Strawberry Fields REIT, Inc. ($STRW)

Okay. We're ready to go. All right. Good morning. The meeting will please come to order. I'd like to start our meeting by introducing myself to you. I'm Moishe Gubin, Chairman and CEO of Strawberry Fields REIT. I will act as Chairman of this meeting. I'd like to extend to you a cordial welcome to the Annual Meeting of the Shareholders of Strawberry Fields REIT Inc. All persons entitled to vote as shareholders and as proxies will please give their names to Steven Greenfield, who is acting as Secretary, and file their proxies with the Secretary if they have not already done so. I'd like to introduce the other Directors of Strawberry Fields REIT, along with its officers, whom I shall ask to stand or wave while being introduced. Michael Blisko.

Good morning, everyone.

Stan Gertz.

Good morning.

Jack Levine.

Good morning.

Mark Myers.

Good morning.

And Ted Lerman.

Good morning.

The officers of our company that are here with us today are Jeff Bajtner, Chief Investment Officer.

Good morning.

And Greg Flamion, our CFO.

Good morning.

And Steven Greenfield, our Chief Legal Officer.

Hello.

I hereby appoint Steven Greenfield as Inspector of Election, and I will now call upon Mr. Greenfield to present proof of the due calling of the meeting of shareholders.

Mr. Chairman, I present my affidavit certifying to the fact that the notice of this meeting was mailed on April 7, 2026, to shareholders of record at the close of business on April 1, 2026, the record date fixed by the Board of Directors.

Unless there's someone who wishes the affidavit read, I will direct that the affidavit be filed with the minutes of the meeting. There being no objection, it is so ordered. A certified list of stockholders entitled to vote at the meeting is available at the meeting and may be inspected by any shareholder. Now not being rude, I also want to mention that we have our auditor with us from Hacker, Johnson.

Good morning.

So Steven Greenfield, having been appointed as Inspector of Election and having subscribed to the oath of office, I hereby direct that such oath is filed with the minutes of the meeting. The inspector will please make a tally of the number of shares of common stock at the meeting and advise me whether there is a quorum present for the conduct of business.

Mr. Chairman, I find that there are 10,827,081 shares of common stock represented at this meeting in person or by proxy out of the total of 13,378,307 shares of common stock outstanding as of the record date. Therefore, 80.9% of the outstanding shares of common stock are represented in person or by proxy at this meeting, and there is a quorum for all matters to be presented.

80.9%, that might be a new record. There is a quorum present, and the meeting can now proceed to consider the matters that come before it. The meeting will now undertake consideration of Proposal 1, the election of directors as set forth in the notice to stockholders. Each director elected will hold office until the Annual Meeting in 2027 and until their successors are elected and qualified. Nominations for directors are now in order.

Mr. Chairman. The following people have been nominated to serve as directors until the Annual Meeting in 2027 and until their successors are duly elected and qualified: Misters Gubin, Blisko, Levine, Lerman, Gertz and Myers.

I second the nomination.

A motion has been made and seconded for the nomination of myself, Moishe Gubin; Michael Blisko; Jack Levine; Ted Lerman; Stan Gertz; and Mark Myers. Are there any other nominations? Hearing none. We'll move on to Proposal 2 to ratify the selection of Hacker, Johnson & Smith as the company's independent auditor for Strawberry Fields REIT. The polls are now open and the Inspector of Election will proceed to distribute ballots and tabulate the votes on Proposals 1 and 2. If you have already executed a proxy and returned it to the company, you should not execute a ballot here at the meeting unless you wish to revoke a proxy previously executed. If you wish to execute a ballot here at the meeting, please raise your hand so those assisting in the meeting can supply you with a ballot form. Have all the ballots been collected?

Yes, they have.

I now declare the polls closed. That's easy. Upon conclusion of the portion of our shareholders' meeting, which requires the voting of shares, I will entertain questions submitted from the floor or via our webcast concerning the business and operations of the company. All questions, I think it's in the portal. Jeff, are they able to submit questions?

Yes.

And then you'll play moderator.

I will.

Okay. While the inspection -- while the Inspector of Election is completing the tabulation of the ballots, I would like to present the following presentation. At last year's Annual Meeting, using the analogy of a child being born and watching it grow, I noted that the company had progressed and entered its teenage years. I closed those remarks by previewing the title of this year's address, we [indiscernible] from strength to strength. One year later, I am pleased to report that the title has held. By every measure that matters, Strawberry Fields is materially stronger than it was 12 months ago and the disciplined platform we have been building since 2015 continues to do precisely what we're designed to do, enable us to acquire assets that bring solid returns to our shareholders. 2025 was a year of execution. It was not a year of reinvention or a dramatic strategic pivot. It was a year of doing what we have always done, doing business at consistent, disciplined and accretive manner. In my view, these objectives are a few of the ways we set ourselves apart from our peers. I would now like to walk you through the presentation discussing our 2025 results and our outlook for 2026. On Slide 3, I'd like to begin by highlighting the company's growth during 2025. Our portfolio grew from 124 facilities to 143. Total assets increased by $100 million. Total assets increased by $100 million net of depreciation. Rental income advanced from $117 million to $143 million, representing a 22% top line growth in a single year. AFFO grew from $56 million to $73 million. And adjusted EBITDA grew from $91 million to $125 million. I believe, and I hope you agree that these are not incremental gains. They reflect our platform operating at scale with each component of the business contributing to the results. Importantly, this growth was achieved without any variation from our underwriting standards or our approach to grow master leases in existing states. In addition to the financial highlights, we successfully completed our sixth bond series in Israel, a relationship now more than a decade old. We grew our shareholder base to over 5,000 individual shareholders, up from approximately [ 4,000 ] from a year ago. Our team participated in more than 12 investor conferences across the country. We closed on 19 skilled nursing and assisted living facilities for an aggregate purchase price of $112 million. We further reduced the affiliate tenant concentration to approximately 46% of the portfolio. And lastly, we increased the quarterly dividend to $0.16 per share, marking a fifth increase since our inaugural distribution in December 2022. All of these things are just us doing our thing and getting stronger and stronger. On the next slide is our balance sheet year-over-year for the last 10 years. The trajectory is one of steady, consistent year-over-year growth. 2025 is the year that our real estate acquired growth, $1 billion, which is an exciting milestone. I would note that our market value of our real estate is probably closer to $1.6 billion today, if not more. Our leverage remains within the middle of our 45% to 55% target range. We paid off around $1.5 million in that month, which we will discuss on a later slide in the presentation. As I have said in the past and will repeat in the future, our balance sheet is very, very strong and something that I'm proud of and that we'll continue to strengthen year-over-year. On the next slide, we show our income statement also for the past 10 years, which mirrors the balance sheet trajectory. Revenue, AFFO and EBITDA each grown year-over-year without exception. It's a beautiful chart, if you ask me. The chart further reflects what disciplined accretive acquisition and activity looks like compounded over time. Over the last 5 years, our AFFO and EBITDA have a compounded annual growth rate of 13-plus percent. These results reflect the work the team has executed across underwriting asset management and capital markets. That underwriting is really our secret sauce. Slide 6 illustrates our geographic footprint and the criteria that is governing our acquisition activity. Our facilities span Illinois, Indiana, Arkansas, Tennessee, Kansas, Kentucky, Missouri, Texas, Ohio and Oklahoma. The investment criteria displayed on the right side of the slide have remained constant, and we do not anticipate changing them. We target a 10% projected return on investment, a 20% projected levered IRR over a 10-year horizon and a 12% projected return on equity at 50% loan-to-value with 8% interest. Our acquisition focus remains on deals within our existing footprint or in new states where we can make a sizable acquisition and grow a master lease. Our deals are often off-market transactions, and once that fall into our sweet spot of between $20 million and $100 million. We continue to evaluate hundreds of opportunities annually and declined a substantial majority of them. Underwriting discipline is what I preach and the product is our stable well-balanced performing portfolio. When an opportunity does not satisfy these criteria, we pass even at the cost of short-term acquisition pace. Slide 7 is one of the slides that I'm most proud of. The 2 pie charts in front of you show our base rent broken down by state on one side and by related consultants on the other. There's no single dominant slice on either chart. No single tenant or state runs the rent roll. That is exactly where we want to be. As a reminder, when we started this company in 2015, it was 1 tenant in 2 states. We have come a long way and feel that we are stronger when there isn't 1 dominant state or operator that we are relying on. Slide 8 is, in many respects, the most important slide on the deck. This chart on the right shows the AFFO per share compounding, and 11.6% annual growth rate. A few REITs in any sector have delivered per share AFFO growth at that pace, and we have done so consistently. The table on the left of the slide explains the mechanism. 2025 AFFO totaled approximately $72.5 million. Our payout ratio was 46% among the lowest in our peer group. Amounting approximately $39 million retained cash flow annually. Reinvested our targeted 15% acquisition return on equity. That retained capital generates approximately $5.9 million of incremental AFFO per year, which equates to roughly 8% of organic AFFO growth before the deployment of any external raised capital. Our payout ratio was intentionally conservative. Retained capital deployed into accretive acquisitions is the most reliable mechanism for compounding shareholder value over time. When we combine per share AFFO growth with our dividend yield, the resulting total return profile is competitive in any environment, and particularly so with a sector that benefits from durable, contractually protected, demographically driven cash flows. We believe that our true return exceeds most of our peers. Slide 9 presents our share price history since the public listing. The trend has been upward, which is encouraging. But the more material observation is that our stock, STRW, continues to trade at a discount to our peer set on multiple of AFFO basis. We view that valuation gap as an opportunity and does not require any extraordinary action on our part. It requires consistent execution. Each conference we attend, each new analysts initiating coverage and each additional shareholder we add narrows that gap. We expect it to close over time. Please go. I would add that we ended 2025 at a high, which we have been lately pushing up against and hopeful that 2026 will reach new all-time highs as well. Slide 10 shows how our debt structure. The stack is well laddered and diversified across HUD, guaranteed debt, secured bank debt and 4 series of bonds issued through our Israeli platform. The HUD component, $254 million at a weighted average interest rate of 3.91% and weighted average maturity of 2047 is a meaningful competitive advantage in the current rate environment. Long-duration fixed rate government guaranteed leverage at sub 4% is not a financing profile that is readily replicable by newer entrants. Our most active capital markets initiative is the refinancing of the Israeli bond series maturity in July and September of this year. We are evaluating multiple paths concurrently, including a refinancing of the bonds themselves or utilizing the new corporate credit facility we signed a term sheet for in Q1. By the time we convene next year, the capital structure will be well laddered into the 2030s and repositioned to support the next phase of growth. Underlying every chart in this deck is a straightforward operational reality. We are collecting 100% contractual rent. Every facility is occupied by a tenant. Operator level performance continues to benefit from a demographic tailwind that is no longer a forecast but a present day phenomenon. The over 65 population in the United States is expanding measurably each year, while the supply of skilled nursing beds is not keeping pace. That structural mismatch is a sustained tailwind, and we expect it to persist over at least the next decade. Pure-play skilled nursing REITs are scarce. As capital markets continue to seek inflation resilience, demographically driven contraction protected income streams, we are positioned in an attractive segment, and we have spent the past decade developing the operational and capital markets expertise to lead in it. Looking ahead, our 2026 priorities are consistent with the strategy that delivered 2025 results. We will complete the bond refinancing on terms that are accretive to shareholders. We will continue to acquire in a disciplined manner and grow the portfolio. We will continue to keep in our master lease structures and operator relationships. And finally, we will continue to expand our shareholder base, broaden analyst coverage and improve trading liquidity. In closing, Michael and I founded this company nearly 23 years ago. When we became Strawberry nearly 11 years ago, we owned 33 facilities, and we were 100% of the tenant base. Today, the company owns and leases 143 facilities across 10 states, and many operators with close to 6,000 shareholders and a balance sheet of $885 million. Every milestone has been reached through the consistent execution of fundamentals over an extended period of time. That approach will not change. As I mentioned in the beginning of my speech, we [indiscernible] from strength to strength. That was the objective 1 year ago and is the result we are reporting today. I've never been more confident in the company's direction, and I'm proud to be on this journey with each of you. To our shareholders, thank you for entrusting us with your capital. To our operators, thank you for the care you provide in the buildings you run. Last thing, to my team, thank you for the work you do every day, much of which is never publicly seen. So with that, I will point out the disclaimers, and this wraps up my prepared remarks. If there are any questions regarding the company, please submit them now, and I'll try to answer them for you. Has the -- and back to the meeting. Has the inspector completed the tabulation of the votes on the matters brought before this meeting and is he ready to present this report?

Mr. Chairman, I am ready to report. I report that the holders of 8,611,945 shares of common stock voted for Proposal 1.

So to summarize, regarding Proposal 1, the following directors are, therefore, duly elected to serve for 1 year and until their successors are elected to qualify: Moishe Gubin, Michael Blisko, Jack Levine, Ted Lerman, Stan Gertz, and Mark Myers.

And the vote for the Proposal 2 is as follows. We ratified the appointment of Hacker, Johnson & Smith, P.A. as the company's independent auditor for fiscal year 2026 for 10,433,324 for, against 359,142, abstained 34,615.

Okay. So that passes as well. If there are any questions regarding the company which you wish to ask, we will now go to the webcast. Any questions?

We have no questions.

All right. On behalf of all the directors and officers of the company, I wish to express our appreciation to all of you for attending this meeting. Is there any other business to come before the Board of this meeting while we're in session?

Motion to adjourn.

There does not appear to be any other business, and I'll therefore and entertain a motion to adjourn, which Jack has jumped on. So we'll let Jack make the motion.

It's second time motion.

Looking for a second.

I second.

Second by Stan. It has been moved and seconded to adjourn this meeting. All those in favor, say aye.

Aye.

Anybody opposed? Motion is carried and the meeting is adjourned. I hope everyone has a really nice day. Thank you.