Roller Coasters, REITs, and Rotten Tomatoes

**SPEAKER_1** (0:00)
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**Upl Rana** (0:33)
Investors are looking for some more safety, some predictable cash flows.
They'll turn to REITs. And the other aspect is, you know, these are businesses that are coming out of the pandemic that are now finally stabilizing. Supplies come down a lot. And so from the operating and fundamental standpoint of REITs, they're starting to grow again.

**Jack Hough** (0:56)
Hello, and welcome to the Barron Streetwise Podcast. I'm Jack Hough, and the voice you just heard is Upl Rana. He's an analyst with KeyBank Capital Markets, covering REITs, real estate investment trusts. They've been on a tear this year. We'll talk about which REITs Upl still likes, including a weird one. And later, we'll hear from Wedbush analyst Alicia Reiss about the box office and her favorite movie stocks. Let's get into it.
Listening in is our audio producer, Emily Semlin. Hi, Emily.

**Emily Semlin** (1:39)
Hi, Jack.

**Jack Hough** (1:40)
I was away last week, a little end of summer getaway, as you know. I don't think I think we pulled it off. I don't think listeners knew.

**Emily Semlin** (1:47)
You were sorely missed here at Barron's.

**Jack Hough** (1:50)
I think we've I think we fooled them.
I experienced some sheer terror. I experienced two minutes of absolute white knuckle terror while I was away.
And, you know, common sources of fear, right? Spiders, snakes, heights, none of those. Clowns, that actually ranks pretty high on the list. Wasn't clowns. It was Maintenance Cap X is probably how I would describe it. And it happened at a place called Great Escape. Do you know what that is?

**Emily Semlin** (2:21)
In the amusement park?

**Jack Hough** (2:22)
It is. It's in the it's in the north of New York state. It's up towards the Adirondacks near Lake George. And it is, I would say, an aging and strange amusement park. Great Escape is a 72 year old amusement park with a 99 year old roller coaster. I know that sounds like it's not possible, but there was one up in Canada and that place closed and they took it apart and they brought it down and they put it back together. It's been, this amusement park has been through all kinds of transitions over the years. It started as a little nursery rhyme place and they grew it gradually to attract older people. And it was taken over for a while by Six Flags. And I knew before going that it had been sold by Six Flags. I didn't look into who bought it or what the terms of the deal were. And I should have because I got on this coaster. I saw the year 1927 Did a little quick math, right? A little on the spot math. No help from my calculator watch. 99 years.
And as the thing was taken off, I just looked at like the way it looked like.
It just looked, I saw a lot of like lumber. There's a lot of wood and the sight lines are not like totally straight on some of these wood pieces. Like the thing is showing its age. I'm sure that it's perfectly safe. But as the coaster got going, what went through my mind was, I bet you this was a private equity deal. And if private equity is buying, they're gonna try to manage this thing for the cashflow. And if they're managing it for the cashflow, the first thing they're gonna do is they're gonna pull back on maintenance cap X. And the more I kept saying the phrase maintenance cap X, the more panicked I became. And I became convinced that this thing was gonna fly off the tracks.
I survived, but I was terrified.

**Emily Semlin** (4:08)
Is it one of those wooden roller coasters that rattles your brain out of your skull?

**Jack Hough** (4:12)
It was a rattling one. It turns out, by the way, that my worst fears, I mean, I survived and my worst fears were not close to the actual story.
This was not a private equity deal. This was bought by a REIT that we're going to talk about in a moment. It's a company called EPR Properties, and it is a known buyer of strange things. Strange meaning they don't fit into normal REIT categories like hotels and apartment buildings and offices and stuff like that. They buy entertainment properties. And it's a REIT yielding more than 6%, and it's a REIT that has outperformed the stock market this year. And it turns out the entire REIT category has done that. And by the way, my concerns about the maintenance CapEx in particular, when I looked into the terms of this deal, the company put up a lot of money for CapEx. They're going to do some improvements. They're going to do plenty of maintenance. So I think that the the park is in good hands. I'm not going to tell you that it was the busiest amusement park I've ever seen, but part of the proposition when this company comes buying is that if you can buy at attractive enough prices, even places that are not top performers can earn good returns. We're going to hear that in a moment when we get to our conversation with Oupil. He talks about the returns being pulled from this deal being well over the cost of financing for the company, and that's sort of the game that EPR is in. We're going to hear from him about this REIT in particular and some other ones that he likes.