Andre Carrotflower / Wikimedia Commons / CC BY-SA 4.0
Strawberry Fields REIT is working to turn a more than $400 million acquisition pipeline into completed healthcare-property purchases before year-end. For investors in the nursing-home landlord, the next test is whether $123.5 million of deals management expects to close can expand rental income.
The company lists the pipeline and expected year-end closings in its Q3 investor presentation, following results released November 5. Those expectations are not completed transactions. Management said it remained positioned to reach its 2026 acquisition target of $100 million to $150 million.
Indiana agreement adds to the year-end deal plan
Strawberry Fields signed a November 1 agreement to buy a 99-bed skilled nursing facility in Angola, Indiana, for $15 million, according to its November 5 results release. It expects the purchase to close before year-end.
The planned payment consists of $14 million from the company’s balance sheet and $1 million in operating partnership units for the seller. The property would join an existing Indiana tenant’s master lease, with initial annual base rent of $1.5 million and 3% annual increases.
That pending purchase follows a completed September 9 acquisition near Kansas City, Missouri. Strawberry Fields paid $10.4 million for a campus containing a licensed 60-bed hospital, a licensed 99-bed skilled nursing facility and medical office buildings. It added the campus to an existing Missouri master lease with $1.04 million in initial annual base rent and 3% annual increases.
Rent collection holds as currency loss hits results
The landlord collected 100% of contractual rents in the third quarter. Rental income was $40 million, compared with $39.7 million a year earlier.
It reported a $14.8 million net loss, against $8.9 million in net income in the prior-year quarter. A $24.6 million foreign currency transaction loss associated with retiring shekel-denominated bonds drove the change.
Adjusted funds from operations, or AFFO, rose to $18.8 million from $18.1 million. AFFO is a non-GAAP measure that adjusts funds from operations for items the company excludes when assessing recurring operating performance. It is not the same as net income or cash available without restriction. AFFO per share was $0.34, compared with $0.33 a year earlier.
Portfolio and tenant coverage
The company’s Q3 presentation lists 145 facilities across ten states, comprising 15,655 licensed beds. It reports EBITDARM rent coverage of 2.24 times for the trailing 12 months through August 2026. EBITDARM is a non-GAAP operating measure; the company says the operator results underlying the coverage figure are unaudited.
The company’s strategy is to own healthcare real estate and lease it to operators under long-term, triple-net arrangements with contractual rent increases. The remaining year-end acquisitions will determine how much of its pipeline becomes income-producing property rather than prospective investment.
JBizNews Desk | SOUTH BEND, INDIANA
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