Investing in Entertainment Ventures: A Real Estate Investor’s Guide – Motley Fool

Spending on experiential entertainment — going to theaters, attractions, and casinos — has increased over the past several decades. That’s because we’re increasingly valuing experiences over accumulating stuff. As a result, entertainment venue operators need to construct more locations to meet growing demand.

One way the entertainment industry is financing growth is by completing sale-leaseback transactions with real estate investors, which enables them to continue operating the venues while also providing them with cash to build more locations. That’s opening the door for investors to make money on this trend of increased entertainment spending. Here’s a look at how to invest in this more unusual real estate opportunity and what you should think about before you do.

How to invest in entertainment venues

There are many different types of entertainment properties that an investor could buy and lease back to the operator, including:

  1. Movie theaters.
  2. Gaming casinos and resorts.
  3. Attractions like amusement parks, waterparks, and marinas.
  4. Eat-and-play properties such as golf entertainment complexes, family entertainment centers, and entertainment districts.
  5. Ski resorts.
  6. Cultural centers like museums, zoos, and aquariums.

A real estate investor could buy or develop a property focused on one of those activities and then lease it back to an operator under a triple net lease agreement. Another option is to purchase shares of a specialty real estate investment trust (REIT) focused on owning entertainment properties.

EPR Properties (NYSE: EPR), for example, currently owns nearly 300 experiential properties leased to roughly 50 tenants under triple net leases. While it has a diversified
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