EPR Properties (EPR) Q4 FY25 earnings call: guidance and Q&A

Can you elaborate on the confidence level for hitting the $400 million to $500 million investment spending guidance for 2026, given it represents an acceleration?

Management expressed high confidence, stating they wouldn't issue the guidance without it and have historically been successful in hitting or raising numbers. They noted the pipeline has been a multi-year process and they are looking at opportunities across most sectors.

“We wouldn't put it out there if we didn't have great confidence in it. Again, if you look historically, we've been successful in not only hitting our numbers, but raising those throughout the year.”

asked by Michael Goldsmith · answered by Gregory Silvers

Topgolf, a key tenant, was taken private by Leonard Green Partners. Have you had conversations with them, and what is your comfort level with your specific locations?

Multiple conversations have occurred. Management is encouraged that Leonard Green is aligned with slowing growth to 3-5 units per year and focusing on F&B/promotional opportunities. Topgolf's refresh program will continue, benefiting EPR's units.

“The thing that we're encouraged is, in fact, what they've told us is they're very much aligned with what we have said that the growth pattern needs to slow down to 3 to 5 units a year.”

asked by Michael Goldsmith · answered by Gregory Silvers

At what cost of capital does it make sense to tap the ATM program, given current trading levels?

Management estimates their cost of equity is in the upper 50s or low 60s, translating to a low to mid-7s cost of capital. They believe this creates a spread of nearly 100 basis points over their investment yields, making it sensible to use the ATM opportunistically, especially for higher investment spending.

“I think we probably see it now in the kind of upper 50s or low 60s at kind of low 7s, low mid-7s. I think that works. We can make that work. we're doing things in the low to mid-8s. So there's 100 basis points of spread.”

asked by John Kilichowski · answered by Gregory Silvers

Can you provide more specifics on the mix of development versus acquisition opportunities and the range of cap rates for different quality assets?

Early in 2026, the investment mix is expected to be 70% acquisitions and 30% development. Most current opportunities have an initial cap rate in the '8s. Lower cap rates, potentially in the '7s, would be considered for assets with much lower advance rates, higher credit scenarios, or better growth profiles.

“I would say, and I'm looking at Greg and Ben, probably 70-30 acquisitions. Right now, I think, again, where you would look at most of our stuff has been in the 8s.”

asked by Anthony Paolone · answered by Gregory Silvers

Regarding the remaining investments to reach the $450 million midpoint of guidance, when do you assume they will be completed?

The remaining investments are weighted more towards the first half of the year.

“Yes, it's actually, frankly, weighted more towards the first half of the year, the way we see things kind of laying out.”

asked by Michael Carroll · answered by Gregory Silvers

What box office growth assumption is embedded in the Regal percentage rent guidance for the lease year ending July 2026?

The assumption is slightly up, consistent with analysts, probably around 2% growth over last year's box office for Regal. This contributes to the $1 million net increase in percentage rent for other tenants.

“No, I think it's slightly up, consistent with kind of analysts. But as you can see, it's probably kind of up 2% over where they were last year as our number is up slightly over there.”

asked by Michael Carroll · answered by Gregory Silvers

Are there any specific property types where you are seeing bigger investment opportunities?

The top three property types for investment opportunities continue to be fitness and wellness, attractions, and Eat & Play. Gaming and ski are more opportunistic.

“I would say the top 3 continue to be fitness and wellness attractions and Eat & play.”

asked by Michael Carroll · answered by Gregory Silvers

How does the transaction market look for larger deals, are you seeing more or less opportunities?

The company is not necessarily seeing more larger deals overall, but their ability to participate in larger deals has increased. This, combined with proceeds from dispositions and the ATM program, allows them to further accelerate growth and deliver outsized value.

“I don't know we're seeing more. We're seeing our ability to participate in larger deals more.”

asked by Upal Rana · answered by Gregory Silvers

With SAG-AFTRA negotiations starting again and contracts expiring, what is your take on how these negotiations could play out?

It's still very early, but the key issue will likely be AI. Management believes a framework is in place to deal with it, and all parties recognize the negative impact of strikes, aiming to avoid them.

“I think it's still really early, but I think you're correct. I think the -- it's really early. I think it's going to still be about AI and the ability to do that.”

asked by Upal Rana · answered by Gregory Silvers

Can you provide an update on the education portfolio and any changing trends, particularly between early childhood and private schools?

The strength of the education portfolio has continued. It may be an area for dispositions in 2026, following the theater portfolio cleanup, to capture good value and accelerate growth.

“Again, I think if anything, the strength of that portfolio has continued to be demonstrated over the last several years. I think one area that as we think about dispositions this year, maybe an area that we start to think about.”

asked by Jana Galan · answered by Gregory Silvers