Good morning. The meeting will please come to order. I'd like to start our meeting by introducing myself to you. I'm Moishe Gubin, chairman and CEO of Strawberry Fields REIT. I will act as chairman of this meeting. I'd like to extend to you a cordial welcome to the annual meeting of the shareholders of Strawberry Fields REIT, Inc. All persons entitled to vote as shareholders or as proxies will please give their names to Steven Greenfield, who is acting as secretary and file their proxies with the secretary if they have not already done so. I'd like to introduce the other directors of Strawberry Fields REIT, along with its officers, whom I shall ask to stand and wave upon being introduced. Michael Blisko. Good morning, everyone. Stanford Gertz.
Good morning.
Jack Levine. Good morning. Mark Meyers.
Good morning.
Ted Lerman.
Good morning.
The officers of our company that are here with us today are Jeffrey Bajtner, Chief Investment Officer.
Good morning.
Greg Flamion, our CFO. Good morning. Steven Greenfield, the Chief Legal Officer.
Hello.
Standing by. I hereby appoint Steven Greenfield as Inspector of Election. I now call upon Mr. Greenfield to present proof of the due calling of the meeting of shareholders.
Mr. Chairman, I present my affidavit certifying the fact that the notice of this meeting was mailed on April 7, 2026, to shareholders of record as of the close of business on April 1, 2026, the record date set by the Board of Directors.
Unless there's someone who wishes the affidavit read, I will direct that the affidavit be filed with the minutes of the meeting. There being no objection, it is so ordered. A certified list of stockholders entitled to vote at the meeting is available at the meeting and may be inspected by any shareholder. Without being rude, I also want to mention that we have our auditors with us from Hacker, Johnson & Smith PA. Good morning. Good morning. Steven Greenfield, having been appointed as Inspector of Election and having subscribed to the oath of office, I hereby direct that such vote be filed with the minutes of the meeting. The Inspector will please take a tally of the number of shares of common stock at the meeting and advise the meeting whether there is a quorum present for the conduct of business.
Mr. Chairman, I advise that there are 10,827,081 shares of common stock are presented at this meeting in person or by proxy out of a total of 13,378,370 shares of common stock outstanding as of the record date. Therefore, 80.9% of the outstanding shares of common stock are represented in person or by proxy at this meeting, and there is a quorum for all matters to be presented.
80.9. That might be good for the record. There is a quorum present, the meeting can now proceed to consider the matters that come before it. The meeting will now undertake consideration on proposal one, the election of directors as set forth in the notice to stockholders. Each director elected will hold office until the annual meeting in 2027 and until their successors are elected and qualified. Nominations for directors are now in order.
Mr. Chairman, the following people have been nominated to serve as directors until the annual meeting in 2027 and until their successors have been duly elected and qualified. Mr. Gubin, Blisko, Levine, Lerman, Gertz, and Meyers.
I second the nomination. A motion has been made and seconded for the nomination of myself, Moishe Gubin, Michael Blisko, Jack Levine, Ted Lerman, Stan Gertz, and Mark Meyers. Are there any other nominations? Hearing none, we'll move on to proposal two to ratify the selection of Hacker, Johnson & Smith PA as the company's independent auditor of Strawberry Fields REIT. The polls are now open, and the inspector of election will proceed to distribute ballots and tabulate the votes for proposals one and two. If you have already executed a proxy and returned it to the company, you should not execute a ballot here at the meeting unless you wish to revoke the proxy previously executed. If you wish to execute a ballot here at the meeting, please raise your hand so that those assisting the meeting may supply you with a ballot form. Will the ballots been collected?
Yes. They have.
I now declare the polls closed. That was easy. On conclusion of the portion of our shareholders' meeting which required the voting of shares, I will entertain questions submitted from the floor or via our webcast concerning the business and operations of the company. All questions, I think there's a portal, yep, for people to submit questions. Yep. Then you'll play moderator. I will. Okay. While the inspector of election is completing tabulation of the ballots, I would like to present the following presentation. At last year's annual meeting, using the analogy of a child being born and watching it grow, I noted that the company had passed the bar but had not entered its teenage years.
I closed those remarks by previewing the title of this year's address, "From Ticker to Tile: From Strength to Strength." One year later, I am pleased to report that the title has held. By every measure that matters, Strawberry Fields is materially stronger than it was 12 months ago. The disciplined platform we have been building since 2015 continues to do precisely what it was designed to do, enable us to acquire assets that bring solid returns to our shareholders. 2025 was a year of execution. It was not a year of reinvestment or dramatic strategic pivots. It was a year of doing what we have always done. We do business in a consistent, disciplined, and accretive manner. In my view, these objectives are a few of the ways we set ourselves apart from our peers.
I would now like to walk you through the presentation discussing our 2025 results and our outlook for 2026. On slide three, I'd like to begin by highlighting the company's growth during 2025. Our portfolio grew from 124 facilities to 143. Total assets increased by $100 million net of depreciation. Rental income advanced from $117 million to $143 million, representing a 22% top-line growth in a single year. AFFO grew from $56 million to $73 million. Adjusted EBITDA grew from $91 million to $125 million. Hope you agree that these are not incremental gains. They reflect our platform operating at scale, with each component of the business contributing to the results. Importantly, this growth was achieved without any variation from our underwriting standards or our approach to grow master leases in existing states.
In addition to the financial highlights, we successfully completed our fifth bond series in Israel, a relationship now more than a decade old. We grew our shareholder base to over 5,000 individual shareholders, up from approximately 4,700 a year ago. Our people participated in more than 12 investor conferences across the country. We closed on a 19 skilled nursing-assisted living disclosure, an aggregate purchase price of $112 million. We further reduced the affiliated tenant concentration to approximately 46% of the portfolio. Lastly, we increased the quarterly dividend to $0.16 per share, marking the fifth increase since our inaugural distribution in December 2022. All of these things are just us doing our thing and getting stronger and stronger. On the next slide is our balance sheet year-over-year for the last 10 years. The trajectory is one of steady, consistent year-over-year growth.
2025 was the year that our real estate acquired growth $1 billion, which is an exciting milestone, at least for me. I would note that our market value of our real estate is probably closer to $1.6 billion today, if not more. Our leverage remains within the middle of our 45%-55% target range. We pay off around $1.5 million a month, which we will discuss on a later slide of the presentation. As I have said in the past, and will repeat in the future, our balance sheet is very, very strong and something that I'm proud of and that will continue to strengthen year-over-year. On the next slide, we show our income statement also for the past 10 years, which mirrors the balance sheet trajectory. Revenue, AFFO, and EBITDA have each grown year-over-year without exception. It's a beautiful chart if you ask me.
The chart further reflects what disciplined accretive acquisition activity looks like compounded over time. Over the last five years, our AFFO and EBITDA have a compounded annual growth rate of 13+%. These results reflect the work the team has executed across underwriting, asset management, and capital markets. That underwriting is really our secret sauce. Slide six illustrates our geographic footprint and the criteria that govern our acquisition activity. Our facilities span Illinois, Indiana, Arkansas, Tennessee, Kansas, Kentucky, Missouri, Texas, Ohio, and Oklahoma. The investment criteria displayed on the right side of the slide have remained constant, and we do not anticipate changing them. We target a 10% projected return on investment, a 20% projected levered IRR over a 10-year horizon, and a 12% projected return on equity at 50% loan to value with 8% interest.
Our acquisition focus remains on deals within our existing footprint or in new states where we can make a sizable acquisition and grow a master lease. Our deals are often off-market transactions and ones that fall in our sweet spot of between $20 million and $100 million. We continue to evaluate hundreds of opportunities annually and decline the substantial majority of them. Underwriting discipline is what I preach, the product is our stable, well-balanced performing portfolio. When an opportunity does not satisfy these criteria, we pass even at the cost of short-term acquisition pace. Slide seven is one of the slides I'm most proud of. The two pie charts in front of you show our base rent broken down by state on one side and by related consultants on the other. There's no single dominant slice on either chart. No single tenant or state runs the rental.
That is exactly where we want to be. As a reminder, when we started this company in 2015, it was one tenant in two states. We have come a long way and feel that we are stronger when there isn't one dominant state or operator that we're relying on. On slide eight is, in many respects, the most important slide in the deck. This chart on the right shows AFFO per share compounding at an 11.6% annual growth rate. Few REITs in any sector have delivered per share AFFO growth at that pace, and we have done so consistently. The table on the left of the slide explains the mechanism. 2025 AFFO total was approximately $72.5 million. Our payout ratio was 46%, among the lowest of our peer group. That means approximately $39 million in free cash flow annually.
We invested in our targeted 15% acquisition return on equity. That retained capital generates approximately [audio distortion] million of incremental AFFO per year, which equates to roughly 8% of organic AFFO growth before the deployment of any external raised capital. Our payout ratio is intentionally conservative. Retained capital deployed toward accretive acquisitions is the most reliable mechanism for compounding shareholder value over time. When we combine per share AFFO growth with our dividend yield, the resulting total return profile is competitive in any environment, and particularly so within a sector that benefits from durable, contractually protected, demographically driven cash flows. We believe that our true return exceeds most of our peers. Slide nine presents our share price history since the public listing.
The trend has been upward, which is encouraging, but the more material observation is that our stock, STRW, continues to trade at a discount to our peer set on a multiple AFFO basis. We view that valuation gap as an opportunity that does not require any extraordinary action on our part. It requires consistent execution. Each conference we attend, each new analyst initiating coverage, and each additional shareholder we add narrows that gap. We expect it to close over time. Please God. I would add that we ended 2025 at a high, which we have lately been pushing up against, and hopeful that 2026 will reach new all-time highs without going. Slide 10 shows our debt structure. The stack is well-laddered and diversified across HUD Guaranteed debt, secured bank debt, and four series of bonds issued through our Israeli platform.
The high component, $264 million at a weighted average interest rate of 3.91% and a weighted average maturity of 2047, is a meaningful competitive advantage in the current rate environment. Long duration, fixed rate, government guaranteed leverage at sub 4% is not a financing profile that is readily replicable by newer entrants. Our most active capital markets initiative is the refinancing of the Israeli bond series maturing in July and December of this year. We are evaluating multiple paths concurrently, including a refinancing of the bonds themselves. We're utilizing the new corporate credit facility we signed term sheet for in Q1. By the time we convene next year, the capital structure will be well laddered into the 2030s and repositioned to support the next phase of growth. Underlying every chart in this deck is a straightforward operational reality. We are collecting hundreds of contractual rents.
Every facility is occupied by a tenant. Operator level performance continues to benefit from a demographic tailwind that is no longer a forecast but a trending base phenomenon. The over 65 population in the U.S. is expanding measurably each year, while the supply of skilled nursing beds is not keeping pace. That structural mismatch is a sustained tailwind. We expect it to persist over at least the next decade. Pure-play skilled nursing REITs are scarce. As capital markets continue to seek inflation resilience, demographically driven, retraction protected income streams, we are positioned in an attractive segment. We have spent the past decade developing the operational and capital market expertise to lead in it. Looking ahead, our 2026 priorities are consistent with the strategy that delivered 2025's results. We will complete the bond refinancing on terms that are accretive to shareholders.
We will continue to acquire in our disciplined manner and grow the portfolio. We will continue to deepen our master lease structures and operator relationships. Finally, we will continue to expand our shareholder base, more than handle coverage, and improve trading liquidity. In closing, Michael and I founded this company nearly 23 years ago. When we became Strawberry nearly 11 years ago, we owned 33 facilities and 100% of the tenants. Today, the company owns and leases 143 facilities across 10 states and many operators, with close to 6,000 shareholders and a balance sheet of $885 million. Every milestone has been reached through the consistent execution of fundamentals over an extended period of time. That approach will not change. As I mentioned at the beginning of my speech, we titled from strength to strength.
That was the objective one year ago, and it is the result we are reporting today. I've never been more confident in the company's direction, and I'm proud to be on this journey with each of you. To our shareholders, thank you for entrusting us with your capital. To our operators, thank you for the care you provide and the buildings you run. Lastly, to my team, thank you for the work you do every day, much of which is never publicly seen. With that, I will point out the disclaimers, and this wraps up my prepared remarks. Share the disclaimers. If there are any questions regarding the company, please submit them now, and I'll try to answer them for you. Back to you, back to the meeting.
Has the inspector completed the tabulation of the votes on the matters put before this meeting, and is he ready to present this report?
Mr. Chairman, I am ready to report. I report that the holders of 8,611,945 shares common stock voted for proposal 1.
To summarize, regarding proposal 1, the following directors are therefore duly elected to serve for one year and until their successors are elected and qualified. Moishe Gubin, Michael Blisko, Jack Levine , Ted Lerman, Stan Gertz and Mark Meyers.
The vote for proposal 2 is as follows. To ratify the employment of Hacker, Johnson & Smith PA as the company's independent auditor for fiscal year 2026 for 10,453,324 or again 359,142 staying 34,650.
Okay, that passes as well. If there are any questions regarding the company which you wish to ask, we'll now go to the webcast.
Any questions?
We have no questions. All right.