Strawberry Fields REIT, Inc. (STRW) Earnings Call Transcript & Summary

Good morning. My name is Tom, and I will be your conference operator today. I would like to welcome everyone to the Strawberry Fields REIT Year-end 2024 Earnings Call. [Operator Instructions] I would now like to turn the conference over to Jeffrey Bajtner, Chief Investment Officer. Sir, please go ahead.

Thank you, and welcome to Strawberry Fields REIT's Year-end 2024 Earnings Call. I am the Chief Investment Officer of the company, and I focus on acquisitions, growing the company's operator base and Investor Relations. On the call with me today are Moishe Gubin, our Chairman and CEO; and Greg Flamion, our CFO. On Thursday, the company issued its year-end 2024 results, which is available on the company's Investor Relations website. Participants should be aware that this call is being recorded, and listeners are advised that any forward-looking statements made on today's call are based on management's current expectations, assumptions and beliefs about Strawberry Fields REIT's business and environment in which it operates. These statements may include projections regarding future financial performance, dividends, acquisitions, investments, returns, financings and may or may not reference other matters affecting the company's business or the businesses of its tenants, including factors that are beyond its control. Additionally, references will be made during this call to non-GAAP financial results. Investors are encouraged to review these non-GAAP financial measures as well as explanation and reconciliation of these measures to the comparable GAAP results are included on the non-GAAP measure reconciliation page in our investor presentation. And now on to discussing Strawberry Fields REIT and our 2024 performance. As we look back at 2024, a big takeaway is the work the team completed on growing the portfolio. This growth was not just through acquisition of new facilities, but also working with existing tenants on renewing existing leases, so the company has stable cash flows into the foreseeable future. I'd like to point out some of the numbers which detail this growth. During the year, the company acquired $130.3 million of real estate, growing the portfolio from 109 facilities in 9 states to 124 facilities in 10 states. Bed-wise, this translates from 12,449 beds to 14,186 beds, which is approximately a 14% increase. Through these acquisitions, the company has grown its tenant base from 10 operators to 14. Additionally, the company's base rents increased from $84 million in 2023 to $104 million in 2024. We expect that number to be around $130 million in 2025. As it relates to our existing tenant's leases, both of our Indiana Master Leases were renegotiated for new 10-year terms, which will ensure rents into 2034. We also had a few individual leases that matured and were re-tenanted by an existing tenant into their master lease. Currently, 88% of our facilities are tied to master leases. For 2025, the company has 6 leases that mature, 4 in Ohio and 2 in Illinois. We are pleased to announce that the tenant for the Ohio facilities has exercised the renewal option for the next 5 years. With these renewed leases and new acquisitions, our average lease term has increased from 4.6 years at the beginning of 2024 to a healthy 7.4 years at the end of the year. It is important to note that this average lease term is based on the initial 10-year lease term [indiscernible] lease. Almost all of our leases include at least two, 5-year options to extend. As it relates to this past year, I wanted to share some key highlights. During the year, the company collected 100% of its contractual rents. As we discussed in last quarter's earnings call, in July, the company filed a registration statement on Form S-3 with the Securities and Exchange Commission. In August, the company established an ATM Program. Due to this program, the company began selling shares to the public for the first time as we initially went public through a direct listing. In December, the company followed up to the ATM Program with our first underwritten public offering of approximately 3.34 million shares of common stock for total gross proceeds of $35 million. In December, the company completed an acquisition with an unaffiliated seller with respect to 8 healthcare facilities located in Missouri, our 10th state. The purchase price for the facilities was $87.5 million. 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 8 facilities are comprised of 1,111 beds. In December, the company entered into a purchase agreement for 6 healthcare facilities with 354 [indiscernible] beds located in Kansas. The purchase price of the facilities was $24 million. The facilities are leased under a triple-net master lease agreement to a group of third-party tenants. The initial lease term is for 10 years and includes two 5-year options. The company closed the acquisition on January 2, 2025. This acquisition brought the company into its 11th state and increased the overall portfolio to 130 facilities and 14,540 beds. Subsequent to quarter end, our Board of Directors authorized a cash dividend of $0.14 a share. The dividend will be payable on March 31, 2025, to shareholders of record on Monday, March 17, 2025. This dividend will be our 10th consecutive quarter of paying dividends and continues to represent the company's philosophy of showing the market that our dividends can be relied upon. I would now like to have Greg Flamion, our Chief Financial Officer, discuss the year-end financials.

Hello, and thank you for attending our end of the year earnings call. 2024 has been a year of significant portfolio expansion for Strawberry Fields REIT. Including the acquisition of our Kansas properties on January 2, 2025. We have increased our portfolio by 19.3%, bringing the overall facility count to 130 facilities. This expansion has strengthened our financial position, driving substantial growth in net-fixed asset-related accounts and increasing total assets by 27.7% to $170 million. In addition to the financial growth, this expansion has enhanced our risk diversification across states and operators as we have entered into two new states and established partnerships with new operators. Additionally, cash and cash equivalents, both restricted and unrestricted, increased due to the financing of the Kansas acquisition and higher reserves associated with financing activities. Our 2024 year growth was supported by multiple funding sources, including $118 million in bond issuances, a new $59 million mortgage facility with Popular Bank, a $33 million equity raise and proceeds from our after-the-market program as well as rental income. The company also strategically reduced debt by paying down $24 million on a higher interest loan. Collectively, these financing activities led to a 23.6% increase in total liabilities or $134.5 million, while equity rose $36 million, representing a 76.8% year-over-year increase. Moving to the profit and loss statement. 2024 was also a year of strong profit growth for Strawberry Fields REIT. Revenue increased by $17.3 million or 17.3%, driven by full year contributions of the Indiana 2 Master Lease, which was acquired in Q3 2023 as well as revenue from additional acquisitions completed throughout 2024. Total expenses rose by $3.4 million or 6.5%, primarily due to higher depreciation and amortization costs, along with increased general and administrative expenses. Interest expense also grew by $8.2 million or 33.4%, reflecting the additional expenses incurred to finance the company's portfolio growth. Despite these increases, revenue growth outpaced expenses, resulting in a net income of $26.5 million. This is an increase of $6.3 million or 30.9% compared to the prior year. Moving to the financial highlights slide. Our strong operational performance resulted in an adjusted AFFO of $55.8 million and an adjusted EBITDA of $90.6 million. These metrics demonstrated year-over-year growth with a compound annual growth rate of 12.6% and 8.2%, respectively. Despite our strategic emphasis on portfolio expansion, we remain committed to delivering value to our shareholders. In 2024, the company increased its dividend from $0.12 per share at the beginning of the year to $0.14 per share by year-end. This represents a 16.6% increase in the annual dividend distribution per share and a 5.3% dividend yield with an AFFO payout of 49.5%. And with this, Moishe Gubin will continue the presentation with additional 2024 portfolio highlights.

Thank you. Thank you, Greg. Thank you, Jeff. Going through the slides. For me, the underlying conversation is the maturity of our company and how we continue to go from originally a mom-and-pop founded by Michael and I, our company to turning into a publicly traded company and heading our way towards getting widely held, adding liquidity to the stock. And so I guess for me, the biggest highlight of the year was actually doing our first real public offering, bringing in some institutional shareholders and getting admitted into the Russell 3000. And for us to grow on that and build on that is what we're looking to do. Currently, the portfolio is 130 facilities in 11 states. Jeff said earlier, about 14,540 beds. We currently [indiscernible] 15 different groups. And like also Jeff, said our WALT went up to 7.2 years. Very -- all of our leases are built at the same exact way, which are 10-year leases with two 5-year lease [indiscernible]. So that WALT at 7.2 years as far as high end, because people are not going to renew leases when there's 6, 7 years left remaining. So we're going to keep working on that and growing that. Our trailing 12-month EBITDARM is a good number [indiscernible] on this chart as we stand [ as our peers ]. We're basically in the same [indiscernible] as everybody else. Base rent growth rate, 7.5%, which is pretty good [indiscernible] just earlier. Really proud of this, particularly from 6 years ago, AFFO of almost $31 million, almost doubling in 6 years, very, very proud of that. The growth rate on the base rent, and like we said earlier, we expect that number to be close to $130 million in '25. [indiscernible] Probably AFFO growth is probably closer to $75 million by the end of the year. We'll see how well we do there. Our stock price, and this is really for me the highlight. We were relatively unknown and trading few shares by appointment at the beginning of 2024. And as the year went on, our volume increased and our stock started to grow. And then we did an offering and the stock went down. And today, our stock price, I believe, is trading over $12 a share. And hopefully, it will continue its rise. I mean as a real goal for today's purpose is for us to be treated like all our peers and that's being traded at a multiple of 13x, 14x our FFO, and we hope to get there God Willing. Our 1 year return versus our peers, as you can tell, I mean this is relatively we graphed [indiscernible] proud of that. Our AFFO trading multiple is at the lowest from our peers. Again, we hope to improve, and part of that is us going to conferences on a regular basis, going to every meeting, investors, meeting with analysts and getting the story out there so that the stock could trade. We'd like to continue to sell shares through the ATM. Our real range of our debt is we want to be between 45% and 55%. Right now we're at 51%, 52%, which is higher than we want to be, but it's in our range. And God willing, we'll have a successful year in raising equity and finding deals and that number should hopefully drop. Our payout ratio, again, we're beating everybody as far as we're only growing paying out 50% using the leftover money, of course, to fund our growth. And our dividend yield is right around 5% and we're happy with that as well. I know there's people out there having a hard time hearing us. We're doing the best we can over here. So hopefully, whatever I miss, you'll ask in the question, and we'll be able to answer it. We're proud of the fact that we're really the only pure-play skilled nursing healthcare REIT out there. And at this graph, we you are able to see that we're close to 91% of our portfolio is skilled nursing. We generally do not look at deals for assisted-living part of the portfolio. And we're going to continue doing exactly what we've been doing all along, very very disciplined like we told people over and [indiscernible] coverage also it's the lower end of the range, but it's a pretty good number. [indiscernible] been improving since Corona ended. We see our tenants doing well and hopefully, they'll continue to thrive. Our AFFO per share growth over the last 5 years is a really, really good number. That number, of course, is going to shrink, but it's going to continue to grow with us being active in the marketplace. These graphs are [indiscernible] graphs and you look at the growth rate of our shares. I think our expectation this year, we ended at $1.11 as AFFO per share. I think we're hoping this year to closer to $1.25, something like that. And that should be another 10% clip or 12% clip. And that, together with our 5% dividend yield provides a good double-digit return for our investors. And we expect that we should have to continue to do that. Our business is so solid and stable that really, if we just stop doing what we're doing, we'd be able to just dividend out twice as much as we have, as we're doing now and we should be able to continue to collect all of our rents and run a really, really strong company. And of course, our objective is to keep growing as long as we can grow the way we want to grow. We're doing it now on our terms. We've told the marketplace exactly how we buy, and we remain committed to buying exactly that way. And so -- and that's what we're doing. And hopefully, we'll be able to continue to do that. Just for informational purposes, our debt maturities, we don't have anything renewing in 2025. We do expect to clean up some of our debt by bringing in less expensive debt. And if our shares continue to trade well, to sell shares through the ATM to pay down debt, that should be good for all of us, the shareholders. We still look to [indiscernible] as our exit on the debt side of things, though they previously prior administration have become very difficult to deal with. We'll see where that lands. This is really what I'm proud of. This [indiscernible] here shows you that we've diversified our portfolio by state and by operator, where nobody is higher than 28% of our portfolio, and that's going to continue to shrink as we continue to grow. And this is -- for me, this is really good because when we started years ago, it was one operator in one state. And then we became one operator, in 2 states. And then as we start getting more folks in. Now the related party leases are probably 50% and still shrinking. So the folks that like the related party leases, that's -- I'm sorry, but we're going to continue to diminish those to shrink those down. Folks that don't like that as much, you should be happy to know that we're continuing to meet with outside newer tenants not related to grow our portfolio. With that, this is what our map looks like. There's still plenty of [indiscernible] in Missouri and Tennessee, Mississippi, Alabama, Georgia, Ohio. So we have what to do in the Midwest, but that's really where we are. Now if we found a deal tomorrow for 20 facilities in Colorado, we would -- if the deal makes sense and it fits in our box, we would buy. The reality is really we're in Midwest anything in Midwest, and we're going to keep growing in circle and the nucleus to be able to keep us moving along those. That's about it. We open the floor for questions.

[Operator Instructions] And the first question this morning is coming from Gaurav Mehta from Alliance Global Partners.

I wanted to ask you more details on this transaction market. I want to get some color on what you were seeing as far as deal flow and pricing?

Okay. Well, I'll let Jeff answer that. But I would just tell you, pricing-wise, we buy things exactly the same way. So if it doesn't fit our box, we don't buy it. We haven't bent on that or bended if that's the right word, on our philosophy and our execution strategy. But I'll let Jeff answer what the pipeline looks like.

As Mike said, I mean, pricing [indiscernible] hasn't changed, [indiscernible] and we're looking for deals, I mean deals are coming in, I mean, consistently from all corners of the country. But I mean, as Mike said, we're only going to be growing in a new state if it makes sense. And we -- I mean, there's a sizable approach to our sizable portfolio. So we just showed in [indiscernible showed you in Missouri and Kansas, there are 8 facilities in Missouri, 6 in Kansas. Our portfolio pipeline right now is about $350 million. And [indiscernible] of [indiscernible] our deals has been coming off this week in San Diego [indiscernible]. So we look forward to seeing more deals and continue to grow the company.

Yes. I would say that as we get bigger and bigger, hopefully, deal size will continue to grow. We've now 2 years in a row, closed over $110 million, $125 million a year. We expect this year, hopefully, if the marketplace wants me to sound like I'm certain that things are going to happen, but I don't have a crystal ball. So I'm telling to you like how I feel. But I expect that we should be able to close $150 million this year and hopefully more. But we already have, I think, most likely lined up probably close to $80 million, $90 million for ready, it's only the beginning of March. So hopefully, this year will be a banner year as far as growth. And again, it's controlled growth because it's only -- it has to fit our box doing business the way we do business.

Okay. Great. As a follow-up, as you look to grow your company in '25, how should we think about your leverage expectations?

So again, our mandate has been between 45% to 55% debt to equity and debt to market cap at this point. And I would expect to be towards the low end of that range. [indiscernible]. I mean that was one of the things I'm proud of from 2024 was that proved that we were able to -- we have an open market for selling equity. We have an open debt market, obviously, in Israel for us, and we have banks in America that are willing to lend to us. So there's a lot of different choices, right? Every cash has a price to it, depending on where things are. We're looking to take out the best option for us. And most of the things that we do, it's flexible. So even if I close on where today, it makes sense to take on debt, right, tomorrow equity goes up, I could take on equity and pay down debt or vice versa. And again, so I have all the confidence today as a human being and as a group, I have all the confidence in our ability to bring in the cash needed for a deal to get closed. And again, we want to be probably south of 50% of debt. And so -- but again, we have all the options available to us.

Okay. And lastly, I don't know if I missed in the prepared remarks, but did you guys provide a forecast for 2025 AFFO per share?

So I think -- I mean, we don't have exact -- I think our range would be somewhere ending the year at about $1.11 FFO. So I would say that we're probably -- I don't want to be too aggressive to fail you. I would say that we're going to look for $1.20 as our expected AFFO per share for the year. But I expect to beat that. I'm really undercutting myself because I want to -- again, I think I said last time, I'm looking for [indiscernible]. I want to beat what I tell you that I look good. The reality is it's probably $1.20 to maybe a little bit north of that.

Your next question is coming from Rob Stevenson from Janney.

The sound keeps cutting in and out. Did you say $1.20 of AFFO for 2025? Was that what the number was that you guys gave?

Yes. Yes, I think that's a number that I can certainly hit. I would expect to probably achieve it.

Okay. And then sorry if you guys covered this because the sound was fading in and out through most of the call. But I think I heard you say that most of your '25 lease expirations had renewed already. Can you talk about where you are with the ones that haven't yet renewed or WALT?

Yes. We have 2 leases left for 2025 to renew. One of them renews either August or September 1, and one of them renews in December. The one that renews in December, there's a 5-year -- there's two 5 years remaining on that deal, and the tenant has already said that they're going to renew that lease. That's good. And the second one, [indiscernible] it doesn't renew. It's the end of the lease, that's matured and the tenant already said that they do not plan on staying in the property. So we're actively pursuing a new tenant for that one asset. But other than that, these are -- this just one asset out of 130 assets. It's one of the stand-alone. Most likely it will end up -- most likely, it will end up not being in A Master lease because I don't think it's -- I think it's going to be a new operator. It's not going to be somebody that we already leased to. And so it will stay a stand-alone. It will probably be -- and it will be a new 10-year or two, 5 years. I would expect that we should be able to be budget neutral, give or take, small money one way or the other. And again, and then we'll lock them in for 10 year with 5 years. We'll take our normal routine, which 6 months to security deposit full guarantee of the lease. And so God willing, we'll be able to get that done towards August, September, and we'll update you folks. it's only one lease. It's relatively immaterial, but it's -- we'll update you, I guess, next quarter earnings call. Hopefully, by then, we'll already...

And then on Page 24 in the slide deck, you guys have the operator payer mix. The Medicaid percentage went up noticeably quarter-over-quarter. Is that just the acquisitions? Or is something else driving that? And is sort of 75%, 76% where this should be going forward in your mind?

We don't audit -- our tenants don't have audited financials, and we don't audit their -- what they submit to us. We gather it and pass it along. And we don't really -- for that specific metric, we're not really auditing that, it's not as important to us. I can try to go and dig into the numbers in the next couple of days and get back to you, Rob. I don't know if it's just a re-class of before hospice or something that now they're coding as Medicaid. So I'd have to get back to you because it's not something that we spend too much time in our asset management really. We spread the numbers and we put it into format and we present it, but it's not something that we really know, and I don't want to be [indiscernible]. That's not my style, as you know.

Okay. And then in terms of the shares and all outstanding, what were the diluted shares and units outstanding for the fourth quarter as well as for the full year? The release only had the share count, but not the units.

So, do you want to answer that?

Our dilutive shares at year-end were roughly 12.1 million shares and our [indiscernible] units were 43.4 million shares. So we had a total of 55.5 million shares.

Okay. And how significant was the ATM issuance in the fourth quarter?

In the fourth quarter, we [ didn't ] use the ATM in October, and we issued 71,000 shares, so it's roughly $161,000.

[Operator Instructions] Your next question is coming from Rich Anderson from Wedbush Securities.

Can you just repeat those diluted share numbers you faded out as you were getting to the OP units? I heard 12.1 million shares and then 43-point-something.

43.4 million OP units.

So for a total of 55.5 million. Is that right?

Yes, [ 1231 ].

That was as of -- okay, got you. When you think about financing future activity. Do you give any thoughts to dispositions playing any kind of role at all? I'm looking at your map here, and you have some assets that are a bit far afield from your core cluster. Is that something you're thinking about? Or are those sort of planted there for a potential to grow in places like South Texas or New Mexico area or something like that?

Well, it's an interesting question. So the thing about our map is what we own. It's not what our tenants operate. And so some of our tenants fill in the map pretty good with stuff that they're leasing from other landlords. So you don't see their whole portfolio and how they're operating. Like Missouri, as an example, Missouri, our tenant in Missouri has 35 facilities. We're only leasing them 8 out of the 35. And so the map fills in pretty good for him. As far as we go, our growth currently is actually the deals that we have that are hot through the next quarter or so are actually in Texas, Oklahoma and in Missouri. So that will help fill in the map. But yes...

I think [indiscernible].

Yes. I'm not catching that last part, but that's okay. That was a good point, why should the -- your tenants themselves kind of fill in the gaps. And then my last question, you got a few on Medicaid and the government and budget and all that sort of stuff. Do you have -- is it keeping you up at night? Or where do you land on all the politics behind skilled nursing these days?

Well, my background was as an operator. I mean, I haven't been involved with operations in probably 10 years or 11 years, but I'm still really in tune with what's going on. I'm still in a bunch of groups, and I get a lot of data. And most of -- I mean, at least in the last few days, I think Trump just announced that they're going to be now eliminating or working on eliminating all the civil [indiscernible] penalties that are -- because it doesn't really police the facilities just by charging that money. That doesn't make them somehow improve their operation. That being said, most of the conversation in the marketplace that I hear of, the conversation that people still are most concerned about is the reimbursement. It's not on the -- it's the net that flies around that causes the biggest trouble is the regulations. And you have to be regulated. It's that kind of a business that someone to be policing, making sure people are taking care of this is our most precious commodity is our ancestry, our parents, our grandparents. That being said, I think the biggest worry out there is still the funding, not really the regulator. Regulation is a net flying around. And I think most people are optimistic that on the downside protection, most people are not expecting any negative reimbursement to occur and hopeful on the upside that the states will find the money in their budgets to be able to keep increasing funding to make sure that the operators have the wherewithal they need to be able to keep operating effectively and profitably. That's my thought. I don't -- I'm not too worried about it, but my personality is anyway that of a worrier. But it's definitely -- it's a little uneasy, but it's not -- I'm totally on the up, not down.

Your next question is coming from Barry Oxford from Colliers.

Getting back to the tenants, the one that is moving out. It seems like you guys got a pretty good beat on re-leasing that. Are there any other tenants looking out into '26 that you're concerned about? I know you collected 100% of rents this quarter.

Overall, not really. Our -- the weak state from a reimbursement standpoint and has a lot to do with the union strength and labor and the whole marketplace is really the Chicago-land market in our portfolio, and the trouble began really post-COVID because of a lot of the rules, they didn't let up on a lot of the COVID rules until only maybe in the last 6 months. And most of us have felt that COVID has been gone already 2 years. So with that, there's been a lot of hesitancy in the operations, and they've caused a lot of pain amongst people as far as operating profitably. Now our model has us when we look for tenants is we're not usually just leasing to people that don't have deep pockets. So most of our people have made money and ride the wave. And when the market is down, market being in this case, state of Illinois reimbursement, and really reimbursement has gone down, expenses are up. Is that they have the wherewithal and deep pockets to be able to withstand it and then ride the wave of the opposite direction, which hopefully happens sooner than later. So with that being said, I'm not really too worried. I'm worried about that region, which is at this point, 6, 7, maybe 8 homes. And out of those 8 homes, 3 of them are really profitable. A couple of them are right in the middle, and then you got a couple of homes that are struggling. And again, I would expect that we'll have a change in one asset. We'll have a change maybe in a second asset, even though we're collecting 100% rent, we'll change out operators to somebody else that wants to make a go of it. And everything should be right way sooner than the end of the year.

Okay. Perfect. And then last question for me. Given the growth that you have in the portfolio for 2025 and maybe doing $150 million, maybe even more acquisitions, how should we think about the G&A as we're kind of modeling that out for '25?

So G&A, I think I said this in my last -- in last year's or last quarter's comments. At this point, our G&A is exactly what you see for fourth quarter G&A, is basically what our normal run rate should be going forward by quarter. The only thing that's still out there is MyPay, where there's been a bunch of discussion amongst the Board members and the Compensation Committee, about compensating [indiscernible] more in line with the market. I'm not pushing it. I honestly don't care. I'm a large shareholder, and it's a labor of love as much as it is a livelihood. And so I would say to you that if you wanted to model for -- I'm going to call it worst case, but that's not really worst case, assuming that you have you signed some kind of employment agreement and you want to model it out, you'd be adding to the G&A maybe $1 million to $2 million a year. It's not a huge, huge number. It's a bigger number than what we've been running. But I think I would still be running leaner than all of my -- all of our competitors, all of our peers. But that's the only thing else. There's no G&A. There's no other expected cost increases anywhere in our cost profile of the G&A expense.

Your next question is coming from Mark Smith from Lake Street.

First question for me was just any update or thoughts on the integration of the newly acquired properties. And you guys were acquiring at a little more rapid pace here recently.

Yes. No, it's seamless. I mean we already had been there beforehand. So from an asset management side, we already had our baseline and other properties looked. We already know the properties. And the first time around before we ever buy the asset, I mean, we have a library full of pictures of every nook and cranny of every building that we bought. With that, our conversation and relationships with the operator has gone off great. Both Willie in Kansas and Rick and Nick in Missouri. I mean, they're model [indiscernible] and good guys, and we're spending a lot of time together outside of -- I mean that's part of our routine is we make friends with people we do business with. And so we -- so yes, so it's relatively seamless. The first month, just a little bit of co-ordination of the wire instructions of the ACH, but now everything is set up to get our rent on the 1st of the month or 2nd of the month like every other tenant. And and we absorbed all the CapEx schedules. And really, it's really not -- it's seamless. There was no hiccup at all, and we don't expect there to be a hiccup at all. It actually causes a little bit more [indiscernible] because now I have to go and spend a little bit more time in St. Louis, Missouri to cultivate the relationship even further. And I'm happy to, because I really like these guys, but I mean it's still a swept for me because I haven't broken out. But other than that, it's -- and I fly commercial, I sit in coach and it's okay. And there's no easy way to get the Lambert from FLL. So it's an all-day event. But that being said, really, really absolutely, I mean, we're really -- at this point, we have a real war machine here, like where we make a deal from start to finish, getting through the deal. [indiscernible] on the legal side, which is always slow in my world. But regardless, it's still -- everyone knows what they got to do and we just get it done. And I'm quarterbacking to make sure that the money is in the right place and things are all lined up the way it's supposed to be. And really, really, there's -- I don't want to sound overconfident, but reality is like there's really nothing that we can't get done here. I mean, I feel confident as far as raising money as far as if we need a lot of money, that's not even at this point, something that would hold us back. And as far as organization, we hired a third asset manager, a bit ago. And now we have 3 active full-time asset managers for a portfolio of 130, which is a good number. This year, most likely, we'd have to hire another asset manager at some point, but it's not a material number. And then same thing in accounting is strong, and we're trying to look for paralegal for the attorney. But other -- it's immaterial numbers for G&A. But yes, thanks for the question.

Okay. The only other question for me is just you guys already talked about kind of how you buy, no change in plans and structure there. I'm curious though as we think about the pipeline, are you seeing any changes in kind of the deals that you're looking at, whether that be size or structure that maybe others are pushing for? Any changes in the pipeline?

Well, that's been our whole approach to this business is that we haven't changed our approach -- [indiscernible] structure of the deals. As I mentioned earlier, with the real estate [indiscernible]. Last year, we bought $130 million of real estate. As long as the deals make sense and the deals that we've been seeing right now make sense, [indiscernible] the deals and we'll get them closed.

Yes. Keep in mind, we're -- I would say just to add to what Jeff said, I mean, we have been seeing a lot more -- it seems like a lot more to me, more sale leaseback opportunities where before it was outright sales because the last two deals we did were sale leasebacks. In fact, the deals we're working on right now are all sale leasebacks. So that's been -- and our argument to them and which helps us to get [indiscernible] two things. Number one, the OP units [indiscernible] in shares. And so there's that. And then the second side of that is we can control what their long-term rent is. So instead of them squeezing every penny out up to $1.25, it can take a little bit less so they can have a little bit more -- a little bit less uneasy around the collar for them on the rent number. So they get paid less and they have less rent. And so I guess that's the one variant that we've seen to answer your question.

And there are no further questions in queue at this time. I would now like to turn the floor back to management for closing remarks.

Yes. I guess I'll close it out. I appreciate the interest from all the folks that joined today. We are working hard for our shareholders. Our objective has always been to bring shareholder returns and to run a nice clean shop that we could all be proud of. And we're going to keep doing what we're doing, exactly how we've been doing it, which has been working so far. And hopefully, we will be providing a good return to our shareholders as expected. And with that, again, thank you so much, and have a very nice day. Any follow-up needed, you guys know we're transparent folks, feel free to reach out to us, and we look forward to the interaction. Have a very good day, everybody.

Thank you.

Thank you. This does conclude today's conference call. You may disconnect at this time, and have a wonderful day. Thank you once again for your participation.