Related Party Transactions and Economic Dependence

9 Months Ended

Sep. 30, 2024

Related Party Transactions [Abstract]

Related Party Transactions and Economic Dependence

NOTE 11. Related Party Transactions and Economic Dependence

The following entities and individuals are considered to be Related Parties:

Moishe Gubin	CEO & Chairman of the Board and a stockholder of the Company
Michael Blisko	Director and a stockholder of the Company

Lease Agreements with Related Parties

As of September 30, 2024 and December 31, 2023, each of the Company’s facilities was leased and operated by separate tenants. Each tenant is an entity that leases the facility from one of the Company’s subsidiaries and operates the facility as a healthcare facility. The Company had 68 tenants out of 114 who were related parties as of September 30, 2024, and 64 tenants out of 107 who were related parties as of December 31, 2023. Most of the lease agreements are triple net leases.

STRAWBERRY FIELDS REIT, INC. and Subsidiaries

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 11. Related Party Transactions and Economic Dependence (cont.)

Lease Agreements with Related Parties (cont.)

The related party interests were via Gubin Enterprises LP and Blisko Enterprises LP. Gubin Enterprises LP is controlled by Moishe Gubin, Chairman of the Board. Blisko Enterprises LP is controlled by Michael Blisko, who serves as Director on the Board of Directors. The related party facilities are concentrated in 3 states: Indiana, Illinois and Tennessee. As of September 30, 2024, in these states, the Company leased 40, 12 and 16 facilities, respectively to related parties.

Balances with Related Parties

	September 30, 2024		December 31, 2023
	(amounts in $000s)
Straight-line rent receivable	$	16,912	$	15,204
Tenant portion of replacement reserve	$	8,952	$	9,683
Notes receivable	$	6,494	$	7,075

Payments from and to Related Parties

	Nine Months ended September 30,				Three Months ended September 30,
	2024		2023		2024		2023
	(amounts in $000s)				(amounts in $000s)
Rental income received from related parties	$	53,200		40,616	$	18,277		14,330

Other Related Party Relationships

On September 30, 2024 and December 31, 2023, the Company had approximately $5.1 million and $1.2 million, respectively, on deposit with OptimumBank. Mr. Gubin is the Chairman of the Board of OptimumBank, and Mr. Blisko is a director.

On June 14, 2022, the Company purchased an $8 million note held by Infinity Healthcare Management, a company controlled by Mr. Blisko and Mr. Gubin. The note was issued by certain unaffiliated tenants. It bears interest at 7% per annum, payable annually. The principal amount of the note becomes payable 120 days after the date on which tenants are first able to exercise the purchase option for the properties contained in their lease. The purchase option becomes exercisable upon the Company’s ability to deliver fee simple title to the properties. If the tenants do not exercise the option within this period, then the outstanding balance of the note will thereafter be payable in thirty-six (36) equal monthly installments of principal and interest.