Company: EPR-PE
Filing Date: 2025-07-31
Form Type: 10-Q
Source: 0001045450-25-000120
Chunk: 31

Company: EPR PROPERTIES
Filing Date: 2025-07-31
Form: 10-Q
Item: Part I, Item 1
Chunk 31
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 improvements of a fitness & wellness property in Georgia. Investment spending for the six months ended June 30, 2025 also included experiential build-to-suit development and redevelopment projects. During the six months ended June 30, 2025, the Company completed the sale of two vacant theatre properties, two operating theatre properties, two leased theatre properties, one vacant early childhood education center and 10 leased early childhood education centers for net proceeds totaling $106.4 million and recognized a net gain on sale totaling $26.2 million.

Subsequent to June 30, 2025, the Company sold an additional vacant theatre property for net proceeds of approximately $16.0 million and expects to recognize a gain on this sale of approximately $3.0 million during the three months ending September 30, 2025. 

5. Investment in Mortgage Notes and Notes Receivable 

The Company measures expected credit losses on its mortgage notes and notes receivable on an individual basis because its financial instruments do not have similar risk characteristics. The Company uses a forward-looking commercial real estate loss forecasting tool to estimate its current expected credit losses (CECL) for each of its mortgage notes and notes receivable on a loan-by-loan basis. As of June 30, 2025, the Company did not anticipate any prepayments. Therefore, the contractual terms of its mortgage notes and notes receivable were used for the calculation of the expected credit losses. The Company updates the model inputs at each reporting period to reflect, if applicable, any newly originated loans, changes to specific loan information on existing loans and current macroeconomic conditions. The CECL allowance is a valuation account that is deducted from the related mortgage note or note receivable. Certain of the Company’s mortgage notes and notes receivable include commitments to fund future incremental amounts to its borrowers. These future funding commitments are also subject to the CECL model. The CECL allowance related to future funding is recorded as a liability and is included in "Accounts payable and accrued liabilities" in the accompanying consolidated balance sheets. Investment in mortgage notes, including related accrued interest receivable, was $666.2 million and $665.8 million at June 30, 2025 and December 31, 2024, respectively. Investment in notes receivable, including related accrued interest receivable, was $3.1 million and $3.3 million at June 30, 2025 and December 31, 2024, respectively, and is included