NOTE 6. Leases

As of March 31, 2026, and December 31, 2025, the Company had leased 133 properties, to tenant/operators in the States of Arkansas, Illinois, Indiana, Kansas, Kentucky, Missouri, Ohio, Oklahoma, Tennessee and Texas. As of March 31, 2026, and December 31, 2025, all the Company’s facilities were leased. Most of these facilities are leased on a triple net basis, meaning that the lessee (i.e., operator of the facility) is obligated under the lease for all expenses of the property in respect to insurance, taxes and property maintenance, as well as the lease payments.

The following table provides additional information regarding the properties owned/leased by the Company for the periods indicated:

Schedule of Properties Owned/Leased Information 

The following table provides additional information regarding the properties/facilities leased by the Company as of March 31, 2026:

Schedule of Additional Information on Properties Facilities Leased 

As of March 31, 2026, total future minimum rental revenues for the Company’s tenants are as follows :

Schedule of Future Minimum Rental Revenues 

STRAWBERRY FIELDS REIT, INC. and SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6. Leases (Cont.)

The following table provides summary information regarding the number of operational beds associated with a property leased by the Company and subleased to third-party operators:

  Schedule of Property Leases to Third Parties 

Right of use assets and operating lease liabilities are disclosed as separate line items in the condensed consolidated balance sheets and are valued based on the present value of the future minimum lease payments at the lease commencement. As the Company’s leases do not provide an implicit rate, the Company used its incremental borrowing rate based on the information available at the adoption date in determining the present value of future payments. Lease expense is recognized on a straight-line basis over the lease term. The Company’s operating lease obligation is for one skilled nursing facility in Indiana. The Indiana lease has an initial term that expires on March 1, 2028, and has two five-year renewal options. The lease is a triple net lease, which requires the Company to pay real and personal property taxes, insurance expenses and all capital improvements. The Company subleases the building as part of the Indiana master lease. Based on the sublease with the Company’s tenant, the tenant is required to pay real and personal property taxes, insurance expenses and all capital improvements.

The components of lease expense and other lease information are as follows (dollars in thousands):

Schedule of Components of Lease Expense 

Future minimum operating lease payments under non-cancellable leases as of March 31, 2026, reconciled to the Company’s operating lease liability presented on the condensed consolidated balance sheets are:

Schedule of Future Minimum Lease Payments on Non-Cancellable Leases

Other Properties leased by the Company

The Company, through one of its subsidiaries, leases its office spaces from a related party. Rental expenses under the leases for the three-month periods ended March 31, 2026 and 2025, were $56,000 and $55,000, respectively.

STRAWBERRY FIELDS REIT, INC. and SUBSIDIARIES

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS