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Tuesday, November 26, 2019

News: Big REIT (Real Estate Investment Trust) Exits the Charter Real Estate Sector | Diane Ravitch's blog

News: Big REIT (Real Estate Investment Trust) Exits the Charter Real Estate Sector | Diane Ravitch's blog

News: Big REIT (Real Estate Investment Trust) Exits the Charter Real Estate Sector

Carol Burris writes about the latest news from the charter industry. This is the same company that Valerie Strauss wrote about, called “Entertainment Properties Trust.” It’s CEO, Dennis Brain, told an interviewer that charter schools were a sound investment, had long waiting lists, and were guaranteed government revenues.
But that rosy picture has dimmed. The long waiting lists are fictional. Charters are likely to close down suddenly. In some states, charter enrollment is declining. The REIT lost confidence in the future of charter schools and liquidated its charter school holdings.
Burris writes:
EPR Properties (NYSE:EPR) is a  triple net lease real estate investment trust (REIT). What that means is that it buys properties and then rents them with the tenant picking up costs like insurance, improvements, and all utilities. Therefore, every dollar EPR makes off the lease is profit. 
EPR used to love the charter sector. It would buy buildings and then rent them to charter schools. In 2017 it had 66 charter schools in its portfolio. By 2018, that number dropped to 60. 
EPR had a special relationship with Imagine Charter Schools. School House Finance, Imagine’s related organization, would buy the property. It would sell it to EPR. EPR would lease it back to School House, which would then lease it to one of Imagine’s charter schools at very high rates. 
EPR also had a special relationship with the for-profit charter management firm CSMI. It would buy their charter school’s buildings and then lease them to the CONTINUE READING: News: Big REIT (Real Estate Investment Trust) Exits the Charter Real Estate Sector | Diane Ravitch's blog