Strawberry Fields REIT : Q4 2024 Investor Presentation

Published: 2025-03-02 19:38:03 ET STRW

Strawberry Fields REIT

NYSE American: "STRW"

March 3, 2025

Use of Projections

This presentation contains projected financial information with respect to the Company. Such projected financial information constitutes forward-looking information and is for illustrative purposes only. The assumptions and estimates underlying such financial forecast information are inherently uncertain and are subject to a wide variety of significant business, economic, competitive and other risks and uncertainties that could cause actual results to differ materially from those contained in such prospective financial information.

Disclaimer Regarding Non-GAAP Financial Measures

This presentation includes certain non-GAAP financial measures not based on generally accepted accounting principles. The Company presents non-GAAP financial measures when it believes that the additional information is useful and meaningful to investors.

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. 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.

Legal

Disclaimer

EBITDARM is a non-GAAP measure that for any period of determination, the aggregate net operating income of Tenant for such period to the extent derived from the operation of the Premises as reflected in their financials, adjusted to add thereto, to the extent allocable to the Premises for the applicable period of determination, without duplication, (1) interest expense, (2) income tax expense, (3) depreciation and amortization expense, (4) base rent, and (5) management fee expenses.

Net Debt, is a non-GAAP financial measure, represents principal debt outstanding less cash and cash equivalents. Net debt provides useful information by calculating and monitoring the Company's leverage metrics.

We believe that the use of FFO, AFFO, EBITDA, Adjusted EBITDA (which can be defined as EBITDA net of the effects of straight-line rent, gain/loss on currency translation costs and the effects of credit provision for doubtful accounts), EBITDARM and Net Debt are helpful to our investors as these metrics are used by management in assessing the health of our business and our operating performance.

The non-GAAP financial measures used in this presentation are reconciled to the most directly comparable GAAP measures on page 31 of this presentation. Additional information about such measures are contained in our annual and quarterly reports on Form 10-K and Form 10-Q filed with the Securities and Exchange Commission. Such reconciliations are also available on our website at www.strawberryfieldsreit.com.

This presentation also contains estimates and other information concerning our industry that are based on industry publications, surveys and forecasts. This information involves a number of assumptions and limitations, and we have not independently verified the accuracy or completeness of the information. This presentation includes industry data obtained from publicly available third-party sources. The Company is not aware of any misstatements contained in such industry data, but it has not independently verified it and does not guarantee the accuracy or completeness of such information contained in this presentation.

No Offer

This presentation does not constitute an offer, or a solicitation of an offer, to buy or sell any securities, investment or other specific product, or a solicitation of any vote or approval, nor shall there be any sale of securities, investment or other specific product in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No public offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act, or an exemption therefrom. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED THIS PRESENTATION.

Legal

Disclaimer

Strawberry Fields REIT

Company Highlights

About Strawberry Fields REIT Inc. (the "Company")

The Company is an income producing real estate investment company that owns 119 properties and also holds leasehold interests in an additional property under a long- term lease. These properties are leased to third-party operators which use them to operate 118 Skilled Nursing Facilities (SNFs), 2 Long Term Acute Care Hospitals (LTACHs) and 10 Assisted Living Facilities (ALFs). These facilities have a total of 14,540 licensed beds.

We primarily lease our properties on a triple net, long term basis, with annual rent escalations of 1%-3%.

51.5% of our facilities are leased to related parties, including 67 facilities leased to affiliates of two of our Directors.

Our properties are located across 11 states: Arkansas, Illinois, Indiana, Kansas, Kentucky, Michigan, Missouri, Ohio, Oklahoma, Tennessee and Texas.

The Company specializes in leasing healthcare properties utilized as SNFs, LTACHs and ALFs. The demand for these types of facilities is expected to continue to grow consistently due the aging population in the U.S.

Our business is financed through a combination of bond debt, HUD guaranteed loans and commercial bank loans.

The operators of our properties primarily provide care to long-term residents who require constant care and rehabilitation.

For the period 2019 through 2024, the Company has shown strong growth in Adjusted EBITDA (CAGR: 8.2%) and Adjusted FFO (CAGR: 12.6%).

Portfolio Summary as of

December 31, 2024*

Demonstrated Operating Results and Financial Strength

118**

$350M+

51.9%***

Owned assets, plus one asset

Acquisition Pipeline

Net Debt Leverage Ratio

under a long-term lease

14,540**

$55.8M

1.75x****

Total number of beds

2024

TTM EBITDARM Rent

Adjusted FFO

Coverage

2023 Adjusted EBITDA: $52.7M

130**

$90.6M

100%

2024

Rent Collected

Total number of facilities

Adjusted EBITDA

Through Q4 2024

2023 Adjusted EBITDA: $79.3M

*Data as of December 31, 2024, unless noted otherwise

**Includes the January 2025 acquisition of 5 skilled nursing facilities and 1 assisted living facility in Kansas

***Net debt leverage ratio is calculated as net debt to enterprise value utilizing STRW's closing price on 2/28/2025

****EBITDARM is a non-GAAP measure; please see the back page for a further explanation. This amount is not audited and is based on annualized operator results as of November 30, 2024.

Proven Acquisition Strategy Driving Significant Growth in the Portfolio

2005 - 2014:

Moishe Gubin, our

Chairman and CEO, and other investors acquire 33 SNF properties in Indiana and Illinois

2015: Our predecessor, Strawberry Fields REIT, LLC, was founded by Mr. Gubin, Mr. Blisko and other investors acquired their portfolio of 33 SNF properties.

2015: We issued $68.3

million of Series A bonds that were listed on the Tel Aviv Stock Exchange, with an initial S&P Israel "ilA-" rating. These bonds were paid off in November 2023

2018: We issued $67.1 million of Series B bonds that were listed on the Tel Aviv Stock Exchange with an initial S&P Israel "ilA+"

rating. These bonds were paid off in March 2022.

2021: We created an

UPREIT structure, with

the Company as the general partner of our operating partnership which holds all of our properties.

2022: We

began

trading on

the OTCQX

under the

ticker

"STRW".

Feb 2023: We up- listed to the

NYSE

American

Jun 2024: We acquired a 78 bed SNF/ ALF located in Georgetown IN for $5.85mm

Aug & Sep 2024:

We acquired 5

long -term

facilities. 3 in TN (356 beds) and 2 in TX (254 beds)

Dec 2024:

We complete

2015 to 2025

2008: Infinity, an affiliate of Mr. Gubin, is engaged as consultant to the tenant operators.

2015: We

expanded into Texas, Ohio, Oklahoma and Michigan through the purchase of 16 properties.

2016: We

expanded into Tennessee and Kentucky through the purchase of 8 properties. We sold one property in Illinois.

2017-2018: We purchased

9 properties in Arkansas,

together with one in Indiana and one in Kentucky. Tenants engaged three additional consulting groups (Benchmark, Green Park, and Paramount).

2019 -2020: We purchased

14 additional properties in

Arkansas,

Kentucky, Illinois and Indiana.

2021: We acquired 5 properties in Tennessee and one in Kentucky. We sold 5 properties in Illinois.

2022: We repaid the Series B Bonds and obtained a

$105.0 million mortgage loan facility

Jan 2023:

acquired a

120 bed SNF in

Breathitt

County,

KY.

Aug 2023:

We acquired 19 SNF's &

5 ALF's (1,852) beds located in Indiana for $102mm

July 2024: We

were granted

effectiveness on our Form S-3 and began selling shares to the market through an ATM Program

Dec 2024/Jan

2025: We

acquired 15

facilities with 1,500+ beds in Kansas/Missouri/ Oklahoma

SF Growth (number of facilities)

140

130

120

110

109

100

Jan-15

Jul-15

Jan-16

Jul-16

Jan-17

Jul-17

Jan-18

Jul-18

Jan-19

Jul-19

Jan-20

Jul-20

Jan-21

Jul-21

Jan-22

Jul-22

Jan-23

Jul-23

Jan-24

Jul-24

Jan-25

Diversified Base of Consultants to

Operators

Infinity of Illinois

Oasis Health Care Group

Bria Health Services

Misc. Operators

Hill Valley HC

Reliant Care Management

Infinity of Tennessee

Infinity of Indiana

AOM Healthcare Management

Advena Healthcare

Portfolio Composition

130 Facilities

14,540 total beds across 11 states (Illinois, Indiana, Arkansas, Tennessee, Kansas, Kentucky, Michigan, Missouri, Ohio, Oklahoma, and Texas)

12 buildings include two types of licensed facilities

In order to leverage scale and efficiencies, the Company focuses on acquiring facilities that are geographically concentrated

Moishe Gubin, our Chairman and founder, has served as the Chief Executive Officer since inception of the Company. From 2004 to 2014, Mr. Gubin was the Chief Financial Officer and Manager of Infinity Healthcare Management, LLC, a company engaged in managing skilled nursing facilities and other healthcare facilities.

Jeffrey Bajtner has served as our Chief Investment Officer since March 2022. Mr. Bajtner's role with the Company focuses on acquisitions/dispositions of real estate and overseeing our investor relations. From 2015 to May 2021, Mr. Bajtner was a Vice President at BlitzLake Partners, where he oversaw acquisitions for mixed-use developments.

Greg Flamion, our Chief Financial Officer, since joining the Company in January 2024. Previously, Mr. Flamion was a CFO of Zimmerman Advertising, an agency under Omnicom Group Inc. (NYSE: OMC) from 2014-2023. Mr. Flamion also held a number of diverse accounting and finance positions at a variety of publicly traded companies.

David Gross serves as our General Counsel. Mr. Gross is an experienced healthcare and transactional attorney with 10+ years in the healthcare industry. Mr. Gross focuses primarily on acquisition, leasing, disposition and financing of skilled nursing facilities, long term acute care hospitals and medical office space.

Experienced Management

Disclaimer

Strawberry Fields REIT Inc. published this content on March 03, 2025, and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on March 03, 2025 at 00:37:06.225.