Entertainment Properties Trust (EPR) is learning a tough lesson from its ambitious investment in charter schools.
The real estate investment trust, known mainly as a landlord to movie theaters who owns 112 of them in 35 states, began expanding into the education business five years ago by buying or building charter schools. The company now owns 37 charter school buildings, most of which are managed by Imagine Schools, one of the nation's largest for-profit charter school operators.
But the investment into charter schools has hit an unexpected snag. In the past few months, Imagine lost its contracts to manage seven schools in Missouri and two in Georgia due to criticism about poor test scores and financial mismanagement. Imagine was forced its close its schools in those states, leaving Entertainment Properties in a pinch to fill the vacant buildings.
Those nine schools represent a $72 million investment for Entertainment Properties and one-third of the number of leases the company has signed with Imagine, which currently operates about 75 schools nationwide.