EPR Properties - Q4 2025

Transcript

Brian Moriarty (SVP of Corporate Communications)

Hello, and welcome to the EPR Properties Q4 and Year-End 2025 Earnings Call. We ask that you please hold all questions until the completion of the formal remarks, at which time you will be given instructions for the question and answer session. As a reminder, this conference is being recorded today. If you have any objections, please disconnect at this time. I will now hand the call over to Brian Moriarty, Senior Vice President of Corporate Communications.

Okay. Thank you, Jenny. Thanks for joining us today for our Fourth Quarter and Year-End 2025 Earnings Call and Webcast. Participants on today's call are Greg Silvers, Chairman and CEO; Greg Zimmerman, Executive Vice President and CIO; Mark Peterson, Executive Vice President and CFO; and Ben Fox, Executive Vice President. Start the call by informing you that this call may include forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995, identified by such words as will be, intend, continue, believe, may expect, hope, anticipate, or other comparable terms. Company's actual financial condition and the results of operations may vary materially from those contemplated by such forward-looking statements. Discussion of those factors that could cause results to differ materially from these forward-looking statements are contained in the company's SEC filings, including the company's reports on Form 10-K and 10-Q.

This call will contain references to certain non-GAAP measures, which we believe are useful in evaluating the company's performance. A reconciliation of these measures to the most directly comparable GAAP measures are included in today's earnings release and supplemental information furnished to the SEC under Form 8-K. If you wish to follow along, today's earnings release, supplemental, and earnings call presentation are all available on the Investor Center page at the company's website, www.eprc.com. I'll turn the call over to Greg Silvers.

Greg Silvers (Chairman and CEO)

Thank you, Brian. Good morning, everyone, and welcome to our fourth quarter and year-end 2025 earnings call and webcast. The fourth quarter capped a year of solid execution and clear progress toward accelerated growth. Our resilient portfolio benefited from durable tenant performance and steady consumer demand, contributing to strong financial performance, including FFO as adjusted per share increase of 5.1% and AFFO per share increase of 6.2%. During the fourth quarter, we announced transactions which significantly expanded our portfolio of championship golf courses, along with a premier regional water park acquisition, further diversifying our attraction sector. As we move into 2026, we expect to build on our strong industry relationships while substantially increasing our investment spending.

We are actively pursuing opportunities across multiple target property types with a flexible approach that encompasses both potential portfolio scale acquisitions and smaller strategic transactions, position us to capitalize on attractive opportunities as they arise. Turning to industry and tenant performance, our portfolio of properties continues to demonstrate broad stability. For the year, North American box office grew 1%, and we anticipate further growth in 2026, supported by an increased number of wide release titles. Performance across our other property sectors remained steady, demonstrating the strength and resilience of our diversified portfolio. As we expand the diversity of our experiential portfolio, we're seeing a balancing effect, strength in certain sectors helping to offset periodic softness in others, reinforcing overall portfolio resilience. Our strategic capital recycling program continued to deliver meaningful results in 2025.

By executing targeted dispositions, we strengthened portfolio qualities, reduced concentration, and unlocked capital to deploy into higher returning experiential investments. We will continue to use disciplined, opportunistic recycling as a proven lever for driving value creation. Our balance sheet remains one of our most important competitive strengths. During the fourth quarter, we successfully closed a $550 million public debt offering and established a $400 million at-the-market equity program, two significant capital market initiatives that bolster our financial flexibility and fund our growing investment pipeline. Reflecting the confidence we have in our earnings trajectory and conservative payout ratio, we are also pleased to announce a 5.1% increase to our monthly dividend to common shareholders. In summary, we've built a robust pipeline of high-quality experiential investments.

Our strong balance sheet and expanded operator relationships now give us access to larger opportunities, and our disciplined approach to capital allocation positions us to capitalize on the significant investment opportunities we anticipate in 2026. I'll turn the call over to Greg Zimmerman to go over the business in greater detail.

Greg Zimmerman (EVP and CIO)

Thanks, Greg. At the end of the quarter, our total investments were approximately $7 billion, with 333 properties that are 99% leased or operated. During the quarter, our investment spending was $147.7 million. 100% of the spending was in our experiential portfolio. Our experiential portfolio comprises 278 properties with 54 operators and accounts for 94% of our total investments, or approximately $6.6 billion, and at the end of the quarter, was 99% leased or operated. Our education portfolio comprises 55 properties with 5 operators, and at the end of the quarter was 100% leased. Turning to coverage. The most recent data provided is based on a December trailing 12-month period. Overall portfolio coverage remains strong at 2 times. Turning to the operating status of our tenants.

2025 box office was $8.7 billion, a 1% increase over 2024. Q4 box office was $2.2 billion, compared to $2.4 billion in Q4 2024. Q4 performance was led by strong results from Zootopia 2, which grossed $337 million in Q4 and has exceeded $420 million to date. Wicked: For Good grossed $335 million. Avatar: Fire and Ash grossed $250 million in Q4 and picked up an additional $147 million after the first of the year. Five Nights at Freddy's 2 also outperformed. The slate for 2026 looks solid, with The Super Mario Galaxy Movie, The Mandalorian & Grogu, Toy Story 5, Minions 3, Moana 2, The Odyssey, Spider-Man: Brand New Day, Avengers: Doomsday, and Dune Messiah.

Analysts expect box office to increase in 2026. Going forward, we will be moving away from providing annual estimates for box office performance. We initiated the practice after the pandemic. As theaters were reopening, box office was recovering, and we were navigating the writers and actors strikes. With all the dislocation, we thought it was helpful to share our perspective. The business is stabilizing, this is no longer necessary. It's important to highlight that the bulk of our theater rent is not tied to fluctuations in box office. The only significant percentage rent component of our theater rent comes from Regal, which is based on a lease year rather than a calendar year, and our estimate of Regal percentage rent is embedded in our percentage rent guidance. A couple of points related to box office.

First, higher margin F&B spending increasingly constitutes a higher percentage of exhibitors' overall revenue. As such, it is not necessary to reach 2019 box office levels for us to have comparable coverage. Second, as we have consistently noted, the number of major releases directly correlates to box office. An increased number of major releases typically drives increased box office gross. Over time, major releases tend to generate an average performance in the range of $70 million. Turning now to an update on our other major customer groups. Our East Coast ski and Midwest ski operators got off to a great start with above-average snow. That strength continued through the winter. Our Northern California asset opened late because of lack of snow. Conditions have improved significantly with recent snowfall. We will see if the snowfall continues to hold throughout the season.

Alyeska has had strong demand throughout the season, augmented by its membership program and inclusion in the Ikon Network. Our Eat and Play coverage remains strong, even with some continuing macro pressures on consumers and expense increases. Andretti Karting's Kansas City location opened well in mid-November. Schaumburg, Illinois, is expected to open in the second quarter of 2026. Our second Pinstack, located in Northern Virginia, is also expected to open in Q2. Of note, in early January, Topgolf Callaway announced the completion of its sale of a 60% interest in Topgolf to Leonard Green & Partners. The transaction valued Topgolf at around $1.1 billion. We view this positively because Topgolf now has a focused private equity majority owner.

Many of our attractions are closed for the season, but Valcartier's outdoor winter park and Hôtel de Glace opened in December and are benefiting from sustained domestic travel within Canada. We are quite pleased with the performance metrics at Enchanted Forest Water Safari in our operator's first full year of ownership. With the indoor water park and family entertainment center fully open at Bavarian Inn, we saw significant year-over-year increases in revenue and EBITDA. We are bullish on the fitness and wellness space. Since 2024, we have invested approximately $150 million in this vertical, including golf, fitness, and hot springs. All three of our hot springs assets delivered strong year-over-year performance. Our education portfolio continues to perform well. Our customers' trailing twelve-month revenue for Q3 was essentially flat, with EBITDA down due to expense increases. Coverage remains strong.

Our investment spending continues to be entirely within our broadening range of experiential asset types. Q4, we invested $147.7 million, bringing our total for 2025 to $288.5 million. This includes funding for projects that we have closed on but are not yet open. We have committed approximately $85 million to experiential development and redevelopment projects, which we expect to fund in 2026. Q4 investment spending was anchored by our acquisition of a five-property portfolio of championship golf courses in the Dallas Metroplex for approximately $90.7 million. The properties will be leased and operated by Advance Golf Partners, a leading golf course operator. This investment follows our extensive research into the golf space and adds to the additional golf investment we made earlier in 2025.

Given our deep relationships, the increased focus on fitness and wellness among multiple generations and demographics, and the wide range of investment opportunities, including golf, climbing gyms, traditional gyms, hot springs, and spas, we are excited about the potential for continued growth in this space. We also acquired the Ocean Breeze Waterpark in Virginia Beach, Virginia, in a sale leaseback transaction for approximately $23.2 million. Ocean Breeze will be leased and operated by an affiliate of Premier Parks, a long-time strategic partner. We kicked off investment spending for 2026 with the first quarter acquisition of the VITAL Climbing Lower East Side in Essex Crossing for approximately $34 million.

As I noted before, we are particularly bullish on the fitness and wellness space, and excited to grow our relationship with this outstanding operator by adding a high-quality Manhattan location, along with our existing VITAL Climbing location in Williamsburg, Brooklyn. As demonstrated by our investments in Q4 and already in Q1, we are increasing our investment spending cadence. We are seeing high-quality opportunities for both acquisition and build-to-suit development in our targeted experiential categories. Our disciplined deployment strategy has enabled us to expand the depth and breadth of our portfolio of experiential properties over the past several years. Our investment spending throughout 2025 and heading into 2026 reflects our deep relationships and high-quality opportunities. We are announcing investment spending guidance for funds to be deployed in 2026 in the range of $400 million-$500 million.

During the quarter, we sold two leased theater properties for alternative uses and two land parcels for net proceeds of $16.1 million and recognized a gain of $5.3 million. Additionally, as announced on our Q3 call, we received $18.4 million in proceeds from a partial paydown on a mortgage note relating to the Gravity Haus in Steamboat Springs. In the past five years, we have sold 33 theaters. We have one remaining vacant theater. Disposition proceeds totaled $168.3 million in 2025. We are announcing 2026 disposition guidance in the range of $25 million-$75 million. I now turn it over to Mark for a discussion of the financials.

Mark Peterson (EVP and CFO)

Thank you, Greg. Today, I'll discuss our financial performance for the fourth quarter and the year, provide an update on our balance sheet, and close with introducing 2026 guidance. FFOs adjusted for the quarter was $1.30 per share versus $1.23 in the prior year, an increase of 5.7%. AFFO for the quarter was also $1.30 per share, compared to $1.22 in the prior year, an increase of 6.6%. Before I walk through the key variances, I want to point out that we had disposition proceeds totaling $34.5 million for the quarter and recognized a gain on sale of $5.3 million. For the year, we had disposition proceeds totaling $168.3 million, and recognized a gain on sale of $39 and a half million.

As we continue to make progress, reducing our investments in theater and education properties and recycling those proceeds into other experiential assets. Note that these gains are excluded from FFO as adjusted and AFFO. Moving to the key variances, total revenue for the quarter was $183 million versus $177.2 million in the prior year. Within total revenue, rental revenue increased $7.9 million versus the prior year, mostly due to the impact of investment spending, rent and interest bumps, and higher percentage rents and participating interest. Percentage rents and participating interest for the quarter were $7.8 million versus $4.9 million in the prior year, the increase was due primarily to higher percentage rent recognized from our attraction and cultural properties, as well as from one of our early childhood education tenants.

We also had higher participating interests related to our Northeast ski property. Both other income and other expense relate primarily to our consolidated operating properties, including The Kartrite Hotel and Indoor Water Park and our four operating theaters. The decrease in other income and other expense versus prior year is due primarily to the sale of three operating theater properties in the first half of 2025. On the expense side, G&A expense for the quarter increased to $14.6 million versus $12.2 million in the prior year, due primarily to higher payroll and benefit expense, particularly incentive compensation. Equity and loss from joint ventures for the quarter was $2.4 million, compared to $3.4 million in the prior year.

This better performance is due to our decision to exit our joint venture in Breaux Bridge, Louisiana, in late 2024, as well as improved results at our two remaining RV park joint ventures. Shifting to full year results, FFO as adjusted was $5.12 per share at the high end of guidance versus $4.87 in the prior year, an increase of 5.1%, and AFFO was $5.14 per share compared to $4.84 in the prior year, an increase of 6.2%. Turning to the next slide, I'll review some of the company's key credit ratios. As you can see, our coverage ratios continue to be very strong, with fixed charge coverage at 3.4 times, and both interest and debt service coverage ratios at 4 times.

Our net debt to annualized adjusted EBITDARE was 4.9 times at year-end, which is below the lower end of our targeted range. Additionally, our net debt to gross assets was 39% on a book basis at year-end, and our common dividend continues to be very well covered, with an AFFO payout ratio of 68% for the fourth quarter and the full year. Now let's move on to our capital market activities and balance sheet, which is in great shape to support our expected growth. At year-end, we had consolidated debt of $2.9 billion, of which all is either fixed-rate debt or debt that has been fixed through interest rate swaps, with an overall blended coupon of approximately 4.4%.

In November, we closed on $550 million of new five-year senior unsecured notes at a coupon of 4.75%. At year-end, we had $90.6 million of cash on hand and no balance drawn on our $1 million revolver. Additionally, in December, we finalized our new ATM program. While no equity issuance is required to fund our plan for 2026, given that we project to be below the midpoint of our targeted leverage range at year-end without any such issuance, this program provides us with an additional tool in our toolbox to issue equity opportunistically, including forward sales. We are introducing our 2026 FFO as adjusted per share guidance of $5.28-$5.48, representing an increase versus the prior year of 5.1% at the midpoint.

We expect a similar % increase in AFFO per share. Note that due primarily to the timing of expected % rents, which are heavily weighted in the last 3 quarters of the year, as well as the fact that the first quarter is off-season for our operating properties, we expect results for the first quarter of 2026 to be lower than the full year divided by 4 by about $0.11 per share. We are also providing our 2026 guidance for investment spending of $400 million-$500 million, and disposition proceeds of $25 million-$75 million. We expect a % rent and participating interest of $18.5 million-$22.5 million. As you can see on the slide, I have provided a reconciliation of the prior year amount to the midpoint of this guidance.

The changes include an out-of-period percentage rents and participating interest of $3.5 million recognized in 2025 that does not repeat. Lower projected percentage rents in 2026 of $1.1 million related to our Northern California speed property due to delayed snowfall for the season. Lower projected percentage rents of $0.4 million related to certain properties having base rent increases in 2026, causing the breakpoint for percentage rents to increase. These decreases were offset by the projected net increase of $1 million in percentage rent for other tenants, including Regal. We expect G&A expense of $56 million-$59 million. In addition, guidance for our consolidated operating properties is provided by giving a range for other income and other expense. Guidance details can be found on page 23 of our supplemental.

Finally, based on our expected 2026 performance, we are pleased to announce a 5.1% increase in our monthly dividend, beginning with the dividend payable April 15th to shareholders of record as of March 31st. We expect our 2026 dividend to be well covered, with an AFFO per share payout continuing to be about 70% based on the midpoint of guidance. With that, I'll turn it back over to Greg for his closing remarks.

Greg Silvers (Chairman and CEO)

Thank you, Mark. 2025 was a very solid year as we delivered strong per share earnings and our portfolio delivered the resilience that we anticipated. 2026, we expect to increase our investment spending materially over the levels we achieved in 2025, which should result in another year of strong per share earnings growth. We begin the year, we are excited about our investment pipeline, our balance sheet, and the team to create value out of this combination. I would also like to take a minute to express my sincere appreciation to Greg Zimmerman, who is participating in his last earnings call as he is retiring from EPR. Greg provided leadership and a steady hand as we navigated COVID and then emerged on the other side. He is my business partner, colleague, and friend, he will be missed.

Ben Fox will now officially take over the role of Chief Investment Officer, and we are excited about his leadership and vision for our future. With that, why don't I open it up for questions? Jenny?

Operator (participant)

Thank you. At this time, if you would like to ask a question, please click on the Raise Hand button, which can be found on the black bar at the bottom of your screen. When it is your turn, you will receive a message on your screen from the host, allowing you to talk, and then you will hear your name called. Please accept, unmute your audio, and ask your question. If you are on a mobile device using the app, simply tap into the 3 dots or More button to find the Raise Hand feature. Lastly, if you are calling in today, star nine will activate the Raise Hand and use star six to mute and unmute. We will wait 1 moment to allow the queue to form. Our first question will come from Michael Goldsmith with UBS.

You will receive a message on your screen allowing you to talk. Please accept, unmute your audio, and ask your question. Michael Goldsmith with UBS, you may ask your question.

Michael Goldsmith (US REITs Analyst)

Good morning. Thanks a lot for taking my question. you know, consistent with last quarter, you know, where you pointed to $400 million-$500 million in acquisitions, you put this out formally with your guidance. Can you just talk a little bit about what you're targeting, what you have line of sight in? It represents an acceleration. Just trying to get a sense of, you know, what you're looking at, what you have line of sight in, and just your confidence level of hitting that $400 million-$500 million in acquisitions. Thanks.

Greg Silvers (Chairman and CEO)

Mike, thank you. I clearly, I think, you know, line of sight or anything, we don't want to comment on specific. We wouldn't put it out there if we didn't have great confidence in it. Again, if you look historically, we've been successful in, A, not only hitting our numbers, but yet, you know, raising those throughout the year. I think, and I'll let Greg comment, that we feel really good about where we're positioning for the beginning of the year. I think we're looking at opportunities across most, if not all, of our sectors. I think, again, we feel like we have particular unique access to the areas that we invest in. Let me let Greg comment.

Greg Zimmerman (EVP and CIO)

No, I agree, Greg. I would also say that, you know, developing a pipeline is usually a multi-year process. We've been building up to this with a line of sight to the fact that we turn on investment spending this year. Again, as Greg mentioned, we're very confident about it. That's why we're achieving balance.

Michael Goldsmith (US REITs Analyst)

Got it. Thank you very much for that. Second question, just, you know, Topgolf is one of your top tenants, and they've been taken private by private equity. You know, have you had conversations with Leonard Green? Just trying to get an understanding of, you know, what they're going to do with the company now that they have their hands on it, and just, you know, the path and your comfort level with your specific locations that you own.

Greg Silvers (Chairman and CEO)

Michael, we've had multiple conversations with them. As you can imagine, both as they were evaluating it as an opportunity and now subsequently. I think the thing that we're encouraged is, in fact, what they've told us is they're very much aligned with what we have said, that the growth pattern needs to slow down to, you know, three to five units a year, where they can hit kind of the demographic and location requirements that we kind of agree with them. As we've said all along, our units continue to demonstrate very strong coverage. I think it's an integral part of the value equation that they saw. I think there are opportunities that they're going to very much look at, being they have a long history of multi-unit retail and even in the fitness and wellness space.

I think they're very, very focused on kind of the food and beverage and promotional opportunity sets. You've seen that, those early impacts of the second half of last year, where Topgolf was already addressing some of those and saw some very, very positive numbers going into the second half of the year in the fourth quarter. Greg, I don't know-

Greg Zimmerman (EVP and CIO)

I would also add, Michael, We're very pleased. They're gonna continue their refresh program, which benefits us greatly. They do a handful of our units every year with a nice refresh to keep them up.

Michael Goldsmith (US REITs Analyst)

Thank you very much. Thank you.

Operator (participant)

Our next question will come from John Kilichowski with Wells Fargo. You will receive a message on your screen allowing you to talk. Please accept, unmute your audio, and ask your question. John Kilichowski with Wells Fargo, you may ask your question.

John Kilichowski (Executive Director of Equity Research)

Hi, good morning out there. My first question is on where you see your cost of capital today. You know, you're trading back close to a range where we were, you know, end of the third quarter. You know, when does it start making sense to tap an ATM?

Greg Silvers (Chairman and CEO)

Sure, John, great question. I'll join in as Mark. I think, you know, we probably see it now in the kind of upper 50s or early low 60s at kind of low 7s, low, mid-7s. I think that works. We can make that work. You know, we're doing things in the low to mid 8s, so there's 100 basis points of spread. I think it's important for us to let people know that we can execute that way and get back on that flywheel of issuing equity. As Mark talked about in his comments, we don't need to. In fact, we'll still be even not even near the midpoint of our leverage range. We're doing the plan that we have executed. What it does mean is maybe we can do more, maybe we can even further de-lever.

I think it gives us a lot of options, and we are clearly entering the zone where it makes sense. Mark?

Greg Zimmerman (EVP and CIO)

Yeah, I think, as Greg said, I think we'll be kind of opportunistic about it, particularly if we're headed to the higher end of spending, investment spending. As Greg said, I think, you know, as you get to the high 50s, low 60s, or low to mid-sevens type of cost of capital, and as Greg said, you get nearly 100 basis points out of the gate. Then, of course, on an IRR basis, it's quite a bit higher than that when you factor in our rent bumps. Feel good about that and the opportunity that lies ahead.

John Kilichowski (Executive Director of Equity Research)

That was very helpful. Thank you. Maybe, you know, just along those same lines, if we could do a sensitivity analysis. Let's say, if your cost of capital got 50 basis points better from here on a blended basis, you know, where does that take, you know, maybe the high end of your investment guide, if this is a better buying opportunity here? I'm just curious, how much more you think you could do if you just had a little bit of improvement on that cost of capital?

Greg Silvers (Chairman and CEO)

Clearly, we think there's opportunity out there. John, I think it, again, it's probably not as linear as we're laying it out, that it's, you know, 50 basis points. It's really about, are they right opportunities and the risk and reward? I think overall, you're hearing our excitement about the opportunity set out there. I think there continues to be good opportunities. I think we're excited about those. We're excited about where our cost of equity seems to be trending, and so hopefully that combination will allow us to continue to grow and grow that base. To speculate on a kind of a sensitivity table would probably be not productive for us right now.

John Kilichowski (Executive Director of Equity Research)

Got it. Thank you.

Greg Silvers (Chairman and CEO)

Thank you, John.

Operator (participant)

Our next question will comes from Smedes Rose with Citi Global Markets. You'll receive a message on your screen allowing you to talk. Please accept, unmute your audio, and ask your question. Smedes Rose from Citi Global Markets, you may ask your question.

Smedes Rose (Director)

Hi, thanks. I was just wondering if you had any updates on what's going on in Sullivan County in terms of the ability to sell the ground lease that kind of came up a while ago. That'd be my first question.

Greg Silvers (Chairman and CEO)

Yeah. Thanks, Smedes. I would say we've not had really any meaningful conversations with them. I mean, again, when I say that, meaning our operator, you know, it's their call on how they want to proceed. It's not built into our plan. You know, our plan is utilizing our existing kind of cash flow, dispositions, things that we've done. But, the easiest thing to say, Smedes, is no, we've not had any meaningful conversations with the operator.

Smedes Rose (Director)

Okay, thanks. Then I was just wondering, you know, when we look in a sort of theme park world, you know, there seems to be, you know, I guess a certain amount of disruption going on and some new management changes. I'm just wondering, are they kind of showing up on your, on your radar screen as a possible solution to some of the issues they might be facing?

Greg Silvers (Chairman and CEO)

I think that's a very reasonable approach. I mean, if you think about the names that are being dropped around, that, yeah, you know, we partner with many, if not all, of those names that are being dropped around. I think it's something. We think that business is actually very, if you look over time, very stable cash cow kind of business. It needs to be a smart, thoughtful, well-covered, kind of thoughtful business. Again, we play in that field. I don't know, Greg, if you want to.

Well, I would agree, and as we announced, we acquired something in the fourth quarter. Yes, we're enthusiastic about the attraction space.

Smedes Rose (Director)

Great. All right, thank you, and best wishes to you, Greg, going forward.

Greg Silvers (Chairman and CEO)

Oh, thanks, Smedes.

Operator (participant)

Our next question comes from Anthony Paolone with J.P. Morgan. You will receive a message on your screen allowing you to talk. Please accept, unmute your audio, and ask your question. Anthony Paolone with J.P. Morgan, you may ask your question.

Anthony Paolone (Executive Director)

Great, thanks. Just, Greg, going back to the opportunity set that you talked about, can you be a little bit more specific in maybe how much of it is development, redevelopment, versus buying existing assets? Maybe kind of the range of cap rates and, like, what would take you know, into the eights versus where you'd probably be maybe in the sevens if something is perhaps a bit higher quality or different?

Greg Silvers (Chairman and CEO)

Sure. I think it's gonna gear, at least early part of this year, gonna be more on the acquisition side. I would say, you know, and I'm looking at Greg and Ben, probably 70/30 acquisitions right now. I think, again, where you would look at, you know, most of our stuff has been in the 8s, where you would look at something below that potentially would be a much lower advance rate. It's really gonna be risk return. If you had a credit, yeah, you know, you had a much higher credit scenario to where you would think lower 7s, but better growth profile. I would say most of our stuff are, right now that we're looking at, has at least an initial 8 handle on it.

Tony, obviously, development deals are gonna carry a higher cap rate because there's more, you know, risk adjusted, there's more risk. That's kind of the way we look at it.

Anthony Paolone (Executive Director)

Okay, got it. My only other question, maybe for Mark, and just on the spending here. If I look at page 19 of the supplemental, there's about $63 million of spending outlined there. Is that different than the $85 million that you, that you guys talked about in the presentation, or do you put those together? how does that work?

Greg Silvers (Chairman and CEO)

Yeah, no, that's a good question. The $63 million is only related to those projects that have been started at the end of the year. The difference between that and the $85 million is projects that haven't been started, but that we have commitments and line of sight to. If you're looking at kind of spending, sort of what's spoken for kind of heading into the year, $85 million is the number to use. If you add, you know, for example, the VITAL Climbing Gym that we did, we're sort of sitting at around $119 million right now in sort of spoken for spending.

As Greg said, I think the amounts that we'll add to get to the midpoint of guidance of 450 will be mostly acquisition oriented.

Anthony Paolone (Executive Director)

Okay, got it. Thank you.

Greg Silvers (Chairman and CEO)

Thank you.

Operator (participant)

Our next question comes from Michael Carroll with RBC Capital Markets. You will receive a message on your screen allowing you to talk. Please accept, unmute your audio, and ask your question. Michael Carroll with RBC Capital Markets, you may ask your question.

Michael Carroll (Managing Director)

Yep, thanks. I guess, Mark, just sticking with the guidance ranges that you provided in the investment. With that remaining investments to get back up to that $450 million, with guidance, when do you assume that gets completed? Is it just kind of ratably throughout the year, or do you kind of have a back end weight it? What's kind of implied in that guidance range?

Greg Silvers (Chairman and CEO)

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

Michael Carroll (Managing Director)

Okay. On, the Regal percentage rents, what you put in guidance, what did you assume would be the box office, at least for the Regal lease year ended July 2026, versus the prior year? Is it kind of a similar box office, so we're expecting percentage rents for Regal to be kind of in line with what it was last year?

Greg Silvers (Chairman and CEO)

Yeah, I think it's slightly up, consistent with kind of analysts, but as you can see, it's probably kind of, up kind of 2% over where they were last year, as our number is up slightly over there.

Greg Zimmerman (EVP and CIO)

Yeah, when we lay out that percentage rent slide, you can see once you cut through the prior period and so forth, you get to about $1 million of net growth amongst all our tenants, and a good chunk of that is Regal, 'cause we do expect box office to be higher next year. Again, Mike, the Regal lease year ends in July, so you're not gonna have the advantage of the fall season.

Michael Carroll (Managing Director)

Yeah. Yeah, got that. Just last one for me, and I know, Greg, you mentioned and talked a little bit about the investment opportunities you have across all your property types. I mean, are there any specific property types where you're seeing bigger opportunities or other types of activity that you could pursue?

Greg Silvers (Chairman and CEO)

I think, as we've talked about, we've hit several things. I would say the top 3 continue to be fitness and wellness, attractions, and eat and play. Again, when you look at those, we're still seeing an occasional opportunity in gaming, but not as much. Ski is more opportunistic. Those other 3, I think, are going to be where the anchor part of what our investment's gonna come from.

Greg Zimmerman (EVP and CIO)

Mike, again, I would, you know, when we say fitness and wellness, that's a very broad category for us. Obviously, we've done a couple of golf deals now. We did a climbing gym deal this quarter. We did a regular fitness deal last quarter, and we have done hot springs deals. We see a lot of opportunity to expand the aperture in that space.

Michael Carroll (Managing Director)

Great. I appreciate it. Thanks.

Greg Silvers (Chairman and CEO)

Thanks, Mike.

Operator (participant)

Our next question comes from Upal Rana with KeyBanc Capital Markets. You will receive a message on your screen allowing you to talk. Please accept, unmute your audio, and ask your question. Upal Rana with KeyBanc Capital Markets, you may ask your question.

Upal Rana (Director and Equity Research Analyst)

Great, thanks for taking my question. Just curious on how the transaction market looks like in terms of larger deals. You know, are you seeing more or less out there?

Greg Silvers (Chairman and CEO)

Again, I think we're starting to see, as we said, I don't know we're seeing more, we're seeing our ability to participate in larger deals more. Upal, that's beneficial to us, but I think it feeds into what, you know, when you look at what we've done, we're talking about 2 years in a row of delivering 5% plus kind of earnings growth. It's getting back into what is our kind of normal trajectory of delivering outsized value for our shareholders, and now we're going to be able, as we, A, one, generated a lot of proceeds from dispositions, or two, getting close to our ability to issue equity through our ATM program.

It's going to allow us to participate in some of these deals, which will further that growth, so that the idea that we've been done it. We did 5% last year, we're doing 5% this year. Let's get on that track of what we delivered 20 years before COVID.

Upal Rana (Director and Equity Research Analyst)

Great. That was helpful. You know, it looks like negotiations are starting to be begin to start up again on SAG-AFTRA with the contracts that were negotiated in 23, you know, expiring in May for writers and in June for the actors. The environment is certainly much different today than it was three years ago. I just, you know, wanted to get your take on those negotiations and how that could play out.

Greg Silvers (Chairman and CEO)

Again, it's I think we think it's still really early, but I think you're correct. I think the... It's really early. I think it's going to still be about AI and the ability to do that, but they set a nice framework to deal with that. Everybody, I think, at this point, saw how negatively the market was impacted by a strike. Much like what we've seen in some other areas, like baseball, people have tried to avoid strikes because they have long-lasting effects, and everybody's saying the right thing about wanting to avoid that.

Upal Rana (Director and Equity Research Analyst)

Great. Thank you. Good, good luck this year.

Greg Silvers (Chairman and CEO)

Thank you.

Greg Zimmerman (EVP and CIO)

Thank you.

Operator (participant)

Our last question comes from Upal Rana. Apologies, that is Jana Galan with Bank of America, Merrill Lynch. You will receive a message on your screen allowing you to talk. Please accept, unmute your audio, and ask your question. Jana Galan with Bank of America, Merrill Lynch, you may ask your question.

Jana Galan (Director)

Thank you. Good morning. I know this is a much smaller part of your portfolio, but curious if you could just provide an update on the education portfolio and kind of any changing trends there between early childhood and the private school.

Greg Silvers (Chairman and CEO)

I think if anything, the strength of that portfolio has continued to be demonstrated over the last several years. I think one area that, you know, as we think about dispositions this year, may be an area that we start to think about. I mean, last year was all about kind of cleaning up the theater portfolio and getting through that. I think the strength of that will allow us to capture good value if we want to do that, and could be another lever that we pull to accelerate growth.

Jana Galan (Director)

Great, thank you. Also wanted to congratulate Greg.

Greg Silvers (Chairman and CEO)

Oh, thank you.

Operator (participant)

There are no more questions, so I will now turn the call back over to Greg Silvers, Chairman and CEO, for any closing remarks.

Greg Silvers (Chairman and CEO)

I just wanna thank you all. As we said, we're excited about the year. Look forward to talking through the year, and look forward to delivering on the guidance that we've set forth. Thanks, everyone. Thank you.

Operator (participant)

Thank you for joining EPR Properties Q4 and Year-End 2025 Earnings Call. This concludes today's call. You may now disconnect.