EPR Divests Charter-School Portfolio

By Ian Ritter

EPR Properties, one of the Kansas City area’s largest public companies, has exited the charter-school business to better focus on its core portfolio of experiential-entertainment real estate.

The Kansas City-based real estate investment trust sold 47 assets in its charter-school portfolio to a fund sponsored by Rosemawr Management, based in New York, for $454 million. The transaction resulted in a net loss of $19 million in its investments on the properties, management said during a conference call outlining the deal. 

Separately, EPR previously sold three schools for $21.6 million and is in the process of divesting a final asset in the property sector. None of the REIT’s former schools are in the Kansas City area.

Now the focus for EPR, which had 2018 revenues of $701 million, will be on entertainment and recreation.

The Colorado Military Academy, in Colorado Springs, is one of the assets sold in EPR’s deal.

The sale “reduces our volatility and improves our predictability,” said Greg Silvers, EPR’s president and chief executive officer. “We expected to rapidly redeploy this [capital from the sale] into experiential assets, including casino-resorts.”

Management is structuring the company to concentrate on properties it is grouping into nine categories: “Theaters, Eat & Play, Ski, Attractions, Experiential Lodging, Gaming, Fitness & Wellness, Cultural, and Live Venues.”

“What we want to offer the marketplace is the most diverse experiential platform,” Silvers said, pointing out that the market offers a $100-billion opportunity. “It’s truly where the consumer is moving. We were in these experiential categories before experiential was recognized.”

Included in EPR’s current national portfolio is 183 megaplax theaters; 12 family entertainment centers, including some Main Event game locations; seven shopping centers with entertainment components; 36 golf complexes; 12 ski areas; 20 attractions that include museums and water parks; and 15 other recreation facilities that include the Genesis health clubs in Mission and Olathe.

Private education facilities are still 11 percent of EPR’s portfolio. Silvers said the company is interested in selling those assets, but it is not in hurry to market them because the triple-net-lease properties have low volatility and provide a consistent income stream.