EPR Properties (EPR) Q3 2026 earnings review
EPR Properties raises its outlook, but fourth-quarter dealmaking slows
EPR Properties, a landlord for movie theatres and theme parks, grew faster as recent acquisitions and box-office bonus rent kicked in. Revenue climbed 12%, while cash profit from real estate (FFOAA) rose 9% per share as higher borrowing costs offset part of the rent gain. Chief executive Greg Silvers raised the full-year earnings and spending plans for a third straight quarter, but by our math the outlook has per-share growth slowing to about 5% in the fourth quarter.
| Revenue | $204.1M +12.0% from a year ago |
|---|---|
| Cash profit (FFOAA) per share | $1.49 +8.8% from a year ago |
| 9M investment spending | $664.5M above prior $600–700M full-year midpoint |
| Full-year FFOAA outlook | Raised $0.04 middle of the range: $5.53 (+8.0%) |
⚖️ Verdict: 🟢 Bullish
The story got better because EPR proved it can sell school buildings at low yields, reinvest in venues with Live Nation and Life Time at 8.3%, and collect 39% more bonus rent from recovering theatres. One caution: nine-month spending of $665 million already covers almost the entire $675–725 million annual plan, so fourth-quarter buying pauses while interest costs keep rising.
The question now is whether 2026's buying spree sets a repeatable pace for 2027 or was a one-time surge led by the second-quarter Six Flags deal. Bulls point to $1.1 billion of available credit and forward share sales; sceptics point to the implied fourth-quarter pause and a $450 million bond maturing in December. Management's 2027 spending plan in February will settle it.
🐂 Bull Case
Acquisitions Lift Revenue 12% and Diversify the Portfolio
EPR Properties, a landlord for movie theatres, theme parks and other leisure venues, is growing again by buying properties. Chief executive Greg Silvers highlighted "our entry into the live venue category with industry leader Live Nation, and the addition of a Life Time fitness and wellness property". The real estate trust spent $172.4 million on investments in the third quarter at an average initial cash return of about 8.3%.
- Rental revenue: $175.3 million, up 13.2% from a year ago
- Property acquisitions in the quarter: $102.1 million across two eat-and-play and two fitness properties
- Mortgage and build-to-suit funding: $27.2 million of new loans, including the Portland Live Nation venue, plus $43.1 million of development
- Full-year investment spending outlook: raised $50 million at the middle of the range to $675–725 million
Those purchases, together with the Six Flags theme parks bought in the second quarter, pushed total revenue up 12.0% to $204.1 million. Funds from operations as adjusted (FFOAA, the company's main measure of recurring cash profit from real estate) rose 8.8% per share to $1.49. Attractions and fitness centres now generate 26% of annualized base rent, up from 21% a year ago.
What to watch: the initial cash return on new deals in the fourth quarter and the 2027 spending plan due in February. A return holding above 8% would show the landlord can keep adding rent profitably despite higher borrowing costs.
Box-Office Rebound Drives 39% Jump in Bonus Rent
Several of EPR's leases, especially with theatre operator Regal, pay percentage rent (extra rent collected when a venue's sales pass a set target). North American box-office ticket sales rose about 20% in the first nine months of the year, according to the company's presentation, and the third quarter is when Regal's annual lease year settles.
That ticket rebound pushed third-quarter percentage rent and participating interest up 39.1% from a year ago to $9.8 million, lifting the nine-month total to $17.2 million. Management raised its full-year outlook for this revenue line by $2.5 million at the middle of the range, to $21.5–24.5 million, and overall tenant rent coverage ticked up to 2.1 times from 2.0 times.
What to watch: fourth-quarter percentage rent, which the new outlook implies at about $5.8 million at the middle of the range, down 25% from a year ago by our math. Beating that figure would show that winter ski and attraction attendance is matching the summer theatre rebound.
Chicago School Sale Delivers the Capital-Recycling Target
EPR has been selling its legacy education properties and weaker theatres to reinvest the cash into leisure venues. After recording no property sales in the first half of the year, the trust sold the British School of Chicago in the third quarter for $68.2 million in net cash and a $30.5 million accounting gain.
The buyer paid a capitalization rate (the property's annual income divided by its sale price) in the low-7% range, while EPR reinvested its third-quarter capital at an 8.3% yield. That ~1 percentage point gain in yield adds to cash flow immediately, and the sale shrank the education portfolio to 4% of annualized base rent. Nine-month disposition proceeds reached $85.4 million, and the full-year outlook is now fixed at $86.0 million.
What to watch: the 2027 disposition target in the fourth-quarter release. With only 54 education properties left, the company will need theatre sales to keep funding new purchases this cheaply.
🐻 Bear Case
Interest Costs Rise 21% as Debt Funds the Buying Spree
To pay for $664.5 million of investments over the past nine months without issuing shares at a low price, management relied on debt and forward share contracts. Silvers said, "With our credit facilities and forward equity in place, we have the capacity to fund a strong pipeline of opportunities." That borrowing is now taking a larger bite out of revenue.
- Net interest expense: $40.3 million, up 21.3% from a year ago and up 1.5 percentage points of revenue to 19.7%
- Depreciation and amortization: $51.1 million, up 20.4% and up 1.8 percentage points of revenue to 25.0%
- Net debt: $3.32 billion, up 20.0% from a year ago, lifting net debt to 5.0 times annualized cash operating profit from 4.7 times
- Forward equity sold: 1.10 million shares in Q3 at $60.79; 2.29 million unsettled forward shares ($134.6 million net) represent 3.0% future share dilution
During the quarter the trust repaid $179.6 million of 4.56% notes and drew all $600.0 million of its new term loan due in 2032, which carries a floating rate of 5.02%. Another $450.0 million of 4.75% notes comes due on December 15, 2026, so borrowing costs will rise again if credit-line draws or new bonds replace them at higher rates.
What to watch: how management refinances the $450 million December bond maturity and when it settles the 2.29 million forward shares. Both steps will trim per-share profit growth in 2027.
Buying Spree Pauses in the Fourth Quarter
"Our third quarter reflects continued momentum across the business, with both strong earnings growth and a robust pace of investment activity," Silvers said. Yet the full-year outlook numbers show that both deal activity and per-share profit growth slow sharply in the final three months of the year.
EPR spent $664.5 million in the first nine months, so the raised $675–725 million full-year investment outlook leaves only $35.5 million at the middle of the range for the fourth quarter, down 76% from $147.7 million a year ago by our math. About $21.0 million of that is already committed to existing construction projects, leaving roughly $15 million for new acquisitions.
The earnings outlook shows the same slowdown: after FFOAA per share grew 9.2% in the first nine months to $4.16, the $5.49–5.57 full-year range implies $1.37 at the middle of the range for the fourth quarter, or 5.4% growth from a year ago by our math.
What to watch: fourth-quarter acquisition closings above the $15 million implied allowance. Without a fourth-quarter surprise, EPR enters 2027 with a much smaller carryover of newly bought rent than it enjoyed after the second quarter.
Risks this quarter didn't answer
Four standing concerns around tenant concentration, theatre exposure and consumer spending received no new quantitative proof in the third-quarter release.
- Theatre concentration: still 34% of annualized base rent across 148 properties against a ~20% long-term target, with zero theatre sales in the third quarter.
- Top-ten tenant share and lease coverage: Topgolf, AMC and Regal supplied about 38% of revenue last quarter; page 22 of the supplemental package (top ten customers) was omitted from the supplied filing excerpt, and no tenant-level coverage was given.
- First-season Six Flags park performance: the seven parks acquired in the second quarter completed their peak summer season, but no attendance or operator coverage figures were disclosed.
- Consumer discretionary moderation: the presentation noted "broader industry moderation" in eat-and-play venues, leaving open whether higher living costs are curbing visits.
What to watch: the top-customer revenue table in the third-quarter Form 10-Q filing. A rise in Topgolf or theatre revenue share, or any rent deferral, would show tenant risk is building.
👓 Other Themes
AFFO Definition Change Adds a Penny per Share
During the third quarter EPR revised how it calculates adjusted funds from operations (AFFO, a cash flow measure that strips out non-cash rent adjustments) "to be consistent with the definitions used by most other triple-net REITs". The trust no longer deducts maintenance capital expenditures ($965 thousand in the quarter), which added $0.01 to third-quarter AFFO per share ($1.54 vs $1.53) and $0.02 to the nine-month figure ($4.26 vs $4.24).
💲 Other KPIs
Unearned rents and interest — cash collected from tenants before the rental period occurs — rose 20.9% from a year ago and 12.3% from last quarter, outpacing the 12.0% rise in total revenue. The steady build over the past four quarters ($101.5 million to $122.7 million) reflects upfront rent payments on newly acquired properties.
Uncollected rent and interest owed by tenants fell 3.9% from the second quarter's $111.4 million, though it remains up 16.0% from $92.3 million a year ago against 12.0% revenue growth. A third-quarter credit-loss charge of $0.8 million, down from $9.1 million a year earlier, indicates stable tenant collections.
Interest income from EPR's mortgage loans fell 4.9% from a year ago and 4.6% from the second quarter, sliding for a third straight quarter from $16.3 million in late 2025. The decline follows the first-quarter conversion of a $70.3 million Tennessee lodging loan into an owned rental property and a $10.4 million Oregon loan payoff.
🔮 Guidance
Raised. EPR lifted the bottom of its cash-profit range by $0.08, raising the middle of the range by $0.04 to $5.53 (8.0% growth over 2025). By our math, that leaves $1.37 for the fourth quarter, or 5.4% growth vs 8.8% in the third quarter. It is the third raise this year: +$0.07, +$0.04, +$0.04.
Raised. The middle of the accounting profit range rose $0.34 to $3.45 per share, driven by the $30.5 million ($0.39 per share) gain on the Chicago school sale. By our math, that leaves $0.70 per share for the fourth quarter, down from $0.79 a year ago.
Raised. Management lifted the middle of the spending plan by $50 million to $700 million, more than double last year's $288.5 million. Because nine-month spending has already reached $664.5 million, by our math the plan leaves only $35.5 million for the fourth quarter, down 76% from a year ago. Third raise this year: +$100M, +$100M, +$50M.
Raised. The outlook is now fixed at $86.0 million, up $11.0 million from the prior $75.0 million middle of the range after the $68.2 million school sale. With $85.4 million already collected in the first nine months, by our math the plan includes virtually no property sales ($0.6 million) in the fourth quarter.
Raised. The middle of the bonus-rent plan moved up $2.5 million to $23.0 million after the strong third-quarter theatre settlement. By our math, that leaves $5.8 million for the fourth quarter, down 25% from $7.8 million in the fourth quarter of 2025.
Raised. The bottom of the overhead cost range rose by $1.0 million, lifting the middle of the range to $58.0 million (up 3.9% from 2025). By our math, that implies $15.0 million of fourth-quarter overhead, up from $14.8 million in the third quarter and $14.6 million a year ago.
Raised. The middle of the range for revenue from third-party-managed properties rose $2.0 million to $47.0 million. With $36.1 million booked in the first nine months, by our math the plan implies $10.9 million in the fourth quarter, up from $9.6 million a year ago.
Raised. The middle of the operating-expense range for managed properties rose $1.0 million to $46.0 million, leaving a net $1.0 million positive gap against other income. By our math, that leaves $11.3 million of expense for the fourth quarter vs $10.0 million a year ago.
❓ Key Questions
Why does the outlook imply only $35M of Q4 deals?
Nine-month investment spending reached $664.5 million, leaving only $35.5 million at the middle of the $675–725 million annual plan for the fourth quarter — including $21.0 million already committed to construction. Are acquisition closings pausing or shifting into early 2027?
How will EPR refinance the $450M December bond maturity?
With the $600 million term loan fully drawn at 5.02% and $450 million of 4.75% notes maturing on December 15, will management draw the 4.87% credit line, issue new bonds, or settle part of the $134.6 million in forward equity?
What are current rent coverage ratios for Topgolf and AMC?
Overall portfolio coverage edged up to 2.1 times, and the presentation noted moderation in the broader eat-and-play sector. What is the latest lease coverage on the Topgolf and AMC master leases, which together account for over a quarter of revenue?
What are the total cost and yield on the Live Nation venue?
EPR funded an initial $0.5 million on a build-to-suit mortgage at 7.35% for a Live Nation venue in Portland, Oregon, and total build-to-suit mortgage commitments jumped by $100 million this quarter. What is the total commitment and conversion structure for Live Nation?