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 Moishe Gubin, our Chairman and CEO, and Greg Flamion, our CFO.

Yesterday evening, the company issued its Q2 2026 earnings results, which are available on the company's Investor Relations 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 Fields REIT's business and the environment in which it operates.

These statements may include projections regarding future financial performance, 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. Now on to discussing Strawberry Fields REIT and 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 275.

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 in existing and 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 Flamion, our Chief Financial Officer, discuss the quarter-end financials.

Thank you, Jeff, and welcome everyone to the Strawberry Fields second quarter earnings call. Let's begin with with a look at our balance sheet.

Total assets are 87 point $878.5 million, an increase of 18.8 or 2.1% compared to June 30th, 2025. The year-over-year decline in assets is is is is driven by elevated cash balances at the end of the second quarter of 2025.

These funds were used to acquire properties 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. Continuing now with the consolidated statement of income for the six months ended July 2026.

2026 revenue was $80 million, up $4.8 million 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 experienced higher revenues, the income growth was offset by higher depreciation, which was driven by the new property acquisitions. General and ad- 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 in a year-to-date income of $18.4 million, or 33 cents a share, compared to 15.7 or 29 per- cents a share for the six months ended Q2 2025.

Going to the next slide, we are now going to look at a quarterly income state- 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 in line; 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 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 15% compound annual growth rate.

Our yield on leases is 14.4%. The company's net debt to net asset ratio currently sits at 49.8%.

As of June 30th, 2026, our dividend is 17 cents a share, representing a 4.9% yield and an AFFO payout of 50.6%. This concludes the financial portion of the earnings call presentation.

I'll now turn it back over to Jeff Bajtner, 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 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 EBITDAR rent coverage for May 31st is 2.17.

The net debt to adjusted EBITDA is 5.7. We've continued to collect 100% of our rents.

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. With that, I'd like to hand it over to Moishe Gubin, 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.

The slides I'm going to go through are just giving you basically the graphs and a couple other pieces of information. The first the first slide shows you our AFFO growth for the last 5 years or 5 and a half years.

Again, it's an 11% growth rate, beautiful from $44 million to almost $74 million. Again, this will this will this will change.

Hopefully, we'll have a nice nice we'll end the year hitting our targets, just hitting targets towards the end of the year instead of the beginning of the year, which is what we wanted. Unfortunately, it's just how it goes.

This year is a quieter year. Like like Jeff said, we we've really we're collecting all our rent still and bringing in the money and making a good living.

That's that's this slide. On the next slide, we talk about the portfolio growth.

We've changed this slide to try to show a straight line at a 10 cap to try to show what what the values are. You see we're sitting at The other slide how we had this previously, we're just showing you historical cost.

Now this is showing you basically market value or a 10 cap value on our rents that we're collecting. These are lease fee appraisals, about a 13% growth rate here from 2021 having value of about $777 million to now $1.425 billion.

The next slide just talks about our stock price over the last 12 months. Seems to be that quarter this quarter we ended off good.

Currently, our stock price is performing better than this, which is good. As as 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 to close in on and catch up to our peers. We're still trading at a 40% discount to our peer average AFFO multiple at 10 and a half.

We feel that we should be able to catch up. Hopefully, sooner than later, we're we're pushing.

Having good results quarter in, quarter out. Dividend that's reliable.

Going to all these conferences, meeting a lot of people. Again, we're we're stick- 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 a very fast AFFO share growth, which is beating all of our peers at at, around 11%. We have the lowest payout ratio, dividend payout ratio, at right around 50%.

We feel all these things should catch up and will be more online, hopefully, sooner than later. On the next slide, we just look at our market performance over the last year.

Our stock actually has held its own. We're proud of that.

We could we we 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 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. That being said, we expect things to just keep continue what we're doing.

Hopefully hopefully the stock will will vindicate us and show show us in a good good light. On the next slide, again, we talked about this already.

This is this is how big of a difference we have. We're at 91 and a half percent in SNFs.

These are our true peers, and now 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 of of the baby boomers and the and the and the value 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. With that, I think I think in the long run, the shareholders or the marketplace should should should flock to us knowing knowing full well that we're going to, continue to have a steady, slow and steady return that you could rely on.

On the next slide, peer comparison again just to show how we compare. Again, 50% payout ratio, and then you have the largest is distributing 87% of their cash.

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. That's a hard way to go.

In our case, everything we're doing is accretive. Even though we do sell stock in the ATM or we, we continue to to extend our shareholder base, we're still we're 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 whatever our payout ratio continues to be.

Then on the other slide, to the right of that, is our growth rate. 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 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. That's that's that's that's the math.

We're proud of that. On the next slide, we just just reiterate the total return.

When you take the growth of the AFFO per share over the last, 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 you're at a you're at a 16% total return.

The math is really really simple. You could see it in the chart here.

$74 million of AFFO, we pay out half of it, the remaining amount of money, we take that, we buy we buy more assets. 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 Even though we're looking at deals and and it's been a weird year as far as how the deals come.

They came, they went, they came, they went. We had deals that we're in contract with, they broke the contract, then we get back into contract.

This We never had a year like this where where we had that kind of erratic nature, and and and it's just random. It's not 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 of deals.

Just that instead of being at the beginning of the year and reflecting in our numbers for the year, it's going to end up being towards the end of the year. Next year will be a solid year.

This year is also a solid year, just not a growth year from that point of view. We spent a lot of time on debt, like Jeff and and and Greg mentioned earlier.

Earlier in the year, we 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. Now we have now a line of credit which has $140 million of availability on it right now.

We still have some debt maturing in in September. We're going to take a road show road 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.

Without adding to our debt load as far as, 50% leverage. We're right now right right right about 50% or a little bit below 50%.

We should be able to get everything done, and then and then we don't have to worry about any bond or any real, financing that's that's maturing, for for a bit. This slide is actually real nice.

I like it. I want I look forward till third quarters when we change this slide around, it's actually going to be nice and smooth across across a few years.

This slide is is pretty self-explanatory: blended interest rate below 6%, 20-year-plus HUD debt maturity, below 50% leverage like we said, and 5.7 times net debt to EBITDA. The corporate bonds, we, like I said, we paid off Bond C.

We now have A and D that are going to get paid off in in third quarter. We redid our line of credit, which we talked about, so that bank debt basically turns into one loan that that's a five-year loan, was really a three-year with two one-year renewals.

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.

You see also the base rent by related consultants. Again, we're pretty we're pretty diversified.

We don't really have too much exposure or or concentration in any one place except for Indiana, which is our best state, so that's positive. We expect we expect before the year's out to add at least one more state, hopefully, to our to our mix.

One of the deals that's hopefully going to close third or fourth quarter is a pretty sizable deal in a new state, which is good. All right, on the next slide, this is the Richard 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.

Again, it doesn't really matter to me. Our tenants, we look at their financials, and they're and they're and they're an efficiency business.

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 telling the folks. Average facility size 108, and and they're running 83 out of 108.

Like most facilities in America, majority of the facilities being paid for by Medicaid. Then everything else is between Medicare, private pay insurance, and and hospice care, which is usually falls under Medicaid or private as well.

On the next slide, just shows you our map. That hasn't changed from quarter to quarter.

We will be I'm happy when we add the new state, it'll fill It won't fill in the middle, but it'll grow our perimeter of of of the current the current operators. Again, pure play, we talked about it, less than 92 or 92% of our portfolio is nursing homes.

Again, we've we've we've we've maintained exactly the way we buy things year in and 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 we start with a at that Once we do that 10 cap, it's a 10-year lease with two five-year renewals, 3% annual increases for most of our portfolio.

Again, we have a projected ROE of 12%. What that's basically considering taking keeping 50% leverage and and then paying interest on the other half and earning a 10 cap, it gives us a little bit more yield.

We typically love the mass- We love the master lease 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.

Then and then a new deal which has multiple facilities under a master lease. That's and that's 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. With that, that that that ends my 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.

Hey, thanks, and I'm honored to have my own slide, thank you for that. When you think about it kind of you look like you're projecting AFFO 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?

Typically I would answer this question, but how about Jeff, why don't you try to answer this question?

The $1.33 is annualizing our current our current FFO for the year AFFO for the year. The acquisition in Missouri that we're going to be closing hopefully during this quarter should move it up incrementally.

Realistically, these new deals that we're looking at are going to be towards later in Q4, and I don't expect it to have the biggest effect on our AFFO per share.

I think, Rich, if you're modeling out or any of the other analysts that are in modeling out, you should be modeling out for probably an AFFO of an additional $12 million or so, maybe a 155 to 160 for next year. Maybe a little higher than that.

Jeff, that makes sense to you? Greg?

Yeah.

Yeah.

The thing is you're going to If

if everything we're working on were to come to were to come to fruition and work out, yes, that would make sense.

155 to 160 would be top line, and the bottom line would be from 70 74 and a half or so to probably closer to 80 82 or something like that, 81 82.

Okay. There's a little potential life to that $1.33 based on whatever might happen back half of this year.

It's a drop.

I Okay.

It's unfortunate. The way this year's played out has been I've never seen it in my I'm doing this now for 20 I started in 1998.

I never saw a year where and I blame all the good on God, when somethings like this where it's a little bit wonky, we blame that on God, too. That somehow, for whatever reason, just made it that a deal happens, and then a deal doesn't happen, and same deal goes back three, four times.

Now we think we're locked and loaded, hopefully, finally, and a couple other deals got signed up since then. Just a strange year for no real reason.

Okay. All right.

Second question for me, the KC deal that's going to close in the third quarter has a hospital element to it. I think we kind of talked about this last quarter, but how open are you to sort of opportunities like that that are largely SNF, but have some other stuff associated with them?

Is that something that you feel adds to the risk profile of the investment? Any kind of color you can provide around investment opportunities that have a little bit more of a diversified component to them?

The starting point is for every deal we look at, there has to be a reasonable sense on who's going to manage the asset, 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.

This fits right into their geography where they are, their operational experience fits perfectly in running a hospital with the physician practices that they already have. This worked.

I would say going forward, and it's been like that in the past, we're open-minded. 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 assisted living operators.

If a deal would come in that's a CCRC, like we did in Maryville

and

huh?

Kingsport.

Kingsport, Maryville, that was the same deal for me, two different places. We have relationships with now other people that we are looking at CCRC stuff where we could either separate out the two sides with two different guys and make sure that the two operators have an agreement between them that they play nicely in the sandbox.

One deal I act as an HOA president between the two sides of the property, where I got two different people, 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.

Just what I need in my life. It makes the deal work, and the two sides deal nicely with each other, and so far so good.

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 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 we don't have a major loss. I'll be the one sitting there operating until I'm able to stabilize it and turn it to the next operator.

I personally don't know how to run a hospital, 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.

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 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." That's been the reason why we kind of shied away from it.

A deal like this, perfect deal for the tenant, for our current tenant that we have. Very easy to add to the master lease.

I think we're closing next week. It's just a good deal.

If there's more of these that fit Missouri, certainly this same tenant would take it and absorb it. That's the story there.

Okay. Hey, I just wanted to ask back half of this year, Jeff, what's the most that could be completed in that pipeline that you mentioned?

You so say $12 million of FFO to it, but what is that number? Is it $50 million, less, more?

Every week Moishe and I and Greg, we go over our pipeline, and I think Moishe has spoken about this in past earnings calls where we say we've got high, medium, and low, the likelihood that the deal will close. 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.

There's a very good likelihood, and we were talking about earlier, I think realistically, we could have about $130 million of real estate at least close towards year-end, and then there's other deals that we're still looking at that could potentially close. We've still got

Thanks very much.

4 and 1/2 4 and 1/2 months till year-end, we're going to keep on working towards it.

Thanks very much, everyone.

Have a good weekend, Rich. Thank you for joining.

You, too.

Hi, guys. First off, just wanted to ask a little bit about SG&A.

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?

It's not new hire. 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. 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.

I get it, and I don't even know. It's part of my pool of shares that I own.

I don't even know how much I'm getting paid truthfully, Mark. I'll let Greg answer, and we'll go from there.

Hey, Mark. How you doing?

In regard to your question, the first part about one-time items, we had about a little less than $800,000 worth of closing costs that were associated with the loans we closed in G&A. That's a one-time item that I think you can disregard going forward.

As for the salary, it's running about maybe 250 to $300,000 extra a quarter. That's something that will be I guess continuing going forward.

That kind of answers your question as to what's the one-timers versus the increases that we see going forward.

No, that's helpful. Then I just wanted to ask big picture, if you guys have seen 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'd say it's Jeff can answer that.

I think it's more similar, 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 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 in the West Coast or 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. The deals have been coming in.

They've been some bigger ones. There's been many smaller ones.

We've been if the deal is a 10 cap acquisition and we get that 1.25 coverage on day one, we've been putting our offers out there. As Moishe mentioned in his prepared remarks, it's something that that's an acquisition strategy that we've been sticking that we've gone with until now, and we plan on sticking to.

To your question, the deals they're we keep on putting offers out. As I said, there's we've actually been signing some of them up, we're very excited to see where it leads towards year-end.

On the three deals that were signed up for that we expect to close this year, Actually, it's really four deals. Without going to location, one of them goes into a master lease.

Another one goes into a master lease. Another one is the biggest deal of the year right now, which would be its own master lease in a new state.

Then we have a one-off new deal in a new state that we expect to get done. All of these deals open up for us new states and continue to grow master leases.

Outside of these three, four deals that we expect to get through before the end of the year, we actually have a bunch of other stuff that's been constant conversation for maybe a year or two years with people that 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, a lot of them say, "Well, Moishe, you did good with Strawberry. We want to do the same thing."

Then my response back to them says, "Why would you want to do all the stuff that I did? This was nail-biting and anxiety-laden process and dealing with what we're doing.

To make friends with all you guys that are on this call took how many years did we banging down the door and then we have one meeting and then we sit down with somebody and then this that. Just takes forever to build."

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." We have three things out there that's been going on for 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, easily we're going to be able to go from where we are today and most likely add $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."

To answer your question as far as pipeline or what kind of deals, there are some big, big deals that at some point are going to hit. We have some other deals that, a $250 million deal, a standalone that came in the last few weeks that there's easily a 50/50 coin flip that that deal happens.

There's some other mid-sized deals, and everything else is what Jeff told you, it's been the same as usual, dribs and drabs of smaller stuff, middle things. It just what comes in, and we jump on every single thing that makes sense for us, it's based on logistics.

If it makes sense for us that we could add to a master lease or it's big enough for us to add a state.

Perfect. That's helpful.

Thank you, guys.

Welcome. Thank you.

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 was still the same math. It's still the same 10 cap.

We haven't made an offer below our disciplined number how we do things. It's an interesting business.

The nursing homes when there's a change of ownership on the propco side, but the operator stays the same, it's peaceful. When the operator is changing to a new tenant that we're bringing in, there's potential turmoil.

That period of time between a deal getting made and the change occurring, the seller is definitely afraid that his staff's going to walk out on him. 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.

They start looking for new places to work, and they bail on the nursing homes. This has been the way it's been for 20 years that I, 20 years or more that I've been involved with this.

The seller is definitely afraid of the employees finding out that there's a sale. When we go there, Strawberry Fields became an appraisal firm.

We're not a nursing home group that's buying nursing homes or a REIT that's buying nursing homes. We're either bankers, or we're appraisers, or we're some other farce so that the employees that meet us don't get smart thinking that the place is being sold.

You put that in perspective. You got more neurotic sellers that and rightfully so, they're worried.

They have a good business, they 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 Strawberry sometimes. They live in fear.

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." They'll act a certain way.

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. I play psychiatrist on the side with telling a seller, "Just it'll be fine.

This'll work out. 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 somebody finding out."

I don't know if this helps the people listening, but there's such a delicate act of transitioning when you're transitioning a new operator. 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'm not dealing with this." We tried to make it work, and was literally months of our life that just we're never getting back.

Then we had this other deal in another state, which is a deal that came back to us, went away, went back, they were difficult, but now we're marching towards a closing. Then the last one we had was one where we had a deal that were buying something in a set bankruptcy deal.

Some guy from out of left field started arguing that the price is wrong, and that the bankruptcy court should ask us for more money or sell it to somebody else. We end up in a fight with some random guy that shows up, and we end up paying a couple million dollars more on a deal that we made with the seller long before.

The seller made a little bit more money, this other guy walks away, and I end up paying more money. Now my tenant was fine paying more rent, we still got the 10 cap rent.

This is the strangest year of dealing with this stuff that's just and this has nothing to do with pricing, valuation, cap rates, blah, blah. This is just this wonky stuff that's just it's been a weird year.

Hopefully, you have a year like this where you deal with it, you come out strong, everything is good, we're still collecting all of our rents, and then God said, "Okay, I gave you the curveball this year so that you can have a little bit of trouble in your life even though everything worked out fine." Next year will be smooth sailing, and hopefully we'll continue to do that, 100, $150 million annual growth minimum.

The larger we get, that becomes a smaller growth, and we want to then make that growth number higher. That bogey goes to $200 million at some point.

All right, Gaurav, hopefully that answered your question.

No, that did. Thanks.

Thanks for that color. Second question on the balance sheet.

You talked about debt maturity in third quarter, I think. Can you maybe provide some color on where you expect the cost of debt to be as you go to Israel to raise some debt?

That that

that's about $160 million that's sitting on our balance sheet. Again, that's that's that's priced out to the shekel.

Right now the dollar the dollar was getting stronger again, and now it got weaker again. Our easiest and that averages out at about an 8% interest rate.

If the dollar to shekel was better for us, we'd be better off, just taking dollars in America at 6. Right now our cost is about 6.4, for for our money in America.

We pay off the 8% money at 6.4, but because the currency is where it is, the better bet I mean now that that could change literally in a month, the rate could go back to 340. I so I I we're we're we have to be nimble here.

We have the Israeli market that supposedly still loves us. The interest rate the last deal we did in May was 7%, even if it's a little higher than the 6.4 in America, 7% is probably It's all math.

Whether that's 7%, we save a dollar, and then we don't have to eat the currency the currency cost of of buying shekel with dollars, and then you we would realize the the the currency Right now we right now we haven't realized the currency, the devaluation between the shekel and dollar. We haven't really realized it.

It's in OCI, it's sitting there as a as a as a recognized, but not realized loss. To not take that through loss, and which I can't stand that if I did, it would kill me personally, most likely our move is we end up taking shekel to pay off shekel, and then we have 4 years for the for the dollar to bounce back, which we expect to occur, and that's, a bunch of money in OCI that's going to turn around in our favor.

That's that's So either way, we're going to get an improvement from 8 to probably at least 7. One way one way one way gets rid of the interest rate risk, but but you but you realize a loss, and one way doesn't get rid of the interest rate risk, but you don't realize a loss.

That's that's where we're at. I'm taking I'm taking my religious gentile CFO, and we're going to take him to visit Jesus and everything in in Israel for him, because he's never been to Israel.

Then I take my religious Jewish COO CIO, and we're going to go and shake the moneymaker and bring bring in some shekels to pay off the the bond debt. Hopefully, it'll be a good trip.

We're leaving on August the 30th, and and God willing, we succeed.

All right, thanks for those details. That's all I had.

Thank you, Gaurav.

Good afternoon. I guess kind of the 133 projection for AFFO in 2026, I know you talked about it a little bit earlier, but can you walk me through what exactly is kind of assumed in that number?

Is that just

No, I misspoke. That number I was referring to was a top line, I think, the rental number.

I was saying that we're going from 145 to a 1 153 or 150. I was talking about rent.

I think I misspoke. Our AFFO right now is about 74, that 74 is going to probably go to 83.

I thought I said that also, but I might have misspoke somewhere in there, and I used the term AFFO versus I was talking about rental income.

As relates to John's question, the $1.33 the $1.33, that's that's just taking our AFFO our AFFO times 2 divided by the outstanding shares in OP units.

Just what you've done in 1H, not like 2Q times 4?

No, it's just the first half of the year.

It's one

Sorry. It's pretty stable between Q1 and Q2.

I'm I'm I'm I'm I'm off I'm off today. We just We just We just came from the bris of my fourth grandson this morning, I'm a little bit I'm a little off my game.

Sorry.

No problem. Then there's a prior conversation on if you get in the Israeli market, is there a size for the amount you're looking to kind of raise?

I understand you do have a significant amount of capacity still on the revolver, but that would potentially be useful as in if some of this deal flow you're talking about in the end of the year kind of comes to fruition. How are you kind of thinking about proceeds and how much of kind of future investment volume may be financed with the revolver versus how much is kind of financed with any additional capital you raise with Israeli debt?

The starting point is you'd need to take a minimum of 165 million shekel, which today comes out to like $55 million. They do everything as in a Dutch auction, depending on the day where things are trading and where they're at, people are putting in closed bids.

I don't believe that they truly, it's really secret. They say it is, I don't believe it.

You start with that number. If the bidding is good, we'll take as much as we can where the pricing is good and, and it saves us, like I said, on the currency.

We need 160. We know we're going to get out of that 160, we know for sure we would get 55, 60 of it.

Depending on the pricing, that number can go all the way till 160, which I don't think we ever get to. Most likely we're drawing on the line in some capacity.

Between the line and that, we for sure will be fine paying it off. I would like to do the most we can if the pricing is good.

The market loves us over there, at least they seem like they do. When it comes to action on pricing and deals, they're greedy like all the guys on Wall Street here as far as well.

It's fine. Everyone needs to make money.

We go there, they're happy to see us, and we're one of like top five strongest companies in Israel as far as cash flow and how we could pay our debt with the cash flow we have. Hopefully, like I said, minimum 55, maximum 160, it's probably somewhere in the middle, and then we'll use the line of credit for the difference.

Then

that future kind of debt raising, could that potentially have kind of a similar impact on G&A as some of the closing costs you saw in 2Q, or is it just much less expensive than what went into closing? I'm assuming most of those closing costs were tied to the credit facility.

What went into closing the new bank debt?

It's an actually interesting accounting thing. When you're doing bond accounting, you have issuance costs that get amortized into interest expense over the life of the bond.

If the life of the bond is a five-year bond, right, then and you're paying your IB there 1 and 1/2 to 2 points, you take that and divide it by 5 years, right, incrementally you're bleeding into your interest expense a smaller number, which is fine. In America, we're able to take a finance charge, and under FAS 91, I think it is, we're able to take that over the life of that loan.

In this case, since it's the way it's written as a 3-1-1, you're taking it over 3 years. What doesn't get amortized over the life is all the title work, and all the closing costs, and all the other BS that goes into the number, appraisals and whatever other And so that shit gets expensed in the period of where it was incurred, and that's what hit us.

It's not, if we were taking that 700 grand or 800 grand, like 760 or whatever the number is, and we would have divided that by 3 years, no one would have even noticed that there was a blip on the Even 768 is immaterial in reality. Take that over 3 years, 200,000, 250 in a year wouldn't even get noticed in a quarter, it's nothing, right?

32 grand, whatever the number is. Because we had to take it when it occurred, and that's where you see that.

In Israel, you don't notice that, you wouldn't see a hit to the net income because there's no real the accounting fee to do the letter over there is like 5 grand, and the law firm, we basically have on retainer and we give them a little extra. There's so little in doing the issuance.

The other benefit of doing the bond, which is what I like also, is when we need money in a pinch, it takes 3 days to do a private placement. If we're trading at par, then we give a guy 98 of par, and we'll have the money in 3 days.

We could do another 20, 30, 40 million. When we have a deal, right now we have Bond B that I could draw from if I wanted to on the private placement, we have Bond C that we have another few months before the lockout ends, and we'll be able to draw.

We have capacity where our rating doesn't change, it gives us ability. Assume for argument's sake we make a deal, and we want to buy something for 200 million in January, we could just go draw on a line, take regular financing, use cash, do an equity raise.

We have so many tools available for us to be able to come up with the cash to be able to close deals. I think that answers your question.

No, it did. I appreciate all that detail.

That's it for me. Thank you very much.

Welcome.

Hey,

good afternoon.

I didn't want your new slide to go unloved. I just want to clarify a comment, I might have misheard it, on the occupancy.

I thought, Moishe, you had said that was high. I just wanted to clarify.

For for us, I I The reason why I don't like that slide is because each state has their own occupancy, number one, and number two, this is a business that's efficient that's efficiency-based. For us, 77% when we're in states that, average occupancy is between 50 and 60, is good.

It gets it gets to that number, like the Kentucky portfolio is, nearing capacity, Arkansas's, but Arkansas is an example is also somewhere, middle middle of the road. We have the the the Indiana and Illinois, or really Indiana, where where the occupancy is like in the 60s, it's a very it's a way lower number, but they're they're our best tenants, we make the most money, and there's and they're and they have the most coverage.

That's why the slide is a little bit misleading, because, if you compare it against a portfolio of of stuff that's in, like New York or California where everyone's at 99% occupancy, you can't compare a portfolio of Midwest where average occupancy is like 60, 70%. That's why I That's why I'm not I'm anti that slide, but that 77 is an up for us.

I think we we used to run on like 60, our portfolio ran like 68, 69. So 77 is is an improve in our portfolio, and you see it in our EBITDAR number going up, the rent, the coverage for the rent is over 2, it's like 2.2 now or something like that.

We're from our point of view is someone's investing with us, they can rely on our dividend because there's we have a 2 times 2 times coverage on our dividend, and and the rental income that's coming in, we have a 2 times coverage on the rent, and we're, we're being a good steward with the money, and we're we're, stockpiling the cash, and being able to buy more stuff to make the value of each share grow. That's that's that's our that's our objective.

We're we're we're thinking about the shareholder and how we're good stewards and custodians of what we're doing here, and so occupancy really doesn't play a role in that. I I think I answered your question.

No, thanks. Yep.

Then on some of the comments you made about some of the new states, are these I know you said one of them's a new master lease and another one's a one-off. Are these new partners or operators or are they people you're familiar with?

They're, well, we're familiar with them, but they're brand new to us. One is a sale-leaseback, and that's a new state, but we're expecting that's going to grow.

This is they're trying for the first time. We sat down with them, and we really feel that they're strong.

They've been in the nursing home business for 20-something years, and now they realized better not to own the real estate, they're doing sale-leasebacks, which will give them more money for working capital and more deals. We should have more deals with these guys.

Then the other one is a brand new portfolio in a new state, new tenant for us, and we know the operator to be, and we're expecting them to succeed and do well there. Okay.

Then you had talked about the potentials for partnering up, and you threw out a number and I was just curious. If you were to be partnering up just with limited resources, would you focus primarily on those partnerships as opposed to acquisitions that you've sourced on your own?

The reason I ask is based on the number you gave, are these partners, do they have similar-sized facilities, the debt being similar? I'm not asking you to get into all the detail, but could this be another 280 facilities that would come onto the books if you were partner with all these?

Yeah. Let me clarify.

Right, there's two things here. There's managing the public market conversation, doing this stuff, which, we're always learning, we're still I don't think we're great at this yet.

We keep it real, we talk and we're friendly with everybody, so that's a good starting point. That's, there's the business of the public markets, raising debt, managing relationships with the analysts and the IBs, raising equity, and running a balance sheet from that perspective.

Then there's also actually running the business, which is also balance sheet, but asset management. These kind of deals, what the benefit that they want is what we've already created, where people know Strawberry Fields and our platform, and our stock trades already, and and so not looking for anything to change on management on the company side, and then the tenants that they have, they're running their own version of a REIT, even though they're not a REIT, they're for-profit LLC that rolls up that we would suck it into our program, and the people that work for them that are managing the asset could come work for us, and we could eliminate a bunch of overhead that they have, because we don't need a second CFO and we don't need, maybe the accounting department needs another person or asset management needs some people obviously, but we're looking that nothing would change.

I wouldn't even call it a partnership. It really be us absorbing them, but them joining the board so that they're part of the future.

In that sense, there's a partnership. It's Strawberry Fields that gets perpetuated long-term, even if current ownership gets diluted and new people come to the table, right, this should be a running business that can perpetuate for the next 50 years and just keep doing what it does and keep growing, and not changing philosophy and not changing how we buy.

If we could absorb this stuff, but this is in my mind, it's 100% within 10 years, we end up absorbing a few of these guys, and because and for their sake, right now they're doing all this as a mom-and-pop without the public market, but they're doing this as mom-and-pop, and for their point of view is like, "If I could get an exit and I have Moishe, who we trust and know, we could just without me having to work hard like this, I could take a board seat and still see residual net income or our distribution and cash flow, like why wouldn't I do that deal?" That's the light bulb that's going off with the people out there that are peer-level folks today that we've known for many years that say, "Okay."

We're working on that. It's a slow process and, but we'll get there.

There's no doubt in my mind, within 10 years, this our company is 4 or 5 times the size we are today.

Great. Thank you.

You're welcome.

No, thank you so much. I'd like to thank everyone for joining us today.

Thank you for the questions. Thank you for the continued support.

If you have any questions, feel free to reach out to Moishe, Greg, or myself. Our emails are at the back of the presentation.

I'd like to wish everyone a good rest of the summer, and we'll see everyone in November.