Strawberry Fields REIT CEO Maps SNF Growth Strategy, 100% Rent Collection

Key Points

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• Strawberry Fields REIT has expanded to 142 skilled nursing facilities, with a $1.6 billion portfolio, more than 15,000 licensed beds and roughly $143 million in annualized rent. Management plans to continue disciplined acquisitions, investing approximately $100 million to $150 million annually.

• The REIT relies on long-term triple-net leases, typically lasting 10 years with renewal options and 3% annual escalators. It reported 100% rent collection for the past eight years, while tenant rent coverage is above 2x and no operator contributes more than 25% of revenue.

• Strawberry Fields says it has financial capacity to fund about $100 million in annual acquisitions without issuing shares, supported by retained cash flow, debt repayment and a new $200 million credit line. Its shares trade at roughly 10.5 times AFFO versus a 15.9-times REIT average, though limited trading liquidity contributes to the discount.

Strawberry Fields REIT (NYSEAMERICAN:STRW) Chairman, CEO and founder Moishe Gubin outlined the skilled nursing facility real estate investment trust’s growth strategy, lease structure and demographic outlook, emphasizing recurring rent collections and a disciplined acquisition model.

Gubin said the company owns 142 buildings, up from its first nursing home acquisition in 2003 and approximately 33 buildings in 2015. The company has grown its assets at an annual rate of roughly 8% to 9%, he said, investing between $100 million and $150 million annually across a real estate portfolio he placed at $1.6 billion.

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The company is a “pure play” skilled nursing facility, or SNF, REIT, according to Gubin. It reported annualized rent of approximately $143 million and more than 15,000 licensed beds. Strawberry Fields is listed on both the New York Stock Exchange and the Tel Aviv Stock Exchange, and Gubin said it has traded publicly in New York for more than four years.

Long-Term, Triple-Net Lease Model

Gubin said Strawberry Fields typically uses 10-year leases with two five-year renewal options and 3% annual rent escalators. He said the company has collected 100% of its rents annually for the past eight years.

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The leases are triple net, meaning operators are responsible for property-level operating expenses and regulatory matters. Gubin said this structure limits the REIT’s direct exposure to the operational pressures facing skilled nursing operators, including labor shortages and wage inflation.

“We don’t suffer the burden of the profits and losses,” Gubin said in response to an analyst question. “Our leases are absolute.”

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