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Strawberry Fields REIT, Inc.

Strawberry Fields REIT, Inc.STRWEarnings & Financial Report

NYSE · Financials · Real Estate Investment Trusts

Strawberry Fields REIT, Inc. is a real estate investment trust focused on healthcare-related real estate assets. It owns, operates and manages skilled nursing facilities, senior living communities, and medical office buildings, primarily serving markets across the United States for healthcare providers and elderly care operators.

What changed in Strawberry Fields REIT, Inc.'s 10-K — 2022 vs 2023

Top changes in Strawberry Fields REIT, Inc.'s 2023 10-K

156 paragraphs added · 157 removed · 116 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

58 edited+11 added−10 removed175 unchanged
Key factors that we consider in the underwriting process include the following: ● the current, historical and projected cash flow and operating margins of each tenant and at each facility; ● the ratio of our tenants’ operating earnings both to facility rent and to facility rent plus other fixed costs, including debt costs; ● the quality and experience of the tenant and its management team; ● construction quality, condition, design and projected capital needs of the facility and property condition assessments; ● competitive landscape; ● drivers of healthcare-related needs; ● the location of the facility; ● local economic and demographic factors and the competitive landscape of the market; ● licensure and accreditation; ● the effect of evolving healthcare legislation and other existing and future regulations and compliance with such regulations on our tenants’ profitability and liquidity; and ● the payor mix of private, Medicare and Medicaid patients at the facility. 17 We also require tenants to furnish property and operator-level financials, among other data, on a monthly basis; we evaluate individual and portfolio property performance, liquidity metrics, lease and debt coverage, occupancy, planned capital expenditures, and other measures; and we conduct in- person visits to each facility in the portfolio at least two times per year.
Key factors that we consider in the underwriting process include the following: ● the current, historical and projected cash flow and operating margins of each tenant and at each facility; ● the ratio of our tenants’ operating earnings both to facility rent and to facility rent plus other fixed costs, including debt costs; ● the quality and experience of the tenant and its management team; ● construction quality, condition, design and projected capital needs of the facility and property condition assessments; ● competitive landscape; ● drivers of healthcare-related needs; ● the location of the facility; ● local economic and demographic factors and the competitive landscape of the market; ● licensure and accreditation; ● the effect of evolving healthcare legislation and other existing and future regulations and compliance with such regulations on our tenants’ profitability and liquidity; and ● the payor mix of private, Medicare and Medicaid patients at the facility. 20 We also require tenants to furnish property and operator-level financials, among other data, on a monthly basis; we evaluate individual and portfolio property performance, liquidity metrics, lease and debt coverage, occupancy, planned capital expenditures, and other measures; and we conduct in- person visits to each facility in the portfolio at least two times per year.
These relationships also provide us with intelligence on the markets in which we own properties and assistance in locating new and replacement tenants. Additionally, the consulting firms assist us without charge in evaluating potential acquisitions and operators. This assistance provides us with insight on local market trends, which is particularly valuable for new markets.
These relationships also provide us with intelligence on the markets in which we own properties and assistance in locating new and replacement tenants. Additionally, the consulting firms assist us without charge in evaluating potential acquisitions and operators. This assistance provides us with insight into local market trends, which is particularly valuable for new markets.
In the final rule issued in January, 2013, HHS modified the standard for determining whether a breach has occurred by creating a presumption that any non-permitted acquisition, access, use or disclosure of protected health information is a breach unless the covered entity or business associate can demonstrate that there is a low probability that the information has been compromised, based on a risk assessment. 24 Covered entities and business associates are subject to civil penalties for violations of HIPAA of up to $1.5 million per year for violations of the same requirement.
In the final rule issued in January, 2013, HHS modified the standard for determining whether a breach has occurred by creating a presumption that any non-permitted acquisition, access, use or disclosure of protected health information is a breach unless the covered entity or business associate can demonstrate that there is a low probability that the information has been compromised, based on a risk assessment. 27 Covered entities and business associates are subject to civil penalties for violations of HIPAA of up to $1.5 million per year for violations of the same requirement.
If a defendant is found liable under the False Claims Act, the defendant may be required to pay three times the actual damages sustained by the government, additional civil penalties of up to $10,000 per false claim, plus reimbursement of the fees of counsel for the whistleblower. 23 Many states have enacted similar statutes preventing the presentation of a false claim to a state government, and we expect more to do so because the Social Security Act provides a financial incentive for states to enact statutes establishing state level liability.
If a defendant is found liable under the False Claims Act, the defendant may be required to pay three times the actual damages sustained by the government, additional civil penalties of up to $10,000 per false claim, plus reimbursement of the fees of counsel for the whistleblower. 26 Many states have enacted similar statutes preventing the presentation of a false claim to a state government, and we expect more to do so because the Social Security Act provides a financial incentive for states to enact statutes establishing state level liability.
In addition, the presence of such substances, or the failure to properly dispose of or remediate such substances, may adversely affect the owner’s ability to sell or rent such property or to borrow using such property as collateral which, in turn, could reduce our revenues. 26 Prior to closing any property acquisition or loan, we ordinarily obtain Phase I environmental assessments in order to attempt to identify potential environmental concerns at the facilities.
In addition, the presence of such substances, or the failure to properly dispose of or remediate such substances, may adversely affect the owner’s ability to sell or rent such property or to borrow using such property as collateral which, in turn, could reduce our revenues. 29 Prior to closing any property acquisition or loan, we ordinarily obtain Phase I environmental assessments in order to attempt to identify potential environmental concerns at the facilities.
Failure to refund amounts received pursuant to a prohibited referral may also constitute a false claim and result in additional penalties under the False Claims Act, which is discussed in greater detail below. 22 There are exceptions to the self-referral prohibition for many of the customary financial arrangements between physicians and providers, including employment contracts, leases and recruitment agreements.
Failure to refund amounts received pursuant to a prohibited referral may also constitute a false claim and result in additional penalties under the False Claims Act, which is discussed in greater detail below. 25 There are exceptions to the self-referral prohibition for many of the customary financial arrangements between physicians and providers, including employment contracts, leases and recruitment agreements.
In addition to enforcement by Federal and State agencies, in an effort to control health care costs, private payors such as employee welfare benefit plans administered by or for employers or unions have become increasing aggressive in bringing actions against providers alleging violations of antitrust laws. 25 Healthcare Industry Investigations .
In addition to enforcement by Federal and State agencies, in an effort to control health care costs, private payors such as employee welfare benefit plans administered by or for employers or unions have become increasing aggressive in bringing actions against providers alleging violations of antitrust laws. 28 Healthcare Industry Investigations .
Pursuant to the terms of our leases, our tenants are required to provide us with certain periodic financial statements and operating data. 16 Utilize Targeted Leverage in Our Investing Activities. We seek to utilize a targeted level of leverage that is appropriate in light of market conditions, future cash flows, the creditworthiness of tenants and future rental rates.
Pursuant to the terms of our leases, our tenants are required to provide us with certain periodic financial statements and operating data. 19 Utilize Targeted Leverage in Our Investing Activities. We seek to utilize a targeted level of leverage that is appropriate in light of market conditions, future cash flows, the creditworthiness of tenants and future rental rates.
This diversification limits our exposure for any single tenant that encounters financial or operational difficulties. Protected Markets . In eight of the nine states in which we operate, we benefit from CON laws that require state approval for the constructions and expansion of certain types of healthcare facilities.
This diversification limits our exposure for any single tenant that encounters financial or operational difficulties. Protected Markets . In eight of the nine states in which we operate, we benefit from CON laws that require state approval for the construction and expansion of certain types of healthcare facilities.
We believe that the diverse operational and financial background and expertise of our management team gives us the ability to successfully manage our portfolio and sustain our growth. 15 Our Business and Growth Strategies Our objective is to generate attractive returns for our stockholders over the long-term through dividends and capital appreciation.
We believe that the diverse operational and financial background and expertise of our management team gives us the ability to successfully manage our portfolio and sustain our growth. 18 Our Business and Growth Strategies Our objective is to generate attractive returns for our stockholders over the long term through dividends and capital appreciation.
The False Claims Act defines the term “knowingly” broadly. Although simple negligence will not give rise to liability under the False Claims Act, submitting a claim with reckless disregard to its truth or falsity or failing to correct an error with in specified period of time constitutes a “knowing” submission.
The False Claims Act defines the term “knowingly” broadly. Although simple negligence will not give rise to liability under the False Claims Act, submitting a claim with reckless disregard to its truth or falsity or failing to correct an error within specified period of time constitutes a “knowing” submission.
If we acquire underperforming properties, we would expect to lease them to tenants and operators that have significant turnaround experience and support from experienced consultants. 14 Experienced and Adept Operators. We have strong and long-standing relationships with operators and their principals who have significant experience in operating successful skilled nursing facilities.
If we acquire underperforming properties, we would expect to lease them to tenants and operators that have significant turnaround experience and support from experienced consultants. 17 Experienced and Adept Operators. We have strong and long-standing relationships with operators and their principals who have significant experience in operating successful skilled nursing facilities.
CMS annually establishes payment rates for the PPS for each applicable facility type and level of care provided. 20 Amounts received under Medicare and Medicaid programs are generally significantly less than established facility gross charges for the services provided and may not reflect the provider’s costs.
CMS annually establishes payment rates for the PPS for each applicable facility type and level of care provided. 23 Amounts received under Medicare and Medicaid programs are generally significantly less than established facility gross charges for the services provided and may not reflect the provider’s costs.
We also face competition in leasing or subleasing available facilities to prospective tenants. 19 Regulation Healthcare Regulatory Matters The following discussion describes certain material healthcare laws and regulations that may affect our operations and those of our tenants/operators.
We also face competition in leasing or subleasing available facilities to prospective tenants. 22 Regulation Healthcare Regulatory Matters The following discussion describes certain material healthcare laws and regulations that may affect our operations and those of our tenants/operators.
Healthcare provider operating margins may continue to be under significant pressure due to the deterioration in pricing flexibility and payor mix, as well as increases in operating expenses that exceed increases in payments under the Medicare and Medicaid programs. 21 Anti-Kickback Statute .
Healthcare provider operating margins may continue to be under significant pressure due to the deterioration in pricing flexibility and payor mix, as well as increases in operating expenses that exceed increases in payments under the Medicare and Medicaid programs. 24 Anti-Kickback Statute .
The information found on, or otherwise accessible through, our website is not incorporated by reference into, nor does it form a part of, this report or any other document that we file with the SEC. 28
The information found on, or otherwise accessible through, our website is not incorporated by reference into, nor does it form a part of, this report or any other document that we file with the SEC. 30
Although skilled nursing and seniors housing occupancy rates have declined during the COVID-19 pandemic, we believe that these trends in population will support an increasing demand for skilled nursing services in the long-term, which in turn will likely support an increasing demand for the services provided within our properties. 9 Tenants and Operators Our properties are currently leased to 83 tenants under 27 lease agreements.
Although skilled nursing and seniors housing occupancy rates have declined during the COVID-19 pandemic, we believe that these trends in population will support an increasing demand for skilled nursing services in the long-term, which in turn will likely support an increasing demand for the services provided within our properties. 9 Tenants and Operators Our properties are currently leased to 109 tenants under 32 lease agreements.
Changes to the policy do not require stockholder approval. Our management does not have a fixed policy relating to the sale of properties. Accordingly, each potential sale opportunity will be examined on its merits in view of the business opportunity involved. Our Leases As of March 27, 2023, all of our healthcare properties were subject to lease agreements.
Changes to the policy do not require stockholder approval. Our management does not have a fixed policy relating to the sale of properties. Accordingly, each potential sale opportunity will be examined on its merits in view of the business opportunity involved. Our Leases As of March 19, 2024, all of our healthcare properties were subject to lease agreements.
While these tenants and operators have been successful, we expect to seek opportunities to diversify our tenant/operator mix through future acquisitions that will be leased to new operators. 10 The following table contains information regarding our healthcare facility portfolio by tenant, as of March 27, 2023.
While these tenants and operators have been successful, we expect to seek opportunities to diversify our tenant/operator mix through future acquisitions that will be leased to new operators. 10 The following table contains information regarding our healthcare facility portfolio by tenant, as of March 19, 2024.
Each of our properties is leased under a separate lease agreement, although 8 groups of properties, covering a total of 64 facilities, are subject to 8 master lease agreements. Each master lease agreement provides that the tenants under the master lease are jointly and severally liable for the obligations of all of the other tenants under such master lease.
Each of our properties is leased under a separate lease agreement, although 11 groups of properties, covering a total of 88 facilities, are subject to 11 master lease agreements. Each master lease agreement provides that the tenants under the master lease are jointly and severally liable for the obligations of all of the other tenants under such master lease.
Additionally, our leases are structured to provide us with key credit support and have credit enhancement provisions that may include non-refundable security deposits of up to 6 months, personal and corporate guarantees and cross-default provisions under our master leases. Approximately 70.1% of our total annualized rental revenue is generated through our 8 master leases that have cross-default and cross-collateralization provisions.
Additionally, our leases are structured to provide us with key credit support and have credit enhancement provisions that may include non-refundable security deposits of up to 6 months, personal and corporate guarantees and cross-default provisions under our master leases. Approximately 72.9% of our total annualized rental revenue is generated through our 11 master leases that have cross-default and cross-collateralization provisions.
In January 2023, affiliates of Moishe Gubin and Michael Blisko acquired the membership interests held by the affiliate of Ted Lerman in all of the related party tenants. Rental income from leases with these related party tenants represented 64.0% of all rental income for the year ended December 31, 2022.
In January 2023, affiliates of Moishe Gubin and Michael Blisko acquired the membership interests held by the affiliate of Ted Lerman in all of the related party tenants. Rental income from leases with these related party tenants represented 67.3% of all rental income for the year ended December 31, 2023.
We believe that our geographic diversification limits the potential impact of any regulatory, reimbursement, competitive dynamic or other changes in any single market on the overall performance of our portfolio. We lease our properties to 83 tenants, with no single tenant accounting for more than 3.1% of our annualized base rent.
We believe that our geographic diversification limits the potential impact of any regulatory, reimbursement, competitive dynamic or other changes in any single market on the overall performance of our portfolio. We lease our properties to 109 tenants, with no single tenant accounting for more than 2.5% of our annualized base rent.
The team is led by Moishe Gubin, our Chief Executive Officer and Chairman of our Board of Directors, Nahman Eingal, our Chief Financial Officer, and Jeffrey Bajtner who serves as our Senior Investment Officer. Combined, this team has over 50 years of experience investing in real estate and particularly in healthcare related real estate and operating companies.
The team is led by Moishe Gubin, our Chief Executive Officer and Chairman of our Board of Directors, Greg Flamion, our Chief Financial Officer, and Jeffrey Bajtner who serves as our Chief Investment Officer. Combined, this team has over 50 years of experience investing in real estate and particularly in healthcare related real estate and operating companies. Mr.
Gubin worked as an operator of skilled nursing facilities and built a strong operational knowledge base that has been incorporated into the day-to-day management of our current portfolio. Additionally, Mr. Gubin has significant acquisition experience having completed over 80 healthcare-related facilities with an aggregate investment amount of over $900 million since 2003.
Gubin worked as an operator of skilled nursing facilities and built a strong operational knowledge base that has been incorporated into the day-to-day management of our current portfolio. Additionally, Mr. Gubin has significant acquisition experience having completed over 125 healthcare-related facilities with an aggregate investment amount of over $1.2 billion since 2003. Mr.
ITEM 1. Business We are a self-managed and self-administered company that specializes in the acquisition, ownership and triple-net leasing of skilled nursing facilities and other post-acute healthcare properties. As of the date of this Form 10-K, our portfolio consisted of 79 healthcare properties with an aggregate of 10,351 licensed beds.
ITEM 1. Business We are a self-managed and self-administered real estate company that specializes in the acquisition, ownership and triple-net leasing of skilled nursing facilities and other post-acute healthcare properties. As of the date of this Form 10-K, our portfolio consisted of 100 healthcare properties with an aggregate of 12,449 licensed beds.
We are entitled to monthly rent paid by the tenants and we do not receive any income or bear any expenses from the operation of such facilities. As of the date of this Form 10-K, the aggregate annualized average base rent under the leases for our properties was approximately $82.5 million.
We are entitled to monthly rent paid by the tenants and we do not receive any income or bear any expenses from the operation of such facilities. As of the date of this Form 10-K, the aggregate annualized average base rent for the expected life of the leases for our properties was approximately $102.3 million.
As of December 31, 2022, 100% of the gross leasable area of our facilities was leased with an average remaining lease term of 6.47 years.
As of December 31, 2023, 100% of the gross leasable area of our facilities was leased with an average remaining lease term of 6.4 years.
Our leases have a weighted-average annualized lease income per leased square foot of $23.35, and as of December 31, 2022, a weighted-average remaining lease term of approximately 6.47 years. To our knowledge, except as noted below, none of our current tenants are in default under any of the leases.
Our leases have a weighted-average annualized lease income per leased square foot of $23.81, and a weighted-average remaining lease term of approximately 6.4 years. To our knowledge, except as noted below, none of our current tenants are in default under any of the leases.
As of March 27, 2023, approximately 64.05% of our annualized base rent is received from such related-party tenants. The failure of these tenants to fulfill their obligations under their leases or renew their leases upon expiration could have a material adverse effect on our business, financial condition and results of operations.
As of March 19, 2024, approximately 67.3% of our annualized base rent is received from such related-party tenants. The failure of these tenants to fulfill their obligations under their leases or renew their leases upon expiration could have a material adverse effect on our business, financial condition and results of operations.
Our leases include 8 master lease agreements that cover 64 facilities leased to 64 tenants, with the remaining 19 leases each covering a single facility leased to one tenant. Forty-one of our tenants are related parties. Each property is operated as a healthcare facility by a licensed operator, which may be the tenant or a separate operator.
Our leases include 11 master lease agreements that cover 88 facilities leased to 88 tenants, with the remaining 21 leases each covering a single facility leased to one tenant. 65 of our tenants are related parties. Each property is operated as a healthcare facility by a licensed operator, which may be the tenant or a separate operator.
Geographic Diversification As of March 27, 2023, our portfolio of 79 properties is broadly diversified by geographic location across nine U.S. states, comprising Arkansas, Illinois, Indiana, Kentucky, Michigan, Ohio, Oklahoma, Tennessee and Texas.
Geographic Diversification As of March 19 , 2024, our portfolio of 100 properties is broadly diversified by geographic location across nine U.S. states, comprising Arkansas, Illinois, Indiana, Kentucky, Michigan, Ohio, Oklahoma, Tennessee and Texas.
Eingal also have significant experience accessing the debt capital markets to fund growth, having raised over $266 million of publicly traded bonds that are listed on the Tel Aviv Stock Exchange.
Gubin also has significant experience accessing debt capital markets to fund growth, having raised over $310 million of publicly traded bonds that are listed on the Tel Aviv Stock Exchange.
Annualized Average Base Rent ($000s) % of Total Annualized Average Base Rent Ambassador Nursing Realty, LLC Illinois SNF 37,100 $ 1,005 1.2 % Momence Meadows Realty, LLC Illinois SNF 37,139 $ 1,038 1.3 % Oak Lawn Nursing Realty, LLC Illinois SNF 37,854 $ 1,083 1.3 % Forest View Nursing Realty, LLC Illinois SNF 34,152 $ 1,215 1.5 % Lincoln Park Holdings, LLC Illinois SNF 34,362 $ 1,260 1.5 % Continental Nursing Realty, LLC Illinois SNF 53,653 $ 1,575 1.9 % Westshire Nursing Realty, LLC Illinois SNF 124,020 $ 1,788 2.1 % Belhaven Realty, LLC Illinois SNF 60,000 $ 2,135 2.6 % West Suburban Nursing Realty, LLC Illinois SNF 70,314 $ 1,962 2.4 % Niles Nursing Realty LLC Illinois SNF 46,480 $ 2,410 2.9 % Parkshore Estates Nursing Realty, LLC Illinois SNF 94,018 $ 2,454 3.0 % Midway Neurological and Rehabilitation Realty, LLC Illinois SNF 120,000 $ 2,548 3.1 % 516 West Frech Street, LLC Illinois SNF 24,979 $ 498 0.6 % 4343 Kennedy Drive, LLC Illinois SNF 104,000 $ 479 0.6 % 1316 North Tibbs Avenue Realty, LLC Indiana SNF 26,572 $ 550 0.7 % 1585 Perry Worth Rd, LLC Indiana SNF 32,650 $ 117 0.1 % 2301 North Oregon Realty, LLC Texas SNF 19,895 $ 740 0.9 % 2301 North Oregon Realty, LLC Texas LTACH 24,660 $ 960 1.2 % 9209 Dollarway Road, LLC Arkansas SNF 45,771 $ 843 1.0 % Total (19) 1,027,619 $ 24,660 29.9 % Investment and Financing Policies Our properties are located in 9 states and we intend to continue to acquire properties in other states throughout the United States.
Annualized Average Base Rent ($000s) % of Total Annualized Average Base Rent Ambassador Nursing Realty, LLC Illinois SNF 37,100 $ 1,005 1.0 % Momence Meadows Realty, LLC Illinois SNF 37,139 $ 1,038 1.0 % Oak Lawn Nursing Realty, LLC Illinois SNF 37,854 $ 1,083 1.1 % Forest View Nursing Realty, LLC Illinois SNF 34,152 $ 1,215 1.2 % Lincoln Park Holdings, LLC Illinois SNF 34,362 $ 1,260 1.2 % Continental Nursing Realty, LLC Illinois SNF 53,653 $ 1,575 1.5 % Westshire Nursing Realty, LLC Illinois SNF 124,020 $ 1,788 1.7 % Belhaven Realty, LLC Illinois SNF 60,000 $ 2,135 2.1 % West Suburban Nursing Realty, LLC Illinois SNF 70,314 $ 1,962 1.9 % Niles Nursing Realty LLC Illinois SNF 46,480 $ 2,410 2.4 % Parkshore Estates Nursing Realty, LLC Illinois SNF 94,018 $ 2,454 2.4 % Midway Neurological and Rehabilitation Realty, LLC Illinois SNF 120,000 $ 2,548 2.5 % 516 West Frech Street, LLC Illinois SNF 24,979 $ 498 0.5 % 4343 Kennedy Drive, LLC Illinois SNF 104,000 $ 479 0.5 % 1316 North Tibbs Avenue Realty, LLC Indiana SNF 26,572 $ 550 0.5 % 1585 Perry Worth Rd, LLC Indiana SNF 32,650 $ 117 0.1 % 9300 Ballard Rd Realty, LLC Illinois SNF 70,556 $ 1,302 1.3 % 2301 North Oregon Realty, LLC Texas LTACH 24,660 $ 1,050 1.0 % 9209 Dollarway Road, LLC Arkansas SNF 45,771 $ 843 0.8 % 100 Netherland Lane LLC Tennessee SNF 28,140 151 0.2 % 2648 Sevierville Road LLC Tennessee SNF 49,810 303 0.3 % Total (21) 1,156,230 $ 25,766 25.2 % Investment and Financing Policies Our properties are located in 9 states and we intend to continue to acquire properties in other states throughout the United States.
Available Information We file annual, quarterly and current reports, proxy statements and other information with SEC. The SEC maintains an internet site that contains these reports, and other information about issuers, like us, which file electronically with the SEC. The address of that site is http://www.sec.gov.
The SEC maintains an internet site that contains these reports, and other information about issuers, like us, which file electronically with the SEC. The address of that site is http://www.sec.gov.
We have a portfolio that is diversified in terms of both geography and tenant composition. As of March 27, 2023, our portfolio is comprised of 79 healthcare-related properties with a total of 10,351 licensed beds located throughout Arkansas, Illinois, Indiana, Kentucky, Michigan, Ohio, Oklahoma, Tennessee and Texas.
We have a portfolio that is diversified in terms of both geography and tenant composition. As of March 19 , 2024, our portfolio is comprised of 100 healthcare-related properties with a total of 12,449 licensed beds located throughout Arkansas, Illinois, Indiana, Kentucky, Michigan, Ohio, Oklahoma, Tennessee and Texas.
This acquisition is expected to generate initial annual cash revenues of approximately $0.6 million. 7 Our management team has extensive experience in acquiring, owning, financing, operating and leasing of skilled nursing facilities and other types of healthcare properties.
These acquisitions and leases are expected to generate initial annual cash revenues of approximately $0.45 million. 7 Our management team has extensive experience in acquiring, owning, financing, operating and leasing skilled nursing facilities and other types of healthcare properties.
Leverage Existing and Develop New Operator Relationships. Our management team has long-standing relationships in the healthcare industry through which we have sourced our existing portfolio, and we intend to continue to expand our portfolio by leveraging these existing relationships. Forty-one of our properties are leased to related parties.
Leverage Existing and Develop New Operator Relationships. relationships in the healthcare industry through which we have sourced our existing portfolio, and we intend to continue to expand our portfolio by leveraging these existing relationships. Sixty-five of our properties are leased to related parties.
In addition, our Adjusted EBITDA and FFO from 2018 to 2022 grew at an approximate 10.8% and 23.4% CAGR, respectfully. During that period, we expanded our geographic footprint from six states to nine states.
In addition, our Adjusted EBITDA and FFO from 2018 to 2023 grew at an approximate 10.4% and 18.6% CAGR, respectively. During that period, we expanded our geographic footprint from six states to nine states.
Related Party Tenants As of December 31, 2022, we leased 41 of our facilities to tenants that are affiliates of Moishe Gubin who serves as Chairman of the Board and our Chief Executive Officer, Michael Blisko, who serves as one of our directors, and Ted Lerman, one of the controlling members of the Predecessor Company.
Related Party Tenants As of March 19, 2024, we leased 65 of our facilities to tenants that are affiliates of: (i) Moishe Gubin who serves as Chairman of the Board and our Chief Executive Officer, (ii) Michael Blisko, who serves as one of our directors, and (iii) Ted Lerman, one of the controlling members of the Predecessor Company.
The following table summarizes information concerning the master lease agreements as of March 27, 2023 (dollars in thousands): Master Lease Agreements Master Lease Name States Facilities Count GLA Annualized Average Base Rent ($000s) % of Total Annualized Average Base Rent Master Lease Indiana (1) IN 13 463,593 $ 13,592 16.4 % Master Lease Central Illinois (2) IL 5 205,060 $ 2,130 2.6 % Master Lease Landmark TX/OK/ MI/IL/KY 17 740,212 $ 13,929 16.9 % Master Lease Ohio OH 4 73,311 $ 864 1.1 % Master Lease Tennessee 1 (1) TN 7 238,937 $ 8,422 10.2 % Master Lease Tennessee 2 (1) TN 5 185,344 $ 8,726 10.6 % Master Lease Arkansas 1 AR 9 414,706 $ 7,053 8.5 % Master Lease Arkansas 2 AR 4 130,429 $ 3,147 3.8 % Total (8) 64 2,451,592 $ 57,863 70.1 % (1) The tenants under the master leases in Indiana and the two Tennessee master leases are affiliated with Moishe Gubin, who is our Chairman and Chief Executive Officer and Michael Blisko, who is one of our directors.
The following table summarizes information concerning the master lease agreements as of March 19, 2024 (dollars in thousands): Master Lease Agreements Master Lease Name States Facilities Count GLA Annualized Average Base Rent ($000s) % of Total Annualized Average Base Rent Master Lease Indiana 1 (1) IN 13 463,593 $ 13,592 13.3 % Master Lease Indiana 2 (1) IN 24 705,730 $ 16,623 16.2 % Master Lease Central Illinois 1 IL 3 205,060 $ 1,657 1.6 % Master Lease Central Illinois 2 IL 2 45,231 601 .6 % Master Lease Landmark TX/OK/ MI/IL/KY 14 740,212 $ 14,164 13.8 % Master Lease Ohio OH 4 73,311 $ 864 .8 % Master Lease Tennessee 1 (1) TN 7 238,937 $ 8,136 8.0 % Master Lease Tennessee 2 (1) TN 5 185,344 $ 8,726 8.5 % Master Lease Arkansas 1 AR 9 414,706 $ 7,053 6.9 % Master Lease Arkansas 2 AR 4 130,429 $ 3,147 3.1 % Master Lease Texas TX 3 184,659 $ 1,994 1.95 % Total (11) 88 3,387,212 $ 76,557 74.8 % (1) The tenants under the two master leases in Indiana and the two Tennessee master leases are affiliated with Moishe Gubin, who is our Chairman and Chief Executive Officer and Michael Blisko, who is one of our directors.
The following table contains information regarding tenant/operators that are related parties of the Company as March 27, 2023: Manager/Tenant/Operators that are Related Parties Lessor/Company Subsidiary Manager/Tenant/Operator Beneficial Owner Percentage in Tenant/Operator by Related Party Moishe Gubin/Gubin Enterprises LP Michael Blisko/Blisko Enterprises LP Master Lease Indiana 1020 West Vine Street Realty, LLC The Waters of Princeton II LLC 49.24 % 50.25 % 12803 Lenover Street Realty LLC The Waters of Dillsboro – Ross Manor II LLC 49.24 % 50.25 % 1350 North Todd Drive Realty, LLC The Waters of Scottsburg II LLC 49.24 % 50.25 % 1600 East Liberty Street Realty LLC The Waters of Covington II, LLC 49.24 % 50.25 % 1601 Hospital Drive Realty LLC The Waters of Greencastle II LLC 49.24 % 50.25 % 1712 Leland Drive Realty, LLC The Waters of Huntingburg II LLC 49.24 % 50.25 % 2055 Heritage Drive Realty LLC The Waters of Martinsville II LLC 49.24 % 50.25 % 3895 South Keystone Avenue Realty LLC The Waters of Indianapolis II LLC 49.24 % 50.25 % 405 Rio Vista Lane Realty LLC The Waters of Rising Sun II LLC 49.24 % 50.25 % 950 Cross Avenue Realty LLC The Waters of Clifty Falls II LLC 49.24 % 50.25 % 958 East Highway 46 Realty LLC The Water of Batesville II LLC 49.24 % 50.25 % 2400 Chateau Drive Realty, LLC The Waters of Muncie II LLC 49.24 % 50.25 % The Big H2O, LLC The Waters of New Castle II LLC 49.24 % 50.25 % Master Lease Tennessee 115 Woodlawn Drive, LLC Lakebridge, a Waters Community, LLC 50.00 % 50.00 % 146 Buck Creek Road, LLC The Waters of Roan Highlands, LLC 50.00 % 50.00 % 704 5 TH Avenue East, LLC The Waters of Springfield, LLC 50.00 % 50.00 % 2501 River Road, LLC The Waters of Cheatham, LLC 50.00 % 50.00 % 202 Enon Springs Road East, LLC The Waters of Smyrna, LLC 50.00 % 50.00 % 140 Technology Lane, LLC The Waters of Johnson City, LLC 50.00 % 50.00 % 835 Union Street, LLC The Waters of Shelbyville, LLC 50.00 % 50.00 % Master Lease Tennessee 2 505 North Roan Street, LLC Agape Rehabilitation & Nursing Center, A Water’s Community, LLC 50.00 % 50.00 % 14510 Highway 79, LLC Waters of McKenzie, A Rehabilitation & Nursing Center, LLC 50.00 % 50.00 % 6500 Kirby Gate Boulevard, LLC Waters of Memphis, A Rehabilitation & Nursing Center, LLC 50.00 % 50.00 % 978 Highway 11 South, LLC Waters of Sweetwater, A Rehabilitation & Nursing Center, LLC 50.00 % 50.00 % 2830 Highway 394, LLC Waters of Bristol, A Rehabilitation & Nursing Center, LLC 50.00 % 50.00 % Individual Leases Ambassador Nursing Realty, LLC Ambassador Nursing and Rehabilitation Center II, LLC 40.00 % 40.00 % Momence Meadows Realty, LLC Momence Meadows Nursing and Rehabilitation Center, LLC 50.00 % 50.00 % Oak Lawn Nursing Realty, LLC Oak Lawn Respiratory and Rehabilitation Center, LLC 50.00 % 50.00 % Forest View Nursing Realty, LLC Forest View Rehabilitation and Nursing Center, LLC 50.00 % 50.00 % Lincoln Park Holdings, LLC Lakeview Rehabilitation and Nursing Center, LLC 40.00 % 40.00 % Continental Nursing Realty, LLC Continental Nursing and Rehabilitation Center, LLC 40.00 % 40.00 % Westshire Nursing Realty, LLC City View Multicare Center LLC 50.00 % 50.00 % Belhaven Realty, LLC Belhaven Nursing and Rehabilitation Center, LLC 35.00 % 35.00 % West Suburban Nursing Realty, LLC West Suburban Nursing and Rehabilitation Center, LLC 40.00 % 40.00 % Niles Nursing Realty LLC Niles Nursing & Rehabilitation Center, LLC 50.00 % 50.00 % Parkshore Estates Nursing Realty, LLC Parkshore Estates Nursing and Rehabilitation Center, LLC 50.00 % 50.00 % Midway Neurological and Rehabilitation Realty, LLC Midway Neurological and Rehabilitation Center, LLC 50.00 % 50.00 % 516 West Frech Street, LLC Parker Rehab & Nursing Center, LLC 50.00 % 50.00 % 4343 Kennedy Drive, LLC Hope Creek Nursing and Rehabilitation Center, LLC 27.50 % 27.50 % 1316 North Tibbs Avenue Realty LLC Westpark A Waters Community, LLC 50.00 % 50.00 % 1585 Perry Worth Road LLC The Waters of Lebanon LLC 50.00 % 50.00 % 12 We monitor the creditworthiness of our tenants by evaluating the ability of the tenants to meet their lease obligations to us based on the tenants’ financial performance, including the evaluation of any guarantees of tenant lease obligations.
As we continue to grow and expand our portfolio, we intend to develop new relationships with unrelated party tenants and operators in order to diversify our tenant base and reduce our dependence on related party and operators. 14 The following table contains information regarding tenant/operators that are related parties of the Company as March 19 , 2024: Manager/Tenant/Operators that are Related Parties Lessor/Company Subsidiary Manager/Tenant/Operator Beneficial Owner Percentage in Tenant/Operator by Related Party Moishe Gubin/Gubin Enterprises LP Michael Blisko/Blisko Enterprises LP Master Lease Indiana 1020 West Vine Street Realty, LLC The Waters of Princeton II LLC 49.49 % 50.1 % 12803 Lenover Street Realty LLC The Waters of Dillsboro – Ross Manor II LLC 49.49 % 50.51 % 1350 North Todd Drive Realty, LLC The Waters of Scottsburg II LLC 49.49 % 50.1 % 1600 East Liberty Street Realty LLC The Waters of Covington II, LLC 49.49 % 50.51 % 1601 Hospital Drive Realty LLC The Waters of Greencastle II LLC 49.49 % 50.51 % 1712 Leland Drive Realty, LLC The Waters of Huntingburg II LLC 49.49 % 50.1 % 2055 Heritage Drive Realty LLC The Waters of Martinsville II LLC 49.49 % 50.51 % 3895 South Keystone Avenue Realty LLC The Waters of Indianapolis II LLC 49.49 % 50.51 % 405 Rio Vista Lane Realty LLC The Waters of Rising Sun II LLC 49.49 % 50.51 % 950 Cross Avenue Realty LLC The Waters of Clifty Falls II LLC 49.49 % 50.51 % 958 East Highway 46 Realty LLC The Water of Batesville II LLC 49.24 % 50.51 % 2400 Chateau Drive Realty, LLC The Waters of Muncie II LLC 49.49 % 50.51 % The Big H2O, LLC The Waters of New Castle II LLC 49.49 % 50.51 % Master Lease Tennessee 115 Woodlawn Drive, LLC Lakebridge, a Waters Community, LLC 50.00 % 50.00 % 146 Buck Creek Road, LLC The Waters of Roan Highlands, LLC 50.00 % 50.00 % 704 5 TH Avenue East, LLC The Waters of Springfield, LLC 50.00 % 50.00 % 2501 River Road, LLC The Waters of Cheatham, LLC 50.00 % 50.00 % 202 Enon Springs Road East, LLC The Waters of Smyrna, LLC 50.00 % 50.00 % 140 Technology Lane, LLC The Waters of Johnson City, LLC 50.00 % 50.00 % 835 Union Street, LLC The Waters of Shelbyville, LLC 50.00 % 50.00 % Master Lease Tennessee 2 505 North Roan Street, LLC Agape Rehabilitation & Nursing Center, A Water’s Community, LLC 50.00 % 50.00 % 14510 Highway 79, LLC Waters of McKenzie, A Rehabilitation & Nursing Center, LLC 50.00 % 50.00 % 6500 Kirby Gate Boulevard, LLC Waters of Memphis, A Rehabilitation & Nursing Center, LLC 50.00 % 50.00 % 978 Highway 11 South, LLC Waters of Sweetwater, A Rehabilitation & Nursing Center, LLC 50.00 % 50.00 % 2830 Highway 394, LLC Waters of Bristol, A Rehabilitation & Nursing Center, LLC 50.00 % 50.00 % Master Lease Indiana 2 8400 Clearvista Place LLC The Waters of Castleton SNF, LLC 50.00 % 50.00 % 524 Anderson Road LLC The Waters of Chesterfield SNF, LLC 50.00 % 50.00 % 640 West Ellsworth Street LLC The Waters of Columbia City SNF, LLC 50.00 % 50.00 % 11563 West 300 South LLC The Waters of Dunkirk SNF, LLC 50.00 % 50.00 % 5544 East State Boulevard LLC The Waters of Fort Wayne SNF, LLC 50.00 % 50.00 % 548 South 100 West LLC The Waters of Hartford City SNF, LLC 50.00 % 50.00 % 2901 West 37th Avenue LLC The Waters of Hobart SNF, LLC 50.00 % 50.00 % 1500 Grant Street LLC The Waters of Huntington SNF, LLC 50.00 % 50.00 % 787 North Detroit Street LLC The Waters of LaGrange SNF, LLC 50.00 % 50.00 % 981 Beechwood Avenue LLC The Waters of Middletown SNF, LLC 50.00 % 50.00 % 317 Blair Pike LLC The Waters of Peru SNF, LLC 50.00 % 50.00 % 815 West Washington Street LLC The Waters of Rockport SNF 50.00 % 50.00 % 612 East 11th Street LLC The Waters of Rushville SNF 50.00 % 50.00 % 505 West Wolfe Street LLC The Waters of Sullivan SNF 50.00 % 50.00 % 500 East Pickwick Drive LLC The Waters of Syracuse SNF 50.00 % 50.00 % 300 Fairgrounds Road LLC The Waters of Tipton SNF 50.00 % 50.00 % 1900 Alber Street LLC The Waters of Wabash SNF East 50.00 % 50.00 % 1720 Alber Street LLC The Waters of Wabash SNF West 50.00 % 50.00 % 300 North Washington Street LLC The Waters of Wakarusa SNF 50.00 % 50.00 % 8400 Clearvista Place LLC The Waters of Castleton ALF, LLC 50.00 % 50.00 % 787 North Detroit Street LLC The Waters of LaGrange ALF, LLC 50.00 % 50.00 % 612 East 11th Street LLC The Waters of Rushville ALF, LLC 50.00 % 50.00 % 505 West Wolfe Street LLC The Waters of Sullivan ALF, LLC 50.00 % 50.00 % 300 North Washington Street LLC The Waters of Wakarusa ALF, LLC 50.00 % 50.00 % Individual Leases Ambassador Nursing Realty, LLC Ambassador Nursing and Rehabilitation Center II, LLC 40.00 % 40.00 % Momence Meadows Realty, LLC Momence Meadows Nursing and Rehabilitation Center, LLC 50.00 % 50.00 % Oak Lawn Nursing Realty, LLC Oak Lawn Respiratory and Rehabilitation Center, LLC 50.00 % 50.00 % Forest View Nursing Realty, LLC Forest View Rehabilitation and Nursing Center, LLC 50.00 % 50.00 % Lincoln Park Holdings, LLC Lakeview Rehabilitation and Nursing Center, LLC 40.00 % 40.00 % Continental Nursing Realty, LLC Continental Nursing and Rehabilitation Center, LLC 40.00 % 40.00 % Westshire Nursing Realty, LLC City View Multicare Center LLC 50.00 % 50.00 % Belhaven Realty, LLC Belhaven Nursing and Rehabilitation Center, LLC 50.00 % 50.00 % West Suburban Nursing Realty, LLC West Suburban Nursing and Rehabilitation Center, LLC 40.00 % 40.00 % Niles Nursing Realty LLC Niles Nursing & Rehabilitation Center, LLC 50.00 % 50.00 % Parkshore Estates Nursing Realty, LLC Parkshore Estates Nursing and Rehabilitation Center, LLC 50.00 % 50.00 % Midway Neurological and Rehabilitation Realty, LLC Midway Neurological and Rehabilitation Center, LLC 50.00 % 50.00 % 516 West Frech Street, LLC Parker Rehab & Nursing Center, LLC 50.00 % 50.00 % 1316 North Tibbs Avenue Realty LLC Westpark A Waters Community, LLC 50.00 % 50.00 % 1585 Perry Worth Road LLC The Waters of Lebanon LLC 50.00 % 50.00 % 100 Netherland Lance LLC The Waters of Kingsport LLC 50.00 % 50.00 % 15 We monitor the creditworthiness of our tenants by evaluating the ability of the tenants to meet their lease obligations to us based on the tenants’ financial performance, including the evaluation of any guarantees of tenant lease obligations.
We expect that the supply/demand imbalance in the skilled nursing industry will increasingly favor skilled nursing and assisted living providers due to the shift of patient care to lower cost settings and an aging population. ● Increased Demand Driven by Aging Populations .
Supply of new facilities is limited due to certificate of need restrictions. 71% of states have certificate of need restrictions., We expect that the supply/demand imbalance in the skilled nursing industry will increasingly favor skilled nursing providers due to the shift of patient care to lower cost settings and an aging population to meet the growing need for post-acute healthcare. ● Increased Demand Driven by Aging Populations .
We generate substantially all of our revenues by leasing our properties to tenants under long-term leases on a triple-net basis, under which the tenant pays the cost of real estate taxes, insurance and other operating costs of the facility and capital expenditures. Each healthcare facility located at our properties is managed by a qualified operator with an experienced management team.
We generate substantially all of our revenues by leasing our properties to tenants under long-term leases primarily on a triple-net basis, under which the tenant pays the cost of real estate taxes, insurance and other operating costs of the facility and capital expenditures. Our properties are currently leased to 109 tenants under 32 lease agreements.
Lessor/ Company Subsidiary Manager/Tenant/ Operator (1) State Property type Number of licensed beds Tenant Lease Expiration Year (2) Rentable square feet Percent leased Annualized Lease Income (in $) % of total Annualized Lease Income Annualized lease income per SQF (in $) Master Lease Indiana 1020 West Vine Street Realty LLC The Waters of Princeton II LLC IN SNF 95 2025 32,571 100 % 1,045,506 1.27 % 32.10 12803 Lenover Street Realty LLC The Waters of Dillsboro – Ross Manor II LLC IN SNF 123 2025 67,851 100 % 1,353,655 1.64 % 19.95 1350 North Todd Drive Realty, LLC The Waters of Scottsburg II LLC IN SNF 99 2025 28,050 100 % 1,089,527 1.32 % 38.84 1600 East Liberty Street Realty LLC The Waters of Covington II, LLC IN SNF 119 2025 40,821 100 % 1,309,634 1.59 % 32.08 1601 Hospital Drive Realty LLC The Waters of Greencastle II LLC IN SNF 100 2025 31,245 100 % 1,100,532 1.33 % 35.22 1712 Leland Drive Realty, LLC The Waters of Huntingburg II LLC IN SNF 95 2025 45,156 100 % 1,045,506 1.27 % 23.15 2055 Heritage Drive Realty LLC The Waters of Martinsville II LLC IN SNF 103 2025 30,060 100 % 1,133,548 1.37 % 37.71 3895 South Keystone Avenue Realty LLC The Waters of Indianapolis II LLC IN SNF 81 2025 25,469 100 % 891,431 1.08 % 35.00 405 Rio Vista Lane Realty LLC The Waters of Rising Sun II LLC IN SNF 58 2025 16,140 100 % 638,309 0.77 % 39.55 950 Cross Avenue Realty LLC The Waters of Clifty Falls II LLC IN SNF 138 2025 39,438 100 % 1,518,735 1.84 % 38.51 958 East Highway 46 Realty LLC The Water of Batesville II LLC IN SNF 86 2025 59,582 100 % 946,458 1.14 % 15.88 2400 Chateau Drive Realty, LLC The Waters of Muncie II LLC IN SNF 72 2025 22,350 100 % 792,383 0.96 % 35.45 The Big H2O LLC The Waters of New Castle II LLC IN SNF 66 2025 24,860 100 % 726,351 0.88 % 29.22 Master Lease Central Illinois 253 Bradington Drive, LLC Bria of Columbia LLC IL SNF 119 2032 43,189 100 % 279,872 0.34 % 6.48 3523 Wickenhauser, LLC Bria of Alton LLC IL SNF 181 2032 44,840 100 % 425,687 0.52 % 9.49 727 North 17 TH Street, LLC Belleville Healthcare Center LLC IL SNF 180 2032 50,650 100 % 423,335 0.51 % 8.36 107 South Lincoln Street LLC (3) Bria of Smithson, LLC IL SNF 0 0 21,150 0 % 367,518 0.45 % 17.38 1623 West Delmar Avenue, LLC Bria of Godfrey LLC IL SNF 68 2032 15,740 100 % 247,438 0.30 % 15.72 393 Edwardsville Road, LLC Bria of WoodRiver LLC IL SNF 106 2032 29,491 100 % 385,712 0.47 % 13.08 Master Lease Landmark 1621 Coit Road Realty, LLC Landmark of Plano Rehabilitation and Nursing Center, LLC TX SNF 160 2032 49,812 100 % 1,177,910 1.43 % 23.65 8200 National Avenue Realty, LLC Landmark of Midwest City Rehabilitation and Nursing Center, LLC OK SNF 106 2032 39,789 100 % 780,365 0.95 % 19.61 8200 National Avenue Realty, LLC Landmark of Midwest City Hospital, LLC OK LTACH 31 2032 49,319 100 % 228,220 0.28 % 4.63 5601 Plum Creek Drive Realty, LLC Landmark of Amarillo Rehabilitation and Nursing Center, LLC TX SNF 99 2032 60,031 100 % 728,832 0.88 % 12.14 9300 Ballard Road Realty, LLC Landmark of Des Plaines Rehabilitation and Nursing Center, LLC IL SNF 231 2032 70,556 100 % 1,700,607 2.06 % 24.10 911 South 3 rd Street, LLC Chalet Of Niles, LLC MI SNF 100 2032 31,895 100 % 736,193 0.89 % 19.61 1015 Magazine Street, LLC Landmark of River City Rehabilitation and Nursing Center, LLC KY SNF 92 2032 36,050 100 % 677,298 0.82 % 18.79 900 Gagel Avenue, LLC Landmark of Iroquois Park Rehabilitation and Nursing Center, LLC KY SNF 120 2032 36,374 100 % 883,432 1.07 % 24.29 308 West Maple Avenue, LLC Landmark of Lancaster Rehabilitation and Nursing Center, LLC KY SNF 96 2032 42,438 100 % 706,746 0.86 % 16.65 1155 Eastern Parkway, LLC Landmark of Louisville Rehabilitation and Nursing Center, LLC KY SNF 252 2032 106,250 100 % 1,855,208 2.25 % 17.46 203 Bruce Court, LLC Landmark of Danville Rehabilitation and Nursing Center, LLC, Goldenrod Village Assisted Living Center, LLC KY SNF/ ALF 108 2032 46,500 100 % 795,089 0.96 % 17.10 120 Life Care Way, LLC Landmark of Bardstown Rehabilitation and Nursing Center, LLC KY SNF 100 2032 36,295 100 % 736,193 0.89 % 20.28 1033 North Highway 11, LLC Landmark of Laurel Creek Rehabilitation and Nursing Center, LLC KY SNF 106 2032 32,793 100 % 780,365 0.95 % 23.80 945 West Russell Street, LLC Landmark of Elkhorn City Rehabilitation and Nursing Center, LLC KY SNF 106 2032 31,637 100 % 780,365 0.95 % 24.67 1253 Lake Barkley Drive, LLC Landmark of Kuttawa, A Rehabilitation & Nursing Center, LLC KY SNF 65 2032 37,892 100 % 478,526 0.58 % 12.63 420 Jett Drive, LLC Landmark of Breathitt County Rehabilitation and Nursing Center, LLC KY SNF 120 2031 32,581 100 % 883,432 1.07 % 27.11 Master Lease Ohio 3090 Five Points Hartford Realty, LLC Continent Health Company of Hartford, LLC OH SNF 54 2025 15,504 100 % 196,012 0.24 % 12.64 3121 Glanzman Road Realty, LLC Continent Health Company of Toledo, LLC OH SNF 84 2025 24,087 100 % 304,908 0.37 % 12.66 620 West Strub Road Realty, LLC Continent Health Company of Sandusky, LLC OH SNF 50 2025 18,984 100 % 181,493 0.22 % 9.56 4250 Sodom Hutchings Road Realty, LLC Continent Health Company of Cortland, LLC OH SNF 50 2025 14,736 100 % 181,493 0.22 % 12.32 Master Lease Tennessee 1 115 Woodlawn Drive, LLC Lakebridge A Waters Community, LLC TN SNF 109 2031 37,734 100 % 1,514,820 1.84 % 40.14 146 Buck Creek Road, LLC The Waters of Roan Highlands, LLC TN SNF 80 2031 30,139 100 % 1,111,794 1.35 % 36.89 704 5 TH Avenue East, LLC The Waters of Springfield, LLC TN SNF 66 2031 19,900 100 % 917,230 1.11 % 46.09 2501 River Road, LLC The Waters of Cheatham, LLC TN SNF 80 2031 37,953 100 % 1,111,794 1.35 % 29.29 202 Enon Springs Road East, LLC The Waters of Smyrna, LLC TN SNF 91 2031 34,070 100 % 1,264,666 1.53 % 37.12 140 Technology Lane, LLC The Waters of Johnson City, LLC TN SNF 84 2031 34,814 100 % 1,167,384 1.41 % 33.53 835 Union Street, LLC The Waters of Shelbyville, LLC TN SNF 96 2031 44,327 100 % 1,334,153 1.62 % 30.10 Master Lease Tennessee 2 505 North Roan Street, LLC Agape Rehabilitation & Nursing Center, A Water’s Community, LLC TN SNF 84 2031 27,100 100 % 1,628,910 1.97 % 60.11 14510 Highway 79, LLC Waters of McKenzie, A Rehabilitation & Nursing Center, A Water’s Community, LLC TN SNF 66 2031 22,454 100 % 1,279,858 1.55 % 57.00 6500 Kirby Gate Boulevard, LLC Waters of Memphis, A Rehabilitation & Nursing Center, LLC TN SNF 90 2031 51,565 100 % 1,745,261 2.11 % 33.85 978 Highway 11 South, LLC Waters of Sweetwater, A Rehabilitation & Nursing Center, LLC TN SNF 90 2031 30,312 100 % 1,745,261 2.11 % 57.58 2830 Highway 394, LLC Waters of Bristol, A Rehabilitation & Nursing Center, LLC TN SNF 120 2031 53,913 100 % 2,327,014 2.82 % 43.16 Master Lease Arkansas 1 5301 Wheeler Avenue, LLC Wheeler Avenue Operating LLC AR SNF 117 2028 41,490 100 % 821,950 1.00 % 19.81 414 Massey Avenue, LLC Massey Avenue ALF Operating LLC AR ALF 32 2028 12,548 100 % 224,807 0.27 % 17.92 706 Oak Grove Street, LLC Oak Grove Street Operating LLC AR SNF 97 2028 31,586 100 % 681,445 0.83 % 21.57 8701 Riley Drive, LLC Riley Drive Operating LLC AR SNF 140 2028 61,543 100 % 983,530 1.19 % 15.98 1516 Cumberland Street, LLC Cumberland Street Operating LLC AR SNF 120 2028 82,328 100 % 843,025 1.02 % 10.24 5720 West Markham Street, LLC West Markham Street Operating LLC AR SNF 154 2028 56,176 100 % 1,081,883 1.31 % 19.26 2501 John Ashley Drive, LLC John Ashley Drive Operating LLC AR SNF 140 2028 65,149 100 % 983,530 1.19 % 15.10 1513 South Dixieland Road, LLC South Dixieland Road Operating LLC AR SNF 110 2028 32,962 100 % 772,773 0.94 % 23.44 826 North Street, LLC North Street Operating LLC AR SNF 94 2028 30,924 100 % 660,370 0.80 % 21.35 Individual Leases Ambassador Nursing Realty, LLC Ambassador Nursing and Rehabilitation Center II, LLC IL SNF 190 2026 37,100 100 % 1,005,313 1.22 % 27.10 Momence Meadows Realty, LLC Momence Meadows Nursing and Rehabilitation Center, LLC IL SNF 140 2025 37,139 100 % 1,038,000 1.26 % 27.95 Oak Lawn Nursing Realty, LLC Oak Lawn Respiratory and Rehabilitation Center, LLC IL SNF 143 2031 37,854 100 % 1,083,048 1.31 % 28.61 Forest View Nursing Realty, LLC Forest View Rehabilitation and Nursing Center, LLC IL SNF 144 2024 34,152 100 % 1,215,483 1.47 % 35.59 Lincoln Park Holdings, LLC Lakeview Rehabilitation and Nursing Center, LLC IL SNF 178 2031 34,362 100 % 1,260,000 1.53 % 36.67 Continental Nursing Realty, LLC Continental Nursing and Rehabilitation Center, LLC IL SNF 208 2031 53,653 100 % 1,575,348 1.91 % 29.36 Westshire Nursing Realty, LLC City View Multicare Center, LLC IL SNF 485 2025 124,020 100 % 1,788,365 2.17 % 14.42 Belhaven Realty, LLC Belhaven Nursing and Rehabilitation Center, LLC IL SNF 221 2026 60,000 100 % 2,134,570 2.59 % 35.58 West Suburban Nursing Realty, LLC West Suburban Nursing and Rehabilitation Center, LLC IL SNF 259 2027 70,314 100 % 1,961,604 2.38 % 27.90 Niles Nursing Realty, LLC Niles Nursing & Rehabilitation Center, LLC IL SNF 304 2026 46,480 100 % 2,409,998 2.92 % 51.85 Parkshore Estates Nursing Realty, LLC Parkshore Estates Rehabilitation and Nursing Center, LLC IL SNF 318 2024 94,018 100 % 2,454,187 2.97 % 26.10 Midway Neurological and Rehabilitation Realty, LLC Midway Neurological and Rehabilitation Center, LLC IL SNF 404 2026 120,000 100 % 2,547,712 3.09 % 21.23 516 West Frech Street LLC Parker Rehab & Nursing Center, LLC IL SNF 102 2031 24,979 100 % 498,350 0.60 % 19.95 4343 Kennedy Drive, LLC Hope Creek Nursing and Rehabilitation Center, LLC IL SNF 245 2030 104,000 100 % 478,985 0.58 % 4.63 1316 North Tibbs Avenue Realty, LLC Westpark A Waters Community, LLC IN SNF 89 2024 26,572 100 % 549,884 0.67 % 20.69 1585 Perry Worth Road, LLC The Waters of Lebanon, LLC IN SNF 64 2027 32,650 100 % 116,677 0.14 % 3.57 1621 Coit Road Realty, LLC None TX Flex-space - - 24,906 - 0.00 % - 2301 North Oregon Realty, LLC MPD Operators Mesa Hills, LLC TX SNF 182 2027 19,895 100 % 737,455 0.89 % 37.17 2301 North Oregon Realty, LLC Mesa Hills Specialty Hospital Operator, LLC TX LTACH 32 2029 24,660 100 % 960,000 1.16 % 38.93 5601 Plum Creek Drive Realty, LLC None TX Flex-space - - 30,015 - 0.00 % - 9209 Dollarway Road, LLC Dollarway Road Operating LLC AR SNF 120 2029 45,771 100 % 843,026 1.02 % 18.42 Master Lease Arkansas 2 326 Lindley Lane, LLC Lindley Lane Operating LLC AR SNF 120 2029 49,675 100 % 850,639 1.03 % 17.12 2821 West Dixon Road, LLC West Dixon Road Operating LLC & West Dixon Road ALF Operating LLC AR SNF/ALF 172 2029 50,382 100 % 1,219,250 1.48 % 24.20 552 Golf Links Road, LLC Golf Links Road Operating LLC AR SNF 152 2029 30,372 100 % 1,077,476 1.31 % 35.48 Total/Average 10,351 3,534,132 100 % 82,520,652 100.00 % 23.35 (1) The tenant and the operator are the same for each facility other than the 13 SNFs leased under the Indiana master lease agreement and one SNF in Amarillo, Texas.
Lessor/Company Subsidiary Manager/ Tenant/ Operator City State Property type Number of licensed beds Tenant Lease Expiration Year (1) Rentable square feet Percent leased Annualized Lease Income (in $) % of total Annualized Lease Income Annualized lease income per SQF (in $) Master Lease IN 1020 West Vine St, LLC The Waters of Princeton II, LLC Princeton IN SNF 95 2025 32,571 100 % 1,045,506 1.02 % 32.10 12803 Lenover Street Realty, LLC The Waters of Dillsboro - Ross II, LLC Dillsboro IN SNF 123 2025 67,851 100 % 1,353,656 1.32 % 19.95 1350 North Todd St, LLC The Waters of Scottsburg II, LLC Scottsburg IN SNF 99 2025 28,050 100 % 1,089,528 1.06 % 38.84 1600 East Liberty Street Realty, LLC The Waters of Covington II, LLC Covington IN SNF 119 2025 40,821 100 % 1,309,634 1.28 % 32.08 1601 Hospital Dr Realty, LLC The Waters of Greencastle II, LLC Greencastle IN SNF 100 2025 31,245 100 % 1,100,533 1.08 % 35.22 1712 Leland Drive Realty, LLC The Waters of Huntingburg II, LLC Huntingburg IN SNF 95 2025 45,156 100 % 1,045,506 1.02 % 23.15 2055 Heritage Dr Realty, LLC The Waters of Martinsville II, LLC Martinsville IN SNF 103 2025 30,060 100 % 1,133,549 1.11 % 37.71 3895 Keystone Ave Realty, LLC The Waters of Indianapolis II, LLC Indianapolis IN SNF 81 2025 25,469 100 % 891,432 0.87 % 35.00 405 Rio Vista Lane Realty, LLC The Waters of Rising Sun II, LLC Rising Sun IN SNF 58 2025 16,140 100 % 638,309 0.62 % 39.55 950 Cross Ave Realty, LLC The Waters of Clifty Falls II, LLC Madison IN SNF 138 2025 39,438 100 % 1,518,736 1.48 % 38.51 958 East Highway 46 Realty, LLC The Water of Batesville II, LLC Batesville IN SNF 86 2025 59,582 100 % 946,458 0.92 % 15.88 2400 Chateau Drive Realty LLC The Waters of Muncie II, LLC Muncie IN SNF 72 2025 22,350 100 % 792,384 0.77 % 35.45 Big H2O The Waters of Newcastle II, LLC (2) New Castle IN SNF 66 2025 24,860 100 % 726,352 0.71 % 29.22 Master Lease 253, Alton, Midwest 253 Bradington Drive, LLC Bria of Columbia Columbia IL SNF 119 2032 43,189 100 % 410,821 0.40 % 9.51 3523 Wickenhauser, LLC Bria of Alton Alton IL SNF 181 2032 44,840 100 % 624,862 0.61 % 13.94 727 North 17th St, LLC Bria of Belleville Belleville IL SNF 180 2032 50,650 100 % 621,410 0.61 % 12.27 107 South Lincoln Street LLC Bria of Smithton Smithton 1623 West Delmar Ave, LLC Bria of Godfrey Godfrey IL SNF 68 2032 15,740 100 % 234,755 0.23 % 14.91 393 Edwardsville Road LLC Bria of Wood River Wood River IL SNF 106 2032 29,491 100 % 365,941 0.36 % 12.41 Master Lease Landmark 8200 National Ave Realty, LLC Landmark of Midwest City Nursing and Rehab Midwest City OK SNF 106 2032 39,789 100 % 1,072,382 1.05 % 26.95 8200 National Ave Realty, LLC Landmark of Midwest City Hospital Midwest City OK LTACH 31 2032 49,319 100 % 313,621 0.31 % 6.36 911 South 3rd St Realty LLC Chalet Of Niles Niles MI SNF 100 2032 31,895 100 % 1,011,681 0.99 % 31.72 1015 Magazine Street, LLC Landmark of River City Rehabilitation and Nursing Center Louisville KY SNF 92 2032 36,050 100 % 930,747 0.91 % 25.82 900 Gagel Avenue, LLC Landmark of Iroquois Park Rehabilitation and Nursing Center Louisville KY SNF 120 2032 36,374 100 % 1,214,018 1.18 % 33.38 308 West Maple Avenue, LLC Landmark of Lancaster Rehabilitation and Nursing Center Lancaster KY SNF 96 2032 42,438 100 % 971,214 0.95 % 22.89 1155 Eastern Parkway, LLC Landmark of Louisville Rehabilitation and Nursing Center Louisville KY SNF 252 2032 106,250 100 % 2,549,437 2.48 % 23.99 203 Bruce Court, LLC Landmark of Danville Rehabilitation and Nursing Center Danville KY SNF 90 2032 26,000 100 % 910,513 0.89 % 35.02 203 Bruce Court, LLC Goldenrod Village Assisted Living Center Danville KY ALF 16 2032 19,500 100 % 161,869 0.16 % 8.30 203 Bruce Court, LLC Hillside Suites Independent Living Center Danville KY Independent Living 0 2032 1,000 - 0.00 % - 120 Life Care Way, LLC Landmark of Bardstown Rehabilitation and Nursing Center Bardstown KY SNF 100 2032 36,295 100 % 1,011,681 0.99 % 27.87 1033 North Highway 11, LLC Landmark of Laurel Creek Rehabilitation and Nursing Center Manchester KY SNF 106 2032 32,793 100 % 1,072,382 1.05 % 32.70 945 West Russell Street, LLC Landmark of Elkhorn City Rehabilitation and Nursing Center Elkhorn City KY SNF 106 2032 31,637 100 % 1,072,382 1.05 % 33.90 420 Jett Drive, LLC Landmark of Breathitt County Rehabilitation and Nursing Center, LLC Jackson KY SNF 120 2032 32,581 100 % 1,214,018 1.19 % 37.26 1253 Lake Barkley Drive, LLC Landmark of Kuttawa, A Rehabilitation & Nursing Center Kuttawa KY SNF 65 2032 37,892 100 % 657,593 0.64 % 17.35 11 Lessor/Company Subsidiary Manager/ Tenant/ Operator City State Property type Number of licensed beds Tenant Lease Expiration Year (1) Rentable square feet Percent leased Annualized Lease Income (in $) % of total Annualized Lease Income Annualized lease income per SQF (in $) Master Lease Ohio - 3090 Five Points Hartford Realty, LLC Continent Healthcare Co - Hartford Fowler OH SNF 54 2025 15,504 100 % 196,012 0.19 % 12.64 3121 Glanzman Rd Realty, LLC Continent Healthcare Co - Toledo Toledo OH SNF 84 2025 24,087 100 % 304,908 0.30 % 12.66 620 West Strub Rd Realty, LLC Continent Healthcare Co - Sandusky Sandusky OH SNF 50 2025 18,984 100 % 181,493 0.18 % 9.56 4250 Sodom Hutchings Road Realty, LLC Continent Healthcare Co - Cortland Cortland OH SNF 50 2025 14,736 100 % 181,493 0.18 % 12.32 Master Lease TN 1 115 Woodlawn Drive, LLC Lakebridge a Waters Community, LLC Johnson City TN SNF 109 2031 37,734 100 % 1,463,458 1.43 % 38.78 146 Buck Creek Road, LLC Waters of Roan Highlands, LLC Roan Mountain TN SNF 80 2031 30,139 100 % 1,074,097 1.05 % 35.64 704 5th Avenue East, LLC Waters of Springfield, LLC Springfield TN SNF 66 2031 19,900 100 % 886,130 0.87 % 44.53 2501 River Road, LLC Waters of Cheatham, LLC Ashland City TN SNF 80 2031 37,953 100 % 1,074,097 1.05 % 28.30 202 Enon Springs East, LLC Waters of Smyrna, LLC Smyrna TN SNF 91 2031 34,070 100 % 1,221,786 1.19 % 35.86 140 Technology Lane, LLC Waters of Johnson City, LLC Johnson City TN SNF 84 2031 34,814 100 % 1,127,802 1.10 % 32.40 835 Union Street, LLC Waters of Shelbyville, LLC Shelbyville TN SNF 96 2031 44,327 100 % 1,288,917 1.26 % 29.08 Master Lease TN 2 505 North Roan Street, LLC Agape Rehabilitation & Nursing Center, A Water’s Community Johnson City TN SNF 84 2031 27,100 100 % 1,628,910 1.59 % 60.11 14510 Highway 79, LLC Waters of McKenzie, A Rehabilitation & Nursing Center McKenzie TN SNF 66 2031 22,454 100 % 1,279,858 1.25 % 57.00 6500 Kirby Gate Boulevard, LLC Waters of Memphis, A Rehabilitation & Nursing Center Memphis TN SNF 90 2031 51,565 100 % 1,745,261 1.71 % 33.85 978 Highway 11 South, LLC Waters of Sweetwater, A Rehabilitation & Nursing Center Sweetwater TN SNF 90 2031 30,312 100 % 1,745,261 1.71 % 57.58 2830 Highway 394, LLC Waters of Bristol, A Rehabilitation & Nursing Center Bristol TN SNF 120 2031 53,913 100 % 2,327,014 2.26 % 43.16 Master Lease AR 5301 Wheeler Avenue, LLC The Blossoms at Fort Smith Fort Smith AR SNF 117 2028 41,490 100 % 821,950 0.80 % 19.81 414 Massey Avenue, LLC The Blossoms at Mountain View Assisted Living Mountain View AR ALF 32 2028 12,548 100 % 224,807 0.22 % 17.92 706 Oak Grove Street, LLC The Blossoms at Mountain View Mountain View AR SNF 97 2028 31,586 100 % 681,445 0.67 % 21.57 8701 Riley Drive, LLC The Blossoms at Woodland Hills Little Rock AR SNF 140 2028 61,543 100 % 983,530 0.96 % 15.98 1516 Cumberland Street, LLC The Blossoms at Cumberland Little Rock AR SNF 120 2028 82,328 100 % 843,025 0.82 % 10.24 5720 West Markham Street, LLC The Blossoms at Midtown Little Rock AR SNF 154 2028 56,176 100 % 1,081,883 1.06 % 19.26 2501 John Ashley Drive, LLC The Blossoms at North Little Rock Little Rock AR SNF 140 2028 65,149 100 % 983,530 0.96 % 15.10 1513 South Dixieland Road, LLC The Blossoms at Rogers Rogers AR SNF 110 2028 32,962 100 % 772,773 0.76 % 23.44 826 North Street, LLC The Blossoms at Stamps Stamps AR SNF 94 2028 30,924 100 % 660,370 0.65 % 21.35 12 Lessor/Company Subsidiary Manager/ Tenant/ Operator City State Property type Number of licensed beds Tenant Lease Expiration Year (1) Rentable square feet Percent leased Annualized Lease Income (in $) % of total Annualized Lease Income Annualized lease income per SQF (in $) Master Lease AR SF LLC 326 Lindley Lane, LLC The Blossoms at Newport Newport AR SNF 120 2029 49,675 100 % 850,639 0.83 % 17.12 2821 West Dixon Road, LLC The Blossoms at West Dixon Little Rock AR SNF 140 2029 42,825 100 % 992,412 0.97 % 23.17 2821 West Dixon Road, LLC The Blossoms at West Dixon Assisted Living Little Rock AR ALF 32 2029 7,557 100 % 226,837 0.22 % 30.02 552 Golf Links Road, LLC The Blossoms at Hot Springs Hot Springs AR SNF 152 2029 30,372 100 % 1,077,476 1.05 % 35.48 Master Lease IN 2 SF LLC 8400 Clearvista Place LLC The Waters of Castleton SNF, LLC Indianapolis IN SNF 114 2029 41,400 100 % 1,023,207 1.00 % 24.72 524 Anderson Road LLC The Waters of Chesterfield SNF, LLC Chesterfield IN SNF 60 2029 21,900 100 % 538,530 0.53 % 24.59 640 West Ellsworth Street LLC The Waters of Columbia City SNF, LLC Columbia City IN SNF 84 2029 30,462 100 % 753,942 0.74 % 24.75 11563 West 300 South LLC The Waters of Dunkirk SNF, LLC Dunkirk IN SNF 46 2029 19,800 100 % 412,873 0.40 % 20.85 5544 East State Boulevard LLC The Waters of Fort Wayne SNF, LLC Ft.
The full amount of the rent payments under the master lease are continuing to be paid. 18 The following table summarizes information concerning the lease agreements that are not subject to a master lease agreement as of March 27, 2023 (dollars in thousands): Individual Leases Lessor State Facility Type Rentable Sq. Ft.
See “Item 1. Business — Our Leases.” 21 The following table summarizes information concerning the lease agreements that are not subject to a master lease agreement as of March 19, 2024 (dollars in thousands): Individual Leases Lessor State Facility Type Rentable Sq. Ft.
Our employees are not members of any labor union, and we consider our relations with our employees to be satisfactory. 27 We endeavor to maintain workplaces that are free from discrimination or harassment on the basis of color, race, sex, national origin, ethnicity, religion, age, disability, sexual orientation, gender identification or expression or any other status protected by applicable law.
We endeavor to maintain workplaces that are free from discrimination or harassment on the basis of color, race, sex, national origin, ethnicity, religion, age, disability, sexual orientation, gender identification or expression or any other status protected by applicable law. The basis for recruitment, hiring, development, training, compensation and advancement at the Company is qualifications, performance, skills and experience.
Human Capital Resource Management As of December 31, 2022, we had 8 full-time employees. Our employees are primarily located at our corporate office in Chicago.
Human Capital Resource Management As of December 31, 2023, we had 9 full-time employees. Our employees are primarily located at our corporate office in Chicago. Our employees are not members of any labor union, and we consider our relations with our employees to be satisfactory.
We operate through an umbrella partnership, commonly referred to as an UPREIT structure, in which substantially all of our properties and assets are held through Strawberry Fields Realty, L.P. (the “Operating Partnership”). We are the general partner of the Operating Partnership and own approximately 12.0% of the outstanding OP units.
We believe that we have been organized and have operated, and we intend to continue to operate, in a manner to qualify for taxation as a REIT. We operate through an umbrella partnership, commonly referred to as an UPREIT structure, in which substantially all of our properties and assets are held through Strawberry Fields Realty, L.P. (the “Operating Partnership”).
In the case of these other facilities, the tenants are county hospitals which have entered into management agreements with the operators listed in the table.
In the case of these other facilities, the tenants are county hospitals which have entered into management agreements with the operators listed in the table. These arrangements permit the facilities to participate in a CMS program that pays higher Medicaid reimbursement rates for facilities associated with hospitals in underserved areas.
As we continue to acquire additional properties and expand our portfolio, we expect to continue diversifying our portfolio by geography and by tenant, while also maintaining balance sheet strength and liquidity.
As we continue to acquire additional properties and expand our portfolio, we expect to continue diversifying our portfolio by geography and by tenant, while also maintaining balance sheet strength and liquidity. We elected to be taxed as a REIT for U.S. federal income tax purposes commencing with our taxable year ending December 31, 2022.
The following table contains information regarding our healthcare facility portfolio by geography, as of March 27, 2023: State Number of Properties Facility Type Licensed Bed Count Annualized Average Base Rent (Amounts in $000s) % of Total Annualized Average Base Rent Illinois (1) 20 20 SNFs 4,226 $ 25,281 30.6 % Indiana 15 15 SNFs 1,388 14,258 17.3 % Arkansas 13 12 SNFs 2 ALFs 1,568 11,044 13.4 % Kentucky 10 10 SNFs 1 ALF 1,165 8,577 10.4 % Tennessee 12 12 SNFs 1,056 17,148 20.8 % Texas 3 3 SNFs 1 LTACH 473 3,604 4.4 % Oklahoma 1 1 SNFs 1 LTACH 137 1,009 1.2 % Ohio 4 4 SNFs 238 864 1.0 % Michigan 1 1 SNF 100 736 0.9 % Totals 79 78 SNFs 2 LTACHs 3 ALFs 10,351 $ 82,521 100.0 % (1) In February 2023 one of the SNF we own in Southern Illinois was closed by the tenant for efficiency reasons.
The following table contains information regarding our healthcare facility portfolio by geography, as of March 19 , 2024: State Number of Properties Facility Type Licensed Bed Count Annualized Average Base Rent (Amounts in $000s) % of Total Annualized Average Base Rent Indiana 34 34 SNFs 5 ALFs 3,240 30,881 30.2 % Illinois 20 20 SNFs 4,226 $ 25,011 24.4 % Tennessee 14 14 SNFs 1,304 17,317 16.9 % Arkansas 13 12 SNFs 2 ALFs 1,568 11,044 10.8 % Kentucky 10 10 SNFs 1 ALF 1,163 11,766 11.5 % Texas 3 3 SNFs 1 LTACH 473 3,045 3.0 % Oklahoma 1 1 SNFs 1 LTACH 137 1,386 1.4 % Ohio 4 4 SNFs 238 864 0.8 % Michigan 1 1 SNF 100 1,012 1.0 % Totals 100 99 SNFs 2 LTACHs 8 ALFs 12,449 $ 102,326 100.0 % 16 Competitive Strengths We believe that the following competitive strengths provide a solid foundation for the sustained growth of our business and successful execution of our business strategies: Diversified Portfolio.
They have completed over 80 real estate related/healthcare related acquisitions totaling over $900 million in gross investment through various investment vehicles. Our management team also has extensive experience as operators of, and healthcare consultants to, skilled nursing facilities, having managed and operated over 60 skilled nursing facilities, including 41 of our current tenants.
In addition, our management team has extensive experience as operators of, and healthcare consultants to, skilled nursing facilities, having managed and operated over 90 skilled nursing facilities, including 65 of our current tenants.
From January 1, 2022, through March 27, 2023, we acquired one SNF for a total cost of approximately $6.0 million (including finder fees and leasehold improvements), which includes capitalized acquisition costs.
From January 1, 2023, through March 19, 2024, we acquired 25 skilled nursing and assisted living facilities for a total cost of $108.0 million (including finder fees and leasehold improvements), which includes capitalized acquisition costs. In addition to these acquisitions, we leased two facilities which we expect to acquire in Q2 2024.
We hold fee title to 78 of these properties, and hold one property under a long-term lease. These properties are located across Arkansas, Illinois, Indiana, Kentucky, Michigan, Ohio, Oklahoma, Tennessee and Texas.
We hold fee title to 97 of these properties and hold three properties under long-term leases. These properties are located across Arkansas, Illinois, Indiana, Kentucky, Michigan, Ohio, Oklahoma, Tennessee and Texas. Our 100 properties comprise 109 healthcare facilities, consisting of 99 skilled nursing facilities, 8 assisted living facilities and 2 long-term acute care hospitals.
According to the American Health Care Association, the nursing home industry was comprised of approximately 15,000 facilities as of December 2020, as compared with over 16,700 facilities as of December 2000.
According to the Valuation & Information Group, which provides appraisal and market reports for the industry, the nursing home industry is currently comprised of approximately 14,800 facilities, as compared with over 16,700 facilities as of December 2000.
Insurance We require our tenants to maintain general liability, professional liability, all risks and other insurance coverages and to name us as an additional insured under these policies. We believe that the policy specifications and insured limits are appropriate given the relative risk of loss, the cost of the coverage and industry practice.
We believe our employees are fairly compensated, and compensation and promotion decisions are made without regard to gender, race and ethnicity. Employees are routinely recognized for outstanding performance. Insurance We require our tenants to maintain general liability, professional liability, all risks and other insurance coverages and to name us as an additional insured under these policies.
Since the Predecessor Company was formed, we have grown significantly through acquisitions, having purchased 29 properties since January 2017, with an aggregate purchase price of approximately $204.1 million. Since 2017, our aggregate annualized average base rent has grown at an approximate 7.6% CAGR from $57.1 million in fiscal year 2017 to $82.5 million in fiscal year 2022.
Since 2017, our aggregate annualized average base rent for the expected life of the leases for our properties has grown at an approximate 10.2% CAGR from $57.1 million in fiscal year 2017 to $102.3 million as of the date of this Form 10-K.
Removed
Our 79 properties comprise 83 healthcare facilities, consisting of the following: ● 76 stand-alone skilled nursing facilities; ● two dual-purpose facilities used as both skilled nursing facilities and long-term acute care hospitals; and ● three assisted living facilities.
Added
Approximately 80.7% of our properties are held under a master lease which provides for cross default provisions, cross collateralization and diversification of risk. As of the date of this Form 10-K, our average remaining initial lease term is 6.4 years with average annual rent escalators of 2.7%. Most of our leases include two 5-year renewal options to extend the term.
Removed
As of December 31, 2022, we had notes receivable consisting of a working capital loan to one of our tenants with a balance of $1.9 million, two uncollateralized loans to purchasers of our former properties with an aggregate balance due of $9.1 million, an $8 million uncollateralized note that the Company purchased related to our Arkansas properties and a short-term loan with a balance of $0.4 million which was repaid in January 2023.
Added
Each healthcare facility located at our properties is managed by a qualified operator with an experienced management team.
Removed
All of the notes receivable are current. We elected to be taxed as a REIT for U.S. federal income tax purposes commencing with our taxable year ending December 31, 2022. We believe that we have been organized and have operated, and we intend to continue to operate, in a manner to qualify for taxation as a REIT.
Added
As of the date of this Form 10-K, 64 facilities representing 67.3% of our annualized base rent are leased to and operated by related parties that are affiliates of Moishe Gubin, who is our Chairman and Chief Executive Officer and Michael Blisko, who is one of our directors.
Removed
These arrangements permit the facilities to participate in a CMS program that pays higher Medicaid reimbursement rates for facilities associated with hospitals in underserved areas. 11 (2) The expiration dates do not reflect the exercise of any renewable options. (3) In February 2023 the facility was closed.
Added
These properties are operated by affiliates of Infinity Healthcare Management (“Infinity Healthcare”), a healthcare consulting business, beneficially owned by Mr. Gubin and Mr. Blisko/. Infinity Healthcare and its affiliates are one of the largest groups of operators of skilled nursing facilities in the Midwest with over 10,000 beds.
Removed
The closure was a result of the tenant request and mainly for efficiency reasons. This SNF is under a master lease with 5 other facilities and the full amount of the rent payments under the master lease are continuing to be paid.
Added
Our relationship with Infinity Healthcare provides us with unmatched insight into operating trends and industry developments. Additionally, our relationship with Infinity Healthcare provides us with operating flexibility with regard to evaluating potential new acquisitions or better understanding of operational issues pertaining to underperforming tenants.
Removed
As we continue to grow and expand our portfolio, we intend to develop new relationships with unrelated party tenants and operators in order to diversify our tenant base and reduce our dependence on related party and operators.
Added
Since January 2017 we have grown significantly through acquisitions, having purchased 52 properties, with an aggregate purchase price of approximately $335.1 million and weighted average lease yield of 15.0%. The weighted average lease yield is calculated as the annualized average annual base rent for the expected life of the leases divided by total purchase price.
Removed
This SNF is under a master lease with 5 other facilities and the full amount of the rent payments under the master lease are continuing to be paid. 13 Competitive Strengths We believe that the following competitive strengths provide a solid foundation for the sustained growth of our business and successful execution of our business strategies: Diversified Portfolio.
Added
Gubin began his career working at a skilled nursing operator in 1998 and developed in-depth knowledge of the business before purchasing his first skilled nursing facility in 2003. Mr. Gubin has successfully raised equity and debt capital to facilitate over 125 real estate related/healthcare related acquisitions totaling over $1.2 billion in gross investment.
Removed
Nahman Eingal, our Chief Financial Officer, has an extensive background in real estate finance with over 20 years of experience in the banking industry focusing on commercial lending to healthcare providers. Mr. Gubin and Mr.
Added
We are the general partner of the Operating Partnership and own approximately 12.6% of the outstanding OP units.
Removed
See “Item 1. Business — Our Leases.” (2) In February 2023 one of the SNF under the Southern Illinois Master Lease was closed. The closure was a result of the tenant request and mainly for efficiency reasons.
Added
Wayne IN SNF 77 2029 31,500 100 % 691,113 0.68 % 21.94 548 South 100 West LLC The Waters of Hartford City SNF, LLC Hartford City IN SNF 65 2029 22,400 100 % 583,407 0.57 % 26.04 2901 West 37th Avenue LLC The Waters of Hobart SNF, LLC Hobart IN SNF 110 2029 43,854 100 % 987,305 0.96 % 22.51 1500 Grant Street LLC The Waters of Huntington SNF, LLC Huntington IN SNF 85 2029 44,957 100 % 762,917 0.75 % 16.97 787 North Detroit Street LLC The Waters of LaGrange SNF, LLC Lagrange IN SNF 100 2029 31,133 100 % 897,550 0.88 % 28.83 981 Beechwood Avenue LLC The Waters of Middletown SNF, LLC Middletown IN SNF 60 2029 18,500 100 % 538,530 0.53 % 29.11 317 Blair Pike LLC The Waters of Peru SNF, LLC Peru IN SNF 130 2029 60,230 100 % 1,166,815 1.14 % 19.37 815 West Washington Street LLC The Waters of Rockport SNF Rockport IN SNF 60 2029 25,000 100 % 538,530 0.53 % 21.54 612 East 11th Street LLC The Waters of Rushville SNF Rushville IN SNF 98 2029 16,572 100 % 879,599 0.86 % 53.08 505 West Wolfe Street LLC The Waters of Sullivan SNF Sullivan IN SNF 93 2029 15,600 100 % 834,721 0.82 % 53.51 500 East Pickwick Drive LLC The Waters of Syracuse SNF Syracuse IN SNF 66 2029 26,000 100 % 592,383 0.58 % 22.78 300 Fairgrounds Road LLC The Waters of Tipton SNF Tipton IN SNF 150 2029 30,970 100 % 1,346,325 1.32 % 43.47 1900 Alber Street LLC The Waters of Wabash SNF East Wabash IN SNF 84 2029 29,762 100 % 753,942 0.74 % 25.33 1720 Alber Street LLC The Waters of Wabash SNF West Wabash IN SNF 44 2029 12,956 100 % 394,922 0.39 % 30.48 300 North Washington Street LLC The Waters of Wakarusa SNF Wakarusa IN SNF 133 2029 48,000 100 % 1,193,741 1.17 % 24.87 8400 Clearvista Place LLC The Waters of Castleton ALF, LLC Indianapolis IN ALF 54 2029 43,900 100 % 484,677 0.47 % 11.04 787 North Detroit Street LLC The Waters of LaGrange ALF, LLC Lagrange IN ALF 17 2029 20,756 100 % 152,583 0.15 % 7.35 612 East 11th Street LLC The Waters of Rushville ALF, LLC Rushville IN ALF 29 2029 11,048 100 % 260,289 0.25 % 23.56 505 West Wolfe Street LLC The Waters of Sullivan ALF, LLC Sullivan IN ALF 32 2029 10,400 100 % 287,216 0.28 % 27.62 300 North Washington Street LLC The Waters of Wakarusa ALF, LLC Wakarusa IN ALF 61 2029 48,630 100 % 547,505 0.54 % 11.26 Master Lease TX 1621 Coit Road Realty, LLC Landmark of Plano Nursing and Rehab Plano TX SNF 160 2033 74,718 100 % 723,520 0.71 % 9.68 5601 Plum Creek Drive Realty, LLC Landmark of Amarillo Nursing and Rehab Amarillo TX SNF 99 2033 90,046 100 % 447,678 0.44 % 4.97 2301 North Oregon Realty, LLC Grace Point Wellness Center El Paso TX SNF 182 2033 19,895 100 % 823,004 0.80 % 41.37 13 Lessor/Company Subsidiary Manager/ Tenant/ Operator City State Property type Number of licensed beds Tenant Lease Expiration Year (1) Rentable square feet Percent leased Annualized Lease Income (in $) % of total Annualized Lease Income Annualized lease income per SQF (in $) Individual Leases Ambassador Nursing Realty, LLC Ambassador Nursing and Rehab, LLC Chicago IL SNF 190 2026 37,100 100 % 1,005,313 0.98 % 27.10 Momence Meadows Realty, LLC Momence Meadows Nursing & Rehab Center, LLC Momence IL SNF 140 2025 37,139 100 % 1,038,000 1.01 % 27.95 Oak Lawn Nursing Realty, LLC Oak Lawn Respiratory and Rehab center, LLC Oak Lawn IL SNF 143 2028 37,854 100 % 1,083,048 1.06 % 28.61 Forest View Nursing Realty, LLC Forest View Rehab and Nursing center, LLC Itasca IL SNF 144 2024 34,152 100 % 1,215,483 1.19 % 35.59 Lincoln Park Holdings, LLC Lakeview Rehab and Nursing center, LLC Chicago IL SNF 178 2031 34,362 100 % 1,260,000 1.23 % 36.67 Continental Realty, LLC Continental Nursing and Rehab, LLC Chicago IL SNF 208 2031 53,653 100 % 1,575,348 1.54 % 29.36 Westshire Realty, LLC City View Multi care Center LLC Cicero IL SNF 485 2025 124,020 100 % 1,788,365 1.75 % 14.42 Belhaven Realty, LLC Belhaven Nursing and Rehab, LLC Chicago IL SNF 221 2026 60,000 100 % 2,134,570 2.08 % 35.58 West Suburban Nursing Realty, LLC West Suburban Nursing & Rehab Center, LLC Bloomingdale IL SNF 259 2027 70,314 100 % 1,961,604 1.92 % 27.90 Niles Nursing Realty, LLC Niles Nursing & Rehab, LLC Niles IL SNF 304 2026 46,480 100 % 2,409,998 2.35 % 51.85 Parkshore Estates Nursing Realty, LLC Parkshore Estates Nursing & Rehab Center, LLC Chicago IL SNF 318 2024 94,018 100 % 2,454,187 2.40 % 26.10 Midway Neurological and Rehab Realty, LLC Midway Neurological and Rehab Center, LLC Bridgeview IL SNF 404 2026 120,000 100 % 2,547,713 2.49 % 21.23 516 West Frech St, LLC Parker Nursing and Rehab, LLC Streator IL SNF 102 2031 24,979 100 % 498,351 0.49 % 19.95 4343 Kennedy Drive, LLC Hope Creek Nursing and Rehabilitation Center, LLC East Moline IL SNF 245 2030 104,000 100 % 478,959 0.47 % 4.61 1316 North Tibbs Avenue Realty LLC West Park a water community Indianapolis IN SNF 89 2024 26,572 100 % 549,885 0.54 % 20.69 1585 Perry Worth Rd, LLC Waters of Lebanon LLC Lebanon IN SNF 64 2027 32,650 100 % 116,678 0.11 % 3.57 2301 North Oregon Realty, LLC Specialty Hospital Management El Paso TX LTACH 32 2029 24,660 100 % 1,050,853 1.03 % 42.61 9209 Dollarway Road, LLC The Blossoms at White Hall White Hall AR SNF 120 2029 45,771 100 % 843,022 0.82 % 18.42 9300 Ballard Rd Realty, LLC Zahav of DesPlaines Des Plaines IL SNF 231 2033 70,556 100 % 1,302,479 1.26 % 18.46 100 Netherland Lane, LLC Waters of Kingsport Kingsport TN SNF 67 2033 28,140 100 % 151,323 0.15 % 5.38 2648 Sevierville Road, LLC Asbury Inc - Maryville Maryville TN SNF 181 2033 49,810 100 % 302,647 0.30 % 6.08 Total/Average 12,449 2029 4,296,662 100.00 % 102,324,734 100.00 % 23.82 (1) The tenant and the operator are the same for each facility other than the 32 SNFs leased under the two Indiana master lease agreements and one SNF in Amarillo, Texas.
Removed
The basis for recruitment, hiring, development, training, compensation and advancement at the Company is qualifications, performance, skills and experience. We believe our employees are fairly compensated, and compensation and promotion decisions are made without regard to gender, race and ethnicity. Employees are routinely recognized for outstanding performance.
Added
(2) The expiration dates do not reflect the exercise of any renewable options.
Added
We believe that the policy specifications and insured limits are appropriate given the relative risk of loss, the cost of the coverage and industry practice. Available Information We file annual, quarterly and current reports, proxy statements and other information with SEC.

Item 2. Properties

Properties — owned and leased real estate

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The following table displays the expiration of the annualized contractual cash rental income under our lease agreements as of December 31, 2022 : Lease Expirations Year of Lease Expiration (1) Number of Leases Facilities GLA of Leases Expiring Percent of Portfolio GLA Annualized Base Rent Percentage of Total Annualized Base Rent Annualized Base Rent Per Sq.
The following table displays the expiration of the annualized contractual cash rental income under our lease agreements as of December 31, 2023: Lease Expirations Year of Lease Expiration (1) Number of Leases Facilities GLA of Leases Expiring Percent of Portfolio GLA Annualized Base Rent Percentage of Total Annualized Base Rent Annualized Base Rent Per Sq.
Real Estate and Accumulated Depreciation” of this Annual Report on Form 10-K. As of December 31, 2022, all of our properties are leased under long-term, triple-net leases.
Real Estate and Accumulated Depreciation” of this Annual Report on Form 10-K. As of December 31, 2023, almost all of our properties are leased under long-term, triple-net leases.
ITEM 2. Properties We hold fee title to 78 of these properties, and hold one property under a long-term lease. These properties are located across Arkansas, Illinois, Indiana, Kentucky, Michigan, Ohio, Oklahoma, Tennessee and Texas.
ITEM 2. Properties We hold fee title to 97 of these properties and hold three property under a long-term lease. These properties are located across Arkansas, Illinois, Indiana, Kentucky, Michigan, Ohio, Oklahoma, Tennessee and Texas.
Our 79 properties comprise 83 healthcare facilities, consisting of the following: ● 76 stand-alone skilled nursing facilities; ● two dual-purpose facilities used as both skilled nursing facilities and long-term acute care hospitals; and ● three assisted living facilities. Information regarding our properties as of December 31, 2022 are included in Item 15. “Exhibits and Financial Statement Schedules—Schedule III.
Our 100 properties comprise 109 healthcare facilities, consisting of the following: ● 99 stand-alone skilled nursing facilities; ● two dual-purpose facilities used as both skilled nursing facilities and long-term acute care hospitals; and ● eight assisted living facilities. Information regarding our properties as of December 31, 2023, are included in Item 15. “Exhibits and Financial Statement Schedules—Schedule III.
Ft. 2024 3 154,742 4.38 % 4,219,554 5.11 % $ 27.27 2025 19 698,063 19.75 % 17,281,846 20.94 % $ 24.76 2026 4 263,580 7.46 % 8,097,593 9.81 % $ 30.72 2027 3 122,859 3.48 % 2,815,767 3.41 % $ 22.92 2028 9 414,706 11.73 % 7,053,312 8.55 % $ 17.01 Thereafter 45 1,880,182 53.20 % 43,052,580 52.18 % $ 22.90 Total 83 3,534,132 100.0 % $ 82,520,652 100.0 % $ 23.35 (1) The year of each lease expiration is based on current contract terms. 29
Ft. 2024 3 154,742 3.67 % 4,219,554 4.31 % $ 27.27 2025 19 698,063 16.55 % 17,281,846 17.64 % $ 24.76 2026 4 263,580 6.25 % 8,097,593 8.26 % $ 30.72 2027 3 102,964 2.44 % 2,078,281 2.12 % $ 20.18 2028 9 414,706 9.83 % 7,053,312 7.20 % $ 17.01 Thereafter 69 2,584,657 61.26 % 59,262,131 60.48 % $ 22.93 Total 107 4,218,712 100.0 % $ 97,992,717 100.0 % $ 23.23 (1) The year of each lease expiration is based on current contract terms. 31

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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ITEM 3. Legal Proceedings We are not currently a party to any material legal proceedings other than the following: In March 2020, Joseph Schwartz, Rosie Schwartz and certain companies owned by them filed a complaint in the U.S.
ITEM 3. Legal Proceedings We are not currently a party to any material legal proceedings, that are not covered by insurance and expected to be resolved within policy limits, other than the following: In March 2020, Joseph Schwartz, Rosie Schwartz and certain companies owned by them filed a complaint in the U.S.
The defendants have filed an answer denying the plaintiffs’ claims and asserting counterclaims based on breach of contract. The parties are currently engaged in discovery.
The defendants have filed an answer denying the plaintiffs’ claims and asserting counterclaims based on breach of contract. This case has been dismissed without prejudice.
In each of these complaints, the plaintiffs asserted claims for fraud, breach of contract and rescission arising out of the defendants alleged failure to perform certain post-closing obligations under the purchase contracts. We have potential direct exposure for these claims because the subsidiaries of the Predecessor Company that were named as defendants are now subsidiaries of the Operating Partnership.
We have potential direct exposure for these claims because the subsidiaries of the Predecessor Company that were named as defendants are now subsidiaries of the Operating Partnership.
In March 2023, the plaintiffs filed a new complaint and again attempted to serve it on the defendants. It is the defendants’ position that service was defective and they intend to take appropriate steps to challenge the services and to have the complaint again dismissed.
In March 2023, the plaintiffs filed a new complaint and again attempted to serve it on the defendants. It is the defendants’ position that service was (once again, potentially) defective and sought a dismissal of the matter for want of prosecution by Joseph Schwartz, Rosie Schwartz and certain companies owned by them.
Added
The dismissal was granted, but has been appealed to the Illinois Appellate Court, with no substantive movement on the matter to date. In each of these complaints, the plaintiffs asserted claims for fraud, breach of contract and rescission arising out of the defendants alleged failure to perform certain post-closing obligations under the purchase contracts.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Common Equity On September 23, 2022, our common stock commenced trading on the OTCQX market operated by the OTC Markets Group, Inc., under the symbol “STRW”. On February 22, 2023, our common stock commenced trading on the NYSE American market.
ITEM 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Common Equity On September 23, 2022, our common stock commenced trading on the OTCQX market operated by the OTC Markets Group, Inc., under the symbol “STRW”. On February 22, 2023, our common stock commenced trading on the NYSE American market, also under the symbol “STRW”.
This number of stockholders of record does not represent the actual number of beneficial owners of our common stock because shares of our common stock are also held in “street name” by securities dealers and others for the benefit of beneficial owners who may vote the shares.
This number of stockholders of record does not represent the actual number of beneficial owners of our common stock because shares of our common stock are also held in “street name” by securities brokers and others for the benefit of beneficial owners who may vote the shares.
The following table sets forth, for the periods indicated, the high and low sales prices for our common stock as reported on the OTCQX for third and fourth quarter of 2022. This information reflects inter-dealer prices, without retail mark-up, markdown or commission and may not represent actual transactions.
The following table sets forth, for the periods indicated, the high and low sales prices for our common stock as reported for each quarter of 2023. This information reflects inter-dealer prices, without retail mark-up, markdown or commission and may not represent actual transactions.
In addition, as of March 27, 2023, the Operating Partnership had 46,890,541 outstanding OP Units held by limited partners other than the Company. No public trading market exists for the OP Units. To maintain REIT status, we are required each year to distribute to stockholders at least 90% of our annual REIT taxable income after certain adjustments.
In addition, as of March 19 , 2024, the Operating Partnership had 45,373,615 outstanding OP Units held by 10 limited partners other than the Company. No public trading market exists for the OP Units. To maintain REIT status, we are required each year to distribute to stockholders at least 90% of our annual REIT taxable income after certain adjustments.
Following is the characterization of our annual cash dividends on common stock for 2022: Common Stock Ordinary dividend Non-dividend distributions $ 59,864 Capital Gain Distribution $ 576,721 Total taxable distribution $ 636,585 Purchases of Equity Securities by the Issuer and Affiliated Purchasers During 2022, affiliates of the Company purchased 3,220 shares of our common stock in the open market at an average price per share of $8.62 and an aggregate repurchase cost of $27,772.20.
Following is the characterization of our annual cash dividends on common stock for 2023: (dollars in thousands) Common Stock Ordinary dividend $ 2,572 Non-dividend distributions $ 265 Capital Gain Distribution $ 35 Total taxable distribution $ 2,872 Purchases of Equity Securities by the Issuer and Affiliated Purchasers During 2023, affiliates of the Company purchased 9,176 shares of our common stock in the open market at an average price per share of $6.95 and an aggregate repurchase cost of $63,751.
High Low Quarter Ended September 30, 2022 $ 10.30 $ 10.00 Quarter Ended December 31, 2022 $ 13.50 $ 7.90 As of March 27, 2023, 300 stockholders of record and approximately 208 shareholders held through brokerage accounts owned 6,365,856 issued and outstanding shares of common stock.
High Low Quarter Ended March 31, 2023 $ 9.25 $ 5.79 Quarter Ended June 30, 2023 $ 7.89 $ 5.79 Quarter Ended September 30, 2023 $ 7.41 $ 6.09 Quarter Ended December 31, 2023 $ 7.99 $ 5.93 As of March 19, 2024, 812 stockholders of record owned 6,474,175 issued and outstanding shares of common stock.
Securities Authorized for Issuance under Equity Compensation Plans The information required by Item 5 is incorporated by reference to our Definitive Proxy Statement for our 2023 annual stockholders’ meeting.
Period Number of Shares Average Price Paid Per Share Cumulative Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares That May Yet be Purchased Under the Plans or Programs October 1-31, 2023 - - - - November 1-30, 2023 - - - - December 1-31, 2023 5,953 $ 7.84 5,953 $ 4,954,000 Total 5,953 $ 7.84 5,953 $ 4,954,000 Securities Authorized for Issuance under Equity Compensation Plans The information required by Item 5 is incorporated by reference to our Definitive Proxy Statement for our 2024 annual stockholders’ meeting.
Removed
Recent Sales of Unregistered Securities During 2022, affiliates of the Company purchased 3,220 shares of our common stock in the open market at an average price per share of $8.62 and an aggregate repurchase cost of $27,772.20.
Added
During 2023, the Company converted 127,953 OP Units into shares of common stock. On November 9, 2023 the Board of Directors authorized the repurchase of up to $5 million of the Company’s common stock.
Added
As of December 31 st , 2023 the Company purchased 5,953 shares of common stock at an average price per share of $7.84 and an aggregate repurchase priced of $46,000.
Added
All common shares repurchased in the program have been retired and are now held as unissued shares available for use and reissuance for purpose as and when determined by the Board. The following table sets forth information regarding the Company’s repurchase of shares of its outstanding common stock during the three months ended December 31, 2023.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Accordingly, we actively monitor certain key factors, including changes in those factors that we believe may provide early indications of conditions that may affect the level of risk in our lease portfolio. 42 Key factors that we consider in underwriting prospective tenants and borrowers and in monitoring the performance of existing tenants include, but are not limited to, the following: ● the current, historical and projected cash flow and operating margins of each tenant and at each facility; ● the ratio of our tenants’ operating earnings both to facility rent and to facility rent plus other fixed costs, including debt costs; ● the quality and experience of the tenant and its management team; ● construction quality, condition, design and projected capital needs of the facility; ● the location of the facility; ● local economic and demographic factors and the competitive landscape of the market; ● the effect of evolving healthcare legislation and other regulations on our tenants’ profitability and liquidity; ● the payor mix of private, Medicare and Medicaid patients at the facility; and ● whether such tenants are related parties.
Accordingly, we actively monitor certain key factors, including changes in those factors that we believe may provide early indications of conditions that may affect the level of risk in our lease portfolio. 44 Key factors that we consider in underwriting prospective tenants and borrowers and in monitoring the performance of existing tenants include, but are not limited to, the following: ● the current, historical and projected cash flow and operating margins of each tenant and at each facility; ● the ratio of our tenants’ operating earnings both to facility rent and to facility rent plus other fixed costs, including debt costs; ● the quality and experience of the tenant and its management team; ● construction quality, condition, design and projected capital needs of the facility; ● the location of the facility; ● local economic and demographic factors and the competitive landscape of the market; ● the effect of evolving healthcare legislation and other regulations on our tenants’ profitability and liquidity; ● the payor mix of private, Medicare and Medicaid patients at the facility; and ● whether such tenants are related parties.
Certain business factors, in addition to those described above that directly affect our tenants, which in turn will likely materially influence our future results of operations: ● the financial and operational performance of our tenants; ● trends in the cost and availability of capital, including market interest rates, which our prospective tenants may use for their working capital financing; ● reductions in reimbursements from Medicare, state healthcare programs and commercial insurance providers that may reduce our tenants’ profitability and our lease rates; and ● competition from other financing sources. 43 Inflation We are exposed to inflation risk as income from long-term leases are a main source of our cash flows from operations.
Certain business factors, in addition to those described above that directly affect our tenants, which in turn will likely materially influence our future results of operations: ● the financial and operational performance of our tenants; ● trends in the cost and availability of capital, including market interest rates, which our prospective tenants may use for their working capital financing; ● reductions in reimbursements from Medicare, state healthcare programs and commercial insurance providers that may reduce our tenants’ profitability and our lease rates; and ● competition from other financing sources. 45 Inflation We are exposed to inflation risk as income from long-term leases are a main source of our cash flows from operations.
Since the Company was recently formed and just completed the formation transactions, certain of these critical accounting policies contain discussion of judgments and estimates that have not yet been required by management but that it believes may be reasonably required of it to make in the future. 40 Principles of Consolidation The consolidated financial statements include the accounts of our Operating Partnership and its wholly owned subsidiaries, and all material intercompany transactions and balances are eliminated in consolidation.
Since the Company was recently formed and just completed the formation transactions, certain of these critical accounting policies contain discussion of judgments and estimates that have not yet been required by management but that it believes may be reasonably required of it to make in the future. 42 Principles of Consolidation The consolidated financial statements include the accounts of our Operating Partnership and its wholly owned subsidiaries, and all material intercompany transactions and balances are eliminated in consolidation.
Series C Bonds In July 2021, the Company completed an initial offering of Series C Bonds with a par value of NIS 208.0 million ($64.7 million). The Series C Bonds were issued at par.
Series C Bonds In July 2021, the BVI Company completed an initial offering of Series C Bonds with a par value of NIS 208.0 million ($64.7 million). The Series C Bonds were issued at par.
Cash flows used in financing activities for the year ended December 31, 2022 were primarily comprised of $106 million in principal bond payments, REIT dividends of $0.6 million, a $10.9 million in distribution to the non-controlling interest holders and a decrease of $33.2 million in senior debt offset by a $105.0 million new borrowings under a mortgage loan facility.
Cash flows used in financing activities for the year ended December 31, 2022 were primarily comprised of $106 million in principal bond payments, REIT dividends of $0.6 million, a $10.9 million in distributions to the non-controlling interest holders and a decrease of $33.2 million in senior debt offset by a $105.0 million new borrowings under a mortgage loan facility.
However, Moishe Gubin, our Chairman and Chief Executive Officer, and Michael Blisko, one of our directors, as the controlling members of 41 of our tenants and related operators, have the ability to obtain information regarding these tenants and related operators and cause the tenants and operators to take actions, including with respect to occupancy.
However, Moishe Gubin, our Chairman and Chief Executive Officer, and Michael Blisko, one of our directors, as the controlling members of 64 of our tenants and related operators, have the ability to obtain information regarding these tenants and related operators and cause the tenants and operators to take actions, including with respect to occupancy.
As of December 31, 2022 and 2021 we determined that no allowance was necessary to cover the potential loss of rent from our tenants. 41 Real Estate Investments We make estimates as part of our allocation of the purchase price of acquisitions (whether an asset acquisition acquired via purchase/leaseback or a business combination via an asset acquired from the current lessor) to the various components of the acquisition based upon the relative fair value of each component for asset acquisitions and at fair value of each component for business combinations.
As of December 31, 2023 and 2022 we determined that no allowance was necessary to cover the potential loss of rent from our tenants. 43 Real Estate Investments We make estimates as part of our allocation of the purchase price of acquisitions (whether an asset acquisition acquired via purchase/leaseback or a business combination via an asset acquired from the current lessor) to the various components of the acquisition based upon the relative fair value of each component for asset acquisitions and at fair value of each component for business combinations.
The loans have an average maturity of 25.0 years. 37 Commercial Bank Term Loan On March 21, 2022, the Company closed a mortgage loan facility with a commercial bank pursuant to which the Company borrowed approximately $105 million. The facility provides for monthly payments of principal based on a 20-year amortization with a balloon payment due in March 2027.
The loans have an average maturity of 22 years. 39 Commercial Bank Term Loan On March 21, 2022, the Company closed a mortgage loan facility with a commercial bank pursuant to which the Company borrowed approximately $105 million. The facility provides for monthly payments of principal based on a 20-year amortization with a balloon payment due in March 2027.
The new credit facility financial covenants consist of (i) a covenant that the ratio of the Company’s indebtedness to its EBITDA cannot exceed 8.0 to 1, (ii) a covenant that the ratio of the Company’s net operating income to its debt service before dividend distribution is at least 1.20 to 1.00 for each fiscal quarter as measured pursuant to the terms of the loan agreement (iii) a covenant that the ratio of the Company’s net operating income to its debt service after dividend distribution is at least 1.05 to 1.00 for each fiscal quarter as measured pursuant to the terms of the loan agreement, and (iii) a covenant that the Company’s GAAP equity is at least $20,000,000.
Both credit facilities are subject to financial covenants which are consist of (i) a covenant that the ratio of the Company’s indebtedness to its EBITDA cannot exceed 8.0 to 1, (ii) a covenant that the ratio of the Company’s net operating income to its debt service before dividend distribution is at least 1.20 to 1.00 for each fiscal quarter as measured pursuant to the terms of the loan agreement (iii) a covenant that the ratio of the Company’s net operating income to its debt service after dividend distribution is at least 1.05 to 1.00 for each fiscal quarter as measured pursuant to the terms of the loan agreement, and (iii) a covenant that the Company’s GAAP equity is at least $20,000,000.
As a result, the overall average interest rate paid with respect to the HUD guaranteed loans as of December 31, 2022, was 3.88% per annum (including the mortgage insurance payments).
As a result, the overall average interest rate paid with respect to the HUD guaranteed loans as of December 31, 2023, was 3.97% per annum (including the mortgage insurance payments).
Accordingly, we intend to make, but are not contractually bound to make, regular quarterly dividends to common stockholders from cash flow from operating activities. All such dividends are at the discretion of our board of directors. As of December 31, 2022, we had cash and cash equivalents and restricted cash and equivalents of $45.7 million.
Accordingly, we intend to make, but are not contractually bound to make, regular quarterly dividends to common stockholders from cash flow from operating activities. All such dividends are at the discretion of our board of directors. As of December 31, 2023, we had cash and cash equivalents and restricted cash and equivalents of $37.8 million.
The rate is based on the one-month Secured Overnight Financing Rate (“SOFR”) plus a margin of 3.5% and a floor of 4% (as of the December 31, 2022 the rate was 7.68%). As of December 31, 2022, total outstanding principal amount was $102.39 million. This loan is collateralized by 21 properties owned by the Company.
The rate is based on the one-month Secured Overnight Financing Rate (“SOFR”) plus a margin of 3.5% and a floor 4% (as of the December 31, 2023 the rate was 8.84%). As of December 31, 2023, total outstanding principal amount was $98.8 million. This loan is collateralized by 21 properties owned by the Company.
We are entitled to monthly rent paid by the tenants and we do not receive any income or bear any expenses from the operations of such facilities. As of December 31, 2022, the aggregate annualized average base rent under the leases for our properties was approximately $82.5 million.
We are entitled to monthly rent paid by the tenants and we do not receive any income or bear any expenses from the operations of such facilities. As of the date of this report, the aggregate annualized average base rent under the leases for our properties was approximately $102.3 million.
As a result, we are subject to potential foreign currency transaction loss due to changes in the value of the U.S. dollar relative to the New Israel Shekel.
Foreign Currency Transaction Gain (Loss): Our bond indebtedness is denominated in NIS. As a result, we are subject to potential foreign currency transaction loss due to changes in the value of the U.S. dollar relative to the New Israel Shekel.
For the year ended December 31, 2022 and 2021, we excluded as non-recurring items the amount of $10.9 million and $8.8 million, respectively, in reclassification of foreign currency transaction losses the Company recorded with respect to foreign currency fluctuations that the Company realized at the time of bond principal payment.
For the year ended December 31, 2023 and 2022, we excluded as non-recurring items a gain in the amount of $0.5 million and a loss of $10.9 million, respectively, in reclassification of foreign currency transactions the Company recorded with respect to foreign currency fluctuations that the Company realized at the time of bond principal payment.
We also had the ability to offer additional Series C Bonds from the current outstanding of $55.69 million up to $179 million subject to compliance with covenants and market conditions. 35 Liquidity is a measure of our ability to meet potential cash requirements, including ongoing commitments to repay borrowings, fund and maintain our assets and operations, make distributions to our stockholders and other general business needs.
We also had the ability to offer additional Series C Bonds from the current outstanding of $60.8 loan up to $170.6 million and the ability to offer additional Series D Bonds from the current outstanding of $42.2 million up to $121.9 million is subject to compliance with covenants and market conditions. 37 Liquidity is a measure of our ability to meet potential cash requirements, including ongoing commitments to repay borrowings, fund and maintain our assets and operations, make distributions to our stockholders and other general business needs.
Overview Strawberry Fields REIT, Inc. (the “Company”) is engaged in the ownership, acquisition, financing and triple-net leasing of skilled nursing facilities and other post-acute healthcare properties. Currently, our portfolio consists of 79 healthcare properties with an aggregate of 10,351 licensed beds. We hold fee title to 78 of these properties and hold one property under a long-term lease.
Overview Strawberry Fields REIT, Inc. (the “Company”) is engaged in the ownership, acquisition, financing and triple-net leasing of skilled nursing facilities and other post-acute healthcare properties. Currently, our portfolio consists of 100 healthcare properties with an aggregate of 12,449 licensed beds. We hold fee title to 97 of these properties and hold three properties under long-term leases.
Summary of fixed and variable loans: December 31, 2022 2021 (Amounts in $000s) Fixed rate loans $ 351,566 $ 479,388 Variable rate loans 105,225 24,789 Gross Notes Payable and other Debt $ 456,791 $ 504,177 Funds From Operations (“FFO”) The Company believes that net income as defined by GAAP is the most appropriate earnings measure.
Summary of fixed and variable loans: December 31, 2023 2022 (Amounts in $000s) Fixed rate loans $ 374,335 $ 351,566 Variable rate loans 164,810 105,225 Gross Notes Payable and other Debt $ 539,145 $ 456,791 Funds From Operations (“FFO”) The Company believes that net income as defined by GAAP is the most appropriate earnings measure.
These Series C Bonds were issued at a price of 95.25%. 38 As of December 31, 2022, the outstanding principal amount of the Series C Bonds was NIS 195.5 million ($55.6 million). The Series C Bonds are traded on the TASE.
These Series C Bonds were issued at a price of 95.25%. 40 As of December 31, 2023, the outstanding principal amount of the Series C Bonds was NIS 220.5 million ($60.7 million). The Series C Bonds are traded on the TASE.
The Company expects to generate sufficient positive cash flow from operations to meet its ongoing debt service obligations and the distribution requirements for maintaining REIT status 36 Cash Flows The following table presents selected data from our consolidated statements of cash flows: Years Ended December 31, 2022 2021 (dollars in thousands) Net cash provided by operating activities $ 50,926 $ 44,786 Net cash used in investing activities (10,101 ) (58,288 ) Net cash (used in) provided by financing activities (47,249 ) 23,571 Net (decrease) increase in cash and cash equivalents and restricted cash and cash equivalents (6,424 ) 10,069 Cash and cash equivalents, and restricted cash and cash equivalents beginning of year 52,128 42,059 Cash and cash equivalents and restricted cash and cash equivalents, end of year $ 45,704 $ 52,128 Net cash provided by operating activities increased $6.1 million for the year ended December 31, 2022 compared to the year ended December 31, 2021, primarily due to an increase of $8 million in net income.
The Company expects to generate sufficient positive cash flow from operations to meet its ongoing debt service obligations and the distribution requirements for maintaining REIT status. 38 Cash Flows The following table presents selected data from our consolidated statements of cash flows: Years Ended December 31, 2023 2022 (dollars in thousands) Net cash provided by operating activities $ 54,944 $ 50,926 Net cash used in investing activities (106,348 ) (10,101 ) Net cash provided by (used in) financing activities 43,458 (47,249 ) Net decrease in cash and cash equivalents and restricted cash and cash equivalents (7,946 ) (6,424 ) Cash and cash equivalents, and restricted cash and cash equivalents beginning of year 45,704 52,128 Cash and cash equivalents and restricted cash and cash equivalents, end of year $ 37,758 $ 45,704 Net cash provided by operating activities increased $4.0 million for the year ended December 31, 2023 compared to the year ended December 31, 2022, primarily due to an increase of $6.9 million increase in accounts payable and accrued liabilities.
Series A Bonds In November 2015, Strawberry Fields REIT, Ltd., a wholly owned subsidiary of the Company (“BVI Company”) issued Series A Bonds in the face amount of New Israeli Shekels (“NIS”) 265.2 million ($68 million) and received the net amount, after issuance costs, NIS 251.2 million ($64.3 million).
Series A Bonds In November 2015, the Company, through a subsidiary, issued Series A Bonds in the face amount of NIS 265.2 million ($68 million) and received the net amount after issuance costs of NIS 251.2 million ($64.3 million).
As of December 31, 2022, on a consolidated basis, we had total indebtedness of approximately $456.8 million, consisting of $275.8 million in HUD guaranteed debt, $75.8 million in net Series A Bonds and Series C Bonds outstanding and $105.2 in commercial mortgages.
As of December 31, 2023, on a consolidated basis, we had total indebtedness of approximately $539.1 million, consisting of $271.4 million in HUD guaranteed debt, $102.9 million in net Series C Bonds and Series D Bonds outstanding and $164.8 million in commercial mortgages.
(2) The Company recognized a loss of $1,075,000 in the second quarter of 2022 due to the write-off of straight-line rent receivables related to the Southern Illinois facilities Dividend Plans We are required to pay dividends in order to maintain our REIT status and we expect to make quarterly dividend payments in cash with the annual dividend amount no less than 90% of our annual REIT taxable income, determined without regard to the dividends paid deduction and excluding any net capital gains.
Dividend Plans We are required to pay dividends in order to maintain our REIT status and we expect to make quarterly dividend payments in cash with the annual dividend amount no less than 90% of our annual REIT taxable income, determined without regard to the dividends paid deduction and excluding any net capital gains.
(Credit) Provision for Doubtful Accounts: During 2022, the Company recognized $5.6 million in income from the successful foreclosure of mortgages held by the Company on properties located in Massachusetts with respect to loans written off on December 31, 2021. The decrease in the provision for doubtful accounts of $10.8 million is primarily related to this recovery.
Credit for Doubtful Accounts: During 2022, the Company recognized $5.6 million in income from the recovery of a written off asset relating to the successful foreclosure of mortgages held by the Company on properties located in Massachusetts.
These types of obligations may materially adversely affect us, including our cash flows, financial condition and ability to make distributions. The Company believes that its overall level of indebtedness is appropriate for the Company’s business in light of its cash flow from operations and value of its properties and is generally typical for owners of multiple healthcare properties.
The Company believes that its overall level of indebtedness is appropriate for the Company’s business in light of its cash flow from operations and value of its properties and is generally typical for owners of multiple healthcare properties.
Outstanding Bond Debt As of December 31, 2022, the Company had outstanding Series A Bonds and Series C Bonds.
As of December 31, 2023, the Company was in compliance with the loan covenants. Outstanding Bond Debt As of December 31, 2023, the Company had outstanding Series C Bonds and Series D Bonds.
The following table reconciles our calculations of FFO and AFFO for the years ended December 31, 2022 and 2021, to net income, the most directly comparable GAAP financial measure (in thousands): 39 FFO and AFFO : Year Ended December 31, 2022 2021 (dollars in $1,000s) Net income $ 16,419 $ 8,419 Depreciation and amortization 28,558 27,488 Gain from Sale of Real Estate Investments - (3,842 ) Funds from Operations 44,977 32,065 Adjustments to FFO : (Credit) Provision for doubtful accounts (1) (5,636 ) 5,128 Straight-line rent (272 ) (2,032 ) Straight-line rent receivable write-off (2) 1,075 - Foreign currency transaction loss 10,932 8,775 Funds from Operations, as Adjusted $ 51,076 $ 43,936 (1) During the year ended December 31, 2022, the Company recovered $4.4 million in cash with respect to foreclosure sales of assets in Massachusetts.
Further, our computation of FFO and AFFO may not be comparable to FFO and AFFO reported by other REITs that do not define FFO in accordance with the current NAREIT definition or that interpret the current NAREIT definition or define AFFO differently than we do. 41 The following table reconciles our calculations of FFO and AFFO for the years ended December 31, 2023 and 2022, to net income, the most directly comparable GAAP financial measure (in thousands): FFO and AFFO : Year Ended December 31, 2023 2022 Net income $ 20,244 $ 16,419 Depreciation and amortization 29,235 28,558 Funds from Operations 49,479 44,977 Adjustments to FFO : Credit for doubtful accounts (1) - (5,636 ) Straight-line rent (30 ) (272 ) Straight-line rent receivable write-off (2) 230 1,075 Contact cancellation expense for proposed financing (3) 1,000 - Loss on real estate impairment (4) 2,451 - Foreign currency transaction (gain) loss (462 ) 10,932 Funds from Operations, as Adjusted $ 52,668 $ 51,076 (1) During the year ended December 31, 2022, the Company recovered $4.4 million in cash with respect to foreclosure sales of assets in Massachusetts.
During September 2016, the BVI Company issued additional Series A Bonds in the face amount of NIS 70.0 million ($18.6 million) and raised a net amount of NIS 70.8 million ($18.8 million). These Series A Bonds were issued at a premium of 103.6%.
During August 2023, the BVI Company issued additional Series D Bonds in the face amount of NIS 70.0 million ($19.3 million) and raised a net amount of NIS 152.9 million ($42.2 million). These Series D Bonds were issued at a price of 99.7%.
This SNF is under a master lease with 5 other facilities and the full amount of the rental payment under the master lease are continuing to be paid. 33 As of the date of this report, none of the Company’s tenants are delinquent on the payment of rent, and none of them have requested the Company to amend the terms of their leases to reduce current or future lease payments.
As of the date of this report, none of the Company’s tenants are delinquent on the payment of rent, and there have been no requests to amend the terms of their respective leases to reduce current or future lease payments.
Cash used in investing activities for the year ended December 31, 2022 primarily consisted of a net increase in notes receivable of $9.6 million, of which $8.0 million is a result of a note purchased related to our Arkansas properties and a loan of $2 million made to an unaffiliated nursing home operator in Illinois.
Cash used in investing activities for the year ended December 31, 2023, primarily consisted of a net increase in investment properties in the amount of $108.1 million and a decrease in notes receivable of $1.7 million. The decrease of $10.1 million during the year ended December 31, 2022 is due to an increase in note receivable of $9.6 million..
Results of Operations Operating Results Year Ended December 31, 2022 Compared to Year Ended December 31, 2021: Year Ended December 31, Increase / Percentage (dollars in thousands) 2022 2021 (Decrease) Difference Revenues: Rental revenues $ 92,543 $ 87,032 $ 5,511 6.3 % Expenses: Depreciation 25,530 24,460 1,070 4.4 % Amortization 3,028 3,028 - 0.0 % General and administrative expenses 6,012 6,297 (285 ) (4.5 )% Property and other taxes 13,131 10,623 2,508 23.6 % Facility rent expenses 532 735 (203 ) (27.6 % (Credit) Provision for doubtful accounts (5,636 ) 5,128 (10,764 ) (210 )% Total Expenses 42,597 50,271 (7,674 ) (15.3 )% Interest expense, net 20,507 21,261 (754 ) (3.5 )% Amortization of interest expense 504 379 125 33.0 % Mortgage Insurance Premium 1,704 1,769 (65 ) (3.7 )% Total Interest Expenses 22,715 23,409 (694 ) (3.0 )% Other (loss) income Other income 120 - 120 100 % Gain from sale of real estate investments - 3,842 (3,842 ) (100 )% Foreign currency transaction loss (10,932 ) (8,775 ) (2,157 ) 24.6 % Net Income 16,419 8,419 8,000 95 % Net income attributable to noncontrolling interest (14,567 ) (3,083 ) (11,484 ) 372.5 % Net income attributable to predecessor - (4,943 ) 4,943 (100 )% Net Income attributable to common stockholders 1,852 393 1,459 371.3 % Basic and diluted income per common share $ 0.31 $ 0.07 - - 34 Rental revenues: Rental revenues during 2022 increased by $5.5 million or 6.3% compared to fiscal year 2021 due to the six new properties acquired in August of 2021.
Results of Operations Operating Results Year Ended December 31, 2023 Compared to Year Ended December 31, 2022: Year Ended December 31, Increase / Percentage (dollars in thousands) 2023 2022 (Decrease) Difference Revenues: Rental revenues $ 99,805 $ 92,543 $ 7,262 7.8 % Expenses: Depreciation 26,207 25,530 677 2.7 % Amortization 3,028 3,028 - - Loss on real estate investment impairment 2,451 - 2,451 100 % General and administrative expenses 5,662 6,012 (350 ) (5.8 )% Property and other taxes 14,459 13,131 1,328 10.1 % Facility rent expenses 559 532 27 5.1 % Credit for doubtful accounts - (5,636 ) 5,636 100 % Total Expenses 52,366 42,597 9,769 22.9 % Interest expense, net 24,443 20,507 3.936 19.2 % Amortization of interest expense 560 504 56 11.1 % Mortgage Insurance Premium 1,671 1,704 33 1.9 % Total Interest Expenses 26,674 22,715 3,959 17.4 % Other (loss) income Other (loss) income (983 ) 120 (1,103 ) (919.2 )% Foreign currency transaction gain (loss) 462 (10,932 ) 11,394 104.2 % Net Income 20,244 16,419 3,825 23.3 % Net income attributable to non-controlling interest (17,748 ) (14,567 ) 3,181 21.8 % Net Income attributable to common stockholders 2,496 1,852 644 34.8 % Basic and diluted income per common share $ 0.39 $ 0.31 - - 36 Rental revenues: Rental revenues during 2023 increased by $7.3 million or 7.8% compared to fiscal year 2022, The additional rental income arising from the renegotiation of certain leases, the receipt of rent from the acquisition of 24 facilities and additional property taxes being reimbursed by the tenants.
Liquidity and Capital Resources To qualify as a REIT for federal income tax purposes, we are required to distribute at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction and excluding any net capital gains, to our stockholders on an annual basis.
Net Income: The increase in net income from $16.4 million during the year ended December 31, 2022 to $20.2 million in the year ended December 31, 2023 is primarily due to increases in rental revenue (net of increase in real estate taxes) and the decline in foreign currency losses offset by an impairment loss, the decline in credit for doubtful accounts, and an increase in interest expense Liquidity and Capital Resources To qualify as a REIT for federal income tax purposes, we are required to distribute at least 90% of our REIT taxable income, determined without regard to the dividends paid deduction and excluding any net capital gains, to our stockholders on an annual basis.
Through 2027 there are two balloon payment obligations consisting of a payment of $44.9 million due under the Series C Bonds in 2026 and a payment of $86.0 million due under our commercial bank term loan due in 2027. We may also obtain additional financing that contains balloon payment obligations.
Through 2027 there are four balloon payment obligations consisting of two payments of $52.6 million and $37.1 million due under the Series C Bonds and Series D bond in 2026, respectively and payments of $86.0 million and $60.7 million due under our two commercial bank term loans due in 2027 and 2028.
Each loan is secured by first mortgages on certain specified properties, interests in the leases for these properties and second liens on the operator’s assets.
Indebtedness Mortgage Loans Guaranteed by HUD As of December 31, 2023, we had non-recourse mortgage loans of $271.4 million from third party lenders that were guaranteed by HUD. Each loan is secured by first mortgages on certain specified properties, interests in the leases for these properties and second liens on the operator’s assets.
Depreciation and Amortization: Increase in depreciation of $1.07 million or 4.4% from fiscal year 2021 to fiscal year 2022 is primarily due to $64.1 million of new real estate investments in the third quarter of 2021.
Depreciation and Amortization: Increase in depreciation of $0.7 million or 2.7% from fiscal year 2022 to fiscal year 2023 is primarily due to $102.0 million of new real estate investments in the third quarter of 2023. Loss on real estate investment impairment: In February 2023, one facility under one of our Southern Illinois master leases was closed.
The Company recognized a loss of approximately $1,075,000 in the second quarter of 2022 due to the write-off of straight-line rent receivable related to the former leases. In October 2022, the Company extended a line of credit in the amount of $2.5 million to the new tenants for the Southern Illinois properties.
(2) The Company recognized a loss of $1,075,000 in the second quarter of 2022 due to the write-off of straight-line rent receivables related to the Southern Illinois facilities (3) The Company incurred a non-recurring expense of $1.0 million in the second quarter of 2023 in connection with the cancellation of a contract with an investment banking firm related to a proposed financing.
Cash flows generated from financing activities for the year ended December 31, 2021 were primarily comprised of $63 million in new bond proceeds and proceeds from the sale of bonds held by a subsidiary of $1.7 million.
Cash flows generated from financing activities for the year ended December 31, 2023 were primarily comprised of $52.4 million in new bond proceeds, REIT dividends of $2.9 million, a $20.6 million in distributions to the non-controlling interest holders and $69.2 million new borrowings under a mortgage loan facility.
In February 2023 one of the SNF’s owned by the Company in Southern Illinois was closed. The closure was a result of the tenant request and mainly for efficiency reasons.
(4) Loss on real estate investment impairment: In February 2023, one facility under one of our Southern Illinois master leases was closed. The closure was made at the request of the tenant and was mainly for efficiency reasons. This facility was leased under a master lease with two other facilities.
General and Administrative Expense: Decrease in general and administrative expenses of $0.3 million or 4.5% during fiscal year 2022 compared to fiscal year 2021 is primarily due to no stock-based compensation expense in 2022. In 2021, $250,000 of stock-based compensation was recognized.
General and Administrative Expense: The decrease in general and administrative expenses of $(0.4) million or 5.8% during fiscal year 2023 compared to fiscal year 2022 is primarily due to lower operating expenses incurred in the year ended December 31 , 2023 Property and other Taxes: The increase in property taxes of $1.3 million or 10.1% during fiscal year 2023 compared to fiscal year 2022 is primarily due was primarily due to increases in real estate taxes and franchise taxes partially as a result of the acquisition of the Indiana Facilities.
Removed
We are the general partner of the Operating Partnership and as of the date of the report own approximately 12.0% of the outstanding OP units. Recent Developments COVID-19 Update The pandemic caused by the coronavirus known as COVID-19 has not had a material adverse effect on the Company’s financial performance, results of operations, liquidity or access to financing.
Added
We are the general partner of the Operating Partnership and as of the date of the report own approximately 12.6% of the outstanding OP units. 34 Recent Developments On May 1, 2023, the Operating Partnership paid $15.6 million to redeem 1,454,308 OP units granted to the sellers of five properties in Tennessee and one in Kentucky the Company acquired in 2021.
Removed
However, the Company’s operations and financial performance are dependent on the ability of its tenants to meet their lease obligations to the Company.
Added
In connection with this payment, the Company contributed $0.7 million to the Operating Partnership and was issued 65,455 OP units. On June 19, 2023, the BVI Company completed an initial offering of Series D Bonds with a par value of NIS 82.9 million ($22.9 million). The Series D Bonds were issued at par and the interest rate is 9.1%.
Removed
To the Company’s knowledge and based on information provided to the Company by our tenants, the financial effects of the pandemic on the Company’s tenants have increased operating costs resulting from the implementation of safety protocols and procedures our tenants are taking to prevent and mitigate the potential outbreak and spread of COVID-19 at their facilities.
Added
During July 2023, the BVI Company issued additional Series D Bonds with a par value of NIS 70.0 million and raised a gross amount of $19.2 million (NIS 69.8 million). The Bonds were issued at a price of 99.7%. On August 25, 2023, the Company acquired 24 healthcare facilities (19 properties) located in Indiana (the “Indiana Facilities”) for $102.0 million.
Removed
Our tenants are also experiencing labor shortages resulting in limited admissions, reduced occupancy and higher agency expenses.
Added
The Indiana Facilities are comprised of 19 skilled nursing facilities with 1,659 licensed beds and five assisted living facilities with 193 beds, of which 29 beds are licensed. Annualized straight line rent for the facilities is expected to equal $12.7 million representing a weighted average lease yield of 12.4%.
Removed
The Company believes that the declines in occupancy were primarily due to declining referrals as a result of hospitals postponing elective surgeries as well as patients’ concerns regarding the risk of infection from COVID-19. 32 As a result of the COVID-19 pandemic, our tenants have received financial support under several government programs.
Added
On October 30, 2023 the Company entered into a lease agreement to re-tenant the three skilled nursing facilities located in Texas. The lease is for 10 years with annual escalations of 2.5%. The lease commenced on December 1, 2023.
Removed
These programs consisted of forgivable loans under Paycheck Protection Program, grants to operators under the Coronavirus Aid, Relief and Economic Security (CARES) Act in an amount equal to 2% of their historical annual revenues, accelerated payments under Medicare, and increased funding for Medicaid patients by some state governments. The financial support provisions of the CARES Act expired during 2022.
Added
On November 8, 2023, the Company paid off the remaining balance of the Series A Bonds, subject to a $900 prepayment penalty because the Bonds were repaid before the scheduled maturity date of July 2024. On December 12, 2023 the Company entered into a lease for two skilled nursing facilities with 226 licensed beds near Johnson City, Tennessee.
Removed
The Company’s management does not expect that the discontinuation of these government programs will have a material adverse effect on the tenants’ ability to pay rent for four reasons. First, the Company’s management believes that most nursing home residents in the United States have received vaccines for COVID-19, which have been effective in preventing serious illness.
Added
The lease includes a purchase option which the Company intends to exercise once certain conditions precedent are met. The lease commenced on January 1, 2024. On February 8 2024, the BVI Company issued additional Series D Bonds with a par value of NIS 100.0 million and raised a gross amount of $26.7 million (NIS 98.0 million).
Removed
Second, occupancy significantly increased between April 2021 and March 2023.
Added
The Bonds were issued at a price of 106.3%. 35 On February 20, 2024 the Company entered into a new, replacement master lease for the properties included in the Indiana acquisition completed in August of 2023. The tenant remains a group of tenants affiliated with two of the Company’s directors, Moishe Gubin and Michael Blisko.
Removed
Third, most of the Company’s tenants have the ability to maintain profitability notwithstanding the decrease in revenues because approximately 85% to 90% of their operating costs are variable items (such as labor costs, food, drugs and supplies, including personal protection equipment and cleaning supplies) that can be reduced when occupancy decreases.
Added
The new master lease has an initial term of ten years and is subject to 2 five-year extensions. The initial annual base rent for the properties is $14.5 million dollars and is subject to annual increases of 3%.
Removed
To the Company’s knowledge, its tenants are complying with all applicable governmental requirements and guidelines for addressing the risks posed by COVID-19.
Added
In connection with the new master lease, the existing purchase option held by the tenant, which was granted by the prior owner of the properties, of $127.0 million was terminated. Consideration for the termination of the purchase option and inducement for entering into the new, replacement master lease was $18.0 million paid to the tenants.
Removed
Although there have been a limited number of confirmed cases of COVID-19 at the facilities operated by the Company’s tenants, to its knowledge, other than our tenants operated under two master leases for a combine six facilities in central Illinois, these cases have not had a material impact on any of the operators.
Added
The $18.0 million payment was funded by cash and the proceeds from the additional Series D Bond issuance in February 2024.
Removed
Other Recent Developments On April 4, 2022, we were notified that the tenants under the master leases for 6 facilities located in central Illinois intended to default with respect to their lease agreements due to operating losses. The tenants indicated that their operating losses were due in part to decreased occupancy caused by COVID-19.
Added
The closure was made at the request of the tenant and was mainly for efficiency reasons. This facility was leased under a master lease with two other facilities. The closure did not result in any reduction in the aggregate rent payable under the master lease, which has been paid without interruption.
Removed
The tenants are affiliates of Steven Blisko, who is the brother of Michael Blisko, one of our directors. These leases provided for a combined rent of $225,000 per month, or $2.7 million per year. All payments due under these leases were paid through mid-June 2022.
Added
As a result of the closure, the Company is seeking to sell the property. Since the facility is no longer licensed to operate as a skilled nursing facility, the Company wrote off its remaining book value.
Removed
On July 1, 2022, the Company entered into new lease agreements with an unaffiliated third-party operator to lease these properties. The new leases have terms of 10 years each and provide for a combined average base rent of $180,000 per month, or $2.3 million per year over the life of the leases.
Added
Interest expense, net: The increase in interest expense of $3.9 million or 19.2% from Fiscal year 2022 to fiscal year 2023 is primarily related to additional interest payments for Series D Bonds, a second commercial bank loan facility obtained in connection with the acquisition of the Indiana Facilities, increases in the floating rate on the Company’s commercial bank loan facilities and additional interest on Series C Bonds that were issued in 2023.
Removed
This line of credit is secured by accounts receivable of the tenants. The line of credit bears interest at the greater of the prime rate or 4% per annum, plus margin of 2.75%. The maturity date of the line of credit is August 31, 2024.
Added
In 2022, we recorded a foreign currency transaction loss of $10.9 million in connection with the repayment of the Series B Bonds in 2022. There was a gain of $0.5 million in foreign currency transactions for 2023.
Removed
On January 3, 2023, the Company acquired the underlying property for $6.0 million, including $1 million in finder fees and $0.7 million in leasehold improvements, which was paid in cash. This property contains a skilled nursing facility with 120 licensed beds and approximately 34,824 square feet.
Added
Other (loss) income: The increase in other loss of $1.0 million was the result of a fee paid to an investment banking firm in connection with the cancellation of an agreement with respect to a proposed financing transaction.
Removed
Concurrently with the closing of the acquisition, we added the property to an existing master lease with an unaffiliated third-party operator. The lease has an initial term of 10 years, with two 5-year extension options. The initial annualized base rent is $600,000 with 3% annual rent escalation.
Added
We may also obtain additional financing that contains balloon payment obligations. These types of obligations may materially adversely affect us, including our cash flows, financial condition and ability to make distributions.
Removed
In addition, the loan made in August 2022 to the seller was repaid at closing. During February 2023, the Company issued an additional NIS 40.00 million in par value of Series C Bonds and received a gross amount of $10.73 million (NIS 38.1 million). The debentures were issued at a price of 95.25%.
Added
These amounts were offset by $24.0 million in principal bond payments, and $14.0 million of repayment of senior debt.
Removed
This increase was offset by a one-time loss of $1.1 million in the second quarter of 2022 due to the write-offs of straight-line rent receivables related to certain defaulted leases. Additionally, revenue was increased by $1.9 million due to additional property taxes being reimbursed by the tenants.
Added
On August 25, 2023, the Company closed a mortgage loan facility with a commercial bank pursuant to which the Company borrowed approximately $66 million. The facility provides for monthly payments of interest and payment of principal will start on August 2024 based on a 20-year amortization with a balloon payment due in August 2028.
Removed
Property and other Taxes: The increase in property taxes of $2.5 million or 23.6% during fiscal year 2022 compared to fiscal year 2021 is primarily due to increases in real estate taxes on gross leased properties and Tennessee franchise taxes paid in 2022.
Added
The rate is based on the one-month Secured Overnight Financing Rate (“SOFR”) plus a margin of 3.5% and a floor of 4% (as of the December 31, 2023, the rate was 8.84%). As of December 31, 2023, total outstanding principal amount was $66 million. This loan is collateralized by 19 properties owned by the Company.
Removed
Interest expense, net: The decrease in interest expense of $0.8 million or 3.6% from Fiscal year 2021 to fiscal year 2022 is primarily related to lower amount of bond principal and decline in total debt.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

3 edited+0 added−0 removed5 unchanged
Financial Statements and Supplementary Data See the Index to Consolidated Financial Statements on page F-1 of this report. 44 ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures None.
Financial Statements and Supplementary Data See the Index to Consolidated Financial Statements on page F-1 of this report. 46 ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures None.
At December 31, 2022, one month SOFR was 4.18%. Assuming no increase in the amount of our variable interest rate debt, if one-month SOFR increased 100 basis points, our annual cash flow would decrease by approximately $1,052,000.
At December 31, 2023, one month SOFR was 5.34%. Assuming no increase in the amount of our variable interest rate debt, if one-month SOFR increased 100 basis points, our annual cash flow would decrease by approximately $1.6 million.
As of December 31, 2022, we had $20.2 million net outstanding under our Series A Bonds, which bear interest at a fixed rate of 6.4% per annum, $55.6 million outstanding under our Series C Bonds, which bear interest at a fixed rate of 5.7% per annum, and $381.0 million in senior debt notes, of which $105.2 million (23.04% of total debt) bear interest at variable rate equal to one month SOFR plus a margin.
As of December 31, 2023, we had $60.8 million net outstanding under our Series C Bonds, which bear interest at a fixed rate of 5.7% per annum, $42.2 million outstanding under our Series D Bonds, which bear interest at a fixed rate of 9.1% per annum, and $436.2 million in senior debt notes, of which $164.8 million (37.78% of total debt) bear interest at variable rate equal to one month SOFR plus a margin.

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