Total revenue reached $204.1 million in the third quarter, representing a 12.0% increase from $182.3 million in the same quarter of the previous year. This growth was driven by new investments, higher rental and interest income, and improved portfolio performance. Adjusted Funds From Operations (FFO) per share rose 8.8% year-over-year, from $1.37 to $1.49, while adjusted Funds From Operations (AFFO) per share increased by 10.8% from $1.39 to $1.54.
Strategic Portfolio Expansion
The third quarter marked a significant milestone in EPR’s diversification strategy: the company made its first investments in two new categories that expand its entertainment portfolio beyond traditional theater properties.
EPR invested $172.4 million in the third quarter at an average initial yield of approximately 8.3%, bringing year-to-date investment spending to $664.5 million. The quarter brought two firsts for EPR: the company’s first investment in a live performance venue—Live Nation’s Steelhead venue in Portland, Oregon—and its first acquisition of a LifeTime fitness center in Irvine, California.
With gross investments totaling $7.6 billion across 350 properties, 99% of EPR’s portfolio is leased or operated. The experiential real estate portfolio accounts for 96% of the annual base rent across 296 properties with 61 operators, while the educational facilities portfolio generates 4% of annual base rent across 54 properties with four operators and has a 100% occupancy rate.
The company raised its forecast for adjusted FFO per share to $5.49 to $5.57, representing an 8.0% increase over the prior year (previous forecast: $5.41 to $5.57). The forecast for capital expenditures was raised from $600 million to $700 million to $675 million to $725 million. This reflects the strong project pipeline and the successful implementation of the diversification strategy.
The forecast for percentage rent and profit sharing has been raised from $18.5 million to $22.5 million to $21.5 million to $24.5 million, reflecting the stronger performance of the theater and attractions.