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EPR Properties recently revealed that it had sold substantially all of its charter school portfolio, consisting of 47 charter school related assets, for approximately $454 million of gross cash consideration to a fund sponsored by Rosemawr Management LLC. The sale does not include three charter schools that the company sold previously in the fourth quarter of 2019 for proceeds of $21.6 million and the one remaining charter school which the Company expects to sell during the fourth quarter of 2019.
The Company also revealed that the sale of the charter school portfolio activates its strategic migration toward focusing its growth on experiential real estate.
“Since we entered the charter school market we have enjoyed very attractive returns, but competitive financing alternatives, primarily in the tax-exempt bond market, have caused structural market changes that increased earnings volatility and were incompatible with our mandate as a REIT to provide long-term and predictable income,” stated Greg Silvers, President and CEO of the Company. “After deliberate consideration of our strategic options, we are excited about our decision to refocus our growth on experiential real estate.”
Silvers continued, “We recognize the strong consumer demand for location-based experiences, and believe our decades of experience, longstanding relationships and institutional knowledge will continue to provide us with a sustainable competitive advantage. We believe our diversified portfolio, with the ultimate addition of casino resorts, distinguishes us from other platforms and uniquely positions us to benefit from the strong tailwinds provided by changing consumer preferences and favorable demographics. Experiential real estate represents an estimated $100 billion market opportunity, and we look forward to continuing to build a diversified portfolio of high-quality assets that deliver attractive returns to our shareholders.”
The Company will also discontinue the organization of its portfolio around the discrete segments of Entertainment, Recreation and Education. Going forward the Company’s Experiential portfolio will be organized by the primary property types targeted for growth in experiential real estate. These property types include: Theatres, Eat & Play, Ski, Attractions, Experiential Lodging, Gaming, Fitness & Wellness, Cultural and Live Venues.