Q2 2025 EPR Properties Earnings Call
Brian Moriarty: Vary materially from those contemplated by such forward-looking statements. Discussion of these 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. Additionally, 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, the most directly comparable GAAP measures, are included in today's earnings release and supplemental information furnished to the SEC under Form 10-K. If you wish to follow along, today's earnings release, supplemental, and earnings call presentation are available on the Investor Center page of the company's website, www.eprkc.com. Now I'll turn the call over to Greg Silvers.
Very materially from those contemplated biceps, we're looking statements.
Discussion of these 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.
Additionally, 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 the most directly comparable. Gaap measures are included in today's earnings release and supplemental information furnished to the SEC under form 10K.
If you wish to follow along, today's earning to release supplemental and earnings. Call presentation are available in the investor Center page for the company's website www.prac.com.
Greg Silvers: Thank you, Brian. Good morning, everyone, and thank you for joining us on today's second quarter of 2025 earnings call and webcast. Our second quarter results underscore sustained momentum across our diversified portfolio, highlighted by solid earnings growth and a disciplined approach to capital allocation. Additionally, we've seen a significant improvement in our cost of capital, supported by the strong appreciation of our equity valuation. During the first half of the year, our elevated cost of capital dictated a measured approach to capital in our capital deployment. However, we have a robust pipeline of opportunities, including more than 100 million committed to experiential development and redevelopment projects in the coming quarters. While our investment spending guidance remains unchanged, our improved cost of capital positions us to accelerate our future investment spending.
Now, I'll turn the call over to Greg Silvers.
Thank you, Brian. Good morning, everyone and thank you for joining us on today's second quarter of 2025 earnings call and webcast.
Our second-quarter results underscore sustained momentum across our diversified portfolio, highlighted by solid earnings growth and a disciplined approach to capital allocation.
Additionally, we've seen a significant improvement in our cost of capital supported by the strong appreciation of our Equity valuation.
During the first half of the Year, our elevated cost of capital dictated, a measured approach to Capital in our Capital deployment. However, we have a robust pipeline of opportunities, including more than 100 million committed to experiential development and Redevelopment projects in the coming quarters.
Greg Silvers: Although the full impact of these efforts will play out over future quarters, our deployment strategy has clearly shifted within the last 60 days as our team has taken a more aggressive growth posture to pursue new opportunities. Our pipeline includes both opportunities with both existing and new partners, spanning a broad range of deal sizes. However, with an improved cost of capital, larger deals are now becoming a possibility. We are also pleased with our ongoing progress in our strategic capital recycling, which is advancing ahead of our expectations. This initiative is pivotal as we further position our portfolio with productive and diversified experiential assets. Turning to our existing portfolio, our second quarter consolidated coverage was up slightly versus first quarter from 2.0 to 2.1. The box office remains a source of meaningful optimism.
While our investment spending guidance remains unchanged, our improved cost of capital positions us to accelerate our future investment spending.
Although the full impact of these efforts will play out over future quarters. Our deployment strategy has clearly shifted within the last 60 days. As our team is taking a more aggressive growth posture to pursue new opportunities.
Our pipeline includes both offer opportunities with both existing and new partners spending a broad range of deal sizes. However, with an improved cost of capital larger deals are now becoming a possibility
We are also pleased with our with our ongoing progress, in our strategic Capital recycling, which is advancing ahead of our expectations. This initiative initiative is pivotal as we further position our portfolio with productive and diversified experiential assets.
Turning to our existing portfolio. Our second quarter Consolidated coverage was up slightly versus first quarter from 2.0 to 2.1.
Greg Silvers: We are seeing sustained momentum and resilience as major releases have generally met or exceeded their expectations, reinforcing positive consumer demand for theatrical exhibition. Notably, we anticipate that the Regal Master lease will land near our percentage rent expectations, which is expected to generate a significant increase from 2024, an encouraging outcome driven by continued box office recovery and the enhanced economic alignment embedded in the revised lease structure. While the broader macroeconomic environment presents ongoing cross-currents, our differentiated strategy provides both resilience and opportunity, anchored by a sustained consumer orientation toward experiential spending. Now I'll turn it over to Greg Zimmerman to go over the business in greater detail.
The box office remains a source of meaningful optimism. We are seeing sustained momentum and resilience as major. Releases have generally met or exceeded. Their expectations reinforcing positive consumer demand for theatrical exhibition,
notably, we anticipate that the Regal Master Lease will land near our percentage. Rent expectations which is expected to generate a significant increase from 2024 and encouraging outcome driven by continued box box, box office recovery and the enhanced economic alignment embedded in the revised lease structure.
while the broader macroeconomic environment, presents ongoing cross-currents are differentiated strategy provides both resilience and opportunity anchored by a sustained consumer, orientation toward experiential spending
Greg Zimmerman: Thanks, Greg. At the end of the quarter, our total investments were approximately 6.9 billion, with 329 properties that are 99% leased or operated, excluding vacant properties we intend to sell. During the quarter, our investment spending was 48.6 million. 100% of the spending was in our experiential portfolio. Our experiential portfolio comprises 274 properties with 52 operators and accounts for 94% of our total investments, or approximately 6.5 billion. And at the end of the quarter, excluding the vacant properties we intend to sell, was 99% leased or operated. Our education portfolio comprises 55 properties with five operators, and at the end of the quarter, was 100% leased. Turning to coverage, the most recent data provided is based on a June trailing 12-month period. Overall portfolio coverage remains strong at 2.1 times, an increase over the last quarter.
Now, I'll turn it over to Grace and run to over the business and greater detail.
Thanks Greg. At the end of the quarter, our total Investments were approximately 6.9 billion with 329 properties that are 99% leased or operated excluding vacant properties. We intend to sell during the quarter. Our investment spending was 48.6 Million. 100% of the spending was in our experiential portfolio.
Our experiential portfolio comprises 274 properties with 52 operators and accounts for 94% of our total investments, or approximately $6.5 billion. At the end of the quarter, excluding the vacant properties we intend to sell, it was 99% leased or operated.
Our education portfolio, comprises 55 properties with 5 operators and at the end of the quarter was 100% least.
Greg Zimmerman: Turning to the operating status of our tenants, the rebound in North American box office continues. Q2 box office was 2.7 billion, up 37% compared to Q2 2024, driven by a full slate of strong performing titles. Six titles grossed over 175 million, including a Minecraft movie at 424 million to date, Relo and Stitch at 419 million to date, Sinners at 279 million to date, and How to Train Your Dragon at 254 million to date. For Q3, three titles are projected to gross over 200 million: Jurassic World Rebirth, Superman, and the Fantastic Four: First Steps. Jurassic World has already grossed over 286 million, and Superman is at 260 million. Fantastic Four opened last weekend to 118 million. We are also very pleased with the success of Apple's F1, which has grossed nearly $160 million to date, making it the most successful Apple theatrical release.
Turning to coverage the most recent data provided is based on a June trailing 12-month period. Overall portfolio coverage, remains strong at 2.1 times and increase over the last quarter.
Turning to the operating status of our tenants.
% compared to Q2 2024 driven by a Full Slate of strong performing titles 6 titles, grossed over 175 million, including a Minecraft movie at 424 million to date. We loan, Stitch at 419 million today, centers at 279 million today and how to train your dragons at 254 million today.
Greg Zimmerman: The slate for the fourth quarter is anchored by three additional films projected to gross over 200 million: Zootopia 2, Wicked: It for Good, and Avatar: Fire on the Edge. Box office through the first half of the year was 4.1 billion, a 15% increase over the first half of 2024. Our estimate of North American box office for calendar year 2025 remains between 9.3 and 9.7 billion. Turning now to an update on our other major customer groups, Andretti Carding opened in Oklahoma City on July 15th. Construction continues in Kansas City and Schaumburg with openings scheduled respectively for late 2025 and early 2026. Notwithstanding some macro pressures on consumers, our EBITDA coverage remains strong and above pre-COVID levels. Importantly, across our portfolio, our operators are continually refining and developing promotional initiatives to attract customers and deliver value. Our attractions are open for the summer.
For Q3 3 titles are projected to gross over 200 million Jurassic world rebirth, Superman and the Fantastic 4. First Steps Jurassic world has already grossed over 286 million and Superman is at 260 million. Fantastic 4 opened last weekend to 1118 million. We are also very pleased with the success of Apple's F1 which has grossed nearly $160 million to date. Making it the most successful Apple theatrical release.
The Slate for fourth quarter is anchored by 3, additional films, projected to gross over 200 million zootopia 2 Wicked for good and Avatar.
Box office through the first half of the year was 4.1 billion. A 15% increase over the first half of 2024
Our estimate of North American box office for calendar year 2025 remains between 9.3 and 9.7 billion.
Turning now to an update on our other major customer groups and ready carding opened in Oklahoma City on July 15th, construction continues in, Kansas City, and Schamberg with opening scheduled respectively for late, 2025, and early 2026.
Notwithstanding some macro pressures on consumers, eating play coverage remains strong and above pre-COVID levels, importantly across our portfolio. Our operators are continually refining and developing promotional initiatives to attract customers and deliver value.
Greg Zimmerman: We are very pleased with the performance of Bavarian Inn. Our major expansion was open for all of Q2 and is driving performance. Throughout the rest of the portfolio, early season performance has been varied because of weather conditions, but historically, they tend to even out over the course of the season. USA Today recently ranked each of our three hot springs resorts in the top 10 of all hot springs resorts in the United States. Our recently expanded Springs Resort at Pagosa Springs is number one. Our Marietta Hot Springs Resort in Marietta, California, is number three, and our Iron Mountain Hot Springs in Glenwood Springs, Colorado, is number five. We are leaders in this industry and have spent a lot of time focused on building a foundation with strong performing assets.
Our attractions are open for the summer. We are very pleased with the performance of the variant. In our major expansion was open for all Q2 and is deriving performance throughout the rest of the portfolio. Early season performance has been varied because of weather conditions. But historically, they tend to even out over the course of the season.
USA Today recently. Ranked each of our 3 Hot Springs resorts in the top 10 of all Hot Springs resorts in the United States. Our recently expanded Spring Resort of Pagosa Springs is number 1, our Murray at a Hot Springs Resort in buretta, California that is number 3 and our Iron Mountain Hot Springs in Glenwood Springs. Colorado is number 5, we are leaders in this industry.
Greg Zimmerman: We see a lot of momentum and investment potential in the hot spring space as people across the demographic spectrum focus on wellness. The expansion in our Jellystone Cozy Rest RV Resort near Pittsburgh is complete, and early season performance shows gains over Q2 2024, driven by an increased number of available rental units. Our education portfolio continues to perform well. Our customer's trailing 12-month revenue and EBITDA across the portfolio for Q1 was essentially flat. Our investment spending for Q2 was 48.6 million, entirely experiential assets, and includes funding for projects that we have closed but are not yet over. Our year-to-date investment spending is 86.3 million. During the quarter, we made our first investment in the traditional golf space, acquiring the land for 1.2 million and providing 5.9 million in mortgage financing, secured body improvements to Eberd partners for an existing private club in Georgia.
Time focused on building a foundation with strong performing assets. We see a lot of momentum and investment potential in the hot springs space as people across the demographic Spectrum, Focus On Wellness,
The expansion in our Jellystone Kozy Rest Rd resort near Pittsburgh is complete and early season performance shows. Gains over Q2 2024 driven by The increased number of available rental units.
Our education portfolio continues to perform well, our customers trailing 12-month revenue and even arm across the portfolio for q1 was essentially black.
Greg Zimmerman: We have spent a lot of time analyzing traditional golf while building deep relationships, and we are delighted to announce our foray into what we think is an exciting growth opportunity in a resilient space with a growing operating. We also acquired our second Pennstack EBITDA venue in Northern Virginia for 1.6 million, with a commitment to provide build-to-soothe financing for 19 million. This project is expected to open in 2026. Pennstack features bowling, food and beverage, and redemption games. As our cost of capital continues to recover, we are increasing our investment spending cadence as we head into the second half of 2025 and for 2026. We continue to see high-quality opportunities for both acquisition and build-to-soothe development in our target experiential categories.
Our investment spending for Q2 was 48.6 Million entirely experiential assets and includes funding for projects that we have closed but are not yet. Open our year-to-date investment spending is 86.3 million. During the quarter. We made our first investment in the traditional golf space acquiring the land for 1.2 million and providing 5.9 million in mortgage financing secure, body improvements to Evergreen partners for existing private club in Georgia. We have spent a lot of time analyzing traditional golf while building deep relationships and we are delighted to announce our 4A into what we think is an exciting growth opportunity in a resilient space with a growing outbreak. We also required our second pinstack, eaten play venue in Northern Virginia for 1.6 million with a commitment to provide Bill to suit financing for 19 million. This project is a
Expected to open in 2026.
Since that features bowling food and beverage and Redemption games.
as our cost of capital continues to recover, we are increasing our investment spending Cadence as we had
2025, and for 2026.
Greg Zimmerman: As we have mentioned frequently, we are especially bullish on the fitness and wellness space, given our deep relationships, the increased focus on fitness and wellness among multiple generations and demographics, and a wide range of investment opportunities from hot springs to spas to fitness. Granting all takes time, so we are maintaining our investment spending guidance of funds to be deployed in 2025 in the range of 200 to 300 million. We have committed over 100 million for experiential development and redevelopment projects that have closed but are not yet funded to be deployed over the next 18 months. We anticipate approximately 43 million of this amount will be deployed in 2025, which is included at the midpoint of our 2025 guidance range. We continue to execute our strategy to focus our portfolio on diversified experiential assets.
From Hot Springs to Spas defense.
Ramping up takes time. So we are maintaining our investment spending guidance for funds to be deployed in 2025 in the range of 200 to 300 million.
We have committed over 100 million for experiential development and Redevelopment projects that have closed but are not yet offended to be deployed over the next 18 months. We anticipate approximately 43 million of this amount will be deployed in 2025, which is included at the midpoint of our 2025 guidance range.
Greg Zimmerman: To that end, in Q2, we sold a vacant former Regal Theater in California to Costco for net proceeds of 24 million, demonstrating the value of good real estate. We also sold two theater properties at a nine count to a smaller operator who leased both locations from us. Total proceeds for these three theater transactions were 35.6 million, with a net gain of 16.8 million. Finally, subsequent to the end of the quarter, we sold our last vacant ANC Theater in Hamilton, New Jersey, to the Children's Hospital of Philadelphia, for net proceeds of approximately 16 million and a gain of approximately 3 million. In the past four years, we have sold 31 theaters. We have one remaining vacant theater. Year to date, we have sold approximately $130 million of assets.
We continue to execute our strategy to focus our portfolio. On Diversified experiential assets to that end in Q2. We sold a vacant former Regal Theater in California to Costco, for net proceeds of 24 million demonstrating, the value of good, real estate. We also sold 2 theater properties at a 9 cap to a smaller operator who leaves the locations from us.
Total proceeds for these 3 Theater transactions or 35.6 million with the net gain of 16.81.
Finally subsequent to the end of the quarter. We've sold our last vacant AMC, Theater in Hamilton, New Jersey, to the Children's Hospital of Philadelphia for net. Proceeds of approximately, 16 million and a gain of approximately 3 million in the past 4 years, we have sold 31 theaters. We have 1 remaining big deal.
Greg Zimmerman: We are revising our 2025 disposition guidance for the range of 130 million to 145 million from a range of 80 million to 120 million. I now turn it over to Mark for a discussion of the financials.
Year to date. We have sold approximately 130 million dollars of assets. We are advising our 2025 disposition, guidance to the range of 130,245 million, from a range of 80 million,
To 120 million.
Mark Peterson: Thank you, Greg. Today, I will discuss our financial performance for the second quarter, provide an update on our balance sheet, and close with an update on 2025 guidance. FFO adjusted for the quarter was $1.26 per share, versus $1.22 in the prior year. An AFFO for the quarter was $1.24 per share, compared to $1.20 in the prior year, both an increase of 3.3%. Now, moving to the key variances, total revenue for the quarter was 178.1 million versus 173.1 million in the prior year. Within total revenue, rental revenue increased 5.3 million versus the prior year, mostly due to the impact of investment spending and higher percentage rents. Percentage rents for the quarter were 4.6 million versus 2 million in the prior year, and the increase was due primarily to percentage rent recognized from one of our theater tenants.
I now, turn it over to mark for a discussion of the financials.
Thank you. Greg today, I will discuss our financial performance for the second quarter. Provide an update on our balance sheet and close with an update on 2025 guidance.
Ffos adjusted for the quarter was, a $1.26 per share versus a $1.22 in the prior year and afo. For the quarter was $1.24 per share. Compared to a $1.20 in the prior year. Both an increase of 3.3%.
Now moving to the key variances, total revenue for the quarter was $178.1 million versus $173.1 million in the prior year.
Within total revenue, rental Revenue, increased 5.3 million versus the prior year, mostly due to the impact of investment spending and higher percentage rents.
Percentage rents for the quarter were 4.6 million versus 2 million in the prior year. And the increase was due primarily to percentage recognized from 1 of our theater times.
Mark Peterson: The increase in mortgage and other financing income of 1.9 million was due to additional investments in mortgage notes over the past year. Both other income and other expense relate primarily to our consolidated operating properties, including the Cartwright Hotel and Indoor Water Park and our operating theaters. The decrease in other income and other expense for the prior year is due primarily to the sale of three operating theater properties in the first half of this year. On the expense side, G&A expense for the quarter increased to 13.2 million versus 12 million in the prior year, due primarily to higher payroll costs, including non-cash share-based compensation expense, as well as higher franchise taxes. As you may recall, in the prior year, there was a legislative tax change that created a one-time benefit in franchise taxes.
The increase in mortgage and other financing income of 1.9 million was due to additional investments in mortgage notes over the past year.
Both other income and other expense for late primarily to our Consolidated operating properties.
Including the cartright hotel and indoor water park and our operating Theatres.
The decrease in other income and other expense versus prior year is due primarily to the sale of 3 operating theater properties, in the first half of this year.
On the expense side, G&A expense for the quarter increased to 13.2 million versus 12 million in the prior year. Due primarily to higher payroll costs including non-cash share based compensation expense as well as higher franchise taxes as you may recall. In the prior year there was a legislative tax, change that created a 1-time benefit in franchise taxes.
Mark Peterson: Interest expense net for the quarter increased by $426,000 compared to the previous year, due to an increase in our weighted average interest rate on outstanding debt, due to additional borrowing on our unsecured revolving credit facility to pay out a lower rate senior unsecured notes at their maturity. With regard to dispositions for the quarter, net proceeds totaled 35.6 million. We recognize a net gain on sale of 16.8 million. Note that this gain is excluded from FFOs adjusted and AFFO. FFOs adjusted for the six months ended June 30th was 245 per share compared to 234 in the prior year, and AFFO for the same period was 244 per share compared to 233 in the prior year, both an increase of 4.7%. To the next slide, I will review some of the company's key credit ratios.
Interest expense net for the quarter increased by 426,000 compared to the previous year. Due to an increase in our weighted average interest rate on outstanding debt
due to additional borrowing on our unsecured revolving credit facility to pay off lower rates, senior unsecured notes at their maturity.
With regard to dispositions for the quarter. Net proceeds, total 35.6 million. We recognize a net gain on sale of 16.8 million.
Note that this gain is excluded from ethos adjusted and affo.
Ffo is adjusted for the 6 months. Ended June 30th was 2 245 per share. Compared to 234 in the prior year and afo for the same period was 244 per share.
compared to 233 in the prior year, both an increase of both, an increase of 4.7%
Mark Peterson: As you can see, our coverage ratios continue to be strong with fixed charge coverage at 3.3 times and both interest and debt service coverage ratios at 3.9 times. Our net debt to adjusted EBITDA IRA was 5.1 times for the quarter. If you adjust this ratio to include the annualization of investments placed in service, investments acquired or disposed of during the quarter, and the annualization of percentage rent and participating interest as well as other items, this ratio was five times at quarter end, which is at the low end of our targeted range. Additionally, our net debt to gross assets was 39% on a book basis at quarter end, and our common dividend continues to be very well covered with an AFFO payout ratio of 71% for the second quarter. Now let's move to our balance sheet, which is in great shape.
To the next slide. I'm reviewing some of the company's Key Credit ratios.
As you can see, our coverage, ratios continue to be strong with fixed charge coverage, and 3.3 times, and both interest and debt service coverage ratios at 3.9 times.
Our net debt to adjusted Evie was 5.1 times for the quarter.
Annualization of investments, placed in service investments required or disposed of during the quarter, and the annualization of percentage participating interest, as well as other items. This ratio was 5 times a quarter end, which is at the low end of our targeted range.
Additionally, our net debt to gross assets was 39% on a book basis at quarter end and our common dividend continues to be very well. Covered with an afo payout ratio of 71% for the second quarter.
Mark Peterson: At quarter end, we had consolidated debt of 2.8 billion, of which 2.4 billion is either fixed-rate debt or debt that has been fixed through interest rate swaps with an overall blended coupon of approximately 4.3%. On April 1st, we repaid 300 million in senior unsecured notes at maturity using funds available under our revolver. We have no other debt maturities in the next 12 months. Our liquidity position remains strong with 13 million cash on hand at quarter end and 405 million drawn on our $1 billion revolver. We are pleased to see the recent significant improvement in our cost of capital.
Now, let's move to our balance sheet, which is in great, shape at quarter end. We had consolidated debt of 2.8 billion of which 2.4 billion is either fixed rate, debt or debt that has been fixed through interest rate swaps with an overall Blended coupon or approximately 4.3%
On April 1st, we repaid $300 million in senior unsecured notes at maturity using funds available under our revolver. We have no other debt maturities in the next 12 months.
Our liquidity position remains strong with 13 million cash on hand a quarter and in 405 million drawn on our 1 billion dollar revolver.
Mark Peterson: While our leverage is at the low end of our range and our 2025 guidance continues to have no equity issuance assumed, we are excited to announce that we are in the process of establishing an ATM program, which will provide us an additional tool in our toolbox for sources of capital. We are confirming our 2024 FFO's adjustment per share guidance of $5 to $5.16, representing an increase over the prior year of 4.3% at the midpoint. We're also confirming our 2025 investment spending guidance of 200 million to 300 million. We're increasing guidance for disposition proceeds for 2025 to a range of 130 million to 145 million from a range of 80 million to 120 million. On the next slide, we are confirming our percentage rent and participating interest income of 21.5 million to 25.5 million and our G&A expense of 53 million to 56 million.
We are pleased to see the recent significant improvement in our cost of capital.
While I Leverage is at the low end of our range and our 2025 guidance continues to have no equity, issuance assumed we have. We are excited to announce that we are in the process of establishing ATM program.
which will provide us an additional tool in our tool box for sources of capital
We are confirming. Our 2024 ffos adjusted per share. Guidance of 5 dollars to 5 dollars and 16 cents.
Represent an increase over the prior year of 4.3% at the midpoint.
We're also confirming our 2025 investment spending, guidance of 200 million to 300 million.
We're increasing guidance for disposition proceeds for 2025 to a range of 130 million to 145 million.
From a range of 80 million to 120 million.
On the next slide, we are confirming our percentage rent and participating interest income of 21.5 million to 25 and a half billion.
Mark Peterson: We're also confirming the guidance for our consolidated operating properties, which is provided by giving a range for other income and other expense. Guidance details can be found on page 23 of our supplemental. Now with that, I'll turn it back over to Greg for his closing remarks.
And our GNA expense of 53 million to 56 million.
We're also confirming the guidance for our Consolidated operating properties, which is provided by giving a range for other income and other expenses.
Guidance details can be found on page 23 of our supplemental.
Greg Silvers: Thank you, Mark. Lastly, I wanted to comment on Greg Zimmerman's planned retirement and the transition of the Chief Investment Officer role to Ben Foss, who will join the company in August as Executive Vice President. We are pleased that Greg will be staying into the first quarter of 2026 to ensure a smooth transition. Although it's not quite yet time to say goodbye to Greg, I would like to thank him for the significant contributions he has made to the company. While instilling a disciplined and thoughtful approach as CIO, he has also helped to navigate the company through some very challenging times, and we're thankful for his efforts. We're also very pleased to welcome Ben Foss to EPR Properties.
Now, with that, I'll turn it back over to Greg for his closing remarks.
Thank you, Mark. Lastly, I wanted to comment on Greg Zimmerman's plan retirement in the transition of the chief investment officer role to Ben Fox, who will join the company in August as Executive Vice President. We are pleased. That Greg will be saved into the first quarter of 2026 to ensure a smooth transition.
Although it's not quite yet, Time to Say Goodbye to Greg. I would like to thank him for the significant contributions. He has made to the company.
While instilling discipline and a thoughtful approach to CIO, he has also helped navigate the company through some very challenging times, and we're thankful for his efforts.
Greg Silvers: Ben brings substantial experience and expertise in the net lease read business, having served in senior positions at Realty Income and most recently in the Net Lease Division of Aries Management Corporation. Ben will work with Greg during his remaining tenure, helping to ensure continuity, knowledge sharing, and continued success. With that, why don't I open it up for questions? Abigail?
We are also very pleased to welcome Ben Fox. The EPR Properties team brings substantial experience and expertise in the net lease REIT business, having served in senior positions at Realty Income and, most recently, in the net lease division of Aries Management Corporation.
Then we'll work with Greg during his remaining tenure helping to ensure continuity knowledge, sharing and continued success with that. Why don't I open it up for questions? Abigail
Abigail: 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 three dots or more button to find the Raise Hand feature. And lastly, if you are calling in today, Star 9 will activate the Raise Hand and use Star 6 to mute and unmute. We will wait just one moment to allow the queue to form. Our first question comes from Rob Stevenson with Janey Montgomery Scott.
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,
To tap into the 3 dots or more buttons to find the raised hand feature. And lastly, if you are calling in today, star 9 will activate the raised hand and use star 6 to mute and unmute.
We will wait, just 1 moment to allow the queue to form.
Abigail: Rob, please unmute your line and ask your question.
Our first question comes from Rob Stevenson's with Jaime Montgomery, Scott.
Rob Stevenson: Good morning, guys. Can you hear me okay?
Raab, please unmute your line and ask your question.
Greg Zimmerman: We can, Rob. Thank you. Morning, Rob.
Greg Silvers: Perfect. Thank you. So, Greg, or Greg, is there a significant amount of assets out there for sale at reasonable prices that you'd want to own? or does expanding your pipeline, going forward here in the, at least in the near term, mean expanding the development pipeline as much or more than acquisitions? How should we be thinking about the acquisition market that you guys are in for quality assets at this point?
Good morning, guys. Can you hear me, okay, we can Rob thank you morning, Rob.
Greg Silvers: Sure. And I'll let Greg comment as well, but I think we're still seeing a robust amount of opportunities. I mean, again, as we've talked about, when you have a limited amount of capital, you're being very discerning in, you know, what is the best targeted of that. It doesn't mean they're not good deals. It's just, you know, you're trying to deploy that in the best manner, supporting existing tenants and otherwise. But I think we still feel there's really good opportunities, and I think Greg would say that, we're starting to see that growing.
Your pipeline, um, going forward here in the, at least in the near term mean expanding the development pipeline as much, or more than Acquisitions. How should we be thinking about the acquisition Market that you guys are in for a quality assets at this point?
Greg Silvers: Yeah, 100%, Greg. Rob, I would say well over half of our pipeline is acquisitions. to Greg's point, we've been unable to participate in some higher deal volume acquisitions just because we were being careful. and again, we're always mindful of balancing development with acquisitions. So to answer your question directly, I don't see us turning to, a lot more development in the future to grow the pipeline. I don't think that'll be necessary.
Sure, and I'll let Greg come in as well, but I think we still seeing a robust amount of opportunities. I, I mean again as we've talked about, when you have limited amount of capital, you're being very Discerning in. Yeah, you know, what is the best targeted of that? It doesn't mean they're not good deals. It's just, you know, you're, you're trying to deploy that in the best manner supporting existing tenants and otherwise. But I think we still feel there's really good opportunities, and I think Greg would say that, uh, we're starting to see that growing.
Yeah, 100%, Greg Robb. I I would say well over half of our pipeline is Acquisitions, uh, to Greg's Point, we've been unable to participate in some higher deal volume Acquisitions just because we were being careful. Um, and again, we're always mindful of balancing development with Acquisitions. So, to answer your question directly, I, I don't see us turning to a lot more development in the future to grow the pipeline. I don't think that'll be necessary.
Rob Stevenson: Okay. And then how are you guys thinking about dispositions in the back half of this year and the early part of next year? You guys have been selling a decent amount of assets. Is there still more stuff that you want to do there and take advantage of the market and use that as capital? or you know, were dispositions this year, you know, sort of more front-end loaded and we'll see that sort of petering out, in the back half of this year and into '26?
Greg Silvers: I mean, I think, Rob, we've talked about, you know, we've already kind of at the low end of our guidance on that. So there could be, but we have as a strategic objective to lower our theater exposure. You saw the first element of selling operating theaters now. We will continue to look at that opportunistically, as as an opportunity to, achieve that strategic objective and, generate what we think could be meaningful capital. But again, the the range kind of says we're we're pretty much close to being done with our targeted, disposition. But as I said, we we have strategic objectives that we will continue to pursue.
Okay. And then how are you guys thinking about this positions in the back half of this year and the early part of next year, you guys have been selling a decent amount of assets, is there still more stuff that you want to do there and take advantage of the market and use that as capital um, or you know where Acquisitions this year? You know, sort of more front-end loaded and we'll see that sort of petering out, um, in the back half of this year and into 26,
Greg Silvers: And, Rob, that would also include education. Yeah. so, you know, we we sold an education portfolio this year, and we're always just opportunistic about that. So if we get a good deal, we'll execute.
I mean, I think, Rob, we've talked about yeah, yeah. You know, we've already kind of at the low end of our guidance on that, so there could be but we, we have as a strategic objective to lower our theater exposure, you saw the first element of selling operating theaters. Now, we will continue to look at that opportunistically, uh, as as an opportunity to, uh, achieve that strategic objective. And, uh, generate what we think could be meaningful Capital, but again, the the range kind of says, we're we we're pretty much close to being done with our targeted, uh, disposition. But as I said, we, we have strategic objectives that we will continue to pursue and Rob, that would also include education. Yeah, um, so, you know, we, we sold an education portfolio this year and we're always just opportunistic about that.
Mark Peterson: I think the good news is we only have one remaining theater, a vacant theater, and there's no vacant education. So the asset management team has done an excellent job of selling, you know, the vacant theaters. And as Greg said, there's, as far as the plan, there's not much to accomplish given the midpoint isn't of our range, isn't much higher than what we've done today to 130 million. So, some some to come for the remainder of the year, but, not not much more in our plan.
So if you get a good deal while executing, I I think the good news is we we only have 1 remaining theater, a vacant theater and and there's no vacant education. So the asset management team has done an excellent job.
Of selling, you know, the vacant figures. And as Greg said, there's as far as the plan, there's not much to accomplish given the midpoint isn't of our range isn't much higher than what we've done today at 130 million. So, um, some some to come for the remainder of the year. But, uh, not not not much more in our plan,
Rob Stevenson: Okay. And then last one for me, Mark, since I've got you, how are you thinking about, the balance sheet over the next year? You moved the 300 million of nodes onto the line. You've got another 630 of nodes coming due next year in August to December. Are you thinking about doing something in the near term? Do you wait until the, you know, sometime in '26 and potentially lower rates, to do something? How are you sort of thinking about balance sheet strategy over the sort of short and intermediate term here?
Mark Peterson: Sure. Yeah, good question. As we look over the remainder of the year, you know, if you look at our investment spending, we've got about 164 million left to hit our midpoint of guidance as far as uses. We'll generate through remaining dispositions subsequent to 630 plus free cash flow, probably nearly 100 million. So there's a net use there of about 64 million. Our line is at 405 million. So I think the point is we have flexibility in that we'd be less than half drawn even if we didn't do a bond transaction. That said, in the last half of the year, we do have a bond transaction contemplated, which would bring down that that line balance heading into next year, and bring it down to a pretty low number.
Okay. And then last 1 for me, Mark. Um, since I've got you, um, how are you thinking about, uh, the balance sheet over the next year, you moved the 300 million of nodes onto the line. You've got another 630 of notes coming due next. Year, in August to December, are you thinking about doing something in the near term? Do you wait until the, you know, sometime in 26 and potentially lower rates, um, to do something. How are you sort of thinking about balance sheet strategy over the sort of short and intermediate term here?
Sure. Yeah, good question is we look over the remainder of the year? You know, if you look at our investment spending, we've got about 164 million left to hit our midpoint of guidance. As far as uses we'll generate through remaining dispositions subsequent to 6:30 plus free, cash flow, probably nearly 100 million. So there's a net, use their of about 64 million. Our line is at 4105 million. So I think the point is
Mark Peterson: and then as we head into next year, of course, as those, as we look to those bond maturities later in '26, you know, we'd likely have another bond transaction to refinance those as well. So that's that's kind of how we're looking at it in the near term.
Rob Stevenson: Okay. Thanks, guys. I appreciate the time this morning.
Flexibility in that, we'd be less than half drawn even if we didn't do a bond transaction that said in the last half of the year, we do have a bond transaction comp contemplated which would bring down that that line balance heading into next year. Um and and bring it down to a pretty low number. Uh and then as we head into next year, of course, as those as we look to those Bond maturities later in 26, you know, we'd likely have another Bond transaction to refinance those as well. So that that's kind of how we're looking at it in the near term.
Okay.
Mark Peterson: Thanks, Rob.
Abigail: Our next question comes from John Kilichowski with Wells Fargo. John, you may now unmute your audio and ask your question.
Thanks guys, I appreciate the time this morning. Thank you thanks bro.
Question.
Greg Silvers: Good morning. Can you hear me, team?
Mark Peterson: Yes, yes.
Good morning. Can you hear me team?
Yes, yes.
Rob Stevenson: Awesome. Thank you. you know, on the, the disposition activity, it looked like pretty good execution on the theaters that you sold at a nine, and these are non-core assets. How should we think about the demand for these assets and maybe pricing for your more core assets?
Greg Silvers: I think what we would say is, you know, we're seeing the beginning of activity in the theater space with recovery in the box office. I mean, these are clearly not, these were not major markets, nor was it a major operator. How that translates, we'll just have to see. But, clearly, there is more interest in the space, and we're starting to see more activity in the acceptance of it again as a, as an asset class. But Greg, maybe.
Awesome. Thank you. Um, you know, on the uh, the disposition activity, it looked like pretty good execution, on the theaters that you sold at a 9 and these are non-core assets. How should we think about the demand for these assets and maybe pricing for your more core assets?
Greg Silvers: Yeah, and more broadly, John, I would say, you know, within the past two years, we told we sold two Titanic museums. We were cap rated in the low sixes, and we sold a theater portfolio for cap rated in the low sevens, if that helps on, you know, the non-theater portion of the education side.
I think what we would say is, you know, we're seeing the beginning of activity in the theater space with recovery in the box office. I mean, these are clearly not. These were not major markets nor was it a major operator. How that translates? Well, just have to see but, uh, clearly there is more interest in the space, and we're starting to see more activity in the acceptance of it again, as a, as an asset class but Greg, maybe, yeah. And more broadly, John, I would say, you know, within the past 2 years, we told we sold 2 Titanic museums for cap rate in the low sixes, and we sold a theater portfolio for Capri and Below 7s. If that helps on, you know, the non-fear portion of the portion of the education, no education too.
Rob Stevenson: Got it. And then maybe on the percentage rent side of things, I could just to sort of bifurcate it into the theater and non-theater portions, it sounded like your commentary around theaters felt very positive. I'm curious how the box office today stands maybe from your beginning to be your expectations and if there's some conservatism in not moving up your expectations around it. And then sort of part two of that would be, you know, what comprises maybe the the other half or the other part of percentage rent? And are there any maybe opportunities for upside that you're seeing that you just haven't baked in yet?
Greg Silvers: I think what I'd say is we've got a really good Greg and his team has a really good group of people who understand the market and predict, are very good at their predictions. And I think, as my comments indicated, we're coming at or right on top of what we thought was our our early predictions. Now, I would tell you honestly, it's it's an over the river and through the woods. Some movies we thought would do well, didn't, and some that we didn't have predicted, actually do quite well. And so they balance each other out. But overall, we feel, yeah, you know, pretty good, in that spot. I think for the rest of the year, I mean, it's it's coming from everywhere. It's coming from ski. It's coming from attractions. It's coming from education.
Got it and then maybe on the percentage rent side of things. Um I could just to sort of bifurcate it into the theater and non theater, portions it sounded like your commentary around, theaters felt very positive. I'm curious how the box office today stands maybe from your beginning of the year expectations and if there's some conservatism and not moving up your expectations around it and then sort of part 2 of that would be, you know what comprises maybe the the the other half or the other part of percentage rent and are there any maybe opportunities for upside that you're seeing that you just haven't baked in yet.
Greg Silvers: So again, we'll we'll see how it plays out if there's additional upside in that. but, I think, like I said, Greg and then Mark and his team and putting together the, the ranges and the estimates, we feel really good about kind of how we've approached that. And that's why we haven't moved that yet.
I think, what we what I'd say is, we've got a, a really good Greg. And his team has a really good group of people who understand the market. And, and predict are very good at their predictions. And I think as my comments indicated, we're coming at or right on top of what we thought was our our, uh, early predictions. Now, I would tell you honestly, it's, it's an over the river and through the woods, some movies we thought would do, well, didn't and some that we didn't have predicted uh, actually do quite well and so it they balance each other out but overall we feel yeah. Yeah. You know, pretty good, uh, in that site. I think for the rest of the year. I mean it's it's coming from everywhere, it is coming from ski, it's coming from attractions, it's coming from education, so I
Mark Peterson: And from a mixed perspective, theaters represent about roughly the third of our kind of the midpoint of guidance. They kind of get a perspective that a lot of it's coming from a lot of other categories, as Greg mentioned, EBITDA, ski, attractions, gaming, fitness. We get it from a lot of different areas. So to put some context around it.
Again, we'll, we'll see how it plays out if there's additional upside in that, uh, but uh, I think, uh, like I said, Greg and then Mark and his team and putting together, the, uh, the ranges, and the estimates. We feel really good about kind of how we've approached that, and that's why we haven't moved that yet.
And and from a mixed perspective theaters represent about roughly a third of our kind of the midpoint of guidance. So you kind of get a perspective that a lot of this coming from a lot of other categories is Greg mentioned. He can play Steve, attractions gaming Fitness. We get it from a lot of different areas so they put some context around it.
Rob Stevenson: Got it. Thank you.
Mark Peterson: Thank you.
Greg Silvers: Thank you, John.
Got it. Thank you.
Thank you, John.
Abigail: Our next question will come from Yupal Rana with Key Bank Capital Markets. Yupal, you may now unmute your audio and ask your question.
Our next question will come from you Paul Rana with Key Bank, Capital markets, you pal. You may now unmute your audio and ask your question.
Rob Stevenson: Hey, good morning, everyone. You know, Greg, you mentioned the larger deals are more likely, you remember, Mark.
Hey, good morning everyone. Uh you know Greg you mentioned. The larger deals are more likely you can repair more
Greg Silvers: You thought we lost you?
You probably lost you.
Rob Stevenson: Hey, can you hear me now?
Greg Silvers: Yeah, we can hear you now. Sorry. Could you start your question over, please?
Rob Stevenson: Sure. You know, Greg, you mentioned you know larger deals are more likely. You know, could you give us a sense of what what's out there in the market and that's attractive to you and what do you potential cap rates on those deals potentially look like?
Hey, can you hear me now? Yeah, we can hear you now, sorry. Could you start your question over, please?
Greg Silvers: Again, I'll let Greg jump in. I I I don't know that I think it's broadly. I mean, without going into too much detail over specific transactions, I think we're seeing it pretty much across the board and and and seeing opportunities. And I think we're still comfortably in the in the eights on on where we're looking at, Greg?
Sure. Um, you know, Greg you mentioned, you know, larger deals are more likely, you know, could you give us a sense of what what's out there in the market and, um, that's attracted to you and what, what do you potential cap rates on those dealers? Potentially look like
Greg Silvers: Yeah, 100% comfortably in the eights. And you know, we're always looking at deals in a wide spectrum of ranges. So we're looking at deals in the 10 million range, and we're looking at deals in the 700. And there are deals in in those categories. And as we both said in our scripts, we're seeing opportunities in all of our verticals other than gaming.
Again, I'll let Greg jump in. I, I, I, I don't know that. I think it's broadly. I mean, without going into too much detail over specific transactions. I think we're seeing it pretty much across the board and, and, and seeing opportunities, and I think we're still comfortably in the, uh, in the eights on, on where we're looking for Greg. Yeah, 100% comfortably in the eights. And, you know, we're always looking at deals in a wide spectrum of, uh, ranges. So, we're looking at deals in the 10 million range and we're looking at deals in the 700 month.
Rob Stevenson: Yeah. Okay, great. That was that was helpful. And then, you know, I had a question on on fuel costs. You know, it's it's down about 10% this year. And I'm I'm curious if this has any impact on your customers and their willingness to either visit more of your properties or or spend spend more at your properties. So I just want to get your thoughts there.
And as we both said in our scripts, uh, we're seeing opportunities in all of our verticals. Open game. Yeah.
Greg Silvers: Again, I think anything that creates additional discretionary income is is positive, and and it's helping to offset some inflationary factors for the consumers. So, you know, I don't know that there's any direct correlation that we're seeing, but you know, it's probably welcome in the pocketbooks of our consumers, and that's much appreciated.
Okay, great. That was, that was helpful. And then, you know, I had a question on on fuel costs, you know, it's it's down about 10% this year. And, you know, I'm, I'm curious if this has any impact on your customers and their willingness to either visit more of your Properties, or, or spend, uh, spend spend more on your property. So, just want to get your thoughts there.
Greg Silvers: And I'd say in today's world, we feel like being in the experiential space is a positive because people still want to get out and do things.
Again I think anything that creates additional discretionary income is is positive and and it's helping to offset some inflationary factors for the consumer. So you you know I don't know that there's any direct correlation that we're seeing but um you know it's it's probably welcome in the pocketbooks of our consumer of our consumers and that's much appreciated and I say in today's world we feel like being in the experiential space at the positive because people still want to get out and do things.
Rob Stevenson: Okay, great. Thank you.
Greg Silvers: Thank you.
Okay, great. Thank you.
Abigail: Our next question will come from Anthony Powellone with JP Morgan. Anthony, you may now unmute your audio and ask your question.
Thank you.
Rob Stevenson: Okay. Thank you. The first question relates to just the deal pipeline. You mentioned some larger transactions that you're starting to see as well. Can you maybe just give us some sense as to, you know, what what definition of larger would be for you all?
Next question will come from Anthony Powell alone with JP Morgan Anthony. You may now unmute your audio and ask your question.
Greg Silvers: I think for us, we would think of it as 100 million plus. I think, you know, when you are when we were thinking of a midpoint of 250, looking at a $100 million transaction, takes, you know, nearly 40% of of of your deal. So we were, and I know Greg and his team were a little bit hesitant to deploy that in one thing. But with our with our cost of capital becoming more favorable, I think we're looking at, those. So I I would say that's the the the term I would the the the dimensionalizing I would use. But Greg, no, I agree. Yeah, Tony, I think the best way to think of it is in terms of, you know, in relation to our guidance. So yeah, 100 million and some in the high tens millions. Yeah.
Okay, thank you. Um, the first question relates to just the the deal pipeline, you mentioned some larger transactions that you're starting to see as well. Can you maybe just give us some sense as to you know what what definition of Barger would be for you all?
I think for us, we would think of it as a 100 million. Plus I I think you know, when you are when we were thinking of a midpoint of 250 looking at a hundred million dollar transaction, uh takes you know, nearly 40% of of of your deal. So we were and I know Greg and his team were a little bit hesitant to deploy that in 1 thing, but with our, with our cost of capital becoming more favorable, I think we're looking at, uh, those. So I, I would say that's the, the, the term I would the the, the the dimensionalizing I would use. But Greg, no, I agree. Yeah. Tony. I think the best way to think of it is in terms of, you know, in relation to our guidance. So, yeah. 100 million in some in the high tens Millions. Yeah.
Rob Stevenson: Okay. Thanks. And then did it on on these transactions, you know, you mentioned your your better capital costs make you more competitive. But you know, if we think about the last, I don't know, a few quarters or so, have these deals been occurring away from you, in the market, or have they just not happened and they might still be out there? Just trying to understand like who's who's been competitive as, you know, before your capital costs improved here.
okay, thanks and then did on on these transactions, you know, you mentioned your your better Capital costs, make you more competitive but you know if we think about the last I don't know, a few quarters or so have these deals been occurring away from you uh in the market or have they just not happened and they might still be out there just trying to understand like, who's, who's being competitive as you know before your Capital costs and
Greg Silvers: Yeah, I actually think that these have been more that are just starting to come to the market, that people are are gaining more acceptance that we're not going back to, you know, substantial low cap rates. But there have been kind of major transactions that that that have have occurred. If you look in the look in the attraction space, Park Rio, you need a did a $700 million dollar attractions deal that, we were solicited for a bid on and and really couldn't participate. So there there were big transactions. I think that ended up going on a debt route. but, there were transactions that were occurring out there, and, we we were asked to be part of of a solution and really just couldn't. But we feel now that those are starting to open up for us.
Approved here.
Yeah, I actually think that these have been more that are just starting to come to the market that people are are draining more acceptance that we're not going back to. Yeah, you know, substantial low cap rates, but there have been kind of major transactions that that that have have occurred. If you look in the we look in the attraction space park where you need a, did a 700 million dollar attractions deal that? Uh, we were solicited for a bid on it and really couldn't participate. So there, there were big transactions. I think that ended up going on a debt route. It's uh, but uh, there were transactions that were occurring out there, and, uh, we we were asked to be part of of a solution and really just couldn't, but we feel now that those are starting to open up for us.
Rob Stevenson: Okay. And if I could just sneak in from Mark, you know, given where the the stock is now, I think you're you're kind of in the money on the two convertible preps. Is is there anything for you all to do there? Like, can you convert them? Does that make sense? Or can you call them? Just just noticing that, you know, it's been a while since spending the money on those.
Mark Peterson: Yeah, they're not really callable. You could go on the market and tender for them, but that would be at a pre-market price. It really doesn't make sense. It's also hard to cobble together any meaningful amount. We've looked at that in the past. so wouldn't expect wouldn't expect anything happening on those two preferred.
Okay, and if I could just speak with him for Mark, um, you know, given where the the stock is now I think you're you're kind of in the money on the 2 PS is, is there anything for you all to do there? Like, can you convert them? Does that make sense or can you call them? Just just noticing that it's been a while since it's been in the money on those?
Yeah, they're not really callable. You could go on the market and tender for them, but that would be at a premium to market price. It really doesn't make sense. It's also hard to Cobble together any meaningful amount. We've looked at that in the past. Um, so wouldn't expect, wouldn't expect anything happening on those 2 preferred?
Rob Stevenson: Okay. Thank you. Thank you, Tony. Thanks.
Okay, thank you. Thank you.
Abigail: Our next question will come from Smeads Rose with City Global Markets. Smeads, you may now unmute your audio and ask your question.
Our next question will come from Smith's rose with Citi, Global markets. Smees you may now unmute your audio and ask your question.
Rob Stevenson: Hi. Thank you. I wanted to ask you just a little bit more about, establishing the ATM program. You know, as you think about potentially, you know, raising new equity, you know, what what kind of, spreads or sort of like maybe a minimum between, cap rates and how you think about your weighted cost of capital? do you look at kind of consensus NAV or an internal NAV? Kind of maybe just help us think about, you know, when you would pull the trigger on, issuing, new equity.
Cap rates. And how you think about your weighted cost of capital? Um, do you look at kind of consensus nav or an internal nav? Kind of maybe just help us think about, you know, when you would pull the trigger on um, issuing um, new equity,
Greg Silvers: Wow. And I'll let Mark jump in on this, but Smeads, historically, we look at all those things. We we look for to to be able--it's actually a balance of of what we can buy assets at and creatively deploy. Historically, that's kind of required a minimum of 100 basis points that we've looked at. And I I think what Mark will tell you is, again, I think we're getting we're getting prepared. it doesn't mean, as he said in his comments, that we have any imminent equity issuance, but the idea that we want this toolbox, this tool in the toolbox as we go forward. And as we begin to continue to execute on our plan, it will create the optionality that we're looking for. But Mark?
Mark Peterson: No, I'd agree. We generally look at cost of capital, and probably in the primary sense, is it a creative to deploy, you know, equity into a deal kind of on a 60/40 basis, 60% equity, 40% debt. So it doesn't make sense to raise equity. And as Greg said, we generally look for that 100 basis points of spread, initial initial spread. you know, it's not to say we could do less than that to further diversify our portfolio, but that's generally how we look at it. I think the ATM provides us another source of capital. We've used the direct share purchase plan, which is another, you know, the ability for the direct share purchase plan to dribble out shares. And I think we've raised over the since I've been here, probably in excess of 700 million in in that regard through that plan.
Yeah, and I'll let Mark jump in on this. But sme's historically, we look at all those things. We we we look for to to be able, it's actually a balance of of what we can buy assets at an accredited creatively deployed historically. It's that's kind of required of a minimum of 100 basis points that we've looked at. And I, I think what Mark will tell you is again, I think we're getting we're getting prepared. Uh it doesn't mean as he said in his comments that we have any imminent, Equity issuance, but the idea that we want this tool box, this tool in the tool box as we go forward. And as we begin to continue to execute on our plan, it will create the optionality that we're looking for, but Mark.
No, I'd agree. We, we generally look at cost of capital and probably in the primary sense. Is it a creative to deploy? Uh, uh, you know, Equity into a deal? Kind of on a 60/40 basis. 60% Equity, 40%. So, does it make sense to raise Equity? As Greg said, we generally look for that 100 basis, points of spread initial, uh, initial spread. Um, you know, it's not to say we could do less than that to further diversify our portfolio.
Mark Peterson: But the ATM provides us the ability to do kind of larger blocks, issuances, and also to look at, you know, the ability to do forward. So, like Greg said, no eminent issuance in our plan. We're at the low end of leverage, and we don't have any equity in our plan. But this will get, this will just give us another tool as we go forward.
Oil. But that's generally how we look at. I think the ATM provides us another source of capital. Uh we've used the direct share purchase plan which is another you know, the ability to the direction of purchase plan to dribble out shares and I think we've raised over the since I've been here probably in excess of 700 million in in that regard through that plan, but the ATM provides us, the ability to kind of larger block. Uh, the
Issuances. And also to look at, you know, the ability to do forward. So, uh, like a great said, no eminent issuance in our plan. We're at the low end of Leverage, um, and we don't have any equity in our plan, but this will get this will just give us another tool as we go forward.
Rob Stevenson: Okay. Thank you. And then I just, I wanted to ask you, I'm sorry, you might have said this, but does your guidance still contemplate, a bond deal later this year to pay down the, credit line?
Greg Silvers: Yes, it still does.
Okay, thank you. And then I just, I wanted to ask you, I'm sorry. You might have said this, but does your guidance still contemplate? Um, a bond deal later this year to pay down the, um, credit line. Yes, it still does
Rob Stevenson: Okay. Okay. Thank you. I appreciate it.
Okay.
Greg Silvers: Smeads. Thank you, Smeads.
Okay, thank you. I appreciate it. Thank you, sweet.
Abigail: Our next question comes from Yana Gallen with Bank of America. Yana, you may now unmute your line and ask your question.
Our next question.
Comes from Jana gallon with Bank of America.
Speaker 9: Thank you. Good morning. It's great to see the rent coverage improve quarter over quarter, given the continued headlines on kind of the more pressured consumer. I was curious if you could talk a bit on how coverage ranges between your different concepts for segments. And then at the Eat and Play locations, I think last quarter you mentioned that, you know, everyone was showing up, but maybe not eating as much. And just curious if that trend is continuing this summer.
Jana you may now unmute your line and ask your question.
Greg Silvers: Again, I think it's always, and we've seen this, John, as Greg, that, that, you know, the consumer is is aware and and looking for value. But I also think our Eat and Play tenants are responding to that and creating different ways to engage with the consumer and creating value. I I think, overall, coverages have been relatively stable. you know, the the the uptick is probably more about the recovery and the continuing recovery of the theater space. But again, given the fact that that's only 37%, that means the other part of that has to be relatively stable. And I think, we've seen that. I think not as much as the consumer, weather and heat and then rain have impacted some attractions, but that's kind of normal. Kind of that, that those are kind of the things that are that are normally incurred.
Thank you. Good morning. Um, it's great to see the rent coverage, improved order over quarter, given the continued headlines on, kind of the pressured more pressured consumer. I was curious, if you could talk a bit on how coverage ranges between your different concepts or segments, and then, um, at the Eaton play locations, I think last quarter you mentioned that, you know, everyone was showing up, but maybe not eating as much and just curious if that's trying to discontinuing this summer.
Again, I think it's always and we've seen this John Gregg, uh, that that uh, you know, the consumer is, is aware and, and looking for Value, but I also think our eat and play tenants are responding to that, and creating different ways to engage with the consumer in creating value. I I think, uh, overall, uh, coverages have been relatively stable. Uh, you, you, you know that the, the uptick is probably more about the recovery and the continuing recovery of the theater space. But again, given the fact that that's only 37%. That means the other part of that has to be relatively stable. And I think, uh, we've seen that I think
Greg Silvers: But we're still seeing really good resilience in the consumer as as evidenced by some of the recent Fed and GDP growth that we've seen, generally.
Not as much as a consumer uh, weather and heat and then rain has impacted some attractions, but that's kind of normal. Kind of that that those are kind of the things that are that are normally incurred. But we're still seeing really good resilience in the consumer as as evidence by some of the recent fed and GDP growth that we've seen uh, generally
Speaker 9: Thank you.
Thank you.
Abigail: Our next question will come from Catherine Grave with UBS. Catherine, you may now unmute your line and ask your question.
Our next question will come from Katherine Graves with UBS Katherine. You may now unmute your line and ask your question.
Speaker 9: Great. Good morning. Thank you for taking my question. Can you all hear me?
Rob Stevenson: Yes.
Mark Peterson: Morning.
Hey, good morning, thank you for taking my questions. Can you all hear me? Yes, morning.
Speaker 9: Awesome. Thank you. Great. So my first question, you mentioned that you have no vacant education centers at this point. You didn't sell any in the second quarter. I was wondering if you could just talk a little bit more about what makes an education center a good candidate for sale, what you're seeing as far as interest in those assets. And would you be looking to do, you know, primarily more portfolio sales, or would you be willing to sell someone on a one-off basis?
Greg Silvers: Yeah. I mean, I think what makes a good sale is a very attractive cap rate. I mean, it's just that candid. And you know, we continue to field calls for people who are who are interested in the space. I think the way our our remaining tenants are set up, they're probably going to be more in portfolios, meaning we would sell a tenant exposure, just kind of somebody the way those are grouped together. Now, that probably means, Greg, they're probably in the $40 to $100 million range having to dispose of those. So you know, some of that is, just, candidly, Catherine, just being, opportunistic. but that's a space that's been very, very resilient. I mean, COVID created actually strengthened that space with the, kind of the elimination of kind of a lot of at-home, childcare options. And so, we're not unhappy at all with the space.
So bacon, Education Centers at this point, you didn't sell any in the second quarter. I was wondering if you could just talk a little bit more about what makes an education center, a good candidate for sale, what you're seeing as far as um interest in those assets and would you be looking to do uh, you know primarily more portfolio sales or would you be willing to sell someone on 1 off basis?
Yeah, I mean, I I think what makes a good sale is a very attractive cap rates. I mean, it. It's just that candidate. And yeah. Yeah. You know, we we could continue to feel calls uh, for people who are, who are interested in the space. I think the way our our remaining tenants are set up. Uh they're probably going to be more in portfolios. Meaning we would sell a tenant exposure. Just kind of have somebody. The the way those are are grouped together now that probably means Greg they're probably in the
Greg Silvers: As Greg talked about in his comments, it's performing very well. And we look at that as opportunistically, when things, are presented to us, we'll we'll evaluate them and see if they make sense for us. And to amplify it, there's a growing market for them. So we're not really concerned about the ability to transact.
40 to 100 million dollar range. How many would dispose of those? So yeah, you know some of that is uh, just uh, candidly Katherine just being uh, opportunistic, uh, but that's a space. That's been very, very resilient. I mean, coid created actually strengthen that space with the kind of the elimination of kind of a lot of at-home, uh, child care options. And so uh, we're not unhappy at all with the space as Greg talked about in his comments. It's
Performing very well. And we look at that as opportunistically uh when things uh are presented to us, will will evaluate them and see if they make sense for us. And and to amplify that there's a broad market for the for them. So we we're not really concerned about the ability to transact.
Speaker 9: Got it. That's helpful. Thank you. And then my second question, there's a couple of headlines of Six Flags closing or or preparing to close a couple of their parks. And I was just wondering if you could provide some color on how you're thinking about your exposure to that tenant, and and just sort of your comfort with with that tenant going forward.
Got it. That's all.
And then my second.
Greg Silvers: Yeah. I mean, I I think we see those, in our discussions with them, and they they will comment on their own as, as you know, this is a continuation of the merger of of kind of rationalizing their their fleet of locations and candidly, opportunistically, selling, and and and deployment of of what we think will be accreted transactions for them. I mean, people forget that often these locations are in and around major metropolitan areas with somewhere in the neighborhood of, you know, 300 to 400 acres. And when you look at some of the areas they're in, sometimes there's just a higher and better use that generates, you know, a great sell price. And I commend them for, aggressively looking at their overall strategy to lower their their debt level.
Lines is 6 Flags closing, or, or preparing to close a couple of their parks. And I was just wondering if you could provide some caller on how you're thinking about your exposure to that tenant um and and just sort of your comfort with with that tenant going forward.
Yeah. I mean, I I think we see those uh, in our discussions with them and they, they will comment on their own. As as you know, this is a continuation of the merger of, of, kind of rationalizing, their their Fleet of locations and candidly opportunistically, uh, selling. Uh, and and, and deployment of of what we think are will be accretive transactions for them. I mean, people forget that often these locations are in and around, major metropolitan areas with somewhere in the neighborhood of, you know, 300 to 400 acres. And when you look at some of the areas there in sometimes there's just a higher and better use that generates. Yeah, you know, a great sale price and I commend them for uh aggressive
Greg Silvers: And when they can sell out of the property and and make substantial gains and and lower and create a better credit tenant for us, that's a positive.
Li looking at their overall strategy to lower their, their debt level and when they can sell out at a property and and make substantial gains and and lower and create a Better Credit tenant for us, that's a positive.
Speaker 9: Got it. That's really helpful. Thanks so much for the color.
Greg Silvers: Thank you.
Got it. That's really helpful. Thanks so much for the caller.
Thank you.
Abigail: Our next question will come from Ryan Caviola with Green Street. Ryan, you may now unmute your audio and ask your question.
Our next question will come from Ryan caviola with Green Street Ryan. You may now unmute your audio and ask your question.
Speaker 9: Hi, it's Spencer here. Hi, guys.
Greg Zimmerman: Hi, everyone.
Client sir here. Hi guys.
Speaker 9: Just one for me. I was hoping you could, good morning. I was hoping you guys could provide an update on the competitive landscape. and then I was also wondering, do you guys tend to see more or less competition for deals as you go up in check size?
Greg Silvers: Again, I think it's it changes. what we see is, especially on 50 million or less, it's a lot more. We occasionally see some of the other REITs, but also family office. As you move up in deal size, it becomes that group kind of falls away in the sense that anytime with private equity, their second question is, "How do I exit this in three to five years?" And a lot of these are kind of long-term capital. So, I think we start to see a different set of of competitors. And, you know, that's nothing new for us, Spencer. It's been that way for our, you know, 27, 28 years.
Um, just 1 for me. I was hoping you could good morning. I was hoping you guys could provide an update on the competitive landscape. Um, and then I was also wondering, do you guys tend to see more or less competition for deals as you go up and check size?
Again I think it's it changes. Uh I I what we see is especially on 50 million or less, it's a lot more occasionally, see some of the other reads but also family office as you move up in Deal size, it becomes that group kind of Falls away in the sense that anytime with private Equity. Their second question is how do I exit this in 3 to 5 years? And a lot of these are kind of long-term capital. So uh I think we start to see a different set of of competitors and uh
Greg Silvers: I think it's, it's not, I wouldn't say the the number of competitors are more robust, but I would say the interesting thing is the credit funds and their need to deploy capital becomes more into that side of the equation when it's larger. But, Greg, I don't think.
Greg Silvers: No, I think you've I agree.
When that's larger but Greg, I don't know. I think you've migrated
Speaker 9: Okay. That's helpful. And do you guys get inbounds from sellers often, especially maybe just for the some of the larger deals and wherever, just get like a first look, just given your your brand in the space?
Okay, that's helpful. And do you guys get
inbounds from some
Greg Silvers: No doubt. Those are those are the calls we love. And I'd say, well, honestly, Spencer, more often than not. I mean, we we see most deals, for sure.
maybe just for the some of the larger deals and wherever just get like a first look. Just giving your your brand in the space. No doubt that those are. Those are the calls we love and I'd say, well, honestly sensor more often than not.
I mean we we see most deals for sure.
Speaker 9: Okay. Great. Thank you, guys.
Greg Silvers: Thank you.
Abigail: Our next question will come from Michael Carroll with RBC Capital Markets. Michael, you may now unmute your line and ask your question.
Okay, great. Thank you guys. Thank you. And question will come from Michael Carroll with RBC Capital markets, Michael? You may now unmute your line and ask your question.
Rob Stevenson: Yeah. Thanks. Mark, given that we're pretty much at the end of July right now, will the reasonable percentage rents, that were reported in prior presentations and after the bankruptcy matching what the box office is doing, is that still a pretty good, ballpark of what we expect could be reported, in July, related to those percentage rents?
Mark Peterson: Yeah, correct. I think that chart that we put out initially is still, you know, in line with our expectations.
Yep, thanks, um, Mark, given that? We're pretty much at the end of July right now, um, will the regional percentage rents, um, that were reported in Prior presentations and after the bankruptcy matching, what the box office is doing is that still a pretty good uh ballpark of what we expect could be reported um in July uh related to those percentage rents? Yeah, correct. I think that chart that we put out initially is still, you know in in line with our expectations
Rob Stevenson: And then how many, how much percentage rents have been reported so far in 2Q? Because I know that there is, it's going to largely straddle between 2Q and 3Q. So how much of a pickup could we expect in 3Q related to the percentage rents in the box office that we've already seen?
Mark Peterson: Yeah, we don't get that specific as far as tenants and what's in one quarter versus the next. I could tell you overall for the quarter, we had 4.6 million of percentage rents. Obviously, looking at our midpoint, that's going to ratchet up in Q3 and Q4, probably fairly evenly between the two to achieve that midpoint of 23 and a half million. So, the bigger chunk of reveal hits in Q3, but, I think between Q and Q3 with respect to reveal, it's kind of in line with our expectations.
And then how many, how much percentage rents has been recorded so far in 2q? Because I know that there is it's going to largely straddle between 2 q and 3 Q. So how much of a pickup could we expect in 3Q related to the percentage rents, and, and the box office that we've already seen?
Yeah, we don't get that specific, as far as tenants and what's in 1 quarter versus an X. I can tell you overall, for the quarter, we had 4.6 million a percentage. Rents, obviously looking at our midpoint that's going to ratchet up in Q3 and Q4 probably fairly evenly between the 2 to achieve that midpoint of 23 and a half million. So uh, the bigger chunk of Regal hits in Q3. Um, but uh, I think between 2 and 2223 with respect to Regal, it's kind of in line with our expectations
Rob Stevenson: Okay. And then just lastly on on the reveal topic, I know you get paid based off of what the revenues at the reveal box is, right? so how have those assets been performing relative to market? I mean, is it largely in line? And do you typically see a lot of deviations between, specific theaters, within a market depending on, how well they're doing or not? Does that vary very much?
Greg Silvers: No, that's that's exactly correct because it it ends up being what is the market share of the individual theaters. Now, some of this, both good and bad, is is impacted. And this is really positive as we go forward, is Regal's investing back into these theaters and adding features and some of those that cause us some disruption. So there may be auditoriums that are shut down. But as we've talked about, we still think we're hitting plan, but we're getting new IMAXs put in at some of our theaters and things like that, which really bode well as we go forward because the consumer has kind of clearly demonstrated the demand for that type of product. But, Greg.
Okay, and then just lastly on on the Regal topic, I know you get paid based off of what the revenues that the Regal boxes, right? Um, so how have those assets been performing relative to Market? I mean, is it largely in line? And we do typically see a lot of deviations between um, specific theaters, um, within a market depending on how well they're doing or not. Is that very, very much? No. That's, that's exactly correct, because it it ends up being. What is the market share of the individual theaters? Now, some of this, both good and bad is, is impacted in. This is really positive as we go. Forward is Regal.
Greg Silvers: Yeah. And Michael, I would say we're very pleased with they've recaptured market share coming out of the bankruptcy back to where we sort of thought they would. And as we've shared with you before, it's it's it's very granular. I mean, it gets down to the number of, you know, large format screens in any given theater, depending on the film. And we monitor it that closely. So the takeaway is we're pleased with how they've recaptured market share and how it.
Investing back into these theaters and adding features and some of those that causes some disruption. So they'll maybe auditoriums that are shut down. But as we've talked about, we still think we're getting planned but we're getting new iMacs is put in at some of our theaters and things like that, which really bode. Well, as we go forward because the consumer has kind of clearly demonstrated the demand for that type of product but Greg made and and Michael, I I would say, we're very pleased with they, they've recaptured market. Share coming out of bankruptcy, come back to, where we sort of thought they would and as, as we've shared with you before, it's, it's, it's very granular. I mean, it it gets down to the number of hyper, you know, uh, large format screens in any given theater, depending on the film and, and we monitor it that closely. So, uh, the takeaway is we're pleased with, uh, how they've recaptured market share and how it performed.
Rob Stevenson: Right now, and those investments are Regal largely making those investments by themselves?
Greg Silvers: Well, there's Regal making investments. And then remember, as part of our deal, we agreed to make certain investments with them limited over a period of years. But it's at least 50% or more of Regal's investment.
Right now and and those Investments are are Regal, largely making those Investments by themselves.
Greg Silvers: Yeah. And again, they're required to prove that it'll be revenue-enhancing before we are required to invest. So they can work so that we get more percentage rent. That's the idea.
Well, there's Regal making Investments. And then remember, as part of our deal, we we agreed to make certain Investments with them as limited over a period of years. Uh, but it's at least 50% or more of a Regal's investment. Yeah. And again, uh, they, they're required to prove that it'll be a revenue enhancement. Before we are required to invest.
Rob Stevenson: Right.
So that we get more percentage around, that's the idea.
Abigail: Our next question will come from Kyle Bonkay with True Securities. Kyle, you may now unmute your audio and ask your question.
Our next question.
Will come from Kyle bond with true securities.
Kyle, you may now unmute your audio and ask your question.
Rob Stevenson: Thanks. Good morning. Can you guys hear me?
Greg Zimmerman: Yes, yes.
Thanks. Good morning. You guys hear me? Yes yes.
Rob Stevenson: Great. So the box box office guidance implies some acceleration into the second half of the year. And I think most of that was addressed in the opening comments. But curious how the production pipeline looks today, more of a forward basis versus where you guys were last year and if you expect to see a continued acceleration in the number of releases.
a forward basis versus where you guys were last year and if you expect to see a continued acceleration in number of releases,
Greg Silvers: I think we're very encouraged. If you saw what came out of the industry kind of discussions is that more films are are being developed. you, you, and as Greg said, the success for Apple having an F1 is encouraging for them. So I, I, it's too early for us right now to to give you our opinion on '26, but nothing has changed our optimism about the direction that, the industry is moving.
Greg Silvers: And I would add significantly, Amazon, a couple of months ago announced that they were going to participate more in theatrical production over time.
I think we're very encouraged. If you saw what came out of of the industry, kind of discussions is that more films are are being developed. Uh, you you and as Greg said, the success for Apple having an F1 is encouraging for them. So I it's too early for us right now, to to give you our opinion on 26 but nothing has changed our optimism about the direction that, uh, the industry is moving and I would add a significantly Amazon, uh, couple of months ago announced that they were going to participate more in Theatrical production.
Over time.
Rob Stevenson: Gotcha. Understood. and I think some of the performance at the, TRS operating properties is where it looks to be ahead of last year. And I imagine some of that is due to the improving theater performance. But, it appears to be, I guess, trending ahead of neutral earnings contribution. do you think that's fair to say at this point?
Gotcha understood. Um, I think some of the performance at the uh, TRS operating properties is or looks to be ahead of last year. And I imagine some of that is due to the approving theater performance. But um,
Mark Peterson: I think, you know, second quarter was a great quarter for theaters versus the prior year quarter, which was fairly rough. And keep in mind, we sold just kind of apples to oranges because we sold three theaters, since since last year. So yes, we did do quite a bit better, quarter over quarter, and it's mostly due to theaters, as you said. That said, you know, for the year, the contribution will be fairly similar to the prior year. It had a nominal increase, a nominal difference last year between other netting, other income bias on their expense. We expect a similar result as as guidance implies and kind of a break-even theaters being ahead and offset by Cartwright being somewhat behind as far as, you know, FMO.
It appears to be, I guess trending ahead of mutual earnings contribution. Um, is, is do you think that's fair to say at this point?
Mark Peterson: So I think, you know, our guidance implies kind of similar net results to for the year, but certainly for the quarter, we benefited by a quarter over quarter big improvement in theaters.
I think, you know, second quarter was a great quarter for theaters versus the prior year quarter, which was fairly rough. And keep in mind, we sold this kind of apples to oranges because we sold 3 theaters uh, since since last year. So yes, we did do quite a bit better uh quarter over quarter and it's mostly due to theaters. As you said that said, you know, for the year the contribution will be fairly similar to the prior year. It had a nominal nominal increase uh nominal difference last year between other netting. Uh other income, minus other expense. We expect to send in a result as, as guidance applies in a kind of a break, even theaters being ahead and offset by part, right? Being somewhat behind as far as, you know, uh, ffo. So I think you know, our guidance implies kind of similar net results to for the year. But certainly for the quarter, we benefited by a quarter over quarter, big Improvement in theaters.
Rob Stevenson: Okay. Understood. Thanks for your time.
Mark Peterson: Thank you.
Okay, understood. Thanks for the time.
Thank you.
Abigail: Our last question will come from Anthony Powellone with JP Morgan. Anthony, you may now unmute your audio and ask your question.
Our last question will come from Anthony Powell alone with JP Morgan.
Anthony, you may now unmute your audio and ask your questions.
Rob Stevenson: Thanks for the follow-ups here. Just two, from me. One is just, is there any cap rate spread between larger and smaller deals?
Uh thanks for for the follow up here. Um just to uh for me um 1 is just is there any cap rate spread between larger and smaller deals?
Greg Silvers: Go ahead, Greg.
Greg Silvers: Yeah, for sure, Tony. I mean, I think, you know, you're probably looking at 25 basis points to 50 basis points spread. And I think Mark mentioned, you know, obviously, we're always looking for a spread of 100 basis points, but you know, there are some strategic decisions we have to make too in terms of, you know, expanding our diversity and getting into spaces.
Rob Stevenson: So 25 to 50 basis points better on the larger deal?
Go ahead Greg. Yeah for sure, Tony. I mean uh I I think you know, you're probably looking at uh 25 basis points to 50 basis points spread and I think Mark mentioned, you know, obviously we're always looking for a spread of 100 basis points but you know, there are some strategic decisions we have to make too in terms of uh you know expanding our diversity and and getting into spaces.
Greg Silvers: Yeah. No, I think that's realistic.
Rob Stevenson: Okay. And then just second one, Cartwright, I think, still makes up the ball because the other sort of revenue and expenses and it just seems to still be a break-even-ish type, asset. Can you maybe give a sense of if there's anything to do there to monetize it or maybe even hazard a guess as to what that might be worth despite it not really doing much for earnings right now?
So 25 to 50 basis points, better on the market. Yeah, no, I think that's realistic.
Greg Silvers: Yeah. I mean, again, Tony, what we've said before is the, I mean, candidly, we've struggled with the operating cost, the union, that that is there that makes it very, very difficult relative to we see how our other water park hotels operate. as far as value, again, it's nothing we would speculate on right now. We look at the project in its entirety with the with the gaming ground lease, because, you know, the one was done to activate the other. but, again, it's not for lack of us working hard at trying to improve that. It's just some of the the challenges that we're facing. we continue no when we say there's that kind of, responses.
Yeah. Okay, and then just second 1, um, cart rate, I think still makes up the bulk of the other sort of Revenue and expenses and just seems to still be a, a break even type, uh, asset. Can you maybe give us a sense of if there's anything to do there to monetize it or maybe even Hazard a guess as to what that might be worth. Despite it not really doing much for for earnings right now.
Yeah. I mean, again, Tony what we've said before is the, uh, I I mean candidly we've struggled with the, the, the operating costs the Union, uh, that that is there that's, uh, makes it very, very, very difficult relative to we see how our other water park hotels operate, uh, as far as value. Uh, again, uh it's nothing. We would speculate on right now we look at the project and its entirety with the with the gaming ground lease.
Uh, because you know, the 1 was done to activate the other. Uh but uh again it's not for lack of us working hard at trying to improve that. It's just some of the, the challenges that we're facing, uh, we continue note. But when we Zig, there's Zagg
kind of, uh,
responses.
Rob Stevenson: Okay. Thank you.
Greg Silvers: Thank you.
Rob Stevenson: Thanks.
Okay, thank you. Thank you, thanks.
Abigail: There are no further questions. So I will now turn the call back over to Greg Silvers for any closing remarks.
Greg Silvers: I just want to say thank you, everyone. We look forward to talking with you in the in the coming months, and have a great day. Thanks, everyone.
There are no further questions so I will now attend the call back over to Greg Silvers for any closing remarks.
Rob Stevenson: Thank you.
Say thank you everyone. Uh, we look forward to, uh, to talking with you in the in the coming months and have a great day. Thanks everyone. Thank you.