What changed in Strawberry Fields REIT, Inc.'s 10-K — 2023 vs 2024
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Paragraph-level year-over-year comparison of Strawberry Fields REIT, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.
+147 added−126 removedSource: 10-K (2025-03-13) vs 10-K (2024-03-19)
Top changes in Strawberry Fields REIT, Inc.'s 2024 10-K
147 paragraphs added · 126 removed · 107 edited across 6 sections
- Item 7. Management's Discussion & Analysis+82 / −63 · 47 edited
- Item 1. Business+44 / −46 · 43 edited
- Item 5. Market for Registrant's Common Equity+11 / −8 · 8 edited
- Item 2. Properties+5 / −5 · 5 edited
- Item 7A. Quantitative and Qualitative Disclosures About Market Risk+3 / −3 · 3 edited
Item 1. Business
Business — how the company describes what it does
43 edited+1 added−3 removed198 unchanged
Item 1. Business
Business — how the company describes what it does
43 edited+1 added−3 removed198 unchanged
2023 filing
2024 filing
Biggest changeWayne 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.
Biggest changeElizabeth MO SNF 63 2033 20,927 100 % 569,678 0.4 % 27.22 Master Lease Kansas 520 E Morse Avenue LLC Advena Living of Bonner Springs Bonner Springs KS SNF 45 2034 13,456 100 % 349,745 0.3 % 25.99 440 N 4th Street LLC Clearwater Assisted and Independent Living Clearwater KS SNF 46 2034 20,260 100 % 357,518 0.3 % 17.65 620 Wood Avenue LLC Advena Living of Clearwater Clearwater KS ALF 55 2034 25,577 100 % 427,467 0.3 % 16.71 601 N Rose Hill Road LLC Advena Living of Fountainview Rose Hill KS SNF 68 2034 33,360 100 % 528,504 0.4 % 15.84 2015 SE 10th Avenue LLC Advena Living on 10th Topeka KS SNF 60 2034 22,877 100 % 466,327 0.3 % 20.38 1600 S Woodlawn Boulevard LLC Advena Living of Woodlawn Wichita KS SNF 80 2034 29,164 100 % 621,770 0.5 % 21.32 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 0.7 % 27.10 Momence Meadows Realty, LLC Momence Meadows Nursing & Rehab Center, LLC Momence IL SNF 140 2025 37,139 100 % 1,038,000 0.8 % 27.95 Lincoln Park Holdings, LLC Lakeview Rehab and Nursing center, LLC Chicago IL SNF 178 2031 34,362 100 % 1,260,000 0.9 % 36.67 Continental Realty, LLC Continental Nursing and Rehab, LLC Chicago IL SNF 208 2031 53,653 100 % 1,575,348 1.2 % 29.36 Westshire Realty, LLC City View Multi care Center LLC Cicero IL SNF 485 2025 124,020 100 % 1,788,365 1.3 % 14.42 Belhaven Realty, LLC Belhaven Nursing and Rehab, LLC Chicago IL SNF 221 2026 60,000 100 % 2,134,570 1.6 % 35.58 West Suburban Nursing Realty, LLC West Suburban Nursing & Rehab Center, LLC Bloomingdale IL SNF 259 2027 70,314 100 % 1,961,604 1.5 % 27.90 Niles Nursing Realty, LLC Niles Nursing & Rehab, LLC Niles IL SNF 304 2026 46,480 100 % 2,409,998 1.8 % 51.85 Midway Neurological and Rehab Realty, LLC Midway Neurological and Rehab Center, LLC Bridgeview IL SNF 404 2026 120,000 100 % 2,547,713 1.9 % 21.23 516 West Frech St, LLC Parker Nursing and Rehab, LLC Streator IL SNF 102 2031 24,979 100 % 498,351 0.4 % 19.95 4343 Kennedy Drive, LLC Hope Creek Nursing and Rehabilitation Center, LLC East Moline IL SNF 245 2030 104,000 100 % 478,959 0.4 % 4.61 1585 Perry Worth Rd, LLC Waters of Lebanon LLC Lebanon IN SNF 64 2027 32,650 100 % 116,678 0.1 % 3.57 2301 North Oregon Realty, LLC Specialty Hospital Management El Paso TX LTACH 32 2029 24,660 100 % 1,050,853 0.8 % 42.61 9209 Dollarway Road, LLC The Blossoms at White Hall White Hall AR SNF 120 2029 45,771 100 % 843,022 0.6 % 18.42 9300 Ballard Rd Realty, LLC Zahav of Des Plaines Des Plaines IL SNF 231 2033 70,556 100 % 1,302,479 1.0 % 18.46 103 Har-Ber Road LLC Grand Lake Villa Grove OK SNF 100 2034 31,691 100 % 573,809 0.4 % 18.11 Total/Average 14,540 2032 5,307,309 100 % 134,751,524 100.0 % 25.39 (1) The tenant and the operator are the same for each facility other than the 32 SNF’s leased under the two Indiana master lease agreements and five SNF’s leased in Texas.
We seek to structure our leases with lease terms of 10 years with tenant options to extend the lease for an additional period of 5 to 10 years and rent escalators that provide a steadily growing cash rental stream.
We seek to structure our leases with initial lease terms of 10 years with tenant options to extend the lease for an additional period of 5 to 10 years and rent escalators that provide a steadily growing cash rental stream.
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.
This diversification limits our exposure for any single tenant that encounters financial or operational difficulties. Protected Markets . In nine of the eleven 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.
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.
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 9,000 beds.
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.
Human Capital Resource Management As of December 31, 2024, 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.
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.
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-seven of our properties are leased to related parties.
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.
Gubin also has significant experience accessing debt capital markets to fund growth, having raised over $350 million of publicly traded bonds that are listed on the Tel Aviv Stock Exchange.
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.
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 67 of our current tenants.
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.
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 130 tenants under 31 lease agreements.
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.
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 140 healthcare-related facilities with an aggregate investment amount of over $1.5 billion since 2003. Mr.
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.
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 140 real estate related/healthcare related acquisitions totaling over $1.5 billion in gross investment.
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.
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 130 tenants under 31 lease agreements.
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.
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 $134.8 million.
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.
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 13, 2025, all of our healthcare properties were subject to lease agreements.
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.
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 13, 2025: 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 1 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 % 1316 North Tibbs Avenue Realty LLC Westpark A Waters Community, LLC 50.00 % 50.00 % 1002 Sister Barbara Way, LLC The Waters of Georgetown LLC 49.49 % 50.51 % 2640 Cold Spring Road Realty, LLC Alpha, A Waters Community, LLC 49.49 % 50.51 % Master Lease Tennessee 1 115 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 % 1340 North Grundy Quarles Highway, LLC Waters of Gainesboro, LLC 50.00 % 50.00 % 100 Netherland Lane, LLC Waters of Kingsport, LLC 50.00 % 50.00 % 2648 Sevierville Road, LLC Waters of Maryville, 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 % 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 % 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 % 1585 Perry Worth Road LLC The Waters of Lebanon 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 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.
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 130 tenants, with no single tenant accounting for more than 4.2% of our annualized base rent.
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.
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 13, 2025.
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.
Approximately 87.7% 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 7.2 years with average annual rent escalators of 2.8%. Most of our leases include two 5-year renewal options to extend the term.
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.
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 13, 2025 (dollars in thousands): Individual Leases Lessor State Facility Type Rentable Sq. Ft.
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.
As of the date of this Form 10-K, 67 facilities representing 52.9% 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.
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.
These acquisitions are expected to generate initial annual cash revenues of approximately $17.7 million. 7 Our management team has extensive experience in acquiring, owning, financing, operating and leasing skilled nursing facilities and other types of healthcare properties.
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.
Each of our properties is leased under a separate lease agreement, although 15 groups of properties, covering a total of 114 facilities, are subject to 15 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.
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.
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 120 healthcare properties with an aggregate of 14,540 licensed beds.
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.
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 84.1% of our total annualized rental revenue is generated through our 15 master leases that have cross-default and cross-collateralization provisions.
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.
Since January 2019 we have grown significantly through acquisitions, having purchased 59 properties, with an aggregate purchase price of approximately $414.0 million and weighted average lease yield of 15.6%. 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.
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.
As of March 13, 2025, approximately 55.2% 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 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.
Our leases include 15 master lease agreements that cover 114 facilities leased to 114 tenants, with the remaining 16 leases each covering a single facility leased to one tenant. 67 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 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.
Our leases have a weighted-average annualized lease income per leased square foot of $25.39, and a weighted-average remaining lease term of approximately 7.2 years. To our knowledge, except as noted below, none of our current tenants are in default under any of the leases.
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.
Since 2019, our aggregate annualized average base rent for the expected life of the leases for our properties has grown at an approximate 13.1% CAGR from $72.8 million in fiscal year 2019 to $134.8 million as of the date of this Form 10-K.
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.
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 Indiana 1 1020 West Vine St, LLC The Waters of Princeton II, LLC Princeton IN SNF 95 2034 32,571 100 % 1,224,215 0.9 % 37.59 12803 Lenover Street Realty, LLC The Waters of Dillsboro - Ross II, LLC Dillsboro IN SNF 123 2034 67,851 100 % 1,585,037 1.2 % 23.36 1350 North Todd St, LLC The Waters of Scottsburg II, LLC Scottsburg IN SNF 99 2034 28,050 100 % 1,275,761 0.9 % 45.48 1600 East Liberty Street Realty, LLC The Waters of Covington II, LLC Covington IN SNF 119 2034 40,821 100 % 1,533,491 1.1 % 37.57 1601 Hospital Dr Realty, LLC The Waters of Greencastle II, LLC Greencastle IN SNF 100 2034 31,245 100 % 1,288,648 1.0 % 41.24 1712 Leland Drive Realty, LLC The Waters of Huntingburg II, LLC Huntingburg IN SNF 95 2034 45,156 100 % 1,224,215 0.9 % 27.11 2055 Heritage Dr Realty, LLC The Waters of Martinsville II, LLC Martinsville IN SNF 103 2034 30,060 100 % 1,327,307 1.0 % 44.16 3895 Keystone Ave Realty, LLC The Waters of Indianapolis II, LLC Indianapolis IN SNF 81 2034 25,469 100 % 1,043,805 0.8 % 40.98 405 Rio Vista Lane Realty, LLC The Waters of Rising Sun II, LLC Rising Sun IN SNF 58 2034 16,140 100 % 747,416 0.6 % 46.31 950 Cross Ave Realty, LLC The Waters of Clifty Falls II, LLC Madison IN SNF 138 2034 39,438 100 % 1,778,334 1.3 % 45.09 958 East Highway 46 Realty, LLC The Water of Batesville II, LLC Batesville IN SNF 86 2034 59,582 100 % 1,108,237 0.8 % 18.6 2400 Chateau Drive Realty LLC The Waters of Muncie II, LLC Muncie IN SNF 72 2034 22,350 100 % 927,826 0.7 % 41.51 Big H2O The Waters of Newcastle II, LLC (2) New Castle IN SNF 66 2034 24,860 100 % 850,507 0.6 % 34.21 1316 North Tibbs Avenue Realty LLC West Park a water community Indianapolis IN SNF 89 2034 26,572 100 % 1,146,896 0.9 % 43.16 0.7 % 1002 SISTER BARBARA WAY, LLC Waters of Georgetown Georgetown IN SNF 78 2034 50,948 100 % 1,005,145 0.8 % 19.73 2640 Cold Spring Road Realty, LLC Alpha A Waters Community, LLC Indianapolis IN SNF 86 2034 37,054 100 % 1,108,237 0.9 % 29.91 Master Lease Illinois 1 253 Bradington Drive, LLC Bria of Columbia Columbia IL SNF 119 2032 43,189 100 % 410,821 0.3 % 9.51 3523 Wickenhauser, LLC Bria of Alton Alton IL SNF 181 2032 44,840 100 % 624,862 0.5 % 13.94 727 North 17th St, LLC Bria of Belleville Belleville IL SNF 180 2032 50,650 100 % 621,410 0.5 % 12.27 Master Lease Illinois 2 1623 West Delmar Ave, LLC Bria of Godfrey Godfrey IL SNF 68 2032 15,740 100 % 234,755 0.2 % 14.91 393 Edwardsville Road LLC Bria of Wood River Wood River IL SNF 106 2032 29,491 100 % 365,941 0.3 % 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 % 550,631 0.4 % 13.84 8200 National Ave Realty, LLC Landmark of Midwest City Hospital Midwest City OK LTACH 31 2032 49,319 100 % 161,034 0.1 % 3.27 911 South 3rd St Realty LLC Chalet Of Niles Niles MI SNF 100 2032 31,895 100 % 519,463 0.4 % 16.29 Oak Lawn Nursing Realty, LLC Oak Lawn Respiratory and Rehab center, LLC Oak Lawn IL SNF 143 2028 37,854 100 % 742,833 0.6 % 19.62 Forest View Nursing Realty, LLC Forest View Rehab and Nursing center, LLC Itasca IL SNF 144 2024 34,152 100 % 748,027 0.6 % 21.90 Parkshore Estates Nursing Realty, LLC Parkshore Estates Nursing & Rehab Center, LLC Chicago IL SNF 318 2024 94,018 100 % 1,651,893 1.2 % 17.57 Master Lease Kentucky 1015 Magazine Street, LLC Landmark of River City Rehabilitation and Nursing Center Louisville KY SNF 92 2032 36,050 100 % 2,060,536 1.5 % 57.16 900 Gagel Avenue, LLC Landmark of Iroquois Park Rehabilitation and Nursing Center Louisville KY SNF 120 2032 36,374 100 % 2,687,656 2.0 % 73.89 308 West Maple Avenue, LLC Landmark of Lancaster Rehabilitation and Nursing Center Lancaster KY SNF 96 2032 42,438 100 % 2,150,125 1.6 % 50.67 1155 Eastern Parkway, LLC Landmark of Louisville Rehabilitation and Nursing Center Louisville KY SNF 252 2032 106,250 100 % 5,644,077 4.2 % 53.12 203 Bruce Court, LLC Landmark of Danville Rehabilitation and Nursing Center Danville KY SNF 90 2032 26,000 100 % 2,015,742 1.5 % 77.53 203 Bruce Court, LLC Goldenrod Village Assisted Living Center Danville KY ALF 16 2032 19,500 100 % 358,354 0.3 % 18.38 203 Bruce Court, LLC Hillside Suites Independent Living Center Danville KY Independent Living 0 2032 1,000 - 0.0 % 120 Life Care Way, LLC Landmark of Bardstown Rehabilitation and Nursing Center Bardstown KY SNF 100 2032 36,295 100 % 2,239,713 1.7 % 61.71 1033 North Highway 11, LLC Landmark of Laurel Creek Rehabilitation and Nursing Center Manchester KY SNF 106 2032 32,793 100 % 2,374,096 1.8 % 72.40 945 West Russell Street, LLC Landmark of Elkhorn City Rehabilitation and Nursing Center Elkhorn City KY SNF 106 2032 31,637 100 % 2,374,096 1.8 % 75.04 420 Jett Drive, LLC Landmark of Breathitt County Rehabilitation and Nursing Center, LLC Jackson KY SNF 120 2032 32,581 100 % 2,687,656 2.0 % 82.49 1253 Lake Barkley Drive, LLC Landmark of Kuttawa, A Rehabilitation & Nursing Center Kuttawa KY SNF 65 2032 37,892 100 % 1,455,813 1.1 % 38.42 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 0.1 % 12.64 3121 Glanzman Rd Realty, LLC Continent Healthcare Co - Toledo Toledo OH SNF 84 2025 24,087 100 % 304,908 0.2 % 12.66 620 West Strub Rd Realty, LLC Continent Healthcare Co - Sandusky Sandusky OH SNF 50 2025 18,984 100 % 181,493 0.1 % 9.56 4250 Sodom Hutchings Road Realty, LLC Continent Healthcare Co - Cortland Cortland OH SNF 50 2025 14,736 100 % 181,493 0.1 % 12.32 Master Lease Tennessee 1 115 Woodlawn Drive, LLC Lakebridge a Waters Community, LLC Johnson City TN SNF 109 2031 37,734 100 % 1,263,854 0.9 % 33.49 146 Buck Creek Road, LLC Waters of Roan Highlands, LLC Roan Mountain TN SNF 80 2031 30,139 100 % 927,600 0.7 % 30.78 704 5th Avenue East, LLC Waters of Springfield, LLC Springfield TN SNF 66 2031 19,900 100 % 765,270 0.6 % 38.46 2501 River Road, LLC Waters of Cheatham, LLC Ashland City TN SNF 80 2031 37,953 100 % 927,600 0.7 % 24.44 202 Enon Springs East, LLC Waters of Smyrna, LLC Smyrna TN SNF 91 2031 34,070 100 % 1,055,145 0.8 % 30.97 140 Technology Lane, LLC Waters of Johnson City, LLC Johnson City TN SNF 84 2031 34,814 100 % 973,980 0.7 % 27.98 835 Union Street, LLC Waters of Shelbyville, LLC Shelbyville TN SNF 96 2031 44,327 100 % 1,113,120 0.8 % 25.11 1340 North Grundy Quarles Highway, LLC Waters of Gainesboro, LLC Gainesboro TN SNF 83 2031 254,585 100 % 962,385 0.7 % 3.78 1340 North Grundy Quarles Highway, LLC Waters of Gainesboro, LLC Gainesboro TN ALF 25 2031 80,315 100 % 289,875 0.2 % 3.61 100 Netherland Lane, LLC Waters of Kingsport Kingsport TN SNF 67 2031 28,140 100 % 776,865 0.6 % 27.61 2648 Sevierville Road, LLC Waters of Maryville Maryville TN SNF 181 2031 49,810 100 % 302,646 0.2 % 6.08 Master Lease Tennessee 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 1.2 % 60.11 14510 Highway 79, LLC Waters of McKenzie, A Rehabilitation & Nursing Center McKenzie TN SNF 66 2031 22,454 100 % 1,279,858 0.9 % 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 1.3 % 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 1.3 % 57.58 2830 Highway 394, LLC Waters of Bristol, A Rehabilitation & Nursing Center Bristol TN SNF 120 2031 53,913 100 % 2,327,014 1.7 % 43.16 Master Lease Arkansas 1 5301 Wheeler Avenue, LLC The Blossoms at Fort Smith Fort Smith AR SNF 117 2028 41,490 100 % 821,950 0.6 % 19.81 414 Massey Avenue, LLC The Blossoms at Mountain View Assisted Living Mountain View AR ALF 32 2028 12,548 100 % 224,807 0.2 % 17.92 706 Oak Grove Street, LLC The Blossoms at Mountain View Mountain View AR SNF 97 2028 31,586 100 % 681,445 0.5 % 21.57 8701 Riley Drive, LLC The Blossoms at Woodland Hills Little Rock AR SNF 140 2028 61,543 100 % 983,530 0.7 % 15.98 1516 Cumberland Street, LLC The Blossoms at Cumberland Little Rock AR SNF 120 2028 82,328 100 % 843,025 0.6 % 10.24 5720 West Markham Street, LLC The Blossoms at Midtown Little Rock AR SNF 154 2028 56,176 100 % 1,081,883 0.8 % 19.26 2501 John Ashley Drive, LLC The Blossoms at North Little Rock Little Rock AR SNF 140 2028 65,149 100 % 983,530 0.7 % 15.10 1513 South Dixieland Road, LLC The Blossoms at Rogers Rogers AR SNF 110 2028 32,962 100 % 772,773 0.6 % 23.44 826 North Street, LLC The Blossoms at Stamps Stamps AR SNF 94 2028 30,924 100 % 660,370 0.5 % 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 Arkasnas 2 326 Lindley Lane, LLC The Blossoms at Newport Newport AR SNF 120 2029 49,675 100 % 850,639 0.6 % 17.12 2821 West Dixon Road, LLC The Blossoms at West Dixon Little Rock AR SNF 140 2029 42,825 100 % 992,412 0.7 % 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 0.2 % 30.02 552 Golf Links Road, LLC The Blossoms at Hot Springs Hot Springs AR SNF 152 2029 30,372 100 % 1,077,476 0.8 % 35.48 Master Lease Indiana 2 8400 Clearvista Place LLC The Waters of Castleton SNF, LLC Indianapolis IN SNF 114 2029 41,400 100 % 1,023,207 0.8 % 24.72 524 Anderson Road LLC The Waters of Chesterfield SNF, LLC Chesterfield IN SNF 60 2029 21,900 100 % 538,530 0.4 % 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 0.6 % 24.75 11563 West 300 South LLC The Waters of Dunkirk SNF, LLC Dunkirk IN SNF 46 2029 19,800 100 % 412,873 0.3 % 20.85 5544 East State Boulevard LLC The Waters of Fort Wayne SNF, LLC Ft.
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.
We have a portfolio that is diversified in terms of both geography and tenant composition. As of March 13, 2025, our portfolio is comprised of 120 healthcare-related properties with a total of 14,540 licensed beds located throughout Arkansas, Illinois, Indiana, Kansas, Kentucky, Michigan, Missouri, 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.
Geographic Diversification As of March 13, 2025, our portfolio of 120 properties is broadly diversified by geographic location across eleven U.S. states, comprising Arkansas, Illinois, Indiana, Kansas, Kentucky, Michigan, Missouri, Ohio, Oklahoma, Tennessee and Texas.
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.
Annualized Average Base Rent ($000s) % of Total Annualized Average Base Rent Ambassador Nursing Realty, LLC Illinois SNF 37,100 $ 1,005 0.7 % Momence Meadows Realty, LLC Illinois SNF 37,139 $ 1,038 0.8 % Lincoln Park Holdings, LLC Illinois SNF 34,362 $ 1,260 0.9 % Continental Nursing Realty, LLC Illinois SNF 53,653 $ 1,575 1.2 % Westshire Nursing Realty, LLC Illinois SNF 124,020 $ 1,788 1.3 % Belhaven Realty, LLC Illinois SNF 60,000 $ 2,135 1.5 % West Suburban Nursing Realty, LLC Illinois SNF 70,314 $ 1,962 1.5 % Niles Nursing Realty LLC Illinois SNF 46,480 $ 2,410 1.8 % Midway Neurological and Rehabilitation Realty, LLC Illinois SNF 120,000 $ 2,548 1.9 % 516 West Frech Street, LLC Illinois SNF 24,979 $ 498 0.4 % 4343 Kennedy Drive, LLC Illinois SNF 104,000 $ 479 0.4 % 1585 Perry Worth Rd, LLC Indiana SNF 32,650 $ 117 0.1 % 9300 Ballard Rd Realty, LLC Illinois SNF 70,556 $ 1,302 1.0 % 2301 North Oregon Realty, LLC Texas LTACH 24,660 $ 1,050 0.8 % 9209 Dollarway Road, LLC Arkansas SNF 45,771 $ 843 0.6 % 103 Har-Ber Road, LLC Oklahoma SNF 31,691 574 0.4 % Total (16) 917,375 $ 20,584 15.3 % Investment and Financing Policies Our properties are located in 11 states and we intend to continue to acquire properties in other states throughout the United 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.
In addition, our Adjusted EBITDA and FFO from 2019 to 2024 grew at an approximate 8.4% and 12.8% CAGR, respectively. During that period, we expanded our geographic footprint from nine states to eleven states.
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.
We hold fee title to 119 of these properties and hold one property under a long-term lease. These properties are located across Arkansas, Illinois, Indiana, Kansas, Kentucky, Michigan, Missouri, Ohio, Oklahoma, Tennessee and Texas. Our 120 properties comprise 130 healthcare facilities, consisting of 118 skilled nursing facilities, 10 assisted living facilities and 2 long-term acute care hospitals.
In April 2018, CMS announced as part of its patient driven payment model (“PDPM”) a skilled-nursing preferred payor system (“SNF-PPS”) intended to reduce administrative burden, and foster innovation to improve care and quality for patients. CMS estimates the program of payment redesign and policy changes would increase Medicare payments to SNFs by 2.4% ($850 million) during 2019.
In April 2018, CMS announced as part of its patient driven payment model (“PDPM”) a skilled-nursing preferred payor system (“SNF-PPS”) intended to reduce administrative burden, and foster innovation to improve care and quality for patients.
We believe these affiliated relationships provide a strong alignment of interests between us and our tenants and offers us increased operating flexibility with regards to potentially replacing underperforming tenants or evaluating acquisitions in new states.
Rental income from leases with these related party tenants represented 55.2% of all rental income for the year ended December 31, 2024. We believe these affiliated relationships provide a strong alignment of interests between us and our tenants and offers us increased operating flexibility with regards to potentially replacing underperforming tenants or evaluating acquisitions in new states.
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 summarizes information concerning the master lease agreements as of March 13, 2025 (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 16 578,167 $ 19,175 14.2 % Master Lease Indiana 2 (1) IN 24 705,730 $ 16,623 12.3 % Master Lease Central Illinois 1 IL 3 138,678 $ 1,657 1.2 % Master Lease Central Illinois 2 IL 2 45,231 $ 601 0.5 % Master Lease Landmark TX/OK/ MI/IL 6 287,028 $ 4,374 3.3 % Master Lease Ohio OH 4 73,311 $ 864 0.6 % Master Lease Tennessee 1 (1) TN 11 348,030 $ 9,358 6.9 % Master Lease Tennessee 2 (1) TN 5 185,344 $ 8,726 6.5 % Master Lease Arkansas 1 AR 9 414,706 $ 7,053 5.2 % Master Lease Arkansas 2 AR 4 130,429 $ 3,147 2.3 % Master Lease Kentucky KY 11 438,810 $ 26,048 19.3 % Master Lease Missouri MO 8 355,776 $ 10,046 7.5 % Master Lease Kansas KS 6 144,694 $ 2,752 2.1 % Master Lease Texas 1 TX 3 55,584 $ 1,994 1.5 % Master Lease Texas 2 TX 2 184,659 $ 1,748 1.3 % Total (15) 114 4,086,177 $ 114,166 84.7 % (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.
We are the general partner of the Operating Partnership and own approximately 12.6% of the outstanding OP units.
We are the general partner of the Operating Partnership and as of December 31, 2024 we own approximately 21.7% of the outstanding OP units.
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.
The following table contains information regarding our healthcare facility portfolio by geography, as of March 13, 2025: State Number of Properties Facility Type Licensed Bed Count Annualized Average Base Rent (Amounts in $000s) % of Total Annualized Average Base Rent Indiana 36 36 SNFs 5 ALFs 3,404 $ 35,914 26.65 % Illinois 20 20 SNFs 4,226 23,401 17.37 % Tennessee 15 14 SNFs 1 ALF 1,412 18,085 13.42 % Arkansas 13 12 SNFs 2 ALFs 1,568 11,044 8.20 % Kentucky 10 10 SNFs 1 ALF 1,163 26,048 19.33 % Missouri 8 8 SNFs 1,111 10,046 7.46 % Kansas 6 5 SNFs 1 ALF 354 2,751 2.04 % Texas 5 5 SNFs 1 LTACH 727 4,793 3.56 % Oklahoma 2 2 SNFs 1 LTACH 237 1,286 0.95 % Ohio 4 4 SNFs 238 864 0.64 % Michigan 1 1 SNF 100 519 0.39 % Totals 120 117 SNFs 10 ALFs 2 LTACHs 14,540 $ 134,751 100.0 % 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.
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.
(2) The expiration dates do not reflect the exercise of any renewable options. Related Party Tenants As of March 13, 2025, we leased 67 of our facilities to tenants that are affiliates of: (i) Moishe Gubin who serves as Chairman of the Board and our Chief Executive Officer and (ii) Michael Blisko, who serves as one of our directors.
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.
From January 1, 2024, through March 13, 2025, we acquired 21 skilled nursing and 2 assisted living facilities for a total cost of $154.3 million (including leasehold improvements), which includes capitalized acquisition costs.
Our leases generally have terms that range from 10 to 20 years with two five-year extensions, and annual rent escalators of 1% to 3% per year, which provides us with a steady and growing cash rental stream.
As of December 31, 2024, 100% of the gross leasable area of our facilities was leased with an average remaining lease term of 7.2 years. Our leases generally have an initial term of 10 years with two five-year extensions, and annual rent escalators of 1% to 3% per year, which provides us with a steady and growing cash rental stream.
Removed
(2) The expiration dates do not reflect the exercise of any renewable options.
Added
Wayne IN SNF 77 2029 31,500 100 % 691,113 0.5 % 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 0.4 % 26.04 2901 West 37th Avenue LLC The Waters of Hobart SNF, LLC Hobart IN SNF 110 2029 43,854 100 % 987,305 0.7 % 22.51 1500 Grant Street LLC The Waters of Huntington SNF, LLC Huntington IN SNF 85 2029 44,957 100 % 762,917 0.6 % 16.97 787 North Detroit Street LLC The Waters of LaGrange SNF, LLC Lagrange IN SNF 100 2029 31,133 100 % 897,550 0.7 % 28.83 981 Beechwood Avenue LLC The Waters of Middletown SNF, LLC Middletown IN SNF 60 2029 18,500 100 % 538,530 0.4 % 29.11 317 Blair Pike LLC The Waters of Peru SNF, LLC Peru IN SNF 130 2029 60,230 100 % 1,166,815 0.9 % 19.37 815 West Washington Street LLC The Waters of Rockport SNF Rockport IN SNF 60 2029 25,000 100 % 538,530 0.4 % 21.54 612 East 11th Street LLC The Waters of Rushville SNF Rushville IN SNF 98 2029 16,572 100 % 879,599 0.7 % 53.08 505 West Wolfe Street LLC The Waters of Sullivan SNF Sullivan IN SNF 93 2029 15,600 100 % 834,721 0.6 % 53.51 500 East Pickwick Drive LLC The Waters of Syracuse SNF Syracuse IN SNF 66 2029 26,000 100 % 592,383 0.4 % 22.78 300 Fairgrounds Road LLC The Waters of Tipton SNF Tipton IN SNF 150 2029 30,970 100 % 1,346,325 1.0 % 43.47 1900 Alber Street LLC The Waters of Wabash SNF East Wabash IN SNF 84 2029 29,762 100 % 753,942 0.6 % 25.33 1720 Alber Street LLC The Waters of Wabash SNF West Wabash IN SNF 44 2029 12,956 100 % 394,922 0.3 % 30.48 300 North Washington Street LLC The Waters of Wakarusa SNF Wakarusa IN SNF 133 2029 48,000 100 % 1,193,741 0.9 % 24.87 8400 Clearvista Place LLC The Waters of Castleton ALF, LLC Indianapolis IN ALF 54 2029 43,900 100 % 484,677 0.4 % 11.04 787 North Detroit Street LLC The Waters of LaGrange ALF, LLC Lagrange IN ALF 17 2029 20,756 100 % 152,583 0.1 % 7.35 612 East 11th Street LLC The Waters of Rushville ALF, LLC Rushville IN ALF 29 2029 11,048 100 % 260,289 0.2 % 23.56 505 West Wolfe Street LLC The Waters of Sullivan ALF, LLC Sullivan IN ALF 32 2029 10,400 100 % 287,216 0.2 % 27.62 300 North Washington Street LLC The Waters of Wakarusa ALF, LLC Wakarusa IN ALF 61 2029 48,630 100 % 547,505 0.4 % 11.26 Master Lease Texas 1 1621 Coit Road Realty, LLC Landmark of Plano Nursing and Rehab Plano TX SNF 160 2033 74,718 100 % 723,520 0.5 % 9.68 5601 Plum Creek Drive Realty, LLC Landmark of Amarillo Nursing and Rehab Amarillo TX SNF 99 2033 90,046 100 % 447,678 0.3 % 4.97 2301 North Oregon Realty, LLC Grace Point Wellness Center El Paso TX SNF 182 2033 19,895 100 % 823,004 0.6 % 41.37 Master Lease Texas 2 2001 Avenue E, LLC Community Care Center of Hondo Hondo TX SNF 75 2034 18,572 100 % 516,213 0.4 % 27.80 1213 Water Street, LLC Waterside Nursing and Rehabilitation Kerrville TX SNF 179 2034 37,012 100 % 1,232,029 0.9 % 33.29 Master Lease Missouri 11515 Troost Avenue LLC Bridgewood Health Care Center Kansas City MO SNF 166 2033 75,045 100 % 1,501,056 1.1 % 20.00 902 Manor Drive LLC Chariton Park Healthcare Center Salisbury MO SNF 120 2033 33,675 100 % 1,085,101 0.8 % 32.22 11400 Mehl Avenue LLC Crestwood Health Care Center Florissant MO SNF 150 2033 39,346 100 % 1,356,376 1.0 % 34.47 1622 East 28th Street LLC Eastview Manor Care Center Trenton MO SNF 90 2033 24,667 100 % 813,826 0.6 % 32.99 2800 Hwy TT LLC Four Seasons Living Center Sedalia MO SNF 239 2033 112,191 100 % 2,161,160 1.6 % 19.26 52435 Infirmary Road LLC Milan Healthcare Center Milan MO SNF 100 2033 27,425 100 % 904,251 0.7 % 32.97 2041 Silva Lane LLC North Village Park Moberly MO SNF 183 2033 22,500 100 % 1,654,779 1.2 % 73.55 649 South Walnut LLC St.
Removed
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.
Removed
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.
Item 2. Properties
Properties — owned and leased real estate
5 edited+0 added−0 removed0 unchanged
Item 2. Properties
Properties — owned and leased real estate
5 edited+0 added−0 removed0 unchanged
2023 filing
2024 filing
Biggest changeFt. 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
Biggest changeFt. 2025 6 234,470 4.84 % 3,690,270 2.74 % $ 15.74 2026 4 263,580 5.44 % 8,097,593 6.00 % $ 30.72 2027 2 102,964 2.12 % 2,078,281 1.54 % $ 20.18 2028 9 414,706 8.55 % 7,053,312 5.23 % $ 17.01 2029 6 200,860 4.14 % 5,041,239 3.74 % $ 25.10 Thereafter 97 3,632,583 74.91 % 108,790,821 80.73 % $ 29.95 Total 124 4,849,163 100.0 % $ 134,751,516 100.0 % $ 23.12 (1) The year of each lease expiration is based on current contract terms. 31
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.
The following table displays the expiration of the annualized contractual cash rental income under our lease agreements as of December 31, 2024: 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, 2023, almost 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, 2024, almost all of our properties are leased under long-term, triple-net leases.
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.
Our 120 properties comprise 130 healthcare facilities, consisting of the following: ● 118 stand-alone skilled nursing facilities; ● two dual-purpose facilities used as both skilled nursing facilities and long-term acute care hospitals; and ● 10 assisted living facilities. Information regarding our properties as of December 31, 2024, are included in Item 15. “Exhibits and Financial Statement Schedules—Schedule III.
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.
ITEM 2. Properties As of the date of this Report, we hold fee title to 119 of these properties and hold one property under a long-term lease. These properties are located across Arkansas, Illinois, Indiana, Kansas, Kentucky, Michigan, Missouri, Ohio, Oklahoma, Tennessee and Texas.
Item 3. Legal Proceedings
Legal Proceedings — active lawsuits and investigations
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Item 3. Legal Proceedings
Legal Proceedings — active lawsuits and investigations
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2023 filing
2024 filing
Biggest changeThe defendants have filed an answer denying the plaintiffs’ claims and asserting counterclaims based on breach of contract. This case has been dismissed without prejudice.
Biggest changeThe 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 April 2024, they filed yet another complaint in Arkansas, and this time dealing with the properties located in Arkansas, Kentucky and Massachusetts.
Added
There has been some motion practice where the Court dismissed some of the Plaintiff’s remedies and claims.
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
Market for Common Equity — stock, dividends, buybacks
8 edited+3 added−0 removed4 unchanged
2023 filing
2024 filing
Biggest changePeriod 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.
Biggest changePeriod 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 Beginning Balance Jan 1, 2024 5,953 $ 7.84 5,953 $ 4,954,000 Q1 2024 19,348 7.96 25,301 4,800,000 Q2 2024 54,057 9.42 79,358 4,291,000 Q3 2024 32,568 10.66 111,926 3,944,000 Q4 2024 143,022 10.23 254,948 2,481,000 Total 254,948 $ 9.93 254,948 $ 2,481,000 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.
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.
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 2024. This information reflects inter-dealer prices, without retail mark-up, markdown or commission and may not represent actual transactions.
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.
During 2024, the Company converted 1,947,078 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.
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.
In addition, as of March 13, 2025, the Operating Partnership had 43,310,875 outstanding OP Units held by 7 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.
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.
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.
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.
As of December 31, 2024 the Company had purchased 254,948 shares in aggregate of common stock at an average price per share of $9.93 and an aggregate repurchase price of $2.5 million dollars.
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.
High Low Quarter Ended March 31, 2024 $ 7.95 $ 7.70 Quarter Ended June 30, 2024 $ 11.41 $ 7.95 Quarter Ended September 30, 2024 $ 12.84 $ 9.57 Quarter Ended December 31, 2024 $ 12.81 $ 9.40 As of March 13, 2025, 4,041 stockholders of record owned 12,217,351 issued and outstanding shares of common stock.
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.
Following is the characterization of our annual cash dividends on common stock for 2024: (dollars in thousands) Ordinary dividend $ 3,457 Non-dividend distributions $ 524 Capital Gain Distribution $ 54 Total taxable distribution $ 4,035 Purchases and Sale of Equity Securities by the Issuer and Affiliated Purchasers On July 12, 2024, the Company filed a Registration Statement on Form S-3 with the Securities and Exchange Commission (“SEC”).
Added
On August 1, 2024, the SEC declared the Registration Statement effective. In connection with the Registration Statement the Company established an at-the-market equity program (the “ATM Program”). The ATM Program will allow the Company to issue and sell to the public from time to time, at the Company’s discretion, newly issued shares of common stock.
Added
The Company expected the ATM to provide the Company with additional financing flexibility and intends to use the net proceeds from the ATM Program to increase stock liquidity and facilitate growth. During 2024 the company issued 278,152 shares in the ATM program at an average price of $11.33 per share netting the company $3.2 million dollars.
Added
During 2024, the Company purchased and retired 248,995 shares of our common stock in the open market at an average price per share of $9.93 and an aggregate repurchase cost of $2.5 million The following table sets forth information regarding the Company’s quarterly repurchase of shares of its outstanding common stock during as of December 31, 2024.
Item 7. Management's Discussion & Analysis
Management's Discussion & Analysis (MD&A) — revenue / margin commentary
47 edited+35 added−16 removed69 unchanged
Item 7. Management's Discussion & Analysis
Management's Discussion & Analysis (MD&A) — revenue / margin commentary
47 edited+35 added−16 removed69 unchanged
2023 filing
2024 filing
Biggest changeResults 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.
Biggest changeResults of Operations Operating Results Year Ended December 31, 2024 Compared to Year Ended December 31, 2023: Year Ended December 31, Increase / Percentage (dollars in thousands) 2024 2023 (Decrease) Difference Rental revenues $ 117,058 $ 99,805 $ 17,253 17.3 % Expenses: Depreciation 29,031 26,207 2,824 10.8 % Amortization 4,657 3,028 1,629 53.8 % Loss on real estate investment impairment - 2,451 (2,451 ) 100.0 % General and administrative expenses 6,851 5,662 1,189 21.0 % Property and other taxes 14,489 14,459 30 0.2 % Facility rent expenses 727 559 168 30.1 % Total Expenses 55,755 52,366 3,389 6.5 % Interest expense, net 32,603 24,443 8,160 33.4 % Amortization of interest expense 657 560 97 17.3 % Mortgage Insurance Premium 1,548 1,671 (123 ) (7.9 )% Total Interest Expenses 34,808 26,674 8,134 30.5 % Other income (loss) Other income (loss) 10 (983 ) (973 ) 99 % Foreign currency transaction gain - 462 (462 ) 100 % Net Income 26,505 20,244 6,261 30.9 % Net income attributable to non-controlling interest (22,410 ) (17,748 ) (4,662 ) 26.3 % Net Income attributable to common stockholders 4,095 2,496 1,599 64.1 % Basic and diluted income per common share $ 0.57 $ 0.39 0.18 46.2 % 35 Rental revenues: Rental revenues during 2024 increased by $17.2 million or 17.3% compared to fiscal year 2023, The additional rental income arising from the renegotiation of certain leases and the receipt of rent from the acquisition of 15 properties and additional property taxes being reimbursed by the tenants.
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.
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. 43 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. 45 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. 44 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. 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.
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. 41 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.
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.
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 was paid without interruption.
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.
However, Moishe Gubin, our Chairman and Chief Executive Officer, and Michael Blisko, one of our directors, as the controlling members of 67 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, 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.
As of December 31, 2024 and 2023 we determined that no allowance was necessary to cover the potential loss of rent from our tenants. 42 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.
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.
Other income (loss): In 2023, the 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.
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.
Indebtedness Mortgage Loans Guaranteed by HUD As of December 31, 2024, we had non-recourse mortgage loans of $262.2 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.
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.
As of December 31, 2024, the Company was in compliance with the loan covenants. Outstanding Bond Debt As of December 31, 2024, the Company had outstanding Series A, Series C Bonds and Series D Bonds.
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).
As a result, the overall average interest rate paid with respect to the HUD guaranteed loans as of December 31, 2024, was 3.91% per annum (including the mortgage insurance payments).
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.
For the year ended December 31, 2023, we excluded as non-recurring items a gain in the amount of $0.5 million 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.
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.
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, 2024, we had cash and cash equivalents and restricted cash and equivalents of $93.7 million.
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.
The two credit facilities closed in March 21, 2022 and August 25, 2023 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.
During February 2023, the BVI Company issued additional Series C Bonds in the face amount of NIS 40.0 million ($11.2 million) and raised a net amount of NIS 38.1 million ($10.7 million).
During February 2023, the BVI Company issued additional Series C Bonds in the face amount of NIS 40.0 million ($11.2 million) and raised a net amount of NIS 38.1 million ($10.7 million). These Series C Bonds were issued at a price of 95.25%.
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%.
During August 2023, the BVI Company issued additional Series D Bonds in the face amount of NIS 70.0 million ($19.2 million) and raised a net amount of NIS 152.9 million ($42.1 million). These Series D Bonds were issued at a price of 99.7%. On February 8, 2024, the BVI Company issued additional NIS 98.2 million ($25.7 million) Series D Bonds.
The loan proceeds were used to acquire the Indiana facilities.
The loan proceeds were used to acquire the Missouri facilities.
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.
Under the lease, the tenants initial annual rents are $500,000 on a triple net basis. 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.
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.
Summary of fixed and variable loans: December 31, 2024 2023 (Amounts in $000s) Fixed rate loans $ 475,494 $ 374,335 Variable rate loans 198,441 164,810 Gross Notes Payable and other Debt $ 673,935 $ 539,145 Funds From Operations (“FFO”) The Company believes that net income as defined by GAAP is the most appropriate earnings measure.
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.
The rate and interest is based on the one-month Secured Overnight Financing Rate SOFR plus a margin of 3.0% and a floor of 4% (as of the December 31, 2024, the rate was 7.49%). As of December 31, 2024, total outstanding principal amount was $59 million. This loan is collateralized by 8 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 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.
The rate is based on the one-month SOFR plus a margin of 3.5% and a floor of 4% (as of the December 31, 2024, the rate was 7.99%). As of December 31, 2024, total outstanding principal amount was $41.6 million. This loan is collateralized by 19 properties owned by the Company.
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.
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. 37 Cash Flows The following table presents selected data from our consolidated statements of cash flows: Years Ended December 31, 2024 2023 (dollars in thousands) Net cash provided by operating activities $ 59,330 $ 54,944 Net cash used in investing activities (136,776 ) (106,348 ) Net cash provided by financing activities 133,344 43,458 Net increase (decrease) in cash and cash equivalents and restricted cash and cash equivalents 55,898 (7,946 ) Cash and cash equivalents, and restricted cash and cash equivalents beginning of year 37,758 45,704 Cash and cash equivalents and restricted cash and cash equivalents, end of year $ 93,656 $ 37,758 Net cash provided by operating activities increased $4.4 million for the year ended December 31, 2024 compared to the year ended December 31, 2023, primarily due to an increase of $6.3 million in net income and $4.5 million increase in depreciation and amortization, offset by a smaller increase in accounts payable and an increase in receivables.
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.
Series C Bonds from the current outstanding of $73.3 up to $172.7 million and the ability to offer additional Series D Bonds from the current outstanding of $51.5 million up to $123.4 million is subject to compliance with covenants and market conditions. 36 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.
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.
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. 40 The following table reconciles our calculations of FFO and AFFO for the years ended December 31, 2024 and 2023, to net income, the most directly comparable GAAP financial measure (in thousands): FFO and AFFO : Year Ended December 31, 2024 2023 Net income $ 26,505 $ 20,244 Depreciation and amortization 33,688 29,235 Funds from Operations 60,193 49,479 Adjustments to FFO : Straight-line rent (4,368 ) (30 ) Straight-line rent receivable write-off (1) - 230 Contact cancellation expense for proposed financing (2) - 1,000 Loss on real estate impairment (3) - 2,451 Foreign currency transaction gain - (462 ) Funds from Operations, as Adjusted $ 55,825 $ 52,668 (1) In 2023 the Company recognized a loss of $0.2 million due to the write-off of straight-line rent receivables related to the Southern Illinois facilities.
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.
Through 2027 there are six balloon payment obligations consisting of three payments of $83.0 million, $68.2 million and $48.4 million due under the Series A Bonds, Series C Bonds and Series D bonds in 2026, respectively, and payments of $86.1 million, $36.6 million and $52.5 million due under our three commercial bank term loans due in 2027, 2028, and 2029.
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 loans have an average maturity of 22 years. 38 Commercial Bank Term Loans On March 21, 2022, the Company closed a mortgage loan facility with a commercial bank pursuant to which the Company borrowed approximately $105 million.
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.
As of December 31, 2024, on a consolidated basis, we had total indebtedness of approximately $673.9 million, consisting of $262.2 million in HUD guaranteed debt, $213.3 million in gross Series A, C, and D bonds outstanding and $198.4 million in commercial mortgages.
We seek to invest in assets that will provide attractive opportunities for dividend growth and appreciation in asset value, while maintaining balance sheet strength and liquidity, thereby creating long-term stockholder value. We expect to grow our portfolio by diversifying our investments by tenant, facility type and geography.
We employ a disciplined approach in our investment strategy by investing in healthcare real estate assets. We seek to invest in assets that will provide attractive opportunities for dividend growth and appreciation in asset value, while maintaining balance sheet strength and liquidity, thereby creating long-term stockholder value.
These properties are located in Arkansas, Illinois, Indiana, Kentucky, Michigan, Ohio, Oklahoma, Tennessee and Texas. We generate substantially all 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.
We generate substantially all 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. Each healthcare facility located at our properties is managed by a qualified operator with an experienced management team.
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.
The facility provides for monthly payments of interest and payment of principal and interest thereafter, will start on August 2024 based on a 20-year amortization with a balloon payment due in August 2028.
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.
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. As of the date of this Form 10-K, our portfolio consists of 130 healthcare facilities with an aggregate of 14,540 licensed beds.
(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.
Amortization increased $1.6 million or 53.8% due to the $24 million in acquisitions of purchase options in 2024. 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.
(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.
(2) In 2023 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. (3) Loss on real estate investment impairment: In February 2023, one facility under one of our Southern Illinois master leases was closed.
The loan proceeds were used to repay the Series B Bonds and prepay commercial loans not secured by HUD guarantees. The Company recognized a foreign currency transaction loss of approximately $10.1 million in connection with the repayment of the Series B Bonds during the year ended December 31, 2022.
The Company recognized a foreign currency transaction loss of approximately $10.1 million in connection with the repayment of the Series B Bonds during the year ended December 31, 2022. 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 closure did not result in any reduction in the aggregate rent payable under the master lease, which was paid without interruption. 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.
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. As a result of the closure, the Company sought to sell the property.
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.
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.
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.
Interest expense, net: The increase in interest expense of $8.1 million or 33.4% from fiscal year 2023 to fiscal year 2024 is primarily related to larger bond balances and a second commercial bank loan facility obtained in connection with the acquisition of the Indiana Facilities.
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%.
The properties are leased in the Texas Master Lease 2, which includes an annual base rent of $1.5 million dollars with 3% annual rent increases and an initial term of 10 years with two options of 5 year extensions.
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.
We expect to grow our portfolio by diversifying our investments by tenant, facility type and geography. 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.
We elect to be taxed as a REIT for U.S. federal income tax purposes commencing with our taxable year ending December 31, 2022. We are organized in an UPREIT structure in which we own substantially all of our assets and conduct substantially all of our business through the Operating Partnership.
We are organized in an UPREIT structure in which we own substantially all of our assets and conduct substantially all of our business through the Operating Partnership.
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.
In October 2024, the BVI company issued an additional NIS 62.0 million ($16.6 million) in Series C Bonds. The bonds were issued at 99.3%. 39 As of December 31, 2023, the outstanding principal amount of the Series C Bonds was NIS 267.5 million ($73.3 million). The Series C Bonds are traded on the TASE.
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.
Depreciation and Amortization: Increase in depreciation of $2.8 million or 10.8% from fiscal year 2023 to fiscal year 2024 is primarily due to year over year depreciation from the Indiana 2 Master Lease and $119.8 million of new real estate investments in 2024. This was offset by other fully depreciated assets in 2024.
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..
Cash used in investing activities increased by $30.4 million for the year ended December 31, 2024 primarily due to a $29.8 million increase in cash used for property acquisitions in real estate and lease rights. Notes receivable decrease was also $0.6 million lower than 2023.
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.
General and Administrative Expense: The decrease in general and administrative expenses of $1.2 million or 21.0% during fiscal year 2024 compared to fiscal year 2023 is primarily the result of higher insurance, higher legal, higher corporate salaries and other expenses.
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.
Cash flows generated from financing activities increased by $89.9 million for the year ended December 31, 2024. The increase was caused by $64.3 million in bond proceeds, a $33.0 million equity raise and no repayments for non-controlling interest redemption. This was offset by $23.4 million in additional senior debt repayments.
As of December 31, 2023, the Series D Bonds had an outstanding principal balance of approximately NIS 152.9 ($42.2 million).
The exchange offer rate was 1.069964 Series A Bonds per Series D Bonds. As a result of this offer, 47,245,161 NIS Series D Bonds ($12.7 million) were exchanged for 50,550,621 NIS Series A Bonds ($13.6 million). As of December 31 2024, the Series D Bonds had an outstanding principal balance of approximately NIS 187.2 ($51.5 million).
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.
On October 14, 2024, the BVI Company issued additional Series C bonds with a par value of NIS 62.0 million ($16.6 million). The bonds were issued at a price of 99.3% to par.
Removed
Each healthcare facility located at our properties is managed by a qualified operator with an experienced management team. We employ a disciplined approach in our investment strategy by investing in healthcare real estate assets.
Added
We hold fee title to 119 of these properties and hold one property under a long-term lease. These properties are located in Arkansas, Illinois, Indiana, Kansas, Kentucky, Michigan, Missouri, Ohio, Oklahoma, Tennessee and Texas.
Removed
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.
Added
As of the date of this report, the aggregate annualized average base rent under the leases for our properties was approximately $134.8 million. We elect to be taxed as a REIT for U.S. federal income tax purposes commencing with our taxable year ending December 31, 2022.
Removed
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%.
Added
We are the general partner of the Operating Partnership and as of the date of the report own approximately 22.1% of the outstanding OP units. 34 Recent Developments On March 25, 2024, the Company entered into a purchase agreement for a property comprised of a 68-bed skilled nursing facility and 10 bed assisted living facility near Georgetown, Indiana.
Removed
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%.
Added
The Company closed on the property on May 31, 2024, for $5.83 million in an all cash transaction. The facility was leased to Infinity, a related party operator. On June 1 st , 2024, the facility was added to the IN Master Lease in the second amendment to the master lease.
Removed
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.
Added
On April 1, 2024, the Company renewed the IN Master Lease (original expiration date July 31, 2025) for 10 years with two 5 years options and added to the lease one more entity that was not part of the original lease. The base rent for the first year is $15.5 million with 3% annual escalations.
Removed
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.
Added
On June 1, 2024, a second amendment was filed with this Master Lease to include the new property purchased in Georgetown, Indiana. On April 30, 2024, the company sold a property 107 South Lincoln Street to The Village of Smithton, a municipality in Illinois and paid off the existing mortgage. The building was sold to the municipality for $1.
Removed
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).
Added
The Company paid $1.2 million in related debt and closing fees for this transaction. On July 12, 2024, the Company filed a Registration Statement on Form S-3 with the Securities and Exchange Commission (“SEC”). On August 1, 2024, the SEC declared the Registration Statement effective.
Removed
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.
Added
In connection with the Registration Statement the Company established an at-the-market equity program (the “ATM Program”). The ATM Program will allow the Company to issue and sell to the public from time to time, at the Company’s discretion, newly issued shares of common stock.
Removed
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.
Added
The ATM Program is expected to provide the Company with additional financing flexibility and intends to use the net proceeds from the ATM Program to increase stock liquidity and facilitate growth. On August 5, 2024, the Company issued 145.6 million NIS in Series A Bonds on the Tel Aviv stock exchange (“TASE”), which is approximately $37.1 million.
Removed
The $18.0 million payment was funded by cash and the proceeds from the additional Series D Bond issuance in February 2024.
Added
The bonds are unsecured, were issued at par and have a fixed interest rate of 6.97%. Repayment of the bond principal, at 6% of the principal, was paid in 2024 and will be paid in 2025, with the remaining 88% due in 2026.
Removed
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.
Added
Interest payments will be due concurrent with the principal payments on September 30th of the years 2024, 2025 and 2026. In addition, the investors in Series D bond were offered to exchange their holdings with certificates of Series A bonds at a conversion rate of 1.069964 bond A for each certificate of bond D.
Removed
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.
Added
In September 2024, 47.2 million NIS ($12.7 million USD) Series D bonds have been exchanged for 50.6 million NIS ($13.6 million) Series A bonds. On August 30, 2024, the Company completed the acquisition for two skilled nursing facilities with 254 licensed beds near San Antonio, Texas. The acquisition was for $15.25 million.
Removed
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.
Added
The Company funded the acquisition utilizing cash from the balance sheet. The facilities are leased to the Tide Health Group, a 3 rd party operator.
Removed
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.
Added
On September 25, 2024, the Company completed the acquisition of a property comprised of an 83-bed skilled nursing facility and 25 bed assisted living facility near Nashville, Tennessee.
Removed
These amounts were offset by $24.0 million in principal bond payments, and $14.0 million of repayment of senior debt.
Added
The acquisition was for $6.7 million and the Company funded the acquisition by assuming $2.8 million of existing debt on the facilities, $3.1 million in common stock to the seller, and transferring $0.8 million of other assets to the seller. The property was leased to Infinity, a related party operator.
Removed
In addition, the Company recognized $1.2 million with respect to a foreclosed property in Massachusetts.
Added
The property annual rent is $670 thousand dollars and the property was added to the Tennessee Master Lease 1. On October 8, 2024, the Company entered into a Purchase and Sale Agreement with an unaffiliated seller with respect to eight healthcare facilities located in Missouri. The purchase price for the facilities was $87,500,000, payable at the closing.
Added
The facilities are currently leased under a master lease agreement to a group of third-party tenants. Under the master lease, the tenants currently pay annual rent on a triple net basis. The eight facilities are comprised of 1,111 licensed beds. The Company purchased the facilities utilizing cash from the balance sheet and funds provided by a third-party lender.
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Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Market Risk — interest-rate, FX, commodity exposure
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Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Market Risk — interest-rate, FX, commodity exposure
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2023 filing
2024 filing
Biggest changeAs 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.
Biggest changeAs of December 31, 2024, we had $88.5 million in Series A Bonds which bear interest at a fixed rate of 6.97%, $73.3 million outstanding under our Series C Bonds, which bear interest at a fixed rate of 5.7% per annum, $51.5 million outstanding under our Series D Bonds, which bear interest at a fixed rate of 9.1% per annum, and $460.6 million in senior debt notes, of which $195.7 million (29.03% of total debt) bear interest at variable rate equal to one month SOFR plus a margin.
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.
Financial Statements and Supplementary Data See the Index to Consolidated Financial Statements on page F-1 of this report. 45 ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures None.
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.
At December 31, 2024, one month SOFR was 4.49%. 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 $2.0 million.