Company: EPR-PE
Filing Date: 2025-05-08
Form Type: 10-Q
Source: 0001045450-25-000082
Chunk: 48

Company: EPR PROPERTIES
Filing Date: 2025-05-08
Form: 10-Q
Item: Part I, Item 1
Chunk 48
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, our Education portfolio consisted of the following property types (owned or financed):

•46 early childhood education center properties; and

•nine private school properties. 

As of March 31, 2025, our wholly-owned Education real estate portfolio consisted of approximately 1.1 million square feet and was 100% leased.

The combined wholly-owned portfolio consisted of 19.6 million square feet, which includes 0.3 million square feet of properties we intend to sell. The wholly-owned portfolio, excluding the vacant properties the Company intends to sell, was 99% leased or operated.

Challenging Economic Environment

As a triple-net lease REIT, we are generally experiencing heightened risks and uncertainties associated with key macroeconomic factors including inflation and interest rate volatility. In recent months, the U.S. government has imposed, and is considering imposing, tariffs and trade restrictions on certain goods produced outside of the United States, including a recent indication that a significant tariff on foreign-made films may be imposed. In response to these actions, certain foreign jurisdictions have imposed, or are considering imposing, tariffs and retaliatory restrictions on goods produced in the United States. In addition, the U.S. government has announced and rescinded multiple tariffs on several foreign jurisdictions, which has increased uncertainty regarding the ultimate effect of tariffs on economic conditions. 

The overall economic uncertainty caused by these or additional changes in the U.S. or international trade policy, along with continued uncertainty surrounding such policies, could also lead to weakened economic conditions, contribute to inflation and increased borrowing costs and could lead to decreased consumer spending. This 

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environment has created negative pressure in the financial and capital markets resulting in a higher cost of capital.  Additionally, tariff increases may impact us by increasing the cost of imported construction materials, which in turn can lead to higher development and renovation expenses. This increase in costs may result in reduced yields on development projects and potentially delay or result in cancelling planned projects. Furthermore, our tenants are similarly experiencing negative pressures from these uncertain economic conditions, which could negatively affect their ability to satisfy their obligations to us. 

Although we intend to continue making future investments, we expect to maintain our investment spending at moderate levels in the near-term due to an elevated cost of capital, and near-term investments will be funded primarily from cash on hand, excess cash flow, disposition proceeds and borrowing availability under our unsecured revolving credit facility, subject to maintaining our leverage levels consistent with past practice. As a result, we intend to continue to be more selective in making future investments and acquisitions until