EPR Properties Seals Strategic Shift With $454M Deal

The company will use the funds from the sale of its charter schools to pivot into a portfolio focused on experiential real estate.
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EPR Properties has sold off the majority of its charter school portfolio for $454 million, in a move to shift its focus toward experiential real estate. Rosemawr Management purchased the 47 charter schools included in the deal.

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Throughout 2006 to 2019, EPR invested $1.1 billion in its charter school assets and saw a 10.5 percent unlevered IRR that includes its latest sale, according to Brian Moriarty, the company’s vice president of communications. While the majority of EPR’s charter schools were sold in this transaction, the company divested three other charter schools this quarter for $21.6 million, with one remaining such asset to go.

Greg Silvers, president & CEO of EPR, said the charter school market had attractive returns, but there was too much volatility in the sector’s earnings for the company to continue. Instead, EPR wanted to take advantage of the strong consumer demand they see in the experiential real estate market.

While most of EPR’s education portfolio is sold, the company is still hanging onto its private school and early childhood education properties that will represent only 11 percent of its portfolio going forward. EPR added that the company doesn’t currently have plans to sell its private school and early education assets, but may consider this in the future.

EPR said it plans to use the funds from the sale of the charter schools to quickly find deals in the experiential market, specifically potential casino resort investments.

Pivot to experiential

The remaining 89 percent of the company’s portfolio will represent the experiential component that includes 176 theaters, 55 eat and play properties, 12 ski resorts, 18 attractions, seven experiential lodging properties, one gaming asset, seven fitness and wellness properties and three cultural assets.

The major shift to experiential is expected to reduce volatility from the charter school earnings and offer stronger returns, due to the growing experiential market. According to Moriarty, the change stems from wanting to bolster EPR’s already-diverse experiential portfolio, as a result of the company’s decades of experience in the sector.