Strategic Student & Senior Housing Trust, Inc. (STSR) stock intrinsic value fair value estimate & owner earnings analysis

Strategic Student & Senior Housing Trust is a non-traded real estate company that owns four senior housing communities: three in Utah (Wellington, Cottonwood Creek and Charleston) and one in Oregon (Courtyard). A third-party operator runs the communities day to day. The company sold its last student housing property in July 2024 and has no equity capital to acquire more. Its shares have no public market, share redemptions and distributions to common stockholders have been suspended since March 2020, and there are about 13.1 million shares and units outstanding. What the business earns. Revenue was $37.7 million in 2025, up from $34.9 million in 2024 and $32.6 million in 2023. After $26.6 million of property operating costs, the four communities produced about $11.1 million before corporate costs, advisor fees, interest and capital spending. Cash from operations was $3.2 million in 2025, but that figure is helped by about $1.7 million of timing effects (lower other assets and higher unpaid payables), so we remove it. We also deduct about $3.4 million of ongoing upkeep spending (total additions to the properties were $3.6 million, and we treat a small slice as growth) and a token $16 thousand of stock compensation. What is left is owner earnings of about negative $2.0 million for 2025, or about negative $0.15 per share. The same measure was about negative $2.5 million in 2024 (negative $0.19 per share) and negative $5.1 million in 2023 (negative $0.39 per share). In plain terms, after paying interest on $102.7 million of mortgages and keeping the buildings up, the company does not yet generate spare cash for its owners. The loss narrowed by about $0.5 million in 2025, and in the first half of 2026 revenue rose to $20.5 million from $18.4 million a year earlier while operating cash flow edged up to $2.3 million from $2.2 million. We treat that as encouraging but not proven, and we do not build it into the base case. Because the earnings stream is negative, what the shares are worth depends on what the buildings are worth when the debt comes due, less everything owed ahead of common shareholders. We therefore value each case as a sale of the four properties at the end of 2028, brought back to today at 6%. What is owed ahead of shareholders. Two Freddie Mac mortgages: $42.7 million at 5.06% maturing February 23, 2028 (the three Utah properties) and $60.1 million at 4.86% maturing September 1, 2028 (Courtyard). About $98.7 million of principal will still be outstanding then, which is a single large repayment in 2028. In addition, the company owes its advisor and affiliates $14.4 million, accounts payable of $3.1 million, and preferred units held by a subsidiary of its sponsor: $10.2 million of units paying a cumulative 9% (payments accrue rather than being paid) plus $9.8 million of distributions payable that keep growing. These claims come out of the sale proceeds before common shareholders receive anything. We roughly project the distributions payable to reach about $14.9 million and the affiliate balance to about $14.8 million by the end of 2028. Base case, $3.97 per share. An independent appraiser (Kroll) valued the four communities at $209.6 million as of September 30, 2025, up from $203.1 million a year earlier. We use that value, less about 3% for selling costs (the company's own estimated per-share value does not deduct them), or about $203 million, and credit no growth beyond it, because nothing in the filings locks in future increases. Owner earnings stay near the 2023-2025 middle level of about negative $2.5 million a year, which, together with the $4.0 million of scheduled mortgage principal payments in 2026 and 2027, uses up the company's roughly $9.7 million of cash, restricted cash and Treasury bills. After the mortgages, payables, affiliate balance and preferred claims, about $59 million is left for common shareholders in 2028, or $3.97 per share in today's money. Bear case, $1.83 per share. Property income slips back to its 2024 level of about $9.4 million, and the buildings sell at the same yield the appraiser implied for 2025, giving about $176 million, less 3% selling costs, or about $171 million. Owner earnings stay at about negative $2.5 million a year. The 2028 debt maturity makes a forced or rushed sale the realistic path in this case, and the same claims ahead of shareholders leave only about $27 million. The legal cost dispute noted in the 2025 filing (about $0.4 million accrued, with a final amount that could be higher) is small next to these numbers. Bull case, $5.67 per share. The appraised value keeps rising by the $6.5 million it gained over the last twelve months, reaching about $231 million by the end of 2028 (about $224 million after selling costs), and the loss narrows by another $0.5 million a year, as it did in 2025, reaching about negative $0.5 million in 2028, which leaves roughly $2.7 million of cash at that point. After the same claims ahead of shareholders, about $85 million is left. What we chose not to credit. We did not assume occupancy or rent gains beyond today's levels, a refinancing at better rates, or a sale above the appraisal, because none of these is contracted or backed by a multi-year record through a downturn. Depreciation ($5.6 million in 2025) is an accounting charge with no cash cost and is already excluded. The company's own estimated per-share value of $6.37 (as of September 30, 2025) is higher than our base case, because it assumes no selling costs and does not reflect the cash burn or the growth of the preferred and affiliate balances through 2028. What could make this wrong. The appraisal was done on a desktop basis and no sale is planned or signed. If the properties sell well above $209.6 million, or if the sponsor forgives or defers its affiliate balance and preferred distributions, the shares would be worth more than we show. If the mortgages cannot be refinanced or extended in 2028, or occupancy falls, they would be worth less. The shares cannot be traded on any exchange, so even a fair valuation is not the same as being able to realize it.