed without consideration to intent and include denial of payment, civil monetary penalties of up to $15,000 per prohibited service provided for failure to return amounts received in a timely manner, and exclusion from the Medicare and Medicaid programs. The statute also provides for a penalty of up to $100,000 for a circumvention scheme. Failure to refund amounts received pursuant to a prohibited referral may also constitute a false claim and result in additional penalties under the False Claims Act, which is discussed in greater detail below.
There are exceptions to the self-referral prohibition for many of the customary financial arrangements between physicians and providers, including employment contracts, leases and recruitment agreements. There is also an exception for a physician’s ownership interest in an entire hospital, as opposed to an ownership interest in a hospital department if such ownership interests and capacity were in place as of March 23, 2010. Unlike safe harbors under the Anti-Kickback Statute, an arrangement must comply with every requirement of a Stark Law exception, or the arrangement will be in violation of the Stark Law. Through a series of rulemakings, CMS has issued final regulations implementing the Stark Law. While these regulations were intended to clarify the requirements of the exceptions to the Stark Law, it is unclear how the government will interpret many of these exceptions for enforcement purposes and even an inadvertent failure to comply with the strict requirements, such as assuring a signature, can result in imposition of penalties under certain circumstances.
Although there is an exception for a physician’s ownership interest in an entire hospital, the Affordable Care Act prohibits newly created physician-owned hospitals from billing for Medicare patients referred by their physician owners. As a result, the law effectively prevents the formation after December 31, 2010 of new physician-owned hospitals that participate in Medicare and Medicaid. While the Affordable Care Act grandfathers existing physician-owned hospitals, it does not allow these hospitals to increase the percentage of physician ownership and significantly restricts their ability to expand services.
Many states also have laws similar to the Stark Law that prohibit certain self-referrals. The scope of these state laws is broad because they can often apply regardless of the source of payment for care, and little precedent exists for their interpretation or enforcement. These statutes typically provide for criminal and civil penalties, as well as loss of facility licensure.
Although our lease agreements will require tenants to comply with the Stark Law, we cannot offer assurance that the arrangements entered into by us or by our tenants/operators will be found to be in compliance with the Stark Law or similar state laws.
The False Claims Act. The federal False Claims Act prohibits knowingly making or presenting any false claim for payment to the federal government. The government may use the False Claims Act to prosecute Medicare and other government program fraud in areas such as coding errors, billing for services not provided, submitting false cost reports and failing to report and repay an overpayment within 60 days of identifying the overpayment or by the date a corresponding cost report is due, whichever is later. The False Claims Act defines the term “knowingly” broadly. Although simple negligence will not give rise to liability under the False Claims Act, submitting a claim with reckless disregard to its truth or falsity or failing to correct an error within specified period of time constitutes a “knowing” submission.
The False Claims Act contains qui tam, or whistleblower, provisions that allow private individuals to bring actions on behalf of the government alleging that the defendant has defrauded the federal government. Whistleblowers under the False Claims Act may collect a portion of the government’s recovery, which serves as an incentive to bring claims which then must be defended whether or not they have merit. Every entity that receives at least $5 million annually in Medicaid payments must have written policies for all employees, contractors or agents, providing detailed information about false claims, false statements and whistleblower protections under certain federal laws, including the False Claims Act, and similar state laws.
In some cases, whistleblowers and the federal government have taken the position, and some courts have held, that providers who allegedly have violated other statutes, such as the Anti-Kickback Statute and the Stark Law, have thereby submitted false claims under the False Claims Act. The Affordable Care Act clarifies this issue with respect to the Anti-Kickback Statute by providing that submission of claims for services or items generated in violation of the Anti-Kickback Statute constitutes a false or fraudulent claim under the False Claims Act. If a defendant is found liable under the False Claims Act, the defendant may be required to pay three times the actual damages sustained by the government, additional civil penalties of up to $10,000 per false claim, plus reimbursement of the fees of counsel for the whistleblower.
Many states have enacted similar statutes preventing the presentation of a false claim to a state government, and we expect more to do so because the Social Security Act provides a financial incentive for states to enact statutes establishing state level liability.
Other Fraud & Abuse Laws. There are various other fraud and abuse laws at both the federal and state levels that cover false claims and false statements and these may impact our business. For example, the Civil Monetary Penalties law authorizes the imposition of monetary penalties against an entity that engages in a number of prohibited activities. The penalties vary by the prohibited conduct, but include penalties of $10,000 for each item or service, $15,000 for each individual with respect to whom false or misleading information was given, and treble damages for the total amount of remuneration claimed. The prohibited actions include, but are not limited to, the following:
● knowingly presenting or causing to be presented, a claim for services not provided as claimed or which is otherwise false or fraudulent in any way;
● knowingly giving or causing to be giving false or misleading information reasonably expected to influence the decision to discharge a patient;
● offering or giving remuneration to any beneficiary of a federal healthcare program likely to influence the receipt of reimbursable items or services; arranging for reimbursable services with an entity which is excluded from participation from a federal healthcare program; or knowingly or willfully soliciting or receiving remuneration for a referral of a federal healthcare program beneficiary.
Any violations of the Civil Monetary Penalties Law by management or our tenants/operators could result in substantial fines and penalties and could have an adverse effect on our business.
HIPAA Administrative Simplification and Privacy and Security Requirements. HIPAA, as amended by the HITECH Act, and its implementing regulations create a national standard for protecting the privacy and security of individually identifiable health information (called “protected health information”). Compliance with HIPAA is mandatory for covered entities, which include healthcare providers such as tenants/operators of our facilities. Compliance is also required for entities that create, receive, maintain or transmit protected health information on behalf of healthcare providers or that perform services for healthcare providers that involve the disclosure of protected health information, called “business associates.”
Covered entities must report a breach of protected health information that has not been secured through encryption or destruction to all affected individuals without unreasonable delay, but in any case, no more than 60 days after the breach is discovered. Notification must also be made to HHS and, in the case of a breach involving more than 500 individuals, to the media. In the final rule issued in January, 2013, HHS modified the standard for determining whether a breach has occurred by creating a presumption that any non-permitted acquisition, access, use or disclosure of protected health information is a breach unless the covered entity or business associate can demonstrate that there is a low probability that the information has been compromised, based on a risk assessment.
Covered entities and business associates are subject to civil penalties for violations of HIPAA of up to $1.5 million per year for violations of the same requirement. In addition, criminal penalties can be imposed not only against covered entities and business associates, but also against individual employees who obtain or disclose protected health information without authorization. The criminal penalties range up to $250,000 and up to 10 years imprisonment. In addition, state Attorneys General may bring civil actions for HIPAA violations, HHS must conduct periodic HIPAA compliance audits of covered entities and business associates. If any of our tenants/operators are subject to an investigation or audit and found to be in violation of HIPAA, such tenants/operators could incur substantial penalties, which could have a negative impact on their financial condition. Our tenants/operators may also be subject to more stringent state law privacy, security and breach notification obligations. Enforcement of HIPAA and the Health Information Technology for Economic and Clinical Health (HITECH) Act, which substantially augmented the requirements under HIPAA have become increasingly stringent and the penalties for non-compliance have become increasingly harsh.
Licensure, Certification and Accreditation. Healthcare property construction and operation are subject to numerous federal, state and local regulations relating to the adequacy of medical care, equipment, personnel, operating policies and procedures, maintenance of adequate records, fire prevention, rate-setting and compliance with building codes and environmental protection laws. The requirements for licensure, certification and accreditation are subject to change and, in order to remain qualified, it may become necessary for our tenants/operators to make changes in their facilities, equipment, personnel and services.
Facilities in our portfolio will be subject to periodic inspection by governmental and other authorities to assure continued compliance with the various standards necessary for licensing and accreditation. We will require our healthcare properties to be properly licensed under applicable state laws. Except for provider types not eligible for participation in Medicare and Medicaid, we expect our tenant/operators to participate in the Medicare and Medicaid programs and, where applicable, to be accredited by an approved accrediting organization which is also often a requirement for Medicare certification. The loss of Medicare or Medicaid certification would result in our tenants/operators that operate Medicare/Medicaid-eligible providers from receiving reimbursement from federal healthcare programs. The loss of accreditation, where applicable, would result in increased scrutiny by CMS and likely the loss of payment from non-government payers which often condition participation and payment on participation in the Medicare program.
In some states, the construction or expansion of healthcare properties, the acquisition of existing facilities, the transfer or change of ownership and the addition of new beds or services may be subject to review by and prior approval of, or notifications to, state regulatory agencies under a Certificate of Need, or CON program. Such laws generally require the reviewing state agency to determine the public need for additional or expanded healthcare properties and services and have begun to expect some level of revenue from enforcement action in their budget planning. Some states in which we operate have also adopted limitations on the opening of new skilled nursing facilities. See “Item 1. Business - Skilled nursing facility industry Business in the United States.” The requirements for licensure, certification and accreditation also include notification or approval in the event of the transfer or change of ownership or certain other changes. Further, federal programs, including Medicare, must be notified in the event of a change of ownership or change of information at a participating provider. Failure by our tenants/operators to provide required federal and state notifications, obtain necessary state licensure and CON approvals could result in significant penalties as well as prevent the completion of an acquisition or effort to expand services or facilities. We may be required to provide ownership information or otherwise participate in certain of these approvals and notifications.
Antitrust Laws. The federal government and most states have enacted antitrust laws that prohibit certain types of conduct deemed to be anti-skilled nursing facilities. These laws prohibit price fixing, concerted refusal to deal, market allocation, monopolization, attempts to monopolize, price discrimination, tying arrangements, exclusive dealing, acquisitions of competitors and other practices that have, or may have, an adverse effect on competition. Violations of federal or state antitrust laws can result in various sanctions, including criminal and civil penalties. Antitrust enforcement in the healthcare industry is currently a priority of the Federal Trade Commission and the Antitrust Division of the Department of Justice. We intend to operate so that we and our tenants/operators are in compliance with such federal and state laws, but future review by courts or regulatory authorities could result in a determination that could adversely affect the operations of our tenants/operators and, consequently, our operations. In addition to enforcement by Federal and State agencies, in an effort to control health care costs, private payors such as employee welfare benefit plans administered by or for employers or unions have become increasing aggressive in bringing actions against providers alleging violations of antitrust laws.
Healthcare Industry Investigations. Significant media and public attention has focused in recent years on the healthcare industry. The federal government is dedicated to funding additional federal enforcement activities related to healthcare providers and preventing fraud and abuse. Our tenants/operators will engage in many routine healthcare operations and other activities that could be the subject of governmental investigations or inquiries. For example, our tenants/operators will likely have significant Medicare and Medicaid billings, numerous financial arrangements with physicians who are referral sources, and joint venture arrangements involving physician investors. In recent years, Congress and the States have increased the level of funding for fraud and abuse enforcement activities. It is possible that governmental entities could initiate investigations or litigation in the future and that such proceedings could result in significant costs and penalties, as well as adverse publicity. It is also possible that our executives could be included in governmental investigations or litigation or named as defendants in private litigation.
Governmental agencies and their agents, such as the Medicare Administrative Contractors, fiscal intermediaries and carriers, as well as the HHS-OIG, CMS and state Medicaid programs, may conduct audits of our tenants/operator’s operations. Private payers may conduct similar post-payment audits, and our tenants/operators may also perform internal audits and monitoring. Many of these audits employ the use of statistical sampling and extrapolation whereby a small number of claims are reviewed but adverse results are applied against a provider’s claims for long periods of time. Depending on the nature of the conduct found in such audits and whether the underlying conduct could be considered systemic such that results are extrapolated, the resolution of these audits which can often require substantial repayments could have a material, adverse effect on our portfolio’s financial position, results of operations and liquidity.
Under the Recovery Audit Contractor, or RAC program, CMS contracts with RACs on a contingency basis to conduct post-payment reviews to detect and correct improper payments in the fee-for-service Medicare program, to managed Medicare plans and in the Medicaid program. CMS has also initiated a RAC prepayment demonstration program in 11 states. CMS also employs Medicaid Integrity Contractors, or MICs to perform post-payment audits of Medicaid claims and identify overpayments. In addition to RACs and MICs, the state Medicaid agencies and other contractors have increased their review activities. Aside from the costs associated with responding to a myriad of requests for substantiation of services, should any of our tenants/operators be found out of compliance with any of these laws, regulations or programs, our business, our financial position and our results of operations could be negatively impacted.
Environmental Matters
A wide variety of federal, state and local environmental and occupational health and safety laws and regulations affect healthcare property operations. These complex federal and state statutes, and their enforcement, involve a myriad of regulations, many of which involve strict liability on the part of the potential offender. Some of these federal and state statutes may directly impact us. Under various federal, state and local environmental laws, ordinances and regulations, an owner of real property or a secured lender, such as us, may be liable for the costs of removal or remediation of hazardous or toxic substances at, under or disposed of in connection with such property, as well as other potential costs relating to hazardous or toxic substances (including government fines and damages for injuries to persons and adjacent property). The cost of any required remediation, removal, fines or personal or property damages and the owner’s or secured lender’s liability therefore could exceed or impair the value of the property, and/or the assets of the owner or secured lender. In addition, the presence of such substances, or the failure to properly dispose of or remediate such substances, may adversely affect the owner’s ability to sell or rent such property or to borrow using such property as collateral which, in turn, could reduce our revenues.
Prior to closing any property acquisition or loan, we ordinarily obtain Phase I environmental assessments in order to attempt to identify potential environmental concerns at the facilities. These assessments will be carried out in accordance with an appropriate level of due diligence and will generally include a physical site inspection, a review of relevant federal, state and local environmental and health agency database records, one or more interviews with appropriate site-related personnel, review of the property’s chain of title and review of historic aerial photographs and other information on past uses of the property. We may also conduct limited subsurface investigations and test for substances of concern where the results of the Phase I environmental assessments or other information indicates possible contamination or where our consultants recommend such procedures.
Americans with Disabilities Act
Our properties must comply with Title III of the ADA to the extent that such properties are “public accommodations” as defined by the ADA. The ADA may require removal of structural barriers to access by persons with disabilities in certain public areas of our properties where such removal is readily achievable. Many States and localities have similar requirements that are in addition to, and sometime more stringent than, Federal requirements. We believe the existing properties are in substantial compliance with the ADA and that we will not be required to make substantial capital expenditures to address the requirements of the ADA. However, noncompliance with the ADA or a comparable State or local requirement could result in imposition of fines or an award of damages to private litigants. The obligation to make readily achievable accommodations is an ongoing one, and we will continue to assess our properties and to make alterations as appropriate in this respect.
Emerging Growth Company Status
We are an “emerging growth company,” as defined in the JOBS Act, and we are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies,” including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. We have not yet made a decision as to whether we will take advantage of any or all of these exemptions. If we do take advantage of any of these exemptions, we do not know if some investors will find common stock less attractive as a result. The result may be a less active trading market for common stock and our stock price may be more volatile.
In addition, the JOBS Act also provides that an “emerging growth company” can take advantage of the extended transition period provided in the Securities Act for complying with new or revised accounting standards. In other words, an emerging growth company can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of the extended transition period for adopting new or revised accounting standards available to emerging growth companies.
We will remain an “emerging growth company” until the earliest to occur of (i) the last day of the fiscal year during which our total annual revenue equals or exceeds $1.07 billion (subject to adjustment for inflation), (ii) the last day of the fiscal year following the fifth anniversary of the first sale of shares pursuant to a registration statement filed under the Securities Act, (iii) the date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt or (iv) the date on which we are deemed to be a “large accelerated filer” under the Exchange Act.
Human Capital Resource Management
As of December 31, 2024, we had 9 full-time employees. Our employees are primarily located at our corporate office in Chicago. Our employees are not members of any labor union, and we consider our relations with our employees to be satisfactory.
We endeavor to maintain workplaces that are free from discrimination or harassment on the basis of color, race, sex, national origin, ethnicity, religion, age, disability, sexual orientation, gender identification or expression or any other status protected by applicable law. The basis for recruitment, hiring, development, training, compensation and advancement at the Company is qualifications, performance, skills and experience. We believe our employees are fairly compensated, and compensation and promotion decisions are made without regard to gender, race and ethnicity. Employees are routinely recognized for outstanding performance.
Insurance
We require our tenants to maintain general liability, professional liability, all risks and other insurance coverages and to name us as an additional insured under these policies. We believe that the policy specifications and insured limits are appropriate given the relative risk of loss, the cost of the coverage and industry practice.
Available Information
We file annual, quarterly and current reports, proxy statements and other information with SEC. The SEC maintains an internet site that contains these reports, and other information about issuers, like us, which file electronically with the SEC. The address of that site is http://www.sec.gov. We make available our reports on Form 10-K, 10-Q, and 8-K (as well as all amendments to these reports), and other information, free of charge, on the Investor Relations section of our website at www.strawberryfieldsreit.com. The information found on, or otherwise accessible through, our website is not incorporated by reference into, nor does it form a part of, this report or any other document that we file with the SEC.

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ITEM 1A. RISK FACTORS
ITEM 1A. Risk Factors
Not applicable.

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ITEM 1B. UNRESOLVED STAFF COMMENTS
ITEM 1B. Unresolved Staff Comments
Not applicable.

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ITEM 2. PROPERTIES
ITEM 2. Properties
As of the date of this Report, we hold fee title to 119 of these properties and hold one property under a long-term lease. These properties are located across Arkansas, Illinois, Indiana, Kansas, Kentucky, Michigan, Missouri, Ohio, Oklahoma, Tennessee and Texas. Our 120 properties comprise 130 healthcare facilities, consisting of the following:
● 118 stand-alone skilled nursing facilities;
● two dual-purpose facilities used as both skilled nursing facilities and long-term acute care hospitals; and
● 10 assisted living facilities.
Information regarding our properties as of December 31, 2024, are included in Item 15. “Exhibits and Financial Statement Schedules-Schedule III. Real Estate and Accumulated Depreciation” of this Annual Report on Form 10-K.
As of December 31, 2024, almost all of our properties are leased under long-term, triple-net leases. The following table displays the expiration of the annualized contractual cash rental income under our lease agreements as of December 31, 2024:
Lease Expirations
Year of Lease
Expiration (1)
Number of
Leases
Facilities
GLA of
Leases
Expiring
Percent of
Portfolio
GLA
Annualized
Base Rent
Percentage of
Total Annualized
Base Rent
Annualized
Base Rent
Per Sq. Ft.
234,470 4.84 % 3,690,270 2.74 % $ 15.74
263,580 5.44 % 8,097,593 6.00 % $ 30.72
102,964 2.12 % 2,078,281 1.54 % $ 20.18
414,706 8.55 % 7,053,312 5.23 % $ 17.01
200,860 4.14 % 5,041,239 3.74 % $ 25.10
Thereafter 3,632,583 74.91 % 108,790,821 80.73 % $ 29.95
Total 4,849,163 100.0 % $ 134,751,516 100.0 % $ 23.12
(1) The year of each lease expiration is based on current contract terms.

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ITEM 3. LEGAL PROCEEDINGS
ITEM 3. Legal Proceedings
We are not currently a party to any material legal proceedings, that are not covered by insurance and expected to be resolved within policy limits, other than the following:
In March 2020, Joseph Schwartz, Rosie Schwartz and certain companies owned by them filed a complaint in the U.S. District Court for the Northern District of Illinois against Moishe Gubin, Michael Blisko, the Predecessor Company and 21 of its subsidiaries, as well as the operators of 17 of the facilities operated at our properties. The complaint was related to the Predecessor Company’s acquisition of 16 properties located in Arkansas and Kentucky that were completed between May 2018 and April 2019 and the attempt to purchase an additional five properties located in Massachusetts. The complaint was dismissed by the Court in 2020 on jurisdictional grounds. The plaintiffs did not file an appeal with respect to this action, and the time for an appeal has expired.
In August 2020, Joseph Schwartz, Rosie Schwartz and several companies controlled by them filed a second complaint in the Circuit Court in Pulaski County, Arkansas. The second complaint had nearly identical claims as the federal case, but was limited to matters related to the Predecessor Company’s acquisition of properties located in Arkansas. The sellers, which were affiliates of Skyline Health Care, had encountered financial difficulties and requested the Predecessor Company to acquire these properties. The defendants have filed an answer denying the plaintiffs’ claims and asserting counterclaims based on breach of contract. This case has been dismissed without prejudice. In April 2024, they filed yet another complaint in Arkansas, and this time dealing with the properties located in Arkansas, Kentucky and Massachusetts. There has been some motion practice where the Court dismissed some of the Plaintiff’s remedies and claims.
In January 2021, Joseph Schwartz, Rosie Schwartz and certain companies owned by them filed a third complaint in Illinois state court in Cook County, Illinois, which has nearly identical claims to the initial federal case, but was limited to claims related to the Kentucky and Massachusetts properties. The complaint has not been properly served on any of the defendants, and, accordingly, the defendants did not responded to the complaint. Instead, the defendants filed a motion to quash service of process. On January 11, 2023, the Cook County Circuit Court entered an order granting such motion, quashing service of process on all defendants. In March 2023, the plaintiffs filed a new complaint and again attempted to serve it on the defendants. It is the defendants’ position that service was (once again, potentially) defective and sought a dismissal of the matter for want of prosecution by Joseph Schwartz, Rosie Schwartz and certain companies owned by them. The dismissal was granted, but has been appealed to the Illinois Appellate Court, with no substantive movement on the matter to date.
In each of these complaints, the plaintiffs asserted claims for fraud, breach of contract and rescission arising out of the defendants alleged failure to perform certain post-closing obligations under the purchase contracts. We have potential direct exposure for these claims because the subsidiaries of the Predecessor Company that were named as defendants are now subsidiaries of the Operating Partnership. Additionally, the Operating Partnership is potentially liable for the claims made against Moishe Gubin, Michael Blisko and the Predecessor Company pursuant to the provisions of the contribution agreement, under which the Operating Partnership assumed all of the liabilities of the Predecessor Company and agreed to indemnify the Predecessor Company and its affiliates for such liabilities. We and the named defendants believe that the claims set forth in the complaints are without merit. The named defendants intend to vigorously defend the litigation and to assert counterclaims against the plaintiffs based on their failure to fulfill their obligations under the purchase contracts, interim management agreement, and operations transfer agreements. We believe this matter will be resolved without a material adverse effect to the Company.
As noted above, the March 2020 and January 2021 complaints also related to the Predecessor Company’s planned acquisition of five properties located in Massachusetts. A subsidiary of the Predecessor Company purchased loans related to these properties in 2018 for a price of $7.74 million with the expectation that the subsidiaries would acquire title to the properties and the loans would be retired. The subsidiary subsequently advanced $3.1 million under the loans to satisfy other liabilities related to the properties. The planned acquisition/settlement with the sellers/owners and/borrowers was not consummated because the underlying tenants of the properties surrendered their licenses to operate healthcare facilities on these properties.
The Predecessor Company intends to institute legal proceedings to collect the outstanding amount of these loans and to assert related claims against the sellers and their principals for the unpaid principal balances as well as protective advances and collection costs. In connection with enforcing their rights, in July 2022, the Company foreclosed, and (as lender) sold four of the five properties at auction for the total amount of $4.4 million. In December 2022, the Company took title on the fifth property with an estimated fair value of $1.2 million.

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ITEM 4. MINE SAFETY DISCLOSURE
ITEM 4. Mine Safety Disclosures
Not applicable.
PART II

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ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY
ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Common Equity
On September 23, 2022, our common stock commenced trading on the OTCQX market operated by the OTC Markets Group, Inc., under the symbol “STRW”. On February 22, 2023, our common stock commenced trading on the NYSE American market, also under the symbol “STRW”.
The following table sets forth, for the periods indicated, the high and low sales prices for our common stock as reported for each quarter of 2024. This information reflects inter-dealer prices, without retail mark-up, markdown or commission and may not represent actual transactions.
High Low
Quarter Ended March 31, 2024 $ 7.95 $ 7.70
Quarter Ended June 30, 2024 $ 11.41 $ 7.95
Quarter Ended September 30, 2024 $ 12.84 $ 9.57
Quarter Ended December 31, 2024 $ 12.81 $ 9.40
As of March 13, 2025, 4,041 stockholders of record owned 12,217,351 issued and outstanding shares of common stock. This number of stockholders of record does not represent the actual number of beneficial owners of our common stock because shares of our common stock are also held in “street name” by securities brokers and others for the benefit of beneficial owners who may vote the shares.
In addition, as of March 13, 2025, the Operating Partnership had 43,310,875 outstanding OP Units held by 7 limited partners other than the Company. No public trading market exists for the OP Units.
To maintain REIT status, we are required each year to distribute to stockholders at least 90% of our annual REIT taxable income after certain adjustments. All distributions will be made by us at the discretion of our board of directors and will depend on our financial position, results of operations, cash flows, capital requirements, debt covenants (which include limits on distributions by us), applicable law, and other factors as our board of directors deems relevant.
Distributions with respect to our common stock can be characterized for federal income tax purposes as taxable ordinary dividends, non-dividend distributions or a combination thereof. Following is the characterization of our annual cash dividends on common stock for 2024:
(dollars in thousands)
Ordinary dividend $ 3,457
Non-dividend distributions $ 524
Capital Gain Distribution $ 54
Total taxable distribution $ 4,035
Purchases and Sale of Equity Securities by the Issuer and Affiliated Purchasers
On July 12, 2024, the Company filed a Registration Statement on Form S-3 with the Securities and Exchange Commission (“SEC”). On August 1, 2024, the SEC declared the Registration Statement effective. In connection with the Registration Statement the Company established an at-the-market equity program (the “ATM Program”). The ATM Program will allow the Company to issue and sell to the public from time to time, at the Company’s discretion, newly issued shares of common stock. The Company expected the ATM to provide the Company with additional financing flexibility and intends to use the net proceeds from the ATM Program to increase stock liquidity and facilitate growth.
During 2024 the company issued 278,152 shares in the ATM program at an average price of $11.33 per share netting the company $3.2 million dollars.
During 2024, the Company converted 1,947,078 OP Units into shares of common stock.
On November 9, 2023 the Board of Directors authorized the repurchase of up to $5 million of the Company’s common stock. As of December 31, 2024 the Company had purchased 254,948 shares in aggregate of common stock at an average price per share of $9.93 and an aggregate repurchase price of $2.5 million dollars. All common shares repurchased in the program have been retired and are now held as unissued shares available for use and reissuance for purpose as and when determined by the Board.
During 2024, the Company purchased and retired 248,995 shares of our common stock in the open market at an average price per share of $9.93 and an aggregate repurchase cost of $2.5 million
The following table sets forth information regarding the Company’s quarterly repurchase of shares of its outstanding common stock during as of December 31, 2024.
Period Number of
Shares
Average Price
Paid Per
Share
Cumulative
Number of
Shares
Purchased as
Part of
Publicly
Announced
Plans or
Programs
Approximate
Dollar Value
of Shares That
May Yet be
Purchased
Under the
Plans or
Programs
Beginning Balance Jan 1, 2024 5,953 $ 7.84 5,953 $ 4,954,000
Q1 2024 19,348 7.96 25,301 4,800,000
Q2 2024 54,057 9.42 79,358 4,291,000
Q3 2024 32,568 10.66 111,926 3,944,000
Q4 2024 143,022 10.23 254,948 2,481,000
Total 254,948 $ 9.93 254,948 $ 2,481,000
Securities Authorized for Issuance under Equity Compensation Plans
The information required by Item 5 is incorporated by reference to our Definitive Proxy Statement for our 2024 annual stockholders’ meeting.

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ITEM 6. SELECTED FINANCIAL DATA
ITEM 6. [Reserved]

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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS
ITEM 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The discussion below contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those which are discussed in the section titled “Risk Factors.” Also see “Statement Regarding Forward-Looking Statements” preceding Part I.
The following discussion and analysis should be read in conjunction with our accompanying consolidated financial statements and the notes thereto.
Overview
Strawberry Fields REIT, Inc. (the “Company”) is engaged in the ownership, acquisition, financing and triple-net leasing of skilled nursing facilities and other post-acute healthcare properties. As of the date of this Form 10-K, our portfolio consists of 130 healthcare facilities with an aggregate of 14,540 licensed beds. We hold fee title to 119 of these properties and hold one property under a long-term lease. These properties are located in Arkansas, Illinois, Indiana, Kansas, Kentucky, Michigan, Missouri, Ohio, Oklahoma, Tennessee and Texas. We generate substantially all our revenues by leasing our properties to tenants under long-term leases primarily on a triple-net basis, under which the tenant pays the cost of real estate taxes, insurance and other operating costs of the facility and capital expenditures. Each healthcare facility located at our properties is managed by a qualified operator with an experienced management team.
We employ a disciplined approach in our investment strategy by investing in healthcare real estate assets. We seek to invest in assets that will provide attractive opportunities for dividend growth and appreciation in asset value, while maintaining balance sheet strength and liquidity, thereby creating long-term stockholder value. We expect to grow our portfolio by diversifying our investments by tenant, facility type and geography.
We are entitled to monthly rent paid by the tenants and we do not receive any income or bear any expenses from the operations of such facilities. As of the date of this report, the aggregate annualized average base rent under the leases for our properties was approximately $134.8 million.
We elect to be taxed as a REIT for U.S. federal income tax purposes commencing with our taxable year ending December 31, 2022. We are organized in an UPREIT structure in which we own substantially all of our assets and conduct substantially all of our business through the Operating Partnership. We are the general partner of the Operating Partnership and as of the date of the report own approximately 22.1% of the outstanding OP units.
Recent Developments
On March 25, 2024, the Company entered into a purchase agreement for a property comprised of a 68-bed skilled nursing facility and 10 bed assisted living facility near Georgetown, Indiana. The Company closed on the property on May 31, 2024, for $5.83 million in an all cash transaction. The facility was leased to Infinity, a related party operator. On June 1st, 2024, the facility was added to the IN Master Lease in the second amendment to the master lease.
On April 1, 2024, the Company renewed the IN Master Lease (original expiration date July 31, 2025) for 10 years with two 5 years options and added to the lease one more entity that was not part of the original lease. The base rent for the first year is $15.5 million with 3% annual escalations. On June 1, 2024, a second amendment was filed with this Master Lease to include the new property purchased in Georgetown, Indiana.
On April 30, 2024, the company sold a property 107 South Lincoln Street to The Village of Smithton, a municipality in Illinois and paid off the existing mortgage. The building was sold to the municipality for $1. The Company paid $1.2 million in related debt and closing fees for this transaction.
On July 12, 2024, the Company filed a Registration Statement on Form S-3 with the Securities and Exchange Commission (“SEC”). On August 1, 2024, the SEC declared the Registration Statement effective. In connection with the Registration Statement the Company established an at-the-market equity program (the “ATM Program”). The ATM Program will allow the Company to issue and sell to the public from time to time, at the Company’s discretion, newly issued shares of common stock. The ATM Program is expected to provide the Company with additional financing flexibility and intends to use the net proceeds from the ATM Program to increase stock liquidity and facilitate growth.
On August 5, 2024, the Company issued 145.6 million NIS in Series A Bonds on the Tel Aviv stock exchange (“TASE”), which is approximately $37.1 million. The bonds are unsecured, were issued at par and have a fixed interest rate of 6.97%. Repayment of the bond principal, at 6% of the principal, was paid in 2024 and will be paid in 2025, with the remaining 88% due in 2026. Interest payments will be due concurrent with the principal payments on September 30th of the years 2024, 2025 and 2026. In addition, the investors in Series D bond were offered to exchange their holdings with certificates of Series A bonds at a conversion rate of 1.069964 bond A for each certificate of bond D. In September 2024, 47.2 million NIS ($12.7 million USD) Series D bonds have been exchanged for 50.6 million NIS ($13.6 million) Series A bonds.
On August 30, 2024, 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 Company funded the acquisition utilizing cash from the balance sheet. The facilities are leased to the Tide Health Group, a 3rd party operator. The properties are leased in the Texas Master Lease 2, which includes an annual base rent of $1.5 million dollars with 3% annual rent increases and an initial term of 10 years with two options of 5 year extensions.
On September 25, 2024, the Company completed the acquisition of a property comprised of an 83-bed skilled nursing facility and 25 bed assisted living facility near Nashville, Tennessee. The acquisition was for $6.7 million and the Company funded the acquisition by assuming $2.8 million of existing debt on the facilities, $3.1 million in common stock to the seller, and transferring $0.8 million of other assets to the seller. The property was leased to Infinity, a related party operator. The property annual rent is $670 thousand dollars and the property was added to the Tennessee Master Lease 1.
On October 8, 2024, the Company entered into a Purchase and Sale Agreement with an unaffiliated seller with respect to eight healthcare facilities located in Missouri. The purchase price for the facilities was $87,500,000, payable at the closing. The facilities are currently leased under a master lease agreement to a group of third-party tenants. Under the master lease, the tenants currently pay annual rent on a triple net basis. The eight facilities are comprised of 1,111 licensed beds. The Company purchased the facilities utilizing cash from the balance sheet and funds provided by a third-party lender. The Company closed the acquisition on December 20, 2024.
On October 11, 2024 the Company acquired an 86-bed skilled nursing facility in Indianapolis, Indiana. The acquisition was for $6.0 million and the Company funded the acquisition utilizing cash from its balance sheet. The facility was added to an existing master lease with Infinity of Indiana.
On October 14, 2024, the BVI Company issued additional Series C bonds with a par value of NIS 62.0 million ($16.6 million). The bonds were issued at a price of 99.3% to par.
On December 5, 2024, priced an underwritten public offering of 3,333,334 shares of its common stock for total gross proceeds (before underwriters’ discounts and commissions and offering expenses) of approximately $35 million.
On December 20, 2024, the Company entered into an Asset Purchase Agreement with an unaffiliated seller for the purchase of six healthcare Facilities located in Kansas. The purchase price for the Facilities was $24,000,000, payable at the closing. The Facilities will be leased under a new 10-year master lease agreement to a group of third-party tenants. Under the master lease, (i) the tenants will be on a triple net basis (ii) the tenants have 2 five-year options to extend the lease. The tenants operate the Facilities as five skilled nursing facilities and one assisted living facility. The six facilities are comprised of 354 licensed beds. The Company closed the acquisition on January 2, 2025.
On December 31, 2024 the Company completed the acquisition of a 100-bed skilled nursing facility in Oklahoma for $5.0 million. Under the lease, the tenants initial annual rents are $500,000 on a triple net basis. As of the date of this report, none of the Company’s tenants are delinquent on the payment of rent, and there have been no requests to amend the terms of their respective leases to reduce current or future lease payments.
Related Party Tenants
As a landlord, the Company does not control the operations of its tenants, including related party tenants, and is not able to cause its tenants to take any specific actions to address trends in occupancy at the facilities operated by its tenants, other than to monitor occupancy and income of its tenants, discuss trends in occupancy with tenants and possible responses, and, in the event of a default, to exercise its rights as a landlord. However, Moishe Gubin, our Chairman and Chief Executive Officer, and Michael Blisko, one of our directors, as the controlling members of 67 of our tenants and related operators, have the ability to obtain information regarding these tenants and related operators and cause the tenants and operators to take actions, including with respect to occupancy.
Results of Operations
Operating Results
Year Ended December 31, 2024 Compared to Year Ended December 31, 2023:
Year Ended
December 31, Increase / Percentage
(dollars in thousands) (Decrease) Difference
Rental revenues $ 117,058 $ 99,805 $ 17,253 17.3 %
Expenses:
Depreciation 29,031 26,207 2,824 10.8 %
Amortization 4,657 3,028 1,629 53.8 %
Loss on real estate investment impairment - 2,451 (2,451 ) 100.0 %
General and administrative expenses 6,851 5,662 1,189 21.0 %
Property and other taxes 14,489 14,459 0.2 %
Facility rent expenses 30.1 %
Total Expenses 55,755 52,366 3,389 6.5 %
Interest expense, net 32,603 24,443 8,160 33.4 %
Amortization of interest expense 17.3 %
Mortgage Insurance Premium 1,548 1,671 (123 ) (7.9 )%
Total Interest Expenses 34,808 26,674 8,134 30.5 %
Other income (loss)
Other income (loss) (983 ) (973 ) 99 %
Foreign currency transaction gain - (462 ) 100 %
Net Income 26,505 20,244 6,261 30.9 %
Net income attributable to non-controlling interest (22,410 ) (17,748 ) (4,662 ) 26.3 %
Net Income attributable to common stockholders 4,095 2,496 1,599 64.1 %
Basic and diluted income per common share $ 0.57 $ 0.39 0.18 46.2 %
Rental revenues: Rental revenues during 2024 increased by $17.2 million or 17.3% compared to fiscal year 2023, The additional rental income arising from the renegotiation of certain leases and the receipt of rent from the acquisition of 15 properties and additional property taxes being reimbursed by the tenants.
Depreciation and Amortization: Increase in depreciation of $2.8 million or 10.8% from fiscal year 2023 to fiscal year 2024 is primarily due to year over year depreciation from the Indiana 2 Master Lease and $119.8 million of new real estate investments in 2024. This was offset by other fully depreciated assets in 2024. Amortization increased $1.6 million or 53.8% due to the $24 million in acquisitions of purchase options in 2024.
Loss on real estate investment impairment: In February 2023, one facility under one of our Southern Illinois master leases was closed. The closure was made at the request of the tenant and was mainly for efficiency reasons. This facility was leased under a master lease with two other facilities. The closure did not result in any reduction in the aggregate rent payable under the master lease, which has been paid without interruption. As a result of the closure, the Company sought to sell the property. Since the facility is no longer licensed to operate as a skilled nursing facility, the Company wrote off its remaining book value. Subsequently, the property was sold in 2024.
General and Administrative Expense: The decrease in general and administrative expenses of $1.2 million or 21.0% during fiscal year 2024 compared to fiscal year 2023 is primarily the result of higher insurance, higher legal, higher corporate salaries and other expenses.
Interest expense, net: The increase in interest expense of $8.1 million or 33.4% from fiscal year 2023 to fiscal year 2024 is primarily related to larger bond balances and a second commercial bank loan facility obtained in connection with the acquisition of the Indiana Facilities.
Other income (loss): In 2023, the other loss of $1.0 million was the result of a fee paid to an investment banking firm in connection with the cancellation of an agreement with respect to a proposed financing transaction.
Net Income: The increase in net income from $20.2 million during the year ended December 31, 2023 to $26.5 million in the year ended December 31, 2024 is primarily due to increases in rental revenue (net of increase in real estate taxes), lower losses on real estate and other losses, offset by higher depreciation, amortization, general and administrative and interest expenses.
Liquidity and Capital Resources
To qualify as a REIT for federal income tax purposes, we are required to distribute at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction and excluding any net capital gains, to our stockholders on an annual basis. Accordingly, we intend to make, but are not contractually bound to make, regular quarterly dividends to common stockholders from cash flow from operating activities. All such dividends are at the discretion of our board of directors.
As of December 31, 2024, we had cash and cash equivalents and restricted cash and equivalents of $93.7 million. We also had the ability to offer additional Series A Bonds from the current outstanding of $88.5 million up to $150.8 million. Series C Bonds from the current outstanding of $73.3 up to $172.7 million and the ability to offer additional Series D Bonds from the current outstanding of $51.5 million up to $123.4 million is subject to compliance with covenants and market conditions.
Liquidity is a measure of our ability to meet potential cash requirements, including ongoing commitments to repay borrowings, fund and maintain our assets and operations, make distributions to our stockholders and other general business needs. Our primary sources of cash include operating cash flows and borrowings. Our primary uses of cash include funding acquisitions and investments consistent with our investment strategy, repaying principal and interest on any outstanding borrowings, making distributions to our equity holders, funding our operations and paying accrued expenses.
Our long-term liquidity needs consist primarily of funds necessary to pay for the costs of acquiring additional healthcare properties and principal and interest payments on our debt. We expect to meet our long-term liquidity requirements through various sources of capital, including future equity issuances or debt offerings, net cash provided by operations, long-term mortgage indebtedness and other secured and unsecured borrowings.
We may utilize various types of debt to finance a portion of our acquisition activities, including long-term, fixed-rate mortgage loans, variable-rate term loans and secured revolving lines of credit. As of December 31, 2024, on a consolidated basis, we had total indebtedness of approximately $673.9 million, consisting of $262.2 million in HUD guaranteed debt, $213.3 million in gross Series A, C, and D bonds outstanding and $198.4 million in commercial mortgages. Under our Bonds and our commercial mortgages, we are subject to continuing covenants, and future indebtedness that we may incur, may contain similar provisions. In the event of a default, the lenders could accelerate the timing of payments under the debt obligations, and we may be required to repay such debt with capital from other sources, which may not be available on attractive terms, or at all, which would have a material adverse effect on our liquidity, financial condition, results of operations and ability to make distributions to our stockholders.
Our debt arrangements may require us to make a lump-sum or “balloon” payment at maturity. Our ability to make the balloon payments due under our existing and future indebtedness will depend on our working capital at the time of repayment, our ability to obtain additional financing or our ability to sell any property securing such indebtedness. At the time the balloon payment is due, we may or may not be able to refinance the existing financing on terms as favorable as the original bond or loan or sell any related property at a price sufficient to make the balloon payment. In addition, balloon payments and payments of principal and interest on our indebtedness may leave us with insufficient cash to pay the distributions that we are required to pay to qualify and maintain our qualification as a REIT.
Through 2027 there are six balloon payment obligations consisting of three payments of $83.0 million, $68.2 million and $48.4 million due under the Series A Bonds, Series C Bonds and Series D bonds in 2026, respectively, and payments of $86.1 million, $36.6 million and $52.5 million due under our three commercial bank term loans due in 2027, 2028, and 2029. We may also obtain additional financing that contains balloon payment obligations. These types of obligations may materially adversely affect us, including our cash flows, financial condition and ability to make distributions.
The Company believes that its overall level of indebtedness is appropriate for the Company’s business in light of its cash flow from operations and value of its properties and is generally typical for owners of multiple healthcare properties. The Company expects to generate sufficient positive cash flow from operations to meet its ongoing debt service obligations and the distribution requirements for maintaining REIT status.
Cash Flows
The following table presents selected data from our consolidated statements of cash flows:
Years Ended December 31,
(dollars in thousands)
Net cash provided by operating activities $ 59,330 $ 54,944
Net cash used in investing activities (136,776 ) (106,348 )
Net cash provided by financing activities 133,344 43,458
Net increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents 55,898 (7,946 )
Cash and cash equivalents, and restricted cash and cash equivalents beginning of year 37,758 45,704
Cash and cash equivalents and restricted cash and cash equivalents, end of year $ 93,656 $ 37,758
Net cash provided by operating activities increased $4.4 million for the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily due to an increase of $6.3 million in net income and $4.5 million increase in depreciation and amortization, offset by a smaller increase in accounts payable and an increase in receivables.
Cash used in investing activities increased by $30.4 million for the year ended December 31, 2024 primarily due to a $29.8 million increase in cash used for property acquisitions in real estate and lease rights. Notes receivable decrease was also $0.6 million lower than 2023.
Cash flows generated from financing activities increased by $89.9 million for the year ended December 31, 2024. The increase was caused by $64.3 million in bond proceeds, a $33.0 million equity raise and no repayments for non-controlling interest redemption. This was offset by $23.4 million in additional senior debt repayments.
Indebtedness
Mortgage Loans Guaranteed by HUD
As of December 31, 2024, we had non-recourse mortgage loans of $262.2 million from third party lenders that were guaranteed by HUD.
Each loan is secured by first mortgages on certain specified properties, interests in the leases for these properties and second liens on the operator’s assets. In the event of default on any single loan, the loan agreement provides that the applicable lender may require the tenants for the property securing the loan to make all rental payments directly to the lender. In exchange for the HUD guarantee, we pay HUD, on an annual basis, 0.65% of the principal balance of each loan as mortgage insurance premium, in addition to the interest rate denominated in each loan agreement. As a result, the overall average interest rate paid with respect to the HUD guaranteed loans as of December 31, 2024, was 3.91% per annum (including the mortgage insurance payments). The loans have an average maturity of 22 years.
Commercial Bank Term Loans
On March 21, 2022, the Company closed a mortgage loan facility with a commercial bank pursuant to which the Company borrowed approximately $105 million. The facility provides for monthly payments of principal and interest based on a 20-year amortization with a balloon payment due in March 2027. The rate is based on the one-month Secured Overnight Financing Rate (“SOFR”) plus a margin of 3.5% and a floor 4% (as of the December 31, 2024 the rate was 7.99%). As of December 31, 2024, total outstanding principal amount was $95.1 million. This loan is collateralized by 21 properties owned by the Company. The loan proceeds were used to repay the Series B Bonds and prepay commercial loans not secured by HUD guarantees. The Company recognized a foreign currency transaction loss of approximately $10.1 million in connection with the repayment of the Series B Bonds during the year ended December 31, 2022.
On August 25, 2023, the Company closed a mortgage loan facility with a commercial bank pursuant to which the Company borrowed approximately $66 million. The facility provides for monthly payments of interest and payment of principal and interest thereafter, will start on August 2024 based on a 20-year amortization with a balloon payment due in August 2028. The rate is based on the one-month SOFR plus a margin of 3.5% and a floor of 4% (as of the December 31, 2024, the rate was 7.99%). As of December 31, 2024, total outstanding principal amount was $41.6 million. This loan is collateralized by 19 properties owned by the Company. The loan proceeds were used to acquire the Indiana facilities.
On December 19, 2024, the Company closed a mortgage loan facility with a commercial bank pursuant to which the Company borrowed approximately $59 million. The facility provides for monthly payments of interest and payment of principal will start on January 2026 based on a 20-year amortization with a balloon payment due in December 2029. The rate and interest is based on the one-month Secured Overnight Financing Rate SOFR plus a margin of 3.0% and a floor of 4% (as of the December 31, 2024, the rate was 7.49%). As of December 31, 2024, total outstanding principal amount was $59 million. This loan is collateralized by 8 properties owned by the Company. The loan proceeds were used to acquire the Missouri facilities.
The two credit facilities closed in March 21, 2022 and August 25, 2023 are subject to financial covenants which are consist of (i) a covenant that the ratio of the Company’s indebtedness to its EBITDA cannot exceed 8.0 to 1, (ii) a covenant that the ratio of the Company’s net operating income to its debt service before dividend distribution is at least 1.20 to 1.00 for each fiscal quarter as measured pursuant to the terms of the loan agreement (iii) a covenant that the ratio of the Company’s net operating income to its debt service after dividend distribution is at least 1.05 to 1.00 for each fiscal quarter as measured pursuant to the terms of the loan agreement, and (iii) a covenant that the Company’s GAAP equity is at least $20,000,000. As of December 31, 2024, the Company was in compliance with the loan covenants.
The credit facility closed on December 19, 2024 is subject to financial covenants which consist of (i) a covenant that the ratio of the Company’s indebtedness to its EBITDA cannot exceed 8.0 to 1, (ii) a covenant that the ratio of the Company’s net operating income to its debt service before dividend distribution is at least 1.25 to 1.00 for each fiscal quarter as measured pursuant to the terms of the loan agreement (iii) a covenant that the ratio of the Company’s net operating income to its debt service after dividend distribution is at least 1.05 to 1.00 for each fiscal quarter as measured pursuant to the terms of the loan agreement, and (iii) a covenant that the Company’s GAAP equity is at least $30,000,000. As of December 31, 2024, the Company was in compliance with the loan covenants.
Outstanding Bond Debt
As of December 31, 2024, the Company had outstanding Series A, Series C Bonds and Series D Bonds.
Series A Bonds
In November 2015, the Company, through a subsidiary, issued Series A Bonds in the face amount of NIS 265.2 million ($68 million) and received the net amount after issuance costs of NIS 251.2 million ($64.3 million). Since then the Company extended the series amount twice in September 2016 and May 2017 and received a combined net amount of $30.1 million. The Series A Bonds had an original interest rate of 6.4% per annum. The Series A Bonds were paid off on November 8, 2023.
Series A Bonds
In August 2024, Strawberry Fields, Inc completed, directly, an initial offering on the Tel Aviv Stock Exchange (“TASE”) of Series A Bonds with a par value of NIS 145.6 million ($37.1 million). The series A Bonds were issued at par. Offering and issuance costs of approximately $1.0 million were incurred at closing. In December 2024, the Inc company issued an additional NIS 145.6 million ($38.1 million) in Series A Bonds.
Exchange of Series D Bonds for Series A Bonds
In September 2024 the Company made an exchange tender offer of outstanding Series D Bonds for Series A Bonds. The interest rate on Series D Bonds is 9.1% per annum. The exchange offer rate was 1.069964 Series A Bonds per Series D Bonds. As a result of this offer, 47,245,161 NIS Series D Bonds ($12.7 million) were exchanged for 50,550,621 NIS Series A Bonds ($13.6 million).
As of December 31, 2024 the outstanding balance of the Series A Bonds was NIS 322.8 million ($88.5 million), given the August 2024 issuance, the September 2024 exchange of Series D bonds for Series A bonds, as well as the additional bond issuance in December 2024.
The Series A Bonds are traded on the TASE.
Series C Bonds
In July 2021, the BVI Company completed an initial offering of Series C Bonds with a par value of NIS 208.0 million ($64.7 million). The Series C Bonds were issued at par. During February 2023, the BVI Company issued additional Series C Bonds in the face amount of NIS 40.0 million ($11.2 million) and raised a net amount of NIS 38.1 million ($10.7 million). These Series C Bonds were issued at a price of 95.25%. In October 2024, the BVI company issued an additional NIS 62.0 million ($16.6 million) in Series C Bonds. The bonds were issued at 99.3%.
As of December 31, 2023, the outstanding principal amount of the Series C Bonds was NIS 267.5 million ($73.3 million).
The Series C Bonds are traded on the TASE.
Series D Bonds
In June 2023, the BVI Company completed an initial offering of Series D Bonds with a par value of NIS 82.9 million ($22.9 million). The Series D Bonds were issued at par. During August 2023, the BVI Company issued additional Series D Bonds in the face amount of NIS 70.0 million ($19.2 million) and raised a net amount of NIS 152.9 million ($42.1 million). These Series D Bonds were issued at a price of 99.7%. On February 8, 2024, the BVI Company issued additional NIS 98.2 million ($25.7 million) Series D Bonds. These Series D Bonds were issued at a price of 106.3%.
Exchange of Series D Bonds for Series A Bonds
In September 2024 the Company made an exchange tender offer of outstanding Series D Bonds for Series A Bonds. The interest rate on Series D Bonds is 9.1% per annum. The exchange offer rate was 1.069964 Series A Bonds per Series D Bonds. As a result of this offer, 47,245,161 NIS Series D Bonds ($12.7 million) were exchanged for 50,550,621 NIS Series A Bonds ($13.6 million).
As of December 31 2024, the Series D Bonds had an outstanding principal balance of approximately NIS 187.2 ($51.5 million).
Summary of fixed and variable loans:
December 31,
(Amounts in $000s)
Fixed rate loans $ 475,494 $ 374,335
Variable rate loans 198,441 164,810
Gross Notes Payable and other Debt $ 673,935 $ 539,145
Funds From Operations (“FFO”)
The Company believes that net income as defined by GAAP is the most appropriate earnings measure. We also believe that funds from operations (“FFO”), as defined in accordance with the definition used by the National Association of Real Estate Investment Trusts (“NAREIT”), and adjusted funds from operations (“AFFO”) are important non-GAAP supplemental measures of our operating performance. Because the historical cost accounting convention used for real estate assets requires straight-line depreciation (except on land), such accounting presentation implies that the value of real estate assets diminishes predictably over time. However, since real estate values have historically risen or fallen with market and other conditions, presentations of operating results for a REIT that use historical cost accounting for depreciation could be less informative. Thus, NAREIT created FFO as a supplemental measure of operating performance for REITs that excludes historical cost depreciation and amortization, among other items, from net income, as defined by GAAP. FFO is defined as net income, computed in accordance with GAAP, excluding gains or losses from real estate dispositions, plus real estate depreciation and amortization. AFFO is defined as FFO excluding the impact of straight-line rent, above-/below-market leases, non-cash compensation and certain non-recurring items. For the year ended December 31, 2023, we excluded as non-recurring items a gain in the amount of $0.5 million in reclassification of foreign currency transactions the Company recorded with respect to foreign currency fluctuations that the Company realized at the time of bond principal payment. We believe that the use of FFO, combined with the required GAAP presentations, improves the understanding of our operating results among investors and makes comparisons of operating results among REITs more meaningful. We consider FFO and AFFO to be useful measures for reviewing comparative operating and financial performance because, by excluding the applicable items listed above, FFO and AFFO can help investors compare our operating performance between periods or as compared to other companies.
While FFO and AFFO are relevant and widely used measures of operating performance of REITs, they do not represent cash flows from operations or net income as defined by GAAP and should not be considered an alternative to those measures in evaluating our liquidity or operating performance. FFO and AFFO also do not consider the costs associated with capital expenditures related to our real estate assets nor do they purport to be indicative of cash available to fund our future cash requirements. Further, our computation of FFO and AFFO may not be comparable to FFO and AFFO reported by other REITs that do not define FFO in accordance with the current NAREIT definition or that interpret the current NAREIT definition or define AFFO differently than we do.
The following table reconciles our calculations of FFO and AFFO for the years ended December 31, 2024 and 2023, to net income, the most directly comparable GAAP financial measure (in thousands):
FFO and AFFO:
Year Ended
December 31,
Net income $ 26,505 $ 20,244
Depreciation and amortization 33,688 29,235
Funds from Operations 60,193 49,479
Adjustments to FFO:
Straight-line rent (4,368 ) (30 )
Straight-line rent receivable write-off(1) -
Contact cancellation expense for proposed financing(2) - 1,000
Loss on real estate impairment (3) - 2,451
Foreign currency transaction gain - (462 )
Funds from Operations, as Adjusted $ 55,825 $ 52,668
(1) In 2023 the Company recognized a loss of $0.2 million due to the write-off of straight-line rent receivables related to the Southern Illinois facilities.
(2) In 2023 the Company incurred a non-recurring expense of $1.0 million in the second quarter of 2023 in connection with the cancellation of a contract with an investment banking firm related to a proposed financing.
(3) Loss on real estate investment impairment: In February 2023, one facility under one of our Southern Illinois master leases was closed. The closure was made at the request of the tenant and was mainly for efficiency reasons. This facility was leased under a master lease with two other facilities. The closure did not result in any reduction in the aggregate rent payable under the master lease, which was paid without interruption. As a result of the closure, the Company is seeking to sell the property. Since the facility is no longer licensed to operate as a skilled nursing facility, the Company wrote off its remaining book value.
Dividend Plans
We are required to pay dividends in order to maintain our REIT status and we expect to make quarterly dividend payments in cash with the annual dividend amount no less than 90% of our annual REIT taxable income, determined without regard to the dividends paid deduction and excluding any net capital gains.
Critical Accounting Policies
The preparation of consolidated financial statements in conformity with generally accepted accounting principles, or GAAP, in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Management considers accounting estimates or assumptions critical in either of the following cases:
● the nature of the estimates or assumptions is material because of the levels of subjectivity and judgment needed to account for matters that are highly uncertain and susceptible to change; and
● the effect of the estimates and assumptions is material to the consolidated financial statements.
Management believes the current assumptions used to make estimates in the preparation of the consolidated financial statements are appropriate and not likely to change in the future. However, actual experience could differ from the assumptions used to make estimates, resulting in changes that could have a material adverse effect on our consolidated results of operations, financial position and/or liquidity. These estimates will be made and evaluated on an on-going basis using information that is available as well as various other assumptions believed to be reasonable under the circumstances.
The following presents information about our critical accounting policies including the material assumptions used to develop significant estimates. Since the Company was recently formed and just completed the formation transactions, certain of these critical accounting policies contain discussion of judgments and estimates that have not yet been required by management but that it believes may be reasonably required of it to make in the future.
Principles of Consolidation
The consolidated financial statements include the accounts of our Operating Partnership and its wholly owned subsidiaries, and all material intercompany transactions and balances are eliminated in consolidation.
From inception, we continually evaluate all of our transactions and investments to determine if they represent variable interests subject to the variable interest entity, or VIE, consolidation model and then determine which business enterprise is the primary beneficiary of its operations. We make judgments about which entities are VIEs based on an assessment of whether (i) the equity investors as a group, if any, do not have a controlling financial interest, or (ii) the equity investment at risk is insufficient to finance that entity’s activities without additional subordinated financial support. We consolidate investments in VIEs when we are determined to be the primary beneficiary. This evaluation is based on our ability to direct and influence the activities of a VIE that most significantly impact that entity’s economic performance.
For investments not subject to the variable interest entity consolidation model, we will evaluate the type of rights held by the limited partner(s) or other member(s), which may preclude consolidation in circumstances in which the sole general partner or managing member would otherwise consolidate the limited partnership. The assessment of limited partners’ or members’ rights and their impact on the presumption of control over a limited partnership or limited liability corporation by the sole general partner or managing member should be made when an investor becomes the sole general partner or managing member and should be reassessed if (i) there is a change to the terms or in the exercisability of the rights of the limited partners or members, (ii) the sole general partner or member increases or decreases its ownership in the limited partnership or corporation, or (iii) there is an increase or decrease in the number of outstanding limited partnership or membership interests.
Our ability to assess correctly our influence or control over an entity at inception of our involvement or on a continuous basis when determining the primary beneficiary of a VIE affects the presentation of these entities in our consolidated financial statements. Subsequent evaluations of the primary beneficiary of a VIE may require the use of different assumptions that could lead to identification of a different primary beneficiary, resulting in a different consolidation conclusion than what was determined at inception of the arrangement.
Revenue Recognition
We recognize rental revenue for operating leases on a straight-line basis over the lease term when collectability is reasonably assured and the tenant has taken possession or controls the physical use of a leased asset. For assets acquired subject to leases, we recognize revenue upon acquisition of the asset provided the tenant has taken possession or control of the physical use of the leased asset. If the lease provides for tenant improvements, we determine whether the tenant improvements, for accounting purposes, are owned by the tenant or us. When we are the owner of the tenant improvements, the tenant is not considered to have taken physical possession or have control of the physical leased asset until the tenant improvements are substantially completed.
When the tenant is the owner of the tenant improvements, any tenant improvement allowance funded is treated as a lease incentive and amortized as a reduction of revenue over the lease term. The determination of ownership of the tenant improvements is subject to significant judgment. If our assessment of the owner of the tenant improvements for accounting purposes were different, the timing and amount of our revenue recognized would be impacted.
We monitor the liquidity and creditworthiness of our tenants and operators on a continuous basis to determine the need for an allowance for doubtful accounts, including an allowance for operating lease straight-line rent receivables, for estimated losses resulting from tenant defaults or the inability of tenants to make contractual rent and tenant recovery payments. This evaluation considers industry and economic conditions, property performance, credit enhancements and other factors. For straight-line rent amounts, our assessment is based on income recoverable over the term of the lease. We exercise judgment in establishing allowances and consider payment history and current credit status in developing these estimates. These estimates may differ from actual results, which could be material to our consolidated financial statements. As of December 31, 2024 and 2023 we determined that no allowance was necessary to cover the potential loss of rent from our tenants.
Real Estate Investments
We make estimates as part of our allocation of the purchase price of acquisitions (whether an asset acquisition acquired via purchase/leaseback or a business combination via an asset acquired from the current lessor) to the various components of the acquisition based upon the relative fair value of each component for asset acquisitions and at fair value of each component for business combinations. In making estimates of fair values for purposes of allocating purchase prices of acquired real estate, we utilize a number of sources, including independent appraisals that may be obtained in connection with the acquisition or financing of the respective property and other market data. We also consider information obtained about each property as a result of our pre-acquisition due diligence, marketing and leasing activities in estimating the fair value of the tangible and intangible assets acquired. The most significant components of our allocations are typically the allocation of fair value to land and buildings and, for certain of our acquisitions, in-place leases and other intangible assets. In the case of the fair value of buildings and the allocation of value to land and other intangibles, the estimates of the values of these components will affect the amount of depreciation and amortization we record over the estimated useful life of the property acquired or the remaining lease term. In the case of the value of in-place leases, including the assessment as to the existence of any above-or below-market in-place leases, our management makes its best estimates based on the evaluation of the specific characteristics of each tenant’s lease. Factors considered include estimates of carrying costs during hypothetical expected lease-up periods, market conditions and costs to execute similar leases. These assumptions affect the amount of future revenue that we will recognize over the remaining lease term for the acquired in-place leases. The values of any identified above-or below-market in-place leases are based on the present value of the difference between (i) the contractual amounts to be paid pursuant to the in-place leases and (ii) management’s estimate of fair market lease rates for the corresponding in-place leases, measured over a period equal to the remaining non-cancelable term of the lease, or for below-market in-place leases including any bargain renewal option terms. Above-market lease values are recorded as a reduction of rental income over the lease term while below-market lease values are recorded as an increase to rental income over the lease term. The recorded values of in-place lease intangibles are recognized in amortization expense over the initial term of the respective leases.
We evaluate each purchase transaction to determine whether the acquired assets meet the definition of a business. Transaction costs related to acquisitions that are not deemed to be businesses are included in the cost basis of the acquired assets, while transaction costs related to acquisitions that are deemed to be businesses are expensed as incurred.
Asset Impairment
Real estate asset impairment losses are recorded when events or changes in circumstances indicate the asset is impaired and the estimated undiscounted cash flows to be generated by the asset are less than its carrying amount. Management assesses the impairment of properties individually and impairment losses are calculated as the excess of the carrying amount over the fair value of assets to be held and used, and carrying amount over the fair value less cost to sell in instances where management has determined that we will dispose of the property. In determining fair value, we use current appraisals or other third-party opinions of value and other estimates of fair value such as estimated discounted future cash flows.
Factors That May Influence Future Results of Operations
Our revenues are primarily derived from rents we earn pursuant to the lease agreements we enter into with our tenants. Our tenants operate in the healthcare industry, generally providing nursing and medical care to patients. The capacity of our tenants to pay our rents is dependent upon their ability to conduct their operations at profitable levels. We believe that the business environment of the industry segments in which our tenants operate is generally positive for efficient operators. However, our tenants’ operations are subject to economic, regulatory and market conditions that may affect their profitability, which could impact our results of operations. Accordingly, we actively monitor certain key factors, including changes in those factors that we believe may provide early indications of conditions that may affect the level of risk in our lease portfolio.
Key factors that we consider in underwriting prospective tenants and borrowers and in monitoring the performance of existing tenants include, but are not limited to, the following:
● the current, historical and projected cash flow and operating margins of each tenant and at each facility;
● the ratio of our tenants’ operating earnings both to facility rent and to facility rent plus other fixed costs, including debt costs;
● the quality and experience of the tenant and its management team;
● construction quality, condition, design and projected capital needs of the facility;
● the location of the facility;
● local economic and demographic factors and the competitive landscape of the market;
● the effect of evolving healthcare legislation and other regulations on our tenants’ profitability and liquidity;
● the payor mix of private, Medicare and Medicaid patients at the facility; and
● whether such tenants are related parties.
One of our goals is to reduce our dependence on related party tenants in order to diversify our tenant base. Although we expect to continue to lease properties to related party tenants in markets in which the related party tenants have substantial experience and operations, we intend to lease properties in other markets to unrelated tenants if we are able to identify qualified operators. Additionally, we will consider leasing properties to unrelated parties in markets in which related parties operate if we are able to identify qualified operators that are willing to lease properties on terms that are no less favorable than those available from related parties.
We also actively monitor the credit risk of our tenants. The methods we use to evaluate a tenant’s liquidity and creditworthiness include reviewing certain periodic financial statements, operating data and clinical outcomes data of the tenant. Over the course of a lease, we also have regular meetings with the facility management teams. Through these means we are able to monitor a tenant’s credit quality.
Certain business factors, in addition to those described above that directly affect our tenants, which in turn will likely materially influence our future results of operations:
● the financial and operational performance of our tenants;
● trends in the cost and availability of capital, including market interest rates, which our prospective tenants may use for their working capital financing;
● reductions in reimbursements from Medicare, state healthcare programs and commercial insurance providers that may reduce our tenants’ profitability and our lease rates; and
● competition from other financing sources.
Inflation
We are exposed to inflation risk as income from long-term leases are a main source of our cash flows from operations. For our leased properties, we expect there to be provisions in the majority of our leases that will protect us from the impact of inflation. These provisions may include rent escalators, and leases that are triple-net. However, due to the long-term nature of the anticipated leases, among other factors, the leases may not re-set frequently enough to cover inflation.

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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk
Market risk includes risks that arise from changes in interest rates, foreign currency exchange rates, commodity prices, equity prices and other market changes that affect market sensitive instruments. In pursuing our business and investment objectives, we expect that the primary market risk to which we will be exposed is interest rate risk.
We may be exposed to the effects of interest rate changes primarily as a result of long-term debt used to acquire properties. As of December 31, 2024, we had $88.5 million in Series A Bonds which bear interest at a fixed rate of 6.97%, $73.3 million outstanding under our Series C Bonds, which bear interest at a fixed rate of 5.7% per annum, $51.5 million outstanding under our Series D Bonds, which bear interest at a fixed rate of 9.1% per annum, and $460.6 million in senior debt notes, of which $195.7 million (29.03% of total debt) bear interest at variable rate equal to one month SOFR plus a margin. At December 31, 2024, one month SOFR was 4.49%. Assuming no increase in the amount of our variable interest rate debt, if one-month SOFR increased 100 basis points, our annual cash flow would decrease by approximately $2.0 million. Our interest rate risk management objectives are to limit the impact of interest rate changes on earnings and cash flows and to lower overall borrowing costs. To achieve our objectives, we may borrow at fixed rates or variable rates. We also may enter into derivative financial instruments such as interest rate swaps and caps in order to mitigate our interest rate risk on a related financial instrument.
In addition to changes in interest rates, the value of our future investments is subject to fluctuations based on changes in local and regional economic conditions, change in currency rates between the Israeli Shekel and the U.S. Dollar and changes in the creditworthiness of tenants/operators, which may affect our ability to refinance our debt if necessary.

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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
ITEM 8. Financial Statements and Supplementary Data
See the Index to Consolidated Financial Statements on page of this report.

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures
None.

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ITEM 9A. CONTROLS AND PROCEDURES
ITEM 9A. Controls and Procedures
Our management, under the supervision and with the participation of our principal executive and financial officer, is responsible for and has evaluated the effectiveness of our disclosure controls and procedures in ensuring that the information required to be disclosed in our filings under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, including ensuring that such information is accumulated and communicated to our company’s management, as appropriate, to allow timely decisions regarding required disclosure. Based on such evaluation, our principal executive and financial officer have concluded that such disclosure controls and procedures were effective as of December 31, 2024 (the end of the period covered by this Annual Report).
Management’s Annual Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. In May 2013, the Internal Control - Integrated Framework (the “2013 Framework”) was released by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”). The 2013 Framework updates and formalizes the principles embedded in the original Internal Control-Integrated Framework issued in 1992 (the “1992 Framework”), incorporates business and operating environment changes and improves the original 1992 Framework’s ease of use and application.
Our management assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2024. In conducting this assessment, it used the criteria set forth by COSO in the 2013 Framework. Based on management’s assessment and those criteria, management believes that the Company has maintained effective internal control over financial reporting as of December 31, 2024.
Limitations on Controls
Our system of internal control over financial reporting was designed to provide reasonable assurance regarding the preparation and fair presentation of published financial statements in accordance with accounting principles generally accepted in the United States. All internal control systems, no matter how well designed, have inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance and may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting that occurred during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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ITEM 9B. OTHER INFORMATION
ITEM 9B. Other Information
During the fourth quarter of 2024, no director or officer adopted any insider trading arrangement contemplated by 17 CFR Section 229.408.
The Company has adopted a Code of Business Conduct & Ethics, which contains insider trading policies and procedures governing the purchase, sale, and/or other dispositions of the Company’s securities by directors, officers and employees, or the registrant itself, that have been designed to promote compliance with insider trading laws, rules and regulations, and the NYSE American’s listing standards.

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ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
ITEM 10. Directors, Executive Officers and Corporate Governance
The information required under Item 10 is incorporated herein by reference to our definitive proxy statement to be filed with the SEC within 120 days after the end of our fiscal year ended December 31, 2024 in connection with our 2025 Annual Meeting of Stockholders.

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ITEM 11. EXECUTIVE COMPENSATION
ITEM 11. Executive Compensation
The information required under Item 11 is incorporated herein by reference to our definitive proxy statement to be filed with the SEC within 120 days after the end of our fiscal year ended December 31, 2024 in connection with our 2025 Annual Meeting of Stockholders.

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ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required under Item 12 is incorporated herein by reference to our definitive proxy statement to be filed with the SEC within 120 days after the end of our fiscal year ended December 31, 2024 in connection with our 2025 Annual Meeting of Stockholders.
The following table discloses the number of outstanding options, warrants and rights granted to participants by the Company under the equity compensation plans, as well as the number of securities remaining available for future issuance under these plans as of December 31, 2024.
Number of securities to be
issued upon exercise of
outstanding options, warrants
and rights (a) Weighted average exercise
price of outstanding options,
warrants and rights (b) Number of securities remaining
available for future issuance under equity
compensation plans (excluding
securities reflected in column (a)) (c)
Equity compensation plans approved by security holders - - 975,100
Equity compensation plans not approved by security holders - - -
Total - - 975,100

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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
ITEM 13. Certain Relationships and Related Transactions, and Director Independence
Additional information required under Item 13 is incorporated herein by reference to our definitive proxy statement to be filed with the SEC within 120 days after the end of our fiscal year ended December 31, 2024 in connection with our 2025 Annual Meeting of Stockholders.

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ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES
ITEM 14. Principal Accountant Fees and Services
The information required under Item 14 is incorporated herein by reference to our definitive proxy statement to be filed with the SEC within 120 days after the end of our fiscal year ended December 31, 2024 in connection with our 2025 Annual Meeting of Stockholders.
PART IV

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ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES
ITEM 15. Exhibit and Financial Statement Schedules
Financial Statements
(1) Consolidated Financial Statements:
See Index to Consolidated Financial Statements at page.
(2) Financial Statement Schedules
Schedule III: Real Estate and Accumulated Depreciation
Note: All other schedules have been omitted because the required information is presented in the consolidated financial statements and the related notes or because the schedules are not applicable.
(3) Exhibits:
The exhibits listed in the accompanying index to exhibits are filed as part of, or incorporated by reference into, this Annual Report.
EXHIBIT INDEX
Exhibit
Description
3.1
Articles of Amendment and Restatement of Strawberry Fields REIT, Inc., incorporated herein by reference to Exhibit 3.1 to the Registration Statement on Form 10 filed with the Securities and Exchange Commission as of July 12, 2022.
3.2
Amended and Restated Bylaws of Strawberry Fields REIT, Inc., incorporated herein by reference to Exhibit to the Registration Statement on Form 10 filed with the Securities and Exchange Commission as of July 12, 2022.
4.1*
Description of Capital Stock
10.1
Deed of Trust dated April 23, 2018, between Strawberry Fields REIT, LTD and Mishmeret Trust Services Company Ltd. .incorporated herein by reference to Exhibit 10.1 to the Registration Statement on Form 10 filed with the Securities and Exchange Commission as of July 12, 2022.
10.2
Deed of Trust dated November 24, 2015, between Strawberry Fields REIT, LTD and Mishmeret Trust Services Company Ltd., incorporated herein by reference to Exhibit 10.2 to the Registration Statement on Form 10 filed with the Securities and Exchange Commission as of July 12, 2022.
10.3
Deed of Trust dated July 27, 2021 between Strawberry Fields REIT, LTD and Mishmeret Trust Services Company Ltd., incorporated herein by reference to Exhibit 10.3 to the Registration Statement on Form 10 filed with the Securities and Exchange Commission as of July 12, 2022.
10.4
First Amended and Restated Agreement of Limited Partnership dated June 1, 2021 of Strawberry Fields Realty LP, incorporated herein by reference to Exhibit 10.4 to the Registration Statement on Form 10 filed with the Securities and Exchange Commission as of July 12, 2022.
10.5
Contribution Agreement dated June 8, 2021 between Strawberry Fields REIT, Inc., Strawberry Fields REIT, LLC and of Strawberry Fields Realty LP., incorporated herein by reference to Exhibit 10.5 to the Registration Statement on Form 10 filed with the Securities and Exchange Commission as of July 12, 2022.
10.6
Tax Protection Agreement effective as of June 8, 2021 among Strawberry Fields Realty LP, Strawberry Fields REIT, Inc. and Strawberry Fields REIT, LLC., incorporated herein by reference to Exhibit 10.6 to the Registration Statement on Form 10 filed with the Securities and Exchange Commission as of July 12, 2022.
10.7
Strawberry Fields REIT, Inc. 2021 Equity Incentive Plan, incorporated herein by reference to Exhibit 10.7 to the Registration Statement on Form 10 filed with the Securities and Exchange Commission as of July 12, 2022.
10.8
Term Loan and Security Agreement dated March 18, 2022, by and among Strawberry Fields Realty LP and certain subsidiaries thereof named as Borrowers, and Popular Bank, as Agent and Lender., incorporated herein by reference to Exhibit 10.8 to the Registration Statement on Form 10 filed with the Securities and Exchange Commission as of July 12, 2022.
10.9
Indemnification Agreement effective January 13, 2020 between the Company and Essel Bailey incorporated herein by reference to Exhibit 10.1 to the Form 10-Q filed with the Securities and Exchange Commission as of September 8, 2022.
10.10
Indemnification Agreement effective January 13, 2020 between the Company and Jack Levine Bailey incorporated herein by reference to Exhibit 10.2 to the Form 10-Q filed with the Securities and Exchange Commission as of September 8, 2022.
10.11
Indemnification Agreement effective January 13, 2020 between the Company and Michael Blisko incorporated herein by reference to Exhibit 10.3 to the Form 10-Q filed with the Securities and Exchange Commission as of September 8, 2022.
10.12
Indemnification Agreement effective January 13, 2020 between the Company and Moishe Gubin incorporated herein by reference to Exhibit 10.4 to the Form 10-Q filed with the Securities and Exchange Commission as of September 8, 2022.
10.13
Indemnification Agreement effective January 13, 2020 between the Company and Reid Shapiro incorporated herein by reference to Exhibit 10.5 to the Form 10-Q filed with the Securities and Exchange Commission as of September 8, 2022.
10.14
Deed of Trust dated June 19, 2023, between Strawberry Fields REIT, LTD and Mishmeret Trust Services Company Ltd. .incorporated herein by reference to Exhibit 10.9 to the Registration Statement on Form 10 filed with the Securities and Exchange Commission as of July 12, 2022.
10.15
Deed of Trust dated August 4, 2024, between the Company and Mishmeret Trust Services Company Ltd., incorporated herein by reference to Exhibit 10.1 to the Form 8-K filed with the Securities and Exchange Commission as of August 6, 2024.
10.16
Underwriting Agreement, dated December 5, 2024, by and between the Company and Janney Montgomery Scott LLC, as representative of the several underwriters named therein, incorporated herein by reference to Exhibit 1.1 to the Form 8-K filed with the Securities and Exchange Commission as of December 9, 2024.
*21.1
List of Subsidiaries of the Registrant
*31.1
Certification of Chief Executive Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
*31.2
Certification of Chief Financial Officer, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
**32.1
Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
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Inline XBRL Instance Document
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Inline XBRL Taxonomy Schema
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Inline XBRL Taxonomy Calculation Linkbase
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Inline XBRL Taxonomy Definition Linkbase
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Inline XBRL Taxonomy Label Linkbase
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Inline XBRL Taxonomy Presentation Linkbase
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* Filed herewith.
** Furnished herewith.
+ Management contract or compensatory plan or arrangement.