Strawberry Fields REIT, Inc. (NYSE AMERICAN: STRW) announced a $59 million acquisition of nine skilled nursing facilities in Missouri, finalized on May 22, 2025. This strategic purchase involves properties totaling 686 licensed beds, representing a substantial expansion of the company's healthcare real estate footprint. The transaction is being financed through a combination of the company's working capital and third-party lending, demonstrating Strawberry Fields REIT's financial approach to growth.
Eight of the newly acquired facilities will be leased to the Tide Group under an expanded master lease agreement, reset for a new 10-year term. This arrangement is expected to generate $5.5 million in annual rent, with provisions for a 3% annual increase, thereby securing a steady revenue stream for the company. The ninth facility will be leased to a Reliant Care Group affiliate under a separate master lease agreement, reset for a 15-year term. This lease is anticipated to contribute an additional $0.6 million in rent annually, also subject to a 3% annual increase.
The company has projected the closure of this transaction by July 1, 2025, although it has noted that this timeline is not guaranteed. This acquisition not only enhances Strawberry Fields REIT's portfolio but also reinforces its commitment to investing in the healthcare real estate sector. With this deal, the company continues to demonstrate its ability to identify and capitalize on opportunities that align with its strategic objectives, further solidifying its position as a key player in the industry. The expansion into Missouri represents a geographic diversification for the REIT, which focuses on healthcare properties across multiple states.
The master lease structure with established operators like the Tide Group and Reliant Care Group provides operational stability and reduces vacancy risk, which is crucial in the skilled nursing facility sector. The long-term lease agreements with built-in rent escalations offer predictable cash flow growth, making this acquisition financially strategic for Strawberry Fields REIT. This transaction follows the company's pattern of targeted acquisitions in the healthcare real estate market, where demographic trends support sustained demand for skilled nursing services. More information about the company's strategy can be found at https://www.strawberryfieldsreit.com.
