Strawberry Fields REIT, Inc. (STRW)·Q3 2024 Earnings Summary

Executive Summary

• Solid operating momentum: Q3 FFO of $15.24M and AFFO of $14.28M, both up sharply year over year on higher rental income from acquisitions and lease renewals; 100% rent collection maintained .
• Dividend raised: Board declared a $0.14/share cash dividend payable Dec 30, 2024, up from $0.13 in Q2, signaling confidence in cash flows; record date Dec 16, 2024 .
• External growth and balance sheet actions: Closed two acquisitions in Texas (254 beds, $15.25M) and Tennessee (83-bed SNF + 23-bed AL, $6.7M) and launched an at-the-market (ATM) equity program following S-3 effectiveness to fund growth and enhance liquidity .
• Estimates context: Wall Street consensus (EPS/Revenue) from S&P Global could not be retrieved due to an API limit; we cannot assess beats/misses this quarter (consensus unavailable).

What Went Well and What Went Wrong

• What Went Well

  • 100% contractual rent collection continued, underpinning cash flow durability .
  • Accretive growth: Closed two facilities near San Antonio, TX ($15.25M; $1.5M first-year base rent with 3% escalators, 10-year term + two 5-year options) and one property near Nashville, TN ($6.7M; mix of assumed debt, stock issuance, and asset transfer), expanding to 114 facilities .
  • CEO on capital access and growth: “We have begun issuing shares under our ATM program... [to] strengthen our balance sheet and increase our stock’s liquidity... [and] closed on real estate acquisitions in Tennessee and Texas... We continue to have a robust pipeline” .

• What Went Wrong

  • Rising interest cost: Interest expense increased $725K (+9.2% YoY) on new Popular Bank loan and Series A/D bond issuances since 3Q23, partially offsetting higher rental income .
  • Higher D&A: Depreciation and amortization rose $1.1M (+14.4% YoY) on new properties and lease rights, offset in part by fully depreciated assets .
  • Limited guidance/visibility: No financial guidance beyond the dividend; no earnings call transcript available in our document set for Q3, limiting narrative insight and Q&A clarifications this quarter (no transcript found) .

Financial Results

Quarterly operating metrics (millions)

Year-over-year reference by quarter (millions)

Non-GAAP notes: FFO excludes real estate depreciation and amortization; AFFO further adjusts for straight-line rent, above/below-market leases, non-cash items and certain non-recurring items per the company’s definitions and reconciliation .

Q3 revenue drivers and costs (management commentary)

• Rental revenues +$3.7M (+14.3% YoY) on acquisitions and lease renewals .
• D&A +$1.1M (+14.4% YoY) on new properties/lease rights, partially offset by fully depreciated assets .
• Interest expense +$725K (+9.2% YoY) on new Popular Bank loan and Series A/D bonds .

KPIs and portfolio scale

Q3 2024 investment activity

Segment/Geography: No segment revenue or regional breakdown disclosed in the Q3 press release .

Guidance Changes

Note: No expense, tax rate, or segment guidance provided in Q3 materials .

Earnings Call Themes & Trends

Note: No Q3 earnings call transcript was available in the document set; themes reflect management press releases.

Management Commentary

• Capital and liquidity: “We have begun issuing shares under our ATM program... We look forward to the benefits of strengthening our balance sheet and increasing our stock’s liquidity.” — Moishe Gubin, Chairman & CEO .
• Growth pipeline: “This marks our 16th facility in Tennessee and 5th facility in Texas... We continue to have a robust pipeline and look forward to closing on additional deals as we near year-end.” .
• Revenue drivers: “The increase in rental revenues... is due to higher income from the purchase of additional properties and lease renewals.” .
• Cost headwinds: D&A up on new properties/lease rights; interest expense up on new loan and bond issuances .

Q&A Highlights

• No Q3 earnings call transcript was found in our document set; therefore, there are no Q&A themes or clarifications to report for Q3 [ListDocuments showed none; no transcript returned].

Estimates Context

• We attempted to pull S&P Global consensus for Primary EPS and Revenue for Q3 2024 and the next quarter; data was unavailable due to a daily request limit on the estimates API. As a result, we cannot assess beats/misses versus Wall Street consensus this quarter.

Key Takeaways for Investors

• Consistent collections and growing base rent: 100% rent collection and rising rental income underpin stable cash flows; acquisitions and renewals are the primary growth drivers .
• Strong YoY growth: FFO ($15.24M) and AFFO ($14.28M) rose materially YoY; net income also increased to $6.90M, supported by portfolio expansion .
• Dividend momentum: Quarterly dividend increased to $0.14/share, suggesting confidence in cash generation; watch for sustainability alongside external growth .
• External growth strategy supported by capital access: S-3 effectiveness and ATM launch add financing flexibility; near-term share issuance could modestly dilute but supports deal pipeline and liquidity .
• Expense watch items: Interest expense and D&A increased YoY due to new debt/bonds and assets; elevated rate environment remains a headwind to earnings leverage .
• Portfolio scale and diversification improving: 114 facilities across multiple states; incremental exposure to TX and TN enhances footprint and embedded rent escalators .
• Near-term focus: Track incremental ATM issuances, additional deal closings in Q4, and any subsequent disclosure with fuller metrics (e.g., 10-Q/2025 guidance) that could refine AFFO trajectory and dividend capacity .

Sources

• Q3 2024 8-K (press release and exhibits): operating metrics, dividend, acquisitions, S-3/ATM, non-GAAP definitions and reconciliations .
• Q2 2024 8-K: operating metrics, dividend, dual listing, Russell 3000 inclusion .
• Q1 2024 8-K: operating metrics, lease renewals, bond issuance, dividend .