Motley Fool: Thar’s gold in them thar charter school properties

by David Safier

This is something I've posted about in the past, but now the investing analyst and advisor, The Motley Fool, has confirmed what I've written.

Owning charter school properties is very good business. One company, Entertainment Properties Trust, whose main holdings are movie theaters, owns 33 charter school properties across the country and

"plans on potentially tripling its current portfolio of 33 public charter schools, up to a range of 50 to 100, over the next 18 months. The spending would represent an investment of between $5 million to $7 million on a per-school basis."

All, or almost all these schools are part of the mega-charter corporation, Imagine Schools, which I've written about frequently. It's one of the most scurrilous of all the charter chains. Some Imagine schools are moderate successes, of course. Many are abysmal failures.

Do you know what "long-term, triple-net leases" are? That's where the tenant pays rent as well as maintenance, property taxes and insurance. According to Motley Fool, Entertainment Properties "relies on long-term, triple-net leases." Some Imagine School charters spend 20% to 40% of their funds on their buildings. All that money, of course, comes from the state. Every penny that goes to rent is a penny not spent on children's education.

Many hedge fund managers are big charter school supporters, often making large donations to help the charter school cause. Hedge fund managers, as you probably know, are not selfless philantropists. Charter schools can be very, very profitable in a number of ways, and big money is always looking for new ways to turn a profit.