EPR Properties 2026年第三季法說會：調升 FFO 與投資指引

重點摘要

• 在投資支出、合約租金調漲以及利息收入增加的推動下，2026 年第三季營收年增 12% 至 2.041 億美元。
• 調整後 FFO 每股成長 8.8% 至 1.49 美元，AFFO 則每股成長 10.8% 至 1.54 美元。EPR 修正了 AFFO 的定義，扣除維護性資本支出，並對先前期間的數據進行了重編。
• EPR 本季投資了 1.724 億美元，平均初始現金殖利率約為 8.3%，使今年累計投資支出達到 6.645 億美元。
• 管理層將 2026 年調整後 FFO 每股指引上調至 5.49 美元至 5.57 美元，並將投資支出指引上調至 6.75 億美元至 7.25 億美元。
• 投資組合租金覆蓋率改善至 2.1 倍。截至季末，總價值 76 億美元的投資組合包含 350 處物業，出租或營運率達 99%。
• EPR 透過與 Live Nation 合作的客製化新建 (build-to-suit) 專案進入現場演出場館領域，並持續擴展其健身與健康投資組合。影城曝險降低至投資組合的約三分之一，朝著管理層約 20% 的長期目標邁進。

關鍵財務數據

業務與營運表現

EPR 的投資組合總額達 76 億美元，涵蓋 350 處物業。核心體驗式資產占年化基礎租金的 96%，涵蓋由 61 家客戶營運的 296 處物業。其餘 4% 則由租賃給 4 家營運商的 54 處教育物業組成。

該公司首個現場演出場館投資專案，是與 Live Nation 在奧勒岡州波特蘭合作的客製化新建項目。管理層強調約 4,000 個座位的中型場館需求尚未被滿足，並表示該專案仍預計於明年夏季開幕。

健身與健康投資包括位於加州爾灣的 Life Time 物業，以及位於維吉尼亞州 Tysons Galleria 的 Onelife Fitness 物業。管理層將兩者皆描述為優質房產，並表示近期翻新與擴建的健身物業展現出趨於穩定的態勢。

影城表現提升了投資組合整體績效。管理層表示，截至 9 月的今年累計票房成長約 20%，有望創下 2019 年以來最佳年度表現。EPR 的影城以 3% 的銀幕數量貢獻了北美約 8% 的總票房；其中 71% 配備躺椅，84% 提供升級的餐飲服務，69% 包含頂級大銀幕 (PLFs)。

餐飲娛樂 (eat & play) 板塊保持韌性，Topgolf 則受惠於費用削減與增收舉措。景點設施總體表現良好，地理區域多元化有助於抵銷單一地區的天氣影響。教育板塊則持續面臨較高的勞工成本、補助金資金挑戰以及監管壓力。

EPR 在本季出售了芝加哥英國學校 (British School of Chicago)，資本化率 (Cap rate) 在 7% 出頭的區間。處分資產總收益為 7,400 萬美元，其中包括出售私立學校的 6,820 萬美元淨收益，並認列了 3,050 萬美元的收益。

管理層財務指引

管理層表示，抽成租金指引的上調主要反映了影城（特別是 Regal）以及加拿大遊樂設施資產的強勁表現。公司預計第四季抽成租金與參與權權益收入約為 600 萬美元，低於去年同期的近 800 萬美元，原因是某租戶的部分租金已於今年第三季認列。

風險與關注焦點

借貸成本上升使淨利息費用年增 710 萬美元。管理層表示，債務資本價格已快速重訂，但交易定價與租金調漲條款也已隨之調整。EPR 聲明不會為了交易量而犧牲投資利差。

教育投資組合持續面臨勞工成本通膨、補助金資金限制與監管壓力。管理層亦指出，低收入消費者群體出現了部分財務壓力問題。

由於利率、營建成本、租戶信用與執行風險，開發專案面臨更高的門檻。與現有資產相比，EPR 對開發機會設定了 50 至 75 個基點的報酬溢價目標。

遊樂設施仍面臨個別天氣事件與營運安全疑慮的影響。管理層強調營運商均維持定期檢查與安全計畫，但表示將持續關注近期事件是否會影響未來的投資決策。

EPR 在 12 月有 4.5 億美元的債務到期，此後直到次年 6 月才會有下一筆到期債務。季末時，公司持有 5,240 萬美元現金，10 億美元的循環貸款餘額為零，並有 1.346 億美元來自尚未結算的遠期股權協議的預計淨收益可用。

分析師問答環節亮點

• 投資管道：管理層形容投資管道異常廣泛，涵蓋健身與健康、餐飲娛樂 (eat & play)、遊樂設施與現場娛樂等領域的併購與開發機會。併購預計仍將是重要組成部分，而開發專案則必須跨過更高的報酬率門檻。
• 投資殖利率：管理層表示，目前的定價討論顯示殖利率約有 25 個基點的變動空間，同時也有機會達成更強力的合約租金調漲條款。EPR 意在維持目標投資利差。
• 現場演出場館：EPR 認為中型場館屬於需求尚未被滿足的領域，且有能力吸引領銜主唱/巨星級藝人。公司還強調了 Live Nation 的信用品質以及現場娛樂需求的韌性。
• 影城曝險：管理層對透過多元化與資產出售來降低影城集中度持開放態度。然而，與 Regal 及 AMC 簽訂的大型主租約 (master leases) 限制了在沒有大型交易的情況下單獨出售個別物業的能力。
• 資本能力：管理層預期在不動用遠期股權收益的情況下，年底槓桿率約為 5.0 倍，並表示資產負債表具備足夠能力支持持續成長。
• 2027 年抽成租金：在未提供正式 2027 年指引的情況下，管理層表示預期明年票房將有所成長，且 Regal 的抽成租金也將增加。

法說會完整逐字稿

完整財報電話會議逐字稿

管理層陳述

Operator

Hello, and welcome to the EPR Properties Q3 2026 Earnings Call. [Operator Instructions] Also, as a reminder, this conference is being recorded today. If you have any objections, please disconnect at this time.

I will now hand the call over to Brian Moriarty, Senior Vice President, Corporate Communications.

Brian Moriarty

Thank you. Thanks for joining us today for our third quarter 2026 earnings call and webcast. Participants on today's call are Greg Silvers, Chairman and CEO; Ben Fox, Executive Vice President and CIO; and Mark Peterson, Executive Vice President and CFO.

We'll start the call by informing you that this call may include forward-looking statements identified in the Private Securities Litigation Act of 1995 by such words as will be, intend, continue, believe, may, expect, hope, anticipate or other such comparable terms. The company's actual financial condition and the results of operations may vary materially from those contemplated by such forward-looking statements. Discussion of those factors that could cause results to differ materially from these forward-looking statements are contained in the company's SEC filings, including the company's reports on Form 10-K and 10-Q. Additionally, this call will contain certain references to non-GAAP measures, which we believe are useful in evaluating the company's performance. A reconciliation of these measures to the most directly comparable GAAP measures are included in today's earnings release and supplemental information furnished to the SEC under Form 8-K. If you wish to follow along, today's earnings release, supplemental and earnings call presentation are all available on the Investor Center page of the company's website, www.eprkc.com.

Now I'll turn the call over to Greg Silvers.

Gregory Silvers

Thank you, Brian. Good morning, everyone, and welcome to our third quarter 2026 earnings call and webcast. Our focus this year has been on accelerating growth, and our third quarter results demonstrate continued momentum across the business. Revenue increased 12%, while FFO as adjusted per share increased 8.8% compared with the same period in 2025. These results were supported by a strong in-place portfolio and a robust pace of investment activity.

Our investment spending remained strong throughout the quarter as we continue to broaden our experiential portfolio and establish important new relationships. We entered the live venue category through a build-to-suit development in Portland, Oregon with industry leader Live Nation. We have long discussed the strong sustained demand fundamentals of live performance and our team worked diligently to identify the right initial opportunity.

We also acquired a Life Time fitness and wellness property in Irvine, California, further expanding both the depth and quality of our fitness and wellness portfolio. Our portfolio coverage incrementally increased during the quarter to 2.1x. We're also pleased to see box office running well ahead of last year. The third quarter capped off a record summer and year-to-date box office was up approximately 20% through September, driven by a broad mix of genres and compelling titles that continue to bring audiences back to theaters. Our results underscore that the consumer continues to demonstrate that they value and prioritize experiential offerings.

We continue to draw on multiple sources of capital to fund our growth. During the quarter, we recycled capital through the sale of a private school property, entered into forward sale agreements under our ATM program and executed a new credit agreement that includes a $600 million term loan. With our credit facilities and forward equity in place, we have the capacity to fund a strong pipeline of opportunities. Given our capacity and our activity to date, we're pleased to raise our investment spending earnings guidance, which represents an increase of 8% at the midpoint over 2025. As our portfolio expands and diversifies, we remain well positioned to capitalize on the continued growth of experiential real estate.

With that, I'll turn the call over to Ben for a closer look at the business and our performance.

Benjamin Fox

Thank you, Greg. As Greg just highlighted, this quarter marked several notable firsts for EPR. Our first investment in the live performance venue with Live Nation and our first acquisition of a fitness facility leased to Life Time. Both transactions highlight not only our continuing investment momentum, but also the accelerating diversification of our portfolio. During the quarter, we invested $172.4 million at an average initial cash yield of approximately 8.3%, bringing our year-to-date investments to $664.5 million. That volume includes a new experiential category, live venues, along with continued additions to our fitness and wellness, eat & play and experiential lodging portfolios. Two of this quarter's investments stand out for their exceptional A+ real estate, Life Time in Irvine, California and Onelife Fitness at Tysons Galleria in Virginia, both occupy world-class locations that we believe support their long-term success. In addition to these investments, we expect to invest another $21 million this year in experiential development and redevelopment projects already underway.

As we noted last quarter, our theater exposure continues to decline as our experiential investment volume accelerates. Theaters now represent roughly 1/3 of our portfolio, and we expect that share to continue trending toward our long-term goal of approximately 20%. Given our investment pace and the depth of our pipeline, we are pleased to once again increase our 2026 investment spending guidance to a range of $675 million to $725 million.

Two points on our pipeline and the current investment environment. First, the breadth of our pipeline is unparalleled in recent memory, and we look forward to sharing some of the exciting opportunities we're pursuing in the coming quarters. Second, on cost of capital and investment spreads, three factors are working in our favor. Our transactions generally have rate protection built in prior to closing, which provides a buffer during periods of market volatility. As we've said before, our biggest competition is debt, not net lease. In this market, debt capital has repriced even faster, so our clients are receptive to conversations on pricing. And because our business is relationship-driven with a proprietary pipeline, we enjoy higher average entry yields, which give us a natural cushion.

Turning to the portfolio. At the end of the third quarter, our portfolio totaled $7.6 billion of gross investment value across 350 properties, which were 99% leased or operated. By ABR, 96% is in our core experiential categories represented by 296 properties operated by 61 clients, which remain 99% leased or operated. The remaining 4% is our education portfolio, made up of 54 properties leased to four operators, which were 100% leased at quarter end. Portfolio health remains sound with unit level rent coverage increasing to 2.1x. While data indicate pockets of strain among the lowest income consumers, people's enduring preference for experiences over things continues to support our portfolio. Our portfolio also benefits from diversification across multiple demographic dimensions with experiences that appeal to many generations and income levels.

Theaters are a great example. Not only do they span all of these demographics, but they also have historically proven resilient in economic downturns. And most importantly, as Greg has said many times, content drives performance. People want to see cool stuff. This year's box office, which is up 20% year-to-date and on track for its best year since 2019, demonstrates exactly that. We've talked about who goes to the movies before, but with the strength we continue to see across our theater portfolio, a few points are worth repeating. Gen Z accounts for 40% of all moviegoers and in multiple polls, Gen Alpha has said it prefers the big screen. Format matters. People can't replicate IMAX and other premium large-format screens at home, and the industry has created real urgency around seeing certain films in these formats. Our portfolio over-indexes to exactly those experiences. 71% of our theaters have recliners, 84% offer enhanced food and beverage and 69% have premium large-format screens. These features help our theaters generate roughly 8% of North American box office gross with only 3% of screens.

Finally, the industry has coalesced around a 45-day theatrical window, which supports exhibitors and spare studios a second marketing push after films leave theaters. Some films will run longer, including the upcoming Netflix release of Narnia with a 7-week window. And it's not just the movies. Young people are lining up for concerts, comedy shows and other live events. They want to get out of the house, and they are hungry for shared experiences. We're capitalizing on this momentum through partnership with industry leaders like Live Nation, whose venue will host concerts and comedy shows.

Turning to other areas of our portfolio. Our eat & play segment remains resilient, strengthened by the quality of our locations despite broader industry moderation. Topgolf's positive momentum since the sale continues. Expense reductions and revenue initiatives are delivering results, and our Topgolf portfolio remains very healthy. Attractions performed well in the third quarter with several parks outperforming. As we saw in ski during the winter, geographic diversification and attractions helped offset isolated summer weather events. Our fitness and wellness portfolio continued with solid performance in the third quarter with stabilizing trends at several recently renovated and expanded properties. Finally, our education portfolio continues to face industry-wide headwinds, including higher labor costs, grant funding challenges and regulatory pressure. Despite this backdrop, this portfolio remains resilient.

Moving on to dispositions. Reflecting our commitment to accretive capital recycling. In the third quarter, we completed the sale of the British School of Chicago to a public net lease peer, transacting at a cap rate in the low 7% range. Following this sale, we are updating our 2026 disposition guidance to approximately $86 million as we do not anticipate any additional dispositions prior to year-end.

In summary, our portfolio remains resilient. Our diversification is accelerating, and we are very excited about the investment opportunities in front of us.

With that, I'll turn it over to Mark for a review of our financial performance.

Mark Peterson

Thank you, Ben. Today, I'll discuss our strong financial performance for the third quarter, provide an update on our balance sheet and close by discussing the increases in our earnings and investment spending guidance for the year. FFO as adjusted for the quarter was $1.49 per share versus $1.37 in the prior year, an increase of 8.8% and AFFO for the quarter was $1.54 per share compared to $1.39 in the prior year, an increase of 10.8%. Please note that this quarter, we have revised our definition of AFFO to no longer deduct maintenance capital expenditures. This change was made to be consistent with most other triple net REITs and is immaterial. All prior periods have been recast to reflect this change and reconciliations from the previous definition to the new definition are included in the supplemental and press release.

Before I walk through the key variances, I want to explain two items excluded from both FFO as adjusted and AFFO. First, during the quarter, we had disposition proceeds of $74 million, which included the sale of a private school property for net proceeds of $68.2 million and a gain of $30.5 million was recognized. Second, as discussed last quarter, we entered into a new amended and restated $1.6 billion credit agreement. And in connection with this, we recognized $605,000 of costs associated with loan refinancing or payoff.

Now moving to a few key variances. Total revenue for the quarter was $204.1 million versus $182.3 million in the prior year, an increase of $21.8 million or 12%. This increase was primarily due to the impact of investment spending as well as rent and interest bumps. Percentage rents and participating interest for the quarter were $9.8 million, up from $7 million in the prior year, primarily due to higher percentage rent recognized from our attraction and theater properties. Both other income and other expense relate primarily to our consolidated operating properties, including our four operating theaters and The Kartrite Resort & Indoor Waterpark. The increase in other income and other expense versus prior year is due primarily to better performance at our theater properties as a result of strong box office during the quarter.

On the expense side, interest expense net increased by $7.1 million due to an increase in average borrowings and the weighted average interest rate on our outstanding debt as well as a decrease in capitalized interest versus the prior year. FFO as adjusted for the 9 months ended September 30 was $4.16 per share compared to $3.81 in the prior year, an increase of 9.2%. And AFFO for the same period was $4.26 per share compared to $3.88 in the prior year, an increase of 9.8%.

Turning to the next slide, I'll review some of the company's key credit ratios. As you can see, our coverage ratios continue to be very strong with fixed charge coverage at 3.5x and both interest and debt service coverage ratios at 4.0x. Our pro forma net debt to annualized adjusted EBITDAre was 4.9x at quarter end, which is below the low end of our targeted range of 5X to 5.6x. Pro forma net debt is calculated by subtracting the estimated net proceeds from all forward sale agreements under our ATM program from net debt. Additionally, our pro forma net debt to gross assets was 40% on a book basis at quarter end, and our common dividend continues to be very well covered with an AFFO payout ratio of 60% for the third quarter.

Now let's move on to debt and capital market activities and our balance sheet, which is in great shape to support our continued growth. At quarter end, we had consolidated debt of $3.3 billion, of which $2.8 billion is fixed rate debt with an average blended coupon of approximately 4.4%. During the quarter, upon maturity, we repaid in full $179.6 million of senior unsecured notes that were originally issued in a private placement transaction.

As discussed in our last call, on July 17, we entered into a new amended and restated $1.6 billion credit agreement that, among other things, extended the maturity date and reduced the interest rate on our $1 billion revolving credit facility and established a new $600 million delayed draw term loan facility that was fully drawn at quarter end. The term loan is due in 2032 with interest based on our current credit ratings at SOFR plus 115 basis points. Additionally, during the quarter, we entered into two forward sale agreements under our ATM program for initial gross sales proceeds of $66.6 million or an average sale price of $6.79 per share. No forward sale agreements were settled during the quarter. And as of quarter end, we had total estimated net proceeds from unsettled forward sale agreements of $134.6 million, representing just under 2.3 million common shares.

Our liquidity position remains strong, and we are well positioned to support our continued growth. In addition to the amount available under forward sale agreements that I just discussed, at quarter end, we had $52.4 million of cash on hand and no balance on our $1 billion revolver. As far as upcoming debt maturities, we have $450 million of debt coming due in December and then nothing comes due until June of next year.

Turning to guidance. We are increasing our 2026 FFO as adjusted per share guidance to a range of $5.49 to $5.57 from a range of $5.41 to $5.57, representing an increase versus the prior year of 8% at the midpoint. We expect a slightly higher percentage increase in AFFO per share. We are also increasing our 2026 guidance for investment spending to a range of $675 million to $725 million from a range of $600 million to $700 million. We are revising disposition proceeds to $86 million for the year from a range of $50 million to $100 million. We are increasing our percentage rent and participating interest income guidance to a range of $21.5 million to $24.5 million from a range of $18.5 million to $22.5 million, primarily due to higher amounts expected related to our theater and attraction properties. Please note that the midpoint of this range implies that fourth quarter percentage rent and participating interest income will be approximately $6 million. This is lower than the prior year's fourth quarter amount of nearly $8 million due to the recognition of a part of one tenant's percentage rent in the third quarter of this year versus the fourth quarter in the prior year. We are revising our G&A expense guidance to a range of $57 million to $59 million from a range of $56 million to $59 million due primarily to an increase in expected noncash share-based compensation expense.

Finally, our guidance for other income and other expense has been updated to a range of $44 million to $50 million and a range of $43 million to $49 million, respectively. The net increase in this guidance of $1 million reflects the additional contribution expected from our operating theaters given the strong box office performance as well as additional gains anticipated related to our Canadian FX hedges, which is booked to other income. Guidance details can be found on Page 23 of our supplemental.

Now with that, I'll turn it back over to Greg for his closing remarks.

Gregory Silvers

Thank you, Mark. As you've heard today, the experience economy continues to demonstrate strength and resilience, and EPR is uniquely positioned to take advantage of this trend as it is the only diversified REIT that focuses solely on the experiential economy. So far this year, we've delivered post-COVID highs in investments and sector-leading FFO as adjusted per share growth. During the quarter, we utilized multiple tools in our tool shed, including opportunistically raising equity through our ATM program, recycling capital through dispositions and thoughtfully refinancing our debt with a new term loan execution. Our focus remains on prudently deploying capital to acquire high-quality properties that are valued by the consumer and deliver accretive earnings growth to our shareholders.

With that, why don't I open it up for questions. Operator?

Operator

[Operator Instructions] We'll take our first question from Anthony Paolone with JPMorgan.

分析師問答

Anthony Paolone

My first question relates to what you described as an unparalleled pipeline of deals. So can you talk a bit more about just what's in that? How much is maybe acquisition opportunities versus build-to-suits, portfolios, areas that you would invest in, et cetera?

Benjamin Fox

Sure, Tony. So, by breadth, we really are talking about all those things that you've mentioned. It's that the diversity of opportunities we're seeing is really, really exciting, right? So we've talked about fitness and wellness before. And even within that category, we're really seeing opportunities that stretch all the way from things that we've talked about from golf to fitness facilities and everything in between. And then beyond that, we're seeing opportunities in a lot of our other verticals, like eat & play, attractions, live entertainment, all of them have activity and the conversations have just been very engaging and encouraging.

Gregory Silvers

Tony, I would add, I think part of what, again, that's going on right now is we're seeing a really continued focus on people even in these categories, continuing to focus on spending money on these experiential properties and the consumers continues to be highly supportive of this. And so our operators and our tenants are continuing to invest and grow their businesses. So that's creating opportunities even in the face of some of the challenges that are generally going in the economy.

Benjamin Fox

And then on the point of development versus acquisitions, we're seeing a split. And consistent with this year, there are a number of acquisitions that we can expect for the coming year. Development, there's always a high hurdle. And in the current rate environment, that hurdle is probably even a little bit higher, but we are exploring those opportunities and as discussed on the call, have a pipeline of those already in place.

Anthony Paolone

Okay. And then just my second one is as it relates to your more recent theme park acquisitions this year. How did they do this summer? How are they performing and also your appetite to do more in that space?

Gregory Silvers

Again, Tony, I will let Ben chime in. I think, again, as we anticipated, this was a transitory year. So we -- consistent with that, I think we think these are performing in line with kind of where we anticipated. It doesn't mean there was -- we anticipated some degree of challenges as you change the operator and things. I think as we move into this coming year, you'll see a ramp-up. Remember, we committed to the capital -- additional capital going into those properties, and I think that will do.

I think likewise, again, the overall attractions industry has been incredibly resilient over time and continues to demonstrate that. We've had certain events toward the end of the season this year that has brought attention to that. I think everyone in the industry, any sort of event that occurs is like that we've seen is tragic and all of our operators are very much in the focus of that. Safety is of utmost importance to them, and they have demonstrated programs of inspection and safety. And literally, if you look over the billions of people that have written rides and things of that, they have a great overall track record of safety. So we'll have to see how -- if that impacts our belief on kind of the -- what we would do in the future. But right now, everything is playing out the right way. I think we thought it would be, and we'll see about opportunities as we go forward.

But Ben, I don't know if you had anything to add to that.

Benjamin Fox

I think that covers it very well. That's exactly what we're seeing.

Operator

Our next question comes from James Feldman with Wells Fargo.

Conor Peaks

You've got Conor here on with Jamie. Given your first investment in Live Nation for a performance venue this quarter, can you talk through what makes performance venues attractive from both a credit and real estate perspective? And can you describe what your runway to grow exposure here looks like?

Gregory Silvers

Again, I'll let Ben give more details, but I think, Conor, first of all, again, if you go -- if you just look about the resilience of it, I mean, live performance has been -- it has been incredible as far as its strength in the underlying experiential economy. I think the model for how musicians make their money has substantially changed to where they're all out and supported on that road.

And let's be candid, Live Nation is the 800-pound gorilla in that market. So I think they've announced a multibillion-dollar expansion program that they're looking for to increase the depth and breadth of their venues. That doesn't mean we're going to be able to do all of those. But I think we're excited about the underlying dynamics of demand compared with the ability to partner with a world-class operator. And I think that just opens up a whole another opportunity for growth for us. But Ben?

Benjamin Fox

Yes. That's exactly what we're seeing. And then what's very exciting is you look at the growth that Live Nation some of the other operators are having, there's a void still of midsized venues. If you think about 4,000 seat, right? So you have the larger amphitheater and then there's smaller local, but that midsize still is an underserved market. And it's really a sweet spot in that it's the perfect size that attracts headline performances and you can command very attractive pricing and there's just a lot of unmet demand. So that gives us a lot of encouragement about the pipeline and the future opportunity in this sector.

Gregory Silvers

And just to note, when we say very attractive pricing, we think that's very attractive pricing for ourselves. The cost of the tickets, I know everyone is complaining about the cost of tickets, but very attractive pricing is relative to which side of the equation you're sitting on. So we think it's very attractive from our perspective.

Mark Peterson

You also mentioned credit. We have Live Nation credit. So that's important to point out as well.

Conor Peaks

Really appreciate the insight. And then maybe given the tick up in rent coverage in the portfolio to 2.1x this quarter, can you walk us through what you're seeing that's driving this increase? And are there any specific sectors or types of tenants driving that?

Gregory Silvers

I think overall, clearly, there's no doubt that the overall rent coverage is being helped by the theater and the performance of that. But I think overall in experiential, I think there's some really good data points. I think -- and I'd reference you guys to McKinsey's report on the State of the Consumer in 2026, where they wrote that the experience economy has become one of the structural forces reshaping global consumer markets rather than viewing experiences as discretionary indulgences, consumers are increasingly treating them as an important part of how they choose to spend both their time and money.

So what we're seeing is people are choosing experiences over stuff and they're continuing to demonstrate that with their spending patterns. And whether you look at credit card data or spending data from the various banks, we're continuing to see experiential spending up and to the right. So we think we're in the right categories, and we think we're the only REIT that offers that level of exposure. So we feel really well with how we're positioned.

Operator

Our next question comes from Rob Stevenson with Huntington.

Robert Stevenson

Greg or Ben, the new Live Nation asset, press reports have that opening next summer. Is that still accurate? And can you talk about how big of an investment that is? And if there's a period of free rent or that starts to get rent to you guys next summer?

Benjamin Fox

That time line is still accurate. And in line with our other practice, we're not going to disclose the specific transaction economics, but that time line for opening is consistent.

Robert Stevenson

Okay. And then, Mark, you have roughly $50 million in cash and $135 million available under the ATM. How much additional debt can you issue from here and still stay in your targeted leverage range? Just curious as to how much dry powder, so to speak, you have to deploy here without having to go back to the market and issue more equity.

Mark Peterson

Yes. Let's just kind of roll forward where we're at. As I mentioned, $50 million of cash, so kind of $35 million of excess as we kind of roll forward to the rest of the year, that should cover our investment spending, which remaining is about $35 million. So we kind of finished the year, that's covered. We have zero on our line today. We do have $450 million of debt due in December, and we can take that down with our lines since we have zero on it or -- and of course, we have those proceeds from the forwards. But we probably don't need the forward equity until next year, so we can kind of have that in the tank for next year's spending. And as that line gets to about that mid-4s, you start to look at potentially a bond transaction that would pay down that line. Typically, that gets to $450 million, $500 million, we look to the market to pay down the line.

In terms of leverage, we finished the quarter here, third quarter at 4.9x pro forma. Just even with the refinancing of the debt in fourth quarter, should that happen, we finished the year around 5x. That's without taking down any forward equity. So we're in great shape kind of approaching next -- going into next year when our leverage range is 5 to 5.6 and being at the lower end of the range. So I think we have plenty of capacity to support the growth.

Operator

Our next question comes from Upal Rana with KeyBanc Capital Markets.

Upal Rana

Ben, you touched on this briefly, but given the increase in cost of capital, how much have investment yields moved on a like-for-like basis? You mentioned the sellers are open to pricing adjustments, but are you get enough to preserve your targeted spreads?

Benjamin Fox

It's a good question, Upal. And we are very comfortable with maintaining our spreads like we talked about, our average entry yield is already very attractive. And conversations are probably in the neighborhood in terms of movement these days of 25 basis points, give or take. And we're also seeing movement on escalators and that we're able to drive more attractive lease increases in a lot of our conversations.

Gregory Silvers

Yes. Upal, I think these conversations are dynamic. I mean a lot of the deals that we closed this year were based upon the cost of capital that we had done previous to the year. And as we move forward, we are -- and I think over the years, we've demonstrated our commitment to accretive growth. And therefore, if we're able to either expand or contract that to hit that. And so I think the good thing is what I talked about earlier, we're in markets that are demonstrating growth and fundamental consumer support.

So our operators are looking to deploy capital, and there is a cost of capital to do that if they want to grow. So I think, as Ben said, they're more receptive to at least continuing their growth. And for us to be there, there's a cost for us doing that, and we've had these discussions, and we'll have more of them.

Benjamin Fox

And ultimately, as Greg highlighted, we're going to remain disciplined in our deployment, and we're not going to sacrifice spread for volume.

Upal Rana

Okay. Great. That was helpful. And then maybe last quarter, you mentioned some of the percentage rent strength was timing related rather than incremental full year upside. With the percentage rent guidance raised this quarter, what changed relative to those assumptions? And was that really The Odyssey and Spider-Man or any kind of other experiential categories?

Mark Peterson

Yes, you're right about a little bit of timing between Q3 and Q4. But overall, the overall increase of $2.5 million is really a combination of theater performance particularly the Regal percentage rents and a couple of other smaller amounts. And we also saw strength overall in the attraction space, particularly with our Canadian assets. So those are really the two primary areas that drove the increase for the year of $2.5 million at the midpoint.

Operator

Our next question comes from Smedes Rose with Citigroup.

Bennett Rose

Yes, I wanted to ask just a little bit about maybe just the Life Time fitness acquisition. I think you said it's at Tysons Corner. So we clearly see a lot of other REITs that have, frankly, a better cost of capital relative to you buying those assets. I was just wondering, could you talk a little bit about the pricing on that specific opportunity and kind of maybe how it came to you and maybe the competitive landscape when it comes to those kinds of facilities?

Gregory Silvers

First of all, let's be clear, the Tysons Galleria asset was not -- Life Time was in Irvine, California. So -- that's quite all right. I just want to make sure that we get that. But second of all, I think as we've talked about, all of ours are relationship driven. I think for us, without displaying any sort of particular that we said our cap rates were average in the 8s, and these are consistent with that. So I think our ability to source those deals is really a long time kind of us working with people and Ben's relationships and other people's relationships here.

So I think we are, like I said, uniquely positioned to kind of take advantage of some of that. We continue to be, I think, fluid and be able to kind of respond in very quickly and timely manners. And so it positions us to kind of take advantage of some of these deals. And like Ben talked about, we probably have -- again, you talk about that cap rate with probably again, I don't know if they report but maybe the best life time of performance west of the Mississippi. So I think we feel pretty good about our ability to continue to consistently do things that, as you say, others should be able to beat us, but they don't.

Bennett Rose

It wasn't. It's not a criticism. It was just observation. I wanted to ask you also on the build-to-suit opportunities, you mentioned that it's sort of a higher bar. But I guess just in general, what sort of spread to your typical going-in cap rates would you look for on a development opportunities?

Benjamin Fox

Yes, Smedes. The higher bar is really that development projects always multiple factors come into play. It's not just for us, but it's for the operators as well, right? So when they're looking at projects, the cost of capital and their cost to build, so construction costs, everything comes into play. And so that's really what we're talking about with the higher bar. In terms of spreads, it's very consistent with where we always target and the kind of 50 to 75 basis point premium to in place.

Gregory Silvers

The other thing I would point out is, again, they are all -- and add on to what Ben said, like I said, there are challenges, like I said, even with -- like we talked about with the live performance, again, the credit quality of the tenant, where do -- where are the escalators at? It's a combination of what Ben and his team put together to what we think is the overall risk reward of that. But as he said, yes, the bar is a little higher on an unproven asset. So we kind of get some level of support to rationalize where that is.

Operator

Our next question comes from Mitch Germain with Citizens Bank.

Mitch Germain

I know you guys talked about declining theater exposure. And I'm curious if there is a thought around maybe capitalizing on some of the momentum and pursuing asset sales on some of your portfolio? Or is that decline just going to be through your deployment into other sectors?

Gregory Silvers

Yes. I think, Mitch, it's a good question. I think it would be open to both. I think let's -- from a data standpoint, I think there are some things that are very positive going on. We just -- in the last quarter, we got messaging of one of our net lease peers has bought a theater in a build-to-suit theater for Cinemark below 8 cap. So yes, that's an encouraging data point and to see other net lease peers starting to tip their toe back into the water. That's exciting. So that may create an opportunity for us.

As we've talked about in that space, we have two large master leases, which -- with Regal and AMC, which means we wouldn't want to break those. But to do that, we have to be a rather large transaction. But we are -- it is not we're not opposed to selling theaters. We actively look at it. We need to get value for what we thought. And like I said, when we're starting to see 8 or below 8, it's beginning to get quite interesting in how we can redeploy capital. But we'll just have to see how that plays out.

Mitch Germain

That's helpful. And maybe just one last one for Mark. Obviously, you guys increased your percentage rent in Regal in the most recent guidance. I'm just curious, without asking for specific commentary on the forward outlook, is there anything that you would consider to be somewhat onetime in nature that's in that number that we need to consider thinking about 2027?

Mark Peterson

Not really. There was one time in '25, but not really in '26. And we do expect box office to be higher next year than this year. So we would expect Regal percentage rents to go up next year. So without getting too specific, we do expect an increase in percentage rents in '27.

Operator

Our next question comes from Michael Goldsmith with UBS.

Anna O'Neil

This is Anna on for Michael. Just I was wondering if you could help us understand how much of the guidance increase was driven by 3Q outperformance? And then I guess, sort of relatedly, maybe the variables that would push you towards the low end versus the high end of this updated guidance?

Mark Peterson

Yes. I mean this quarter was a little bit higher, some of which was timing, some of which was performance. It's probably easier to look at what drives the full year guidance than trying to identify the quarter. And if you look at the full year guidance, we're up $0.04, a little over $0.03 of that is percentage rents. As you saw, we increased our other income and other expense, and that net is $1 million higher than it used to be, primarily driven by theater performance on the operating side. And then going the other way, G&A guidance was up $0.5 million, so call it $0.05. That's really the drivers of the $0.04 increase for the year. And like I said, some of that's outperformance from Q3, but some of that was that timing of percentage rents Q3 to Q4. So I think it's really better to look at full year is a lot easier to understand.

Operator

Our last question comes from Jana Galan with Bank of America Securities.

Jana Galan

Congrats on a great quarter. Mark, thank you for highlighting the maintenance CapEx change in AFFO. I believe in the up, you also changed the top tenant contributions from percent of revenue to percent of ABR. I'm just wondering if there's anything to highlight on ground leases there or if this was just to be more comparable with peers who report on ABR? And if there's any other kind of changes you made in terms of the presentation?

Mark Peterson

Really, you're right. We split from total revenue to ABR. Total revenue has straight-line rent and so forth, and we thought a much better representation of sort of cash rents was to use ABR, and that's more consistent with what peers show. So you're right, we did make that change -- it didn't significantly change the lineup in terms of percentages and so forth, but that was a change we made in terms of the sub. And we've kind of moved to more of an ABR than a GAAP revenue type presentation.

With respect to AFFO, we did some work looking at peers and noted that most of our peers, the vast majority do not subtract maintenance CapEx from AFFO. So we made that change. And then to make sure everyone understood, recast prior periods and so forth, it didn't really have a whole lot of impact on growth. It's fairly immaterial. But we do think to be more consistent with the peer group, that made a lot of sense. It does affect -- it does reduce our payout ratio a little bit, but that's the right way to look at it on a comparative basis to our peer set. And it has mildly increases AFFO, as I mentioned, sort of on a near material basis. But those were the two changes we thought were good changes that we made this quarter.

Operator

There are no more questions. So I will now turn the call back over to Greg Silvers, Chairman and CEO, for any closing remarks.

Gregory Silvers

I just want to say thank you to everyone. I hope everyone has a great balance of the year, and we look forward to talking to you in the new year. Thanks, everyone.

Operator

Thank you for joining EPR Properties Q3 2026 Earnings Call. This concludes today's call. You may now disconnect.