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

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press star 1 1 on your telephone and wait for your name to be announced to withdraw your question please press star 1 1 again i would not like to hand the conference over to your speaker today jeff beitner chief investment officer.

Thank you and welcome to Strawberry Fields REIT's Q2 2026 earnings call. I am the Chief Investment Officer and joining me today on the call are Marge Gubin, our Chairman and CEO, and Greg Flamian, our CFO. Yesterday evening, the company issued its Q2 2026 earnings results, which are available on the company's investor website. 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 Field's REITs business and the environment in which it operates. These statements may include projections regarding future financial 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 included on the non-GAAP measure reconciliation pages at the back of our investor presentation. And now, on to discussing Strawberry Fields REIT in our Q2 2026 performance. I wanted to start by sharing some key highlights for the quarter. During the quarter, the company collected 100% of its contractual rents. On June 18th, the company closed on its corporate credit facility with availability up to $300 million. The credit facility is comprised of a $100 million term loan and a $200 million revolving line of credit, both having initial three-year terms and two one-year extension options. Proceeds from the credit facility were used to refinance existing secured bank debt, and the remainder will be available to support acquisition growth. The rate on the credit facility is SOFR plus $2.75. On April 21st, the company entered into a contract for the acquisition of a hospital campus comprised of a licensed 60-bed hospital, licensed 99-bed skilled nursing facility, and ancillary medical office buildings near Kansas City, Missouri. The purchase price will be $10.4 million, and the company expects to fund the acquisition from the balance sheet. The hospital campus will be added to an existing master lease of a tenant in Missouri with annual base rents of $1.04 million and subject to 3% annual rent increases. The company expects to close on this acquisition during Q3. Deal-wise, we have been very busy looking at deals and existing in new states. After a little bit of a lull, beginning with the above mentioned hospital, it seems that deals are starting to make sense again. And we are hopeful that Q4 is going to be a busy quarter closing some of these deals. Yesterday, the board of directors approved the Q3 2026 dividend, which will be 17 cents a share. The dividend will be paid on September 30th to shareholders of record on September 16th. I would now like to have Greg Flamian, our Chief Financial Officer, discuss the quarter-end financials.

Thank you, Jeff, and welcome everyone to the Strawberry Field's second quarter earnings call. Let's begin with a look at our balance sheet. Total assets are $878.5 million, an increase of 18.8 or 2.1% compared to June 30th, 2025. over year decline in assets is driven by elevated cash balances at the end of the second quarter of 2025. These funds were used to acquire property later in that fiscal year. On the liability side, higher debt balances were driven by financing associated with our acquisitions, together with foreign currency translation effects. Equity was lower year over year, primarily due to the decline in accumulated other comprehensive income related to foreign currency translation adjustments. Now with the consolidated statement of income for the 6 month ended July 2026. 2026 revenue was 80M dollars up 4.8M compared to June 30th 2025. This represents a 6.4% increase. Which was driven by the timing and integration of properties acquired in 2025. While we experience higher revenues, the income growth was offset by higher depreciation, which was driven by the new property acquisitions. General and administrative expenses were also higher due to higher closing costs, corporate salaries, and other operating expenses. These increases were offset by lower amortization. The results in a year-to-date income of $18.4 million, or 33 cents a share, compared to 15.7 or 29 cents a share for the six-month ended Q2 2025. Going to the next slide, we're now going to look at a quarterly income statement comparison of Q2 2026 to Q2 2025. The second quarter revenues were $40 million, which is $2.2 million higher than Q2 2025. Expenses were mostly aligned, however, quarterly increases were driven by higher G&A expenses. Q2 net income was $8.9 million, which is marginally higher than the net income from the prior year quarter. Finally, I'd like to end my presentation with some financial highlights. Our 2026 AFFO is $73.9 million, representing an 11% compound annual growth rate. The 2026 projected AFFO per share growth is 10.1%. The 2026 adjusted EBITDA is is $135.7 million, representing a 50% compound annual growth rate. Are you aware that the yield on leases is 14.4%. The company's net debt to net asset ratio currently sits at 49.8%. And as of June 30th, 2026, our dividend is 70 cents a share, representing a 4.9% yield and an AFFL payout of 50.6%. This concludes the financial portion of the earnings call presentation. I'll now turn it back over to Jeff Beitner, who will walk us through additional portfolio highlights.

Thank you, Greg. Looking at the portfolio highlights, currently our portfolio has 142 facilities located in 10 states. In these facilities, we have 15,496 licensed beds. The total property value of our portfolio is in excess of $1.4 billion. This amount is calculated by taking our annualized base rents of $143 million and multiplying it by a conservative cap rate of 10%. With the current healthcare real estate market being very strong and looking at comps, we believe that our portfolio should be valued at a lower cap rate than a 10%. Included in our most recent investor deck that we filed yesterday and is on the company's website, there is a sensitivity table at the back. back, showing that as the cap rates go down, the values go up. Currently, our portfolio has 16 consultants advising operators. The remaining average lease term of the portfolio is 6.9 years. We are pleased to report that our tenants continue to do well, and the EBITDA rent coverage for May 31st is 2.17. The next year, we will be able to see the results of the portfolio. net debt adjusted EBITDA is 5.7. We've continued to collect a hundred percent of our rents. And as a final point, as I mentioned earlier, our pipeline remains strong and we're seeing deals in existing states and new states, and currently we're looking at deals in excess of $225 million. And with that, I'd like to hand it over.

to Tomasz Dubin, our Chairman and CEO, to continue the presentation. All right. Thank you, Jeff. As Jeff and Greg already alluded to, we had a pretty quiet quarter. And so the slides I'm going to go through are just giving you basically the graphs and a couple other pieces of information. So the first the first slide shows you our FFO growth for the last five years or five and a half years. And again, it's an 11% growth rate, beautiful from 44 million to almost $74 million. Again, this will change. Hopefully we'll have a nice, we'll end the year hitting our targets, just hitting the targets towards the end of the year which is what we wanted. Unfortunately, it's just how it goes. And so this year is a quieter year, but we're like like Jeff said, we we've already we're collecting all our rent still and bringing in the money and we're making a good living. So that's that's the slide on the next slide. We talk about the portfolio growth. We changed the slide to trade try to show a straight line at a 10 cap. to try to show what the values are. So you see we're sitting at the other side of how we had this previously, which is showing you historical cost. Now this is showing you basically market value or 10-cap value on our rents that we're collecting. These are lease fee appraisals. So about a 13% growth rate here from 2021, having a value of about $777 million. into now 14 and a quarter million. The next slide just talks about our stock price over the last 12 months. It seems to be that quarter, this quarter we ended off good. Currently our stock price is performing better than this, which is good. And as things continue, we expect to get closer to our peers as far as valuation. On our next slide, we talk about our valuation gap, which we're hoping to continue to close in on, catch up to our peers. We're still trading at a 40% discount to our peer average, if a multiple, a 10 and a half. We feel that we should be able to catch up. Hopefully sooner than later. We're pushing, having good results quartering quarter out, dividend that's reliable, going to all these conferences, meeting a lot of people. Again, we're sticking with the fact that we're the most SNF-focused portfolio with almost 92% of our portfolio being nursing homes. We have a very quick, very fast AFFO share growth, which is beating all of our peers at around 11%. And we have the lowest payout ratio, dividend payout ratio at right around 50%. We feel all these things should catch up and we'll be more online hopefully sooner than later. On the next slide, you just look at our market performance over the last year. Our stock actually has held its own and we're proud of that. expect for it to continue on a rise. I don't think there shouldn't be. Right now, we're still collecting 100% of our rents, which Jeff said earlier. Our metrics are all good. Slow growth year. Hopefully, it doesn't affect us to the marketplace. Actually, I'm a little embarrassed by it, even though I keep bringing it up on this call. But that being said, we expect things to just keep continue what we're doing and um and hopefully hopefully the stock will uh will vindicate us and show show us a good good light on the next slide again we talked about this already you know this is this is how big of a difference we have we're at 91.5 and snap and these are our true peers. And now they're the largest one is 63% and the smallest one is 36%. That's really, I think it's good for us because somebody who recognizes the value of the baby boomers and the value of the baby boomers of the need for SNF care in America and how you could rely on the return. There's no, it's not erratic. It's not based on performance of the operations. They pay us our rent, which is absolute. So with that, I think in the long run, the shareholders or the marketplace should flock to us knowing full well that we're going to continue to have a steady, slow and steady return return that you could rely on. On the next slide, your comparison again just to show how we compare. Again, 50% payout ratio, and then you have the largest is distributing 87% of their cash And so that means for every time they want to buy stuff, right, they have to sell more equity which dilutes the shareholders and their share of the profits. And that's a hard way to go. In our case, everything we're doing is accretive. And even though we do sell stock in the ATM or we, you know, We continue to extend our shareholder base. We're still mainly using cash from our balance sheet to grow, and then we're able to add debt to stay at a 50% leverage ratio for us to be able to... for us to be able to meet what our payout ratio continues to be. And then on the other slide to the right of that is our growth rate. And again, it's just basically because of that simple math. Since we're using our own cash and we're not selling more equity to be able to to to to grow the portfolio, that makes it that we have AFFO share growth because each share is earning more and more money every year, as opposed to having more shares, earning more money as a group, but having more shares to share it with. So that's the math and we're proud of that. On the next slide, we just reiterate the total return. When you take the growth of the AFFO per share over the last, you know, if you include 26 whole year as a projection, it's a 10% growth rate. You take that together with the 5% dividend yield, right, you're at a 16% total return. And the math is really, really simple. You know, you could see it in the chart here. We paid half of it, the remaining amount of money. We take that, we buy more assets. and that gives us the return. The next slide just talks about our debt structure. This ended up being the year of the debt restructure because we're spending all of our time, even though we're looking at deals and it's been a weird year as far as how the deals come, they came, they went, they came, they went, we have deals that we're in contract with, they broke the contract and we get back into contract. We never had a year like this where we had that kind of of erratic nature and it's just random. It's not like you can't read into it to say, well, something changed in the marketplace. It's just the way this year played out. We'll still hit our bogey as far as closing between 100 and $150 million of deals. Just that instead of being at the beginning of the year and reflecting in our numbers for the year, the end of the year, it's going to end up being towards the end of the year. And so next year will be a solid year. And this year is also a solid year, just not a growth year. from that point of view. But we spend a lot of time on debt, like Jeff and Greg mentioned earlier, in the year. We refinanced, and subsequent to quarter end, we've actually paid off one of our bonds. We used cash from the balance sheet. We raised a little bit of money in May. And now we have an hour line of credit, which has $140 million of availability on it right now. We still have some debt maturing in September. We're going to take a road trip to Israel. And by the time we get back from Israel or shortly thereafter, somehow we'll have the bonds paid off. and without adding to our debt load as far as 50% leverage. We're right now right about 50% or a little bit below 50%. So we should be able to get everything done and then we don't have to worry about any bond or any real, you know, financing that's maturing, you know, for a bit. So this slide is actually real nice. I like it. I look forward till third quarter is when we change this slide around, it's actually going to be nice and smooth across a few years. And so this slide, is pretty self explanatory. Lended interest rate below 6%, 20 year plus HUD debt maturity below 5%, 50% leverage, like we said, and 5.7 times net debt to EBITDA. corporate bonds, like I said, we paid off bond C. We now have A and D that are going to get paid off in third quarter, and then we have, We redid our line of credit, which we talked about. So that bank debt basically turns into one loan. That's a five-year loan. It was really a three-year or two one-year renewals. And we still basically have one regular conventional loan at like 6% at a small bank in Tennessee. God bless them. On the next slide, we talk about the diversity of our portfolio. That hasn't really changed from last quarter and year to year. You see also the base rent by related consultants. Again, we're pretty diversified. We don't really have too much exposure or concentration in any one place, except for Indiana, which is our best state. So that's positive. And we expect before the year's out, to add at least one more state, hopefully, to our mix. one of the deals that's hopefully going to close um third or fourth quarter um and is a pretty sizable deal in a new state, which is good. All right, on the next slide, this is the Rich Anderson slide, which I really, he's the only reason for this slide to be in this presentation, God bless him. The occupancy for the facilities, right around 77%, which is a high, but again, it doesn't really matter to me. You know, our tenants, we look at their financials and they're an efficiency business. So sometimes a lower occupancy will make them more money than a higher occupancy. It's contribution margins, if any of you remember from accounting school. That being said, it's a metric we're telling the folks. Average facility size of 108, and they're running 83 out of 108. Like most facilities in America, majority of the facility is being paid for by Medicaid. and then everything else is between medicare private pay insurance um and and um hospice care, which usually falls under Medicaid or private as well. On the next slide, it just shows you our map. That hasn't changed from quarter to quarter. I'm happy when we add the new state, it won't fill in the middle, but it'll grow our perimeter of the current operation. Again, pure play, we talked about it, less than 92% of our portfolio is nursing homes. And again, we've maintained exactly the way we buy things year in, year out. That hasn't changed. Most of you that are listening to this call probably already know it. We buy everything to a 10 cap. We start with, once we do that 10 cap, it's a 10-year lease or two 5-year renewals, 3% annual increases for most of our portfolio. And again, we have a projected ROE of 12%. That's basically considering keeping 50% leverage and then paying interest on the other half and earning a 10 cap. So it gives us a little bit more yield. We typically love the master. We love the masterly structure and so we continue to buy. I think right now we're buying hopefully something in Tennessee that's going to add to a master lease, adding some buying something in Missouri that's going to add to a master lease and then and then a new deal, which is multiple facilities under a master lease. And that's how we've done it historically, and that's how we continue to do it Most likely that's how we're going to do it going forward as well. Okay, with that, that ends my comments and my remarks on this presentation. Thank you all for joining us. We will now turn it over to the operator for any questions and answers. anyone has and we'll be glad to provide.

Thank you. As a reminder, to ask a question, please press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again. One moment for questions. And our first question comes from Richard Anderson with Kent of Fitzgerald. You may proceed.

Thanks, and I'm honored to have my own slides, so thank you for that. So when you think about, it kind of looked like you're projecting a FFO of $1.33 for this year. To what degree does that take into account any activity that you might close for the back half of this year, if at all? Or is it because it'd be closing so late that it probably doesn't have much of an impact on the numbers?.

So typically I would answer this question, but Jeff, why don't you try to answer this question?.

The $1.33 is annualizing our current FFO for the year. The acquisition in Missouri that we're going to be closing, hopefully during this quarter, should move it up incrementally. But realistically, these new deals that we're looking at are going to be towards later in Q4. I expect it to have the biggest effect on our FFO per share.

I think, Rich, if you're modeling out or any of the other analysts that are modeling out, you should be modeling out for probably an AFFO of an additional 12 million or so. So maybe 155 to 160 for next year, maybe a little higher than that. Jeff, that make sense to you? Greg? Yes. Yes. Yes. I mean, I think if everything we're working on were to come to fruition and work out, yes, that would make sense. 155, 160 would be top line, and the bottom line would be from 74.5 or so to probably closer to 80, 82 or something like that, 81, 82. Yes.

Okay, so there's a little potential life to that dollar thirty three based on whatever might happen back in.

half of this year yes yes it's a drop i okay it's it's it's unfortunate the way the way this year has played out has been i've never i've never seen it in my in my i'm doing this now for 20 i started in 1998 i never saw a year where where and i'm just i'm i i blame all the good on god so when when some things like this where where it's a little bit wonky we blame that on god too that somehow for whatever reason just made it that, you know, a deal happens and that deal doesn't happen and deal same deal goes back three or four times. And now we think we're locked and loaded, hopefully finally. And a couple other deals got signed up since then. Uh,.

Just a strange year for no real reason. Okay. All right, second question for me. KC deal that it's going to close in the third quarter has a hospital element to it. I think we kind of talked about this last, last quarter, but how open are you to sort of opportunities like that, that are, you know, are largely sniff, but have some other stuff associated with them? Um, Is that something that you feel is... you know, adds to the risk profile of the investment, anything, any kind of color you can provide around something that.

you know, investment opportunities that have a little bit more of a diversified component to them? Well, the starting point is for every deal we look at, there has to be a reasonable, you know, sense on who's going to manage the asset, you know, who's going to, who's going to be our operator if they have the financial wherewithal. to make sure that our rent is bulletproof, that we're going to get paid. This deal specifically is almost a perfect deal for this operator. They own a physician practice already. They are a master lessee of ours. And so this fits right into their geography where they are, their, you know, their, operational experience fits perfectly in running a hospital with the physician practices that they already have. So this work, I mean, I would say going forward, and it's been like that in the past, like we're open-minded, you know, we typically have only really bought nursing homes and anything connected to nursing homes, but we do now have people in our world that are are assisted living operators. And if a deal would come in, that's a CCRC, like we did in Maryville and we, and, and, and, and, and, Kingsport, Kingsport, Maryville, those same deal for me, you know, two different places. So we have, we have, we have, we have relationships with, with now other people that we are looking at CCRC stuff. where we can either separate out the two sides with two different guys and make sure that they, you know, the two operators have an agreement between them that they have, you know, they play nicely in the sandbox. I mean, one deal, I act as like an HOA president between the two sides of the property where I got two different people that are operating two different, one's running a hospital and one's running a nursing home. And I play referee. If those two can't get along, I'm HOA president, if you can imagine. That's just what I need in my life. But it makes the deal work. And the two sides deal nicely with each other. And so far, so good. Good. So, you know, look, we're open-minded. It comes down to fitting our box. Asset-wise, these things all fit in our box. It's all healthcare and it's all real estate. The one thing I try to avoid, the one reason I try to avoid that stuff as buying it by itself is because historically we tell the marketplace that if, God forbid, something went wrong in our portfolio, I'm going to be the guy hopping on a plane and I'm going to go there to stabilize it, make sure it's good. sure we don't have a major loss. And I'll be the one sitting there operating until I'm able to stabilize it and turn it to the next operator. And I personally don't know how to run a hospital. So I wouldn't be able to make that same representation to the marketplace. Right now, we go to investor meetings and we tell people, look, we have such a good bulletproof income stream. And on top of all that is that, God forbid, something goes wrong, I could go there and fix it. I could deal with it. I still have the operational experience. I have, you know, you know. know, partnerships where I could get people to help that are part of our world. I'm not part of that world today, but I'm still an owner that I could ask people to pitch in and help me out, and I could send nurses across the country, and I could do stuff. So that's been the reason why we kind of shied away from it. But, you know, a deal like this, perfect deal for the 10th for our current tenant that we have, very easy to add to the master lease. I think we're closing next week. And it's just a good deal. And if there's more of these that fit Missouri, certainly this same tenant would take it and absorb it.

So that's the story there. Okay. I just wanted to ask back half of this here, Jeff, what's the most that could be completed now? you know, in that pipeline that you mentioned. You associated $12 million of FFO to it, but I mean, what is that number? Is it 50 million, less, more?.

So every week, Maisha and I and Greg, we go over our pipeline and we've always, I think Maisha has spoken about this in past earnings calls where we say we've got high, medium and low, like the likelihood that they could work out and the deal will close. And recently we were in one of our meetings, I actually said, this is the first time that our pipeline is filled with deals that a majority of it is medium to high. So there's a very good likelihood. And we were talking about earlier, I mean, I think realistically, we could have about $130 million of real estate at least closed towards year end. And then there's other deals that we're still looking at that could potentially close. So we've got four and a half months till your end. So we're going to keep on working towards it.

Thanks very much, everyone. Have a good weekend, Rich. Thank you for joining.

Thank you. Our next question comes from Mark Smith with Lake Street. You may proceed.

Hi guys, first off, just wanted to ask a little bit about SG&A. Yes, I don't know if you guys can quantify maybe how much of the SG&A step up was one time in nature versus kind of a new higher run rate.

So it's not new hire. We have right now, we're fully staffed. When we do this next deal, we're probably going to have to hire an asset manager just to add one person to our team, but otherwise we're fully staffed. I'm going to let Greg answer about the SG&A because truthfully, the number that's in there that's an increase is because of me. I don't even know what it is because I wasn't part of the conversations. I don't even know what compensation committee granted me. It's all in stock that I never see. So I get it and I don't even notice it's part of like, you know, my, my pool of shares that I own. So I don't even know how much I'm getting, how much I'm getting paid. Truthfully, Mark. So I like Greg answer and, and, uh,.

go from there. Mark, how you doing? So regarding your question, the first part about the one time items we had about about a little less than $800,000 worth of closing costs that were associated with some of the loans we closed in GNA. So that's a one-time item that I think you can disregard going forward. As for the salary, it's running about maybe $250,000 to $300,000 extra a quarter So that's something that will be, I guess, going forward. So that can answer your question as to what's the one-timers versus the things that we expect to, the increases that we see going forward.

That's helpful. And then I just want to ask big picture, if you guys have seen much, many changes or anything different as you look at kind of the deal pipeline, it sounds like maybe you're seeing some bigger deals come available and negotiating and looking at, but curious kind of what you're seeing out there in the market.

I mean, I'd say it's- yes, Jeff, you can answer that. I think it's more similar or the same. It's just a matter of there's always, as we've said in the past, there's always deals coming in day in, day out. It's very easy for us to decide on the deals that do make sense and don't make sense. For example, the deals that are one offs on the West Coast or the East Coast, it's not something that we're really looking to go into. We've been looking to grow our master leases in existing states or in states that we know that we could continue to grow in. So the deals have been coming in. There have been some bigger ones. There's been many smaller ones, but we've been, if the deal is a 10 cap asset, we've acquisition and we get that 125 coverage on day one, we've been putting our offers out there. As Marge mentioned in his prepared remarks, it's something that's an acquisition strategy that we've gone with until now, we plan on sticking to. So to your question, the deals, we keep on putting offers out and as I said,.

we've actually been signing some of them up. So we're very excited to see where it leads towards your end. So on the three deals that were signed up for that we expect to close this year, actually it's really four deals. So without going to location, and one of them is, is, is, um, is goes into a master lease. Another one goes into a master lease. Another one is a, is, is the bigger, is the biggest deal of the year right now, which would be its own master lease in a new state. And then we have a one-off, um, new deal in a new state, um, that we expect to, uh, expect to get done. All of these deals. open up for us new states and continue to grow master leases. have deals out there now that have been worked on for outside of these three, four deals that we expect to get through by before the end of the year, we actually have a bunch of other stuff that's been, you know, constant conversation, um, for maybe a year or two years with people that, you know, a lot of the guys, a lot of the guys that are contemporaries or students, I call them disciples in my world, people that I've helped earlier in their careers. You know, they, a lot of them say, well, Maisha, you did good with Strawberry. We want to do the same thing. And then my response back to them says, why would you want to do all the stuff that I did? This was you know, nail biting and as anxiety laden, you know, process and, you know, dealing what we're doing, you know, to make friends with all you guys that are on this call, you know, took how many years? Did we bang it down a door and then we have one meeting and then we sit down with somebody and then this, that, I mean, it just takes forever to build. So I tell them, why don't you just merge yourself into me and we'll give you a board seat. You can be part of the team. And so we have like three things out there that's been going on for like a year or two that's festering that are three big groups potentially. I don't know the timing of it, but I would say that if I was giving you a 10 year picture, there's easily, we're going to be able to go from where we are today and most likely add like $4 billion worth of property at some point, absorbing friends that want to be public also, and that I'm trying to convince, and they are sitting with me on a regular basis, that you don't want to go through the process of going public yourself. We already are now known, we have 6,000 shareholders or more, and people know who we are, and the stock's trading finally, and the stock is up, it's still a major discount. And so to answer your question as far as pipeline or what kind of deals, there are some big, big deals at some point are going to hit. We have some, some other deals that, you know, a $250 million deal, a standalone that came in the last few weeks that there's a, you know, there's, there's a, there's easily a 50, 50 coin flip that, that deal happens. Um, there's some other midsize deals and everything else is what Jeff told you has been the same as usual, you know, drips and drabs of smaller stuff, you know, middle things. It just, what comes in and we, and we, and we jump on every single thing that makes sense for us, uh, You know, it's based on logistics. Like if it makes sense for us, you know, that we can add it to a master release or it's big enough for us to add a state. Perfect. That's helpful. Thank you, guys. Welcome. Thank you.

Thank you. Our next question comes from Gaurav Mehta with Alliance Global Partners. You may proceed. Yes, thank you. I want to go back to your comments around the transaction market where you mentioned that you worked on some deals that didn't close. Just want to get some more color on those deals that didn't close. Did those deals go at a lower cap rate? to your competitors or why do you think those deals didn't go through?.

No, the math, the math, the math was still the same math. It's still the same Temcab. We haven't made an offer below our disciplined number, how we do things. You know, it's an interesting business. You know, the nursing homes. Um, if, when, when there's a change of ownership, you know, on the PropCo side, but the operator stays the same, it's peaceful. But when the operator is changing to a new tenant that we're bringing in, there's potential turmoil, you know, that period of time between a deal getting made and, and the change occurring. Yes. you know, the seller is deathly afraid that his staff's going to walk out on him. And, you know, the common conception, I don't know if this is in the regular corporate world also, but the common conception in a nursing home is they think if the place is getting sold, everyone thinks they're getting fired. And so they go and they go find, start looking for new nursing, new places to work, and they bail on the nursing homes. And it's, It's, it's, it's, it's, this has been the way it's been for 20 years that I, you know, 20 years or more that I've been involved with this. And so the seller is definitely afraid of, of, of the employees finding out that there's a sale. So like, you know, when we go there, Strawberry Fields became an appraisal firm. We're not, we're not a nursing home group that's buying nursing homes, you know, or, or. or a REIT that's buying nursing homes. We're either bankers or we're appraisers or we're some other farce that, so that the employees that meet us don't get smart thinking that the place is being sold. So you put that in perspective, you got more neurotic sellers that, and rightfully so, like they're worried, to make a good money today, and they're exiting with a good multiple, and they're happy to sell, and they're happy with the price, and they're happy to take stock in strawberries sometimes. They live in fear. And so you have to have a good, you know, the guy on the other end says, don't worry, you're giving it to me. I'll do what I can. I'll keep the secret safe. I won't blow the cover, you know, and they'll act a certain way. And so you have where the deal falls apart because somewhere in the middle, somebody finds something out and the guy has to go tell his employees, look, I'm not selling. And so this is what we deal with. And, you know, I play psychiatrist on the side with, you know, telling a seller, you know, just it'll be fine. This will work out. Okay. let's not take a tour or let's not do this. Or why don't you send me that and we'll work around, you know, somebody finding out. And, and so I, I don't know if this helps the people listening, but like, it's such a delicate, delicate act of transitioning when you're transitioning a new operator. And so, um, And so we sit there and this year, for some reason, that's happened more. We had a deal in Tennessee that spent months on the deal in Tennessee. And then at the end, one person said, no, I just I'm not dealing with this. And. And we tried to make it work. And it was literally months of our life that just whenever getting back and then and then we had this other deal and another state, which is a deal that came back to us, went away, went back. They were they were they were difficult, but but now we're marching towards a closing. And then last one we had was one where we had a deal that we're buying something in a set bankruptcy deal. And so some guy from out of left field started arguing that the price is wrong and that the bankruptcy question court should ask us for more money or sell it to somebody else. And so we ended up in a fight with, with, uh, with some random guy that shows up and we ended up paying, you know, a couple million dollars more on, on a, on a deal that we made with the seller long before. So the seller made a little bit more money. This other guy walks away and I ended up paying more money and my tenant was fine paying them more rent. So we still got the 10 cap rent, but this is like the strangest year of dealing with this stuff. Like that's just, and this has nothing to do with, you know, pricing, valuation, cap rates. This is just, this wonky stuff. That's just, uh, it's been a weird year. Um, And so hopefully, you know, you have a year like this where you deal with it, you come out strong, everything is good, still collecting all my rents. And then God said, okay, I gave you the curveball this year so that you're going to have a little bit of trouble in your life, even though everything worked out fine. And so next year will be smooth sailing and hopefully we'll continue to do that, you know, 100, 150 million annual income. growth minimum. I mean, we, we, you know, the larger we get, that becomes a smaller growth and we want to then make that growth number higher. So, you know, that bogey goes to 200 million at some point. So, um,.