Strawberry Fields targets $100M–$150M annual growth with 13% AFFO CAGR amid disciplined acquisitions

Earnings Call Insights: Strawberry Fields REIT, Inc. (STRW) Q4 2025

MANAGEMENT VIEW

* Jeffrey Bajtner, COO & Chief Investment Officer, opened the call by highlighting that "throughout 2025, the company collected 100% of its contractual rents," emphasizing the strength of their disciplined investment approach. He noted the retenanted 10 Kentucky properties with Hill Valley as the new tenant at a base rent of $23.3 million per year, subject to 2.5% annual increases, and the acquisition of 6 Kansas facilities for $24 million. Bajtner stated, “in June, the company issued ILS 312 million in Series B Bonds on the Tel Aviv Stock Exchange, which is approximately $89.5 million. The bonds are unsecured and were issued at par with a fixed interest rate of 6.7%.” He also cited the $59 million acquisition of 9 Missouri facilities and a dividend increase from $0.14 to $0.16 per share, a 14% rise. Bajtner concluded: “2025 was the best year the company has had since its inception. Over the last 5 years, the company has had 13-plus percent growth of the adjusted FFO, adjusted EBITDA and the average base rents.”
* Greg Flamion, Chief Financial Officer, stated: “Total assets are $885 million, an increase of $97.9 million or 12.4% compared to December 31, 2024.” He reported “2025 revenue was $155 million, up $37.9 million compared to December 31, 2024,” and a “year-to-date net income of $33.3 million or $0.60 per share compared to $26.5 million or $0.57 per share in 2024.” Flamion highlighted “2025 AFFO is $72.5 million. This is a growth of 29.8% versus 2024 and represents a 13.3% compound annual growth rate.”
* CEO Moishe Gubin commented: “proudly from $38 million to $72 million. These are really good numbers that we’re very proud of.” He emphasized, “our stock price, which in December, we hit an all-time high. We've got to $14 a share. And we're still way undervalued.” Gubin reiterated their strategy as a “pure-play skilled nursing facility, healthcare REIT,” and targeted “guidance of being able to grow $100 million to $150 million a year.”

OUTLOOK

* Management reiterated their growth target, with Gubin stating, “we’re still anticipating guidance of being able to grow $100 million to $150 million a year. We hope to beat that.” He also noted plans to keep “staying above 90% in skilled nursing facilities.”
* Gubin projected, “we ended up the year with an AFFO of $1.30. We should beat that easily in '26.”

FINANCIAL RESULTS

* Flamion reported, “2025 revenue was $155 million, up $37.9 million compared to December 31, 2024.” Net income was $33.3 million or $0.60 per share. AFFO reached $72.5 million, a 29.8% increase versus 2024. Adjusted EBITDA was $125.3 million, a 38.2% increase compared to 2024. The dividend was increased to $0.16 a share, with an AFFO payout of 46%.
* Bajtner detailed the portfolio: “143 facilities located in 10 states, which comprises 15,602 licensed beds. The total value of our portfolio at acquisition is $1.1 billion. Our acquisition pipeline remains strong at $250 million.”
* Gubin noted, “our AFFO payout ratio continues to be the lowest, where we’re paying out of 47% or close to 47% of our AFFO using the rest of the money to pay down debt as a placeholder, but to be able to use it to buy more assets.”

Q&A

* Richard Anderson, Cantor Fitzgerald: Asked about EBITDARM coverage and free cash flow after dividends. Gubin responded the number is “right around $40 million after everything said and done, that we are stockpiling.” Anderson inquired about Medicare Advantage exposure; Gubin explained, “we don’t have any of our rents that are predicated on results of our tenants and our rent changing up or down as bonus rent or not bonus rent. So we don’t have -- we don’t suffer from that at all.”
* Gaurav Mehta, Alliance Global Partners: Inquired about 2026 debt maturities and new rates. Gubin said, “the line of credit debt is going to come back in at SOFR 2.70 about. SOFR 2.65, 2.75 right around there and that the bond debt is going to come in around 6.25%.” On G&A, Flamion noted a “onetime item. We had some additional payroll that came through in Q4 due to additional executive compensation.” Gubin clarified, “the onetime event is I finally got a raise… they recorded about $1 million or $1.1 million in a onetime thing.”
* Mark Smith, Lake Street: Asked about acquisition pipeline and occupancy. Gubin emphasized, “we’ve never had an impediment as far as cash,” while Bajtner noted, “the deals are coming in day in, day out.” On occupancy, Gubin said, “our revenue is not based on… occupancy… we’re showing 100% occupied because every building that we have has been leased out and we get paid a rent no matter how full they are.”

SENTIMENT ANALYSIS

* Analysts focused on sustainability of payout ratio, dividend growth, debt refinancing, and acquisition pipeline, with a generally positive tone. There was curiosity about risks but no signs of significant skepticism.
* Management was confident throughout, frequently highlighting disciplined investment and growth. Gubin used language such as, “we are confident and we know that debt markets… are open,” and “we feel like we’re going to just keep sticking with our guns.”
* Compared to last quarter, both analysts and management maintained a slightly more upbeat tone, with management emphasizing record results and growth targets.

QUARTER-OVER-QUARTER COMPARISON

* Guidance remains consistent, with management reiterating a $100 million to $150 million annual growth target. The AFFO compound annual growth rate was again highlighted at over 13%. Dividend increased to $0.16 per share from $0.14, and AFFO payout ratio remains below 50%.
* Strategic focus remains on acquisitions, maintaining a pure-play skilled nursing portfolio, and strengthening the balance sheet. Management’s language around portfolio quality and undervaluation of the stock continues from the previous quarter.
* Analysts’ questions continue to focus on dividend policy, debt structure, and acquisition pipeline, with an ongoing interest in how the company will fund future growth. Management’s confidence in their disciplined approach and ability to close deals appeared stronger this quarter.

RISKS AND CONCERNS

* Gubin addressed risks related to Medicare Advantage, stating there is “no exposure” to bonus rent fluctuations. He also discussed potential interest rate changes on debt refinancing but modeled new debt at reasonable rates and expects maturity extension.
* On G&A, one-time executive compensation was noted as a non-recurring item. Management does not expect further G&A increases in 2026.
* Analysts questioned occupancy levels, but management reiterated rent collection is not tied to occupancy and emphasized a resilient revenue model.

FINAL TAKEAWAY

Management emphasized record growth in revenue, AFFO, and portfolio size in 2025, highlighted by full rent collection, a disciplined acquisition strategy, and a robust acquisition pipeline. The company reaffirmed its annual growth target of $100 million to $150 million, maintained a low payout ratio, and reported increasing dividends. With a focus on maintaining a pure-play skilled nursing portfolio and managing risk through stable master leases, management expressed strong confidence in ongoing expansion and the ability to sustain and increase shareholder returns in the coming year.

Read the full Earnings Call Transcript [https://seekingalpha.com/symbol/strw/earnings/transcripts]

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