EPR - Earnings call transcript Q3 2019

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Operator

Good afternoon, ladies and gentlemen and welcome to the third quarter 2019 EPR Properties earnings conference call. At this time all participants are in listen-only mode. Later we will conduct a question and answer session and instructions will follow at that time. [Operator Instructions] As a reminder, this conference is being recorded.

I would like to turn the conference over to your host, Mr. of President Vice Moriarty, Corporate Communications. Brian may you begin. Sir,

Brian Moriarty

welcome. Thank quarter us joining Hi, XXXX and you, everyone, Thanks today call. for operator. earnings for our third

I'll materially from could condition contemplated of as differ and Private anticipate SEC may vary terms. Securities the that reports of are Act of that results expect, forward-looking filings, such informing forward-looking factors materially statements today hope, company's by or Discussion company's on cause as those intend, statements. Litigation in start forward-looking operations The such continue, by identified financial may to the Form may, words contained statements including the comparable XX-Q. call be, from company's XX-K these include you in these results and defined XXXX, the call will other this actual by believe,

to call directly and in A are in the release supplemental in will evaluating Form contain this today’s SEC to X-K. the measures information Additionally, the under non-GAAP these references believe we are the earnings measures, included useful GAAP measures of to performance. which company’s company’s certain furnished reconciliation comparable most

supplemental If the available along follow wish earnings earnings page today’s all you presentation call company’s are on release, Center to Investor www.eprkc.com. the and of website

the turn company’s President and to I'll call Now, the over CEO, Greg Silvers.

Greg Silvers

review then Zimmerman. financial to a company’s With follow Thank will discuss Greg call with Peterson start in Mark CFO, of greater the call summary. making the quarterly on to and pass you, detail. debut, headlines are the the Greg me CIO, I'll Brian. today and company's with our his our the Mark business then

started. get So, let's

continued quarter assets. experiential first by anchored strong demand Our for headline,

experiential sustain coverages. performance economy the consistent solid on rent portfolio to focus Our and continues

devoted that As evidenced properties box continues our to positive by support third results attraction tenants results office and the quarter to experiential the the properties, are consumer economy. and the

our fuel should tenant of to into demand translate for opportunities future increasing consumer growth. our trend offerings This

Our bond and yield second low spread. headline record

the we and senior in XX-year in completed company's the at the due notes senior yield lowest price issued and of we were size that During spread XXXX. notes in higher redemption and quarter, new the the largest history,

result, a significantly our debt maturity. extended debt average cost our and lowered of we As have

third sheet with balance headline, Our well-positioned capacity. ample

to line continue equity activity, well-positioned quarter addition debt the In million unrestricted for have on raise cash and we of on common nearly we Clearly, our we end during outstanding credit. are to X growth. and of billion at our hand nothing quarter, XXX

with strong Our our space. fourth a headline, consistent the increasing opportunities in and of year, results the forecast of guidance; for year-to-date the robust earnings experiential spending remainder the with and investment pipeline attractive along

our guidance adjusted Mark per spending. increasing guidance are We in provide on FFO his investments as comments. detail well the will as share for as

after Greg to comments it I'll over through rejoin then that, turn you questions. With Mark's and Zimmerman

Greg Zimmerman

At total service X.X were Greg. billion the end with and occupied. nearly Thanks, the investments properties were XX% of third that quarter, XXX our

were investment spending million. million, was our the XXX.X dispositions quarter, from proceeds During and XXX.X

X.XX coverage consistency portfolio. Our times, company strength demonstrating continuing of rent and was the our level

total of billion with and development, properties service X.X XXX investments and approximately comprised operators. portfolio properties entertainment our two quarter-end, At under XX

was occupancy coverage and was Our X.XX times. our XX% rent

of the continues results. box driver be Strong solid movie to product office key

drive expected the year-over-year. quarter close XXXX The anticipated with to up XXXX With quarter, high. the approximately office by box all-time third extend XXXX, to the box exceed X% office fourth to momentum should is which

Skywalker, The opened Rise by to including of strongly record-breaking with quarter Frozen Star Wars, strong Jumanji, followed opening a fourth The Next The and X, film Joker's Level. slate weekend the be

of theaters, and across centers. development centers Our our quarter, entertainment investment the in of projects spending portfolio entertainment and million third XX.X retail primarily entertainment totaled family redevelopment consisting

in properties X.X our total comprised operators. portfolio service quarter-end, billion of XX investments, recreation and approximately At XX

rent X.XX our and times. XXX% approximately was Our occupancy coverage was

August operators portfolio, months visits and solid results through is The our this segment average. period, the delivered of part up trailing the three-year respectively, have revenue season with our XX in X% X% trailing and versus attractions which recreation approximately

spending consisting recreational our included segment new the of entertainment XX.X in complexes and developments XX.X and approximately of the Waterpark million million, which X.X mortgage loans properties, totaled million Hotel, Kartrite recreation Investment golf build-to-suit on for primarily balance of attractions.

in Bridgestone a Convention secured to opposed was loan, arena, hotel by experiential investment Margaritaville structure, the hottest Nashville new as of primary Center. and mortgage SoBro recently Auditorium Ryman the country's Nashville's district, the operating destinations traditional National the walking distance one REIT Hotel The of $XX.X the the heart opened of million within

announced, on the was of facilitated both the Group’s Water purchase pay-off mortgage front, on by On Schlitterbahn This for info payment $XXX.X two disposition we $XXX and real July Fair's Schlitterbahn previously Texas the including note. of business the Xst our CEDAR Parks received million, operating million as estate.

Resorts. Also, fifth operates reflected as and is the supplemental, Vail Resorts in in customer. the California Vail Northstar third on largest the quarter, their Peak acquisition with addition closed of our our Peak now announced six previously of investments, Resort our Resorts Vail

Education service investments, and $X.X properties operators. quarter-end, comprised XXX approximately our XX in At portfolio billion total of

was occupancy times. and was rent Our XX% X.XX our coverage

we Crème the October, end excellent to taking and our of We remaining in primarily schools, continue to of successfully public de developments private of schools centers. the built transition anticipate on CLA of million Crème approximately redevelopments suit and acquisitions XX la four over our make our the CLA to the schools totaled Crème. have consisting quarter. early to education $XX.X of charter they properties transferred progress XX schools Through and fourth education during spending childhood segment Investment

fees included available These of of school. municipal and charter a million termination center schools. fees. to $X.X the charter note the to a by schools, reflect sale a related transactions million time early and one childhood During of proceeds received we of million in the a education the prepayment four disposition mortgage pay-off $XXX of proceeds The $XX.X strength operating market quarter, secured charter

evident to consumer The experiences. continues strong for demand

broad-based opportunities experiential already our of the assets. a to portfolio expand deep of We have pipeline

to in years investing will continue for have asset business growth that toward one primary our XX that non-experiential from class and areas going We been be forever experiential forward. over focus successfully shift of we the properties, and

With Mark to it the over for I of discussion turn financials. that,

Mark Peterson

you, Thank FFO performance prior for begin the financial today the the our discussing adjusted Greg. share was $X.XX a quarter. by per versus for as share I’ll $X.XX in quarter year. a per

fees in mortgage properties. During $XX XXXX, that a the prepayment recognized of key third quarter pay-off to the we secured of note by was million related

amounts FFO include education the my by Note per discuss year. in termination later related exclude our fees, both impact you increased as If which adjusted XX% this that for versus lease periods share of about prior as the adjusted share quarter income, for comments. per I’ll FFO

the primarily you from when the investments Total revenue increased and quarter, was by fees prior the new that I just that increase from $XX about prepayment of by of revenue revenue million dispositions. for driven discussed. year, XX%, exclude This

interest rents and prior the the Percentage year. million totaled quarter $X.X participating for million $X.X versus in

prepayment also school, to of we $X.X in a million million. notes mortgage of we million Xst our notes by Water As receivable charter which quarter, related July the during mortgage previously reported, to of $XXX.X totaling four a and early fee the $XX.X payments received pay-off Schlitterbahn anticipated, related received included Parks as secured the on

to the which revenue included REIT under impacts other lodging Note, Park KartriteResort be total the operated Water as in structure, the and as opened also that income other continues Indoor traditional quarter expense. during well second

previous about on $X.X operating the leased calls. I of new discussed standard, million as have offset the by adoption increase property of to which Finally, revenue expense the relates is accounting higher

year, income related The versus benefit $X.X tax tax $X.X benefit resulting to the primarily the deferred of of operations from the expense the in million prior of income million Kartrite.

of to primarily Crème. costs for million $X CLAs quarter Additionally, transfer the nine and transaction were related the to

expense deferred shift transaction adjusted. cost from areas resources was the X.X was FFO from million our reminder, properties. and toward $X.X and year-to-date. a million As result taxes a of business non-experiential experiential excluded quarter are in expense of for Severance as This

for the sale gain recognize during of and we the million properties XX.X these also million. property XX.X proceeds Finally, totaling sales net combine quarter on of completed

fees three been FFO were pursuant net to of adjusted. get property gain charter on options tenant purchase to school in termination sale Included sold to million XX.X included property XX.X in related FFOs totaling to have the proceeds the added and sales for million

larger our plan. in were fee as are anticipated operator fees than elected not levels discuss an both have termination expected on higher school charter to was one more public I later of a These I'll guidance. option that his and revised when disposition exercise

capital activities. markets our let's move Now, sheet balance and to

X.X debt adjusted was ratio EBITDA times a Our to quarter.

basis, net XX% at was to debt on XX% XXth. a and gross Our a basis assets market September book on

with or been a either debt of had At billion, fixed X.X interest debt coupon rate through swaps total rate quarter-end, approximately all fixed of we has that debt X.X%. of which blended is outstanding

of notes of notes at quarter, new XXX X.XX% X.XX% redeemed we issued whole XXX the a of unsecured coupon make million senior at our and cost. the During unsecured million XX-year all

Strong the coupon, the original investor on lowest allowed history. in us took very attractive beyond as upsize demand our amount plan the notes of the advantage to a company's we

period mortgage a XX secured was for Additionally, on than debt previous our of remaining fixed rate. we million X.XX%, secured notes of only payable a paid which years lower in XX.X and the million the full rate totaling five at variable interest

variable average of until now pleased debt approximately debt extending as lot a seven think years debt as sense. maturity XXXX. and makes fixing and weighted of interest low interest rate are today's rate debt maturities average have We our no well duration a We environment

million took share quarter, our another experiential a direct issuance price we approximately plan subsequent XX quarter strategy average at advantage end on of million of combined in this and $XX.XX. plan approximately as million. Also, brings under to support market This of again common equity well issued during as our XXX our year-to-date once XX purchase the the

on of both of well which plan equity, were The long-term previous incremental take had impact the in of the our debt near-term earnings. using decision proceeds as versus credit, to our reducing line raising not additional as

of However, and $X near-term cash with unrestricted leverage million of XXX in and line nothing at the debt quarter credit, on our low maturities. billion no outstanding bank

now into finish pipeline fund XXXX. sheet as balance and Our our is opportunities we year positioned even move the growing to better of

of a to upper the XXX to million X.XX are X.XX, to on results range to from FFOs spending to the a and we of million XXX to guidance raising and end X.XX range share XXX XXXX to for fourth Based per from million. investment the for a arrange quarter, X.XX XXX range a expectation raising adjusted million guidance for date our our toward of our

increasing of page range our a XXX XXX from supplemental. also million million. can to of our disposition a XXXX XXX be are found on proceeds million million We XX Guidance to for expected range XXX to of

what we for There guidance the additional properties and we we fourth X.X are by our you this are in earned fees prepayment fees quarter. of to no XXXX XXX. have will raising that education total also expecting that to termination related means through million a that Note see such

related by the more our as full FFO to related Note additional expected. to share strength previously that by increasing reflect overall, related related of education $X.XX activities, the per fees raising dispositions $X.XX adjusted is at the higher for $X.XX and business midpoint, XXXX $X.XX which offset core guidance our and $X.XX than impact capital the more is of year that's to to in

Finally, you receive for increased per of and year exclude X% as of XXXX $X.XX share per we midpoint full prepayment for XXX XX.X the non-education reflects that growth. note our fees share. about guides XXXX when The adjusted million, FFO or related the

for turn I'll that, Greg remarks. his Now it back closing over to with

Greg Silvers

Thank you, Mark.

quarter As investments management. for or productive from discussed that balance third performance, very be asset the sheet whether EPR, we've today, was

We advantage the economy position experiential the that creating. to of many take to continue is the company opportunities

Sarah? With questions. that, up I'll open it for

Operator

question of Your from first line instructions] the Craig KeyBanc Markets. from [Operator Capital comes Mailman

Your line is open.

Craig Mailman

capacity to investment going bringing you're XX. are could you guys give here know you talk of bit. bolstering here So, about raising I for guidance kind spending a down I leverage mean, XXXX not

little there's what But in anticipating a are in a on can the guys the XXXX little of you choppiness that insight lower I you're here trying capital know in anticipation on seeing prompted insight and case market any mean, in you spending opportunity that leverage bit investment or into some a into raises? what you you're but maybe front give ramp the bit that's to extra I hit kind more

Greg Silvers

we'll have distinguish it's this kind little Silvers. a two probably But Sure. think ourselves. Greg, And have both. Since is of of Greg to I we be

I think opportunity I one, we stronger. is, the think set think getting is

management price sheet bounced way balance prudent of our kind around is just also think day tenants. the I the year us understanding that we for and the when have and works for works XX a

in advantage the looking of forward we're take us we're that to as for. way that of always prudent It's and preparing

I rate think, we're the years to we've around over the at kind to overall, maybe that XXX of But I millions dynamic I and forward. where spending, believe change least don't of, you're somewhere Greg, going you last out we've of couple to run I to more a if that? coming add of, of know think investment of do see anything XXX that, got kind that to up

Greg Zimmerman

need and No, I don't have we a to even we prepared. robust think pipeline be

Craig Mailman

where I potential anything there is, mean, to even for incremental else capacity? stock into the capital more is you given raises baked give guidance

Greg Silvers

we fourth At But we any the did decide kind did could assume chest me beyond decided war we the we already the of this quarter. our as raise create doesn't more million in to a guidance if quarter, issuance equity in midpoint, XX kind fourth the but no. the range, for quarter, to, capital in to of no,

Craig Mailman

you. Got

the areas where of of different about seeing best Greg, your Okay flow and, you can the the among Greg, kind segments? maybe you're opportunity other talk kind

Greg Zimmerman

Sure, the as experiential is reflected the -- of lodging, seeing think visits a a Greg entertainment our in theaters, one in Nashville, and investment opportunities I in country million opportunities of mentioned, year. hottest think and I centers, experiential of We're family one opportunities seeing opportunities. our, is all which XX.X the we're our opportunities with lot we're still investment as in places of seeing across

of we're So for those them. are seeing opportunities looking kind the we're and

Craig Mailman

schools little are may just early, terms how on I of just transition guys CLA, about be in you then those a students? know, And doing could but talk it retaining bit

Greg Silvers

rate be this I that the Greg which would think we and at originally Silvers, XXXX Yes, can interpret we pulled you of forecast number is March back. that

reflection it. success in to a that new of operator that's accelerate this enjoys the fact they think that I the wanted

indicating don't under their think assets they're individual this don't I umbrella successful kind their faster that tenants. I them and to But So, think their that of are that report I we and on bodes for well want with think or actions get performance.

Craig Mailman

us million? mean, CLA the give I rents, on kind where would I of you a guys come when forma maybe versus the sense you in pro we're thought of original XX indicated recut could coverage coverages guess, you

Greg Zimmerman

those if were was properties Remember, not tenant Right. remember, correct you a structure properties that that on own. actually our that other were had just setting coverages we bad from

around were five be that's with that would one increasing, before those range an think at at if was. So, we I think think would what coverages we not least not CLA where is they was which the operator stressed as

Craig Mailman

you. thank Great,

Greg Silvers

Thank you.

Operator

Joseph next line Your Nick Citi. the question comes of from from

may You the ask question.

Nick Joseph

walk you attractive standpoint? Margaritaville Can you. Thank what makes just the through an from experiential Nashville Hotel

Greg Zimmerman

it is Greg a rooftop downtown Sure. lot It it amenities. it's the in a Broadway One about a is of It's got sober of thing it got we Nashville. the is Zimmerman. Margaritaville bar. the This of has right like near heart in district has brand, lot

it's center and walkable So, Street. play in Ryman it's where Arena the the to to Broadway it's predators walkable the walkable to Bridgestone Auditorium, convention

in XX four the leisure and are XX XX% all is nights. average stay visits travel there year for are So, a Nashville million

So, invest the exactly experiential lodging for it's that we're in. to kind of us, looking

Greg Silvers

would other we the And being we I into fixed Nick income about, add, as, and this talked is thing mortgage. again, type a got a investment, as

we've to hotel stay done of in commitment that the think a way variability I we've a our of out honored model, the So, of this.

broadcasting we're It's We significantly an of actually hotel. where leverage on LTV station serious asset to basis, on this think the end Margaritaville relative an the this from that on also lower is the is it.

of said and strategic lot the consistent So directionally are that it of efforts think focus directed. our kind district area lifestyle we an this in we with brand in being a what entertainment of it's again, experiential it's got to

Nick Joseph

that's to And Thanks, then on sit currently in the space. you maybe And helpful. you on if gaming where authority an terms assets any are just of give and pipeline update that on in today? then entering

Greg Silvers

continue or had We the We that GXE conference to just XX meetings. again, at don't not, we're about bidding out whether we progress in XX specific or make were talk and area.

as So, there's - there's in are making But that the said, will that I very people we planned. would indicate interested in have in talking to we're our it's near-term and nothing think, nothing something us. something Mark have hopefully guidance efforts,

into later. rather sooner So translate will hopefully than that opportunities

Nick Joseph

Thank you.

Operator

The line from next Morgan. Tony JP from the [ph] question of comes Poland

is line open. Your

Unidentified Analyst

you. thank morning. Good Okay,

Just analyze what is a side, like clarifying strength question on like from business, or the for just $X.XX? mark the that $X.XX is investment the of rents activity the that core percentage like is

Mark Peterson

combination of number a a things. It's of

we One things Kartrite the of than the a little during was ramped better anticipated. had quarter

kind what's a there. the of the kind of one things was It's of of but main, there's behind number that. besides Kartrite there major main everything was that things. So else the indicated But driver

Unidentified Analyst

some the and trying the door kind organic, it's is just Okay, dollars it that being just of some get? is investment it income the out and of to

Mark Peterson

the door, off million better Kartrite investment but a the better by operating spending midpoint, the Dollars It's definite during kind of is I think little higher, driven had kind we're so just I planned. guidance we raising mean, some we're pretty at than performance consistent. quarter had slightly XX we particularly assets. of our

Unidentified Analyst

the there pivot the thinking three be those I candidates education, think how of want just like about - sales about guess couple all categories education Okay. we in businesses as more two, or What's three commented you category. next, crush that how we could within year you should to Like as what about then, that? and seems towards - And the Do the subcategories look be experiential there's more out bucket. in are times, in almost you a it distinct, assets.

Greg Silvers

- fair the see market municipal charter we and school very that a Tony, clearly it's time, is said are the with don't we return I opportunity charter, risk Again, the bond reward I competitive for that. the think question, at we've especially this think

So anything but to right accelerating time come we we're now. sales. that at about right we're be that the or don't dollars equation given going said naturally prepared risk I now devoting is, of about know least seeing what the future, again, we're area with to foreseeable not reward that in lot for down talk a that have investment that

Unidentified Analyst

of guidance, on this you is giving in into turn something heavy paybacks and did so out and but XXXX a to not year you're pretty the the level do be recycling such dispositions terms and of continue you Okay, future? mortgages portfolio with this think

Greg Silvers

maintained if it's that think that look an the owned the paid at had that's abnormally around high of was year we years, Schlitterbahn were this you XX our I the you I we always back think Fair capitals asset, for the noise - working think that, of what outcome, happy with but asset we kind now. Cedar and value that, there cost given demonstrated look, those of if and we'd go kind I

So, to saw be think we dispositions don't improvement, not, will going to I portfolio more it's kind near probably this year. but level doing the that we they're in of raise

Unidentified Analyst

walk the into? can markets can yields of I you go And major achieving investment you're Okay. types through that on

Greg Silvers

with consistent our to we've mid what low are sevens think said of again, I Yes, trading yet kind or most of properties eights.

those can said are the low that some coast, we've and to seven. get seeing the then on thing or transactions theater are we're very kinds sevens seven, As down trading below that of of

harvest been of able to presented and of be and being relationships us. excited this are work attractive those that lot in opportunities given area, that spread we've a continue to given those very a capital that our Greg's our cost space, and creates So, about to in

Unidentified Analyst

levels... kinds same You're of build-to-suit at those

Greg Silvers

kind be accommodate XXX Generally, to of points associated of as to risk going to always, for wide the a build-to-suit. just XX basis that generally with they're

Unidentified Analyst

you. Thank great. Okay,

Greg Silvers

Thank you, Tony.

Operator

the line Rob of next Janney. from from comes Your Stevenson question

open. is line Your

Rob Stevenson

is going to is a ownership lodging, Original good be balance wind to Hi, in to structures and lodging forward, where there deals likelihood lodging is be up position a Nashville's of likely of approach ones guys. a two that resort this gaming type first that one sheet as going point? you the note and morning, is was I JV value at a possibly forward how of the guess likely a it you're an there on take terms or those Greg, having I is stuff likelihood there also some going in

Greg Silvers

Sure.

going been we at Rob, in I three only all, look you and think first we of I'm prognosis portfolio, did brings First our But actually of is if time original the the what that. at that's all take look called have it I've lease. if advantage like OG. you a

here preference look, did the our we is mortgage us what in what to the at lease. see lease be think in in I look will either or if be you you the mortgage, to Nashville If you

to But the to be income where for opposed there are that work, there or in otherwise variability a are as not what we certain want may hotel reasons fixed times the but remodel. is like tax be instrument of

go back, Occasionally, will the us amount significant may doubt you'll in we that fashion. triple in preference see the net So, to to to be and lead lease our a I hotel the REIT be mortgages. model. have

Rob Stevenson

and Okay then…

Mark Peterson

also apply space. for would casino That the

Greg Silvers

place casino Yeah, right restructuring. where it space, the bet would be in the net I lease could

Rob Stevenson

much Okay, of the up. continue end specifically How point, willing of do Regal theaters regal exposure to exposure of the in in increase guys just this not do you went all standpoint, to sort to operator theaters you the to how this or you sort wise, but have within are from and at over comfortable movie are terms diversity the guys upper portfolio? a AMC at quarter

Greg Silvers

find think like always like high can that a said I we all-time it’s theaters, business quality and us we’ve record set I XX years last Again, stable an for business if very-very year in we Office. been that for Box said we’d

exposure Cinemart space. So trajectory, it’s asset in recently good it’s that so, much like that to AMC, finding this the often invest and like involves with I like that think, renovated we about been and coverage theaters or really space, we have right if not the continue as we exposure the we’ll Regal to

Rob Stevenson

any you pipeline? me, in All the are last there behind right, then and did construction, more many how Topgolf under from this start one

Greg Silvers

at term but I couple that speak think, out a still. have are we most

Mark Peterson

are those the one service, in Just last.

Greg Silvers

as but said so Okay, Topgolf pretty opportunities. almost we much we’ve see every

of to are good, little managing are exposure We think part have will not the would a we opportunities being won’t that of that selective. exposure. strong. be the and as are robust continue. add given portfolio Topgolf will future opportunity more assets But level think that I we selectively make because new in is had to will It but we as the probably we because when where the really we our

Rob Stevenson

thanks Okay, guys.

Operator

from next Hawthorne Your comes RBC the of from line Brian question Capital Markets.

Your line is open.

Brian Hawthorne

Hi, on the CLA? the that year, lease due this million due that Education tied exploration schedule are that’s is in all Whatever ones XX. the to

Greg Silvers

Yes.

Mark Peterson

to Yeah, you and are that’s have as from number since as saw have that if that left eight down quarter converted. XX X that another time the then of been last quarter, we down taken eight

near-term kind all so to is. XXXX, to that’s moving are those from what way leases, exactly of the that So subsequent

those the so, zero. should And by the year end should of be that

Brian Hawthorne

them investment small with then, - guess your And XX going invest public we’re of Topgolf your at does I is or piece in change lands NIM in all? to great. and Okay, but public, that ability with potentially

Greg Zimmerman

a limitation an Again, limitation I exposure. remember is on think our self-imposed

which exposure space. only this but of I we in me, issue kind in view profitability to or that. it’s we as point that they when were mean have go so type financial set level that get their the not big think, trust we a to kind as of participant just view I of really clearly think have of of because whether they those managing evaluate at people details will probably public already I not have an kind so we’ll

broader is operator transferring we different may of that more and What of get of as ease is, that. may in change and some options, more operators a operations take there there view

Brian Hawthorne

my for taking questions. Okay, thanks

Operator

Your America. next comes from from the of Bank of Joshua Dennerlein question line

Your line is open.

Joshua Dennerlein

Good comfortable concentration morning guess industry me. big you with appears maybe tenant How there level your guys, built are one pretty I just from picture high?

Greg Silvers

are spending these feel speaking, you I the really what generally any on to nothing that our oppose we but more of accelerating, good compared we’re well-positioned more so if of think if metric, about space, type become durability in look you is that and to of some experiential we’re doing expenditures actually the look, in going who we retail traditional mean, as we’re in. that retailers to more sectors I as think valuable. competitors the only be focused

Joshua Dennerlein

you All right, guys. thank

Operator

Your comes Thalmann. John Ladenburg line the from question next of from Massocca

Your line is open.

John Massocca

morning. Good

Greg Silvers

Good morning, John.

John Massocca

already quarter, kind I the made of kind the on maybe rooms. Margaritaville during how but Margaritaville of So, you of investment I bit revenue think the underlying is little commented much to a tied

I'm to revenue the is it's there maybe another think traditional drivers the like of be payments you going to besides of lodging just kind some interest trying of do kind that guys? underlying there driver

Greg Silvers

planned Yes, I think of kind activity there's lot bar Again, a top there's there. a I this. there's roof a significant of F&B component Like to lounge. said,

think the I positioned not is So, this all at as kind of traditional business traveller.

not for is experiential entertainment activity think around is brand. in district significantly is lifestyle in of lot kind but dynamic an of a and of lot the and what we only a This into which lodging the is exciting there's or demand that going think offering, we this what is actual and there tapping area, activity driving

John Massocca

the color little bit, maybe maybe or you more but how guys of lower I got mean, a John of provide the some can the comfortable just end extent comment security on you then it the is on on than interest? loan, the the And to of Okay. sub that you XX LTV kind

Greg Silvers

very in XX% we to I again; feel space. appraisal range, that I in to what that would we a think comfortable it's think say this relative is XX% on that probably

John Massocca

are Okay, you away on guys severance given are moving the from? maybe non-experiential the commentary charge, or and investment the then what on verticals some assets of the

Greg Silvers

less spending pretty is space. we're that I about resources the devoting openly charter not school what mean, we've talked John less and and to

outperform of product assets you that number these actually economy or our as said correlated So, there a look I is toward the trend the diversity to assets about is the has doubt broadening focus durability product more we've that more studies the said, of others. of and to I experiential earlier reasons it's that the continued seen, and no whether for our like

space, So, I say it's space. the more primarily specifically broadly education in charter that the school in would what in but

John Massocca

sub two other investments of giving would the but still education kind in verticals away? Okay, be being general moved of is kind or

Greg Silvers

and charter it's I even that leases. volatility. I the and are of a that the in the don't brings, that and those charter think that term that space, focus the the and that lot long We parts had, of is school in volatility the, school whereas Again, and the like we've the our other term fees because space, other there turnover two, education, those mean primarily the in without I said, are in in other long leases termination

still not it's we two there's municipal a and So, bond those spaces. other not in market that, nearly think

I would school space. focused now it's say right So, the charter in

John Massocca

Okay. near then the sorry any you also know about number, theatre small but you three relatively how but already on about maybe education guys that it's any or commented this, you a assets on Understood. are potential talked assets kind assets, for guys commentary? going there and term explorations, I of the releasing if I'm forward And but lease feel those

Greg Zimmerman

fourth the of were quarter. extended the two three already Yes, in

John Massocca

perfect. me. it Thank for That's Okay, you.

Greg Silvers

Thanks, John.

Operator

James. line comes next Raymond the question Mings [Operator instructions] of from The Collin from

open. is line Your

Collin Mings

morning, Good everyone. Thanks.

Greg Silvers

morning. Good

Collin Mings

as maybe seen curious, just a or past that just there trends broader might on you spoken just a you've on that due more First for more about weakness Greg, areas again, path lot the tailwinds future and be one, you may of subsets of on data. made you around think just be just your where are potential nuanced step decided a picking in you've point diligence Are big how just there? recognizing you've if done any up this growth - kind some curious take experiential do I'm focused a question. to a And you brush focus. experiential picture you the back it's engaging from just we've the broader

Greg Silvers

today - like it's Yes, said really been strong. I

the always I and an to focus think to economic, underwrite always on what in we're trying downturn. as trying we're

not where but see is think operate, So, we higher trying point how concern things aware, activities. are, the to they least how I are, price following and at

closely very we and low where offerings they're alternatives, the about think you have. of almost various that we're lot things aware if price are cyclical, of Again, a the of movies, these points cost the counter so

the points you some higher core And as correlation opposed economic counter into the activity to as downturn cost up to you more of that is of of kind move cyclical. what see

Collin Mings

Rob's curious I go want was the there. it mortgage okay, back was during much just front just it, quarter. that's helpful to smaller, but earlier, other just question the on recreation color recognizing Got investment to the And what

as then pipeline your investment currently anything other are And look mortgage opportunities many magnitude just there how of in kinds is of and the of you Margaritaville? pipeline, just at the

Greg Zimmerman

Kansas in center in fitness Fitness a was far mortgage that we investment the mortgage Genesis then and City, versus-- other invested as Center as The

Greg Silvers

as structure. think escalators don't I They way -- leases. can But often that you at a a mean, But said, efficiency of I manage there these that and of have by significant I to is else you look motivated using get a are read these mortgages. a tax kind of lot like that if like tax everything issue. lot

Greg Zimmerman

mortgages issue, use we but target like you we tried cases in leases. those structure like said, leases, but maybe tax there's said, to a just Greg we Like

have a next to we think. it's certainly we've that hard and predict leases more to lot mortgages done expect done trend So, I but and continue, the

Collin Mings

Okay, thank Thanks. you.

Greg Silvers

Collin. Thanks

Operator

now time. Greg questions to I the back to Silver's. would I'm further showing conference at turn this no Mr. like

Greg Silvers

your and many to Well, morning. at fourth thank tuning to you we again, you and this again REIT on look seeing forward all appreciate call. in of our you all Thank quarter for talking We May you time you. guys

Greg Zimmerman

Thank you.

Operator

for Thank and the participation concludes wonderful conference. gentlemen, this day. Ladies have and your you a

disconnect. You may all

EPR Properties (EPR) 30 Oct 192019 Q3 Earnings call transcript