Carol Burris writes about the latest news from the charter industry. This is the same company that Valerie Strauss wrote about, called “Entertainment Properties Trust.” It’s CEO, Dennis Brain, told an interviewer that charter schools were a sound investment, had long waiting lists, and were guaranteed government revenues.
But that rosy picture has dimmed. The long waiting lists are fictional. Charters are likely to close down suddenly. In some states, charter enrollment is declining. The REIT lost confidence in the future of charter schools and liquidated its charter school holdings.
Burris writes:
EPR Properties (NYSE:EPR) is a triple net lease real estate investment trust (REIT). What that means is that it buys properties and then rents them with the tenant picking up costs like insurance, improvements, and all utilities. Therefore, every dollar EPR makes off the lease is profit.
One of the CSMI schools wasCamden Community Charter School. CSMI paid $300,000 to buy the land from the Camden Redevelopment Agency—the agency responsible for redevelopment efforts in the city. On April 9, 2013 CSMI sold the property to Education Capital Solutions LLC for $500,000, netting CSMI a two-week $200,000 profit.
Education Capital Solutions is the wholly owned subsidiary of Entertainment Properties Trust (EPR).
In 2016 the school’s “operating lease” was $1,711,368. The next year it jumped to $1,871,506, which represents 17 percent of all school revenues.
The school folded. But another charter came into the building for which the company could collect rent.
Now EPR is getting out of the charter school business. It realized it was just too unstable. They have sold off their buildings to Rosemawr Management, LLC.
Diane Ravitch's blog 
“the for-profit charter management firm CSMI”
Are ed reformers ever going to admit that even if state law dictates that the charter entity is non profit the management company doesn’t have to be? This seems like an issue of basic fact. It’s nuts to continue to deny it and characterize these schools and companies as “non profit”. It’s blatantly misleading to the public.
How can we possibly have a “debate” about charter schools if none of the cheerleaders will admit this? They can say it doesn’t matter, they can say they’re fine with a whole management/investment/legal/accounting industry that has sprung up around charter schools but what they can’t do is pretend it doesn’t exist. It does. This is the system and schools they created. Defend THIS, not the imaginary non profit, “pure” system they use in their political marketing.
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Chiara,
The REIT Dude does not have a dog in this fight. In fact, he only found this blog because the post happened to be about REITs. But he’s curious why it matters if charter schools make a profit. Plenty of government contractors are for profit entities and they still perform important work. As long as their price is a competitive one and they deliver good results with students, the REIT Dude is ok with it.
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If the charter investment business is too unstable for investors, let us consider just how unstable the charter business is to the children, many of whom come from unstable families living in poverty. With schools opening and closing all the time and children being shuffled from one end of the city to another, this is no way to treat poor, vulnerable students.
In the diverse public school where I spent many years we offered our poor students stability, support, care and outreach to families. Most of our poor students flourished in our schools. If we really want to help children, they must be the center of the education discussion, not profit or real estate.
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