The company (NYSE: EPR) purchased five new charter schools from Imagine Schools Inc. of Arlington, Va., at a cost of $44 million and agreed to finance expansion of two others at a cost of $4 million.
Entertainment Properties Trust, which is based in Kansas City, will lease the five new schools back to Imagine Schools, a leading operator of public charter schools.
Entertainment Properties Trust’s portfolio now includes 27 charter schools that Imagine Schools operates in nine states and the District of Columbia.
“We are excited to add to our public charter school portfolio and enthusiastic about the prospects of Imagine and this investment category,” Entertainment Properties Trust CEO David Brain said in a release.
In an interview, Brain said the Imagine Schools transaction announced Friday fulfilled Entertainment Properties’ 2007 commitment to make at least $200 million worth of acquisitions from Imagine. It also increases Entertainment Properties’ footprint in what Brain called “a huge new category” for private real estate investment.
“Public charter schools are now a 4 or 5 percent slice of a couple trillion dollar public education real estate market,” Brain said.
Heretofore, new public schools have been financed almost exclusively through school-bond issues, he said. But Brain said the move to “decentralize and debureaucratize public education” is creating an increasing number of charter schools, which aren’t as cost-efficiently financed through bond issues.
Friday, January 22, 2010
Imagine Schools Sell Five Schools
Cha-ching: that's the sound of Imagine Schools selling 5 schools to Entertainment Properties Trust. From a Kansas City Business Journal article by staff writer Rob Roberts:
You have to admire Mr. Brain's honesty - he's clearly in it just to make a buck (or a few million).
If he's right about this really being a "huge new category" for investment, lawmakers, school districts and the general public should be aware of the way buildings are privatized in these kinds of deals. We should also consider how a rapidly growing network of privately owned schools could suck away funding from the already cash-strapped public schools, which have been subjected to deteriorating and deplorable facilities for eons. Keep in mind much of this crisis was caused by Wall Street...and the profiteers conveniently wind up owning the property of "public" charter schools.
Don't forget to capitalize on those disasters - particularly if you have gobs of cash to throw around.
Posted by Ken Libby at 2:40 PM