Strawberry Fields REIT, Inc. (STRW) stock intrinsic value fair value estimate & owner earnings analysis

Strawberry Fields REIT owns 133 properties (143 skilled nursing, assisted living and long-term acute care facilities, 15,602 licensed beds) in Arkansas, Illinois, Indiana, Kansas, Kentucky, Missouri, Ohio, Oklahoma, Tennessee and Texas. It leases them to operators under long-term triple-net leases, where the tenant pays taxes, insurance, maintenance and capital expenditures. About 89% of properties sit under master leases with cross-default protection. Leases run a further 7.2 years on average, with average annual rent escalators of 2.8% and typically two five-year renewal options. Only about 0.7% of base rent expires in 2026, 1.5% in 2027, 4.9% in 2028 and 2.8% in 2029. How we measure earnings. We start with operating cash flow and subtract working-capital swings and stock compensation. We deduct no maintenance capital spending because tenants bear it; the roughly $110 million bought each year in 2024 and 2025 is acquisition (growth) spending. The REIT owns only about 24% of its operating partnership, and the other units are exchangeable one-for-one into shares, so we divide by all units (about 55 million), not the roughly 13 million listed common shares. Earnings per unit on this basis were about $1.08 (2022), $0.98 (2023), $1.14 (2024) and $1.44 (2025). Earnings grew 26% in 2025 because 2024 acquisitions ran for a full year; we do not project that pace. The first half of 2026 was flat with the first half of 2025 after removing working-capital timing (roughly $39.8 million in each), so we anchor at about $1.40, slightly below 2025. Year 1 growth of 2% in the base case is below the trailing 26%. Debt is heavy: about $795 million in total, including Israeli-shekel bonds on the Tel Aviv exchange at 5.7% to 9.1% and about 20% floating-rate senior debt. Interest is already deducted in our earnings and we do not subtract debt again; it is reflected in the bear case. Base case (about $23.3 per unit): $1.40 growing 2% a year for seven years, less than the 2.8% contractual escalators because first-half 2026 showed no net growth. After the initial lease terms we assume flat earnings through year 20, since the owned real estate and two five-year renewal options are documented, and then a 3% annual decline as buildings age. New acquisitions are not credited: two years of purchases funded by new debt is not a record through a downturn. Bear case (about $16.0): earnings start 12% lower, reflecting the 9.9% of rent expiring 2026 to 2029 re-leasing 30% lower plus refinancing costs on shekel bonds and floating debt. No growth at all for years, flat to year 15, then a 6% annual decline. Operators depend on Medicaid-reimbursed revenue, which is disclosed in the filing as a risk. Bull case (about $27.6): the 2.8% escalators flow fully through, giving 3.5% growth for seven years from $1.44, flat to year 25 as renewals are exercised, then a 2% decline. Something that could not be reconciled: the 2024 weighted share count is not comparable with 2025, so unit counts for earlier years are estimated from year-end ownership percentages. What would make this wrong: a large operator failing to pay rent, Medicaid reimbursement cuts, or shekel weakness or refinancing at much higher rates.