Notice that the revenue column specifies that these are pre-COVID-19 figures. We'll discuss pandemic developments in the next section, but it's worth mentioning that many of EPR's tenants (especially theater operators) have been unable or unwilling to pay rent during the pandemic, and EPR has modified some of its theater leases in mutually beneficial ways.
EPR's goal is to build a collection of top-notch experiential real estate, and the company feels like there is tons of potential to grow. Among its target property types, management estimates an addressable market of more than $100 billion worth of real estate. In addition to the property types currently in the portfolio, EPR has identified museums, zoos, aquariums, marinas, fitness centers, concert and performance venues, and themed lodging properties as potential targets. And the company has previously mentioned increasing its focus on gaming properties going forward as well. Whatever the case, I definitely foresee EPR actively trying to diversify away from its high concentration in movie theaters in the post-pandemic years.
EPR Properties news
Most of the significant recent news involving EPR Properties has to do with the COVID-19 pandemic. As the coronavirus outbreak worsened in March, virtually all of EPR's tenants were forced to close.
For the most part, EPR's properties have reopened. As of early November, 93% of EPR's non-theater properties were open for business along with 63% of its theaters. With the theaters, however, there's a big asterisk here. Nearly two-thirds of EPR's theater properties are open, but there aren't many movies being released -- in other words, these are businesses without much of a product to sell. Most major movie titles scheduled for 2020 releases have been pushed to 2021 or even 2022, so movie theaters are sort of treading water at best right now.
At the onset of the pandemic, EPR's rent collection plunged. As its tenants were forced to shut down, EPR collected about 24% of its contractual rent in the second quarter. This has steadily improved as businesses have been allowed to reopen, increasing to 35%, 40%, and 48% in July, August, and September, respectively. Overall, EPR collected 41% of its contractual rent in the third quarter, and management expects this to increase in the fourth quarter and beyond.
It's also important to point out that EPR reached rent deferral agreements with some of its tenants, so it will get a significant amount of its uncollected rent eventually. The company successfully restructured some of its leases -- particularly AMC Entertainment (NYSE: AMC), its biggest tenant, in a mutually beneficial way that lowers near-term costs for the tenant but extends the terms of the leases.
Even with the low rent collection rate, EPR isn't losing much money right now. In fact, during the third quarter of 2020, EPR was actually slightly profitable on an adjusted funds from operations (AFFO) basis. Cash flow was negative $4 million for the quarter, but with about $985 million of cash on hand, this isn't a major cause for concern, especially since rent collection is expected to rise significantly.
EPR Properties stock price
As you might expect of an experiential REIT during a global pandemic, EPR Properties' stock hasn't exactly performed well in recent history. Even after rebounding strongly from its March 2020 lows, EPR had lost 56% of its value in 2020 through mid-November.
Even in normal times, EPR is a somewhat cyclical REIT. While its tenants generally sign long-term leases, they also depend on discretionary consumer spending. In the five-year period from 2015 through 2019, EPR generated a solid 66% total return for investors, just behind the S&P 500's performance.
Here's a look at how EPR's stock has performed over certain periods of time: