Strawberry Fields REIT Q2 Earnings Call Highlights

Key Points

• Operational performance remained solid: Strawberry Fields collected 100% of contractual rents in Q2, with 142 facilities, approximately $143 million in annualized base rent, and tenant EBITDA-to-rent coverage of 2.17x.
• Financial results and balance sheet improved: Six-month revenue rose 6.4% to $80 million, while net income increased to $18.4 million. The company approved a $0.17 quarterly dividend and secured a credit facility with up to $300 million in borrowing capacity.
• Acquisition activity is expected to accelerate: The REIT agreed to buy a Missouri healthcare campus for $10.4 million and is evaluating more than $225 million of additional transactions, with management targeting $100 million to $150 million of total acquisitions in 2026.

Strawberry Fields REIT NYSEAMERICAN: STRW reported full contractual rent collection during the second quarter of 2026, while management said its acquisition pipeline has begun to improve following a slower and more volatile deal environment earlier in the year.

Chief Investment Officer Jeff Bajtner said the healthcare real estate investment trust collected 100% of contractual rents during the quarter. The company’s portfolio included 142 facilities across 10 states, with 15,496 licensed beds and annualized base rent of approximately $143 million. Management estimated the portfolio’s value at more than $1.4 billion using a 10% capitalization rate.

The company’s tenants generated EBITDA-to-rent coverage of 2.17x as of May 31, according to Bajtner, while the portfolio’s remaining average lease term was 6.9 years. Strawberry Fields said approximately 91.5% of its portfolio consists of skilled nursing facilities.

Financial Results and Dividend

For the six months ended in July 2026, Strawberry Fields reported revenue of $80 million, up $4.8 million, or 6.4%, from the comparable 2025 period. Chief Financial Officer Greg Flamion said the revenue increase was driven by the timing and integration of properties acquired in 2025.

Year-to-date net income increased to $18.4 million, or $0.33 per share, from $15.7 million, or $0.29 per share, in the prior-year period. Higher depreciation associated with acquired properties, as well as increased general and administrative costs, partially offset revenue growth.

Second-quarter revenue totaled $40 million, up $2.2 million from the second quarter of 2025. Quarterly net income was $8.9 million, marginally above the prior-year quarter, Flamion said.

Management cited 2026 adjusted funds from operations, or AFFO, of $73.9 million and projected AFFO-per-share growth of 10.1%. The company also reported adjusted EBITDA of $135.7 million, a lease yield of 14.4%, and net debt to net assets of 49.8%.

The board approved a third-quarter dividend of $0.17 per share, payable Sept. 30 to shareholders of record on Sept. 16. As of June 30, the company’s annualized dividend was $0.70 per share, representing a 4.9% yield and a 50.6% AFFO payout ratio, according to management.

Credit Facility and Debt Plans

On June 18, Strawberry Fields closed a corporate credit facility providing up to $300 million of availability. The facility includes a $100 million term loan and a $200 million revolving credit line, each with an initial three-year term and two one-year extension options. The borrowing rate is SOFR plus 275 basis points.

Proceeds were used to refinance existing secured bank debt, with the remaining capacity intended to support acquisitions. Chief Executive Officer Moishe Gubin said the revolver had about $140 million of availability at the time of the call.

Management said it had paid off one corporate bond after quarter-end using balance-sheet cash and planned to address additional debt maturing in September. Gubin said the company expected to seek financing in Israel, where it has previously issued debt denominated in Israeli shekels, while potentially using its credit line for any remaining repayment needs.

Strawberry Fields reported a blended interest rate below 6%, net debt to adjusted EBITDA of 5.7x, and leverage near or below its 50% target.

Missouri Hospital Campus Acquisition

The REIT has contracted to acquire a hospital campus near Kansas City, Missouri, for $10.4 million. The campus includes a licensed 60-bed hospital, a licensed 99-bed skilled nursing facility, and ancillary medical office buildings.

The company expects to fund the acquisition from its balance sheet and close during the third quarter. The property will be added to an existing Missouri master lease, with annual base rent of $1.04 million and 3% annual rent escalators.

During the question-and-answer session, Gubin said the company remains primarily focused on skilled nursing and related healthcare real estate but would consider other asset types when they fit an established operator and master-lease structure. He said the Missouri transaction was particularly suited to the existing tenant because of its geographic presence and physician-practice operations.

Pipeline Builds as Management Targets Year-End Closings

Bajtner said Strawberry Fields is evaluating more than $225 million of potential transactions across existing and new states. He said the company has seen a stronger mix of medium- to high-probability opportunities and could close roughly $130 million of real estate transactions near year-end if deals progress as expected.

Gubin said the company still expects to close between $100 million and $150 million of deals during the year, although much of that activity may occur later than initially anticipated. He attributed the uneven pace to transaction-specific complications rather than changes in acquisition pricing or cap-rate discipline.

Management said it continues to target acquisitions at a 10% capitalization rate and seeks rent coverage of at least 1.25x at closing. The company is prioritizing opportunities that can expand existing master leases or establish a foothold in new states where it sees potential for additional growth.

Looking ahead, Gubin said the company is also in discussions with other healthcare real estate owners that could potentially be absorbed into Strawberry Fields’ platform. He characterized those discussions as long-term opportunities and said the company’s operating model and public-market platform could appeal to smaller owners seeking an alternative to building their own public companies.

About Strawberry Fields REIT (NYSEAMERICAN:STRW)

Strawberry Fields REIT, Inc, is a self-administered real estate investment trust engaged in the ownership, acquisition, development and leasing of skilled nursing and certain other healthcare-related properties. The Company's portfolio includes 109 healthcare facilities with an aggregate of 12,449 bed, located throughout the states of Arkansas, Illinois, Indiana, Kentucky, Michigan, Ohio, Oklahoma, Tennessee and Texas. The 109 healthcare facilities comprise 99 skilled nursing facilities, eight assisted living facilities, and two long-term acute care hospitals.

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