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What changed in EPR PROPERTIES's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of EPR PROPERTIES's 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+325 added−362 removedSource: 10-K (2025-02-27) vs 10-K (2023-12-31)

Top changes in EPR PROPERTIES's 2024 10-K

325 paragraphs added · 362 removed · 273 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

60 edited+7 added−13 removed58 unchanged
Biggest changeAs of December 31, 2023 , our owned Experiential real estate portfolio consisted of approximately 19.8 million square feet, which includes 0.6 million square feet of properties we intend to sell. Our Experiential portfolio, excluding the properties we intend to sell, was 99% leased and included $131.3 million in property under development and $20.2 million in undeveloped land inventory.
Biggest changeOur wholly-owned Experiential portfolio, excluding the vacant properties we intend to sell, was 99% leased or operated and included $112.3 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.
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 8 cumulative redeemable preferred shares ("Series G preferred shares") have a dividend rate of 5.75%.
Our Series C 8 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%.
For additional information regarding regulations applicable to our business, and risks 10 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.
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.
We do not intend for information contained in our website to be part of this Annual Report on Form 10-K.
We do not intend for information contained in our website to be part of this Annual Report on Form 10-K. 10
Accordingly, we intend to be more selective in making 6 investments and acquisitions until such time as economic conditions improve and our cost of capital returns to acceptable levels. 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.
Accordingly, we intend to be more selective in making investments and acquisitions until such time as economic conditions improve and our cost of capital returns to acceptable levels. 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.
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.
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. 7 We will also investigate opportunities to redevelop certain of our existing properties.
By focusing on engagement, we gather valuable information needed to engage and retain the most talented associates. • 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.
By focusing on engagement, we gather valuable information needed to engage and retain the most talented associates. • 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.
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.
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 2 approximately 45 days (versus the previous window of approximately 75 days), which is when most of a film's box office revenue is earned.
Additionally, we target casino resorts and hotels that provide a wide array of experiential offerings outside of lodging and state-of- 4 the-art gaming. Through live entertainment, various recreational opportunities, dining options and night clubs, the combination of amenities appeals to a broader demographic.
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.
We may redevelop properties in conjunction with a lease renewal or new tenant, or we may redevelop properties that have more earnings potential 7 due to the redevelopment. Additionally, certain of our properties have excess land where we will proactively seek opportunities to further develop.
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.
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.
We have and will continue to evaluate our existing portfolio for additional development of entertainment, retail and restaurant density, 3 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.
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 employees 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, diverse workforce; and evolve and invest in technology, tools, and resources to enable employees at work.
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.
Additionally, we believe we benefit from our regional destinations (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.
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.
Lease Structure We have structured 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.
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.
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 receivab le from, seven different operators. We expect to continue to pursue opportunities in this area.
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 receivab le from, eight different operators. We expect to continue to pursue opportunities in this area.
Moviegoing has been a dominant out-of-home entertainment option for decades, with over 1.2 billion tickets sold in North America during 2019 (prior to the pandemic) according to the Motion Picture Association (MPA) 2019 Theme Report. We believe that the evolution in theatres and enhanced customer experience will continue to bring customers back to enjoy film exhibition.
Movie-going has been a dominant out-of-home entertainment option for decades, with over 1.2 billion tickets sold in North America during 2019 (prior to the pandemic) according to the Motion Picture Association (MPA) 2019 Theme Report. We believe that the evolution in theatres and enhanced customer experience will continue to bring customers back to enjoy film exhibition.
Traditional REIT Lodging Structure In certain limited instances, we have utilized traditional REIT lodging structures, where we hold qualified lodging facilities under the REIT and we separately hold the operations of the facilities in TRSs, which are facilitated by management agreements with eligible independent contractors.
Traditional REIT Lodging Structure In certain limited instances, we have utilized traditional REIT lodging structures, where we hold qualified lodging facilities under the REIT and we separately hold the operations of the facilities in taxable REIT subsidiaries ("TRSs"), which are facilitated by management agreements with eligible independent contractors.
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, provide us with a distinct competitive advantage.
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.
See Item 7 - "Management's Discussion and Analysis of Financial C ondition and Results of Operations - Non-GAAP Financial Measures" for the reconciliation of "Total assets" in the consolidated balance sheet to total investments 1 and the calculation of total investments at December 31, 2023 and 2022 . We group our investments into two reportable segments: Experiential and Education.
See Item 7 - "Management's Discussion and Analysis of Financial C ondition 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, 2024 and 2023 . We group our investments into two reportable segments: Experiential and Education.
Mortgage Structure We have structured 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.
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.
Additionally, EPR will match employee contributions annually up to a given amount for contributions from their personal funds to nonprofit organizations that meet the criteria of the program.
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.
Through a number of employees 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 employees, EPR Impact’s annual budget includes a pool of funds to support employee-directed contributions to nonprofit organizations where an employee is personally involved.
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.
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 pre-determined level.
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.
As of December 31, 2023 , our investment in gaming consisted of land under ground lease related to the Resorts World Catskills casino and resort project in Sullivan County, New York.
As of December 31, 2024 , 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 tenants make it their goal to motivate, educate, and help consumers look and feel better. We will continue to seek opportunities for the acquisition, financing or development of other experiential properties that leverage our expertise in this area.
Our tenants make it their goal to motivate, educate, and help consumers look and feel better. 4 We will continue to seek opportunities for the acquisition, financing or development of other Fitness & Wellness properties that leverage our expertise in this area.
As of December 31, 2023, our Experiential investments comprised $6.3 billion, or 93%, and our Education investments comprised $0.5 billion, or 7%, of our total investments . A more detailed description of the property types included within these segments is provided below.
As of December 31, 2024, our Experiential investments comprised $6.4 billion, or 93%, and our Education investments comprised $0.5 billion, or 7%, of our total investments . A more detailed description of the property types included within these segments is provided below.
Our benefits include competitive base pay, performance-based restricted stock awards and a 401(k) with a robust company match. We support our employees’ physical and mental health through paid parental leave, industry-leading health care benefits, unlimited sick leave, flexible paid time off and employee assistance programs.
Our benefits include competitive base pay, performance-based restricted stock 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 9 off and associate assistance programs.
Two theatre customers continue to be on a cash-basis for revenue recognition purposes due to the ongoing uncertainty, including American Multi-Cinema, Inc. ("AMC"). We have experienced vacancies at certain theatre properties and have sold many of these properties. The remaining vacant properties are currently in the process of being sold or we are managing these theatres through a third-party manager.
Two theatre customers remain on a cash-basis for revenue recognition purposes due to the ongoing uncertainty, including American Multi-Cinema, Inc. ("AMC"). We have experienced vacancies at certain theatre properties and have sold many of these properties. The remaining vacant properties are currently in the process of being sold or we are operating these theatres through third-party managers.
The evolution of the theatre industry over the last 20 years from the sloped floor theatre to the megaplex stadium theatre to the expanded amenity theatre has demonstrated that exhibitors and their landlords are willing to make investments in their theatres to take the customer experience to the next level.
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.
Education As of December 31, 2023, our Education segment consisted of the following property types (owned or financed): • 61 early childhood education center properties; and • nine private school properties.
Education As of December 31, 2024, our Education segment consisted of the following property types (owned or financed): • 59 early childhood education center properties; and • nine private school properties.
During the period of COVID-19 pandemic-response restrictions on theatre operations, certain studios choose to experiment with hybrid content release strategies in support of their direct-to-consumer streaming services.
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.
Our investments are generally structured as long-term triple-net leases that require tenants to pay substantially all expenses associ ated with the operation and maintenance of the property, or as long-term mortgages with economics similar to our triple-net lease structure. Our total investments (a non-GAAP financial measure) were approximat ely $6.8 billion at December 31, 2023 .
Our investments are generally structured as long-term triple-net leases that require tenants to pay substantially all expenses associ ated with the operation and maintenance of the property, or as long-term mortgages with economics similar to our triple-net lease structure. 1 Our total investments (a non-GAAP financial measure) were approxima tely $6.9 billion at December 31, 2024 .
These are properties that make up the social infrastructure of society. 5 Our long-term primary business objective is to enhance shareholder value by achieving predictable and increasing Funds From Operations As Adjusted ("FFOAA") and dividends per share (See Item 7 – “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Non-GAAP Financial Measures - Funds From Operations (FFO), Funds From Operations As Adjusted (FFOAA) and Adjusted Funds From Operations (AFFO)” for a discussion of FFOAA, which is a non-GAAP financial measure).
Our long-term primary business objective is to enhance shareholder value by achieving predictable and increasing Funds From Operations As Adjusted ("FFOAA") and dividends per share (See Item 7 – “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Non-GAAP Financial Measures - Funds From Operations (FFO), Funds From Operations As Adjusted (FFOAA) and Adjusted Funds From Operations (AFFO)” for a discussion of FFOAA, which is a non-GAAP financial measure).
As a result, we intend to continue to be more selective in our investment spending until such time as economic conditions and our cost of capital improve. As of December 31, 2023, our total assets were a pproximately $5.7 billion (after accumulated depreciation of approximately $1.4 billion) with properties located in 44 states, Ontario and Quebec, Canada.
As a result, we intend to continue to be more selective in making future investments and acquisitions until such time as economic conditions and our cost of capital improve. As of December 31, 2024, our total assets were a pproximately $5.6 billion (after accumulated depreciation of approximately $1.6 billion) with properties located in 44 states, Ontario and Quebec, Canada.
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.
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.
Experiential As of December 31, 2023, our Experiential portfolio (excluding property under development and undeveloped land inventory) consisted of the following property types (owned or financed): • 166 theatre properties; • 58 eat & play properties (including seven theatres located in entertainment districts); • 23 attraction properties; • 11 ski properties; • seven experiential lodging properties; • 20 fitness & wellness properties; • one gaming property; and • three cultural properties.
Experiential As of December 31, 2024, our Experiential portfolio (excluding property under development, undeveloped land inventory and the three joint venture properties noted below) consisted of the following property types (owned or financed): • 157 theatre properties; • 58 eat & play properties (including seven theatres located in entertainment districts); • 24 attraction properties; • 11 ski properties; • four experiential lodging properties; • 22 fitness & wellness properties; • one gaming property; and • one cultural property.
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, 2023 , our owned theatre properties were leased to 17 different leading theatre operators. A significant portion of our total revenue was from AMC and Regal.
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, 2024, our owned theatre properties were leased to 17 different leading theatre operators.
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.
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.
As of December 31, 2023, we had 55 full-time employees. Examples of key programs and initiatives that are focused to attract, develop and retain our diverse workforce include: • Employee Engagement. We use Gallup to measure employee engagement through a survey administered annually. This helps us to understand the overall level of engagement of our associates.
As of December 31, 2024, we had 55 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.
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.
In the case of a multi-tenant development, we generally require a significant amount of the development to be pre-leased prior to construction 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.
As of December 31, 2023, our owned Education real estate portfolio consisted of approximately 1.3 million square feet, which includes 39 thousand square feet of properties we intend to sell. The Education portfolio, excluding the properties we intend to sell, was 100% leased.
As of December 31, 2024, our wholly-owned Education real estate portfolio consisted of approximately 1.2 million square feet, which includes 13 thousand square feet for a vacant property we intend to sell. Our wholly-owned Education portfolio, excluding the vacant property we intend to sell, was 100% leased.
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.
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.
Until capital costs improve, we expect that our levels of investment spending will be limited in the near-term and that these investments will be funded primarily from cash on hand, excess cash flow, disposition proceeds and borrowing availability under our unsecured revolving credit facility, subject to maintaining our leverage levels consistent with past practice.
Although we intend to continue to make future investments, w e expect to maintain our investment spending at moderate levels in the near-term due to an elevated cost of capital, and near-term investments will be funded primarily from cash on hand, excess cash flow, disposition proceeds and borrowing availability under our unsecured revolving credit facility, subject to maintaining our leverage levels consistent with past practice.
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 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.
We will continue to seek opportunities for the acquisition, financing or development of such properties that leverage our expertise in this area. 3 Attractions Our attractions portfolio consists primarily of waterparks and amusement parks, each of which draw a diverse segment of customers.
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.
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, bocce ball and karting.
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, bocce ball and karting. Andretti Indoor Karting and Games ("Andretti") represents an operator that delivers a unique combination of entertainment options, combining electric go karts with immersive gaming.
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.
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.
Dispositions We will consider discretionary property dispositions for reasons such as under performance, 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.
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.
Our theatre customers were more severely impacted by the COVID-19 pandemic and have seen a slower recovery than our non-theatre customers due primarily to changes in the timing of film releases, labor disputes, production delays and experimentation with streaming. Going forward, we intend to significantly reduce our investments in theatres, thereby increasing the diversity of our experiential property types.
Our theatre customers were more severely impacted by the COVID-19 pandemic and have seen a slower recovery than our non-theatre customers due primarily to changes in the timing of film releases, production delays and experimentation with streaming during this period. Further slowing their recovery, our theatre customers were negatively impacted by labor disputes which caused more production delays.
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.
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.
As theatre customers continue to be impacted by the pandemic and the related issues discussed above, we will evaluate the best strategy for any future vacancies on a property by property basis. 2 The modern megaplex theatre provides a greatly enhanced audio and visual experience for patrons.
We will evaluate the best strategy for any vacancies on a property-by-property basis. 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.
We generally do not begin development of a single-tenant property without a signed lease providing for rental payments that are commensurate with our level of capital investment. In the case of a multi-tenant development, we generally require a significant amount of the development to be pre-leased prior to construction to minimize lease-up risks.
Development and Redevelopment We intend to continue developing properties and redeveloping existing properties that are consistent with our growth strategies. We generally do not begin development of a single-tenant property without a signed lease providing for rental payments that are commensurate with our level of capital investment.
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 approximat ely $98.0 million, or 13.9%, of the Company's total revenue for the year ended December 31, 2023. We also continue to seek opportunities for the acquisition, financing or development of entertainment districts.
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 approxim ately $100.8 million, or 14.4%, of the Company's tot al revenue for the year ended December 31, 2024. Entertainment districts are restaurant, retail and other entertainment venues typically anchored by a megaplex theatre.
For the year ended December 31, 2023 , approximately $94.7 million, or 13.4%, and $103.7 million, or 14.7%, of the Company's total revenue was from AMC and Regal, respectively.
A significant portion of our total revenue was from AMC and Cineworld Group, plc, Regal Entertainment Group and our other Regal theatre tenants (collectively, “Regal”). For the year ended December 31, 2024, approximately $94.4 million, or 13.5%, and $76.4 million, or 10.9%, of the Company's total revenue was from AMC and Regal, respectively.
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.
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.
During 2022, we returned to growth as our customers' businesses continued to recover. More recently, rising interest rates, inflation and the challenging economic environment, along with a theatre customer's bankruptcy, have increased our cost of capital, which has negatively impacted our ability to make investments in the near-term.
Additionally, we have tenant and borrower relationships that provide us with access to investment opportunities. 6 Elevated interest rates, inflation and the challenging economic environment have increased our cost of capital, which has negatively impacted our ability to make investments in the near-term.
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. Subsequent to 2021, REITS have generally experienced heightened risks and volatility due to the impact of inflation, including rising interest rates.
Going forward, we intend to significantly reduce our investments in theatres, thereby increasing the diversity of our 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. The current environment for REITs is marked by both challenges and opportunities.
In 2023, we hosted and facilitated a two-part training session titled "It's Your Career, Own It." • Diversity, Equity, Inclusion and Belonging ("DEIB"). Our DEIB objectives are to ensure our culture is evolving and inclusive and to build teams that reflect the life experiences of our customers and the ultimate consumers of our customers’ services.
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.
It is our intention to ultimately dispose of our Education portfolio over time. During 2021 and 2020, the COVID-19 pandemic severely impacted experiential real estate properties because such properties involve congregate social activity and discretionary spending.
It is our intention to ultimately dispose of our Education portfolio over time and recycle the proceeds into other experiential investments.
Our investments in experiential lodging are structured using triple-net leases and mortgage notes, and we currently operate five properties (all of which are included in unconsolidated joint ventures) through traditional REIT lodging structures.
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.
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Subsequent to this, our non-theatre properties demonstrated strong recovery and stabilization from the impacts of the pandemic with overall rent coverage for 2023 above the 2019 pre-pandemic level.
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Despite the recent economic uncertainty, REITs have demonstrated resilience. As a triple-net lease REIT, we are generally experiencing heightened risks and uncertainties associated with key macroeconomic factors, including, but not limited to, inflation and interest rate volatility. This environment has created negative pressure in the financial and capital markets resulting in a higher cost of capital.
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As a result, negative pressure in financial and capital markets has increased the cost of capital.
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We have excluded three experiential lodging properties held in joint ventures from the property count above. One was transferred to our joint venture partner on February 4, 2025.
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Theatres A significant portion of our Experiential portfolio consists of modern megaplex theatres. During 2023, the theatre industry continued its recovery from the COVID-19 pandemic supported by a wide range of box office hits including Barbie, The Super Mario Bros. Movie, Spider Man - Across the Spider Verse and Oppenheimer.
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As we have previously disclosed, the remaining two properties sustained significant hurricane damage and 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, which we expect to result in the eventual removal of the properties from our portfolio, although there can be no assurances as to the outcome of those discussions.
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Additionally, Taylor Swift: The Eras Tour and Renaissance: A Film by Beyoncé grossed a combined $8.9 billio n in North American box office revenues during 2023, creating an opportunity for alternative content for our theatre tenants. To tal North American box office revenues for 2023 were up approximately 21% over 2022.
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Included in the property count are two experiential lodging properties held in unconsolidated joint ventures in which we continue to have interests. As of December 31, 2024 , our wholly-owned Experiential real estate portfolio consisted of approximately 18.8 million square feet, which includes 0.3 million square feet of vacant properties we intend to sell.
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While the industry continues to demonstrate significant resilience driven by consumer demand, the recently resolved writers' and actors' strikes created production delays, which have impacted the release timing of future titles. Separately, theatre food and beverage revenues have notably increased as compared to 2019, contributing to improved theatre rent coverage levels, which are approaching pre-COVID levels.
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During 2024, production delays created by the 2023 writers' and actors' strikes impacted the theatre industry. To tal North American box office revenues for 2024 were down approximately 4% v ersus 2023. It is anticipated that the strikes will have little to no impact on the movie release schedule going forward.
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In the traditional REIT lodging structure, we hold qualified lodging facilities under the REIT and we separately hold the operations of the facilities in taxable REIT subsidiaries ("TRSs"), which are facilitated by management agreements with eligible independent contractors. We expect to continue to pursue opportunities for investments in experiential lodging.
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Separately, theatre food and beverage revenues per customer visit have notably increased as compared to 2019, contributing to improved theatre rent coverage leve ls, which were near pre-COVID levels for 2024 despite the decrease in box office revenue.
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Additionally, we have tenant and borrower relationships that provide us with access to investment opportunities. The pandemic impeded our growth during 2020 and 2021 while we focused on addressing challenges brought on by the pandemic including monitoring customer status, working with customers to help ensure long-term stability and assisting customers in establishing re-opening plans.
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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. 5 Business Objectives and Strategies Our vision is to continue to build the premier diversified experiential REIT.
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However, we currently anticipate migrating some of what we hold in such structures to more traditional net lease or mortgage arrangements over time. Development and Redevelopment We intend to continue developing properties and redeveloping existing properties that are consistent with our growth strategies.
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Capitalization Strategies Debt and Equity Financing We believe that our shareholders are best served by a conservative capital structure.
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Our Senior Vice President, Human Resources and Administration works in conjunction with our Executive Vice President and General Counsel, who reports directly to our Chief Executive Officer, to develop and oversee our human capital management objectives, programs and initiatives.
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Specific steps we have taken to address our commitment to DEIB include: ▪ Continuing DEIB Council meetings to drive DEIB initiatives; ▪ Refining a Diversity Statement articulating our commitment to building an inclusive and diverse environment as follows: 9 "At EPR Properties, people are the heart of our business. We invest in properties to create experiences for all people.
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We advocate and strive for a culture that recognizes and believes in diversity, equity, inclusion and belonging." ▪ Development of a vision statement outlining long-term goals and our aspirations for the future as follows: "Build a dedicated and engaged workforce by nurturing a culture that promotes innovation and teamwork.
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This environment will fuel business growth and enable employees to reach their highest potential while being true to their authentic selves." ▪ Continuing partnership with CEO Action for Diversity & Inclusion Network to drive measurable action and meaningful change in advancing diversity, equity and inclusion in the workplace. ▪ Enhanced focus on development of a candidate pipeline consisting of a diverse talent pool through our EPR Internship program; ▪ Hosting DEIB learning opportunities with external experts in 2023; and ▪ Active involvement in diverse communities through partnerships, sponsorships and attending/participating in conferences with diverse organizations. • Compensation and Benefits.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeHowever, as a result of the impact of the COVID-19 pandemic, a generally challenging and uncertain economic environment and Regal's bankruptcy, we have also begun managing a limited number of theatres formerly operated by our tenants and may manage a greater number in the future if customer defaults or bankruptcies result in our taking back properties.
Biggest changeHowever, we also manage a limited number of theatres formerly operated by our tenants and may manage a greater number in the future if customer defaults or bankruptcies result in our taking back 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.
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. A significant portion of our investments are in megaplex theatre properties.
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.
Gaming competition 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.
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.
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 and/or penalties. Real estate investments are relatively illiquid.
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.
One of the factors that investors may consider is 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.
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 participation in joint ventures subjects us to risks, including but not limited to, the following risks that: • 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; • 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.
Our participation in joint ventures subjects us to risks, including but not limited to, the following risks that: • 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.
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, 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.
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, 22 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.
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 ("IT") networks and related systems.
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.
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.
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. 31 We may be subject to adverse legislative or regulatory tax changes that could reduce the market price of our shares.
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; • 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 employees 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; 29 • 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 employees, tenants, former stockholders 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.
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; • 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; 28 • 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 stockholders 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.
Any continued 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.
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.
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.
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 12 acceleration of indebtedness. Under those circumstances, other sources of capital may not be available to us or be available only on unattractive terms.
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.
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, 17 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.
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 significant portion of our investments include build-to-suit projects.
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.
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 23 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.
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.
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.
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 24 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.
Our properties in Canada, investments in China 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.
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.
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. 12 Most of our customers, consisting primarily of tenants and borrowers, operate properties in market segments that depend upon discretionary spending by consumers.
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. Most of our customers, consisting primarily of tenants and borrowers, operate properties in market segments that depend upon discretionary spending by consumers.
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 32 contracts to hedge in part our exposure to exchange rate fluctuations.
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.
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 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, 13 a bankruptcy court might authorize the tenant to terminate its leases with us.
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.
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 26 could borrow under our unsecured revolving credit facility and reduce our ability to service our debt and pay dividends to shareholders.
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 16 manage.
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.
If some or all of our leases are not respected as true leases or 19 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.
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.
A small amount of our debt financing is secured by 18 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.
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.
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. We are subject to risks associated with the employment of personnel by managers of certain of our properties.
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. 20 We are subject to risks associated with the employment of personnel by managers of certain of our properties.
Non-U.S. real estate and tax laws are complex 28 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.
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.
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 27 arising from the operation of the properties. We believe all of our properties are in material compliance with environmental laws.
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.
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.
Accordingly, competition for the acquisition of real property could materially and adversely affect us. 15 Principal factors of competition are rent or interest charged, attractiveness of location, the quality of the property and breadth and quality of services provided.
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 United States or Canada; • 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 and floods, which could exceed the aggregate limits of insurance coverage; • 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; 24 • 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 • general competitive factors.
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 United States or Canada; • 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; • impacts of climate change; • 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; 23 • 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 • general competitive factors.
We may be materially and adversely affected in the event of a significant default by our customers and counterparties. 15 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.
We may be materially and adversely affected in the event of a significant default by our customers and counterparties. 14 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.
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 IT 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.
Higher interest rates would also likely increase our future borrowing costs and 30 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.
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. 29 Inflation may have an effect on the value of our shares.
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. 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 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.
In addition, if we fail to qualify as a REIT, we will 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.
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.
This is because 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.
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.
See "Cautionary Statement Concerning Forward-Looking Statements." Risks That May Impact Our Financial Condition or Performance Global economic uncertainty, disruptions in the financial markets, rising interest rates and inflation, and the challenging economic environment may impair our ability to refinance existing obligations or obtain new financing for acquisition or development of properties.
See "Cautionary Statement Concerning Forward-Looking Statements." Risks That May Impact Our Financial Condition or Performance Global economic 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.
Economic conditions, including increasing 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.
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.
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.
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.
Although we do not directly employ or manage employees 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.
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.
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 tenant's, borrower's, or our operations may be impacted by weather conditions, climate change and natural disasters.
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. 27 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.
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, the interests of holders of our common shares could be diluted.
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, the interests of holders of our common shares could be diluted.
As a result, from time to time, we enter into management agreements with third-party managers to operate certain properties. In the past, this practice has been most frequent with our experiential lodging properties.
As a result, from time to time, we enter into management agreements with third-party managers to operate certain properties. This practice has been most frequent with our experiential lodging properties.
Additionally, a portion of our leases are not triple-net leases, which exposes 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 reimbursements paid by tenants.
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.
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. Rising 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 acquisition and development activities.
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.
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 be inadequate, and these risks may be increased as we expand our portfolio into experiential properties that may present more risk of 25 loss as compared to properties in our existing portfolio.
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.
As a result, we intend to be more selective in making future investments and acquisitions until such time as economic conditions improve and our cost of capital returns to acceptable levels.
As a result, we intend to be more selective in making future investments and acquisitions until such time as economic conditions and our cost of capital improve.
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 and residual effects of the COVID-19 pandemic.
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.
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. 22 In many jurisdictions, gaming laws can require certain of our shareholders to file an application, be investigated, and qualify or have his, her or its suitability determined by gaming authorities.
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.
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; • 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; 31 • 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 employees calling for severance compensation and vesting of equity compensation upon termination of employment upon a change in control or certain events of the employees' termination of service.
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; • 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. 30 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.
Additionally, as of December 31, 2023, our Series E preferred shares are convertible, at each of the holder's option, into our common shares at a conversion rate of 0.4826 common shares per $25.00 liquidation preference, which is equivalent to a conversion price of approximately $51.80 per common share (subject to adjustment in certain events).
Additionally, as of December 31, 2024, our Series E preferred shares are convertible, at each of the holder's option, into our common shares at a conversion rate of 0.4831 common shares per $25.00 liquidation preference, which is equivalent to a conversion price of approximately $51.75 per common share (subject to adjustment in certain events).
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.
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. Future sales or divestitures could affect our costs, revenues, results of operations, financial condition, liquidity and our ability to comply with applicable financial covenants.
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 the residual effects of the COVID-19 pandemic and other similar health crises, labor shortages, travel restrictions, supply chain disruptions and generally challenging and uncertain economic conditions.
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.
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, 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.
While relief provisions can sometimes excuse REIT gross income test failures, significant penalty taxes may still be imposed. 19 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, 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 had 55 f ull-time employees as of December 31, 2023 and, therefore, the impact we may feel from the loss of an employee 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 .
We had 55 f ull-time associates as of December 31, 2024 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 .
In addition, megaplex theatre properties depend on regular production and availability of motion pictures, which the Writers Guild of America and Screen Actors Guild strikes of 2023 severely disrupted. As a result, we are subject to more risk associated with megaplex theatres than if we had more diversified investments.
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. As a result, we are subject to more risk associated with megaplex theatres than if we had more diversified investments.
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.
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.
The ultimate extent to which the residual effects of the COVID-19 pandemic and 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.
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.
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, many of which are being targeted for future growth.
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.
As of December 31, 2023, our Series C preferred shares are convertible, at each of the holder's option, into our common shares at a conversion rate of 0.4252 common shares per $25.00 liquidation preference, which is equivalent to a conversion price of approximately $58.80 per common share (subject to adjustment in certain events).
As of December 31, 2024, our Series C preferred shares are convertible, at each of the holder's option, into our common shares at a conversion rate of 0.4316 common shares per $25.00 liquidation preference, which is equivalent to a conversion price of approximately $57.92 per common share (subject to adjustment in certain events).
Although we reinstituted this dividend in 2021, 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.
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.
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.
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.
Regal emerged from the Chapter 11 bankruptcy cases in July 2023. As a result of the bankruptcy, we entered into a new master lease with Regal for 41 of these properties, took back 16 properties from Regal and agreed to hold a significant amount of deferred rent owed by Regal in abeyance with a remaining portion discharged in bankruptcy.
As a result of the resolution of this bankruptcy in 2023, we entered into a new master lease with Regal for 41 properties, took back 16 properties and agreed to hold a significant amount of deferred rent owed by Regal in abeyance with a remaining portion discharged in bankruptcy.
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.
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. Some potential losses are not covered by insurance.
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, 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. 18 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.
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.
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.
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. 21 We have a limited number of employees and loss of personnel could harm our operations and adversely affect the value of our shares.
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 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 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.
Regal, Topgolf and AMC represent a significant portion of our total revenue. For the year ended December 31, 2023, total revenues of approximately $103.7 million or 14.7% were from Regal, approximately $98.0 million or 13.9% were from Topgolf and approximately $94.7 million or 13.4% were from AMC.
Topgolf, AMC and Regal represent a significant portion of our total revenue. For the year ended December 31, 2024, total revenues of approximately $100.8 million or 14.4% were from Topgolf, approximately $94.4 million or 13.5% were from AMC and approximately $76.4 million or 10.9% were from Regal.
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.
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.
A severe natural disaster, such as a forest fire 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.
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.
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.
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. 21 Gaming authorities may conduct investigations into the conduct or associations of our trustees, officers, key associates or investors to ensure compliance with applicable standards.
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 theatres have not fully recovered from the negative impacts of the COVID-19 pandemic.
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.
This increased cost has made the financing of any acquisition and development activity costlier, and may lower future earnings. Rising interest rates, or the continuation of existing 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.
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.
Our credit ratings can affect the amount and type of capital we can access, as well as the terms and costs of any financings we may obtain.
Our credit ratings can affect the amount and type of capital we can access, as 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 addition, disruptions in global financial markets may have other adverse effects on us, our tenants, our borrowers or the economy in general. 11 Although we intend to continue making future investments, we expect that our levels of investment spending will be limited in the near term due to elevated costs of capital, and that these investments will be funded primarily from cash on hand, cash from operations, disposition proceeds and borrowing availability under our unsecured revolving credit facility, subject to maintaining our leverage levels consistent with past practice.
Although we intend to continue making future investments, we expect that our levels of investment spending will be reduced in the near term due to elevated costs of capital, and near-term investments will be funded primarily from cash on hand, excess cash flow, disposition proceeds and borrowing availability under our unsecured revolving credit facility, subject to maintaining our leverage levels consistent with past practice.
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, increased cost of capital, high inflation and other risks and uncertainties, and our business has been more acutely affected by these risks. We rely in part on debt financing to finance our investments and development.
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. Our business has been more acutely affected by these risks.
A severe forest fire, flood or other severe impacts from naturally occurring events 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.
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 experienced customer rent deferral requests and defaults resulting from the reduced economic activity that initially resulted from the COVID-19 pandemic, and 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 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.
There exists a high level of global economic challenges and uncertainty, including uncertainty regarding interest rates, inflationary pressures, geopolitical conflicts and the residual effects of the COVID-19 pandemic after its subsidence, all of which have contributed to volatility in the global financial markets and caused general negative performance of the real estate sector.
There continues to be a high level of global economic challenges and uncertainty, including uncertainty regarding interest rates, inflationary pressures, 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.
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. 20 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.
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.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe Company's Vice President of Information Systems has been with the Company for over 18 years and has overseen the Company's information systems, including its cyber risk management program, for the last five years.
Biggest changeThe Company's Vice President of Information Systems has been with the Company for over 19 years and has overseen the Company's information systems, including its cyber risk management program, for the last six years.
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.
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 32 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.
Additionally, the Company’s security program is supported by external third-party experts, including outside 33 cybersecurity professionals at a security operations center and expert legal counsel specializing in information technology and cybersecurity.
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.
In addition, the Company conducts frequent security awareness trainings for all employees, utilizes malware, antivirus, and spyware protections and has other protections in place for its network and users. 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.
In addition, the Company conducts frequent security awareness trainings for all associates, utilizes malware, antivirus, and spyware protections and has other protections in place for its network and users. 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.
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, employees and other stakeholders.
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.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeThe following table sets forth certain information by state or province regarding our owned real estate portfolio as of December 31, 2023 (dollars in thousands): Location Building (gross sq. ft.) Rental Revenue for the Year Ended December 31, 2023 % of Rental Revenue Texas 2,949,257 $ 84,461 13.7 % California 1,753,099 76,359 12.4 % Florida 1,507,299 44,397 7.2 % Ontario, Canada 1,204,639 33,917 5.5 % Pennsylvania 1,013,568 32,149 5.2 % Illinois 886,172 25,881 4.2 % Ohio 814,269 16,460 2.7 % Louisiana 809,615 17,430 2.7 % Tennessee 711,643 18,487 3.0 % New York 682,200 37,458 6.0 % Colorado 660,411 19,712 3.2 % North Carolina 631,137 24,390 4.0 % Virginia 618,659 16,487 2.7 % Missouri 566,890 6,830 1.1 % Michigan 521,631 8,612 1.4 % Georgia 516,315 14,922 2.4 % Kansas 511,234 12,856 2.1 % Arizona 465,755 14,121 2.3 % Quebec, Canada 399,437 9,398 1.5 % Indiana 392,998 8,337 1.4 % New Jersey 392,930 7,986 1.3 % Kentucky 365,971 8,100 1.3 % South Carolina 349,388 11,245 1.8 % Alabama 323,972 5,988 1.0 % Oregon 201,532 4,698 0.8 % Connecticut 185,074 3,830 0.6 % Minnesota 181,764 5,652 0.9 % Idaho 179,036 4,714 0.8 % Maryland 177,856 4,954 0.8 % Wisconsin 170,720 377 0.1 % Arkansas 165,219 4,139 0.7 % Mississippi 116,900 8,045 1.3 % Massachusetts 111,166 1,020 0.2 % Maine 107,000 1,083 0.2 % New Hampshire 97,400 1,284 0.2 % Iowa 93,755 1,402 0.2 % Oklahoma 90,737 6,586 1.1 % New Mexico 71,297 3,261 0.5 % Nevada 50,426 2,368 0.4 % Washington 47,004 3,035 0.5 % Montana 44,650 1,092 0.2 % Hawaii — 2,533 0.4 % Nebraska (1) — 83 — % 21,140,025 $ 616,139 100.0 % (1) Property sold during the year ended December 31, 2021 and tenant continues to pay deferred rent to EPR. 36 Office Location Our executive office is located in Kansas City, Missouri and is leased from a third-party landlord.
Biggest changeThe following table sets forth certain information by state or province regarding our owned real estate portfolio as of December 31, 2024 (dollars in thousands): Location Building (gross sq. ft.) Rental Revenue for the Year Ended December 31, 2024 % of Rental Revenue Texas 2,810,267 $ 76,093 13.0 % California 1,753,099 79,659 13.6 % Florida 1,286,099 41,789 7.1 % Ontario, Canada 1,204,639 36,110 6.2 % Pennsylvania 954,660 33,894 5.8 % Illinois 831,355 20,959 3.6 % Ohio 753,055 13,551 2.3 % New York 682,200 40,622 7.0 % Tennessee 680,570 17,581 3.0 % Colorado 634,674 19,839 3.4 % North Carolina 631,137 20,649 3.5 % Virginia 618,659 16,168 2.8 % Louisiana 591,272 14,686 2.5 % Michigan 521,631 8,958 1.5 % Georgia 516,315 13,232 2.3 % Missouri 490,330 6,065 1.0 % Kansas 482,359 11,845 2.0 % Arizona 465,755 13,751 2.4 % Quebec, Canada 399,437 9,306 1.6 % New Jersey 392,930 8,053 1.4 % Kentucky 365,971 6,619 1.1 % South Carolina 349,388 11,233 1.9 % Indiana 345,941 7,624 1.3 % Alabama 323,972 5,935 1.0 % Oregon 201,532 3,686 0.6 % Connecticut 185,074 4,371 0.8 % Minnesota 181,764 6,067 1.0 % Idaho 179,036 3,789 0.7 % Maryland 177,856 2,160 0.4 % Arkansas 165,219 4,148 0.7 % Mississippi 116,900 3,781 0.7 % Massachusetts 111,166 1,020 0.2 % Maine 107,000 1,083 0.2 % New Hampshire 97,400 1,284 0.2 % Iowa 93,755 1,402 0.2 % Oklahoma 90,737 6,689 1.1 % New Mexico 71,297 2,542 0.4 % Nevada 50,426 1,650 0.3 % Washington 47,004 3,123 0.5 % Montana 44,650 1,092 0.2 % Wisconsin 22,580 432 0.1 % Hawaii — 2,544 0.4 % Nebraska (1) — 83 — % 20,029,111 $ 585,167 100.0 % (1) 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.
Our leases are typically triple-net leases that require the tena nt 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 lesse e in 51 operating ground leases as of December 31, 2023.
Our leases are typically triple-net leases that require the tena nt 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 lesse e in 51 operating ground leases as of December 31, 2024.
Item 2. Properties As of December 31, 2023, 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.
Item 2. Properties As of December 31, 2024, 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 lease has projected 2024 annual rent of appr oximately $958 thousand and is scheduled to expire on September 30, 2026, with two separate five-year extension options available.
The lease has projected 2025 annual rent of appr oximately $958 thousand and is scheduled to expire on September 30, 2026, with two separate five-year extension options available.
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 have remaining terms ranging from one year to 25 years. These leases may be extended for predetermined extension terms at the option of the tenants.
The following table sets forth our 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, 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, 2023 (dollars in thousands).
The following table sets forth our wholly-owned properties (excluding properties under development, land held for developme nt, properties owned by unconsolidated real estate joint ventures an d properties securing our mortgage notes) listed by segment and property type, 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, 2024 (dollars in thousands).
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 2024 of approximately $493.0 million (not including the impact of rent deferrals, ground lease payments for leases in which we are a sub-lessor, periodic rent escalations that are not fixed, percentage rent or straight-line rent).
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 2025 of approximately $503.8 million (not including the impact of rent deferrals, ground lease payments for leases in which we are a sublessor, periodic rent escalations that are not fixed, percentage rent or straight-line rent).
However, pursuant to the facility leases, the tenants are generally responsible for performing substantially all of our obligations under the ground leases. 34 Number of Properties Building Gross Square Footage Percentage Leased (5) Rental Revenue for the Year Ended December 31, 2023 % of Company's Rental Revenue Experiential Theatres (1) 166 11,396,543 100.0 % $ 284,018 46.1 % Eat & Play (2) 53 5,081,986 95.3 % 167,985 27.4 % Attractions (3) 21 1,001,169 100.0 % 66,066 10.7 % Ski 3 330,508 100.0 % 25,358 4.1 % Experiential Lodging 1 276,210 100.0 % 2,743 0.4 % Fitness & Wellness 7 631,920 100.0 % 11,522 1.9 % Gaming (4) 1 — — % 12,575 2.0 % Cultural 3 512,768 100.0 % 7,448 1.2 % Total Experiential 255 19,231,104 98.8 % $ 577,715 93.8 % Education Early Childhood Education Centers 59 1,014,576 100.0 % $ 28,024 4.5 % Private Schools 9 292,362 100.0 % 10,400 1.7 % Total Education 68 1,306,938 100.0 % $ 38,424 6.2 % Total 323 20,538,042 98.8 % $ 616,139 100.0 % (1) Includes seven properties operated by EPR through third-party managers.
However, pursuant to the facility leases, the 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 (5) Rental Revenue for the Year Ended December 31, 2024 % of Company's Rental Revenue Experiential Theatres (1) 157 10,994,761 100.0 % $ 237,034 40.5 % Eat & Play (2) 53 5,081,986 96.0 % 172,856 29.5 % Attractions (3) 22 1,001,169 100.0 % 69,254 11.8 % Ski 3 330,508 100.0 % 25,217 4.3 % Experiential Lodging 1 276,210 100.0 % 2,743 0.5 % Fitness & Wellness 8 631,920 100.0 % 21,534 3.7 % Gaming (4) 1 — 100.0 % 12,993 2.2 % Cultural 1 457,093 100.0 % 5,679 1.0 % Total Experiential 246 18,773,647 98.9 % $ 547,310 93.5 % Education Early Childhood Education Centers 57 963,102 100.0 % $ 27,358 4.7 % Private Schools 9 292,362 100.0 % 10,499 1.8 % Total Education 66 1,255,464 100.0 % $ 37,857 6.5 % Total 312 20,029,111 99.0 % $ 585,167 100.0 % (1) Includes six properties operated by EPR through third-party managers.
Our tenants are generally sub-tenants under these ground leases and are responsible for paying rent under these agreements. Our sub-lessor operating ground leases provide for aggregate annual minimum rental payments for 2024 of approx imately $25.8 million.
Our tenants are generally sub-tenants under these ground leases and are responsible for paying rent under these agreements. Our sub-lessor operating ground leases provide for aggregate annual minimum rental payments for 2025 of approx imately $26.3 million. Our ground leases have remaining terms ranging from one year to 42 years, most of which include one or more options to renew.
The percentage of total investment spending related to build-to-suit projects, including investment spending for mortgage notes on such projects, was approx imately 36% in 2 023. 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.
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.
The following table sets forth lease expirations regarding EPR’s owned portfolio as of December 31, 2023 excluding properties we operate, non-theatre tenant leases at entertainment districts and experiential lodging properties operated through a traditional REIT lodging structure (dollars in thousands): Year Number of Properties Square Footage Rental Revenue for the Year Ended December 31, 2023 % of Company's Rental Revenue 2024 3 217,572 $ 4,450 0.7 % 2025 3 95,328 3,407 0.6 % 2026 2 39,289 2,643 0.4 % 2027 4 314,699 22,559 3.7 % 2028 9 604,771 16,592 2.7 % 2029 11 594,572 17,845 2.9 % 2030 18 1,391,775 34,850 5.7 % 2031 8 407,049 10,884 1.8 % 2032 10 483,288 12,613 2.0 % 2033 7 320,563 10,203 1.7 % 2034 36 2,313,989 73,560 11.9 % 2035 30 2,442,798 75,314 12.2 % 2036 40 2,698,769 77,242 12.5 % 2037 29 1,631,637 61,311 10.0 % 2038 42 2,267,041 62,902 10.1 % 2039 3 145,083 5,411 0.9 % 2040 4 209,680 9,665 1.6 % 2041 30 805,130 18,608 3.0 % 2042 4 466,958 17,747 2.9 % 2043 7 123,497 18,602 3.0 % Thereafter 2 50,073 1,822 0.3 % 302 17,623,561 $ 558,230 90.6 % 35 Our owned proper ties are located in 40 states and the Canadian provinces of Ontario and Quebec.
The following table sets forth lease expirations regarding EPR’s wholly-owned portfolio as of December 31, 2024 excluding properties we operate, non-theatre tenant leases at entertainment districts and experiential lodging properties operated through a traditional REIT lodging structure (dollars in thousands): Year Number of Properties Square Footage Rental Revenue for the Year Ended December 31, 2024 % of Company's Rental Revenue 2025 1 39,240 $ 653 0.1 % 2026 2 39,289 2,412 0.4 % 2027 4 314,699 21,065 3.6 % 2028 9 604,771 14,905 2.5 % 2029 14 812,144 21,720 3.7 % 2030 19 1,391,775 32,043 5.5 % 2031 4 354,930 7,382 1.3 % 2032 8 460,708 12,236 2.1 % 2033 7 320,563 10,409 1.8 % 2034 36 2,313,989 65,859 11.3 % 2035 29 2,435,642 75,265 12.9 % 2036 40 2,698,769 73,313 12.5 % 2037 29 1,631,637 61,970 10.6 % 2038 41 2,241,304 63,443 10.8 % 2039 9 202,336 6,511 1.1 % 2040 4 209,680 10,235 1.7 % 2041 30 805,130 18,608 3.2 % 2042 4 466,958 17,597 3.0 % 2043 7 123,497 20,529 3.5 % 2044 2 279,281 10,972 1.9 % Thereafter 1 19,000 1,048 0.2 % 300 17,765,342 $ 548,175 93.7 % 34 Our wholly-owned proper ties (excluding properties under development, land held for development, properties owned by unconsolidated real estate joint ventures and properties securing our mortgage notes) are located in 40 states and the Canadian provinces of Ontario and Quebec.
Removed
Our ground leases have remaining term s ranging from one year to 43 years, most of which include one or more options to renew. Property Acquisitions and Developments in 2023 Our property acquisi tions and developments in 2023 consisted of spending on experiential properties.
Added
Property Acquisitions and Developments in 2024 Our property acquisi tions and developments in 2024 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 approx ima tely 64% in 2024.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+0 added−0 removed2 unchanged
Biggest changeREIT Index $ 100.00 $ 125.84 $ 116.31 $ 166.39 $ 125.61 $ 142.87 Russell 1000 Index $ 100.00 $ 131.43 $ 158.98 $ 201.03 $ 162.58 $ 205.72 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. 38 Item 6. [Reserved]
Biggest changeREIT Index $ 100.00 $ 92.43 $ 132.23 $ 99.82 $ 113.54 $ 123.47 Russell 1000 Index $ 100.00 $ 120.96 $ 152.96 $ 123.71 $ 156.53 $ 194.89 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. 37 Item 6. [Reserved]
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, 2023, the Company did not sell any unregistered equity securities.
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, 2024, the Company did not sell any unregistered equity securities.
Share Performance Graph The following graph compares the cumulative return on our common shares during the five-year period ended December 31, 2023, 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.
Share Performance Graph The following graph compares the cumulative return on our common shares during the five-year period ended December 31, 2024, 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.
On February 28, 2024, there were app roximately 5,805 holders of record of our outstanding common shares. Issuer Purchases of Equity Securities During the quarter ended December 31, 2023, the Company did not repurchase any of its equity securities. 37 Dividends We expect to continue paying dividends to our common and preferred shareholders in future periods.
On February 26, 2025, there were app roximately 5,503 holders of record of our outstanding common shares. Issuer Purchases of Equity Securities During the quarter ended December 31, 2024, the Company did not repurchase any of its equity securities. 36 Dividends We expect to continue paying dividends to our common and preferred shareholders in future periods.
Performance during the comparison period is not necessarily indicative of future performance. Total Return Analysis 12/31/2018 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 EPR Properties $ 100.00 $ 117.13 $ 56.12 $ 84.51 $ 72.16 $ 100.18 MSCI U.S.
Performance during the comparison period is not necessarily indicative of future performance. Total Return Analysis 12/31/2019 12/31/2020 12/31/2021 12/31/2022 12/31/2023 12/31/2024 EPR Properties $ 100.00 $ 47.91 $ 72.15 $ 61.61 $ 85.53 $ 84.46 MSCI U.S.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

83 edited+34 added−49 removed55 unchanged
Biggest changeReconciliations 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): 55 December 31, 2023 2022 Net Debt: Debt $ 2,816,095 $ 2,810,111 Deferred financing costs, net 25,134 31,118 Cash and cash equivalents (78,079) (107,934) Net Debt $ 2,763,150 $ 2,733,295 Gross Assets: Total Assets $ 5,700,885 $ 5,758,701 Accumulated depreciation 1,435,683 1,302,640 Cash and cash equivalents (78,079) (107,934) Gross Assets $ 7,058,489 $ 6,953,407 Debt to Total Assets Ratio 49 % 49 % Net Debt to Gross Assets Ratio 39 % 39 % Three Months Ended December 31, 2023 2022 EBITDAre and Adjusted EBITDAre: Net income $ 45,529 $ 42,329 Interest expense, net 30,337 31,879 Income tax expense 667 86 Depreciation and amortization 40,692 41,303 Loss (gain) on sale of real estate 3,612 (347) Impairment of real estate investments, net (1) 2,694 21,030 Allocated share of joint venture depreciation 2,344 1,833 Allocated share of joint venture interest expense 1,879 2,215 EBITDAre $ 127,754 $ 140,328 Sale participation income (2) — (9,134) Transaction costs 401 993 Provision (benefit) for credit losses, net 1,285 1,369 Impairment of operating lease right-of-use asset (1) — 1,968 Adjusted EBITDAre $ 129,440 $ 135,524 Adjusted EBITDAre (annualized) (3) $ 517,760 $ 542,096 Net Debt to Adjusted EBITDAre Ratio 5.3 5.0 (1) Impairment charges recognized during the three months ended December 31, 2022 totaled $23.0 million, which was comprised of $21.0 million of impairments of real estate investments and a $2.0 million impairment of an operating lease right-of-use asset.
Biggest changeOur 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, 2024 2023 Net Debt: Debt $ 2,860,458 $ 2,816,095 Deferred financing costs, net 19,134 25,134 Cash and cash equivalents (22,062) (78,079) Net Debt $ 2,857,530 $ 2,763,150 Gross Assets: Total Assets $ 5,616,507 $ 5,700,885 Accumulated depreciation 1,562,645 1,435,683 Cash and cash equivalents (22,062) (78,079) Gross Assets $ 7,157,090 $ 7,058,489 Debt to Total Assets Ratio 51 % 49 % Net Debt to Gross Assets Ratio 40 % 39 % Three Months Ended December 31, 2024 2023 EBITDAre and Adjusted EBITDAre: Net (loss) income $ (8,395) $ 45,529 Interest expense, net 33,472 30,337 Income tax expense 653 667 Depreciation and amortization 40,995 40,692 (Gain) loss on sale of real estate (112) 3,612 Impairment of real estate investments 39,952 2,694 Allocated share of joint venture depreciation 1,965 2,344 Allocated share of joint venture interest expense 589 1,879 Impairment charges on joint ventures 16,087 — EBITDAre $ 125,206 $ 127,754 Transaction costs 423 401 Provision (benefit) for credit losses, net 9,876 1,285 Adjusted EBITDAre $ 135,505 $ 129,440 Adjusted EBITDAre (annualized) (1) $ 542,020 $ 517,760 Net Debt to Adjusted EBITDAre Ratio 5.3 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).
If an impairment is indicated, we will record a loss for the amount by which the carrying value of the asset exceeds its estimated fair value. 43 The assumptions used to derive the estimated future cash flows for the undiscounted cash flow test are based on capitalization rates, anticipated future market rent and our anticipated hold period, which are all subjective.
If an impairment is indicated, we will 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 based on capitalization rates, anticipated future market rent and our anticipated hold period, which are all subjective.
FFO, FFOAA and AFFO are widely used measures o f the operating performance of real estate companies and are provided here as supplemental measures to GAAP net income ava ilable 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 widely used measures o f the operating performance of real estate companies and are provided here as supplemental measures to GAAP net income ava ilable to common shareholders and earnings per share, and management provides FFO, FFOAA and AFFO herein because it believes this information is useful to 50 investors in this regard.
FFOAA is presented by adding to FFO 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.
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.
Our principal investing activities are acquiring, developing and financing Exp eriential properties. These investing activities have generally been financed with senior unsecured notes and the proceeds from equity offerings. Our 49 unsecured revolving credit facility and cash from operations are also used to finance the acquisition or development of properties, and to provide mortgage financing.
Our principal investing activities are acquiring, developing and financing Exp eriential 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 define Adjusted EBITDAre as EBITDAre (defined above) for the quarter excluding sale participation income, gain on insurance recovery, severance expense, transaction costs, provision (benefit) for credit losses, net, impairment losses on operating lease right-of-use assets and prepayment fees.
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.
However, there can be no assurance that additional financing or capital will be available, or that terms will be acceptable or advantageous to us, particularly in light of the impact of the challenging economic environment and our elevated cost of capital.
However, there can be no assurance that additional financing or capital will be available, or that terms will be 49 acceptable or advantageous to us, particularly in light of the impact of the challenging economic environment and our elevated cost of capital.
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, 2023 and 2022.
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, 2024, 2023 and 2022.
If economic conditions or the tenant's financial condition or results decline, the anticipated collection of outstanding lease receivables may not be probable and could result in the suspension of revenue recognition and the write off of the lease receivable.
If economic conditions or the 41 tenant's financial condition or results decline, the anticipated collection of outstanding lease receivables may not be probable and could result in the suspension of revenue recognition and the write-off of the lease receivable.
In the event we have a past due mortgage note or note receivable 44 and we determine it is collateral dependent, we measure expected credit losses based on the fair value of the collateral.
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.
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 2023 compared to fiscal year 2022 is presented below.
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 2024 compared to fiscal year 2023 is presented below.
We regularly evaluate the collectibility 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 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.
Collectibility of Lease Receivables Our accounts receivable balance is comprised primarily of rents and operating cost recoveries due from tenants as well as accrued rental rate increases to be received over the life of the existing leases. We regularly evaluate the collectibility of our receivables on a lease-by-lease basis.
Collectability of Lease Receivables Our accounts receivable balance is comprised primarily of rents and operating cost recoveries due from tenants as well as accrued 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.
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 for cash and cash equivalents.
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. 52 Gross Assets Gross Assets represents total assets (reported in accordance with GAAP) adjusted to exclude accumulated depreciation and reduced by cash and cash equivalents.
If we borrow the maximum amount available under our 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.
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.
At December 31, 2023, we had outstanding $2.5 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%.
At December 31, 2024, we had outstanding $2.5 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%.
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), and the non-cash portion of mortgage and other financing income.
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.
We suspend revenue recognition when the collectibility of amounts due are no longer probable and record a direct write-off of the receivable to revenue. 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.
We suspend revenue recognition when the collectability of amounts due is deemed no longer probable and record a direct write-off of the receivable to revenue. 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.
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 the debt instrument . We were in compliance with all financial and other covenants under our debt instruments at December 31, 2023.
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 the debt instrument. We were in compliance with all financial and other covenants under our consolidated debt instruments at December 31, 2024.
For further detail on items impacting our operating results, see section below titled "Results of Operations". FFOAA is a non-GAAP financial measure.
For further details on items impacting our operating results, see section below titled "Results of Operations". FFOAA is a non-GAAP financial measure.
Collectibility of Mortgage and Notes Receivables Our mortgage and notes receivables consist of loans originated by us and the related accrued and unpaid interest income.
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.
A discussion regarding our financial condition and results of operations for fiscal year 2022 compared to fiscal year 2021 is incorporated herein by reference and can be found under Item 7 of Part II of ou r Annual Report on Form 10-K for the fiscal year ended December 31, 2022, filed with the SEC on February 23, 2023.
A discussion regarding our financial condition and results of operations for fiscal year 2023 compared to fiscal year 2022 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, 2023, filed with the SEC on February 29, 2024.
Our business is subject to a number of risks and uncertainties, including those described in Item 1A - “Risk Factors” of this report. 39 As of December 31, 2023, our total assets were app roximately $5.7 billion (after accumulated depreciation of approximately $1.4 billion) with properties located in 44 states and the provinces of Ontario and Quebec, Canada.
Our business is subject to a number of risks and uncertainties, including those described in Item 1A - “Risk Factors” of this report. 38 As of December 31, 2024, our total assets were app roximately $5.6 billion (after accumulated depreciation of approximately $1.6 billion) with properties located in 44 states and the provinces of Ontario and Quebec, Canada.
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, stock repurchases and dividend distributions and require us to maintain a minimum consolidated tangible net worth and meet certain coverage levels for fixed charges and debt service.
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, stock repurchases and dividend distributions and require us to meet certain coverage levels for fixed charges and debt service.
Although we intend to continue making future investments, we expect our levels of investment spending to be reduced in the near-term due to elevated costs of capital, and near-term investments will be funded primarily from cash on hand, excess cash flow, disposition proceeds and borrowing availability under our unsecured revolving credit facility, subject to maintaining our leverage levels consistent with past practice.
Although we intend to continue making future investments, we expect to maintain our investment spending at moderate levels in the near-term due 39 to an elevated cost of capital, and near-term investments will be funded primarily from cash on hand, excess cash flow, disposition proceeds and borrowing availability under our unsecured revolving credit facility, subject to maintaining our leverage levels consistent with past practice.
Mortgage Debt, Senior Notes, Unsecured Revolving Credit Facility and Unsecured Term Loan Facility As of December 31, 2023 , we had total debt outstanding of $2.8 billion of which 99% was unsecured.
Mortgage Debt, Senior Notes, Unsecured Revolving Credit Facility and Unsecured Term Loan Facility As of December 31, 2024 , we had total debt outstanding of $2.9 billion of which 99% was unsecured.
More recently, and as further discussed below, the challenging economic environment and a theatre tenant's bankruptcy have increased our cost of capital, which has negatively impacted our ability to make investments in the near-term.
More recently, and as further discussed below, the challenging economic environment has increased our cost of capital, which has negatively impacted our ability to make investments in the near-term.
(7) The loss on sale of real estate for the year ended December 31, 2023 related to the sale of three vacant theatres properties, two operating theatre properties, one vacant eat & play property, four vacant early childhood education centers and one land parcel.
The loss on sale of real estate for the year ended December 31, 2023 related to the sale of three vacant theatre properties, two leased theatre properties, one vacant eat & play property, four vacant early childhood education centers and three land parcels.
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, 2023, we had 15 development projects with commitments to fund an aggregate of approximately $171.3 million, of which approximately $81.0 million is expected to be funded in 2024.
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, 2024, we had 15 development projects with commitments to fund an aggregate of approximately $164.4 million, of which approximately $113.2 million is expected to be funded in 2025.
As of December 31, 2023, our Experiential investments comprised $6.3 billion, or 93%, and our Education investments comprised $0.5 billion, or 7%, of our total investments.
As of December 31, 2024, our Experiential investments comprised $6.4 billion, or 93%, and our Education investments comprised $0.5 billion, or 7%, of our total investments.
As of December 31, 2023 , our Education segment consisted of the following property types (owned or financed): • 61 early childhood education center properties; and • nine private school properties.
As of December 31, 2024 , our Education portfolio consisted of the following property types (owned or financed): • 59 early childhood education center properties; and • nine private school properties.
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).
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).
In addition, we had restricted cash of $2.9 million at December 31, 2023, which related primarily to escrow deposits required for property management and debt agreements or held for potential acquisitions and redevelopments.
In addition, we had restricted cash of $13.6 million at December 31, 2024, which related primarily to escrow deposits required for property management, mortgage note and debt agreements or held for potential acquisitions, developments and redevelopments.
Other assets include the following: December 31, 2023 December 31, 2022 Intangible assets, gross $ 65,299 $ 60,109 Less: accumulated amortization on intangible assets (30,589) (23,487) Notes receivable and related accrued interest receivable, net 3,879 2,872 Prepaid expenses and other current assets 22,718 33,559 Total other assets $ 61,307 $ 73,053 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.
Other assets include the following: December 31, 2024 December 31, 2023 Intangible assets, gross $ 64,317 $ 65,299 Less: accumulated amortization on intangible assets (31,876) (30,589) Notes receivable and related accrued interest receivable, net 3,346 3,879 Prepaid expenses and other current assets 39,464 22,718 Total other assets $ 75,251 $ 61,307 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.
The unsecured revolving credit facility bears interest at a floating rate of SOFR plus 1.30% (based on our unsecured debt ratings and with a SOFR floor of zero), which was 6.66% at December 31, 2023. Additionally, the facility fee on the revolving credit facility is 0.25%.
The unsecured revolving credit facility bears interest at a floating rate of the Secured Overnight Funds Rate (SOFR) plus 1.15% (based on our unsecured debt ratings and with a SOFR floor of zero), which was 5.46% at December 31, 2024. Additionally, the facility fee on the revolving credit facility is 0.25%.
Long-term liquidity requirements consist primarily of debt maturities. We have $136.6 million in scheduled debt payments due in 2024. 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.
Long-term liquidity requirements consist primarily of debt maturities. We have $300.0 million of consolidated debt maturities due April 1, 2025. 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.
The facility will mature on October 6, 2025. We have two options to extend the maturity date of the facility by an additional six months each (for a total of 12 months), subject to paying additional fees and the absence of any default.
We have two options to extend the maturity date of the new credit facility by an additional six months each (i.e., for a total of 12 months), subject to paying additional fees and the absence of any default.
The table below summarizes our cash flows (dollars in thousands): Year Ended December 31, 2023 2022 Net cash provided by operating activities $ 447,094 $ 441,716 Net cash used by investing activities (201,048) (351,585) Net cash used by financing activities (275,695) (269,392) Liquidity and material cash requirements at December 31, 2023 consisted primarily of maturities of debt.
The table below summarizes our cash flows (dollars in thousands): Year Ended December 31, 2024 2023 Net cash provided by operating activities $ 393,137 $ 447,094 Net cash used by investing activities (176,352) (201,048) Net cash used by financing activities (261,619) (275,695) 48 Liquidity and material cash requirements at December 31, 2024 consisted primarily of maturities of debt.
During the year ended December 31, 2023, we renewed one lease agreement on approximately 62 thousand square feet, experienced a decrease of approximately 11.5% in rental rates and paid no leasing commissions with respect to this lease renewal.
During the year ended December 31, 2024, we renewed 11 lease agreements on approximately 295 thousand square feet and experienced a decrease of approximately 0.5% in rental rates and paid no leasing commissions with respect to these lease renewals.
The following table reconciles net income available to common shareholders, the most directly comparable GAAP measure, to FFO, FFOAA and AFFO including per share amounts for FFO and FFOAA, for the years ended December 31, 2023, 2022 and 2021 (unaudited, in thousands, except per share information): 52 Year ended December 31, 2023 2022 2021 FFO: Net income available to common shareholders of EPR Properties $ 148,901 $ 152,088 $ 74,472 Loss (gain) on sale of real estate 2,197 (651) (17,881) Impairment of real estate investments, net (1) 67,366 25,381 2,711 Real estate depreciation and amortization 167,219 162,821 162,951 Allocated share of joint venture depreciation 8,876 7,409 3,340 Impairment charges on joint ventures (1) — 647 — FFO available to common shareholders of EPR Properties $ 394,559 $ 347,695 $ 225,593 FFO available to common shareholders of EPR Properties $ 394,559 $ 347,695 $ 225,593 Add: Preferred dividends for Series C preferred shares 7,752 7,752 — Add: Preferred dividends for Series E preferred shares 7,752 7,756 — Diluted FFO available to common shareholders of EPR Properties $ 410,063 $ 363,203 $ 225,593 FFOAA: FFO available to common shareholders of EPR Properties $ 394,559 $ 347,695 $ 225,593 Severance expense 547 — — Transaction costs 1,554 4,533 3,402 Provision (benefit) for credit losses, net 878 10,816 (21,972) Costs associated with loan refinancing or payoff — — 25,451 Impairment of operating lease right-of-use assets (1) — 1,968 — Sale participation income (included in other income) — (9,134) — Gain on insurance recovery (included in other income) — (552) (1,181) Deferred income tax benefit (344) (169) — FFOAA available to common shareholders of EPR Properties $ 397,194 $ 355,157 $ 231,293 FFOAA available to common shareholders of EPR Properties $ 397,194 $ 355,157 $ 231,293 Add: Preferred dividends for Series C preferred shares 7,752 7,752 — Add: Preferred dividends for Series E preferred shares 7,752 7,756 — Diluted FFOAA available to common shareholders of EPR Properties $ 412,698 $ 370,665 $ 231,293 AFFO: FFOAA available to common shareholders of EPR Properties $ 397,194 $ 355,157 $ 231,293 Non-real estate depreciation and amortization 814 831 819 Deferred financing fees amortization 8,637 8,360 7,666 Share-based compensation expense to management and trustees 17,512 16,666 14,903 Amortization of above/below-market leases, net and tenant allowances (535) (355) (385) Maintenance capital expenditures (2) (12,399) (4,545) (4,631) Straight-lined rental revenue (10,591) (6,993) (5,664) Straight-lined ground sublease expense 1,099 1,692 382 Non-cash portion of mortgage and other financing income (1,088) (473) (446) AFFO available to common shareholders of EPR Properties $ 400,643 $ 370,340 $ 243,937 FFO per common share: Basic $ 5.24 $ 4.64 $ 3.02 Diluted 5.15 4.60 3.02 FFOAA per common share: Basic $ 5.28 $ 4.74 $ 3.09 Diluted 5.18 4.69 3.09 53 Year ended December 31, 2023 2022 2021 Shares used for computation (in thousands): Basic 75,260 74,967 74,755 Diluted 75,715 75,043 74,756 Weighted average shares outstanding-diluted EPS 75,715 75,043 74,756 Effect of dilutive Series C preferred shares 2,283 2,250 — Effect of dilutive Series E preferred shares 1,663 1,664 — Adjusted weighted average shares outstanding - diluted Series C and Series E 79,661 78,957 74,756 Other financial information: Dividends per common share $ 3.300 $ 3.250 $ 1.500 (1) Impairment charges recognized totaled $28.0 million for the year ended December 31, 2022, and was comprised of $25.4 million of impairments of real estate investments, $2.0 million of impairments of operating lease right-of-use assets and $0.6 million of impairments on joint ventures.
The following table summarizes our FFO, FFOAA and AFFO including per share amounts for FFO and FFOAA, for the years ended December 31, 2024, 2023 and 2022 and reconciles such measures to net income available to common shareholders, the most directly comparable GAAP measure (unaudited, in thousands, except per share information): Year ended December 31, 2024 2023 2022 FFO: Net income available to common shareholders of EPR Properties $ 121,922 $ 148,901 $ 152,088 (Gain) loss on sale of real estate (16,101) 2,197 (651) Impairment of real estate investments 51,764 67,366 25,381 Real estate depreciation and amortization 165,029 167,219 162,821 Allocated share of joint venture depreciation 9,419 8,876 7,409 Impairment charges on joint ventures 28,217 — 647 FFO available to common shareholders of EPR Properties $ 360,250 $ 394,559 $ 347,695 FFO available to common shareholders of EPR Properties $ 360,250 $ 394,559 $ 347,695 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 7,756 Diluted FFO available to common shareholders of EPR Properties $ 375,754 $ 410,063 $ 363,203 FFOAA: FFO available to common shareholders of EPR Properties $ 360,250 $ 394,559 $ 347,695 Retirement and severance expense 1,836 547 — Transaction costs 798 1,554 4,533 Provision (benefit) for credit losses, net 12,247 878 10,816 Costs associated with loan refinancing or payoff 337 — — Impairment of operating lease right-of-use assets — — 1,968 Sale participation income (included in other income) — — (9,134) Gain on insurance recovery (included in other income) — — (552) Deferred income tax benefit (1,539) (344) (169) FFOAA available to common shareholders of EPR Properties $ 373,929 $ 397,194 $ 355,157 FFOAA available to common shareholders of EPR Properties $ 373,929 $ 397,194 $ 355,157 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 7,756 Diluted FFOAA available to common shareholders of EPR Properties $ 389,433 $ 412,698 $ 370,665 51 Year ended December 31, 2024 2023 2022 AFFO: FFOAA available to common shareholders of EPR Properties $ 373,929 $ 397,194 $ 355,157 Non-real estate depreciation and amortization 704 814 831 Deferred financing fees amortization 8,844 8,637 8,360 Share-based compensation expense to management and trustees 14,066 17,512 16,666 Amortization of above/below-market leases, net and tenant allowances (333) (535) (355) Maintenance capital expenditures (1) (7,299) (12,399) (4,545) Straight-lined rental revenue (17,327) (10,591) (6,993) Straight-lined ground sublease expense 97 1,099 1,692 Non-cash portion of mortgage and other financing income (1,984) (1,088) (473) Allocated share of joint venture non-cash items 712 — — AFFO available to common shareholders of EPR Properties $ 371,409 $ 400,643 $ 370,340 FFO per common share: Basic $ 4.76 $ 5.24 $ 4.64 Diluted 4.70 5.15 4.60 FFOAA per common share: Basic $ 4.94 $ 5.28 $ 4.74 Diluted 4.87 5.18 4.69 Shares used for computation (in thousands): Basic 75,636 75,260 74,967 Diluted 75,999 75,715 75,043 Weighted average shares outstanding-diluted EPS 75,999 75,715 75,043 Effect of dilutive Series C preferred shares 2,314 2,283 2,250 Effect of dilutive Series E preferred shares 1,664 1,663 1,664 Adjusted weighted average shares outstanding - diluted Series C and Series E 79,977 79,661 78,957 Other financial information: Dividends per common share $ 3.400 $ 3.300 $ 3.250 (1) Includes maintenance capital expenditures and certain second-generation tenant improvements and leasing commissions.
Our total investments (a non-GAAP financial measure) were approximate ly $6.8 billion at December 31, 2023. See "Non-GAAP Financial Measures" for the reconcil iation of "Total assets" in the consolidated balance sheet to total investments and the calculation of total investments at December 31, 2023 and 2022. We group our investments into two reportable segments, Experient ial and Education.
Our total investments (a non-GAAP financial measure) were approximately $6.9 billion as of December 31, 2024. 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, 2024 and 2023. We group our investments into two reportable segments, Experiential and Education.
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.
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.
(4) The change in provision (benefit) for credit losses, net for the year ended December 31, 2023 compared to the year ended December 31, 2022 was due primarily to credit loss expense of $6.8 million related to one mortgage note receivable and $3.1 million related to two notes receivable recorded during the year ended December 31, 2022.
(3) The change in provision (benefit) for credit losses, net for the year ended December 31, 2024 compared to the year ended December 31, 2023 was due primarily to credit loss expense of $10.3 million related to one mortgage note receivable recognized during the year ended December 31, 2024.
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). 51 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.
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.
As of December 31, 2023, our owned Education real estate portfolio consisted of approximately 1.3 million square feet, which includes 39 thousand square feet of properties we intend to sell. The Education portfolio, excluding the properties we intend to sell, was 100% leased.
As of December 31, 2024, our wholly-owned Education real estate portfolio consisted of approximately 1.2 million square feet, which includes 13 thousand square feet for a vacant property we intend to sell. The wholly-owned Education portfolio, excluding the vacant property we intend to sell, was 100% leased.
(3) The increase in straight-line rent for the year ended December 31, 2023 compared to the year ended December 31, 2022 was due primarily to recording straight-line rent receivables for Regal in connection with reestablishing accrual basis accounting on August 1, 2023.
(3) The increase in straight-line rent for the year ended December 31, 2024 compared to the year ended December 31, 2023 was due primarily to property acquisitions and developments completed in 2024 and 2023 and straight-line rent receivable for Regal recognized during the year ended December 31, 2024 in connection with reestablishing accrual basis accounting for Regal on August 1, 2023.
(2) 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 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 facility provides for an initial maximum principal amount of borrowing availability of $1.0 billion with 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 new 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 new credit facility matures on October 2, 2028.
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 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 pre-determined rates upon completion of construction.
During the years ended December 31, 2023 and 2022, we collected $36.4 million and $17.7 million, respectively, in deferred rent and interest from cash basis customers and from customers for which the deferred payments were not previously recognized as revenue.
We collected all deferred receivables from accrual basis tenants that were deferred due to the COVID-19 pandemic. During the years ended December 31, 2024 and 2023 , we collected $0.6 million and $36.4 million, respectively, in deferred rent and interest from cash basis customers and from customers for which the deferred payments were not previously recognized as revenue.
(5) Impairment charges recognized during the year ended December 31, 2023 related to eight Regal Surrendered Properties, two other theatre properties and two early childhood education center properties. Impairment charges recognized during the year ended December 31, 2022 related to five early education center properties and two theatre properties.
Impairment charges recognized during the year ended December 31, 2023 related to eight theatre properties surrendered by Regal in connection with their bankruptcy resolution, two leased theatre properties and two early childhood education center properties.
A reconciliation of total assets (computed in accordance with GAAP) to total investments is included in the following table (unaudited, in thousands): December 31, 2023 December 31, 2022 Total assets $ 5,700,885 $ 5,758,701 Operating lease right-of-use assets (186,628) (200,985) Cash and cash equivalents (78,079) (107,934) Restricted cash (2,902) (2,577) Accounts receivable (63,655) (53,587) Add: accumulated depreciation on real estate investments 1,435,683 1,302,640 Add: accumulated amortization on intangible assets (1) 30,589 23,487 Prepaid expenses and other current assets (1) (22,718) (33,559) Total investments $ 6,813,175 $ 6,686,186 Total Investments: Real estate investments, net of accumulated depreciation $ 4,537,359 $ 4,714,136 Add back accumulated depreciation on real estate investments 1,435,683 1,302,640 Land held for development 20,168 20,168 Property under development 131,265 76,029 Mortgage notes and related accrued interest receivable 569,768 457,268 Investment in joint ventures 49,754 52,964 Intangible assets, gross (1) 65,299 60,109 Notes receivable and related accrued interest receivable, net (1) 3,879 2,872 Total investments $ 6,813,175 $ 6,686,186 (1) Included in "Other assets" in the accompanying consolidated balance sheets.
A reconciliation of total assets (computed in accordance with GAAP) to total investments is included in the following table (unaudited, in thousands): December 31, 2024 December 31, 2023 Total assets $ 5,616,507 $ 5,700,885 Operating lease right-of-use assets (173,364) (186,628) Cash and cash equivalents (22,062) (78,079) Restricted cash (13,637) (2,902) Accounts receivable (84,589) (63,655) Add: accumulated depreciation on real estate investments 1,562,645 1,435,683 Add: accumulated amortization on intangible assets (1) 31,876 30,589 Prepaid expenses and other current assets (1) (39,464) (22,718) Total investments $ 6,877,912 $ 6,813,175 Total Investments: Real estate investments, net of accumulated depreciation $ 4,435,358 $ 4,537,359 Add back accumulated depreciation on real estate investments 1,562,645 1,435,683 Land held for development 20,168 20,168 Property under development 112,263 131,265 Mortgage notes and related accrued interest receivable 665,796 569,768 Investment in joint ventures 14,019 49,754 Intangible assets, gross (1) 64,317 65,299 Notes receivable and related accrued interest receivable, net (1) 3,346 3,879 Total investments $ 6,877,912 $ 6,813,175 (1) Included in "Other assets" in the accompanying consolidated balance sheets.
The fair value may be impacted based on economic factors, an estimate of future operating cash flows of the collateral and capitalization rates, that 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.
The fair value may be impacted based on economic factors, an estimate of future operating cash flows of the collateral and capitalization rates, that are subjective and can be impacted by a lack of comparable transactions.
As of December 31, 2023, our Experiential segment consisted of the following property types (owned or financed): • 166 theatre properties; • 58 eat & play properties (including seven theatres located in entertainment districts); • 23 attraction properties; • 11 ski properties; • seven experiential lodging properties; • 20 fitness & wellness properties; • one gaming property; and • three cultural properties.
As of December 31, 2024, our Experiential portfolio (excluding property under development, undeveloped land inventory and the three joint venture properties noted below) consisted of the following property types (owned or financed): • 157 theatre properties; • 58 eat & play properties (including seven theatres located in entertainment districts); • 24 attraction properties; • 11 ski properties; • four experiential lodging properties; • 22 fitness & wellness properties; • one gaming property; and • one cultural property.
At December 31, 2023 , we had outstanding $316.2 million of senior unsecured notes that were issued in a private placement transaction. The private placement notes were issued in two tranches with $136.6 million due August 22, 2024, and $179.6 million due August 22, 2026.
At December 31, 2024, 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, 2024, the interest rate for these Series B private placement notes was 4.56%.
As of December 31, 2023, rental revenue from two of our tenants, who are also sub-tenants under the ground leases, are being recognized on a cash basis. In most cases, the ground lease sub-tenants have continued to pay the rent under these ground leases, however, one of these properties does not currently have a sub-tenant.
As of December 31, 2024, rental revenue from one of our tenants, who is also a sub-tenant under certain ground leases, is being recognized on a cash basis. In addition, two of our ground leases do not currently have sub-tenants.
(2) The increase in general and administrative expense for the year ended December 31, 2023 compared to the year ended December 31, 2022 related primarily to an increase in payroll and benefit costs and an increase in professional fees, including those related to the comprehensive restructuring agreement with Regal.
(2) The decrease in general and administrative expense for the year ended December 31, 2024 compared to the year ended December 31, 2023 related primarily to a decrease in payroll and benefit costs, a decrease in franchise taxes due to a state legislative change that went into effect during the second quarter of 2024 and a decrease in professional fees, including those related to the comprehensive restructuring agreement with Regal in 2023.
The most significant assumptions and estimates relate to the valuation of real estate, accounting for real estate acquisitions, assessing the collectibility 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.
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.
As a result, we intend to continue to be more selective in making future investments and acquisitions until such time as economic conditions improve and our cost of capital improves. 42 Operating Results Our total revenue, net income available to common shareholders per diluted share and FFOAA per diluted share (a non-GAAP financial measure) are detailed below for the years ended December 31, 2023 and 2022 (dollars in millions, except per share information): Year ended December 31, 2023 2022 Change Total revenue $ 705.7 $ 658.0 7 % Net income available to common shareholders per diluted share 1.97 2.03 (3) % FFOAA per diluted share 5.18 4.69 10 % The major factors impacting our results for the year ended December 31, 2023 , as compared to the year ended December 31, 2022 were as follows: • The increase in rental revenue due to an increase in contractual and deferred rental payments from cash basis tenants; • The effect of property acquisitions and dispositions that occurred in 2023 and 2022; • The decrease in other income of $9.1 million due to sale participation income received during the year ended December 31, 2022 and offsetting increases in other income and other expense related to operating properties; • The decrease in interest expense due to an increase in capitalized interest and interest income on short-term investments; and • The increase in general and administrative expense, impairment charges, loss on sale of real estate and loss from joint ventures offset by a decrease in transaction costs and provision (benefit) for credit losses, net.
Operating Results Our total revenue, net income available to common shareholders per diluted share and Funds From Operations As Adjusted ("FFOAA") per diluted share (a non-GAAP financial measure) are detailed below for the years ended December 31, 2024 and 2023 (dollars in millions, except per share information): Year ended December 31, 2024 2023 Change Total revenue $ 698.1 $ 705.7 (1) % Net income available to common shareholders per diluted share 1.60 1.97 (19) % FFOAA per diluted share 4.87 5.18 (6) % The major factors impacting our results for the year ended December 31, 2024 , as compared to the year ended December 31, 2023 were as follows: • The decrease in rental revenue due to a comprehensive restructuring agreement with Regal and higher deferred rental payments from cash basis tenants received in 2023; • The effect of property acquisitions and dispositions that occurred in 2024 and 2023; • The increase in other income and other expense related to operating additional properties; • The decrease in impairment charges and general and administrative expense; • The increase in equity in loss from joint ventures, impairment charges on joint ventures and provision for credit losses; and • The recognition of higher net gain on sale of real estate in 2024 versus the recognition of net loss on sale of real estate in 2023.
If commitments are funded in the future, interest will be charged at rates consistent with the existing investments. In connection with construction of our development projects and related infrastructure, certain public agencies require posting of surety bonds to guarantee that our obligations will be satisfied. These bonds expire upon the completion of the improvements or infrastructure.
In connection with construction of our development projects and related infrastructure, certain public agencies require posting of surety bonds to guarantee that our obligations will be satisfied. These bonds expire upon the completion of the improvements or infrastructure. As of December 31, 2024, we had three surety bonds outstanding totaling $0.6 million.
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 borrowings under our unsecured revolving credit facility as well as debt and equity financing alternatives or proceeds from asset dispositions.
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.
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.
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.
Interest payments on our unsecured senior notes are due semiannually. At December 31, 2023 , we had no outstanding balance under our $1.0 billion unsecured revolving credit facility. Our unsecured revolving credit facility is governed by the terms of a Third Amended, Restated and Consolidated Credit Agreement, dated as of October 6, 2021 (the "Third Consolidated Credit Agreement").
Interest payments on our unsecured senior notes are due semiannually. At December 31, 2024, we had a $175.0 million outstanding balance under our $1.0 billion unsecured revolving credit facility.
Our method of calculating 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. 54 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.
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.
(2) The increase in percentage rent (amounts above base rent) for the year ended December 31, 2023 compared to the year ended December 31, 2022 was due primarily to higher percentage rent recognized from one ski property tenant, one cultural property tenant and one attraction property tenant.
(2) The increase in percentage rent (i.e., amounts above base rent) for the year ended December 31, 2024 compared to the year ended December 31, 2023 was due primarily to higher percentage rent recognized from two of our theatre tenants and was offset by lower percentage rent recognized in 2024 related to two cultural properties that were sold early in the year.
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 estimates of impairment may have a direct impact on our consolidated financial statements.
Applying these assumptions requires exercising judgment as to future uncertainties and, as a result, actual results could differ from these estimates. 40 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.
As a result, we intend to continue to be more selective in making investments, acquisitions, utilizing cash on hand, excess cash flow and borrowings under our line of credit until such time as economic conditions improve and our cost of capital returns to acceptable levels. Capital Structure We believe that our shareholders are best served by a conservative capital structure.
As a result, we intend to continue to be more selective in making future investments and acquisitions until such time as economic conditions improve and our cost of capital improves.
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 2023 2022 Property operating expense $ 57,478 $ 55,985 $ 1,493 Other expense (1) 44,774 33,809 10,965 General and administrative expense (2) 56,442 51,579 4,863 Severance expense 547 — 547 Transaction costs (3) 1,554 4,533 (2,979) Provision (benefit) for credit losses, net (4) 878 10,816 (9,938) Impairment charges (5) 67,366 27,349 40,017 Depreciation and amortization (6) 168,033 163,652 4,381 (Loss) gain on sale of real estate (7) (2,197) 651 (2,848) Interest expense, net (8) 124,858 131,175 (6,317) Equity in loss from joint ventures (9) 6,768 1,672 5,096 Impairment charges on joint ventures — 647 (647) Income tax expense 1,727 1,236 491 Preferred dividend requirements 24,145 24,141 4 (1) The increase in other expense for the year ended December 31, 2023 related primarily to an increase in operating expense from two theatre properties and the Kartrite resort compared to the year ended December 31, 2022 and the addition of five new operating theatre properties.
(5) The increase in mortgage and other financing income during the year ended December 31, 2024 compared to the year ended December 31, 2023 related to interest income on new mortgage notes funded in 2024 and 2023 and from additional investments on existing mortgage note receivables. 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 2024 2023 Property operating expense $ 59,146 $ 57,478 $ 1,668 Other expense (1) 56,877 44,774 12,103 General and administrative expense (2) 50,096 56,442 (6,346) Retirement and severance expense 1,836 547 1,289 Transaction costs 798 1,554 (756) Provision (benefit) for credit losses, net (3) 12,247 878 11,369 Impairment charges (4) 51,764 67,366 (15,602) Depreciation and amortization 165,733 168,033 (2,300) Gain (loss) on sale of real estate (5) 16,101 (2,197) 18,298 Costs associated with loan refinancing or payoff 337 — 337 Interest expense, net (6) 130,810 124,858 5,952 Equity in loss from joint ventures (7) 8,809 6,768 2,041 Impairment charges on joint ventures (8) 28,217 — 28,217 Income tax expense 1,433 1,727 (294) Preferred dividend requirements 24,144 24,145 (1) (1) The increase in other expense for the year ended December 31, 2024 compared to the year ended December 31, 2023 related primarily to the addition of operating expense from five theatre properties that were previously leased by Regal.
We have agreed to lease the properties to the operators at pre-determined rates upon completion of construction. 50 We have certain commitments related to our mortgage notes and notes receivable investments that we may be required to fund in the future.
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.
T he challenging economic environment has increased our cost of capital, which has negatively impacted our ability to make investments in the near-term.
The challenging economic environment has increased our cost of capital which has negatively impacted our ability to make investments in the near-term. Accordingly, we intend to continue to be more selective in making future investments and acquisitions until such time as economic conditions improve and our cost of capital improves.
Recent Developments Investment Spending Our investment spending during the years ended December 31, 2023 and 2022 totaled $269.4 million and $402.5 million, respectively, and is detailed below (in thousands): For the Year Ended December 31, 2023 Investment Type Total Investment Spending New Development Re-development Asset Acquisition Mortgage Notes or Notes Receivable Investment in Joint Ventures Experiential: Theatres $ 5,182 $ — $ 5,182 $ — $ — $ — Eat & Play 24,048 20,750 2,192 — 1,106 — Attractions 28,384 — 3,669 — 24,715 — Ski 5,324 — — — 5,324 — Experiential Lodging 16,034 — — — — 16,034 Fitness & Wellness 184,370 45,632 3,286 53,144 82,308 — Cultural 6,086 — 6,086 — — — Total Experiential 269,428 66,382 20,415 53,144 113,453 16,034 Education: Total Education — — — — — — Total Investment Spending $ 269,428 $ 66,382 $ 20,415 $ 53,144 $ 113,453 $ 16,034 45 For the Year Ended December 31, 2022 Investment Type Total Investment Spending New Development Re-development Asset Acquisition Mortgage Notes or Notes Receivable Investment in Joint Ventures Experiential: Theatres $ 622 $ 5 $ 617 $ — $ — $ — Eat & Play 24,747 23,151 1,596 — — — Attractions 145,026 — 2,261 142,765 — — Ski 27,178 — — — 27,178 — Experiential Lodging 77,782 4,354 — — 11,305 62,123 Fitness & Wellness 127,057 44,090 6,358 19,858 56,751 — Cultural 107 — 107 — — — Total Experiential 402,519 71,600 10,939 162,623 95,234 62,123 Education: Total Education — — — — — — Total Investment Spending $ 402,519 $ 71,600 $ 10,939 $ 162,623 $ 95,234 $ 62,123 The above amounts include $3.6 million and $1.3 million in capitalized interest and $0.2 million and $0.7 million in capitalized other general and administrative direct project costs for the years ended December 31, 2023 and 2022, respectively.
Changes in these assumptions could materially impact the estimated value of the collateral and lead to increased provision (benefit) for credit losses, net. 42 Recent Developments Investment Spending Our investment spending during the years ended December 31, 2024 and 2023 totaled $263.9 million and $269.4 million, respectively, and is detailed below (in thousands): 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 For the Year Ended December 31, 2023 Investment Type Total Investment Spending New Development Re-development Asset Acquisition Mortgage Notes or Notes Receivable Investment in Joint Ventures Experiential: Theatres $ 5,182 $ — $ 5,182 $ — $ — $ — Eat & Play 24,048 20,750 2,192 — 1,106 — Attractions 28,384 — 3,669 — 24,715 — Ski 5,324 — — — 5,324 — Experiential Lodging 16,034 — — — — 16,034 Fitness & Wellness 184,370 45,632 3,286 53,144 82,308 — Cultural 6,086 — 6,086 — — — Total Experiential 269,428 66,382 20,415 53,144 113,453 16,034 Education: Total Education — — — — — — Total Investment Spending $ 269,428 $ 66,382 $ 20,415 $ 53,144 $ 113,453 $ 16,034 The above amounts i nclude $3.5 million a nd $3.6 million in capitalized interest for the years ended December 31, 2024 and 2023, respectively, an d $0.2 million in capitalized other general and administrative direct project costs for both the years ended December 31, 2024 and 2023.
As of December 31, 2023 , our ow ned Experiential real estate portfolio consisted of approximately 19.8 million square feet, which includes 0.6 million square feet of properties we intend to sell. The Experiential portfolio, excluding the properties we intend to sell, was 99% leased and included $131.3 million in property under development and $20.2 million in undeveloped land inventory.
Included in the property count are two experiential lodging properties held in unconsolidated joint ventures in which we continue to have interests. As of December 31, 2024 , our wholly-ow ned Experiential real estate portfolio consisted of approximately 18.8 million square feet, which includes 0.3 million square feet of vacant properties we intend to sell.
Excluded from the table above are $12.1 million and $4.3 million of maintenance capital expenditures and other spending for the years ended December 31, 2023 and 2022, respectively.
Excluded from the table above are $7.3 million and $12.4 million of maintenance capital expenditures and other spending for the years ended December 31, 2024 and 2023, respectively. 43 Dispositions During the year ended December 31, 2024, we completed the sales of two leased cultural properties, eight vacant theatre properties, one leased theatre property and two vacant early childhood education centers for net proceeds totaling $74.4 million.
Partially offsetting this decrease was an increase in income from two theatre properties and the Kartrite Resort over the prior year and the addition of five new operating theatre properties, previously leased by Regal, during the year ended December 31, 2023.
(4) The increase in other income for the year ended December 31, 2024 compared to the year ended December 31, 2023 related primarily to an increase in operating income from the addition of five operating theatre properties in the third quarter of 2023 that were previously leased by Regal.
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, 2023, we had five mortgage notes with commitments totaling approximately $104.7 million, of which approximately $59.3 million is expected to be funded in 2024.
As of December 31, 2024, we had three mortgage notes with commitments totaling approximately $49.3 million, of which approximately $2.4 million is expected to be funded in 2025. If commitments are funded in the future, interest will be charged at rates consistent with the existing investments.
Dispositions During the year ended December 31, 2023, we completed the sale of three vacant theatre properties, two operating theatre properties, one vacant eat & play property, four vacant early childhood education centers and a land parcel for net proceeds totaling $57.2 million. In connection with these sales, we recognized a combined loss on sale of $2.2 million.
In connection with these sales, we recognized a net gain on sale totaling $16.1 million. Impairment Charges and Credit Loss During the year ended December 31, 2024, we reassessed the holding period of one vacant theatre property, two theatre properties currently operated through a third-party management agreement and two leased theatre properties.
In addition, there was an increase in minimum rent of $3.4 million related to lease termination fees recognized during the year ended December 31, 2023 and $12.1 million related to property acquisitions and developments completed in 2023 and 2022. This increase was partially offset by a decrease in rental revenue of $0.5 million from property dispositions.
This decrease was partially offset by an increase in rental revenue of $9.4 million rel ated to property acquisitions and developments completed in 2024 and 2023 and an increase in rental revenue on existing properties of $6.0 million.
Contractual obligations as of December 31, 2023 are as follows (in thousands): Year ended December 31, Contractual Obligations 2024 2025 2026 2027 2028 Thereafter Total Long Term Debt Obligations $ 136,637 $ 300,000 $ 629,597 $ 450,000 $ 400,000 $ 924,995 $ 2,841,229 Interest on Long Term Debt Obligations 120,728 106,773 99,595 62,020 39,558 64,882 493,556 Operating Lease Obligation - Corporate Office 958 958 717 — — — 2,633 Operating Ground Lease Obligations (1) 27,341 27,460 25,954 24,614 23,730 212,408 341,507 Total $ 285,664 $ 435,191 $ 755,863 $ 536,634 $ 463,288 $ 1,202,285 $ 3,678,925 (1) Our te nants, who are generally sub-tenants under the ground leases, are responsible for paying the rent under these ground leases.
Contractual obligations as of December 31, 2024 are as follows (in thousands): Year ended December 31, Contractual Obligations 2025 2026 2027 2028 2029 Thereafter Total Long Term Debt Obligations $ 300,000 $ 629,597 $ 450,000 $ 575,000 $ 500,000 $ 424,995 $ 2,879,592 Interest on Long Term Debt Obligations 116,328 109,150 71,575 46,862 26,752 38,130 408,797 Operating Lease Obligation - Corporate Office 958 717 — — — — 1,675 Operating Ground Lease Obligations (1) 27,844 26,401 25,075 24,192 22,635 190,198 316,345 Total $ 445,130 $ 765,865 $ 546,650 $ 646,054 $ 549,387 $ 653,323 $ 3,606,409 (1) Our te nants, who are generally sub-tenants under the ground leases, are responsible for paying the rent under these ground leases.
In conjunction with the transaction, Southern paid its deferred rent receivable of $11.6 million in full, which was recognized as rental revenue during the year ended December 31, 2023. 46 Results of Operations Year ended December 31, 2023 compared to year ended December 31, 2022 Analysis of Revenue The following table summarizes our total revenue (dollars in thousands): Year Ended December 31, Change 2023 2022 Minimum rent (1) $ 570,549 $ 536,957 $ 33,592 Percentage rent (2) 12,192 10,457 1,735 Straight-line rent (3) 10,591 6,993 3,598 Tenant reimbursements 21,285 19,849 1,436 Other rental revenue 1,522 1,345 177 Total Rental Revenue $ 616,139 $ 575,601 $ 40,538 Other income (4) 45,947 47,382 (1,435) Mortgage and other financing income (5) 43,582 35,048 8,534 Total revenue $ 705,668 $ 658,031 $ 47,637 (1) For the year ended December 31, 2023 compared to the year ended December 31, 2022, the increase in minimum rent resulted primarily from an increase of $18.6 million related to rental revenue on existing properties including improved collections of rent being recognized on a cash basis.
See discussion below in Liquidity and Capital Resources and Note 9 to the consolidated financial statements in this Annual Report on Form 10-K for additional information. 44 Results of Operations Year ended December 31, 2024 compared to year ended December 31, 2023 Analysis of Revenue The following table summarizes our total revenue (dollars in thousands): Year Ended December 31, Change 2024 2023 Minimum rent (1) $ 530,664 $ 570,549 $ (39,885) Percentage rent (2) 14,540 12,192 2,348 Straight-line rent (3) 17,327 10,591 6,736 Tenant reimbursements 20,758 21,285 (527) Other rental revenue 1,878 1,522 356 Total Rental Revenue $ 585,167 $ 616,139 $ (30,972) Other income (4) 57,071 45,947 11,124 Mortgage and other financing income (5) 55,830 43,582 12,248 Total revenue $ 698,068 $ 705,668 $ (7,600) (1) For the year ended December 31, 2024 compared to the year ended December 31, 2023, the decrease in minimum rent resulted from a decrease of $11.5 million related to the comprehensive restructuring agreement with Regal entered into on June 27, 2023, a $33.3 million decrease in deferred rental repayments from cash basis tenants, a $6.9 million decrease from property dispositions, a $3.4 million decrease from lease termination fees recognized during the year ended December 31, 2023 and a $0.2 million decrease from vacant properties.
We determined that the estimated cash flows for eight of the Regal Surrendered Properties, two of the other theatre properties and two early childhood education center properties were not sufficient to recover the carrying values and estimated the fair value of the real estate investments of these properties using independent appraisals.
We determined that the sum of the undiscounted cash flows did not exceed the carrying value of the theatre properties and estimated the fair value of the real estate investments of these properties using an independent appraisal and purchase offers. Accordingly, we recognized impairment charges totaling $51.8 million for the year ended December 31, 2024 related to these properties.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

11 edited+0 added−3 removed5 unchanged
Biggest changeThe 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 millions) 2024 2025 2026 2027 2028 Thereafter Total Estimated Fair Value December 31, 2022: Fixed rate debt $136.6 $300.0 $629.6 $450.0 $400.0 $925.0 $2,841.2 $2,606.8 Average interest rate 4.35 % 4.50 % 4.70 % 4.50 % 4.95 % 3.65 % 4.32 % 6.56 % Variable rate debt $ — $ — $ — $ — $ — $ — $ — $ — Average interest rate (as of December 31, 2023) — % — % — % — % — % — % — % — % 2023 2024 2025 2026 2027 Thereafter Total Estimated Fair Value December 31, 2022: Fixed rate debt $ — $136.6 $300.0 $629.6 $450.0 $1,325.0 $2,841.2 $2,413.6 Average interest rate — % 4.35 % 4.50 % 4.70 % 4.50 % 4.04 % 4.32 % 7.88 % Variable rate debt $ — $ — $ — $ — $ — $ — $ — $ — Average interest rate (as of December 31, 2022) — % — % — % — % — % — % — % — % The fair value of our debt as of December 31, 2023 and 2022 is estimated by discounting the future cash flows of each instrument using current market rates and current market spreads.
Biggest changeThe 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 millions) 2025 2026 2027 2028 2029 Thereafter Total Estimated Fair Value December 31, 2024: Fixed rate debt $300.0 $629.6 $450.0 $400.0 $500.0 $425.0 $2,704.6 $2,590.3 Average interest rate 4.50 % 4.70 % 4.50 % 4.95 % 3.75 % 3.54 % 4.32 % 5.50 % Variable rate debt $ — $ — $ — $175.0 $ — $ — $175.0 $175.0 Average interest rate (as of December 31, 2024) — % — % — % 5.46 % — % — % 5.46 % 5.46 % 2024 2025 2026 2027 2028 Thereafter Total Estimated Fair Value December 31, 2023: Fixed rate debt $136.6 $300.0 $629.6 $450.0 $400.0 $925.0 $2,841.2 $2,606.8 Average interest rate 4.35 % 4.50 % 4.70 % 4.50 % 4.95 % 3.65 % 4.32 % 6.56 % Variable rate debt $ — $ — $ — $ — $ — $ — $ — $ — Average interest rate (as of December 31, 2023) — % — % — % — % — % — % — % — % The fair value of our debt as of December 31, 2024 and 2023 is estimated by discounting the future cash flows of each instrument using current market rates and current market spreads.
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 majority of our borrowings are subject to contractual agreements or mortgages, which limit the amount of indebtedness we may incur.
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.
See Note 10 to the consolidated financial statements in this Annual Report on Form 10-K for additional information on our derivative financial instruments and hedging activities. 59
See Note 10 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
For foreign currency derivatives designated as net investment hedges, the change in the fair value of the derivatives are 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.
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.
As of December 31, 2023, we had a $1.0 billion unsecured revolving credit facility with no balance outsta nding. 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 of December 31, 2024, we had a $1.0 billion unsecured revolving credit facility with $175.0 million outsta nding. 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.
On December 13, 2023, we terminated our previous CAD to USD forward contracts in conjunction with entering into the new forward agreements described above. We received $10.0 million in connection with the settlement of the CAD to USD forward contracts.
On December 19, 2024, we terminated our previous CAD to USD forward contracts in conjunction with entering into the new forward agreements described above. We received $10.4 million in connection with the settlement of the CAD to USD forward contracts.
Cash Flow Hedges of Foreign Exchange Risk-Cross Currency Swaps We entered into three USD-CAD cross-currency swaps that became effective July 1, 2022, mature on October 1, 2024, and have a total fixed original notional value of $150.0 million CAD and $118.7 million USD.
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.
We entered into a forward contract that became effective December 13, 2023 with a fixed notional value of $90.0 million CAD and $66.8 million USD with a settlement date of December 1, 2025. The exchange rate of this forward contract is approximately $1.35 CAD per USD.
The exchange rate of these forward contracts is approximately $1.40 CAD per USD. 56 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.
Net Investment Hedges - Foreign Currency Forward Contracts We entered into two forward contracts that became effective December 13, 2023 with a fixed notional value of $200.0 million CAD and $148.3 million USD with a settlement date of October 1, 2025. The exchange rate of these forward contracts is approximately $1.35 CAD per USD.
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 net effect of these swaps provides a fixed exchange rate of $1.30 CAD per USD on approximately $8.1 million of annual CAD denominated cash flows.
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.
The net effect of these 58 swaps provides a fixed exchange rate of $1.28 CAD per USD on approximately $4.5 million of annual CAD denominated cash flows. We entered into three USD-CAD cross-currency swaps that became effective June 1, 2022, mature on December 1, 2024 and have a total fixed notional value of $90.0 million CAD and $69.5 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.
Removed
As of December 31, 2023, we had a 65% investment interest in two unconsolidated real estate joint ventures related to two experiential lodging properties located in St. Petersburg Beach, Florida. At December 31, 2023, the joint 57 ventures had a secured mortgage loan with an outstanding ba lance of $105.0 million.
Removed
Th e mortgage loan bears interest at SOFR plus 3.65%, with monthly interest payments required. The joint venture includes an interest rate cap agreement to limit the variable portion of the interest rate (SOFR) on this note to 3.5% from May 19, 2022 to June 1, 2024.
Removed
The net effect of these swaps provides a fixed exchange rate of $1.26 CAD per USD on approximately $10.8 million annual CAD denominated cash flows. We entered into two USD-CAD cross-currency swaps that became effective May 1, 2022, mature on October 1, 2024 and have a total fixed notional value of $200.0 million CAD and $156.0 million USD.

Other EPR 10-K year-over-year comparisons