THE DIVERSIFIED
EXPERIENTIAL REIT
2025 ANNUAL REPORT
Annual Shareholders Meeting
The annual meeting of
shareholders will be held at
11:00 a.m. (CST), May 5, 2026,
at the Company’s offices at
909 Walnut St., Suite 200,
Kansas City, MO 64106.
Stock Market Information
The Company’s common
shares of beneficial
interest are traded on the
New York Stock Exchange
under the symbol EPR.
Investor Relations
For further information regarding
EPR Properties, please direct
inquiries to:
EPR Properties
Investor Relations Department
909 Walnut St., Suite 200
Kansas City, MO 64106
brianm@eprkc.com
Transfer Agent and Registrar
Computershare Trust Company, N.A.
P.O. Box 43007
Providence, RI 02940-3007
Independent Auditors
KPMG LLP
1000 Walnut St.
Suite 1000
Kansas City, MO 64106
For access to additional financial
information, visit EPRKC.COM
Corporate
Information
Board of Trustees
GREGORY K. SILVERS
Chairman & Chief Executive Officer
VIRGINIA E. (GINNY) SHANKS
Lead Independent Trustee
PETER C. BROWN
WILLIAM P. (LIAM) BROWN
JOHN P. CASE III
JAMES B. CONNOR
ROBIN P. STERNECK
JOHN PETER (JP) SUAREZ
LISA G. TRIMBERGER
CAIXIA Y. ZIEGLER
Executive Officers
GREGORY K. SILVERS
Chairman & Chief Executive Officer
BENJAMIN N. FOX
Executive Vice President & Chief Investment Officer
MARK A. PETERSON
Executive Vice President, Chief Financial Officer & Treasurer
ELIZABETH A. GRACE
Senior Vice President – Human Resources & Administration
GWEN M. JOHNSON
Senior Vice President – Asset Management
TONYA L. MATER
Senior Vice President & Chief Accounting Officer
BRIAN A. MORIARTY
Senior Vice President – Corporate Communications
PAUL R. TURVEY
Senior Vice President, General Counsel & Secretary
Dear Fellow Shareholder:
2025 was defined by steady execution and meaningful
progress toward accelerated growth. Our experiential
portfolio once again demonstrated resilience, supported by
solid tenant performance and sustained consumer demand
for shared experiences. Against a backdrop of economic
uncertainty, our disciplined deployment strategy, strategic
capital recycling, and deep relationships with new and
previous operators enabled us to expand our portfolio and
enhance our financial flexibility.
We delivered strong financial performance, including FFO as adjusted (“FFOAA”) per share earnings
growth of 5.1%*, demonstrating the stability of our experiential platform and the benefits of our
relationship-driven, high-quality investment pipeline. We also made strategic progress on capital
recycling, primarily focused on non-core theatre properties and opportunistic education sales. These
actions created capacity for accretive experiential investments and further strengthened our portfolio.
GREGORY K. SILVERS
Chairman & CEO
*See Form 10-K or Supplemental Operating and Financial Data for the Fourth Quarter and Year Ended December 31, 2025 for definition and calculation
of this non-GAAP measure; Coverage is TTM December 31, 2025
PORTFOLIO GROWTH AND STRATEGIC ALIGNMENT
Throughout 2025, we continued to enhance our portfolio with selective investments in proven
experiential properties. These investments reflect our confidence in long-term demand for experiences
and our commitment to expanding in categories that offer resilient performance and compelling future
growth opportunities.
During the year, our investment spending was approximately $289 million and included several notable
highlights, such as our first traditional golf investment, distinctive attraction concepts, and differentiated
fitness platforms. These investments both strengthen relationships with existing operators and create
new partnerships, expanding our presence across attractive experiential segments.
Consistent with our long-term strategy, our strategic capital recycling program was an important
element of our 2025 progress. During the year dispositions totaling approximately $168 million
consisted of primarily non-core theatres and early childhood education properties. These targeted
dispositions further improved portfolio quality, reduced concentration risk, and created capacity for
We delivered strong financial performance, including FFO as adjusted
(“FFOAA”) per share earnings growth of 5.1%*, demonstrating the
stability of our experiential platform and the benefits of our relationship-
driven, high-quality investment pipeline.
“
”
OCEAN BREEZE WATER PARK - Virginia Beach, Virginia
2025 Investment Spending Highlights
FRISCO LAKES - Dallas, Texas
ALTEA - Winnipeg, Canada
EAT & PLAY
Golf Entertainment
Complexes
Family Entertainment
Centers
Bowling/Karting
Entertainment
Districts
ATTRACTIONS
Amusement Parks
Waterparks
Marinas
GAMING
Casino Resorts
CULTURAL
Museums
Zoos
Aquariums
EXPERIENTIAL LODGING
Ski-Based Lodging
Waterpark Lodging
National Parks
Themed Lodging
LIVE VENUES
Concert Venues
Performance Venues
E-Gaming
SKI
Metro
Regional
Destination
FITNESS & WELLNESS
Fitness Centers
Climbing Gyms
Spas/Clubs
Youth Sports/
Athletics
Golf
Target Experiential Property Types
reinvestment into accretive experiential investments. Consumers continue to seek value-oriented leisure
and entertainment. Moreover, many of our operators have enhanced their offerings around an evolving
consumer backdrop, including annual pass and subscription programs, bundled and loyalty-driven
discounting, dynamic pricing, and enhanced technology and digital engagement tools.
These initiatives not only improve customer experience but also create operational efficiencies that
strengthen tenant performance and support rent coverage. Our total portfolio coverage remained
strong at 2.0x*. Box office held steady, with approximately 1% growth in North America and
further growth expected in 2026. Our theatre portfolio continued its stable performance, aided by
increased per patron food and beverage spending.
We ended the year with a total of 333 properties and total investments of $7.0 billion. Our
experiential portfolio totaled 278 properties with 54 operators, and our education portfolio totaled
55 properties with five operators.
POSITIONED FOR ACCELERATED INVESTING
Our balance sheet remains one of our most important strengths. During the year we executed
key capital markets initiatives to fund our investment pipeline and strengthen our balance sheet.
We closed on a $550 million public offering of 4.75% senior unsecured notes due in 2030, with
proceeds used to repay borrowings under our unsecured revolving credit facility and support general
corporate purposes. Shortly thereafter, we established a $400 million “at-the-market” equity offering
program (“ATM Program”) providing flexible access to equity capital as needed.
Our conservative payout ratio and strong earnings growth also supported a 3.5% increase to our
monthly dividend to common shareholders in 2025, while maintaining substantial financial flexibility.
We have built a robust pipeline of high-quality experiential investments. Larger opportunities are
now accessible due to our strengthened balance sheet, expanded operator relationships, and deep
underwriting expertise. The strength of our balance sheet, combined with our disciplined approach
to capital allocation, positions us to capitalize on the significant investment opportunities we
anticipate in 2026.
*See Form 10-K or Supplemental Operating and Financial Data for the Fourth Quarter and Year Ended December 31, 2025 for definition and calculation of this non-GAAP measure
Capital Structure
(in millions)
Q4
2025
Common
Equity
$3,800
Preferred
Equity
$371
Net
Debt
$2,864
Total Market
Capitalization
$7,035
Financial Highlights
Liquidity available: $90.6M cash on hand
$1B revolver, ZERO outstanding
~$2.9B total debt; all fixed rate or fixed
through int. rate swaps at wtd. avg. of 4.4%
Unsecured
Debt 99%
Net Debt to Annualized
Adjusted EBITDAre* 4.9x
New ATM Program
for issuance of
common shares for
aggregate sales price
up to $400M
Closed public
offering of $550M
of 5-year senior
unsecured notes;
interest rate of 4.75%
Fitch
BBB-
Stable
S&P
BBB-
Stable
Investment Grade
Ratings
EPR’s unsecured debt
is investment grade
Moody’s
Baa3
Stable
ANDRETTI
TOPGOLF
DIGGERLAND
COMMITMENT TO
CORPORATE RESPONSIBILITY
We remain committed to operating with integrity,
advancing sustainable practices, and supporting the
long-term health of our communities. We continue
to work with operators on energy efficiency
measures and environmentally responsible
development. Our culture emphasizes inclusivity,
diverse perspectives, and strong governance
principles, all of which are key components of our
long-term value creation framework.
CREATING SHAREHOLDER VALUE
As we look toward 2026 and beyond, our experiential real estate platform is well positioned for
outperformance. The sustained consumer preference for shared experiences, combined with our
relationship-driven strategy, disciplined
capital allocation, and strong financial
foundation, creates a compelling path for
accelerated value creation.
For nearly 30 years, we have
demonstrated our ability to navigate
economic cycles by focusing on what
we can control, including selective
investments, conservative balance sheet
management, and strategic capital
recycling. These principles have served
us well as we have continued to deliver
lifetime total returns that exceed both
the MSCI US REIT Index and the Russell
1000 Index.
Thank you to our shareholders,
customers, and team members for your
continued trust and support. We are excited about the opportunities ahead and confident in our
ability to deliver enduring value through focused, strategic growth.
Sincerely,
GREGORY K. SILVERS
Chairman & CEO
1,138%
RUSSELL 1000
1,788%
EPR
769%
MSCI US REIT (RMZ)
Lifetime Total Shareholder Return
Source: S&P Capital IQ, dates 11/18/1997 through 12/31/2025
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
☒
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2025
or
☐
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 001-13561
EPR PROPERTIES
(Exact name of registrant as specified in its charter)
Maryland
43-1790877
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
909 Walnut Street, Suite 200
Kansas City, Missouri
64106
(Address of principal executive offices)
(Zip Code)
Registrant’s telephone number, including area code: (816) 472-1700
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading
symbol(s)
Name of each exchange on
which registered
Common shares, par value $0.01 per share
EPR
New York Stock Exchange
5.75% Series C cumulative convertible preferred shares, par value $0.01 per share
EPR PrC
New York Stock Exchange
9.00% Series E cumulative convertible preferred shares, par value $0.01 per share
EPR PrE
New York Stock Exchange
5.75% Series G cumulative redeemable preferred shares, par value $0.01 per share
EPR PrG
New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None.
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☒ No ☐
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ☐ No ☒
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of
Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such
files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an
emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth
company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☒
Accelerated filer
☐
Non-accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any
new or revised financial standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal
control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C.7262(b)) by the registered public accounting firm that prepared
or issued its audit report. ☒
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the
filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received
by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒
The aggregate market value of the common shares of beneficial interest (“common shares”) of the registrant held by non-affiliates, based on the closing
price on the last business day of the registrant’s most recently completed second fiscal quarter, as reported on the New York Stock Exchange, was
$4,458,055,841.
At February 25, 2026, there were 76,520,011 common shares outstanding.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant’s definitive Proxy Statement for the 2026 Annual Meeting of Shareholders to be filed with the Commission pursuant to Regulation 14A
are incorporated by reference in Part III of this Annual Report on Form 10-K.
CAUTIONARY STATEMENT CONCERNING FORWARD-LOOKING STATEMENTS
With the exception of historical information, certain statements contained or incorporated by reference herein may
contain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended
(the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”),
such as those pertaining to our capital resources and liquidity, our expected pursuit of growth opportunities, our
expected cash flows, the performance of our customers, our expected cash collections and our results of operations
and financial condition. Forward-looking statements involve numerous risks and uncertainties, and you should not
rely on them as predictions of actual events. There is no assurance the events or circumstances reflected in the
forward-looking statements will occur. You can identify forward-looking statements by use of words such as “will
be,” “intend,” “continue,” “believe,” “may,” “expect,” “hope,” “anticipate,” “goal,” “forecast,” “pipeline,”
“estimates,” “offers,” “plans,” “would” or other similar expressions or other comparable terms or discussions of
strategy, plans or intentions in this Annual Report on Form 10-K.
Forward-looking statements necessarily are dependent on assumptions, data or methods that may be incorrect or
imprecise. These forward-looking statements represent our intentions, plans, expectations and beliefs and are subject
to numerous assumptions, risks and uncertainties. Many of the factors that will determine these items are beyond our
ability to control or predict. For further discussion of these factors see "Summary Risk Factors" below and Item 1A -
"Risk Factors" in this Annual Report on Form 10-K.
For these statements, we claim the protection of the safe harbor for forward-looking statements contained in the
Private Securities Litigation Reform Act of 1995. You are cautioned not to place undue reliance on our forward-
looking statements, which speak only as of the date of this Annual Report on Form 10-K or the date of any
document incorporated by reference herein. All subsequent written and oral forward-looking statements attributable
to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements
contained or referred to in this section. Except as required by law, we do not undertake any obligation to release
publicly any revisions to our forward-looking statements to reflect events or circumstances after the date of this
Annual Report on Form 10-K.
SUMMARY RISK FACTORS
Our business is subject to varying degrees of risk and uncertainty. You should carefully review and consider the full
discussion of our risk factors in Item 1A - “Risk Factors” in this Annual Report on Form 10-K. If any of these risks
occur, our business, financial condition or results of operations could be materially and adversely affected. Set forth
below is a summary list of the principal risk factors relating to our business:
•
Global economic and geopolitical uncertainty, disruptions in financial markets, and challenging economic
conditions;
•
Risks associated with the future outbreak of any highly infectious or contagious diseases, such as the
COVID-19 pandemic;
•
The impact of inflation on our customers and our results of operations;
•
Actual and perceived changes in U.S. trade policies;
•
Reduction in discretionary spending by consumers;
•
Covenants in our debt instruments that limit our ability to take certain actions;
•
Adverse changes in our credit ratings;
•
Elevated interest rates;
•
Defaults in the performance of lease terms by our tenants;
•
Defaults by our customers and counterparties on their obligations owed to us;
•
A borrower's bankruptcy or default;
•
Risks associated with sales or divestitures of properties;
•
Our ability to renew maturing leases on terms comparable to prior leases and/or our ability to locate
substitute lessees for these properties on economically favorable terms or at all;
•
Risks of operating in the experiential real estate industry (including the impact of labor strikes on the
production, supply or theatrical release of motion pictures to our theatre tenants);
i
•
Our ability to compete effectively;
•
Risks associated with three tenants representing a substantial portion of our lease revenues;
•
The ability of our build-to-suit tenants to achieve sufficient operating results within expected time-frames
and therefore have capacity to pay their agreed-upon rent;
•
Risks associated with our dependence on third-party managers to operate certain of our properties;
•
Risks associated with our level of indebtedness;
•
Risks associated with use of leverage to acquire properties;
•
Financing arrangements that require lump-sum payments;
•
Our ability to raise capital;
•
The concentration of our investment portfolio;
•
Our continued qualification as a real estate investment trust for U.S. federal income tax purposes and
related tax matters;
•
The ability of our subsidiaries to satisfy their obligations;
•
Financing arrangements that expose us to funding and completion risks;
•
Our reliance on a limited number of associates, the loss of which could harm operations;
•
Risks associated with the employment of personnel by managers of certain of our properties;
•
Risks associated with the gaming industry;
•
Risks associated with gaming and other regulatory authorities;
•
Delays or prohibitions of transfers of gaming properties due to required regulatory approvals;
•
Risks associated with security breaches and other disruptions;
•
Risks associated with the use of artificial intelligence;
•
Changes in accounting standards that may adversely affect our financial statements;
•
Fluctuations in the value of real estate income and investments;
•
Risks relating to real estate ownership, leasing and development, including local conditions such as an
oversupply of space or a reduction in demand for real estate in the area, competition from other available
space, whether tenants and users such as customers of our tenants consider a property attractive, changes in
real estate taxes and other expenses, changes in market rental rates, the timing and costs associated with
property improvements and rentals, changes in taxation or zoning laws or other governmental regulation,
whether we are able to pass some or all of any increased operating costs through to tenants or other
customers, and how well we manage our properties;
•
Our ability to secure adequate insurance and risk of potential uninsured losses, including from natural
disasters;
•
Risks involved in joint ventures;
•
Risks in leasing multi-tenant properties;
•
Risks associated with litigation that could negatively impact our financial condition, cash flows, results of
operations and the trading price of our shares;
•
A failure to comply with the Americans with Disabilities Act or other laws;
•
Risks of environmental liability;
•
Risks associated with climate change;
•
Risks associated with the relatively illiquid nature of our real estate investments;
•
Risks with owning assets in foreign countries;
•
Risks associated with owning, operating or financing properties for which the tenants', mortgagors' or our
operations may be impacted by weather conditions, climate change and natural disasters;
•
Risks associated with the development, redevelopment and expansion of properties and the acquisition of
other real estate related companies;
•
Our ability to pay dividends in cash or at current rates;
•
Risks associated with the impact of inflation or market interest rates on the value of our shares;
•
Fluctuations in the market prices for our shares;
•
Certain limits on changes in control imposed under law and by our Declaration of Trust and Bylaws;
•
Policy changes obtained without the approval of our shareholders;
•
Equity issuances that could dilute the value of our shares;
•
Future offerings of debt or equity securities, which may rank senior to our common shares;
•
Risks associated with changes in foreign exchange rates; and
•
Changes in laws and regulations, including tax laws and regulations.
ii
Market and Industry Data
This Annual Report on Form 10-K contains market and industry data and forecasts obtained from publicly available
information, various industry publications, and other published industry sources. We have not independently verified
the information from third party sources and cannot make any representation as to the accuracy or completeness of
such information. None of the reports and other materials of third-party sources referred to in this Annual Report on
Form 10-K were prepared for use in, or in connection with, this Annual Report on Form 10-K.
iii
TABLE OF CONTENTS
Page
PART I ............................................................................................................................................................. 1
Item 1.
Business ........................................................................................................................ 1
Item 1A.
Risk Factors .................................................................................................................. 10
Item 1B.
Unresolved Staff Comments ........................................................................................ 32
Item 1C.
Cybersecurity ............................................................................................................... 32
Item 2.
Properties ...................................................................................................................... 33
Item 3.
Legal Proceedings ........................................................................................................ 36
Item 4.
Mine Safety Disclosures ............................................................................................... 36
PART II ........................................................................................................................................................... 36
Item 5.
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer
Purchases of Equity Securities ..................................................................................... 36
Item 6.
[Reserved] .................................................................................................................... 38
Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of
Operations .................................................................................................................... 39
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk ..................................... 55
Item 8.
Financial Statements and Supplementary Data ............................................................ 58
Item 9.
Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure ..................................................................................................................... 112
Item 9A.
Controls and Procedures ............................................................................................... 112
Item 9B.
Other Information ......................................................................................................... 113
Item 9C.
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections ......................... 113
PART III .......................................................................................................................................................... 113
Item 10.
Directors, Executive Officers and Corporate Governance ........................................... 113
Item 11.
Executive Compensation .............................................................................................. 113
Item 12.
Security Ownership of Certain Beneficial Owners and Management and Related
Stockholder Matters ..................................................................................................... 113
Item 13.
Certain Relationships and Related Transactions, and Director Independence ............. 113
Item 14.
Principal Accountant Fees and Services ...................................................................... 114
PART IV .......................................................................................................................................................... 114
Item 15.
Exhibits and Financial Statement Schedules ................................................................ 114
Item 16.
Form 10-K Summary ................................................................................................... 117
iv
PART I
Item 1. Business
General
EPR Properties (“we,” “us,” “our,” “EPR” or the “Company”) was formed on August 22, 1997 as a self-
administered Maryland real estate investment trust (“REIT”), and an initial public offering of our common shares of
beneficial interest (“common shares”) was completed on November 18, 1997. Since that time, we have been a
leading net lease investor in experiential real estate, venues that create value by facilitating out-of-home leisure and
recreation experiences where consumers choose to spend their discretionary time and money. We focus our
underwriting of experiential property investments on key industry and property cash flow criteria, as well as the
credit metrics of our tenants and customers.
We believe that our position is further supported by the fact that our customers offer popular and affordable
entertainment and social outlet options, particularly through our theatres, eat & play and cultural venues.
Additionally, we believe we benefit from the regional destinations offered by our experiential lodging, ski,
attractions and gaming properties, which are drive-to locations that do not require air travel.
The Company remains focused on future growth targeted in experiential property types. Experiential properties have
proven to be an enduring sector of the real estate industry and we believe our strategy of diversified growth, industry
relationships and the knowledge of our management team, provides us with a distinct competitive advantage. This
strategy aligns with the long-term consumer trends of the growing experiential economy and offers the potential for
higher growth, increased diversification and better yields. Our Education portfolio, consisting of early childhood
education centers and private schools, continues as a legacy investment and provides additional geographic and
property diversity. We intend to ultimately dispose of our Education portfolio over time and recycle the proceeds
into other experiential investments.
As of December 31, 2025, our total assets were approximately $5.7 billion (after accumulated depreciation of
approximately $1.7 billion) with properties located in 43 states and Canada. Our investments are generally
structured as long-term triple-net leases or mortgages that require tenants or borrowers to pay substantially all
expenses associated with the operation and maintenance of the property.
Our total investments (a non-GAAP financial measure) were approximately $7.0 billion at December 31, 2025. See
Item 7 - "Management's Discussion and Analysis of Financial Condition and Results of Operations - Non-GAAP
Financial Measures" for the reconciliation of "Total assets" in the consolidated balance sheet to total investments
and the calculation of total investments at December 31, 2025 and 2024. We group our investments into two
reportable segments: Experiential and Education. As of December 31, 2025, our Experiential investments comprised
$6.6 billion, or 94%, and our Education investments comprised $0.4 billion, or 6%, of our total investments. A more
detailed description of the property types included within these segments is provided below.
Although we are primarily a long-term investor, we may sell assets if we believe that it is in the best interest of our
shareholders or pursuant to contractual rights of our tenants or our customers.
Experiential
As of December 31, 2025, our Experiential portfolio (excluding property under development, undeveloped land
inventory and two joint venture properties) consisted of the following property types (owned or financed):
•
148 theatre properties;
•
60 eat & play properties (including seven theatres located in entertainment districts);
•
26 attraction properties;
•
11 ski properties;
1
•
four experiential lodging properties;
•
27 fitness & wellness properties;
•
one gaming property; and
•
one cultural property.
As of December 31, 2025, our wholly-owned Experiential real estate portfolio consisted of approximately
19.0 million square feet, was 99% leased or operated and included $54.9 million in property under development and
$20.2 million in undeveloped land inventory.
Theatres
A significant portion of our Experiential portfolio consists of modern megaplex theatres. The theatre industry
continues to rebound from the production delays created by the 2023 writers' and actors' strikes. Total North
American box office revenues for 2025 increased by approximately 1% versus 2024. Separately, theatre food and
beverage revenues per customer visit have notably increased as compared to 2019.
During the period in which COVID-19 pandemic-response restrictions were placed on theatre operations, certain
studios chose to experiment with hybrid content release strategies in support of their direct-to-consumer streaming
services. Results of such various release experiments demonstrated the significant economic and strategic
importance of theatrical exhibition and studios have broadly returned to exclusive theatrical releases for a period of
approximately 45 days (versus the previous window of approximately 75 days), which is when most of a film's box
office revenue is earned.
The modern megaplex theatre provides a greatly enhanced audio and visual experience for patrons. Additionally,
national and local exhibitors have made significant strides to further enhance the customer experience. These
enhancements include reserved, luxury seating and expanded food and beverage offerings, such as the addition of
alcohol and more efficient point of sale systems. The evolution of the theatre industry over the last 30 years, from
the sloped floor theatre to the megaplex stadium theatre to the expanded amenity theatre, demonstrates that
exhibitors and their landlords are willing to make investments in their theatres to take the customer experience to the
next level.
Movie-going has been a dominant out-of-home entertainment option for decades, with an average of approximately
15 million tickets sold weekly in North America in 2025. We believe that the evolution in theatres and enhanced
customer experience will continue to bring customers back to enjoy film exhibition. While consumers have the
option of watching streaming content at home, historical data indicates that theatre exhibition and at-home streaming
options have successfully coexisted, highlighted by the fact that the most frequent moviegoers also spend the most
time streaming. This is in part likely due to the fact that the majority of content streamed in-home is series-based
content.
Consumer demand for moviegoing has repeatedly proven to be content-driven, with strong films delivering outsized
attendance and revenues. Accordingly, the industry relies on a consistent cadence of wide release films supported by
meaningful theatrical exclusivity windows. Potential studio consolidation could introduce risk that the number of
wide release titles are reduced or theatrical windows are compressed.
Due to our asset concentration and historical challenges, we intend to reduce our investments in theatres in the future
and further diversify our other experiential property types. We expect this to occur as we limit new investments in
theatres, grow other target experiential property types and pursue opportunistic dispositions of theatre properties.
As of December 31, 2025, our owned theatre properties were leased to 17 different leading theatre operators. A
significant portion of our total revenue was from American Multi-Cinema, Inc. ("AMC") and Cineworld Group, plc,
Regal Entertainment Group and our other Regal theatre tenants (collectively, “Regal”). For the year ended
December 31, 2025, approximately $97.4 million, or 13.6%, and $82.8 million, or 11.5%, of the Company's total
revenue was from AMC and Regal, respectively.
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Eat & Play
The emergence of the "eatertainment" category has inspired an increasing number of successful concepts that appeal
to consumers by providing high-quality food and entertainment options all at one location. Our eat & play portfolio
includes golf entertainment complexes, entertainment districts and family entertainment centers.
Our golf entertainment complexes combine golf with entertainment, competition and food and beverage service, and
are leased to, or we have mortgage receivables from, Topgolf USA ("Topgolf"). By combining interactive
entertainment with high-quality food and beverage and a long-lived recreational activity, Topgolf provides an
innovative, enjoyable and repeatable customer experience. We expect to continue to pursue select opportunities
related to golf entertainment complexes. A significant portion of our total revenue was from Topgolf, which totaled
approximately $102.3 million, or 14.2%, of the Company's total revenue for the year ended December 31, 2025.
Entertainment districts are restaurant, retail and other entertainment venues typically anchored by a megaplex
theatre. The opportunity to capitalize on the traffic generated by our existing market-dominant theatres to create
entertainment districts not only strengthens the execution of the megaplex theatre, but adds diversity to our tenant
and asset base. This broad selection of entertainment options creates a convenient and engaging experience for
consumers who want to park their cars only once, and experience different forms of entertainment. We have and will
continue to evaluate our existing portfolio for additional development of entertainment, retail and restaurant density,
and we will also continue to evaluate the purchase or financing of existing entertainment districts that demonstrate
strong financial performance and meet our quality standards. The leasing and property management requirements of
our entertainment districts are generally met using third-party professional service providers.
Our family entertainment center operators offer a variety of entertainment options including bowling, laser tag,
karting, arcade games and virtual reality experiences. Andretti Indoor Karting and Games ("Andretti") represents an
operator that delivers a unique combination of entertainment options, combining electric go karts with immersive
gaming. We have grown our investments with Andretti as they have consistently created highly entertaining and
successful offerings. We will continue to seek opportunities for the acquisition, financing or development of family
entertainment centers that leverage our expertise in this area.
Attractions
Our attractions portfolio consists primarily of waterparks and amusement parks, each of which draw a diverse
segment of customers. These properties offer themed experiences designed to appeal to all ages while remaining
accessible in both cost and proximity.
Our attraction operators continue to deliver innovative and compelling attractions along with high standards of
service, making our attractions a day of fun that is accessible for families, teens, locals and tourists. As the
attractions industry continues to evolve, innovative technologies and concepts are redefining the attractions
experience.
Our attraction properties are leased to, or we have mortgage notes receivable from, eight different operators. We
expect to continue to pursue opportunities in this area.
Ski
Our ski portfolio provides a sustainable advantage for the experience-oriented consumer, providing outdoor
entertainment in the winter and, in some cases, year-round. All the ski properties that serve as collateral for our
mortgage notes in this area, as well as our three owned properties, offer snowmaking capabilities and provide a
variety of terrains and vertical drop options.
We believe that the primary appeal of our ski properties lies in the convenient and reliable experience consumers can
expect. Given that all of our ski properties are located near major metropolitan areas, they offer skiing,
snowboarding and other activities without the expense, travel, or lengthy preparations of remote ski resorts.
Furthermore, advanced snowmaking capabilities increase the reliability of the experience during the winter versus
other ski properties without such capabilities. These properties are leased to, or we have mortgage notes receivable
from, three different operators. We expect to continue to pursue opportunities in this area.
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Experiential Lodging
Experiential lodging meets the needs of consumers by providing a convenient, central location that combines high-
quality lodging amenities with entertainment, recreation and leisure activities. The appeal of these properties attracts
multiple generations at once. By offering more than the standard lodging destination, these properties provide an
added incentive as consumers opt for distinctive, curated experiences. Our investments in experiential lodging are
structured using triple-net leases and mortgage notes, and we currently operate two properties. We expect to
continue to pursue opportunities for investments in experiential lodging.
Fitness & Wellness
The increased focus on holistic wellness has become a driving force within the fitness and wellness industry. From
relaxing spas to intense spin classes, consumers are seeking an expanded set of offerings delivered across a variety
of boutique fitness centers, larger fitness centers and resort spas. By allowing consumers to focus on their individual
interests and goals in a community setting, operators gain loyalty and retention which are essential elements in the
ongoing success of fitness and wellness facilities. Industry leaders remain at the forefront by offering personalization
within congregate settings. Our tenants make it their goal to motivate, educate, and help consumers look and feel
better. We expect to continue to pursue opportunities for investments in Fitness & Wellness.
Gaming
Our gaming portfolio is strategically focused on casino resorts and hotels leased to leading operators with a strong
regulatory track record that seek to drive consumer loyalty and value through quality customer experiences, superior
service, world-class affinity programs and continuous innovation on and off the gaming floor. Additionally, we
target casino resorts and hotels that provide a wide array of experiential offerings outside of lodging and state-of-
the-art gaming. Through live entertainment, various recreational opportunities, dining options and night clubs, the
combination of amenities appeals to a broader demographic.
As of December 31, 2025, our investment in gaming consisted solely of land under ground lease related to the
Resorts World Catskills casino and resort project in Sullivan County, New York. Our ground lease tenant has
invested in excess of $930.0 million in the construction of the casino and resort project, and the casino first opened
for business in February 2018. We will continue to pursue opportunities for investment in gaming under triple-net
lease structures or mortgages.
Cultural
Our cultural investments seek to engage consumers and create memorable experiences and are evolving to offer
immersive and interactive exhibits that encourage repeat visits. Combining an opportunity to experience animals, art
or history with a congregate social experience, cultural venues, such as zoos, aquariums and museums, are
reemerging as an entertainment option. As appreciation for the importance of leisure time is growing, cultural
venues are broadening their appeal to reach a variety of customers.
Desiring to be a preeminent provider of location-based experiences, several trends have developed among cultural
venues. Many are utilizing new technology, personalizing the guest experience and implementing an element of play
that was previously absent. In making new investments in this property type, we will continue to identify the
locations and tenants that execute well on these trends and have a history of strong attendance. City Museum in St.
Louis is one of our properties and is a great example of an emerging category called “artainment,” which is an art
display that invites guests to interact and explore.
We believe that demand for cultural activities will continue to build, and we expect to continue to pursue
opportunities in this area.
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Education
As of December 31, 2025, our Education segment consisted of the following property types (owned or financed):
•
46 early childhood education center properties; and
•
nine private school properties.
As of December 31, 2025, our wholly-owned Education real estate portfolio consisted of approximately 1.1 million
square feet and was 100% leased. Our private schools provide an alternative to meet the significant demand for
high-quality education in the United States. As educational choice remains a priority for parents, private schools
provide yet another option for maximizing the educational experience. Our investment in early childhood education
centers recognizes the growing demand for quality early childhood education facilities that offer the best educational
experience in a competitive market. As discussed above, our growth going forward will be focused on experiential
properties and therefore we do not expect to seek additional opportunities for education properties.
Business Objectives and Strategies
Our vision is to continue to build the premier diversified experiential REIT. We focus on real estate venues that
create value by facilitating out of home leisure and recreation experiences where consumers choose to spend their
discretionary time and money. These are properties that make up the social infrastructure of society.
Our long-term primary business objective is to enhance shareholder value by achieving predictable and increasing
Funds From Operations As Adjusted ("FFOAA"), Adjusted Funds From Operations ("AFFO") and dividends per
share (See Item 7 – “Management’s Discussion and Analysis of Financial Condition and Results of Operations -
Non-GAAP Financial Measures" for a discussion and reconciliations of FFOAA and AFFO, which are non-GAAP
financial measures). Our growth strategy focuses on acquiring or developing experiential properties in which we
maintain a depth of knowledge and relationships, and which we believe offer sustained performance throughout
most economic cycles. We intend to achieve this objective by continuing to execute the Growth Strategies,
Operating Strategies and Capitalization Strategies described below.
Growth Strategies
Our strategic growth is focused on acquiring or developing a high-quality, diversified portfolio of experiential real
estate venues that create value by facilitating out of home leisure and recreation experiences where consumers
choose to spend their discretionary time and money. We may also pursue opportunities to provide mortgage
financing for these investments in certain situations where this structure is more advantageous than owning the
underlying real estate.
Our focus on experiential properties is consistent with our strategic organizational design, which is structured around
building a center of knowledge and strong operating competencies in the experiential real estate market. Retention
and building of this knowledge depth creates a competitive advantage allowing us to more quickly identify key
market trends.
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To this end, we deliberately apply information and our ingenuity to identify properties that represent potential
logical extensions within each of our existing experiential property types, or potential future additional experiential
property types. As part of our strategic planning and portfolio management process, we assess new opportunities
against the following underwriting principles:
Industry
•
Experiential Alignment
•
Proven Business Model
•
Enduring Value
•
Addressable Opportunity
Property
•
Location Quality
•
Competitive Position
•
Location Rent Coverage
•
Cash Flow Durability
Tenant
•
Demonstrated Success
•
Commitment
•
Reputable Management
•
Solid Credit Quality
We believe that our nearly 30 years of experience and knowledge in the experiential real estate market gives us the
opportunity to be the dominant player in this area. Additionally, we have tenant and borrower relationships that
provide us with access to investment opportunities.
Operating Strategies
Lease Risk Minimization
To avoid initial lease-up risks and produce a predictable income stream, we typically acquire or develop single-
tenant properties that are leased under long-term leases. We believe our willingness to make long-term investments
in properties offers our tenants financial flexibility and allows tenants to allocate capital to their core businesses.
Although we will continue to emphasize single-tenant properties, we have acquired or developed, and may continue
to acquire or develop, multi-tenant properties we believe add shareholder value.
Lease Structure
We structure our leasing arrangements to achieve a positive spread between our cost of capital and the rents paid by
our tenants. We typically structure leases on a triple-net basis under which the tenants bear the principal portion of
the financial and operational responsibility for the properties. During each lease term and any renewal periods, the
leases typically provide for periodic increases in rent and/or percentage rent based upon a percentage of the tenant’s
gross sales over a predetermined level. In our multi-tenant property leases and some of our theatre leases, we
generally require the tenant to pay a common area maintenance (“CAM”) charge to defray its pro rata share of
insurance, taxes and maintenance costs.
Mortgage Structure
We structure our mortgages to achieve economics similar to our triple-net lease structure with a positive spread
between our cost of capital and the interest paid by our tenants. During each mortgage term and any renewal periods,
the notes typically provide for periodic increases in interest and/or participating features based upon a percentage of
the tenant’s gross sales over a predetermined level. Many of our mortgage notes also contain provisions which
provide us the option, subject to certain terms, to convert the outstanding balances to ownership of the underlying
properties.
Development and Redevelopment
We intend to continue developing properties and redeveloping existing properties that are consistent with our growth
strategies. We generally do not commence development or redevelopment projects without a signed lease or leases
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providing for rental payments that are commensurate with our level of capital investment to minimize lease-up risks.
In addition, to minimize overhead costs and to provide the greatest amount of flexibility, we generally outsource
construction management to third-party firms.
We believe our build-to-suit development program is a competitive advantage. First, we believe our strong
relationships with our tenants and developers drive new investment opportunities that are often exclusive to us,
rather than bid broadly, and with our deep knowledge of their businesses, we believe we are a value-added partner in
the underwriting of each new investment. Second, we offer financing from start to finish for a build-to-suit project
such that there is no need for a tenant to seek separate construction and permanent financing, which we believe
makes us a more attractive partner. Third, we are actively developing strong relationships with tenants in the
experiential sector, leading to multiple investments without strict investment portfolio allocations. Finally, multiple
investments with the same tenant allows us in most cases to include cross-default provisions in our lease or
financing contracts, meaning a default in an obligation to us at one location is a default under all obligations with
that tenant.
We will also investigate opportunities to redevelop certain of our existing properties. We may redevelop properties
in conjunction with a lease renewal or new tenant, or we may redevelop properties that have more earnings potential
due to the redevelopment. Additionally, certain of our properties have excess land where we will proactively seek
opportunities to further develop.
Tenant and Customer Relationships
We intend to continue developing and maintaining long-term working relationships with experiential operators and
developers by providing capital for multiple properties on a regional, national and international basis, thereby
creating efficiency and value for both the operators and the Company.
Portfolio Diversification
We will endeavor to further diversify our asset base by property type, geographic location and customer. In pursuing
this diversification strategy, we will target experiential business operators that we view as leaders in their property
types and have the ability to compete effectively and perform under their agreements with the Company.
Dispositions
We will consider discretionary property dispositions for reasons such as underperformance, vacancies,
opportunistically taking advantage of an above-market offer, reducing exposure related to a certain tenant, property
type or geographic area, or creating price awareness of a certain property type.
Capitalization Strategies
Debt and Equity Financing
We believe that our shareholders are best served by a conservative capital structure. Therefore, we seek to maintain
a conservative debt level on our balance sheet as measured primarily by our net debt to adjusted EBITDAre, a non-
GAAP measure (see Item 7 – “Management’s Discussion and Analysis of Financial Condition - Non-GAAP
Financial Measures" for definitions and reconciliations). We also seek to maintain conservative interest, fixed
charge, debt service coverage and net debt to gross asset ratios.
We rely primarily on an unsecured debt structure. In the future, while we may obtain secured debt from time to time
or assume secured debt financing obligations in acquisitions, we intend to issue primarily unsecured debt securities
to satisfy our debt financing needs. We believe this strategy increases our access to capital and permits us to more
efficiently match available debt and equity financing to our ongoing capital requirements.
Our equity financing activities primarily include issuing common shares and preferred shares, including convertible
preferred shares. We may issue equity capital through traditional underwritten registered public offerings, our at-the-
market equity program ("ATM Program") or our Dividend Reinvestment and Direct Share Purchase Plan (“DSP
Plan”). While issuances under our ATM Program and DSP Plan are typically smaller, they allow us to raise capital
7
more efficiently and on a recurring basis. We expect to continue accessing the equity markets as needed, including
through these programs or in connection with future acquisitions.
Joint Ventures
We will examine and may pursue potential additional joint venture opportunities with institutional investors or
developers if the investments to which they relate meet our guiding principles discussed above. We may employ
higher leverage in joint ventures and be more inclined to use secured financing at the property level.
Payment of Regular Dividends
We expect to continue paying dividend distributions to our common shareholders monthly (as opposed to quarterly).
We expect to continue paying dividend distributions to our preferred shareholders quarterly. Our Series C
cumulative convertible preferred shares (“Series C preferred shares”) have a dividend rate of 5.75%, our Series E
cumulative convertible preferred shares (“Series E preferred shares”) have a dividend rate of 9.00% and our Series G
cumulative redeemable preferred shares ("Series G preferred shares") have a dividend rate of 5.75%. Among the
factors the Company’s board of trustees (“Board of Trustees”) considers in setting the common share dividend rate
are the applicable REIT tax rules and regulations that apply to dividends, the Company’s results of operations,
including FFOAA per share and AFFO per share, and the Company’s Cash Available for Distribution (defined as
net cash flow available for distribution after payment of operating expenses, debt service, preferred dividends and
other obligations).
Competition
We compete for real estate financing opportunities with a wide range of real estate investors and lenders, including
public and private REITs, private equity funds and traditional financial institutions such as banks and insurance
companies. We believe our specialization in experiential real estate, focus on customer relationships and our
underwriting discipline enhance our ability to compete for high-quality assets.
Human Capital
Our strategy is specializing in investments in select enduring experiential properties in the real estate industry, and
our people are vital to our success in executing on this strategy. As a human-capital intensive business, the long-term
success of our firm depends on our people. Our Senior Vice President, Human Resources and Administration reports
directly to our Chief Executive Officer to develop and oversee our human capital management objectives, programs
and initiatives. In addition, our Board of Trustees is actively involved in our human capital management in its
oversight of our long-term strategy and through its Compensation and Human Capital Committee and engagement
with management. Our management regularly reports to the Compensation and Human Capital Committee regarding
management's human capital objectives, programs and initiatives.
Our key human capital objectives are to attract, retain and develop the highest quality talent to ensure that we have
the right talent, in the right place, at the right time. To achieve these objectives, our human capital programs are
designed to develop talent to prepare them for critical roles and leadership positions for the future; reward and
support associates through competitive pay, benefits, and perquisite programs; enhance our culture through efforts
aimed at making the workplace more engaging and inclusive; acquire talent and facilitate internal talent mobility to
create a high-performing workforce; and evolve and invest in technology, tools, and resources to enable associates at
work. As of December 31, 2025, we had 54 full-time associates.
Examples of key programs and initiatives that are focused to attract, develop and retain our workforce include:
•
Associate Engagement - We use Gallup to measure associate engagement through a survey administered
annually. By focusing on engagement, we gather valuable information needed to engage and retain the most
talented associates.
8
•
Development - We provide opportunities for our associates to learn and thrive as professionals, including
educational reimbursement, mentorship, executive coaching and ongoing professional development.
Annually, EPR hosts leadership development sessions for all levels of our organization.
•
Culture - We strive to build a dedicated and engaged workforce by nurturing a culture that promotes
innovation and teamwork. We work to ensure our culture is evolving and inclusive and believe in building
teams with a mix of backgrounds and experiences that reflect the life experiences of our customers and the
ultimate consumers of our customers’ services.
•
Compensation and Benefits - Our benefits include competitive base pay, performance-based restricted
share awards and a 401(k) with a robust company match. We support our associates’ physical and mental
health through paid parental leave, industry-leading health care benefits, unlimited sick leave, flexible paid
time off and associate assistance programs. In addition, we offer yearly wellness reimbursements, an on-site
fitness center and fully stocked kitchens.
•
Community & Social Impact - Giving back is one of our core values. We demonstrate this through our
charitable giving program, EPR Impact, a key cornerstone of our social responsibility. Through a number
of associates actively engaged in nonprofits and our commitment to donating to and sponsoring charitable
causes and events, we are fortunate to partner with amazing organizations both locally and nationally. As a
benefit to associates, EPR Impact’s annual budget includes a pool of funds to support associate-directed
contributions to nonprofit organizations where an associate is personally involved. Additionally, EPR will
match associate contributions annually up to a given amount for contributions from their personal funds to
nonprofit organizations that meet the criteria of the program.
Regulation
To maintain our status as a REIT for federal income tax purposes, we must distribute to our shareholders at least
90% of our taxable income for a calendar year, as well as satisfy certain assets, income, organizational, distribution,
stockholder ownership and other requirements on a continuing basis. In addition, we are subject to numerous
federal, state and local laws and regulations applicable to owners of real property. For instance, under federal, state
and local environmental laws, we may be liable for the costs of removal or remediation of certain hazardous or toxic
substances at, on, in or under our properties, as well as certain other potential costs relating to hazardous or toxic
substances (including government fines and penalties and damages for injuries to persons and adjacent property).
These laws may impose liability without regard to whether we knew of, or were responsible for, the presence or
disposal of those substances. In addition, most of our properties must comply with the Americans with Disabilities
Act ("ADA"). The ADA requires that public accommodations reasonably accommodate individuals with disabilities
and that new construction or alterations be made to commercial facilities to conform to accessibility guidelines. The
ownership, operation, and management of our gaming facilities are also subject to pervasive regulation. These
gaming regulations impact our gaming tenants and persons associated with our gaming facilities, which in many
jurisdictions include us as the landlord and owner of the real estate.
Our properties are also subject to various other federal, state and local regulatory requirements. We do not know
whether existing requirements will change or whether compliance with future requirements will involve significant
unanticipated expenditures. Although these expenditures would be the responsibility of our tenants in most cases and
for our managers to oversee at our properties, if these tenants or managers fail to perform these obligations, we may
be required to do so. For additional information regarding regulations applicable to our business, and risks
associated with our failure to comply with such regulations, see Item 1A – "Risk Factors" in this Annual Report on
Form 10-K.
Principal Executive Offices
The Company’s principal executive offices are located at 909 Walnut Street, Suite 200, Kansas City, Missouri
64106; telephone (816) 472-1700.
9
Materials Available on Our Website
Our internet website address is www.eprkc.com. We make available, free of charge, through our website copies of
our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and amendments
to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably
practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission
(the “Commission” or “SEC”). You may also view our Code of Business Conduct and Ethics, Company Governance
Guidelines, Independence Standards for Trustees and the charters of our Audit, Nominating/Company Governance,
Finance and Compensation and Human Capital Committees on our website. Copies of these documents are also
available in print to any person who requests them. We do not intend for information contained in our website to be
part of this Annual Report on Form 10-K.
Item 1A. Risk Factors
There are many risks and uncertainties that can affect our current or future business, operating results, financial
condition or share price. The following discussion describes important factors that could adversely affect our current
or future business, operating results, financial condition or share price. This discussion includes a number of
forward-looking statements. See "Cautionary Statement Concerning Forward-Looking Statements."
Risks That May Impact Our Financial Condition or Performance
Global economic and geopolitical uncertainty, disruptions in the financial markets, inflation, and the challenging
economic environment may impair our ability to refinance existing obligations or obtain new financing for
acquisition or development of properties.
There continues to be a high level of global economic and geopolitical challenges and uncertainty, including
uncertainty regarding interest rates, inflationary pressures, tariffs and trade policies, geopolitical conflicts and
political changes in the U.S. and abroad, all of which have contributed to volatility in the global financial markets
and contributed to negative performance of the real estate sector. REITs are generally experiencing heightened risks
and uncertainties resulting from current challenging economic conditions, including significant volatility and
negative pressure in financial and capital markets, higher cost of capital, lasting impacts of high inflation and other
risks and uncertainties associated with the current economic environment.
We rely in part on debt financing to finance our investments and development. To the extent that turmoil in the
financial markets continues or intensifies, it has the potential to adversely affect our ability to refinance our existing
obligations as they mature or obtain new financing for acquisition or development of properties and adversely affect
the value of our investments. If we are unable to refinance existing indebtedness on attractive terms at its maturity,
we may be forced to dispose of some of our assets. Uncertain economic conditions and disruptions in the financial
markets could also result in a substantial decrease in the value of our investments, which could also make it more
difficult to refinance existing obligations or obtain new financing. In addition, these factors may make it more
difficult for us to sell properties or may adversely affect the price we receive for properties that we do sell, as
prospective buyers may experience increased costs of capital or difficulties in obtaining capital. These events in the
credit markets may have an adverse effect on other financial markets in the U.S., which may make it more difficult
or costly for us to raise capital through the issuance of our common shares or preferred shares. In addition,
disruptions in global financial markets may have other adverse effects on us, our tenants, our borrowers or the
economy in general.
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The future outbreak of any highly infectious or contagious diseases, such as the COVID-19 pandemic, could
materially and adversely impact or cause disruption to, our performance, financial condition, results of
operations and cash flows.
We cannot predict the degree to which the effects of any future pandemic, epidemic or outbreak of any highly
infectious disease may adversely affect our business, financial condition and results of operations. The COVID-19
pandemic severely impacted global economic activity and caused significant volatility and negative pressure in
financial markets. In response to the COVID-19 pandemic, many jurisdictions within the United States and abroad
instituted health and safety measures, including quarantines, mandated business and school closures and travel
restrictions. As a result, the COVID-19 pandemic severely impacted experiential real estate properties given that
such properties involve congregate social activity and discretionary consumer spending.
Inflation could adversely impact our customers and our results of operations.
Inflation, both real and anticipated as well as any resulting governmental policies, could adversely affect the
economy and the costs of labor, goods and services to our tenants or borrowers. Our long-term leases and loans
typically contain provisions such as rent escalators, percentage rent or participating interest, designed to mitigate the
adverse impact of inflation. However, these provisions may have limited effectiveness at mitigating the risk of high
levels of inflation due to contractual limits on escalation, which exist on substantially all of our escalation provisions
and the uncertainty that percentage rent and participating interest provisions will capture the impact of such inflation
through higher revenues realized at the applicable properties. Many of our leases are triple-net and typically require
the tenant to pay all property operating expenses and, therefore, increases in property-level expenses at our leased
properties generally do not directly affect us. However, increased operating costs resulting from inflation could have
an adverse impact on our tenants and borrowers if increases in their operating expenses exceed increases in their
revenue, which may adversely affect our tenants’ or borrowers' ability to pay rent or other obligations owed to us.
An increase in our customers' expenses and a failure of their revenues to increase at least with inflation could
adversely impact our customers' and our financial condition and our results of operations.
Additionally, a portion of our leases are not triple-net leases, which exposes us to the risk of potential common area
maintenance expense slippage that occurs when the actual cost of taxes, insurance and maintenance at the property
exceeds the reimbursements paid by tenants. To the extent any of these leases contain fixed expense reimbursement
provisions or limitations, we may be subject to increases in costs resulting from inflation that are not fully passed
through to tenants, which could adversely impact our financial condition and our results of operations.
Some of our investments are managed through a third-party manager. When we manage properties through a third-
party manager, we rely on the performance of our properties and the ability of the properties' managers to increase
revenues to keep pace with inflation, which may be limited by competitive pressures. An increase in our expenses at
these properties and a failure of our revenues to increase at least with inflation could adversely impact our financial
condition and our results of operations.
Actual and perceived changes in U.S. trade policies, including changes to existing trade agreements and
heightened global trade tensions, and retaliatory responses from other countries may have a material adverse
effect on our business, results of operations and financial condition.
Our business, results of operations and financial condition may be adversely affected by uncertainty and changes in
U.S. trade policies, including tariffs, trade agreements or other trade restrictions imposed by the U.S. or other
governments. During 2025, the U.S. government imposed, and is continuing to consider imposing, tariffs and trade
restrictions on certain goods produced outside of the U.S., including an indication that a tariff on foreign-made films
may be imposed. In response to these actions, certain foreign jurisdictions have imposed, or are considering
imposing, tariffs and retaliatory restrictions on goods produced in the United States. These actions are
unprecedented, have caused substantial uncertainty and volatility in financial markets and resulted in retaliatory
countermeasures on U.S. goods by its trading partners.
Construction of our development projects requires access to steel and other materials. Any imposition of or increase
in tariffs on imports of steel or other materials, as well as corresponding price increases for such materials available
domestically, could increase our development project construction costs and our costs to maintain our existing
properties. To the extent that we are unable to pass all or any such cost increases on to our customers, such cost
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increases could adversely affect our returns on investment. Higher materials costs could also diminish our ability to
develop new projects at acceptable returns and limit our ability to pursue growth opportunities.
Tariffs or other trade restrictions, increasing trade tensions, or other changes in similar governmental policies could
increase our operating costs, reduce discretionary consumer spending, cause disruptions or shortages in global
supply chains and negatively impact the U.S., regional or local economies in which we, our tenants or borrowers and
their customers operate, any of which could adversely impact our business, results of operations and financial
condition.
Most of our customers, consisting primarily of tenants and borrowers, operate properties in market segments that
depend upon discretionary spending by consumers. Any reduction in discretionary spending by consumers within
the market segments in which our customers or potential customers operate could adversely affect such
customers' operations and, in turn, reduce the demand for our properties or financing solutions.
Most of our portfolio is leased to or financed with customers operating service or retail businesses on our property
locations. Many of these customers operate services or businesses that are dependent upon consumer experiences.
The success of most of these businesses depends on the willingness or ability of consumers to use their discretionary
income to purchase our customers' products or services. A downturn in the economy, or a trend to not want to go
"out of home," could cause consumers in each of our property types to reduce their discretionary spending within the
market segments in which our customers or potential customers operate, which could adversely affect such
customers' operations and, in turn, reduce the demand for our properties or financing solutions.
Covenants in our debt instruments could adversely affect our financial condition and our acquisitions and
development activities.
Our unsecured revolving credit facility, senior notes and other loans that we may obtain in the future contain certain
cross-default provisions as well as customary restrictions, requirements and other limitations on our ability to incur
indebtedness, including covenants involving our maximum total debt to total asset value; maximum permitted
investments; minimum tangible net worth; maximum secured debt to total asset value; maximum unsecured debt to
eligible unencumbered properties; minimum unsecured interest coverage; and minimum fixed charge coverage. Our
ability to borrow under our unsecured revolving credit facility is also subject to compliance with certain other
covenants. We also have senior notes issued in a private placement transaction that are subject to certain covenants.
In addition, some of our properties, including those held in joint ventures, are subject to mortgages that contain
customary covenants such as those that limit our ability, without the prior consent of the lender, to further mortgage
the applicable property or to discontinue or reduce insurance coverage.
The current challenging and uncertain economic environment could negatively impact our future compliance with
financial covenants of our credit facility and other debt agreements and result in a default and potentially an
acceleration of indebtedness. Under those circumstances, other sources of capital may not be available to us or be
available only on unattractive terms. Additionally, our ability to satisfy current or prospective lenders' insurance
requirements may be adversely affected if lenders generally insist upon greater insurance coverage than is available
to us in the marketplace or on commercially reasonable terms.
We rely on debt financing, including borrowings under our unsecured revolving credit facility, issuances of debt
securities and debt secured by individual properties, to finance our acquisition and development activities and for
working capital. If we are unable to obtain financing from these or other sources, or to refinance existing
indebtedness upon maturity, our financial condition and results of operations would likely be adversely affected. The
ultimate extent to which the current challenging economic environment impacts our ability to comply with existing
financial covenants and obtain financing will depend on future developments, which, as discussed above, are highly
uncertain and cannot be predicted with confidence.
Adverse changes in our credit ratings could impair our ability to obtain additional debt and equity financing on
favorable terms, if at all, and negatively impact the market price of our securities, including our common shares.
The credit ratings of our senior unsecured debt and preferred equity securities are based on our operating
performance, liquidity and leverage ratios, overall financial position and other factors employed by the credit rating
agencies in their rating analysis of us. Our credit ratings can affect the amount and type of capital we can access, as
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well as the terms and costs of any financings we may obtain. There can be no assurance that we will be able to
maintain our current credit ratings. In the event that our current credit ratings deteriorate, we would likely incur a
higher cost of capital and it may be more difficult or expensive to obtain additional financing or refinance existing
obligations and commitments. Also, downgrades in our credit ratings would trigger additional costs or other
potentially negative consequences under our current and future credit facilities and future debt instruments.
Elevated interest rates and future increases will likely increase interest cost on new debt and could materially
adversely impact our ability to refinance existing debt, sell assets and limit our investment activities.
Interest rates are highly sensitive to many factors that are beyond our control, including general economic conditions
and policies of various governmental and regulatory agencies. The U.S. Federal Reserve raised the benchmark
interest rate significantly in 2022 and again in 2023. Although the benchmark interest rate was decreased in the
second half of 2024 and again in 2025, there can be no assurances that the rate will not increase in the future.
Increases in interest rates could have an adverse impact on our business by increasing the cost of borrowing,
affecting our interest costs and our ability to make new investments on favorable terms or at all. Rising interest rates,
or the continuation of elevated rates into the future, could limit our ability to refinance existing debt when it matures
or cause us to pay higher interest rates upon refinancing and increase interest expense on refinanced indebtedness. In
addition, higher interest rates could decrease the amount third parties are willing to pay for our assets, thereby
limiting our ability to reposition our portfolio efficiently in response to changes in economic or other conditions.
We depend on leasing space to tenants on economically favorable terms and collecting rent from our tenants,
who may not be able to pay.
At any time, a tenant may experience a downturn in its business that may weaken its financial condition. Similarly, a
general decline in the economy may result in a decline in demand for space at our commercial properties. Our
financial results depend significantly on leasing space at our properties to tenants on economically favorable terms.
In addition, because a majority of our income comes from leasing real property, our income, funds available to pay
indebtedness and funds available for distribution to our shareholders will decrease if a significant number of our
tenants cannot pay their rent or if we are not able to maintain our levels of occupancy on favorable terms. If our
tenants cannot pay their rent or we are not able to maintain our levels of occupancy on favorable terms, there is also
a risk that the fair value of the underlying property will be considered less than its carrying value and we may have
to take a charge against earnings. In addition, if a tenant does not pay its rent, we might not be able to enforce our
rights as landlord without significant delays and substantial legal costs.
A tenant becoming bankrupt or insolvent could diminish or eliminate the income we expect from that tenant's leases.
If a tenant becomes insolvent or bankrupt, we cannot be sure that we could promptly recover the premises from the
tenant or from a trustee or debtor-in-possession in a bankruptcy proceeding relating to the tenant. On the other hand,
a bankruptcy court might authorize the tenant to terminate its leases with us. If that happens, our claim against the
bankrupt tenant for unpaid future rent would be subject to statutory limitations that might be substantially less than
the remaining rent owed under the leases. In addition, any claim we have for unpaid past rent would likely not be
paid in full and we would take a charge against earnings for any accrued straight-line rent receivable related to the
leases. We have experienced material customer bankruptcies in the past. Specifically, in 2022, Regal filed for
protection under Chapter 11 of the U.S. Bankruptcy Code. There can be no assurances that our tenants will not
become bankrupt or insolvent in the future.
We could be adversely affected by a borrower's bankruptcy or default.
If a borrower becomes bankrupt or insolvent or defaults under its loan, that could force us to declare a default and
foreclose on any available collateral. As a result, future interest income recognition related to the applicable note
receivable could be significantly reduced or eliminated. There is also a risk that the fair value of the collateral, if
any, will be less than the carrying value of the note and accrued interest receivable at the time of a foreclosure and
we may have to take a charge against earnings. If a property serves as collateral for a note, we may experience costs
and delays in recovering the property in foreclosure or finding a substitute operator for the property. If a mortgage
we hold is subordinated to senior financing secured by the property, our recovery would be limited to any amount
remaining after satisfaction of all amounts due to the holder of the senior financing. In addition, to protect our
subordinated investment, we may desire to refinance any senior financing. However, there is no assurance that such
refinancing would be available or, if it were to be available, that the terms would be attractive. We may experience
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future defaults and bankruptcies, the breadth of which will depend upon the scope, severity and duration of the
future events and circumstances heightening default and bankruptcy risks.
We may sell or divest different properties or assets after an evaluation of our portfolio of businesses or as a result
of a customer exercising a purchase or note pay-off option. Such sales or divestitures could affect our costs,
revenues, results of operations, financial condition and liquidity.
From time to time, we may evaluate our properties and may, as a result, sell or attempt to sell, divest, or spin-off
different properties or assets, subject, if applicable, to the terms of lease agreements. In addition, certain of our
customer agreements provide customers with purchase or note pay-off options. Future sales or divestitures could
affect our costs, revenues, results of operations, financial condition, liquidity and our ability to comply with
applicable financial covenants. Divestitures have inherent risks, including possible delays in closing transactions,
potential difficulties in obtaining regulatory approvals, receiving lower-than-expected sales proceeds for the divested
assets, potential impairment charges and potential post-closing claims for indemnification. In addition, economic
conditions, such as high inflation or rising interest rates, and relatively illiquid real estate markets may result in
fewer potential bidders and unsuccessful sales efforts with respect to potential sales or divestitures.
We are exposed to the credit risk of our customers and counterparties and their failure to meet their financial
obligations could adversely affect our business.
Our business is subject to credit risk. There is a risk that a customer or counterparty will fail to meet its obligations
when due. Customers and counterparties that owe us money may default on their obligations to us due to
bankruptcy, lack of liquidity, operational failure or other reasons. Although we have procedures for reviewing credit
exposures to specific customers and counterparties to address present credit concerns, default risk may arise from
events or circumstances that are difficult to detect or foresee. Some of our risk management methods depend upon
the evaluation of information regarding markets, clients or other matters that are publicly available or otherwise
accessible by us. That information may not, in all cases, be accurate, complete, up-to-date or properly evaluated. In
addition, concerns about, or a default by, one customer or counterparty could lead to significant liquidity problems,
losses or defaults by other customers or counterparties, which in turn could adversely affect us. We may experience
future rent deferral requests or defaults, the breadth of which will depend upon the scope, severity and duration of
the future events and circumstances heightening credit risks. We may be materially and adversely affected in the
event of a significant default by our customers and counterparties.
From time to time, the base terms of some of our leases will expire and there is no assurance that such leases will
be renewed at existing lease terms, at otherwise economically favorable terms or at all.
From time to time, the base terms of some of our leases with our tenants will expire. These tenants have and may
continue to seek rent or other concessions from us, including requiring us to modify the properties in order to renew
their leases. There is no guarantee that we will be able to renew these leases at existing lease terms, at otherwise
economically favorable terms or at all. In addition, if we fail to renew these leases, there can be no assurances that
we will be able to locate substitute tenants for such properties or enter into leases with these substitute tenants on
economically favorable terms, which may impact our financial results by lowering income or requiring us to record
an impairment loss.
Operating risks in the experiential real estate industry may affect the ability of our customers to perform under
their leases or mortgages.
The ability of our customers to operate successfully in the experiential real estate industry and remain current on
their obligations depends on a number of factors, including, with respect to theatres, the availability and popularity
of motion pictures, the performance of those pictures in tenants' markets, the allocation of popular pictures to
tenants, the release window (the time that elapses from the date of a motion picture's theatrical release to the date it
is available on other mediums) and the terms on which the motion pictures are licensed. In addition, motion picture
production is highly dependent on labor that is subject to various collective bargaining agreements. The Writers
Guild of America and the Screen Actors Guild strikes in 2023 significantly impacted the production and supply of
motion pictures. Studios are party to collective bargaining agreements with a number of other labor unions, and
failure to reach timely agreements or renewals of existing agreements or future strikes or labor disruptions may
further affect the production, supply and theatrical release of motion pictures. Studios or motion picture distributors
may, as a result of consolidation or otherwise, modify their traditional studio release models, such as reducing the
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number of wide release titles or reducing theatrical release windows. Neither we nor our customers control the
operations of studios or motion picture distributors. There can be no assurances that motion picture distributors will
continue to rely on theatres as the primary means of distributing first-run films and motion picture distributors have,
and may in the future, consider alternative film delivery methods. In addition, in August 2020, a U.S. District Court
granted the U.S. Department of Justice's request to terminate the Paramount Consent Decrees, which prohibit movie
studios from owning theatres or utilizing "block booking," a practice whereby movie studios sell multiple films as a
package to theatres, in addition to other restrictions. There can be no assurances as to the effects of this regulatory
action or whether this regulatory action will materially adversely affect our theatre customers' operations and, in
turn, their ability to perform under their leases.
Our other experiential customers are exposed to the risk of adverse economic conditions that can affect experiential
activities. Eat & play, ski, attraction, experiential lodging, gaming, fitness & wellness and cultural properties are
discretionary activities that can entail a relatively high cost of participation and may be adversely affected by an
economic slowdown or recession. Economic conditions, including elevated interest rates and inflation, high
unemployment and erosion of consumer confidence, may potentially have negative effects on our customers and on
their results of operations. We cannot predict what impact these uncertainties may have on overall guest visitation,
guest spending or other related trends and the ultimate impact it will have on our customers’ operations and, in turn,
their ability to perform under their respective leases or mortgages.
Real estate is a competitive business.
We operate in the highly competitive real estate industry. We compete with a large number of real estate property
investors and developers including traded and non-traded public REITs, private equity investors, sovereign funds,
institutional investment funds and other investors, some of whom are significantly larger and have greater resources,
access to capital and lower costs of capital or different investment parameters. Some of these investors may be
willing to accept lower returns on their investments or have greater financial resources or a lower cost of capital than
we do, a greater ability to borrow funds to acquire properties and the ability to accept more risk than we prudently
manage. This competition may increase the demand for the types of properties in which we typically invest and,
therefore, reduce the number of suitable acquisition opportunities available to us and increase the prices paid for
such acquisition properties. This competition will increase if investments in real estate become more attractive
relative to other types of investment. Accordingly, competition for the acquisition of real property could materially
and adversely affect us.
Principal factors of competition are rent or interest charged, attractiveness of location, the quality of the property and
breadth and quality of services provided. If our competitors offer space at rental or interest rates below the rates we
are currently charging our customers, we may lose potential customers, and we may be pressured to reduce our
rental or interest rates below those we currently charge in order to retain customers when our customers’ leases or
mortgages expire. Our success depends upon, among other factors, trends of the national and local economies,
financial condition and operating results of current and prospective customers, availability and cost of capital,
construction and renovation costs, taxes, governmental regulations, legislation and population trends.
Three customers represent a significant portion of our total revenues.
Topgolf, AMC and Regal represent a significant portion of our total revenue. For the year ended December 31,
2025, total revenues of approximately $102.3 million or 14.2% were from Topgolf, approximately $97.4 million or
13.6% were from AMC and approximately $82.8 million or 11.5% were from Regal. We have diversified and
expect to continue to diversify our real estate portfolio by entering into lease transactions or financing arrangements
with a number of other tenants or borrowers. If for any reason Topgolf, AMC and/or Regal failed to perform under
their lease or mortgage obligations for a significant period of time, or under any modified lease or mortgage
obligations, we could be required to reduce or suspend our shareholder dividends and may not have sufficient funds
to support operations or service our debt until substitute customers are obtained. If that happened, we cannot predict
when or whether we could obtain substitute quality customers on acceptable terms.
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Properties we develop may not achieve sufficient operating results within expected timeframes and therefore the
tenant or borrowers may not be able to pay their agreed upon rent or interest, and managed properties may not be
able to operate profitably, which could adversely affect our financial results.
A portion of our investments include build-to-suit projects. When construction is completed, these projects may
require some period of time to achieve targeted operating results. For properties leased or financed, we may provide
our tenants or borrowers with lease or financing terms that are more favorable to them during this timeframe.
Tenants and borrowers that fail to achieve targeted operating results within expected timeframes may be unable to
pay their obligations pursuant to the agreed upon lease or financing terms or at all. If we are required to restructure
lease or financing terms or take other action with respect to the applicable property, our financial results may be
impacted by lower revenues, recording an impairment or provision for loan loss or writing off rental or interest
amounts. Additionally, if we have entered into a management agreement to operate a property we have developed,
the project may not be able to achieve targeted operating results, which may impact our financial results by lowering
income or recording an impairment loss.
We have entered into management agreements to operate certain of our properties and we could be adversely
affected if such managers do not manage these properties successfully.
To maintain our status as a REIT, we are generally not permitted to directly operate our properties. As a result, from
time to time, we enter into management agreements with third-party managers to operate certain properties. We
utilize a third party manager for a limited number of theatres formerly operated by our tenants and may engage
additional third-party managers in the future if customer defaults or bankruptcies result in our taking back
properties. Additionally, we utilize a third party manager for the Kartrite Resort and Indoor Waterpark and two
experiential lodging properties. For managed properties, our ability to direct and control how our properties are
operated is less than if we were able to manage these properties directly. Under the terms of our management
agreements, our participation in operating decisions relating to these properties is generally limited to certain
matters. We do not supervise any of these managers or their personnel on a day-to-day basis. We cannot provide any
assurances that the managers will manage our properties in a manner that is consistent with their respective
obligations under the applicable management agreement or our obligations under any franchise agreements. We
could be materially and adversely affected if any of our managers fail to effectively manage revenues and expenses,
provide quality services and amenities, or otherwise fail to manage our properties in our best interests, and we may
be financially responsible for the actions and inactions of the managers. In certain situations, we may terminate the
management agreement. However, we can provide no assurances that we could identify a replacement manager, or
that the replacement manager will manage our property successfully. A failure by our third-party managers to
successfully manage our properties could lead to an increase in our operating expenses or decrease in our revenue,
or both.
Our indebtedness may affect our ability to operate our business and may have a material adverse effect on our
financial condition and results of operations.
We have a significant amount of indebtedness. As of December 31, 2025, we had total debt outstanding of
approximately $2.9 billion. Our indebtedness could have important consequences, such as:
•
limiting our ability to obtain additional financing to fund our working capital needs, acquisitions, capital
expenditures or other debt service requirements or for other purposes;
•
limiting our ability to use operating cash flow in other areas of our business because we must dedicate a
substantial portion of these funds to service debt;
•
limiting our ability to compete with other companies who are not as highly leveraged, as we may be less
capable of responding to adverse economic and industry conditions;
•
restricting us from making strategic acquisitions, developing properties or pursuing business opportunities;
•
restricting the way in which we conduct our business because of financial and operating covenants in the
agreements governing our existing and future indebtedness;
•
exposing us to potential events of default (if not cured or waived) under financial and operating covenants
contained in our debt instruments that could have a material adverse effect on our business, financial
condition and operating results;
•
increasing our vulnerability to a downturn in general economic conditions or in pricing of our investments;
•
negatively impacting our credit ratings; and
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•
limiting our ability to react to changing market conditions in our industry and in our customers’ industries.
In addition to our debt service obligations, our operations require substantial investments on a continuing basis. Our
ability to make scheduled debt payments, to refinance our obligations with respect to our indebtedness and to fund
capital and non-capital expenditures necessary to meet our remaining commitments on existing projects and
maintain the condition of our assets, as well as to provide capacity for the growth of our business, depends on our
financial and operating performance, which, in turn, is subject to prevailing economic conditions and financial,
business, competitive, legal and other factors.
Subject to the restrictions in our unsecured revolving credit facility and the debt instruments governing our existing
senior notes, we may incur significant additional indebtedness, including additional secured indebtedness. Although
the terms of our unsecured revolving credit facility and the debt instruments governing our existing senior notes
contain restrictions on the incurrence of additional indebtedness, these restrictions are subject to a number of
qualifications and exceptions, and additional indebtedness incurred in compliance with these restrictions could be
significant. If new debt is added to our current debt levels, the risks described above could increase.
There are risks inherent in having indebtedness and using such indebtedness to fund acquisitions.
We currently use debt to fund portions of our operations and acquisitions. In a rising or elevated interest rate
environment, the cost of our existing variable rate debt and any new debt will likely increase or remain higher
compared to historical periods. We have used leverage to acquire properties and expect to continue to do so in the
future. Although the use of leverage is common in the real estate industry, our use of debt exposes us to some risks.
If a significant number of our customers fail to make their lease or interest payments for a significant period of time,
the risk of which has been heightened as a result of the generally challenging and uncertain economic environment,
and we do not have sufficient cash to pay principal and interest on the debt, we could default on our debt
obligations. A small amount of our debt financing is secured by mortgages on our properties and we may enter into
additional secured mortgage financing in the future. If we fail to meet our mortgage payments, the lenders could
declare a default and foreclose on those properties. We expect that our levels of investment spending will be limited
in the near term due to elevated costs of capital.
Most of our debt instruments contain balloon payments, which may adversely impact our financial performance
and our ability to pay dividends.
Most of our financing arrangements require us to make a lump-sum or "balloon" payment at maturity. There can be
no assurance that we will be able to refinance such debt on favorable terms or at all, especially in light of elevated
interest rates and other negative economic conditions. To the extent we cannot refinance such debt on favorable
terms or at all, we may be forced to dispose of properties on disadvantageous terms or pay higher interest rates,
either of which would have an adverse impact on our financial performance and ability to pay dividends to our
shareholders.
Without new financing, our growth is limited.
As a REIT, we are required to distribute at least 90% of our taxable net income to shareholders in the form of
dividends. Other than deciding to make these dividends in our common shares, we are limited in our ability to use
internal capital to acquire properties and must continually raise new capital in order to continue to grow and
diversify our investment portfolio. Our ability to raise new capital depends in part on factors beyond our control,
including conditions in equity and credit markets, conditions in the industries in which our customers are engaged
and the performance of real estate investment trusts generally, all of which have been negatively impacted by
generally challenging and uncertain economic conditions. We continually consider and evaluate a variety of
potential transactions to raise additional capital, but we cannot assure that attractive alternatives will always be
available to us, nor that our share price will increase or remain at a level that will permit us to continue to raise
equity capital publicly or privately.
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Our real estate investments are concentrated in experiential real estate properties and a significant portion of
those investments are in megaplex theatre properties, making us more vulnerable economically than if our
investments were more diversified.
We acquire, develop or finance experiential real estate properties. Although we are subject to the general risks
inherent in concentrating investments in real estate, the risks resulting from a lack of diversification become even
greater as a result of investing primarily in experiential real estate properties. These risks are further heightened by
the fact that a significant portion of our investments are in megaplex theatre properties. Although a downturn in the
real estate industry could significantly adversely affect the value of our properties, a downturn in the experiential
real estate industry could compound this adverse effect. These adverse effects could be more pronounced than if we
diversified our investments to a greater degree outside of experiential real estate properties or, more particularly,
outside of megaplex theatre properties. Megaplex theatre properties depend on regular production and availability of
motion pictures, which were severely disrupted during the COVID-19 pandemic and by the Writers Guild of
America and Screen Actors Guild strikes in 2023. The future production and availability of motion pictures may be
negatively affected by changes in traditional motion picture release models by studios or motion pictures
distributors, as a result of consolidation or otherwise, such as reducing the number of wide release titles or reducing
theatrical release windows. As a result, we are subject to more risk associated with megaplex theatres than if we had
more diversified investments.
If we fail to qualify as a REIT, we would be taxed as a corporation, which would substantially reduce funds
available for payment of dividends to our shareholders.
If we fail to qualify as a REIT for U.S. federal income tax purposes, we will be taxed as a corporation. We are
organized and believe we qualify as a REIT, and intend to operate in a manner that will allow us to continue to
qualify as a REIT. Qualification as a REIT involves the application of highly technical and complex provisions of
the Internal Revenue Code of 1986, as amended (the "Internal Revenue Code"), on which there are only limited
judicial and administrative interpretations, and depends on facts and circumstances not entirely within our control,
including requirements relating to the sources of our gross income. Accordingly, we cannot provide any assurance
that we have always qualified and will remain qualified as a REIT in the future. Even a technical or inadvertent
violation could jeopardize our REIT qualification. Rents received or accrued by us from our tenants may not be
treated as qualifying income for purposes of these requirements if the leases are not respected as true leases or
qualified financing arrangements for U.S. federal income tax purposes and instead are treated as service contracts,
joint ventures or some other type of arrangement. If some or all of our leases are not respected as true leases or
qualified financing arrangements for U.S. federal income tax purposes and are not otherwise treated as generating
qualifying REIT income, we may fail to qualify to be taxed as a REIT. Furthermore, our qualification as a REIT will
depend on our satisfaction of certain asset, income, organizational, distribution, shareholder ownership and other
requirements on a continuing basis. Our ability to satisfy the asset tests depends upon our analysis of the
characterization and fair market values of our assets, some of which are not susceptible to a precise determination,
and for which we may not obtain independent appraisals. In addition, future legislation, new regulations,
administrative interpretations or court decisions may significantly change the tax laws, the application of the tax
laws to our qualification as a REIT or the U.S. federal income tax consequences of that qualification.
If we were to fail to qualify as a REIT in any taxable year (including any prior taxable year for which the statute of
limitations remains open), we would face tax consequences that could substantially reduce the funds available for
the service of our debt and payment of dividends:
•
we would not be allowed a deduction for dividends paid to shareholders in computing our taxable income
and would be subject to federal income tax at regular corporate rates;
•
we could be subject to increased state and local taxes;
•
unless we are entitled to relief under statutory provisions, we could not elect to be treated as a REIT for
four taxable years following the year in which we were disqualified; and
•
we could be subject to tax penalties and interest.
In addition, if we fail to qualify as a REIT, we would no longer be required to pay dividends. As a result of these
factors, our failure to qualify as a REIT could adversely affect the market price for our shares.
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In the event that we recognize a significant gain from cash settlement of a forward sale agreement under our
ATM Program, the U.S. federal income tax treatment of the cash that we receive in such instance is unclear and
could impact our ability to meet the REIT qualification requirements.
We may enter into forward sale agreements from time to time in connection with our ATM Program and, subject to
certain conditions, we have the right to elect physical, cash or net share settlement under these agreements at any
time and from time to time, in part or in full. In the event that we elect to settle a forward sale agreement for cash
and the settlement price is below the forward sale price, we would be entitled to receive a cash payment from the
applicable forward purchaser(s). Under Section 1032 of the Internal Revenue Code, generally, no gains and losses
are recognized by a corporation in dealing in its own shares, including pursuant to a “securities futures contract,” as
defined in the Internal Revenue Code by reference to the Exchange Act. Although we believe that any amount
received by us in exchange for our common shares would qualify for the exemption under Section 1032 of the
Internal Revenue Code, because it is not entirely clear whether a forward sale agreement qualifies as a “securities
futures contract,” the U.S. federal income tax treatment of any cash settlement payment we receive is uncertain. In
the event that we recognize a significant gain from the cash settlement of a forward sale agreement, we might not be
able to satisfy the gross income requirements applicable to REITs under the Internal Revenue Code. If we were to
fail to satisfy one or both of the gross income tests for any taxable year, we may nevertheless qualify as a REIT for
such year if we were entitled to relief under certain provisions of the Internal Revenue Code. If these relief
provisions were inapplicable, we would not qualify to be taxed as a REIT.
Even if we remain qualified for taxation as a REIT under the Internal Revenue Code, we may face other tax
liabilities that reduce our funds available for payment of dividends to our shareholders.
Even if we remain qualified for taxation as a REIT under the Internal Revenue Code, we may be subject to federal,
state and local taxes on our income and assets, including taxes on any undistributed income, excise taxes, state or
local income, property and transfer taxes, and other taxes. Also, some jurisdictions may in the future limit or
eliminate favorable income tax deductions, including the dividends paid deduction, which could increase our income
tax expense. In addition, in order to meet the requirements for qualification and taxation as a REIT under the
Internal Revenue Code, prevent the recognition of particular types of non-cash income, or avert the imposition of a
100% tax that applies to specified gains derived by a REIT from dealer property or inventory, we may hold or
dispose of some of our assets and conduct some of our operations through our taxable REIT subsidiaries ("TRSs") or
other subsidiary corporations that will be subject to corporate level income tax at regular rates. In addition, while we
intend that our transactions with our TRSs will be conducted on arm's length bases, we may be subject to a 100%
excise tax on a transaction that the Internal Revenue Service ("IRS") or a court determines was not conducted at
arm's length. Any of these taxes would decrease cash available for distribution to our shareholders.
Distribution requirements imposed by law limit our flexibility.
To maintain our status as a REIT for federal income tax purposes, we are generally required to distribute to our
shareholders at least 90% of our taxable income for that calendar year. Our taxable income is determined without
regard to any deduction for dividends paid and by excluding net capital gains. To the extent that we satisfy the
distribution requirement but distribute less than 100% of our taxable income, we will be subject to federal corporate
income tax on our undistributed income. In addition, we will incur a 4% nondeductible excise tax on the amount, if
any, by which our distributions in any year are less than the sum of (i) 85% of our ordinary income for that year, (ii)
95% of our capital gain net income for that year and (iii) 100% of our undistributed taxable income from prior years.
We intend to continue to make distributions to our shareholders to comply with the distribution requirements of the
Internal Revenue Code and to reduce exposure to federal income and nondeductible excise taxes. Differences in
timing between the receipt of income and the payment of expenses in determining our taxable income and the effect
of required debt amortization payments could require us to borrow funds on a short-term basis in order to meet the
distribution requirements that are necessary to achieve the tax benefits associated with qualifying as a REIT.
If arrangements involving our TRSs fail to comply as intended with the REIT qualification and taxation rules, we
may fail to qualify for taxation as a REIT under the Internal Revenue Code or be subject to significant penalty
taxes.
We lease some of our experiential lodging properties to our TRSs pursuant to arrangements that, under the Internal
Revenue Code, are intended to qualify the rents we receive from our TRSs as income that satisfies the REIT gross
income tests. We also intend that our transactions with our TRSs be conducted on an arm's length basis so that we
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and our TRSs will not be subject to penalty taxes under the Internal Revenue Code applicable to mispriced
transactions. While relief provisions can sometimes excuse REIT gross income test failures, significant penalty taxes
may still be imposed.
For our TRS arrangements to comply as intended with the REIT qualification and taxation rules under the Internal
Revenue Code, a number of requirements must be satisfied, including:
•
our TRSs may not directly or indirectly operate or manage a lodging facility, or provide rights to operate or
manage a lodging facility under a brand name, other than through an eligible independent contractor as
defined by the Internal Revenue Code;
•
the leases to our TRSs must be respected as true leases for federal income tax purposes and not as service
contracts, partnerships, joint ventures, financings or other types of arrangements;
•
the leased properties must constitute qualified lodging facilities (including customary amenities and
facilities) under the Internal Revenue Code;
•
our leased properties must be managed and operated on behalf of the TRSs by independent contractors who
are less than 35% affiliated with us and who are actively engaged (or have affiliates so engaged) in the
trade or business of managing and operating qualified lodging facilities for persons unrelated to us; and
•
the rental and other terms of the leases must be arm's length.
We cannot be sure that the IRS or a court will agree with our assessment that our TRS arrangements comply as
intended with REIT qualification and taxation rules. If arrangements involving our TRSs fail to comply as we
intended, we may fail to qualify for taxation as a REIT under the Internal Revenue Code or be subject to significant
penalty taxes.
We may depend on distributions from our direct and indirect subsidiaries to service our debt and pay dividends to
our shareholders. The creditors of these subsidiaries, and our direct creditors, are entitled to amounts payable to
them before we pay any dividends to our shareholders.
Substantially all of our assets are held through our subsidiaries. We depend on these subsidiaries for substantially all
of our cash flow from operations. The creditors of each of our direct and indirect subsidiaries are entitled to payment
of that subsidiary's obligations to them, when due and payable, before distributions may be made by that subsidiary
to us. In addition, our creditors, whether secured or unsecured, are entitled to amounts payable to them before we
may pay any dividends to our shareholders. Thus, our ability to service our debt obligations and pay dividends to
holders of our common and preferred shares depends on our subsidiaries' ability first to satisfy their obligations to
their creditors and then to pay distributions to us and our ability to satisfy our obligations to our direct creditors. Our
subsidiaries are separate and distinct legal entities and have no obligations, other than limited guaranties of certain of
our debt, to make funds available to us.
Our development financing arrangements expose us to funding and completion risks.
Our ability to meet our construction financing obligations that we have undertaken or may in the future enter into
depends on our ability to obtain equity or debt financing in the required amounts. There is no assurance we can
obtain this financing or that the financing rates available will ensure a spread between our cost of capital and the rent
or interest payable to us under the related leases or mortgage notes receivable. As a result, we could fail to meet our
construction financing obligations or decide to cease such funding, which, in turn, could result in failed projects and
penalties, each of which could have a material adverse impact on our results of operations and business.
We have a limited number of associates and loss of personnel could harm our operations and adversely affect the
value of our shares.
We had 54 full-time associates as of December 31, 2025 and, therefore, the impact we may feel from the loss of an
associate may be greater than the impact such a loss would have on a larger organization. We are particularly
dependent on the efforts of our senior leadership team. While we believe that we could find replacements for our
personnel, the loss of their services could harm our operations and adversely affect the value of our shares.
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We are subject to risks associated with the employment of personnel by managers of certain of our properties.
Managers of certain of our properties are responsible for hiring and maintaining the labor force at each of these
properties. Although we do not directly employ or manage associates at these properties, we are subject to many of
the costs and risks associated with such labor force, including but not limited to risks associated with that certain
union contract binding the manager of our Kartrite Resort and Indoor Waterpark and overall labor shortages. From
time to time, the operations of our properties that are managed by third parties may be disrupted as a result of
strikes, lockouts, public demonstrations or other negative actions and publicity. We may also incur increased legal
costs and indirect labor costs as a result of contract disputes and other events. The resolution of labor disputes or
renegotiated labor contracts could lead to increased labor costs, either by increases in wages or benefits or by
changes in work rules.
We may in the future have greater dependence upon the gaming industry and may be susceptible to the risks
associated with it, which could materially and adversely affect our business, financial condition, liquidity, results
of operations and prospects.
As a landlord of gaming facilities or secured creditor to gaming operators, we may be impacted by the risks
associated with the gaming industry. Therefore, so long as we make investments in gaming-related assets, our
success is dependent on the gaming industry, which could be adversely affected by economic conditions in general,
changes in consumer trends and preferences and other factors over which we and our tenants have no control, such
as public health crises, labor shortages, travel restrictions, supply chain disruptions and generally challenging and
uncertain economic conditions. A component of the rent under our gaming facility lease agreements may be based,
over time, on the performance of the gaming facilities operated by our tenants on our properties and any decline in
the operating results of our gaming tenants could be material and adverse to our business, financial condition,
liquidity, results of operations and prospects.
The gaming industry is characterized by a high degree of competition among a large number of participants,
including riverboat casinos, dockside casinos, land-based casinos, video lottery, sweepstakes and poker machines
not located in casinos, Native American gaming, internet lotteries and other internet wagering gaming services and,
in a broader sense, gaming operators face competition from all manner of leisure and entertainment activities.
Competition in the gaming industry is intense in most of the markets where our facilities are located. Recently, there
has been additional significant competition in the gaming industry as a result of the upgrading or expansion of
facilities by existing market participants, the entrance of new gaming participants into a market, internet gaming and
legislative changes. As competing properties and new markets are opened, we may be negatively impacted.
Additionally, decreases in discretionary consumer spending brought about by weakened general economic
conditions such as, but not limited to, higher interest rates, high inflation, lackluster recoveries from recessions, high
unemployment levels, higher income taxes, low levels of consumer confidence, weakness in the housing market,
cultural and demographic changes and increased stock market volatility may negatively impact our revenues and
operating cash flows.
We and our tenants face extensive regulation from gaming and other regulatory authorities with respect to our
gaming properties.
The ownership, operation, and management of gaming facilities are subject to pervasive regulation. These gaming
regulations impact our gaming tenants and persons associated with our gaming facilities, which in many
jurisdictions include us as the landlord and owner of the real estate. Certain gaming authorities in the jurisdictions in
which we hold properties may require us and/or our affiliates to maintain a license as a key business entity or
supplier because of our status as landlord. Gaming authorities also retain great discretion to require us to be found
suitable as a landlord, and certain of our shareholders, officers and trustees may be required to be found suitable as
well.
In many jurisdictions, gaming laws can require certain of our shareholders to file an application, be investigated, and
qualify or have their suitability determined by gaming authorities. Gaming authorities have very broad discretion in
determining whether an applicant should be deemed suitable. Subject to certain administrative proceeding
requirements, the gaming regulators have the authority to deny any application or limit, condition, restrict, revoke or
suspend any license, registration, finding of suitability or approval, or fine any person licensed, registered or found
suitable or approved, for any cause deemed reasonable by the gaming authorities.
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Gaming authorities may conduct investigations into the conduct or associations of our trustees, officers, key
associates or investors to ensure compliance with applicable standards. If we are required to be found suitable and
are found suitable as a landlord, we will be registered as a public company with the gaming authorities and will be
subject to disciplinary action if, after we receive notice that a person is unsuitable to be a shareholder or to have any
other relationship with us, we:
•
pay that person any distribution or interest upon any of our voting securities;
•
allow that person to exercise, directly or indirectly, any voting right conferred through securities held by
that person;
•
pay remuneration in any form to that person for services rendered or otherwise; or
•
fail to pursue all lawful efforts to require such unsuitable person to relinquish his or her voting securities,
including, if necessary, the immediate purchase of the voting securities for cash at fair market value.
Many jurisdictions also require any person who acquires beneficial ownership of more than a certain percentage of
voting securities of a gaming company and, in some jurisdictions, non-voting securities, typically 5% of a publicly-
traded company, to report the acquisition to gaming authorities, and gaming authorities may require such holders to
apply for qualification, licensure or a finding of suitability, subject to limited exceptions for "institutional investors"
that hold a company's voting securities for passive investment purposes only.
Required regulatory approvals can delay or prohibit transfers of our gaming properties, which could result in
periods in which we are unable to receive rent for such properties.
The tenant of our gaming property is (and any future tenants of our gaming properties will be) a gaming operator
required to be licensed under applicable law. If our gaming facility lease agreement, or any such future lease
agreements we enter into, are terminated (which could be required by a regulatory agency) or expire, any new tenant
must be licensed and receive other regulatory approvals to operate our properties as gaming facilities. Any delay in,
or inability of, the new tenant to receive required licenses and other regulatory approvals from the applicable state
and county government agencies to operate the properties as gaming facilities may prolong the period during which
we are unable to collect the applicable rent. Further, in the event that our gaming facility lease agreement or future
lease agreements are terminated or expire and a new tenant is not licensed or fails to receive other regulatory
approvals, the properties may not be operated as gaming facilities and we will not be able to collect the applicable
rent. Moreover, we may be unable to transfer or sell the affected properties as gaming facilities, which could
materially and adversely affect our business, financial condition, liquidity, results of operations and prospects.
We face risks associated with security breaches through cyber-attacks, cyber-intrusions or otherwise, as well as
other significant disruptions of our information technology networks and related systems.
We face risks associated with security breaches, whether through cyber-attacks or cyber-intrusions over the internet,
malware, computer viruses, attachments to e-mails, persons inside our organization or persons with access to
systems inside our organization, and other significant disruptions of our information technology ("IT") networks and
related systems. The risk of a security breach or disruption, particularly through cyber-attack or cyber-intrusion,
including by computer hackers, foreign governments and cyber terrorists, has generally increased as the number,
intensity and sophistication of attempted attacks and intrusions from around the world have increased. These risks
are further heightened by factors such as developments in artificial intelligence, increased remote working and
geopolitical turmoil. Our IT networks and related systems are essential to the operation of our business and our
ability to perform day-to-day operations, including the increase in remote access and operations due to reshaping
traditional working dynamics. Although we make efforts to maintain the security and integrity of these types of IT
networks and related systems, and we have implemented various measures to manage the risk of a security breach or
disruption, there can be no assurance that our security efforts and measures will be effective or that attempted
security breaches or disruptions would not be successful or damaging. A security breach or other significant
disruption involving our IT networks and related systems could disrupt the proper functioning of our networks and
systems; result in misstated financial reports, violations of loan covenants and/or missed reporting deadlines; result
in our inability to monitor our compliance with the rules and regulations regarding our qualification as a REIT;
result in the unauthorized access to, and destruction, loss, theft, misappropriation or release of proprietary,
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confidential, sensitive or otherwise valuable information of ours or others, which could be used to compete against
us or for disruptive, destructive or otherwise harmful purposes and outcomes; require significant management
attention and resources to remedy any damages that result; subject us to claims for breach of contract, damages,
credits, penalties or termination of certain agreements; or damage our reputation among our tenants and investors
generally. Any or all of the foregoing could have a material adverse effect on our financial condition, results of
operations, cash flow and ability to make distributions with respect to, and the market price of, our common shares.
We may also incur losses in connection with security breaches that exceed coverage limits under our cyber
insurance policies. Our service providers, tenants, managers of our properties and other customers and their business
partners are exposed to similar risks and the occurrence of a security breach or other disruption with respect to their
information technology and infrastructure could, in turn, have a material adverse impact on our results of operations
and business.
The use of artificial intelligence presents risks and challenges that may adversely impact our business and
operating results or that of our customers.
We may adopt and integrate generative artificial intelligence and machine learning (collectively, “AI”) tools into our
operations to enhance efficiencies and streamline existing systems, and our customers may similarly implement such
tools. However, the deployment and maintenance of AI tools may entail substantial risks. While these tools hold
promise in optimizing processes and driving efficiencies, as with many technological innovations, they also pose
inherent risks. These include, but are not limited to, the potential for inaccuracy, bias, intellectual property
infringement, or misappropriation, as well as concerns regarding data privacy and cybersecurity.
As AI technologies become more advanced, cybercriminals may develop more sophisticated attack methods. Such
methods may include the use of AI to automate and enhance phishing schemes, advance malware, and carry out
more effective cyberattacks. The AI-driven cyber threats could be harder to detect and counteract, which may pose
significant risks to our data security and the integrity of our systems and those of our customers and third-party
service providers. If such AI-enhanced cyberattacks are successful, they could lead to substantial data breaches, loss
of sensitive information, and significant financial and reputational damage.
Changes in accounting standards issued by the Financial Accounting Standards Board ("FASB") or other
standard-setting bodies may adversely affect our business.
Our financial statements are subject to the application of U.S. GAAP, which is periodically revised and/or expanded.
From time to time, we are required to adopt new or revised accounting standards issued by recognized authoritative
bodies, including the FASB and the SEC. It is possible that accounting standards we are required to adopt may
require changes to the current accounting treatment that we apply to our consolidated financial statements and may
require us to make significant changes to our systems. Changes in accounting standards could result in a material
adverse impact on our business, financial condition and results of operations.
Risks That Apply to Our Real Estate Business
Real estate income and the value of real estate investments fluctuate due to various factors.
The value of real estate fluctuates depending on conditions in the general economy and the real estate business.
These conditions may also limit our revenues and available cash. Valuations and appraisals of our assets are
estimates of fair value and may not necessarily correspond to realizable value. The rents, interest and other payments
we receive and the occupancy levels at our properties may decline as a result of adverse changes in any of the factors
that affect the value of our real estate. If our revenues decline, we generally would expect to have less cash available
to pay our indebtedness and distribute to our shareholders. In addition, some of our unreimbursed costs of owning
real estate may not decline when the related rents decline.
The factors that affect the value of our real estate include, among other things:
•
international, national, regional and local economic conditions;
•
consequences of any armed conflict involving, or terrorist attack against, the U.S. or Canada;
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•
the threat of domestic terrorism or pandemic or other illness outbreaks (such as COVID-19 or variants
thereof), which could cause consumers to avoid congregate settings;
•
our ability or the ability of our tenants or managers to secure adequate insurance;
•
natural disasters, such as earthquakes, hurricanes, wildfires and floods, which could exceed the aggregate
limits of insurance coverage;
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impacts of climate change;
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local conditions such as an oversupply of space or lodging properties or a reduction in demand for real
estate in the area;
•
competition from other available space or, in the case of our experiential lodging properties, competition
from other lodging properties or alternative lodging options in our markets;
•
whether tenants and users such as customers of our tenants consider a property attractive;
•
the financial condition of our tenants, borrowers and managers, including the extent of bankruptcies or
defaults;
•
higher levels of inflation;
•
whether we are able to pass some or all of any increased operating costs through to tenants or other
customers;
•
how well we manage our properties or how well the managers of properties manage those properties;
•
in the case of our experiential lodging properties, dependence on demand from business and leisure
travelers, which may fluctuate and be seasonal;
•
fluctuations in interest rates;
•
changes in real estate taxes and other expenses;
•
changes in market rental rates;
•
the timing and costs associated with property improvements and rentals;
•
changes in taxation or zoning laws;
•
government regulation;
•
availability of financing on acceptable terms or at all and the costs of such financing;
•
potential liability under environmental or other laws or regulations; and
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general competitive factors.
The rents, interest and other payments we receive and the occupancy levels at our properties may decline as a result
of adverse changes in any of these factors. If our revenues decline, we generally would expect to have less cash
available to pay our indebtedness and distribute to our shareholders. In addition, some of our unreimbursed costs of
owning real estate may not decline when the related rents decline.
There are risks associated with owning and leasing real estate.
Although our lease terms, in most cases, obligate the tenants to bear substantially all of the costs of operating the
properties and our managers to manage such costs, investing in real estate involves a number of risks, including:
•
the risk that tenants will not perform under their leases or that managers will not perform under their
management agreements, reducing our income from such leases or properties under such management;
•
we may not always be able to lease properties at favorable rates or certain tenants may require significant
capital expenditures by us to conform existing properties to their requirements;
•
we may not always be able to sell a property when we desire to do so at a favorable price; and
•
changes in tax, zoning or other laws could make properties less attractive or less profitable.
If a tenant fails to perform on its lease covenants or a manager fails to perform on its management covenants, that
would not excuse us from meeting any debt obligation secured by the property and could require us to fund reserves
in favor of our lenders, thereby reducing funds available for payment of dividends. We cannot be assured that
tenants or managers will elect to renew their leases or management agreements when the terms expire. If a tenant or
manager does not renew its lease or agreement or if a tenant or a manager defaults on its lease or management
obligations, there is no assurance we could obtain a substitute tenant or manager on acceptable terms. If we cannot
obtain another quality tenant or manager, we may be required to modify the property for a different use, which may
involve a significant capital expenditure and a delay in re-leasing the property or obtaining a new manager.
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Some potential losses are not covered by insurance.
Our leases with tenants, financing arrangements with borrowers and agreements with managers of our properties
require the customers and managers to carry comprehensive liability, casualty, workers' compensation, extended
coverage and rental loss insurance on our properties, as applicable. We believe the required coverage is of the type,
and amount, customarily obtained by an owner of similar properties. We believe all of our properties are adequately
insured. However, we are exposed to risks that the insurance coverage levels required under our leases with tenants,
financing arrangements with borrowers and agreements with managers of our properties may increase in cost
significantly or be inadequate, and these risks may be increased as we expand our portfolio into experiential
properties that may present more risk of loss as compared to properties in our existing portfolio. In addition, there
are some types of losses, such as pandemics, catastrophic acts of nature, acts of war or riots, for which we, our
customers or managers of our properties cannot obtain insurance at an acceptable cost or at all. If there is an
uninsured loss or a loss in excess of insurance limits, we could lose both the revenues generated by the affected
property and the capital we have invested in the property. We would, however, remain obligated to repay any
mortgage indebtedness or other obligations related to the property. In addition, the cost of insurance protection
against terrorist acts has risen dramatically over the years. There can be no assurance our customers or managers of
our properties will be able to obtain terrorism insurance coverage, as applicable, or that any coverage they do obtain
will adequately protect our properties against loss from terrorist attack.
Joint ventures may limit flexibility with jointly owned investments.
We may continue to acquire or develop properties in joint ventures with third parties when those transactions appear
desirable. We would not own the entire interest in any property acquired by a joint venture. Our participation in joint
ventures subjects us to risks, including but not limited to, the following risks that:
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we may need our partner(s)' consent for major decisions regarding a joint venture property;
•
our joint venture partners may have different objectives than us regarding the appropriate timing and terms
of any sale or refinancing of a property, its operation or, if applicable, the commencement of development
activities;
•
our joint venture partners may be structured differently than us for tax purposes and this could create
conflicts of interest, including with respect to our compliance with the REIT requirements, and our REIT
status could be jeopardized if any of our joint ventures do not operate in compliance with REIT
requirements;
•
our joint venture partners may have competing interests in our markets that could create conflicts of
interest;
•
our joint venture partners may default on their obligations, which could necessitate that we fulfill their
obligations ourselves or forfeit our interest in the ventures;
•
our joint ventures may be unable to repay any amounts that we may loan to them;
•
our joint venture agreements may contain provisions limiting the liquidity of our interest for sale or sale of
the entire asset;
•
as the general partner or managing member of a joint venture, we could be generally liable under applicable
law for the debts and obligations of the venture, and we may not be entitled to contribution or
indemnification from our partners; and
•
our joint venture agreements may contain provisions that allow our partners to remove us as the general
partner or managing member for cause, and this could result in liability for us to our partners under the
governing agreement of the joint venture.
If we have a dispute with a joint venture partner, we may feel it necessary or become obligated to acquire the
partner's interest in the venture or to forfeit our interest in the venture. However, we cannot ensure that the price we
would have to pay or the timing of the acquisition would be favorable to us. If we are invested in a joint venture in
which control over significant decisions is shared, the assets and financial results of the joint venture may not be
reportable by us on a consolidated basis. To the extent we have commitments to, or on behalf of, or are dependent
on, any such "off-balance sheet" arrangements, or if those arrangements or their properties or leases are subject to
material contingencies, our liquidity, financial condition and operating results could be adversely affected by those
commitments or off-balance sheet arrangements.
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Our multi-tenant properties expose us to additional risks.
Our entertainment districts and similar properties we may seek to acquire or develop in the future, involve risks not
typically encountered in the purchase and lease-back of real estate properties that are operated by a single tenant.
The ownership or development of multi-tenant retail centers could expose us to the risk that a sufficient number of
suitable tenants may not be found to enable the centers to operate profitably and provide a return to us. This risk may
be compounded by the failure of existing tenants to satisfy their obligations due to various factors, including
economic downturns or inflation. These risks, in turn, could cause a material adverse impact to our results of
operations and business.
Retail centers are also subject to tenant turnover and fluctuations in occupancy rates, which could affect our
operating results. Multi-tenant retail centers also expose us to the risk of potential common area maintenance
expense slippage, which may occur when the actual cost of taxes, insurance and maintenance at the property exceeds
the common area maintenance fees paid by tenants.
We may from time to time be subject to litigation that could negatively impact our financial condition, cash flows,
results of operations and the trading price of our shares.
We may from time to time be a defendant in lawsuits and regulatory proceedings relating to our business or
properties. Such litigation and proceedings may result in defense costs, settlements, fines, or judgments against us,
some of which may not be covered by insurance. Due to the inherent uncertainties of litigation and regulatory
proceedings, we cannot accurately predict the ultimate outcome of any such litigation or proceedings. An
unfavorable outcome may result in our having to pay significant fines, judgments, or settlements, which, if
uninsured, or if exceeding insurance coverage, could adversely impact our financial condition, cash flows, results of
operations and the trading price of our shares. Additionally, certain proceedings or the resolution of certain
proceedings may affect the availability or cost of some of our insurance coverage, exposing us to increased risks for
which we may be uninsured.
Failure to comply with the Americans with Disabilities Act and other laws could result in substantial costs.
Most of our properties must comply with the ADA. The ADA requires that public accommodations reasonably
accommodate individuals with disabilities and that new construction or alterations be made to commercial facilities
to conform to accessibility guidelines. Failure to comply with the ADA can result in injunctions, fines, damage
awards to private parties and additional capital expenditures to remedy noncompliance. Our leases with tenants,
financing arrangements with borrowers and agreements with managers of our properties require them to comply
with the ADA.
Our properties are also subject to various other federal, state and local regulatory requirements. We do not know
whether existing requirements will change or whether compliance with future requirements will involve significant
unanticipated expenditures. Although these expenditures would be the responsibility of our customers in most cases,
if these customers fail to perform these obligations, we may be required to do so.
Potential liability for environmental contamination could result in substantial costs.
Under federal, state and local environmental laws, we may be required to investigate and clean up any release of
hazardous or toxic substances or petroleum products at our properties, regardless of our knowledge or actual
responsibility, simply because of our current or past ownership of the real estate. If unidentified environmental
problems arise, we may have to make substantial payments, which could adversely affect our cash flow and our
ability to service our debt and pay dividends to our shareholders. This is because:
•
as owner, we may have to pay for property damage and for investigation and clean-up costs incurred in
connection with the contamination;
•
the law may impose clean-up responsibility and liability regardless of whether the owner or operator knew
of or caused the contamination;
•
even if more than one person is responsible for the contamination, each person who shares legal liability
under environmental laws may be held responsible for all of the clean-up costs; and
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•
governmental entities and third parties may sue the owner or operator of a contaminated site for damages
and costs.
These costs could be substantial and in extreme cases could exceed the value of the contaminated property. The
presence of hazardous substances or petroleum products or the failure to properly remediate contamination may
adversely affect our ability to borrow against, sell or lease an affected property. In addition, some environmental
laws create liens on contaminated sites in favor of the government for damages and costs it incurs in connection with
a contamination. Most of our loan agreements require the Company or a subsidiary to indemnify the lender against
environmental liabilities. Our leases with tenants and agreements with managers of our properties require them to
operate the properties in compliance with environmental laws and to indemnify us against environmental liability
arising from the operation of the properties. We believe all of our properties are in material compliance with
environmental laws. However, we could be subject to strict liability under environmental laws because we own the
properties. There is also a risk that tenants and borrowers may not satisfy their environmental compliance and
indemnification obligations under the leases or other agreements. Any of these events could substantially increase
our cost of operations, require us to fund environmental indemnities in favor of our lenders, limit the amount we
could borrow under our unsecured revolving credit facility and reduce our ability to service our debt and pay
dividends to shareholders.
We are exposed to the potential impacts of future climate change and climate-change related risks.
We are exposed to potential physical risks from possible future changes in climate. We have significant investments
in coastal markets, some of which may be targeted for future growth. Those coastal markets have historically
experienced severe weather events, such as severe storms and prolonged drought, as well as other natural
catastrophes such as wildfires and floods. If the frequency of extreme weather and other natural events increases due
to climate change, our exposure to these events could increase. We may also be adversely impacted as a real estate
owner, operator and developer in the future by stricter energy and water efficiency standards, water access for our
properties or greenhouse gas regulations. Climate change may also have indirect negative effects on our business by
increasing the cost of, or decreasing the availability of, property insurance on terms we find acceptable and
increasing the cost of energy and building materials.
Compliance with new laws or regulations and investor expectations relating to climate change and climate change
disclosure, including compliance with securities and any federal or state disclosure requirements, voluntary
compliance with independent rating systems and “green” building codes, may require us or our customers to make
improvements to our existing properties or result in increased operating costs, thereby impacting the financial
condition of our customers and their ability to meet their lease or debt obligations. We cannot give any assurance
that other such conditions do not exist or may not arise in the future. The potential impacts of future climate change
on our real estate properties could adversely affect our ability to lease, develop or sell such properties. If we are
unable to comply with laws and regulations on climate change or implement effective sustainability strategies, our
reputation among our customers and investors may be damaged and we may incur fines or penalties.
Real estate investments are relatively illiquid.
We may desire to sell properties in the future because of changes in market conditions, poor tenant performance or
default of any mortgage we hold, or to avail ourselves of other opportunities. We may also be required to sell a
property in the future to meet debt obligations or avoid a default. Specialty real estate projects such as our
investments cannot always be sold quickly, and we cannot assure you that we could always obtain a favorable price.
In addition, the Internal Revenue Code limits our ability to sell our properties. We may be required to invest in the
restoration or modification of a property before we can sell it. The inability to respond promptly to changes in the
performance of our property portfolio could adversely affect our financial condition and ability to service our debt
and pay dividends to our shareholders.
There are risks in owning assets outside the United States.
Our properties in Canada and future investments in other international markets we may enter are subject to the risks
normally associated with international operations. The value of our current international portfolio and any other
properties we purchase in non-U.S. jurisdictions may be affected by factors specific to the laws and business
practices of such jurisdictions. The laws and business practices of foreign jurisdictions may expose us to risks that
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are different from and in addition to those commonly found in the United States, including, but not limited to, the
following: (i) the burden of complying with non-U.S. laws including land use and zoning laws or more stringent
environmental laws; (ii) existing or new laws relating to the foreign ownership of real property and laws restricting
our ability to repatriate earnings and cash into the United States; (iii) the potential for expropriation; (iv) adverse
effects of changes in the exchange rate between U.S. dollars and foreign currencies in which revenue is generated at
our properties outside the United States; (v) imposition of adverse or confiscatory taxes, changes in real estate and
other tax rates or laws and changes in other operating expenses in such foreign jurisdictions; (vi) possible challenges
to the anticipated tax treatment of our revenue and our properties; (vii) the potential difficulty of enforcing rights and
obligations in other countries; and (viii) our more limited experience and expertise in foreign countries relative to
our experience and expertise in the United States. Non-U.S. real estate and tax laws are complex and subject to
change, and we cannot assure you we will always be in compliance with those laws or that compliance will not
expose us to additional expense. We may also be subject to fluctuations in real estate values or markets or the
economy as a whole of non-U.S. jurisdictions we enter, which may adversely affect our international investments.
There are risks in owning or financing properties for which the tenants', borrowers', or our operations may be
impacted by weather conditions, climate change and natural disasters.
Severe weather events, such as severe storms and prolonged drought, as well as other natural catastrophes such as
wildfires and floods may interrupt the operations of an operator, damage our properties, reduce the number of guests
who visit the properties in affected areas or negatively impact an operator's revenue and profitability. Damage to our
properties could take a long time to repair and there is no guarantee that we would have adequate insurance to cover
the costs of repair and recoup lost profits. Furthermore, such a disaster may interrupt or impede access to our
affected properties or require evacuations and may cause visits to our affected properties to decrease for an indefinite
period. The ability of our operators to attract visitors to our experiential lodging properties is also influenced by the
aesthetics and natural beauty of the outdoor environment where these resorts are located. Severe weather events,
such as severe storms and prolonged drought, as well as other natural catastrophes such as wildfires and floods could
negatively impact the natural beauty of our resort properties and have a long-term negative impact on an operator's
overall guest visitation as it could take several years for the environment to recover.
We have acquired and financed ski properties and expect to do so in the future. The operators of these properties,
our tenants or borrowers, are dependent upon the operations of the properties to pay their rents and service their
loans. The ski property operator's ability to attract visitors is influenced by weather conditions and climate change in
general, each of which may impact the amount of snowfall during the ski season. Adverse weather conditions may
discourage visitors from participating in outdoor activities. In addition, unseasonably warm weather may result in
inadequate natural snowfall, which increases the cost of snowmaking, and could render snowmaking wholly or
partially ineffective in maintaining quality skiing conditions and attracting visitors. Excessive natural snowfall may
materially increase the costs incurred for grooming trails and may also make it difficult for visitors to obtain access
to ski properties. We also own and finance attractions that would also be subject to risks relating to weather
conditions such as in the case of waterparks and amusement parks, including excessive rainfall or unseasonable
temperatures. Prolonged periods of adverse weather conditions, or the occurrence of such conditions during peak
visitation periods, could have a material adverse effect on the operator's financial results and could impair the ability
of the operator to make rental or other payments or service our loans.
We face risks associated with the development, redevelopment and expansion of properties and the acquisition of
other real estate related companies.
We may develop, redevelop or expand new or existing properties or acquire other real estate related companies, and
these activities are subject to various risks. We may not be successful in pursuing such development or acquisition
opportunities. In addition, newly developed or redeveloped/expanded properties or newly acquired companies may
not perform as well as expected. We are subject to other risks in connection with any such development or
acquisition activities, including the following:
•
we may not succeed in completing developments or consummating desired acquisitions on time;
•
we may face competition in pursuing development or acquisition opportunities, which could increase our
costs;
28
•
we may encounter difficulties and incur substantial expenses in integrating acquired properties into our
operations and systems and, in any event, the integration may require a substantial amount of time on the
part of both our management and associates and therefore divert their attention from other aspects of our
business;
•
we may undertake developments or acquisitions in new markets or industries where we do not have the
same level of market knowledge, which may expose us to unanticipated risks in those markets and
industries to which we are unable to effectively respond, such as an inability to attract qualified personnel
with knowledge of such markets and industries;
•
we may incur construction costs in connection with developments, which may be higher than projected,
potentially making the project unfeasible or unprofitable;
•
we may incur unanticipated capital expenditures in order to maintain or improve acquired properties;
•
we may be unable to obtain zoning, occupancy or other governmental approvals;
•
we may experience delays in receiving rental payments for developments that are not completed on time;
•
our developments or acquisitions may not be profitable;
•
we may need the consent of third parties such as anchor tenants, mortgage lenders and joint venture
partners, and those consents may be withheld;
•
we may incur adverse tax consequences if we fail to qualify as a REIT for U.S. federal income tax purposes
following an acquisition;
•
we may be subject to risks associated with providing mortgage financing to third parties in connection with
transactions, including any default under such mortgage financing;
•
we may face litigation or other claims in connection with, or as a result of, acquisitions, including claims
from terminated associates, tenants, former shareholders or other third parties;
•
the market price of our common shares, preferred shares and debt securities may decline, particularly if we
do not achieve the perceived benefits of any acquisition as rapidly or to the extent anticipated by securities
or industry analysts or if the effect of an acquisition on our financial condition, results of operations and
cash flows is not consistent with the expectations of these analysts;
•
we may issue shares in connection with acquisitions resulting in dilution to our existing shareholders; and
•
we may assume debt or other liabilities in connection with acquisitions.
In addition, there is no assurance that planned third-party financing related to development and acquisition
opportunities will be provided on a timely basis or at all, thus increasing the risk that such opportunities are delayed
or fail to be completed as originally contemplated. We may also abandon development or acquisition opportunities
that we have begun pursuing and consequently fail to recover expenses already incurred and have devoted
management time to a matter not consummated. In some cases, we may agree to lease or other financing terms for a
development project in advance of completing and funding the project, in which case we are exposed to the risk of
an increase in our cost of capital during the interim period leading up to the funding, which can reduce, eliminate or
result in a negative spread between our cost of capital and the payments we expect to receive from the project.
Furthermore, our acquisitions of new properties or companies will expose us to the liabilities of those properties or
companies, some of which we may not be aware at the time of acquisition. In addition, development of our existing
properties presents similar risks. If a development or acquisition is unsuccessful, either because it is not meeting our
expectations or was not completed according to our plans, we could lose our investment in the development or
acquisition.
Risks That May Affect the Market Price of Our Shares
We cannot assure you we will continue paying cash dividends at current rates.
Our dividend policy is determined by our Board of Trustees. Our ability to pay dividends on our common shares or
to pay dividends on our preferred shares at their stated rates depends on a number of factors, including our liquidity,
our financial condition and results of future operations, the performance of lease and mortgage terms by our tenants
and customers, our ability to acquire, finance and lease additional properties at attractive rates, and provisions in our
loan covenants. Although we currently intend to pay dividends in future periods, there can be no assurances that we
will maintain or increase any future common share dividend rate, and the market price of our common shares and
possibly our preferred shares could be adversely affected if we fail to maintain or increase such rate. Furthermore, if
29
the Board of Trustees decides to pay dividends on our common shares partially or substantially all in common
shares, that could have an adverse effect on the market price of our common shares and possibly our preferred
shares.
Market interest rates may have an effect on the value of our shares.
One of the factors that investors may consider in deciding whether to buy or sell our common shares or preferred
shares is our dividend rate as a percentage of our share price, relative to market interest rates. If market interest rates
increase or remain elevated, prospective investors may desire a higher dividend rate on our common shares or seek
securities paying higher dividends or interest. Higher interest rates would also likely increase our future borrowing
costs and potentially decrease funds available for distribution, which could have an adverse effect on the market
price of our common shares and possibly our preferred shares.
Inflation may have an effect on the value of our shares.
One of the factors that investors may consider in deciding whether to buy or sell our common shares or preferred
shares is our ability to increase rent or interest income on existing leases and loans in the event of significant
inflation. Our long-term leases and loans typically contain provisions such as rent or interest escalators and
percentage rent or percentage interest designed to mitigate the adverse impact of inflation. However, in periods of
significant inflation, the impact of these provisions may be limited due to fixed escalators, rent or interest caps and
percentage rent or interest breakpoints, potentially resulting in below-market lease rates or loan terms. Accordingly,
if inflation increases significantly, prospective investors may desire to invest in a company that can increase revenue
without such contractual limitations, which could impact the market value of our shares.
Broad market fluctuations could negatively impact the market price of our shares.
The stock market has experienced extreme price and volume fluctuations in recent years. Such volatility has affected
the market price of the common equity of many companies, including companies in industries similar or related to
ours. These broad market fluctuations could reduce the market price of our shares. Furthermore, our operating
results and prospects may be below the expectations of public market analysts and investors or may be lower than
those of companies with comparable market capitalization. Either of these factors could lead to a material decline in
the market price of our shares.
Market prices for our shares may be affected by perceptions about the financial health or share value of our
tenants, borrowers and managers or the performance of REIT stocks generally.
To the extent any of our customers or their competitors report losses, slower earnings growth, take charges against
earnings or enter bankruptcy proceedings, the market price for our shares could be adversely affected. The market
price for our shares could also be affected by any weakness in the performance of REIT stocks generally or
weakness in any of the sectors in which our customers operate, any of which may be adversely affected by generally
challenging and uncertain economic conditions.
Limits on changes in control may discourage takeover attempts, which may be beneficial to our shareholders.
There are a number of provisions in our Declaration of Trust and Bylaws and under Maryland law and agreements
we have with others, any of which could make it more difficult for a party to make a tender offer for our shares or
complete a takeover of the Company that is not approved by our Board of Trustees. These include:
•
a limit on beneficial ownership of our shares, which acts as a defense against a hostile takeover or
acquisition of a significant or controlling interest, in addition to preserving our REIT status;
•
the ability of the Board of Trustees to issue preferred or common shares, to reclassify preferred or common
shares, and to increase the amount of our authorized preferred or common shares, without shareholder
approval;
•
limits on the ability of shareholders to remove trustees without cause;
•
requirements for advance notice of shareholder proposals at shareholder meetings;
•
provisions of Maryland law restricting business combinations and control share acquisitions not approved
by the Board of Trustees and unsolicited takeovers;
30
•
provisions of Maryland law protecting corporations (and by extension REITs) against unsolicited takeovers
by limiting the duties of the trustees in unsolicited takeover situations;
•
provisions in Maryland law providing that the trustees are not subject to any higher duty or greater scrutiny
than that applied to any other director under Maryland law in transactions relating to the acquisition or
potential acquisition of control;
•
provisions of Maryland law creating a statutory presumption that an act of the trustees satisfies the
applicable standards of conduct for trustees under Maryland law;
•
provisions in loan or joint venture agreements putting the Company in default upon a change in control;
and
•
provisions of our compensation arrangements with our associates calling for severance compensation and
vesting of equity compensation upon termination of employment upon a change in control or certain events
of the associates' termination of service.
Any or all of these provisions could delay or prevent a change in control of the Company, even if the change was in
our shareholders' interest or offered a greater return to our shareholders.
We may change our policies without obtaining the approval of our shareholders.
Our operating and financial policies, including our policies with respect to acquiring or financing real estate or other
companies, growth, operations, indebtedness, capitalization and dividends, are exclusively determined by our Board
of Trustees. Accordingly, our shareholders do not control these policies.
Dilution could affect the value of our shares.
Our future growth will depend in part on our ability to raise additional capital. If we raise additional capital through
the issuance of equity securities (directly, in underwritten offerings or through our ATM Program or DSP Plan, or
indirectly through convertible or exchangeable securities, warrants or options), the interests of holders of our
common shares could be diluted. Any such additional issuances, or the perception that additional equity securities
are available for issuance or that such issuances are likely to occur, could materially and adversely affect the market
price for our common shares. Likewise, our Board of Trustees is authorized to cause us to issue preferred shares in
one or more series, the holders of which would be entitled to dividends and voting and other rights as our Board of
Trustees determines, and which could be senior to or convertible into our common shares. Accordingly, an issuance
by us of preferred shares could be dilutive to or otherwise adversely affect the interests of holders of our common
shares. As of December 31, 2025, our Series C preferred shares are convertible, at each of the holder's option, into
our common shares at a conversion rate of 0.4378 common shares per $25.00 liquidation preference, which is
equivalent to a conversion price of approximately $57.10 per common share (subject to adjustment in certain
events). Additionally, as of December 31, 2025, our Series E preferred shares are convertible, at each of the holder's
option, into our common shares at a conversion rate of 0.4845 common shares per $25.00 liquidation preference,
which is equivalent to a conversion price of approximately $51.60 per common share (subject to adjustment in
certain events). Under certain circumstances in connection with a change in control of the Company, holders of our
Series G preferred shares may elect to convert some or all of their Series G preferred shares into a number of our
common shares per Series G preferred share equal to the lesser of (a) the $25.00 per share liquidation preference,
plus accrued and unpaid dividends divided by the market value of our common shares or (b) 0.7389 shares.
Depending upon the number of Series C, Series E and Series G preferred shares being converted at one time, a
conversion of Series C, Series E and Series G preferred shares could be dilutive to or otherwise adversely affect the
interests of holders of our common shares. In addition, we may issue a significant amount of equity securities in
connection with acquisitions or investments, with or without seeking shareholder approval, which could result in
significant dilution to our existing shareholders.
Future offerings of debt or equity securities, which may rank senior to our common shares, may adversely affect
the market price of our common shares.
If we decide to issue debt securities in the future, which would rank senior to our common shares, it is likely that
they will be governed by an indenture or other instrument containing covenants restricting our operating flexibility.
Additionally, any equity securities or convertible or exchangeable securities that we issue in the future may have
rights, preferences and privileges more favorable than those of our common shares and may result in dilution to
31
owners of our common shares. We and, indirectly, our shareholders, will bear the cost of issuing and servicing such
securities. Because our decision to issue debt or equity securities in any future offering will depend on market
conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of our
future offerings. Thus, holders of our common shares will bear the risk of our future offerings reducing the market
price of our common shares and diluting the value of their shareholdings in us.
Changes in foreign currency exchange rates may have an impact on the value of our shares.
The functional currency for our Canadian operations is CAD. As a result, our future operating results could be
affected by fluctuations in the USD-CAD exchange rate, which in turn could affect our share price. We have
attempted to mitigate our exposure to Canadian currency exchange risk by entering into foreign currency exchange
contracts to hedge in part our exposure to exchange rate fluctuations. Foreign currency derivatives are subject to
future risk of loss. We do not engage in purchasing foreign exchange contracts for speculative purposes.
Additionally, we may enter other international markets that pose similar currency fluctuation risks as described
above.
We may be subject to adverse legislative or regulatory tax changes that could reduce the market price of our
shares.
At any time, the U.S. federal income tax laws or regulations governing REITs or the administrative interpretations of
those laws or regulations may be changed, possibly with retroactive effect. We cannot predict if or when any new
U.S. federal income tax law, regulation or administrative interpretation, or any amendment to any existing U.S.
federal income tax law, regulation or administrative interpretation, will be adopted, promulgated or become effective
or whether any such law, regulation or interpretation may take effect retroactively. We and our shareholders could
be adversely affected by any such change in, or any new, U.S. federal income tax law, regulation or administrative
interpretation. Furthermore, any proposals seeking broader reform of U.S. federal income tax laws, if enacted, could
change the federal income tax laws applicable to REITs, subject us to federal tax or reduce or eliminate the current
deduction for dividends paid to our shareholders, any of which could negatively affect the market for our shares.
Item 1B. Unresolved Staff Comments
There are no unresolved comments from the staff of the SEC required to be disclosed herein as of the date of this
Annual Report on Form 10-K.
Item 1C. Cybersecurity
The Company's Board of Trustees recognizes the critical importance of maintaining the trust and confidence of the
Company's customers, business partners, associates and other stakeholders. The Board, in coordination with the
Audit Committee, is actively involved in the oversight of the Company's enterprise risk management ("ERM")
program, of which cybersecurity is an important component. The Company's cyber risk management program is
fully integrated into the Company's broader ERM program and includes cybersecurity policies, standards, processes
and practices that are based on recognized frameworks and other applicable industry standards. In general, the
Company seeks to address cybersecurity risks through a comprehensive, company-wide cyber risk program focused
on preserving the confidentiality, security and availability of the information that the Company collects and stores
by identifying, preventing and mitigating cybersecurity threats and effectively responding to cybersecurity incidents
when they occur.
The Company's cyber risk management program is led by the Company's Vice President of Information Systems,
whose team is responsible for leading company-wide cybersecurity strategy, policy, and processes while reporting
directly to the Company's Chief Financial Officer. While the Board has ultimate oversight for the risk management
process, the Audit Committee is responsible for overseeing the Company's policies and procedures for assessing and
managing its exposure to risk, including cybersecurity risks. The Company's Vice President of Information Systems
provides regular reports to the Audit Committee on any cyber risks and threats to the Company, assessments of the
Company's security program and projects in progress to enhance the Company's security systems. The Company's
Board of Trustees also receives periodic updates relating to the Company's cybersecurity programs and emerging
cybersecurity threats as part of its general oversight duties. Pursuant to the Company's response plan, the Board and
the Audit Committee will receive prompt and timely information regarding any material cybersecurity incidents.
32
The Company has a documented response plan to follow in the event a cybersecurity incident occurs. The plan
details how to determine the scope and risk of an incident, incident response, escalating and communication
procedures and the reporting of incident results and risks to all stakeholders and how to reduce the likelihood of an
incident occurring or reoccurring. On an annual basis, the Company conducts a test of the cyber response plan in
order to test its pre-planned actions, facilitate discussions regarding the plan’s effectiveness and identify useful
strategies and tactics learned from the test. Additionally, the Company’s security program is supported by external
third-party experts, including outside cybersecurity professionals at a security operations center and expert legal
counsel specializing in information technology and cybersecurity.
The Company's cyber risk management program includes processes for identifying and overseeing both internal
cybersecurity risks and those presented by third parties, including vendors, service providers and other external users
of the Company's systems, as well as the systems of third parties that could adversely impact the Company's
business in the event of a cybersecurity incident affecting those third-party systems.
In addition, the Company conducts frequent security awareness trainings for all associates, utilizes tools to detect,
prevent and neutralize malware, viruses, spyware and other cyber threats and leverages a layered set of systems and
controls to protect its network, users and data. The Company maintains robust end user and administrative user
policies governing the use of Company technology. The Company also maintains cyber liability insurance coverage
and performs regular vulnerability and penetration assessments.
The Company's Vice President of Information Systems has been with the Company for over 20 years and has
overseen the Company's information systems, including its cyber risk management program, for the last seven years.
He is a member of the Global Information Assurance Certification Advisory ("GIAC") Board and has received
various GIAC certifications in the areas of information security governance and technical controls focused on
protecting, detecting and responding to cybersecurity issues. The Company's Chief Financial Officer has over 25
years of experience managing risks at the Company and at similar companies, including risks arising from
cybersecurity threats.
As of the date of this report, the Company is not aware of any material risks from cybersecurity threats that have
materially affected or are reasonably likely to materially affect the Company, including the Company's business
strategy, results of operations or financial condition.
Item 2. Properties
As of December 31, 2025, our real estate portfolio consisted of investments in our Experiential and Education
reportable segments. Except as otherwise noted, all of the real estate investments listed below are owned or ground
leased directly by us.
The following table sets forth our wholly-owned properties (excludes properties under development, land held for
development, properties owned by unconsolidated real estate joint ventures and properties securing our mortgage
notes) listed by segment and property type and includes gross square footage (except for certain ski and attraction
properties where such number is not meaningful), percentage leased and total rental revenue for the year ended
December 31, 2025 (dollars in thousands). At certain properties included below, we are the tenant under third-party
ground leases and have assumed responsibility for performing the obligations thereunder. However, pursuant to the
facility leases, our tenants are generally responsible for performing substantially all of our obligations under the
ground leases.
33
Number of
Properties
Building
Gross Square
Footage
Percentage
Leased
Rental
Revenue for the Year
Ended December 31, 2025
% of
Company's Rental
Revenue
Experiential
Theatres (1)
148 10,310,839
99.2 % $
244,523
40.2 %
Eat & Play (2)
55 5,281,017
96.4 %
178,534
29.3 %
Attractions (3)
24 1,430,890
100.0 %
72,125
11.9 %
Ski
3
330,508
100.0 %
25,321
4.2 %
Experiential Lodging
1
276,210
100.0 %
2,743
0.4 %
Fitness & Wellness
13
869,693
100.0 %
29,348
4.8 %
Gaming (4)
1
—
100.0 %
12,571
2.1 %
Cultural
1
457,093
100.0 %
5,982
1.0 %
Total Experiential
246 18,956,250
98.6 % $
571,147
93.9 %
Education
Early Childhood Education Centers
46
828,047
100.0 % $
26,879
4.4 %
Private Schools
9
292,362
100.0 %
10,579
1.7 %
Total Education
55 1,120,409
100.0 % $
37,458
6.1 %
Total
301 20,076,659
98.7 % $
608,605
100.0 %
(1) Includes four properties operated by EPR through third-party managers. Revenue for these properties is
included in other income in the consolidated statements of income and comprehensive income.
(2) Includes seven theatres located in entertainment districts.
(3) Includes one property operated by EPR through a third-party manager. Revenue for this property is included in
other income in the consolidated statements of income and comprehensive income.
(4) Represents land owned by us and ground leased to a casino operator.
The following table sets forth lease expirations regarding EPR’s wholly-owned portfolio (defined above) as of
December 31, 2025 excluding properties we operate through third-party managers and non-theatre tenant leases at
entertainment districts (dollars in thousands):
Year
Number of
Properties
Square
Footage
Rental Revenue for the Year
Ended December 31, 2025
% of Company's Rental
Revenue
2026
1
39,289 $
1,141
0.2 %
2027
4
314,699
20,675
3.4 %
2028
9
604,771
15,107
2.5 %
2029
14
796,011
21,726
3.6 %
2030
20
1,449,253
34,158
5.6 %
2031
3
279,325
5,126
0.8 %
2032
8
460,708
12,237
2.0 %
2033
7
320,563
10,210
1.7 %
2034
34
2,295,305
68,599
11.3 %
2035
29
2,333,642
72,313
11.9 %
2036
40
2,563,753
76,396
12.5 %
2037
27
1,604,632
61,758
10.1 %
2038
40
2,225,531
65,029
10.7 %
2039
2
120,481
4,987
0.8 %
2040
3
196,781
9,799
1.6 %
2041
30
805,130
18,608
3.1 %
2042
4
466,958
18,640
3.1 %
2043
7
123,497
20,266
3.3 %
2044
1
—
3,071
0.5 %
2045
6
632,488
21,570
3.5 %
Thereafter
7
220,370
7,003
1.2 %
296
17,853,187 $
568,419
93.4 %
34
Our wholly-owned properties (defined above) are located in 38 states and Canada. The following table sets forth
certain information by state or province regarding our owned real estate portfolio as of December 31, 2025 (dollars
in thousands):
Location
Building (gross sq. ft.)
Rental Revenue for the Year Ended
December 31, 2025
% of Rental Revenue
Texas
2,716,738 $
77,436
12.7 %
California
1,665,099
83,162
13.7 %
Florida
1,286,099
42,491
7.0 %
Ontario, Canada
1,204,639
37,157
6.1 %
New York
1,111,921
42,283
6.9 %
Pennsylvania
933,779
33,884
5.6 %
Illinois
831,355
19,986
3.3 %
Colorado
773,077
25,216
4.1 %
Ohio
739,759
13,237
2.2 %
Tennessee
680,570
18,109
3.0 %
North Carolina
631,137
22,170
3.6 %
Louisiana
591,272
15,032
2.5 %
Kansas
582,159
12,727
2.1 %
Virginia
545,159
16,582
2.7 %
Michigan
521,631
9,146
1.5 %
Georgia
509,159
13,512
2.2 %
Missouri
490,330
6,642
1.1 %
Arizona
465,755
14,614
2.4 %
Quebec, Canada
399,437
10,392
1.7 %
South Carolina
349,388
12,032
2.0 %
Indiana
345,941
8,386
1.4 %
Kentucky
334,733
6,547
1.1 %
Alabama
323,972
6,110
1.0 %
New Jersey
297,464
9,545
1.6 %
Oklahoma
189,968
8,014
1.3 %
Minnesota
181,764
6,618
1.1 %
Idaho
179,036
3,991
0.7 %
Oregon
166,526
3,750
0.6 %
Arkansas
165,219
4,169
0.7 %
Connecticut
158,069
3,506
0.6 %
Mississippi
116,900
4,144
0.7 %
Massachusetts
111,166
1,100
0.2 %
Maine
107,000
1,131
0.2 %
Iowa
93,755
1,524
0.2 %
New Mexico
71,297
2,713
0.4 %
Maryland
63,306
2,190
0.3 %
Nevada
50,426
1,649
0.3 %
Washington
47,004
3,216
0.5 %
Montana
44,650
1,092
0.2 %
Hawaii
—
2,640
0.4 %
New Hampshire (1)
—
556
0.1 %
Wisconsin (1)
—
120
— %
Nebraska (2)
—
84
— %
20,076,659 $
608,605
100.0 %
(1) Properties sold during the year ended December 31, 2025.
(2) Property sold during the year ended December 31, 2021 and tenant continues to pay deferred rent to EPR.
35
Office Location
Our executive office is located in Kansas City, Missouri and is leased from a third-party landlord. The lease has
projected 2026 rent of approximately $717 thousand and is scheduled to expire on September 30, 2026. Subsequent
to December 31, 2025, we signed a new office lease for our executive office with a term of 10.5 years for
approximately 41,525 square feet of office space. The lease is expected to commence January 1, 2027 with an initial
annual rent payment of approximately $1.0 million.
Tenants and Leases
Our existing leases on real estate investments (on a consolidated basis - excluding unconsolidated joint venture
properties) provide for aggregate annual minimum rental payments for 2026 of approximately $536.7 million (not
including ground lease payments for leases in which our tenants are sub-tenants and are responsible for paying rent
under the ground lease, periodic rent escalations that are not fixed, percentage rent or straight-line rent). Our leases
have remaining terms ranging from one year to 26 years. These leases may be extended for predetermined extension
terms at the option of the tenants. Our leases are typically triple-net leases that require the tenant to pay substantially
all expenses associated with the operation of the properties, including taxes, other governmental charges, insurance,
utilities, service, maintenance and any ground lease payments.
Additionally, we are lessee in 50 operating ground leases as of December 31, 2025. Our tenants are sub-tenants
under these ground leases and are responsible for paying rent under these agreements in all but two instances. Our
sub-lessor operating ground leases provide for aggregate annual minimum rental payments for 2026 of
approximately $27.3 million. Our ground leases have remaining terms ranging from eight months to 17 years, most
of which include one or more options to renew.
Property Acquisitions and Developments in 2025
Our property acquisitions and developments in 2025 consisted of spending on experiential properties. The
percentage of total investment spending related to build-to-suit projects, including investment spending for mortgage
notes on such projects, was approximately 33% in 2025. Many of our build-to-suit opportunities come to us from
our existing strong relationships with property operators and developers, and we expect to continue to pursue these
opportunities.
Item 3. Legal Proceedings
We are subject to certain claims and lawsuits in the ordinary course of business, the outcome of which cannot be
determined at this time. In the opinion of management, any liability we might incur upon the resolution of these
claims and lawsuits will not, in the aggregate, have a material adverse effect on our consolidated financial position
or results of operations.
Item 4. Mine Safety Disclosures
Not applicable.
PART II
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
Our common shares are listed on the New York Stock Exchange (“NYSE”) under the trading symbol “EPR.”
During the year ended December 31, 2025, the Company did not sell any unregistered equity securities.
On February 25, 2026, there were approximately 5,172 holders of record of our outstanding common shares.
36
Issuer Purchases of Equity Securities
Period
Total Number
of Shares
Purchased
Average
Price Paid
Per Share
Total Number of
Shares
Purchased as
Part of Publicly
Announced
Plans or
Programs
Maximum Number
(or Approximate
Dollar Value) of
Shares that May
Yet Be Purchased
Under the Plans or
Programs
October 1 through October 31,
2025 common shares
387 (1) $
57.73
— $
—
November 1 through November
30, 2025 common shares
—
—
—
—
December 1 through December
31, 2025 common shares
—
—
—
—
Total
387
$
57.73
— $
—
(1) The repurchases of equity securities during October 2025 were completed in conjunction with the vesting of
employee nonvested shares. These repurchases were not made pursuant to a publicly announced plan or program.
Dividends
We expect to continue paying dividends to our common and preferred shareholders in future periods. Our Series C
preferred shares have a dividend rate of 5.75%, our Series E preferred shares have a dividend rate of 9.00% and our
Series G preferred shares have a dividend rate of 5.75%. Among the factors the Company’s Board of Trustees
considers in setting the common share dividend rate are the applicable REIT tax rules and regulations that apply to
dividends, the Company’s results of operations, including FFO, FFOAA and AFFO per share, and the Company’s
Cash Available for Distribution (defined as net cash flow available for distribution after payment of operating
expenses, debt service, preferred dividends and other obligations).
37
Share Performance Graph
The following graph compares the cumulative return on our common shares during the five-year period ended
December 31, 2025, to the cumulative return on the MSCI U.S. REIT Index and the Russell 1000 Index for the same
period. The comparisons assume an initial investment of $100 and the reinvestment of all dividends during the
comparison period. Performance during the comparison period is not necessarily indicative of future performance.
Total Return Analysis
12/31/2020
12/31/2021
12/31/2022
12/31/2023
12/31/2024
12/31/2025
EPR Properties
$
100.00 $
150.60 $
128.59 $
178.52 $
176.28 $
212.46
MSCI U.S. REIT Index
$
100.00 $
143.06 $
108.00 $
122.84 $
133.59 $
137.53
Russell 1000 Index
$
100.00 $
126.45 $
102.27 $
129.40 $
161.12 $
189.10
Source: S&P Global Market Intelligence
The performance graph and related text are being furnished to and not filed with the SEC, and will not be deemed
"soliciting material" or subject to Regulation 14A or 14C under the Exchange Act or to the liabilities of Section 18
of the Exchange Act, and will not be deemed to be incorporated by reference into any filing under the Securities Act
or the Exchange Act, except to the extent we specifically incorporate such information by reference into such a
filing.
Item 6. [Reserved]
38
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to
promote an understanding of our financial condition, results of operations, liquidity and certain other factors that
may affect future results. MD&A is provided as a supplement to, and should be read in conjunction with, the
consolidated financial statements and notes thereto included in this Annual Report on Form 10-K. The forward-
looking statements included in this discussion and elsewhere in this Annual Report on Form 10-K involve risks and
uncertainties, including anticipated financial performance, business prospects, industry trends, shareholder returns,
performance of leases by tenants, performance on loans to customers and other matters, which reflect management’s
best judgment based on factors currently known. See “Cautionary Statement Concerning Forward-Looking
Statements.” Actual results and experience could differ materially from the anticipated results and other expectations
expressed in our forward-looking statements as a result of a number of factors, including but not limited to those
discussed in this Item and in Item 1A - “Risk Factors.”
A discussion regarding our financial condition and results of operations for fiscal year 2025 compared to fiscal year
2024 is presented below. A discussion regarding our financial condition and results of operations for fiscal year
2024 compared to fiscal year 2023 is incorporated herein by reference and can be found under Item 7 of Part II of
our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed with the SEC on February 27,
2025.
Overview
Business
Our primary long-term business objective is to enhance shareholder value by achieving predictable and increasing
Funds From Operations As Adjusted ("FFOAA"), Adjusted Funds From Operations ("AFFO") and dividends per
share. FFOAA and AFFO are non-GAAP financial measures and are defined and reconciled below in the section
titled "Non-GAAP Financial Measures." Our growth strategy focuses on acquiring or developing experiential
properties in which we maintain a depth of knowledge and relationships, and which we believe offer sustained
performance through most economic cycles. See Item 1 - "Business" for further discussion regarding our strategic
rationale for our focus on experiential properties.
Our investment portfolio includes ownership of and long-term mortgages on Experiential and Education properties.
Substantially all of our owned single-tenant properties are leased pursuant to long-term, triple-net leases under
which the tenants typically pay all operating expenses of the property. Tenants at our owned multi-tenant properties
are typically required to pay common area maintenance charges to reimburse us for their pro-rata portion of these
costs.
We believe our management's knowledge and industry relationships have facilitated opportunities for us to acquire,
finance and lease properties. Our strategy has been to structure leases and financings to ensure a positive spread
between our cost of capital and the rentals or interest paid by our tenants. To avoid initial lease-up risks and produce
a predictable income stream, we typically acquire or develop single-tenant properties that are pre-leased under long-
term leases. We have also entered into certain joint ventures. We intend to continue entering into some or all of these
types of arrangements in the foreseeable future.
Historically, our primary challenges have been locating suitable properties, negotiating favorable lease or financing
terms (on new or existing properties), managing our expanding portfolio and having a cost of capital that allows us
to grow our investments in new properties beyond those funded primarily with free cash and disposition proceeds.
As of December 31, 2025, our total assets were approximately $5.7 billion (after accumulated depreciation of
approximately $1.7 billion) with properties located in 43 states and Canada. Our total investments (a non-GAAP
financial measure) were approximately $7.0 billion as of December 31, 2025. See "Non-GAAP Financial Measures"
for the reconciliation of "Total assets" in the consolidated balance sheet to total investments and the calculation of
total investments at December 31, 2025 and 2024. We group our investments into two reportable segments,
39
Experiential and Education. As of December 31, 2025, our Experiential investments comprised $6.6 billion, or 94%,
and our Education investments comprised $0.4 billion, or 6%, of our total investments.
As of December 31, 2025, our Experiential portfolio (excluding property under development, undeveloped land
inventory and two joint venture properties) consisted of the following property types (owned or financed):
•
148 theatre properties;
•
60 eat & play properties (including seven theatres located in entertainment districts);
•
26 attraction properties;
•
11 ski properties;
•
four experiential lodging properties;
•
27 fitness & wellness properties;
•
one gaming property; and
•
one cultural property.
As of December 31, 2025, our wholly-owned Experiential real estate portfolio consisted of approximately
19.0 million square feet, was 99% leased or operated and included $54.9 million in property under development and
$20.2 million in undeveloped land inventory.
As of December 31, 2025, our Education portfolio consisted of the following property types (owned or financed):
•
46 early childhood education center properties; and
•
nine private school properties.
As of December 31, 2025, our wholly-owned Education real estate portfolio consisted of approximately 1.1 million
square feet and was 100% leased.
The combined wholly-owned portfolio consisted of 20.1 million square feet and was 99% leased or operated.
Geopolitical and International Trade Environment
Recent geopolitical events and macroeconomic trends, including evolving global armed conflicts and significant
changes in U.S. trade policy, have produced heightened uncertainty. This uncertainty could lead to weakened
economic conditions, contribute to inflation and increased borrowing costs and could lead to decreased consumer
spending. For example, tariff increases may impact our business by increasing the cost of construction materials,
which in turn may lead to higher development and renovation expenses. This increase in costs may result in reduced
yields on development projects and potentially delay or result in cancelling planned projects. Additionally, our
tenants and their customers are similarly experiencing these uncertainties, which could negatively affect their
financial resources and ability to satisfy their obligations to us.
Operating Results
Our total revenue, net income available to common shareholders per diluted share and FFOAA per diluted share are
detailed below for the years ended December 31, 2025 and 2024 (dollars in millions, except per share information):
Year ended December 31,
2025
2024
Change
Total revenue
$
718.4 $
698.1
3 %
Net income available to common shareholders per diluted share
3.28
1.60
105 %
FFOAA per diluted share
5.12
4.87
5 %
The major factors impacting our results for the year ended December 31, 2025, as compared to the year ended
December 31, 2024 were as follows:
•
The effect of investments and dispositions that occurred in 2025 and 2024;
40
•
The recognition of lower other income and other expense primarily related to having fewer operating
properties for the year ended December 31, 2025 versus the year ended December 31, 2024;
•
The recognition of higher general and administrative expense, retirement and severance expense,
transaction costs and income tax expense for the year ended December 31, 2025 versus the year ended
December 31, 2024.
•
The decrease in provision for credit losses, net, impairment charges and impairment charges on joint
ventures for the year ended December 31, 2025 versus the year ended December 31, 2024;
•
The recognition of higher gain on sale of real estate and early ground lease termination for the year ended
December 31, 2025 versus the year ended December 31, 2024; and
•
The recognition of lower equity in loss from joint ventures for the year ended December 31, 2025 versus
the year ended December 31, 2024.
For further details on items impacting our operating results, see section below titled "Results of Operations".
FFOAA is a non-GAAP financial measure. For the definitions and further details on the calculation of FFOAA and
certain other non-GAAP financial measures, see section below titled "Non-GAAP Financial Measures."
Critical Accounting Policies and Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United
States (“GAAP”) requires management to make estimates and assumptions in certain circumstances that affect
amounts reported in the accompanying consolidated financial statements and related notes. In preparing these
financial statements, management has made its best estimates and assumptions that affect the reported assets and
liabilities and the reported amounts of revenues and expenses during the reporting periods. The most significant
assumptions and estimates relate to the valuation of real estate, accounting for real estate acquisitions, assessing the
collectability of receivables and the credit loss related to mortgage and other notes receivable. Applying these
assumptions requires exercising judgment as to future uncertainties and, as a result, actual results could differ from
these estimates.
Impairment of Real Estate Values
We are required to make subjective assessments as to whether there are impairments in the value of our real estate
investments. These impairment estimates may have a direct impact on our consolidated financial statements. We
assess the carrying value of our real estate investments whenever events or changes in circumstances indicate that
the carrying amount of a property may not be recoverable. Certain factors may indicate that impairments exist,
which include, but are not limited to, under-performance relative to projected future operating results, change in the
time period we expect to hold the property, tenant difficulties and significant adverse industry or market economic
trends. If an indicator of possible impairment exists, the property is evaluated for impairment by completing the
undiscounted cash flow test, which compares the carrying amount of the real estate investment to the estimated
future cash flows (undiscounted and without interest charges), including the residual value of the real estate. If an
impairment is indicated, we record a loss for the amount by which the carrying value of the asset exceeds its
estimated fair value.
The assumptions used to derive the estimated future cash flows for the undiscounted cash flow test are subjective
and include, but are not limited to, capitalization rates, anticipated future market rent and our anticipated hold
period. Market rent assumptions used for the estimated future cash flows and the capitalization rate used to estimate
the residual value of the real estate can fluctuate based on economic and industry specific factors. Changes in these
assumptions could materially impact the result of the undiscounted cash flow test and lead to an impairment loss. If
there is a shift in economic conditions, or a change in our property strategy, including a reduction in our anticipated
hold period, these changes could materially impact the result of the undiscounted cash flow test and also lead to an
impairment loss. Impairment loss is calculated based upon the difference between the fair value and the carrying
value of the property. We generally use the income approach to derive the fair value of the property, which includes
estimates for market rent, capitalization rates, and discount rates that are subjective and can be impacted by a lack of
comparable transactions. We may also use the sales comparison approach or take into account real estate purchase
offers to derive the fair value of the real estate if it is anticipated that the property may be sold.
41
Real Estate Acquisitions
Upon acquisition of real estate properties, we evaluate the acquisition to determine if it is a business combination or
an asset acquisition. Our acquisitions are generally considered to be asset acquisitions, and, accordingly, we allocate
the purchase price and other related capitalized acquisition costs incurred to the acquired tangible assets and
identified intangible assets and liabilities on a relative fair value basis. Typically, relative fair values are based on
recent independent appraisals or methods similar to those used by independent appraisers, as well as management
judgment. In addition, acquisition-related costs incurred for asset acquisitions are capitalized.
The methods used to derive the relative fair value of the acquired tangible and intangible assets and liabilities
generally include the income approach, cost approach and sales comparison approach. The assumptions used in
these approaches include, but are not limited to, estimates for market rent, capitalization rates and discount rates.
These estimates are subjective and can be impacted by a lack of comparable transactions. Assumptions used in the
valuation of real estate can fluctuate based on economic and industry specific factors.
Collectability of Lease Receivables
Our accounts receivable balance is comprised primarily of rents and operating cost recoveries due from tenants as
well as accrued fixed rental rate increases to be received over the life of the existing leases. We regularly evaluate
the collectability of our receivables on a lease-by-lease basis. The evaluation primarily consists of reviewing past
due account balances and considering such factors as the credit quality of our tenants, historical trends of the tenant,
property level metrics, current economic conditions and changes in customer payment terms. When the collectability
of lease receivables or future lease payments are no longer probable, we record a direct write-off of the outstanding
receivable to rental revenue and recognize future rental revenue on a cash basis.
To determine if the collection of lease receivables is probable, we review our tenants' financial condition, including
estimates of their expected future operating results, which are subjective. The tenant's current and estimated future
operating results, the tenant's ability to obtain additional financing, as well as the ability and intention to pay lease
receivables can vary based on economic conditions and industry specific factors. If economic conditions or the
tenant's financial condition decline, the anticipated collection of outstanding lease receivables may not be probable
and could result in the suspension of accrual revenue recognition and the write-off of outstanding lease receivables.
Collectability of Mortgage and Notes Receivables
Our mortgage and notes receivables consist of loans originated by us and the related accrued and unpaid interest
income. We regularly evaluate the collectability of our receivables by considering such factors as the credit quality
of our borrowers, historical trends of the borrower, our historical loss experience, current portfolio, market and
economic conditions and changes in borrower payment terms. We estimate our current expected credit losses on a
loan-by-loan basis using a forward-looking commercial real estate forecasting tool. We record provision (benefit)
for credit losses, net, and reduce our mortgage note and note receivables balances by the allowance for credit losses
on a quarterly basis in accordance with ASC 326. In the event we have a past due mortgage note or note receivable
and we determine it is collateral dependent, we measure expected credit losses based on the fair value of the
collateral. If foreclosure is deemed probable, and we expect to sell rather than operate the collateral, we adjust the
fair value of the collateral for the estimated costs to sell.
The significant assumptions used in the forecasting tool to estimate our current expected credit losses include loan
level assumptions such as loan to value ratio and debt service coverage ratio, as well as market level assumptions
such as unemployment rates, interest rates and real estate price indices. Changes in these assumptions could
materially impact the allowance for credit losses. If economic conditions or the borrower's financial condition
declines, this could result in additional provision (benefit) for credit losses, net, the suspension of interest income
recognition or the write-off of the receivables.
42
If a loan is determined to be collateral dependent, the assumptions used to determine the fair value of the underlying
collateral vary based on the type of collateral that secures the mortgage or note receivable. The fair value may be
impacted based on economic factors, an estimate of future operating cash flows of the collateral and capitalization
rates, which are subjective and can be impacted by a lack of comparable transactions. Changes in these assumptions
could materially impact the estimated value of the collateral and lead to increased provision (benefit) for credit
losses, net.
Recent Developments
Investment Spending
Our investment spending during the years ended December 31, 2025 and 2024 totaled $288.5 million and $263.9
million, respectively, and is detailed below (in thousands):
For the Year Ended December 31, 2025
Investment Type
Total
Investment
Spending
New
Development
Re-
development
Asset
Acquisition
Mortgage Notes
or Notes
Receivable
Investment in
Joint
Ventures
Experiential:
Theatres
$
8,167 $
— $
8,167 $
— $
— $
—
Eat & Play
77,763
72,724
4,765
—
274
—
Attractions
37,452
—
—
37,452
—
—
Ski
1,880
—
—
—
1,880
—
Experiential
Lodging
4,038
—
32
—
—
4,006
Fitness & Wellness
159,235
—
19,316
91,984
47,935
—
Total Experiential
288,535
72,724
32,280
129,436
50,089
4,006
Education:
Total Education
—
—
—
—
—
—
Total Investment
Spending
$
288,535 $
72,724 $
32,280 $
129,436 $
50,089 $
4,006
For the Year Ended December 31, 2024
Investment Type
Total
Investment
Spending
New
Development
Re-
development
Asset
Acquisition
Mortgage Notes
or Notes
Receivable
Investment in
Joint
Ventures
Experiential:
Theatres
$
370 $
— $
370 $
— $
— $
—
Eat & Play
42,254
30,058
1,118
—
11,078
—
Attractions
78,025
—
164
33,437
44,424
—
Ski
2,018
—
—
—
2,018
—
Experiential
Lodging
9,411
—
—
—
—
9,411
Fitness & Wellness
129,710
24,080
48,412
—
57,218
—
Cultural
2,132
—
2,132
—
—
—
Total Experiential
263,920
54,138
52,196
33,437
114,738
9,411
Education:
Total Education
—
—
—
—
—
—
Total Investment
Spending
$
263,920 $
54,138 $
52,196 $
33,437 $
114,738 $
9,411
43
The above amounts include $3.9 million and $3.5 million in capitalized interest and $0.3 million and $0.2 million in
other general and administrative direct project costs for the years ended December 31, 2025 and 2024, respectively.
Excluded from the table above are $5.2 million and $7.3 million of maintenance capital expenditures and other
spending for the years ended December 31, 2025 and 2024, respectively.
Dispositions
During the year ended December 31, 2025, we completed the sale of three vacant theatre properties, two operating
theatre properties, four leased theatre properties, one vacant early childhood education center, four land parcels and
10 leased early childhood education centers for net proceeds totaling $141.8 million and recognized a net gain on
sale totaling $36.1 million.
On March 7, 2025, we received $8.1 million in proceeds representing prepayment in full on two mortgage note
receivables that were secured by two early childhood education center properties. Additionally, on October 1, 2025,
we received $18.4 million in proceeds representing partial prepayment on one mortgage note receivable relating to
the sale of one of the five fitness & wellness properties that secure the note.
On August 5, 2025, we exercised an early termination option of a ground lease on an eat & play property. As a result
of the early termination, we recognized a gain of $3.4 million due to the reassessment of the lease term and the
corresponding remeasurement of the lease liability and right-of-use asset. The gain is included in "Gain (loss) on
sale of real estate and early ground lease termination" in the accompanying consolidated statements of income and
comprehensive income included in this Annual Report on Form 10-K for the year ended December 31, 2025.
Chief Investment Officer Transition
During the year ended December 31, 2025, our Executive Vice President and Chief Investment Officer, Greg
Zimmerman, notified us of his intention to retire from his position in the first quarter of 2026. On February 23, 2026,
he notified us that his retirement will be effective March 2, 2026. The role of Executive Vice President and Chief
Investment Officer will be assumed by Ben Fox, who joined us in August of 2025. Mr. Fox previously served as
Managing Director in the Net Lease Division of Ares Management Corporation (“Ares”), a global alternative
investment manager operating in the credit, private equity and real estate markets. Prior to Ares, Mr. Fox served as
Executive Vice President, Asset Management and Operations at Realty Income, where he oversaw and managed
approximately 7,000 properties across the U.S. and U.K. For the year ended December 31, 2025, we recorded
retirement and severance expense related to Mr. Zimmerman's expected retirement totaling $3.0 million, which
included cash payments totaling $0.8 million and accelerated vesting of nonvested shares totaling $2.2 million.
Capital Markets Activity
As discussed below in Liquidity and Capital Resources, during the year ended December 31, 2025, we had the
following capital markets activity:
•
Upon maturity, on April 1, 2025, we repaid in full $300.0 million of senior unsecured notes using
borrowings under our $1.0 billion senior unsecured revolving credit facility;
•
On June 3, 2025, we filed a new universal shelf registration statement and a new shelf registration
statement for our Dividend Reinvestment and Direct Share Purchase Plan (“DSP Plan”) with the SEC;
•
On September 22, 2025, we entered into amendment number one to our Fourth Amended, Restated and
Consolidated Credit Agreement, dated as of September 19, 2024 (the "Amended Credit Agreement"), to
remove the SOFR index adjustment with respect to loans denominated in U.S. dollars;
•
On November 13, 2025, we issued $550.0 million in aggregate principal amount of senior unsecured notes
due on November 15, 2030, which bear interest at an annual interest rate of 4.75%; and
•
On December 5, 2025, in connection with the commencement of an "at-the-market" offering program
("ATM Program"), we entered into an equity distribution agreement with certain institutional investment
banks pursuant to which we may issue common shares having an aggregate sales price of up to $400.0
million on the open market or in privately negotiated transactions deemed to be “at-the-market” offerings
under SEC rules.
44
Results of Operations
Year ended December 31, 2025 compared to year ended December 31, 2024
Analysis of Revenue
The following table summarizes our total revenue (dollars in thousands):
Year Ended December 31,
Change
2025
2024
Minimum rent (1)
$
547,090 $
530,664 $
16,426
Percentage rent (2)
22,063
14,540
7,523
Straight-line rent
16,100
17,327
(1,227)
Tenant reimbursements
21,374
20,758
616
Other rental revenue
1,978
1,878
100
Total Rental Revenue
$
608,605 $
585,167 $
23,438
Other income (3)
45,592
57,071
(11,479)
Mortgage and other financing income (4)
64,160
55,830
8,330
Total revenue
$
718,357 $
698,068 $
20,289
(1) For the year ended December 31, 2025 compared to the year ended December 31, 2024, the increase in minimum
rent resulted from an increase of $11.5 million related to property acquisitions and developments completed in 2025
and 2024. In addition, there was a net increase in minimum rent of $8.4 million related to rental revenue on existing
properties. This was partially offset by a decrease in rental revenue of $3.5 million from property dispositions.
During the year ended December 31, 2025, we renewed five lease agreements on approximately 160 thousand
square feet and experienced an increase of approximately 1.6% in rental rates. In addition, we paid $1.0 million in
leasing commissions with respect to one of these lease renewals.
(2) The increase in percentage rent (i.e., amounts above base rent) for the year ended December 31, 2025 compared
to the year ended December 31, 2024 was due primarily to higher percentage rent recognized from our theatre
tenants, one of our early childhood education center tenants and from our attraction tenants.
(3) The decrease in other income for the year ended December 31, 2025 compared to the year ended December 31,
2024 related primarily to a decrease in operating income from three operating theatre properties (including one that
became vacant prior to sale) that were sold during the year ended December 31, 2025.
(4) The increase in mortgage and other financing income for the year ended December 31, 2025 compared to the
year ended December 31, 2024 related to interest income on new mortgage notes funded and additional investments
on existing mortgage notes in 2025 and 2024. In addition, $2.5 million of participating interest income was
recognized during the year ended December 31, 2025 from one ski borrower, of which $1.8 million related to
amounts under review regarding the calculation of participating interest income from prior periods that was resolved
during the year ended December 31, 2025.
45
Analysis of Expenses and Other Line Items
The following table summarizes our expenses and other line items (dollars in thousands):
Year Ended December 31,
Change
2025
2024
Property operating expense
$
59,172 $
59,146 $
26
Other expense (1)
45,756
56,877
(11,121)
General and administrative expense (2)
55,830
50,096
5,734
Retirement and severance expense
2,995
1,836
1,159
Transaction costs
2,199
798
1,401
Provision (benefit) for credit losses, net (3)
8,477
12,247
(3,770)
Impairment charges (4)
—
51,764
(51,764)
Depreciation and amortization
169,160
165,733
3,427
Gain on sale of real estate and early ground lease termination (5)
39,533
16,101
23,432
Costs associated with loan refinancing or payoff
—
337
(337)
Interest expense, net
133,079
130,810
2,269
Equity in loss from joint ventures (6)
3,790
8,809
(5,019)
Impairment charges on joint ventures (7)
—
28,217
(28,217)
Income tax expense
2,496
1,433
1,063
Preferred dividend requirements
24,144
24,144
—
(1) The decrease in other expense for the year ended December 31, 2025 compared to the year ended December 31,
2024 related primarily to a decrease in operating expenses from three operating theatre properties (including one that
became vacant prior to sale) that were sold during the year ended December 31, 2025.
(2) The increase in general and administrative expense for the year ended December 31, 2025 compared to the year
ended December 31, 2024 related primarily to an increase in payroll and benefit costs, including annual incentive
and share-based compensation.
(3) The change in provision (benefit) for credit losses, net for the year ended December 31, 2025 compared to the
year ended December 31, 2024 related primarily to credit loss expense of $6.2 million recognized to fully reserve
one mortgage note receivable during the year ended December 31, 2025 versus credit loss expense of $10.3 million
related to one mortgage note receivable recognized during the year ended December 31, 2024.
(4) Impairment charges recognized during the year ended December 31, 2024 related to one vacant theatre property,
two theatre properties being operated through third-party property management agreements and two leased theatre
properties. No impairment charges were recognized during the year ended December 31, 2025.
(5) The gain on sale of real estate and early ground lease termination for the year ended December 31, 2025 related
to the sale of three vacant theatre properties, two operating theatre properties, four leased theatre properties, one
vacant early childhood education center, four land parcels and 10 leased early childhood education centers, as well
as the exercise of an early termination option of a ground lease on an eat & play property. The gain on sale of real
estate and early ground lease termination for the year ended December 31, 2024 related to the sale of two cultural
properties, eight vacant theatre properties, one leased theatre property and two vacant early childhood education
centers.
(6) The decrease in equity in loss from joint ventures for the year ended December 31, 2025 compared to the year
ended December 31, 2024 related primarily to the decision in 2024 to exit our joint ventures in Breaux Bridge,
Louisiana and St. Pete Beach, Florida.
(7) Impairment charges on joint ventures recognized during the year ended December 31, 2024 related to other-than-
temporary impairments on our equity investments in joint ventures holding three experiential lodging properties. No
impairment charges on joint ventures were recognized during the year ended December 31, 2025.
46
Liquidity and Capital Resources
Cash and cash equivalents were $90.6 million at December 31, 2025. In addition, we had restricted cash of $8.1
million at December 31, 2025, which related primarily to escrow deposits required for property management,
mortgage note and debt agreements or held for potential acquisitions, developments and redevelopments.
Mortgage Debt, Senior Notes, Unsecured Revolving Credit Facility and Unsecured Term Loan Facility
As of December 31, 2025, we had total debt outstanding of $2.9 billion of which 99% was unsecured.
At December 31, 2025, we had outstanding $2.75 billion in aggregate principal amount of unsecured senior notes
(excluding the private placement notes discussed below) ranging in interest rates from 3.60% to 4.95%. The notes
contain various covenants, including: (i) a limitation on incurrence of any debt that would cause the ratio of our debt
to adjusted total assets to exceed 60%; (ii) a limitation on incurrence of any secured debt that would cause the ratio
of secured debt to adjusted total assets to exceed 40%; (iii) a limitation on incurrence of any debt that would cause
our debt service coverage ratio to be less than 1.5 times; and (iv) the maintenance at all times of our total
unencumbered assets such that they are not less than 150% of our outstanding unsecured debt. Interest payments on
our unsecured senior notes are due semiannually.
Upon maturity, on April 1, 2025, we repaid in full $300.0 million of senior unsecured notes using borrowings under
our $1.0 billion senior unsecured revolving credit facility.
On November 13, 2025, we issued $550.0 million in aggregate principal amount of senior notes due November 15,
2030 pursuant to an underwritten public offering. The notes bear interest at an annual rate of 4.75%. Interest is
payable on May 15 and November 15 of each year beginning on May 15, 2026 until the stated maturity date. The
notes were issued at 98.8% of their face value and are unsecured. Net proceeds from the note offering were used to
repay the outstanding principal balance of our unsecured revolving credit facility and the remaining amount of net
proceeds for general business purposes.
At December 31, 2025, we had no balance outstanding under our $1.0 billion unsecured revolving credit facility.
Our unsecured revolving credit facility is governed by the terms of the Amended Credit Agreement. On September
22, 2025, we entered into amendment number one to the Amended Credit Agreement to remove the Secured
Overnight Funds Rate (SOFR) index adjustment with respect to loans denominated in U.S. dollars. The facility will
mature on October 2, 2028. We have two options to extend the maturity date of this credit facility by an additional
six months each (for a total of 12 months), subject to paying additional fees and the absence of any default. The
Amended Credit Agreement provides for an initial maximum principal amount of borrowing availability of $1.0
billion, which includes a $100.0 million letter-of-credit subfacility and a $300.0 million foreign currency revolving
credit subfacility. The credit facility contains an "accordion" feature under which we may increase the total
maximum principal amount available by $1.0 billion, to a total of $2.0 billion, subject to lender consent. The
unsecured revolving credit facility bears interest at a floating rate of SOFR plus 1.05% (based on our unsecured debt
ratings and with a SOFR floor of zero), which was 4.71% at December 31, 2025. Additionally, the facility fee on the
revolving credit facility is 0.25%.
At December 31, 2025, we had outstanding $179.6 million of Series B senior unsecured notes that were issued in a
private placement transaction and are due on August 22, 2026. At December 31, 2025, the interest rate for these
Series B private placement notes was 4.56%. The private placement notes were originally issued in two tranches:
Series A due 2024; and Series B due 2026. On August 22, 2024, we repaid in full the Series A notes for $136.6
million using funds available under our $1.0 billion senior unsecured revolving credit facility.
Our unsecured revolving credit facility and the private placement notes contain financial covenants or restrictions
that limit our levels of consolidated debt, secured debt, investments outside certain categories, share repurchases and
dividend distributions and require us to meet certain coverage levels for fixed charges and debt service.
Additionally, these debt instruments contain cross-default provisions if we default under other indebtedness
exceeding certain amounts. Those cross-default thresholds vary from $50.0 million to $75.0 million, depending upon
47
the debt instrument. We were in compliance with all financial and other covenants under our consolidated debt
instruments at December 31, 2025.
In 2024, two experiential lodging properties located in St. Pete Beach, Florida, in which we hold unconsolidated
equity investments, were severely damaged by two hurricanes. We continue to work in good faith with our joint
venture partners, the non-recourse debt provider and the insurance companies to identify a path forward in which we
expect to result in the eventual removal of the unconsolidated equity investments in these experiential lodging
properties and the related non-recourse debt from our portfolio. Accordingly, we determined that our investment in
these joint ventures had no fair value and was not recoverable, and during the year ended December 31, 2024, we
recognized $12.1 million in other-than-temporary impairment charges on joint ventures related to these equity
investments. There can be no assurance as to the ultimate outcome of our negotiations regarding our exit from these
joint ventures.
Our principal investing activities are acquiring, developing and financing Experiential properties. These investing
activities have generally been financed with senior unsecured notes and the proceeds from equity offerings. Our
unsecured revolving credit facility and cash from operations are also used to finance the acquisition or development
of properties, and to provide mortgage financing. We have and expect to continue to issue debt securities in public
or private offerings. We have and may in the future assume mortgage debt in connection with property acquisitions
or incur new mortgage debt on existing properties. We may also issue equity securities in connection with
acquisitions. Continued growth of our real estate investments and mortgage financing portfolios will depend in part
on our continued ability to access funds through additional borrowings and securities offerings and, to a lesser
extent, our ability to assume debt in connection with property acquisitions. We may also fund investments with the
proceeds from asset dispositions.
Capital Markets
On June 3, 2025, we filed a new universal shelf registration statement with the SEC that is effective for a term of
three years. The securities covered by this registration statement include common shares, preferred shares, debt
securities, depository shares, warrants and units. We may periodically offer one or more of these securities in
amounts, prices and on terms to be announced when and if these securities are offered. The specifics of any future
offerings along with the use of proceeds of any securities offered, will be described in detail in a prospectus
supplement, or other offering materials, at the time of any offering.
Additionally, on June 3, 2025, we filed a shelf registration statement with the SEC for our DSP Plan that is effective
for a term of three years and permits the issuance of up to 25,000,000 common shares.
On December 5, 2025, we commenced our ATM Program and entered into an equity distribution agreement with
certain institutional investment banks pursuant to which we may issue common shares up to an aggregate sales price
of $400.0 million to the banks as sales agents (or principals when acting directly for their own account) or forward
sellers on behalf of any forward purchasers pursuant to a forward sale agreement. As of December 31, 2025, $400.0
million remained available for sale under the ATM Program. Future sales will depend upon a variety of factors
including, but not limited to, market conditions, the trading price of our common shares and our capital needs. We
are not obligated to issue and sell any common shares. For additional information on the ATM Program, see Note 11
to the Consolidated Financial Statements included in this Annual Report on Form 10-K.
Liquidity Requirements
Short-term liquidity requirements consist primarily of normal recurring corporate operating expenses, debt service
requirements, and distributions to shareholders. We have historically met these requirements primarily through cash
provided by operating activities. The table below summarizes our cash flows (dollars in thousands):
Year Ended December 31,
2025
2024
Net cash provided by operating activities
$
420,953 $
393,137
Net cash used by investing activities
(121,681)
(176,352)
Net cash used by financing activities
(236,726)
(261,619)
48
Liquidity and material cash requirements at December 31, 2025 consisted primarily of maturities of debt.
Contractual obligations as of December 31, 2025 are as follows (in thousands):
Year ended December 31,
Contractual Obligations
2026
2027
2028
2029
2030
Thereafter
Total
Long Term Debt
Obligations
$ 629,597 $ 450,000 $ 400,000 $ 500,000 $ 550,000 $ 424,995 $ 2,954,592
Interest on Long Term
Debt Obligations
125,720
88,145
65,683
52,877
37,892
23,730
394,047
Operating Lease Obligation
- Corporate Office (1)
717
—
—
—
—
—
717
Operating Ground Lease
Obligations (2)
28,871
28,011
27,110
25,552
20,901
153,854
284,299
Total
$ 784,905 $ 566,156 $ 492,793 $ 578,429 $ 608,793 $ 602,579 $ 3,633,655
(1) Subsequent to December 31, 2025, we signed a new office lease for a term of 10.5 years for approximately
41,525 square feet of office space. The lease is expected to commence January 1, 2027 with an initial annual rent
payment of approximately $1.0 million.
(2) Our tenants who are sub-tenants under the ground leases are responsible for paying the rent under these ground
leases. Two of our ground leases do not currently have sub-tenants. In the event our tenant fails to pay the ground
lease rent or the property does not have sub-tenants, we would typically be responsible for the payment, assuming
we do not sell or re-tenant the property. The above amounts exclude contingent rent due under leases where the
ground lease payment, or a portion thereof, is based on the level of the tenant's sales.
Commitments
As of December 31, 2025, we had 14 development projects with commitments to fund an aggregate of
approximately $53.7 million, of which approximately $36.1 million is expected to be funded in 2026. We advance
development costs in periodic draws. If we determine that construction is not being completed in accordance with
the terms of the development agreement, we can discontinue funding construction draws. We have agreed to lease
the properties to the operators at predetermined rates upon completion of construction.
We have certain commitments related to our mortgage notes and notes receivable investments that we may be
required to fund in the future. We are generally obligated to fund these commitments at the request of the borrower
or upon the occurrence of events outside of its direct control. As of December 31, 2025, we had two mortgage notes
with commitments totaling approximately $48.1 million, all of which is expected to be funded in 2026. If
commitments are funded in the future, interest will be charged at rates consistent with the existing investments.
Liquidity Analysis
We currently anticipate that our cash on hand, cash from operations, funds available under our unsecured revolving
credit facility and proceeds from asset dispositions will provide adequate liquidity to meet our financial
commitments, including the amounts needed to fund our operations, make recurring debt service payments, allow
distributions to our shareholders and avoid corporate level federal income or excise tax in accordance with REIT
Internal Revenue Code requirements.
Long-term liquidity requirements consist primarily of debt maturities. We have $629.6 million of debt maturities
due in 2026. We currently believe that we will be able to repay, extend, refinance or otherwise settle our debt
maturities as the debt comes due and that we will be able to fund our remaining commitments, as necessary.
However, there can be no assurance that additional financing or capital will be available, or that terms will be
acceptable or advantageous to us.
Our primary use of cash after paying operating expenses, debt service, distributions to shareholders and funding
existing commitments is growing our investment portfolio through acquiring, developing and financing additional
properties. We expect to finance these investments with cash on hand, excess cash flow, proceeds from asset
49
dispositions or borrowings under our unsecured revolving credit facility as well as debt and equity financing
alternatives. If we borrow the maximum amount available under our $1.0 billion unsecured revolving credit facility,
there can be no assurance that we will be able to obtain additional or substitute investment financing. We may also
assume mortgage debt in connection with property acquisitions. The availability and terms of any such financing or
sales will depend upon market and other conditions.
Capital Structure
We believe that our shareholders are best served by a conservative capital structure. Therefore, we seek to maintain
a conservative debt level on our balance sheet as measured primarily by our net debt to adjusted EBITDAre ratio
(see "Non-GAAP Financial Measures" for definitions). Because adjusted EBITDAre, as defined, does not include
the annualization of investments put in service, acquired or disposed of during the quarter, or the potential earnings
on property under development, the annualization of percentage rent and adjustments for other items, we also look at
an additional ratio that reflects these adjustments. We also seek to maintain conservative interest, fixed charge, debt
service coverage and net debt to gross asset ratios (see "Non-GAAP Financial Measures" for calculations).
Non-GAAP Financial Measures
Funds From Operations (FFO), Funds From Operations As Adjusted (FFOAA) and Adjusted Funds From
Operations (AFFO)
The National Association of Real Estate Investment Trusts (“NAREIT”) developed FFO as a relative non-GAAP
financial measure of performance of an equity REIT in order to recognize that income-producing real estate
historically has not depreciated on the basis determined under GAAP. Pursuant to the definition of FFO by the
Board of Governors of NAREIT, we calculate FFO as net income available to common shareholders, computed in
accordance with GAAP, excluding gains and losses from disposition of real estate and early ground lease
terminations and impairment losses on real estate, plus real estate related depreciation and amortization, and after
adjustments for unconsolidated partnerships, joint ventures and other affiliates. Adjustments for unconsolidated
partnerships, joint ventures and other affiliates are calculated to reflect FFO on the same basis. We have calculated
FFO for all periods presented in accordance with this definition.
In addition to FFO, we present FFOAA and AFFO. FFOAA is presented by adding to FFO retirement and severance
expense, transaction costs, provision (benefit) for credit losses, net, costs associated with loan refinancing or payoff,
preferred share redemption costs and impairment of operating lease right-of-use assets and subtracting sale
participation income, gain on insurance recovery and deferred income tax (benefit) expense. AFFO is presented by
adding to FFOAA non-real estate depreciation and amortization, deferred financing fees amortization and share-
based compensation expense to management and Trustees; and subtracting amortization of above and below market
leases, net and tenant allowances, maintenance capital expenditures (including second-generation tenant
improvements and leasing commissions), straight-lined rental revenue (removing the impact of straight-line ground
sublease expense), the non-cash portion of mortgage and other financing income and the allocated share of joint
venture non-cash items.
FFO, FFOAA and AFFO are widely used measures of the operating performance of real estate companies and are
provided here as supplemental measures to GAAP net income available to common shareholders and earnings per
share, and management provides FFO, FFOAA and AFFO herein because it believes this information is useful to
investors in this regard. FFO, FFOAA and AFFO are non-GAAP financial measures. FFO, FFOAA and AFFO do
not represent cash flows from operations as defined by GAAP and are not indicative that cash flows are adequate to
fund all cash needs and are not to be considered alternatives to net income or any other GAAP measure as a
measurement of the results of our operations or our cash flows or liquidity as defined by GAAP. It should also be
noted that not all REITs calculate FFO, FFOAA and AFFO the same way so comparisons with other REITs may not
be meaningful.
The following table summarizes our FFO, FFOAA and AFFO including per share amounts for FFO and FFOAA, for
the years ended December 31, 2025, 2024 and 2023 and reconciles such measures to net income available to
common shareholders, the most directly comparable GAAP measure (unaudited, in thousands, except per share
information):
50
FFO:
Net income available to common shareholders of EPR Properties
$ 250,792 $ 121,922 $ 148,901
(Gain) loss on sale of real estate and early ground lease termination
(39,533)
(16,101)
2,197
Impairment of real estate investments
—
51,764
67,366
Real estate depreciation and amortization
168,545
165,029
167,219
Allocated share of joint venture depreciation
4,010
9,419
8,876
Impairment charges on joint ventures
—
28,217
—
FFO available to common shareholders of EPR Properties
$ 383,814 $ 360,250 $ 394,559
FFO available to common shareholders of EPR Properties
$ 383,814 $ 360,250 $ 394,559
Add: Preferred dividends for Series C preferred shares
7,752
7,752
7,752
Add: Preferred dividends for Series E preferred shares
7,752
7,752
7,752
Diluted FFO available to common shareholders of EPR Properties
$ 399,318 $ 375,754 $ 410,063
FFOAA:
FFO available to common shareholders of EPR Properties
$ 383,814 $ 360,250 $ 394,559
Retirement and severance expense
2,995
1,836
547
Transaction costs
2,199
798
1,554
Provision (benefit) for credit losses, net
8,477
12,247
878
Costs associated with loan refinancing or payoff
—
337
—
Deferred income tax benefit
(846)
(1,539)
(344)
FFOAA available to common shareholders of EPR Properties
$ 396,639 $ 373,929 $ 397,194
FFOAA available to common shareholders of EPR Properties
$ 396,639 $ 373,929 $ 397,194
Add: Preferred dividends for Series C preferred shares
7,752
7,752
7,752
Add: Preferred dividends for Series E preferred shares
7,752
7,752
7,752
Diluted FFOAA available to common shareholders of EPR Properties $ 412,143 $ 389,433 $ 412,698
AFFO:
FFOAA available to common shareholders of EPR Properties
$ 396,639 $ 373,929 $ 397,194
Non-real estate depreciation and amortization
615
704
814
Deferred financing fees amortization
8,808
8,844
8,637
Share-based compensation expense to management and trustees
15,329
14,066
17,512
Amortization of above/below-market leases, net and tenant allowances
(324)
(333)
(535)
Maintenance capital expenditures (1)
(5,205)
(7,299)
(12,399)
Straight-lined rental revenue
(16,100)
(17,327)
(10,591)
Straight-lined ground sublease expense
(37)
97
1,099
Non-cash portion of mortgage and other financing income
(1,502)
(1,984)
(1,088)
Allocated share of joint venture non-cash items
—
712
—
AFFO available to common shareholders of EPR Properties
$ 398,223 $ 371,409 $ 400,643
Year ended December 31,
2025
2024
2023
51
FFO per common share:
Basic
$
5.05 $
4.76 $
5.24
Diluted
4.96
4.70
5.15
FFOAA per common share:
Basic
$
5.22 $
4.94 $
5.28
Diluted
5.12
4.87
5.18
Shares used for computation (in thousands):
Basic
76,040
75,636
75,260
Diluted
76,495
75,999
75,715
Weighted average shares outstanding-diluted EPS
76,495
75,999
75,715
Effect of dilutive Series C preferred shares
2,348
2,314
2,283
Effect of dilutive Series E preferred shares
1,668
1,664
1,663
Adjusted weighted average shares outstanding - diluted Series C and
Series E
80,511
79,977
79,661
Other financial information:
Dividends per common share
$
3.52 $
3.40 $
3.30
Year ended December 31,
2025
2024
2023
(1) Includes maintenance capital expenditures and certain second-generation tenant improvements and leasing
commissions.
The effect of the conversion of our convertible preferred shares is calculated using the if-converted method and the
conversion, which results in the most dilution is included in the computation of per share amounts. The conversion
of the 5.75% Series C cumulative convertible preferred shares and the 9.00% Series E cumulative convertible
preferred shares would be dilutive to FFO, FFOAA and AFFO per share for the years ended December 31, 2025,
2024 and 2023. Therefore, the additional common shares that would result from the conversion and the
corresponding add-back of the preferred dividends declared on those shares are included in the calculation of diluted
FFO and FFOAA per share and would be included in a calculation of AFFO per share for these periods.
Net Debt
Net Debt represents debt (reported in accordance with GAAP) adjusted to exclude deferred financing costs, net and
reduced for cash and cash equivalents. By excluding deferred financing costs, net and reducing debt for cash and
cash equivalents on hand, the result provides an estimate of the contractual amount of borrowed capital to be repaid,
net of cash available to repay it. We believe this calculation constitutes a beneficial supplemental non-GAAP
financial disclosure to investors in understanding our financial condition. Our method of calculating Net Debt may
be different from methods used by other REITs and, accordingly, may not be comparable to such other REITs.
Gross Assets
Gross Assets represents total assets (reported in accordance with GAAP) adjusted to exclude accumulated
depreciation and reduced by cash and cash equivalents. By excluding accumulated depreciation and reducing cash
and cash equivalents, the result provides an estimate of the investment made by us. We believe that investors
commonly use versions of this calculation in a similar manner. Our method of calculating Gross Assets may be
different from methods used by other REITs and, accordingly, may not be comparable to such other REITs.
Net Debt to Gross Assets Ratio
Net Debt to Gross Assets Ratio is a supplemental measure derived from non-GAAP financial measures that we use
to evaluate capital structure and the magnitude of debt to gross assets. We believe that investors commonly use
versions of this ratio in a similar manner. Our method of calculating the Net Debt to Gross Assets Ratio may be
different from methods used by other REITs and, accordingly, may not be comparable to such other REITs.
52
EBITDAre
NAREIT developed EBITDAre as a relative non-GAAP financial measure of REITs, independent of a company's
capital structure, to provide a uniform basis to measure the enterprise value of a company. Pursuant to the definition
of EBITDAre by the Board of Governors of NAREIT, we calculate EBITDAre as net income, computed in
accordance with GAAP, excluding interest expense (net), income tax (benefit) expense, depreciation and
amortization, gains and losses from disposition of real estate and early ground lease terminations, impairment losses
on real estate, costs associated with loan refinancing or payoff and adjustments for unconsolidated partnerships, joint
ventures and other affiliates.
Management provides EBITDAre herein because it believes this information is useful to investors as a supplemental
performance measure because it can help facilitate comparisons of operating performance between periods and with
other REITs. Our method of calculating EBITDAre may be different from methods used by other REITs and,
accordingly, may not be comparable to such other REITs. EBITDAre is not a measure of performance under GAAP,
does not represent cash generated from operations as defined by GAAP and is not indicative of cash available to
fund all cash needs, including distributions. This measure should not be considered an alternative to net income or
any other GAAP measure as a measurement of the results of our operations or cash flows or liquidity as defined by
GAAP.
Adjusted EBITDAre
Management uses Adjusted EBITDAre in its analysis of the performance of the business and operations of the
Company. Management believes Adjusted EBITDAre is useful to investors because it excludes various items that
management believes are not indicative of operating performance, and because it is an informative measure to use in
computing various financial ratios to evaluate the Company. We define Adjusted EBITDAre as EBITDAre (defined
above) for the quarter excluding sale participation income, gain on insurance recovery, retirement and severance
expense, transaction costs, provision (benefit) for credit losses, net, impairment losses on operating lease right-of-
use assets and prepayment fees.
Our method of calculating Adjusted EBITDAre may be different from methods used by other REITs and,
accordingly, may not be comparable to such other REITs. Adjusted EBITDAre is not a measure of performance
under GAAP, does not represent cash generated from operations as defined by GAAP and is not indicative of cash
available to fund all cash needs, including distributions. This measure should not be considered as an alternative to
net income or any other GAAP measure as a measurement of the results of our operations or cash flows or liquidity
as defined by GAAP.
Net Debt to Adjusted EBITDAre Ratio
Net Debt to Adjusted EBITDAre Ratio is a supplemental measure derived from non-GAAP financial measures that
we use to evaluate our capital structure and the magnitude of our debt against our operating performance. We
believe that investors commonly use versions of this ratio in a similar manner. In addition, financial institutions use
versions of this ratio in connection with debt agreements to set pricing and covenant limitations. Our method of
calculating the Net Debt to Adjusted EBITDAre Ratio may be different from methods used by other REITs and,
accordingly, may not be comparable to such other REITs.
53
Reconciliations of debt, total assets and net income (all reported in accordance with GAAP) to Net Debt, Gross
Assets, Net Debt to Gross Assets Ratio, EBITDAre, Adjusted EBITDAre and Net Debt to Adjusted EBITDAre
Ratio (each of which is a non-GAAP financial measure), as applicable, are included in the following tables
(unaudited, in thousands except ratios):
December 31,
2025
2024
Net Debt:
Debt
$
2,929,411
$
2,860,458
Deferred financing costs, net
25,181
19,134
Cash and cash equivalents
(90,577)
(22,062)
Net Debt
$
2,864,015
$
2,857,530
Gross Assets:
Total Assets
$
5,699,762
$
5,616,507
Accumulated depreciation
1,714,886
1,562,645
Cash and cash equivalents
(90,577)
(22,062)
Gross Assets
$
7,324,071
$
7,157,090
Debt to Total Assets Ratio
51 %
51 %
Net Debt to Gross Assets Ratio
39 %
40 %
Three Months Ended December 31,
2025
2024
EBITDAre and Adjusted EBITDAre:
Net income (loss)
$
66,904
$
(8,395)
Interest expense, net
33,574
33,472
Income tax expense
954
653
Depreciation and amortization
43,582
40,995
Gain on sale of real estate and early ground lease termination
(5,297)
(112)
Impairment of real estate investments
—
39,952
Allocated share of joint venture depreciation
1,000
1,965
Allocated share of joint venture interest expense
516
589
Impairment charges on joint ventures
—
16,087
EBITDAre
$
141,233
$
125,206
Retirement and severance expense
1,901
—
Transaction costs
471
423
Provision (benefit) for credit losses, net
(985)
9,876
Adjusted EBITDAre
$
142,620
$
135,505
Adjusted EBITDAre (annualized) (1)
$
570,480
$
542,020
Net Debt to Adjusted EBITDAre Ratio
5.0
5.3
(1) Adjusted EBITDAre for the quarter is multiplied by four to calculate an annual amount but does not include the
annualization of investments put in service, acquired or disposed of during the quarter, as well as the potential
earnings on property under development, the annualization of percent rent and participating interest and
adjustments for other items.
54
Total Investments
Total investments is a non-GAAP financial measure defined as the sum of the carrying values of real estate
investments (before accumulated depreciation), land held for development, property under development, mortgage
notes receivable and related accrued interest receivable, net, investment in joint ventures, intangible assets, gross
(before accumulated amortization and included in other assets) and notes receivable and related accrued interest
receivable, net (included in other assets). Total investments is a useful measure for management and investors as it
illustrates across which asset categories the Company's funds have been invested. Our method of calculating total
investments may be different from methods used by other REITs and, accordingly, may not be comparable to such
other REITs. A reconciliation of total assets (computed in accordance with GAAP) to total investments is included
in the following table (unaudited, in thousands):
December 31, 2025
December 31, 2024
Total assets
$
5,699,762 $
5,616,507
Operating lease right-of-use assets
(170,755)
(173,364)
Cash and cash equivalents
(90,577)
(22,062)
Restricted cash
(8,071)
(13,637)
Accounts receivable
(97,855)
(84,589)
Add: accumulated depreciation on real estate investments
1,714,886
1,562,645
Add: accumulated amortization on intangible assets (1)
31,584
31,876
Prepaid expenses and other current assets (1)
(37,237)
(39,464)
Total investments
$
7,041,737 $
6,877,912
Total Investments:
Real estate investments, net of accumulated depreciation
$
4,494,259 $
4,435,358
Add back accumulated depreciation on real estate investments
1,714,886
1,562,645
Land held for development
20,168
20,168
Property under development
54,905
112,263
Mortgage notes and related accrued interest receivable
679,254
665,796
Investment in joint ventures
12,316
14,019
Intangible assets, gross (1)
63,239
64,317
Notes receivable and related accrued interest receivable, net (1)
2,710
3,346
Total investments
$
7,041,737 $
6,877,912
(1) Included in "Other assets" in the accompanying consolidated balance sheets. Other assets include the following:
December 31, 2025
December 31, 2024
Intangible assets, gross
$
63,239 $
64,317
Less: accumulated amortization on intangible assets
(31,584)
(31,876)
Notes receivable and related accrued interest receivable, net
2,710
3,346
Prepaid expenses and other current assets
37,237
39,464
Total other assets
$
71,602 $
75,251
Impact of Recently Issued Accounting Standards
See Note 2 to the consolidated financial statements included in this Annual Report on Form 10-K for additional
information on the impact of recently issued accounting standards on our business.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to market risks, primarily relating to potential losses due to changes in interest rates and foreign
currency exchange rates. We seek to mitigate the effects of fluctuations in interest rates by matching the term of new
investments with new long-term fixed rate borrowings whenever possible. As of December 31, 2025, we had a $1.0
billion unsecured revolving credit facility with no outstanding balance. We also had a $25.0 million bond that bears
interest at a floating rate but has been fixed through an interest rate swap agreement as discussed below.
We are subject to risks associated with debt financing, including the risk that existing indebtedness may not be
refinanced or that the terms of such refinancing may not be as favorable as the terms of current indebtedness. The
55
majority of our borrowings are subject to contractual agreements or mortgages, which limit the amount of
indebtedness we may incur. Accordingly, if we are unable to raise additional equity or borrow money due to these
limitations or otherwise, our ability to make additional real estate investments may be limited.
The following table presents the principal amounts, weighted average interest rates, and other terms required by year
of expected maturity to evaluate the expected cash flows and sensitivity to interest rate changes as of December 31
(including the impact of the interest rate swap agreements described below):
Expected Maturities (dollars in thousands)
2026
2027
2028
2029
2030
Thereafter
Total
Estimated
Fair Value
December 31, 2025:
Fixed rate debt
$629,597 $450,000 $400,000 $500,000 $550,000 $424,995 $2,954,592
$2,870,031
Average interest rate
4.70 %
4.50 %
4.95 %
3.75 %
4.75 %
3.54 %
4.38 %
4.60 %
Variable rate debt
$
—
$
—
$
—
$
—
$
—
$
—
$
—
$
—
Average interest rate
(as of December 31,
2025)
— %
— %
— %
— %
— %
— %
— %
— %
2025
2026
2027
2028
2029
Thereafter
Total
Estimated
Fair Value
December 31, 2024:
Fixed rate debt
$300,000 $629,597 $450,000 $400,000 $500,000 $424,995 $2,704,592
$2,590,303
Average interest rate
4.50 %
4.70 %
4.50 %
4.95 %
3.75 %
3.54 %
4.32 %
5.50 %
Variable rate debt
$
—
$
—
$
—
$175,000 $
—
$
—
$175,000
$175,000
Average interest rate
(as of December 31,
2024)
— %
— %
— %
5.46 %
— %
— %
5.46 %
5.46 %
The fair value of our debt as of December 31, 2025 and 2024 is estimated by discounting the future cash flows of
each instrument using current market rates and current market spreads.
Cash Flow Hedges of Interest Rate Risk
In order to hedge our interest rate risk, we entered into an interest rate swap agreement on our variable rate secured
bonds with a notional amount of $25.0 million. The interest rate cap agreement limits the variable portion of the
interest rate (SOFR) on this bond to 2.5325% until September 30, 2026.
We are exposed to foreign currency risk against our functional currency, the U.S. dollar ("USD"), on our six
Canadian properties and the rents received from tenants of the properties are payable in the Canadian dollar
("CAD"). In order to hedge our CAD denominated cash flows and our net investment in our six Canadian properties,
we entered into cross-currency swaps designated as cash flow hedges and foreign currency forwards designated as
net investment hedges as further described below.
Cash Flow Hedges of Foreign Exchange Risk-Cross Currency Swaps
We entered into six USD-CAD cross-currency swaps that became effective October 1, 2024 with a total fixed
original notional value of $170.0 million CAD and $125.0 million USD. The net effect of these swaps is to lock in
an exchange rate of $1.35 CAD per USD on approximately $15.3 million annual CAD denominated cash flows
through December 2026.
We entered into two USD-CAD cross-currency swaps that became effective December 1, 2024 with a total fixed
original notional value of $90.0 million CAD and $66.2 million USD. The net effect of these swaps is to lock in an
exchange rate of $1.35 CAD per USD on approximately $8.1 million annual CAD denominated cash flows through
December 2026.
56
Fair Value Hedge of Foreign Exchange Risk-Cross Currency Swap
We entered into a USD-CAD cross-currency swap that became effective September 25, 2025, with a total fixed
notional value of $27.9 million CAD and $20.0 million USD. The cross-currency swap includes an initial and final
exchange of the principal balance of the CAD denominated mortgage note receivable with an exchange rate of
$1.392 CAD per USD. In addition to the initial and final exchange, we have monthly exchanges on the notional
value of $27.9 million CAD. The net effect of these swaps is to lock in an exchange rate of $1.246 CAD per USD on
approximately $2.2 million annual CAD denominated cash flows through September 2030.
Net Investment Hedges - Foreign Currency Forward Contracts
We entered into two forward contracts that became effective December 19, 2024 with a fixed notional value of
$200.0 million CAD and $142.8 million USD with a settlement date of December 1, 2026. The exchange rate of
these forward contracts is approximately $1.40 CAD per USD.
We entered into a forward contract that became effective December 19, 2024 with a fixed notional value of $90.0
million CAD and $64.3 million USD with a settlement date of December 1, 2026. The exchange rate of this forward
contract is approximately $1.40 CAD per USD.
For foreign currency derivatives designated as net investment hedges, the change in the fair value of the derivatives,
including any cash settlements, is reported in AOCI as part of the cumulative translation adjustment. Amounts are
reclassified out of AOCI into earnings when the hedged net investment is either sold or substantially liquidated.
See Note 9 to the consolidated financial statements in this Annual Report on Form 10-K for additional information
on our derivative financial instruments and hedging activities.
57
Item 8. Financial Statements and Supplementary Data
EPR Properties
Contents
Report of Independent Registered Public Accounting Firm ............................................................................... 59
Audited Financial Statements
Consolidated Balance Sheets .............................................................................................................................. 61
Consolidated Statements of Income and Comprehensive Income ...................................................................... 62
Consolidated Statements of Changes in Equity .................................................................................................. 63
Consolidated Statements of Cash Flows ............................................................................................................. 65
Notes to Consolidated Financial Statements ....................................................................................................... 67
Financial Statement Schedules
Schedule III - Real Estate and Accumulated Depreciation ................................................................................. 103
58
Report of Independent Registered Public Accounting Firm
To the Board of Trustees and Shareholders
EPR Properties:
Opinions on the Consolidated Financial Statements and Internal Control Over Financial Reporting
We have audited the accompanying consolidated balance sheets of EPR Properties and subsidiaries (the Company)
as of December 31, 2025 and 2024, the related consolidated statements of income and comprehensive income,
changes in equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the
related notes and financial statement schedule III (collectively, the consolidated financial statements). We also have
audited the Company’s internal control over financial reporting as of December 31, 2025, based on criteria
established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring
Organizations of the Treadway Commission.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the
financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash
flows for each of the years in the three-year period ended December 31, 2025, in conformity with U.S. generally
accepted accounting principles. Also in our opinion, the Company maintained, in all material respects, effective
internal control over financial reporting as of December 31, 2025 based on criteria established in Internal Control –
Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
Basis for Opinions
The Company’s management is responsible for these consolidated financial statements, for maintaining effective
internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial
reporting, included in the accompanying Management's Report on Internal Control Over Financial Reporting. Our
responsibility is to express an opinion on the Company’s consolidated financial statements and an opinion on the
Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered
with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent
with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and
regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of
material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting
was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material
misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that
respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and
disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles
used and significant estimates made by management, as well as evaluating the overall presentation of the
consolidated financial statements. Our audit of internal control over financial reporting included obtaining an
understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and
testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our
audits also included performing such other procedures as we considered necessary in the circumstances. We believe
that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
59
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become
inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may
deteriorate.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated
financial statements that was communicated or required to be communicated to the audit committee and that: (1)
relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our
especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not
alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by
communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the
accounts or disclosures to which they relate.
Evaluation of indicators real estate investments may not be recoverable
As discussed in Notes 2 and 3 to the consolidated financial statements, the real estate investments, net balance as of
December 31, 2025 was $4,494,259 thousand. The Company reviews a real estate investment for impairment
whenever events or changes in circumstances indicate that the carrying value of the real estate investment may not
be recoverable.
We identified the evaluation of indicators real estate investments may not be recoverable as a critical audit matter.
There is a high degree of subjective judgement in evaluating the events or changes in circumstances that may
indicate the carrying value of real estate investments may not be recoverable. In particular, the judgments regarding
the expected period the Company will hold the real estate investments on the determination of the recoverability of
the real estate investments required a higher degree of auditor judgment.
The following are the primary procedures we performed to address this critical audit matter. We evaluated the
design and tested the operating effectiveness of an internal control related to the critical audit matter. This control
related to the Company’s process to identify and evaluate events or changes in circumstances that may indicate the
carrying amount of real estate investments may not be recoverable, which includes determining the period the
Company will hold the real estate investments. We inquired of Company officials and inspected documents such as
meeting minutes of the Board of Trustees to evaluate the likelihood that a real estate investment would be sold prior
to the estimated holding period.
We have served as the Company’s auditor since 2002.
Chicago, Illinois
February 26, 2026
60
EPR PROPERTIES
Consolidated Balance Sheets
(Dollars in thousands except share data)
December 31,
2025
2024
Assets
Real estate investments, net of accumulated depreciation of $1,714,886 and
$1,562,645 at December 31, 2025 and 2024, respectively
$
4,494,259 $
4,435,358
Land held for development
20,168
20,168
Property under development
54,905
112,263
Operating lease right-of-use assets
170,755
173,364
Mortgage notes and related accrued interest receivable, net of allowance for credit
losses of $15,929 and $17,111 at December 31, 2025 and 2024, respectively
679,254
665,796
Investment in joint ventures
12,316
14,019
Cash and cash equivalents
90,577
22,062
Restricted cash
8,071
13,637
Accounts receivable
97,855
84,589
Other assets
71,602
75,251
Total assets
$
5,699,762 $
5,616,507
Liabilities and Equity
Liabilities:
Accounts payable and accrued liabilities
$
99,392 $
107,976
Operating lease liabilities
204,747
212,400
Common dividends payable
22,463
25,831
Preferred dividends payable
6,032
6,032
Unearned rents and interest
108,546
80,565
Debt
2,929,411
2,860,458
Total liabilities
3,370,591
3,293,262
Equity:
Common Shares, $0.01 par value; 125,000,000 shares authorized at
December 31, 2025 and 2024; and 84,239,580 and 83,619,740 shares issued
at December 31, 2025 and 2024, respectively
842
836
Preferred Shares, $0.01 par value; 25,000,000 shares authorized:
5,392,616 and 5,392,716 Series C convertible shares issued at December
31, 2025 and 2024, respectively; liquidation preference of $134,815,400
54
54
3,445,980 Series E convertible shares issued at December 31, 2025 and
2024; liquidation preference of $86,149,500
34
34
6,000,000 Series G shares issued at December 31, 2025 and 2024;
liquidation preference of $150,000,000
60
60
Additional paid-in-capital
3,978,093
3,950,528
Treasury shares at cost: 8,094,942 and 7,883,581 common shares at
December 31, 2025 and 2024, respectively
(295,290)
(285,413)
Accumulated other comprehensive income (loss)
1,037
(3,756)
Distributions in excess of net income
(1,355,659)
(1,339,098)
Total equity
$
2,329,171 $
2,323,245
Total liabilities and equity
$
5,699,762 $
5,616,507
See accompanying notes to consolidated financial statements.
61
EPR PROPERTIES
Consolidated Statements of Income and Comprehensive Income
(Dollars in thousands except per share data)
Year Ended December 31,
2025
2024
2023
Rental revenue
$ 608,605 $ 585,167 $ 616,139
Other income
45,592
57,071
45,947
Mortgage and other financing income
64,160
55,830
43,582
Total revenue
718,357
698,068
705,668
Property operating expense
59,172
59,146
57,478
Other expense
45,756
56,877
44,774
General and administrative expense
55,830
50,096
56,442
Retirement and severance expense
2,995
1,836
547
Transaction costs
2,199
798
1,554
Provision (benefit) for credit losses, net
8,477
12,247
878
Impairment charges
—
51,764
67,366
Depreciation and amortization
169,160
165,733
168,033
Total operating expenses
343,589
398,497
397,072
Gain (loss) on sale of real estate and early ground lease termination
39,533
16,101
(2,197)
Income from operations
414,301
315,672
306,399
Costs associated with loan refinancing or payoff
—
337
—
Interest expense, net
133,079
130,810
124,858
Equity in loss from joint ventures
3,790
8,809
6,768
Impairment charges on joint ventures
—
28,217
—
Income before income taxes
277,432
147,499
174,773
Income tax expense
2,496
1,433
1,727
Net income
274,936
146,066
173,046
Preferred dividend requirements
24,144
24,144
24,145
Net income available to common shareholders of EPR Properties
$ 250,792 $ 121,922 $ 148,901
Net income available to common shareholders of EPR Properties per share:
Basic
$
3.30 $
1.61 $
1.98
Diluted
$
3.28 $
1.60 $
1.97
Shares used for computation (in thousands):
Basic
76,040
75,636
75,260
Diluted
76,495
75,999
75,715
Other comprehensive income:
Net income
$ 274,936 $ 146,066 $ 173,046
Foreign currency translation adjustment
12,878
(23,036)
6,851
Unrealized (loss) gain on derivatives, net
(8,085)
15,984
(5,452)
Comprehensive income attributable to EPR Properties
$ 279,729 $ 139,014 $ 174,445
See accompanying notes to consolidated financial statements.
62
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