Hello, ladies and gentlemen, and welcome to the Q4 2020 EPR Properties Earnings Conference Call. At this time, all participants are in a listen only mode. Later, we will conduct a question and answer session and instructions will follow at that time. As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Mr.
Brian Moriarty, Vice President, Corporate Communications.
Hi. Thank you, and hi, everybody, and welcome. Thanks for joining us for today's Q4 and year end 2020 earnings call. I'll start the call by informing you that this call may include forward looking statements as declined in the Private Securities Litigation Act of 1995 identified by such words as will be, intend, continue, believe, may, expect, hope, anticipate or other 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 those forward looking statements are contained in the company's SEC filings, including the company's reports on Form 10 ks and 10 Q. Additionally, this call will contain references to several 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 in the SEC to the SEC under Form 8 ks. 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 the company's President and CEO, Greg Silvers.
Thank you, Brian. Good morning, everyone, and thank you for joining us on today's Q4 year end call. We are happy to be with you as we turn the calendar to 2021, and I sincerely hope that everyone is staying healthy and safe. Joining me on the call today are company CIO, Greg Zimmerman and company CFO, Mark Peterson. I will start the call with an opening statement, then turn the call over to Greg and Mark, who will provide more detail.
For the overview, clearly 2020 was a year unlike any other we've experienced since the company was founded in 1997. Early in the onset of the pandemic, we recognized the need to fortify the company's balance sheet to maintain sufficient liquidity for the long term. Key among early actions was to defer an anticipated gaming venue investment of approximately 1,000,000,000 along with deferring other uncommitted investment spending of approximately $600,000,000 Additionally, we accessed our unsecured credit facility as a precautionary measure and suspended our monthly dividend to common shareholders. We determined that these actions were prudent due to the extremely challenging environment in which our tenants have been operating. As we speak today, our liquidity remains in a strong position with cash on hand in excess of 500,000,000 dollars This large reserve of cash reflects the fact that we have to return to normalcy.
However, as we announced in our quarterly disclosure on January 7, we generated positive cash flow in the 4th quarter and anticipate this trend to continue. The recent pay down of our credit facility balance reflects this positive momentum and demonstrates our increased confidence. Throughout 2020, our team was focused on the many challenges brought on by the pandemic, including monitoring tenant performance, assisting and reopening plans and collaborating to develop plans that ensure long term stability and success for both our tenants and EPR properties. We have seen the success of this strategy with our non theater tenants, where approximately 94% are open and rent collections have improved materially. While our properties are still impacted by locally mandated closures and capacity restraints, performance and customer demand continue to improve, which we believe demonstrates our final thesis of people's desire for experiences.
As Greg will discuss in more detail, our theater tenants are still primarily challenged with limited film product, which should subside as we progress through 2021. However, early indications from around the world indicate that when product is available and flowing, there is robust consumer demand. Overall, we are pleased with both the progress and trajectory of our recovery as it is reflected in a continued increase in cash collections as we enter 2021. Throughout the year, we made continuous progress. And as I've stated before, I'm very proud of how our team has responded to the substantial challenges that they have faced.
Looking ahead, as we look forward in 2021, we're encouraged by the accelerated rollout of vaccines. We recognize that the reopening of the U. S. Will continue to be a phased process, yet we also believe that as a society we are more than ready to return to a sense of normalcy. We also continue to be encouraged by the resiliency displayed by many of our tenants and anticipate that theaters will follow a similar pattern when they open more widely and key titles are consistently released.
As the country begins the recovery process, we look forward to getting back on the path to growth. This process requires continued improvement and stabilization of our cash collections, which will allow us to exit our existing debt covenant waivers. Upon achieving that goal, our focus will turn to reinstituting our common dividend and reinitiating our investment spending program. The timing of achieving these milestones is highly dependent on a number of variables including an effective vaccine deployment. However, as today's results indicate, our progress has measurably improved in the early months of 2021 and we are optimistic that our goals are achievable during the second half of twenty twenty one.
With that, let me turn it over to Greg Zimmerman discussion of our portfolio and its performance. Greg?
Thanks, Greg. At the end of the first quarter, our total investments were approximately $6,500,000,000 with 356 properties in service and 94.2% occupied. During the quarter, our investment spending was $22,800,000 and was entirely in our experiential portfolio, comprising build to suit development and redevelopment projects that were committed prior to the COVID-nineteen pandemic. For the year, our investment spending was 85,100,000 dollars Our experiential portfolio comprises 281 properties with 43 operators, is 93.8% occupied and accounts for 91% of our total investments or approximately $5,900,000,000 of the total 6,500,000,000 dollars We have 3 properties under development. Our education portfolio comprises 75 properties with 12 operators and at the end of the quarter was 100% occupied.
As the vaccine rollout accelerates, people are looking for safe and easily accessible ways to get out of their homes and come back together with friends. Our operators are working hard to offer entertainment experiences, which create memories in safe environments. We're seeing that as consumers become increasingly confident in safety measures and restrictions are reduced, they're returning to our properties. Now I'll update you on the operating status of our tenants, our deferral agreements and our rent payment timelines. 60% of our theaters were open as of February 22.
As we previously noted, Cineworld made the decision to close all of its U. S, U. K. And Ireland theaters because of the lack of tentpole films from Hollywood. Today, none of our 57 Regal Theatres are open.
Theatres continue to face significant headwinds from a lack of tentpole films and capacity and concessions restrictions implemented by state and local governments. These challenges will slowly begin to abate during vaccination ramp up and with loosening restrictions throughout the country. Based on the current vaccine vaccination cadence, we believe major film releases and box office will begin to accelerate in the second half of twenty twenty one. The 2021 film slate was strong before the pandemic Because the number of films scheduled for 2020 pushed to 2021, we believe the projected film slate will provide a strong content cadence for theaters to ramp up as vaccinations increase, normalcy returns and consumers feel more and more comfortable returning to the movies. 2021 tent poles currently scheduled for release beginning in May include Black Widow, The Fast and Furious 9, Maverick, Jungle Cruise, Death on the Nile, A Quiet Place Part II, Dune, No Time to Die, Ghostbusters: Afterlife and Mi7.
Box office strength will continue into 2022 with Jurassic World Dominion pushing to mid-twenty 2. As demonstrated by consumer behavior in Asia and the Hollywood release schedule, we do not see evidence of structural changes in theater going habits as a result of the COVID-nineteen pandemic. In Asia, the consumer bounced back quickly. China's box office continues to perform solidly even in weeks without products. During the Lunar New Year holiday, Detective Chinatown 3 opened with the highest grossing opening day, $163,000,000 and opening weekend, dollars 398,000,000 in history, outpacing Avengers: Endgame.
Over the Lunar New Year holiday, Detective Chinatown 3 and Hi Mom each grossed over $620,000,000 In January, Demon Slayer became Japan's highest grossing movie ever. Further, as provided by the continued recovery and resilience of our other experiential tenants, which I'll discuss in a moment, customers still want to engage in entertaining affordable out of home experiences. Once they know the operator is open and become comfortable with new protocols, we see that they are returning to experiential assets. We are confident the same will hold true for theaters as vaccinations ramp up and normalcy returns. As we have said throughout the COVID-nineteen pandemic, the studio's decision to push the vast majority of tentpoles to theatrical release in 2020 2022 is the best evidence of their commitment to the exhibition economic model.
The economics are straightforward. Tentpole films cost well over $100,000,000 to produce so that the studios need theatrical release to maximize revenue for major only 6 films were moved to non theatrical release and one other, Wonder Woman 1984 was released simultaneously to theaters and HBO Max. In uniquely trying times, studios took the opportunity to test alternative delivery channels and for those with streaming services to add subscribers, even when in parts of the country people could not leave their homes and theaters were either completely shut down or open with capacity and concessions restrictions, these releases had limited success. After a couple of major tests with Wonder Woman 19 84's Simultaneous Theatrical, an HBO Max release, and the release of Mulan, Trolls World and Seoul to premium video on demand or streaming video on demand, the studios withheld the vast majority of top films from digital only distribution to preserve theatrical release in 2021. On its recent earnings call, Disney reaffirmed it will release Black Widow theatrically subject to opening cadence and consumer sentiment about going back to the movies, proving that all things being equal, Disney continues to see the enormous power of theatrical release for major motion pictures.
Likewise, Paramount recently publicly confirmed that Maverick will be released theatrically in July, again, subject to vaccination rollout. In summary, despite the unique challenges presented by COVID-nineteen, Hollywood continues to recognize that consumers still prefer to see movies on the big screen and don't embrace PBOD as a viable value alternative. The decision to push theatrical release dates for the vast majority of major films, even after a unique period of experimentation, demonstrates that theatrical exhibition remains the preferred medium for consumers and the best format to deliver returns to the studios for major releases. I also want to update you on our other major customer groups. Approximately 94% of our non theater operators are open or for seasonal businesses are closed in the normal course.
These businesses continue operating with appropriate safety protocols to comply with state and local requirements. Performance remains fluid depending on the impact of COVID-nineteen in each locale. However, at a high level, our operators are resilient and performance has generally exceeded their expectations in the face of this lengthy pandemic. Furthermore, we are seeing the benefit of owning drive to value oriented destinations. I'll now provide a brief update on each of our property types.
The ski season is underway. All of our ski resorts are open, and we're pleased with results to date. All of our Topgolf locations, all of our Andretti karting locations and all of our family entertainment centers are open. All but one of our U. S.
Gyms are open. About 61% of our attractions had opened for normal operations prior to normal seasonal shutdowns. As we have indicated in past calls, a few of our attractions missed all or part of the season due to governmental health and sanitation measures and the financial feasibility of operating with reduced occupancy in a truncated season. All of our cultural operators are open. Except for the Kartrite Resort and indoor water park, all of our experiential lodging assets are open.
Kartrite remains subject to New York State's phased reopening plans, and we are planning for a Kartrite reopening in summer 2021. Resorts World Catskills is open. Finally, turning to our education portfolio, all of our early education centers are open. We are seeing a steady increase in demand monthly as COVID restrictions ease and parents return to work. All of our private schools remain open, utilizing a combination of in person, online and hybrid instruction models.
Varying state and local requirements continue to influence each school's instruction model. Volatility in reopening plans for public school systems has benefited private schools, and we believe parents continue to see the value of private school instruction. We continued progress in executing our strategy to reduce our overall education portfolio. In December, we sold 6 private schools and 4 early childhood education centers for net proceeds of $201,000,000 These assets were sold at cash and GAAP cap rates based on base rents of 8.1% and 9%, respectively. Note that over the past 2 years, we also collected average annual percentage rents of $6,300,000 from 3 of the private schools based on total tuition levels.
However, these percentage rents were scheduled to expire over the next few years. Overall, the assets included in this sale were an excellent investment for us with an unlevered internal rate of return of 13% over the life of our ownership. Additionally, we sold 4 experiential properties and 2 vacant land parcels for net proceeds of around $23,000,000 Total disposition proceeds in the quarter were $224,000,000 During the quarter, we terminated all 7 of our AMC transition leases and took back the properties. We are executing our plans for each location. In December, we completed the sale of 1 of the transition lease properties for an industrial use.
We are in various stages of active negotiation to sell another 5. We anticipate these will result in various uses, including industrial, multifamily, office, retail and theater reuse. We also took over management of 2 of our theaters, one of the transition leased properties in Columbus, Ohio and the former Goodrich Savoy in Champaign, Illinois. We have retained a well respected experienced theater management company to operate both locations on our behalf and both are open for Cash collections have continued to improve in conjunction with reopenings. Cash collections have continued to improve in conjunction with reopenings.
Tenants and borrowers paid 46% of pre COVID contractual cash revenue for the 4th quarter versus 29% 43% in the 2nd and third quarters respectively. As Mark will go over, we expect 1st quarter cash collections to significantly exceed 4th quarter collections. Quarter collections. In January, we collected 66% and in February, collections are currently 64%, in each case of pre COVID contractual cash revenue. During the quarter, due to the continuing impact from COVID-nineteen, we reserved the outstanding principal loan balance of $6,100,000 and the unfunded commitment of $12,900,000 for one of our attractions operators.
Customers representing approximately 95% of our pre COVID contractual cash revenue, which includes each of our top 20 customers, are either paying their pre COVID contract rent or interest or have deferral agreement in place. In those deferral agreements, we have granted approximately 5% of permanent rent and interest payment reductions. However, there can be no assurance that additional permanent rent or interest payment reductions or other term modifications will not occur in future periods in light of the continued adverse effect of the pandemic and financial condition of our customers, particularly with ongoing uncertainty in the theater industry. As we've discussed, our exhibition partners have faced and continue to face serious headwinds. It goes without saying that the lack of product and reopening restrictions have weighed heavily on box office performance since early 2020 and continue to dramatically impact projected box office performance.
Our goal has been to work diligently with all of our customers to structure appropriate deferral and repayment agreements to facilitate their ability to reopen efficiently and help ensure their long term health, while also protecting our position and rights as landlord. We intended to help them through a period where they have significantly reduced or no cash flow, allowing them to ramp back up to stabilize cash flow. We individually tailored each deal, considering the variables impacting each business and improved our position through various arrangements. These agreements are generally structured with rent and mortgage payments commencing and ramping up through 2021 and in some cases after 2021. Repayment of deferred amounts typically commences in 2021 and depending on the deferred amount to allow our customers some breathing room, the deferral repayment period generally extends beyond 2021.
The vast majority provide for repayment of all deferred rent. As we have stated previously, in a few cases, we have provided rent concessions, but we've generally received equal or greater value through additional lease term, additional collateral or other benefits. In most cases, our customers have paid and continue to pay 3rd party expenses, including ground rent, taxes and insurance. Mark will provide additional color on the revenue recognition and cash collections implications for the Q1 of 2021. I now turn it over to him for a discussion of the financials.
Thank you, Greg. Today, I will discuss our financial performance for the quarter year, continue to be impacted by the disruption caused by COVID-nineteen, provide an update on our balance sheet and strong liquidity position and close with some estimated forward information. FFO as adjusted for the quarter was $0.18 per share versus $1.26 in the prior year and AFFO for the quarter was $0.23 per share compared to $1.25 in the prior year. Note that the operating results for the prior year included the public charter school portfolio, which was sold during the Q4 of 2019 and are included in discontinued operations. Total revenue from continuing operations for the quarter was $93,400,000 versus $170,300,000 in the prior year.
This decrease was due to the accounting for the various agreements with customers as a result of the COVID-nineteen impact similar to what we discussed last quarter. During the quarter, we wrote off $2,400,000 in receivables related to putting 2 additional customers on a cash basis of accounting, bringing the total for the year for such write offs to $65,100,000 including $38,000,000 of straight line rent. Additionally, due primarily to the Kartrite Resort indoor water park remaining closed due to COVID-nineteen restrictions, we had lower other income and lower other expense of $7,400,000 $8,700,000 respectively. Percentage rents for the quarter totaled $3,000,000 versus $6,400,000 in the prior year. This decrease related primarily to the closure of properties due to COVID-nineteen restrictions.
I would like to point out, as I did last quarter, that we are defining percentage rents here as amounts due above fixed rent and not payments in lieu of fixed rent based on a percentage of revenue. Therefore, AMC and other theater tenants that were in the 4th quarter making cash payments based on a percentage of their revenue against contractual rents are recognized as minimum rent. Property operating expense Property operating expense of $16,400,000 for the quarter was up slightly versus prior year, but was up about $2,500,000 from last quarter due to increased vacancy including the terminated AMC leases that Greg described. Transaction costs were $800,000 for the quarter compared to $5,800,000 in the prior year. The decrease is related primarily to lower costs incurred related to the transfer of early education properties to Creme de la Creme.
Interest expense increased by $7,900,000 from prior year to $42,800,000 This increase was primarily due to the precautionary measure we took last March to draw $750,000,000 on our $1,000,000,000 revolving credit facility, which provided us with additional liquidity during this uncertain time. Due to stronger collections and significant liquidity, including $224,000,000 in net proceeds received from property dispositions in the Q4, we reduced the outstanding balance by $160,000,000 to $590,000,000 at year end. Subsequent to year end, we used a portion of our cash on hand to further reduce this balance by 500,000,000 dollars resulting in a current balance of $90,000,000 on our revolver. As I noted last quarter, we are also paying higher rates of interest on our bank credit facilities as well as our private placement notes during the covenant relief period. The next slide lays out 4th quarter results reflecting the impact of the receivable write offs I discussed earlier.
These write offs totaled $0.03 per share for the quarter and $0.86 per share for the year. During the quarter, we had other items that were excluded from FFO as adjusted. Gain on sale of real estate was $49,900,000 and gain on insurance recovery, which is included in other income, was 800,000 dollars We recognized a total of $22,800,000 in impairment charges because of shortening our expected hold periods on 4 theaters as we expect to sell each of these properties. In addition, we recognized net credit loss expense $20,300,000 that was due primarily to fully reserving the outstanding principal balance and unfunded commitment related to notes receivable from 1 borrower, as Greg discussed. We also recognized severance expense of $2,900,000 due to the retirement of an executive as previously announced.
Our results for the full year 2020 were clearly impacted by COVID-nineteen as FFO's adjusted per share was 1.43 dollars versus $5.44 in the prior year and AFFO per share was $1.89 versus $5.44 in the prior year. Note again that the prior period results included the public charter school portfolio that was sold during 2019 and those results including $24,100,000 in termination fees are included in discontinued operations. As discussed last quarter, we have classified our tenants and borrowers into categories based on how we accounted for them in the context of our annualized pre COVID contractual cash revenue level of $624,000,000 which consists of cash rent including tenant reimbursements and percentage rents and interest payments. This annualized cash revenue excludes properties operated under a TRS structure. The changes of these classifications from last quarter were not very significant, but include a new category to reflect sold properties, most of which was previously classified under the 1st category titled no payment deferral.
There was also a slight increase in the new vacancies category, primarily as a result of terminated AMC leases. Now let's move to our balance sheet and capital markets activities. Our debt to gross assets was 40% on a book basis at December 31. At year end, we had total outstanding debt of $3,700,000,000 of which $3,100,000,000 is fixed rate debt or debt that has been fixed through interest rate swaps with a blended coupon of approximately 4.6%. Additionally, our weighted average debt maturity is approximately 5 years, and we have no scheduled debt maturities until 2022 when only our revolving credit facility matures.
As previously announced due to the continued pressure on near term quarterly results as a result of the impact of COVID-nineteen, during the quarter, we further amended our bank credit facilities and private placement notes to obtain an extension through the end of 2021 subject to certain conditions of the waivers of the same four covenants temporarily suspended in June. This amendment provides us additional time and flexibility to work with our customers during this period of uncertainty. Note that we can elect to get out of the covenant relief period early subject to certain conditions and there was no change in the interest rate schedules from that agreed to previously. We believe we have sufficient liquidity to see us through the market disruption caused by COVID-nineteen. We had over $1,000,000,000 of cash on hand at year end.
Cash flow from operations was positive for the Q4 at approximately $6,000,000 and we expect our operating cash flow to be substantially higher as we move into 2021. This positive trajectory and our substantial liquidity gave us confidence in our decision subsequent to year end to pay down our $1,000,000,000 line of credit to $90,000,000 while still maintaining about $500,000,000 of cash on hand. In addition, subsequent to year end, we reduced the balance outstanding on our private placement notes by $23,800,000 to $316,200,000 as a result of certain property sales and in accordance with the recent amendment to those notes. There was no prepayment penalty on this pay down. As previously announced, due to the uncertainties created by the COVID-nineteen disruption, we are not providing forward earnings guidance.
However, we would like to update you on the expected ranges of contractual cash revenue that we expect to recognize in our financial statements for the Q1 of 2021 as well as our expected collections for the same period. Because there have been changes in portfolio due to permanent rent reductions, acquisitions and dispositions, changes in the occupancy levels and other items, we are moving away from reporting against pre COVID contractual cash revenue to current contractual cash revenue for purposes of our guidance and future reporting. This slide shows a reconciliation of those amounts which begins with pre COVID contractual cash revenue including percentage rents for both the quarter and annualized of $156,000,000 $624,000,000 respectively and then subtracts out pre COVID percentage rents of $4,000,000 $15,000,000 respectively. From there, we make the additional adjustments to the portfolio I just described to come to the current contractual cash revenue amount of $136,000,000 for the Q1 $545,000,000 annualized. Note that both of these amounts are before the impact of any temporary abatements or deferrals.
Accordingly, the expected range we expect to recognize in Q1 of 2021 is $98,000,000 to 105,000,000 dollars or 72% to 77% of such contractual cash revenue. Additionally, the expected range we expect to collect in Q1 of 2021 is $87,000,000 to $93,000,000 or 64% to 68% of such contractual cash revenue. Differences from the full amount of contractual cash revenue relate to deferrals granted and the associated accounting as well as abatements. Now with that, I'll turn it back over to Greg for his closing remarks.
Thank you, Mark. As you can see from our presentation today, the trends remain positive and we're optimistic about the continued recovery as we progress throughout 2021. No one is happier than EPR to put 2020 behind us and we look forward like many consumers to begin again enjoying the experiences that our properties offer. With that, why don't I open it up for questions?
The first response is from Ki Bin Kim of Chooist.
So first, good job on getting the collections up to 66%. Obviously, it implies that you're getting a good degree of rents from your movie theater tenants. Could you just help us better understand what the collection trends are within theaters versus non theaters?
Sure. In the Q4, we reported 46% and theaters were about 21% and non theaters was about 71%. In January February, that's moved significantly. Theaters are to in the 40s, 49% for January and the other was 84%. So we're seeing an increase in both categories, but particularly in the theater category.
Okay. And in regards to AMC, could you set some baseline expectations in terms of what we should expect for longer term rent structures? I realize in the 2nd quarter you renegotiated a deal to lower fee and fees rents by 21%. But I'm just curious given all that's happened within the past quarters, if that's still realistic or if that has to be revisited?
Again, Ki Bin, we've not as we said, we haven't revisited those agreements. And those agreements are still in place that we referenced before.
Got it. All right. Thank you.
Thank you.
Thank you. Your next response is from Anthony Chiauly, JPMorgan.
Thanks. Good morning. Mark, appreciate that bridge from that original $624,000,000 Just a couple of questions. In the new $545,000,000 how does that how do we think about in the past you talked about maybe a 5% to 7% haircut when all is said and done. How much of that is dialed into the 5.45% at this point versus what may happen in the future?
Yes, sure. So that 5% to 7% we've been referencing is based on that $609,000,000 kind of the number without percentage rents there. And you see $24,000,000 of permanent rents. That's about 4% of 609. And then there's another 1% that was that is now in vacancies.
Remember, we terminated we gave a haircut on the transitional leases for AMC and now those are vacant. So there's another 1% of cuts that are sitting in the 2017. So the 5% to answer your question is in the $545,000,000 it's what's happened to date. It's in 2 places on the schedule permanent rent cuts 4% there another 1% in vacancies. So that's where we stand today.
We're 95% through our deferral agreements and we feel good about where we are. We've talked about 5% to 7%, but we're through like I said 95% and 5% and feel pretty good about that. And then we'll see if any other cuts are necessary. Sitting here today, we think we're in pretty good shape.
Okay. And then, the OpEx piece, I think, was running, give or take $60,000,000 How should we think about that against the $545,000,000 Is there any change on that side?
There's a little bit of change as we sell properties. You saw a bit of an elevation in property operating expenses. It was kind of running around 14% and then it went to 16% here in the Q4. As we as Greg Zimmerman mentioned, as we sell those properties that should come back down. So we think it's kind of temporary inflated, but that kind of gives you a sense that it's a little bit high in the Q4, but should come back down as we go into 2021.
Okay. And then just last item around dispositions. The 5 theaters that it sounds like you have in the market for sale, can you give us some sense as to maybe what proceeds could be from those? And then also anything else of size that you think you might look to sell this year?
Yes. I'll jump in on that. I think what we can reference the one that's sold and I'll ask Greg to comment. I think of the 7 that we've mentioned, we sold 1. I think and Greg, correct me if I'm wrong, that's sold for a 6 cap for industrial use.
And as Greg said, I think there's the other we have 5 of the other remaining 6 under LOI or contract, and we'll see how those progress throughout the year. Now the thing about it is, and I think the positive reflection that we've seen is that we own quality real estate and that there's going to be a varied demand for this, as Greg mentioned, whether that's industrial, multifamily, different uses. And they're all not going to be 6 caps, but we think overall, we're going to have a good reuse of our properties. And that's kind of what these have done and was part of Greg's strategy and our asset management team. So again, I don't think we're going to comment about the other one other than to say that we have they're either under contract or under LOI and that gave us the confidence to go ahead and terminate the AMC leases.
But we will see how those play out. But Greg, do you have anything else to add to that?
Yes. Tony, the only other thing I would add is that in each of the instances, we've had multiple offers to choose from. So it's been pretty fulsome and we're very pleased with the response. And as Greg said, I think it really demonstrates the quality of our real estate.
Okay. And anything else of size this year you think you'll do?
None at this time that we're talking about. I mean, we're always looking as we did with some of our education assets, but nothing to talk about now.
You. Your next response is from Rob Stevenson of Janney. Please go ahead.
Hi. Good morning, guys. Just a follow-up on that last question. That 6% cap rate based on pre COVID NOI or current NOI? What is that based on?
That was pre COVID NOI. That's based on the number that was part of that 609.
Okay. And then what does it look like just in terms of sort of rough dollar value in terms of what does it look like price wise to sell a theater for industrial use in general versus where you could have sold that theater pre COVID as a theater? I mean is it basically pretty similar? Are you taking much of a hit? You're actually making more money because of the demand for industrial and infill locations?
What does that sort of look like?
I would say of the and using and Greg, I'll ask you to come in, but using kind of these first six as an example, I would say it's really location dependent. I mean, again, I would say industrials are probably clearly selling for above kind of theater cap rates. But I would say if you blend it at all, it's probably at or near kind of where theaters were selling on a pre COVID basis. Greg, maybe you have some thoughts.
No, I would agree. I would also say I think multifamily in certain locations is strong right now as well. But generally, I agree with what you said, yes.
Okay. And then you guys continue to sell the Education segment down. How low does that exposure go? And if you're to hazard guess, is EPR in that business 3, 5 years from now? Is this just a temporary thing for source of capital and where you could sell the assets?
And once the acquisitions start ramping back up again, it's going to be a disproportionate amount of education or is education sort of winding down as a major investment for you guys?
Yes, I would say as a major investment, you're correct. I mean, when we determined to focus on experiential, we announced that we weren't growing that area and that over time we could sell out of that. So I would say there's no rush to do it. I mean, this was a tenant exercise option to purchase these assets. So I but I wouldn't see us those assets being any material part of our portfolio as we look out over the medium to longer term.
Okay. And then last one for me. As you and the Board, Greg, think about getting back to an acquisition environment, Is there anything that's happened anything that's occurred over the last year that would dampen the enthusiasm to move into the casino business in a significant way relative to where your desires were, call it, 13 months ago?
Rob, I would say, if anything, it's kind of proven out our thesis. We talked about when we looked at the space that we liked the regional plays and the drive to destination. And I think if you see the trends and how that business has responded, I think we would still be very interested in that space.
Your next response is from Katy McConnell of Citi.
Great. Thanks. Good morning. Good morning. So as we look at the new vacancy component and the revenue bridge that you provided, what are your thoughts around prospects and what rent adjustment can look like there based on any releasing progress you've made so far?
I think and Mark and then I'll let you comment. I think in that vacancy are the 5 properties that I just mentioned that we have under contract. So there's going to be a significant amount of those to be part of capital recycling. There will be some re leasing, but I do think right now the majority of that are properties that I think we are evaluating whether we're going to release that or kind of dispose of those assets. But Mark, maybe you have more color?
No, I'd agree. A lot of that vacancy increase was those terminated leases. And I think as Greg said, 5 of those are under contract or LOI. So we expect that really to result in sales and vacancies will go down because the properties will be sold.
Okay. Thanks. And then can you talk about how traffic and sales trended in 4Q relative to pre COVID levels for the markets where your theaters have reopened so far? And how impactful do you think the reopening of New York theaters could be on your portfolio?
Greg, do you want to take that?
Yes. Obviously, I think the trends both with New York reopening and with vaccinations ramping up are good. We're feeling very positive that the release schedule will hold, cautiously optimistic that Black Widow and Fast and Furious 9 will drop in May. And I think as we've said all along, what we need is continued product and the ability for our exhibition partners to open and remain open without having to go into further lockdown. So we see a lot of positive trends, particularly when you look at what's happened in China.
I think people are there's a lot of pent up demand to get back and do things.
And I would add on to that. And it's just kind of an indication just because it's time. I think if you look at kind of our expectations coming into the ski season and talking with our operators, I would say that across the board, they've exceeded expectations as far as consumer demand coming back to the product. So it's across all of our experiential properties. When available to operate, the consumer is speaking with their feet and returning in strong numbers.
And I would add to that, Greg,
very much impacted by the fact that we have drive to value destination. So we're just not being negatively impacted by air travel constraints.
Okay. Thank you.
Thank you. Your next response is from Joshua Doolin, DOA. Please go ahead.
Hey, good morning guys.
Good morning.
Good morning.
I was looking at Page 29 of your sup where you have minimum rent, percentage rent and I guess like rental revenues total there. Just wanted to clarify, is that minimum rent a cash number or GAAP?
On Page 29, we're reconciling GAAP revenue there.
GAAP revenue. Okay. I guess my question around this is related to how to think about that minimum rent going forward. Are we kind of at a trough there? And then how to kind of think about that percentage rent?
I know you have a lot more percentage rent going forward with the AMC restructuring. So just kind of of frame all that would be really
helpful. Well, AMC was in percentage rent for their contract in Q4. Their contract moves away from percentage rent and more to fixed rent. So with respect to AMC, secondly, the rent that theaters are paying anyone that's on a percentage rent basis that's not what we're calling percentage rent here. We're defining percentage rent here as amounts over base, right?
So if they're paying some portion of the minimum rent through kind of a variable arrangement based on sales, we're not deeming that percentage rent. Now that said, percentage rent this year, I think, was around 8 points. I think it was 6,000,000 dollars Let me get that real quick. Sorry, dollars 8 point it was $8,600,000 for this year as a whole. Next year, we do expect percentage rents, but a lot of that 8.6000000 in 20 percent in 2020 was driven by private schools, right?
They had we had significant percentage rents, as Greg said, at average about over $6,000,000 in the last 2 years. So that will drop. At the same time, we do have an early ed tenant that's paying a base amount and then paying percentage rents over that base amount. So that will go up. So long story short, I think percentage rents, it's fairly similar, but for different reasons.
I think there is potential upside for that to that just because of as certain of our attraction properties get back to normal, they could hit percentage rent limits, but it's hard to say right now. But so anyway, percentage rents, just keep in mind, it's over base amounts. It's not and then like I said, with respect to AMC, they really transitioned have transitioned for their agreement that we went over from a percentage rent or a variable rent basis to a fixed basis.
Okay. So it's a little bit different than what I was thinking.
Yes. Okay. Yes.
I appreciate that. I'll yield the floor. Thanks.
Thank you. Your next response is from John Massocca of Ladenburg Thalmann. Please go ahead.
Good morning.
Hey, John.
Maybe building a
little bit on that last comment. I mean, is AMC paying their full contractual rents as of kind of current in 1Q 2021?
John, we don't comment on any particular tenant. What we will say is that all of our tenants are paying in conformance with agreements that we have we've entered into, and our cash collections reflect that.
Okay. I'll
give it a try.
And then you also kind of mentioned in
the prepared remarks that you had taken over operations at a couple of theaters. Can you maybe provide some color on why you decided to do that and if there may be more
of that going
forward? Again, and I'll let Greg comment on this after I think part of the issue was when we began this, clearly, there was more concern about some theater tenants and their ability to withstand the pressures of COVID. So we felt the need to create a it's for not for lack of a better term, a backstop that we knew we had good properties and we knew that this business would return. So we felt the need to create the ability to operate our properties through management companies if necessary. And so we have taken what we think are 2 good performers, and we've set that up to allow not only ourselves to understand that we can do this if necessary, but also to give confidence to investors that we are not in a position to where if theater companies are saying you have to take my terms.
No, we don't. We have the capability and we have the resources for good properties to make these work. And so when we were negotiating with people and even into the transition leases. I mean, this one of the theaters that we took over, and Greg's comment, is probably a top 100 theater in the country. And so we wanted to demonstrate that we're going to approach this from a position of strength.
And I think you will see that in our negotiations. But Greg, I don't know if you have anything else to comment on that?
No, I think you covered it. I mean, obviously, both theaters are strong in their markets, and we're learning a lot. And we will also be able to make sure that we're getting reasonable rents as they turn back into operating theaters with someone else in the future.
Yes. And I think as Greg pointed out there, John, I think the long term our long term objective would be as we get back to normalcy, we'll find somebody who will lease these properties, but it will not be at some draconian cut that people may think they had leverage to do. We will get them back to what we think are very reasonable and respectable rent levels.
Very helpful. And then one last detail one. In terms of the collection, I know the guidance is based on the new kind of base rent number. But were the reported January February collections also based on that number?
Yes. And I'll let Mark comment on this, but the $66,000,000 $64,000,000 I think are apples to apples to what you saw the $46,000,000 at. Is that a first statement, Mark?
Yes. The only change there
is we adjusted for sales because obviously we had sold the spring portfolio, but we didn't adjust for permanent rent cuts and vacancy and so forth like we did in the new contractual. So $68,000,000 $66,000,000 $64,000,000 as Greg said are essentially on a pre COVID basis. Only adjustment there was really for net activity, which is really the sales for the education portfolio primarily. And then the new basis is based on that $545,000,000 annualized or that quarterly amount is that 64% to 68% is based on the new basis.
So basically, we go through the walk to try to get what it would be on the new basis, It would just be take out that sales component, but everything else is?
Well, it's effectively that bridge I showed. So to get to the new basis, so let me be clear, 46% was pre COVID, really didn't have sales to deal with. But we then sold right at the end of the year the spring portfolio. And we say pre COVID in the press release, and we say 6664. It's effectively pre COVID, nothing to do with permanent rent cuts, nothing to do with vacancies.
It's pre COVID and that so that's consistent. When you move to the new, now we're just talking about guidance now. And we give a range of 64% 68%. That is now off that revised new contractual amount that does take into account not only disposition activity, but the other things there, vacancy and so forth. So that's really the bridge.
Effectively, the like I said, 66%, 64% old basis only adjusted for sales of properties, whereas now we're bridging to a new contractual line. It doesn't make sense for us to be quoting forever pre COVID. If we've given permanent rent cuts, if we kept saying pre COVID, we'd never get to 100% because we gave permanent rent reductions. We want and the same thing with vacancies. We needed to take that into account going forward in our guidance and we'll kind of have an that's why we established this new kind of current contractual revenue.
Okay. Very helpful. That's it for me. Thank you very much.
Thanks, John. Thanks, John. Thanks.
Thank you. Next response is from Todd Thomas with KeyBanc Capital. Please Please go ahead.
Hi, thanks. Good morning. Just circling back to the theaters, I was just curious, how should we think about the risk of future rent reductions or deferrals in general for the theaters at this point? Do you think that, that risk is largely off the table? Or is there still some potential risk there moving further into 'twenty one?
Again, Todd, I think what I can say is we've entered into agreements with most well, with all of our major theater tenants. And so we feel pretty good about where we're at. Now again, now you get into the crystal ball and how the rest of the year in vaccine deployment and how quickly it ramps up. I think the we don't know. I mean, what I could tell you is where we sit right now, we feel pretty good about where we positioned ourselves with our major theater tenants.
And we'll have to go from where we're at. But Greg, I don't know if you want to add anything to that. No, I think you covered it,
Greg. Okay. And then, sorry if I missed this, but do you have any visibility on the reopening of your Regal Theatres? Do you have a sense for what the timeline is like at this point for them to reopen their theaters?
I think, Todd, it's going to flow with product flow as we see in the second and third quarter products start to flow. I mean, they've been fairly consistent with their comments that if there's product, they're going to open up. I think they mentioned they could be open within 2 weeks when product begins to flow. So I think they've just made the decision up to now that from a cost effect standpoint, it's cheaper for them to be closed without product and respond very quickly. So I think as Greg pointed out, we see that product begin to flow in spring, that's consistent with kind of dates kind of firming and hardening up.
And I think you'll see them kind of respond to that with opening schedule.
Okay. And then Mark, I think you said Cartwright's scheduled to open this summer. I think previously the open was intended to be around April 1. Can you just provide an update there? Is there anything concrete at this point that you can share?
Greg Zimmerman, do you want to take that one? I think it's moved from April to kind of more of a June type of kind of early summer. But Greg, I'll let you comment on that.
Yes, that's right. Probably June and it's almost all related to the pace of the reopening schedule in New York State. So that's what we're planning on.
Okay. All right, great. Thank you.
Thanks.
I'm showing no further questions at this time. I would now like to turn the call over to Rex Silver.
Thank you all for joining us today. Again, as I said earlier, we're really excited about putting 2020 behind us. We look at we're enthusiastic and optimistic about 2021. And we look forward to talking to you on our completion of our Q1 and talking about our results then. So everyone stay safe and healthy.
Thank you. Bye bye.
Thank you.