Edgar Filing: ENTERTAINMENT PROPERTIES TRUST

PROSPECTUS SUPPLEMENT
(TO PROSPECTUS DATED JUNE 2, 1999)

2,000,000 COMMON SHARES

ENTERTAINMENT PROPERTIES TRUST

We are offering 2,000,000 common shares of beneficial interest at a price
of $19.25 per share. Our common shares are listed on the New York Stock Exchange
under the symbol "EPR." The last reported sale price of our common shares on
February 4, 2002 was $19.69 per share.

Investing in our common shares involves certain risks. You should carefully
consider the information under the heading "Risk Factors" on page 3 of the
accompanying prospectus, the "Additional Risk Factors" on page S-6 of this
prospectus supplement, and the risks described in the documents incorporated by
reference to read about factors you should consider before buying our common
shares.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS SUPPLEMENT IS ACCURATE OR COMPLETE. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.

PER SHARE TOTAL
--------- -----

Initial price to public..................................... $ 19.25 $38,500,000
Underwriting discount....................................... $ 0.515 $ 1,030,000
Proceeds, before expenses, to us............................ $18.735 $37,470,000

We have granted the underwriter an option to purchase an additional 300,000
common shares at the public offering price, less the underwriting discounts and
commissions, solely to cover over-allotments, if any.

We expect that the common shares will be ready for delivery on or about
February 8, 2002.

FRIEDMAN BILLINGS RAMSEY

February 4, 2002

You should rely only on the information contained in or incorporated by
reference into this prospectus supplement and the accompanying prospectus. We
have not, and the underwriter has not, authorized any other person to provide
you with different information. If anyone provides you with different or
inconsistent information, you should not rely on it. We are not, and the
underwriter is not, making an offer to sell these securities in any jurisdiction
where the offer or sale is not permitted. The information in this prospectus
supplement and the accompanying prospectus is current as of the date such
information is presented. Our business, financial condition, results of
operations and prospects may have changed since those dates.

TABLE OF CONTENTS

PROSPECTUS SUPPLEMENT
---------------------

Forward-Looking Statements............. S-2
Our Company............................ S-3
Recent Developments.................... S-3
The Offering........................... S-5
Price Range of Common Shares and
Dividends............................ S-6
Use of Proceeds........................ S-6
Additional Risk Factors................ S-6
Underwriting........................... S-7
Legal Opinions......................... S-8
Experts................................ S-8

PROSPECTUS
----------

About This Prospectus.................. 1
Where You Can Find More Information.... 1
Incorporation of Certain Documents By
Reference............................ 1
Forward-Looking Statements............. 2
Risk Factors........................... 3
Business and Properties................ 7
Use of Proceeds........................ 12

FORWARD-LOOKING STATEMENTS

With the exception of historical information, this prospectus supplement
and the accompanying prospectus and our reports filed under the Securities
Exchange Act of 1934 ("Exchange Act") and incorporated by reference in this
prospectus supplement and the accompanying prospectus contain forward-looking
statements, such as those pertaining to the acquisition of properties, our
capital resources and our results of operations. Forward-looking statements
involve numerous risks and uncertainties and you should not rely on them as
predictions of actual events. There is no assurance the events or circumstances
reflected in the forward-looking statements will occur. You can identify
forward-looking statements by use of words such as "will be," "intend,"
"continue," "believe," "may," "expect," "hope," "anticipate," "goal,"
"forecast," or other comparable terms, or by discussions of strategy, plans or
intentions. Forward-looking statements are necessarily dependent on assumptions,
data or methods that may be incorrect or imprecise. EPR's actual financial
condition, results of operations or business may vary materially from those
contemplated by these forward-looking statements and involve various
uncertainties, including but not limited to the factors described under "Risk
Factors" in the accompanying prospectus, "Additional Risk Factors" in this
prospectus supplement and the risks described in our reports under the Exchange
Act. We caution you not to place undue reliance on any forward-looking
statements, which reflect our analysis only.

S-2

OUR COMPANY

EPR was formed on August 22, 1997 as a Maryland real estate investment
trust. We completed an initial public offering of our shares on November 18,
1997. Our executive offices are located at 30 Pershing Road, Suite 201, Kansas
City, Missouri 64108. Our telephone number is (816) 472-1700.

EPR is a self-administered REIT. Our real estate portfolio currently
consists of 27 megaplex theatre properties located in eleven states and one
entertainment-themed retail center property located in Westminster, Colorado. We
also own land parcels and related properties adjacent to several of our theatre
properties. Our theatre properties are leased to leading theatre operators,
including AMC Entertainment, Inc. ("AMC"), Consolidated Theatres, Muvico
Entertainment LLC ("Muvico") and Edwards Theatre Circuits, Inc. ("Edwards").

We are the only publicly-held REIT formed exclusively to invest in
entertainment-related properties leased to leading operators. We believe
entertainment is an important sector of the retail real estate industry and
that, as a result of the Company's focus on properties in this sector and the
industry relationships of our management, we have a competitive advantage in
providing capital to operators of these types of properties. The principal
business strategy of the Company is to continue acquiring high-quality
properties leased to entertainment and entertainment-related business operators,
generally under long-term triple-net leases that require the tenant to pay
substantially all expenses associated with the operation and maintenance of the
property.

Megaplex theatres typically have at least 14 screens with predominantly
stadium-style seating (seating with elevation between rows to provide
unobstructed viewing) and are equipped with amenities that significantly enhance
the audio and visual experience of the patron. We believe the development of
megaplex theatres has accelerated the obsolescence of many previously-existing
movie theatres by setting new standards for moviegoers, who, in our experience,
have demonstrated their preference for the more attractive surroundings, wider
variety of films, superior customer service and more comfortable seating typical
of megaplex theatres.

We expect the development of megaplex theatres to continue in the United
States and abroad in the immediate future. As a result of the significant
capital commitment involved in building these properties and the experience and
industry relationships of our management, we believe EPR will continue to have
opportunities to provide capital to businesses that seek to develop and operate
these properties but would prefer to lease rather than own the properties. We
believe our ability to finance these properties will enable EPR to continue to
grow and diversify its asset base.

We have elected to be treated as a real estate investment trust (a "REIT")
for federal income tax purposes. In order to maintain our status as a REIT, we
must comply with a number of requirements under federal income tax law that are
discussed under "Federal Income Tax Consequences" in the accompanying
prospectus.

As a REIT, EPR primarily leases its properties to tenants on a triple-net
basis and does not operate its properties. Instead, the tenants, and not the
Company, assume the primary risks involved in the operation.

RECENT DEVELOPMENTS

PROPOSED GULF STATES ACQUISITION

On January 7, 2001, we entered into a letter of intent to acquire the
theatre real estate assets of five limited liability companies doing business as
Gulf States Theatres. Gulf States currently operates five megaplex movie
theatres with an aggregate of 68 screens in the New Orleans, Louisiana
metropolitan area.

We anticipate that the purchase price will include the issuance of $15
million in preferred interests in a limited liability company we would form to
purchase the interests in the Gulf States entities. These units would pay a 10%
annual return and would be exchangeable for our common shares at an exchange
rate of

S-3

$17.50 per unit. We anticipate that EPR would be obligated to guaranty payment
of the 10% return. We also expect to grant registration rights with respect to
the shares we would issue in exchange for the units.

Following the solicitation of bids from several national theatre operators,
Gulf States has entered into a letter of intent with AMC to acquire the non-real
estate assets and operations of Gulf States, and simultaneous with the closing
of the acquisition, we expect to enter into long-term net leases with AMC, who
would operate the theatres. We would expect the rental and other terms of the
leases to be substantially similar to the leases for our other theatre
properties.

The closing of the acquisition and the leases are subject to various
conditions precedent, including the negotiation of definitive documents with
Gulf States and AMC, and there can be no assurance we will complete these
transactions or that the final terms of the transactions will be as described
above. See "Additional Risk Factors" on page S-6 of this prospectus supplement.

ACQUISITION OF JOINT VENTURE INTEREST IN WESTMINSTER RETAIL CENTER

On December 11, 2001, we acquired the remaining 50% interest in the
entertainment-themed retail center development in Westminster, Colorado which we
did not already own for a purchase price of $13.5 million. The center is a
multi-tenant retail property anchored by an AMC megaplex theatre which is
subject to an existing mortgage.

INCREASE IN THE SIZE OF OUR CREDIT FACILITY

On October 31, 2001, we increased the size of an existing secured credit
facility from $50 million to $75 million for the purpose of funding the
Westminster joint venture acquisition and other potential property acquisitions.

REIT MODERNIZATION ACT

The REIT Modernization Act ("RMA") was passed by Congress and became
effective for tax years beginning after December 31, 2000. Among other things,
the RMA permits REITs to invest in taxable REIT subsidiaries ("TRS") subject to
certain limitations.

CHANGES TO THE ASSET TESTS

The RMA amended Section 856(c)(4) of the Code so that it now provides that,
except for real estate assets, cash and cash items (including receivables), and
government securities: (a) not more than 25% of the value of a REIT's total
assets can consist of securities, (b) not more than 20% of the value of a REIT's
total assets can be represented by securities of one or more TRSs, and (c)
except with respect to TRSs and the securities previously mentioned, (i) not
more than 5% of the value of the REIT's total assets can consist of securities
of any one issuer, and (ii) the REIT cannot hold securities having a value of
more than 10% of the total voting power or total value of the outstanding
securities of any one issuer. For purposes of the requirements of subparagraph
(ii), certain straight debt obligations may be disregarded.

IMPERMISSIBLE TENANT SERVICES INCOME

The RMA amended Section 856(d)(7)(C) of the Code so that it now provides
that income from services furnished or rendered, or management or operation
provided, through an independent contractor from whom the REIT does not derive
or receive any income or through a TRS does not constitute impermissible tenant
service income.

INCOME FROM TRS TREATED AS RENTS FROM REAL PROPERTY

The RMA amended Section 856(d) of the Code so that amounts paid to a REIT
by a TRS will not be excluded from rents from real property if at least 90% of
the leased space of the property is rented to persons other than the TRS of such
REIT and other than persons that are considered related under Section

S-4

856(d)(2)(B) of the Code and the amount paid is substantially comparable to
rents made by other tenants of the REIT's property for comparable space.

DETERMINATION OF RENT

The RMA made two amendments that affect the determination of rent. Section
856(d) of the Code was amended so that the allocation of rent between personal
and real property is now based on fair market value as opposed to adjusted
bases. In addition, Section 856(d)(2)(B) of the Code was amended so that it
excludes from the definition of rent amounts received from a party in which the
REIT owns 10% or more of the total value of its stock, rather than the total
number of shares.

DISTRIBUTION REQUIREMENT

The RMA amended Section 857(a) of the Code and reduced the amount of
distribution required by a REIT. Currently, a REIT must distribute to its
shareholders an amount equal to 90% of the REIT's taxable income before
deductions for dividends paid and excluding net capital gain.

THE OFFERING

Common shares offered........................ 2,000,000 shares
Common shares to be outstanding after the 16,801,759 shares
offering...................................
Use of proceeds.............................. For general corporate purposes, including the
potential acquisition of megaplex movie
theatre properties and related assets
New York Stock Exchange symbol............... EPR

The above information regarding shares to be outstanding after the offering
excludes shares issuable upon exercise of our outstanding options or in the form
of bonuses to or direct share purchases by our officers, or any shares issuable
in exchange for securities that may be issued in the Gulf States acquisition.

S-5

PRICE RANGE OF COMMON SHARES AND DIVIDENDS

The following table shows the high and low sale prices for our common
shares for the periods indicated as reported by the New York Stock Exchange and
the dividends per common share paid by us with respect to each such period.

HIGH LOW DIVIDENDS
---- --- ---------

2000
First Quarter......................................... $14.4375 $11.1275 $0.44
Second Quarter........................................ $ 15.00 $ 12.50 $0.44
Third Quarter......................................... $ 14.625 $10.4375 $0.44
Fourth Quarter........................................ $ 12.25 $10.5625 $0.44
2001
First Quarter......................................... $ 15.00 $ 11.25 $0.45
Second Quarter........................................ $ 18.64 $ 13.85 $0.45
Third Quarter......................................... $ 18.65 $ 15.60 $0.45
Fourth Quarter........................................ $ 19.68 $ 15.85 $0.45
2002
First Quarter (through February 4, 2002).............. $ 20.85 $ 19.03 $0.45

On February 4, 2002, the last reported sale price of our common shares was
$19.69 per share.

Generally, we expect to pay dividends to our common shareholders on or
about the 15th day of each January, April, July and October. Dividends are paid
at the discretion of our Board of Trustees and will depend on our Funds from
Operations ("FFO"), our financial condition, capital requirements, the annual
distribution requirements under the REIT provisions of the Internal Revenue Code
of 1986, as amended ("the Code"), and such other factors as the Board of
Trustees deems relevant. There can be no assurance we will continue to pay
dividends in the future, or that our future dividend rate will equal or exceed
our historical dividend rate.

We have implemented a dividend reinvestment and direct share purchase plan
under which our shareholders may elect to automatically reinvest their dividends
in our common shares. To fulfill our obligations under this plan, we may, from
time to time, issue additional common shares, or the plan administrator may
purchase shares in the open market.

USE OF PROCEEDS

The net proceeds to us from the sale of the common shares are expected to
be approximately $37,345,000 ($42,965,500 if the underwriter exercises its
over-allotment option in full) after deducting the underwriting discount and the
estimated expenses of this offering. We currently intend to use the net proceeds
from this offering for general corporate purposes, including the acquisition of
properties and/or repayment of debt.

Pending application of net proceeds, we expect to invest net proceeds in
interest-bearing accounts and short-term interest-bearing securities which are
consistent with our qualification as a REIT.

ADDITIONAL RISK FACTORS

WE MAY NOT SUCCESSFULLY COMPLETE THE PROPOSED GULF STATES ACQUISITION, OR
MAY COMPLETE THE ACQUISITION ON DIFFERENT TERMS.

The completion of the Gulf States acquisition is uncertain based on the
fact that:

- We, Gulf States and AMC are still finalizing the terms of the proposed
transaction and the transaction will not progress without successful
completion of definitive agreements with Gulf States and AMC.

S-6

- The completion of the acquisition will be subject to numerous
contingencies which may not be realized. We may also complete the Gulf
States acquisition and AMC leases on different terms than we currently
anticipate.

To the extent the proceeds of this offering are not used in the Gulf States
acquisition, we may acquire other theatre properties. There can be no assurance
we can acquire additional properties and/or lease properties on favorable terms.

WE ARE DEPENDENT ON OUR EXECUTIVE OFFICERS TO OPERATE OUR BUSINESS AND
ACQUIRE AND FINANCE PROPERTIES.

EPR's success depends to a large extent upon the experience and abilities
of our executive officers, David M. Brain, our President and Chief Executive
Officer, Fred L. Kennon, our Vice President, Treasurer and Chief Financial
Officer, and Gregory K. Silvers, our Vice President, Chief Development Officer
and General Counsel. The loss of any of these executives' services could have a
material adverse effect on our Company.

THE RECENT TERRORIST ATTACKS IN THE UNITED STATES COULD HAVE A NEGATIVE
EFFECT ON OUR EARNINGS.

The terrorist attacks which occurred in New York City and Washington, D.C.
on September 11, 2001, and the subsequent military actions taken by the United
States and its allies in response, have caused significant uncertainty in the
global financial markets. While the short-term and long-term affects of these
events and their potential consequences are uncertain, they could have a
material adverse effect on general economic conditions, consumer confidence and
market liquidity. Among other things, it is possible that short-term interest
rates may be affected by these events. If short-term interest rates increase
rapidly, it would cause our borrowing costs to increase faster than increases in
the rental rates for our properties. If that were to happen, our earnings would
be negatively affected. Increases in short-term interest rates could also
adversely affect the earnings or capital of our tenants. If movie attendance is
reduced due to uncertain economic conditions, that could also adversely affect
the operations of our tenants.

UNDERWRITING

Friedman, Billings, Ramsey & Co., Inc. is acting as the sole underwriter of
this offering. Subject to the terms and conditions contained in the underwriting
agreement, we have agreed to sell to the underwriter, and the underwriter has
agreed to purchase from us, a total of 2,000,000 common shares. The underwriting
agreement provides that the obligation of the underwriter to pay for and accept
delivery of our common shares is subject to approval of certain legal matters by
counsel and to certain other conditions. The underwriter is obligated to take
and pay for all of our common shares offered hereby, other than those covered by
the over-allotment option described below, if any such shares are taken.

The following table shows the per share and total underwriting discount we
will pay to the underwriter. The amounts are shown assuming both no exercise and
full exercise of the underwriter's option to purchase 300,000 additional common
shares to cover over-allotments.

NO EXERCISE FULL EXERCISE
----------- -------------

Per Share................................................... $ 0.515 $ 0.515
Total....................................................... $1,030,000 $1,184,500

Our executive officers have agreed with the underwriter, for a period of 90
days after the date of this prospectus supplement, subject to certain
exceptions, not to sell any of our shares, or any securities convertible into or
exchangeable for shares, owned by them, without the prior written consent of the
underwriter. However, the underwriter may, in its sole discretion and at any
time without notice, release all or any portion of the securities subject to
these agreements.

The underwriter proposes to offer our common shares directly to the public
at $19.25 per share and to certain dealers at this price less a concession not
in excess of $0.28 per share. The underwriter may allow, and the dealers may
reallow, a concession not in excess of $0.10 per share to certain dealers.

We expect to incur expenses of approximately $125,000 in connection with
this offering.

S-7

We have granted the underwriter an option, exercisable for 30 days after
the date of this prospectus supplement, to purchase up to 300,000 additional
shares to cover over-allotments, if any, at the public offering price less the
underwriting discount described on the cover page of this prospectus supplement.
If the underwriter exercises this option, the underwriter will have a firm
commitment, subject to certain conditions, to purchase all of the shares covered
by the option.

We have agreed to indemnify the underwriter against certain liabilities,
including liabilities under the Securities Act of 1933, as amended, or to
contribute to payments the underwriter may be required to make in respect
thereof.

In connection with the offering, the underwriter is permitted to engage in
certain transactions that stabilize the price of our common shares. These
transactions consist of bids or purchases for the purpose of pegging, fixing or
maintaining the price of our common shares. If the underwriter creates a short
position in our common shares in connection with the offering by selling more
than 2,000,000 shares, the underwriter may reduce that short position by
purchasing our shares in the open market. In general, purchases of a security
for the purpose of stabilization or to reduce a short position could cause the
price of the security to be higher than it might be in the absence of those
purchases. Neither we nor the underwriter make any representation or prediction
as to the direction or magnitude of any effect that the transactions described
above may have on the price of our common shares. In addition, neither we nor
the underwriter make any representation that the underwriter will engage in
those transactions or that those transactions, once commenced, will not be
discontinued without notice.

LEGAL OPINIONS

The validity of the common shares offered by this prospectus supplement has
been passed upon for us by Kutak Rock LLP, Kansas City, Missouri. In addition,
the description of federal income tax consequences in "Federal Income Tax
Consequences" in the accompanying prospectus and in "Recent Developments -- REIT
Modernization Act" in this prospectus supplement is based on the opinion of
Kutak Rock LLP. Certain legal matters in connection with this offering will be
passed upon for the underwriter by Winston & Strawn, Chicago, Illinois.

EXPERTS

Ernst & Young LLP, independent auditors, have audited our consolidated
financial statements and schedule included in our annual report on Form 10-K for
the year ended December 31, 2000, as set forth in their report, which is
incorporated by reference in the accompanying prospectus and elsewhere in the
registration statement. Such consolidated financial statements and schedule are
incorporated by reference in reliance on Ernst & Young LLP's report given upon
the authority of that firm as experts in accounting and auditing.

S-8

PROSPECTUS
ENTERTAINMENT PROPERTIES TRUST
5,000,000 COMMON SHARES OF BENEFICIAL INTEREST

Entertainment Properties Trust may offer common shares of
beneficial interest, par value $.01 per share, from time to
time. The shares will be offered for cash on terms to be
determined at the time of the offering.

The shares may be sold directly or through agents,
underwriters or dealers. If any agent or underwriter is
involved in selling the shares, its name, the applicable
purchase price, fee, commission or discount arrangement, and
the net proceeds to the Company from the sale of the shares
will be listed in a Prospectus Supplement. See "Plan of
Distribution."

Our shares are traded on the New York Stock Exchange
under the ticker symbol "EPR." The last reported sales price
of the Shares on June 1, 1999 was $18.687 per share.

The Company has paid regular quarterly dividends to its
shareholders. See "About EPR" and "Description of Common
Shares."

The specific terms of an offering will be included in one
or more Supplements to this Prospectus. You should read this
Prospectus and the applicable Prospectus Supplement carefully
before you invest.

INVESTING IN THESE SECURITIES INVOLVES CERTAIN RISKS. SEE THE "RISK
FACTORS" BEGINNING ON PAGE 3.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.

THIS PROSPECTUS MAY NOT BE USED FOR ANY SALES OF SHARES UNLESS ACCOMPANIED
BY A PROSPECTUS SUPPLEMENT.

THE DATE OF THIS PROSPECTUS IS JUNE 2, 1999.

ABOUT THIS PROSPECTUS

This Prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission ("SEC") using a "shelf registration" process.
Under this shelf process, Entertainment Properties Trust ("EPR" or the
"Company") may sell up to 5,000,000 common shares of beneficial interest (the
"Shares") described in this Prospectus in one or more offerings.

This Prospectus provides you with a general description of the Shares. Each
time we sell Shares, we will provide a Prospectus Supplement that will contain
specific information about the terms of the offering. The Prospectus Supplement
may also update or change information provided in this Prospectus. You should
read both this Prospectus and the applicable Prospectus Supplement together with
the additional information described under "Where You Can Find More
Information."

WHERE YOU CAN FIND MORE INFORMATION

As a public company with securities listed on the New York Stock Exchange
("NYSE"), we must comply with the Securities Exchange Act of 1934, as amended
(the "Exchange Act"). This requires that we file annual, quarterly and special
reports, proxy statements and other information with the SEC. You may read and
copy any reports, proxy statements or other information we file at the SEC's
Public Reference Rooms at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington D.C. 20549 and at the SEC's regional offices at Seven World Trade
Center, 13th Floor, New York, New York 10048, and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Please call the SEC at
1-800-SEC-0330 for further information. Copies of these materials may be
obtained by mail from the Public Reference Rooms of the SEC. You may also access
our SEC filings at the SEC's Internet website (http://www.sec.gov). You can
inspect reports and other information we file at the offices of the New York
Stock Exchange, Inc., 20 Broad Street, New York, New York 10005.

We have filed a registration statement which includes this Prospectus plus
related Exhibits with the SEC under the Securities Act of 1933, as amended (the
"Securities Act"). The registration statement contains additional information
about EPR and the Shares. You may view the registration statement and Exhibits
on file at the SEC's website. You may also inspect the registration statement
and Exhibits without charge at the SEC's offices at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and you may obtain copies from the SEC at prescribed
rates.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The SEC allows us to "incorporate by reference" the information we file
with the SEC, which means we can disclose important information to you by
referring to those documents. The information incorporated by reference is an
important part of this Prospectus. Any statement contained in a document which
is incorporated by reference in this Prospectus is automatically updated and
superseded if information contained in this Prospectus, or information we later
file with the SEC, modifies or replaces that information.

The documents listed below have been filed by EPR under the Exchange Act
(File No. 1-13561) and are incorporated by reference in this Prospectus:

1. EPR's Annual Report on Form 10-K for the year ended December 31, 1998.

2. EPR's Quarterly Report on Form 10-Q for the quarter ended March 31,
1999.

3. EPR's Proxy Statement dated March 30, 1999.

4. All documents filed by EPR under Section 13(a), 14 or 15(d) of the
Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the Shares covered by this Prospectus.

To obtain a free copy of any of the documents incorporated by reference in
this Prospectus (other than Exhibits, unless they are specifically incorporated
by reference in the documents) please contact us at Investor Relations
Department, Entertainment Properties Trust, 1200 Main Street, Suite 3250, Kansas
City, Missouri, 64105, telephone number (816) 472-1700, facsimile (816)
472-5794, e-mail info@eprkc.com.

Our SEC filings are also available from our Internet website at
http://www.eprkc.com.

As you read these documents, you may find some differences in information
from one document to another. If you find differences between the documents and
this Prospectus, you should rely on the statements made in the most recent
document.

YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS OR
INCORPORATED BY REFERENCE. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION THAT IS DIFFERENT. WE MAY ONLY USE THIS PROSPECTUS TO SELL SHARES IF
IT IS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT. WE ARE ONLY OFFERING THE SHARES IN
STATES WHERE THE OFFER IS PERMITTED. YOU SHOULD NOT ASSUME THE INFORMATION IN
THIS PROSPECTUS OR THE APPLICABLE PROSPECTUS SUPPLEMENT IS ACCURATE AS OF ANY
DATE OTHER THAN THE DATE ON THE FRONT OF THESE DOCUMENTS.

FORWARD-LOOKING STATEMENTS

With the exception of historical information, this Prospectus and our
reports filed under the Exchange Act and incorporated by reference in this
Prospectus contain forward-looking statements, such as those pertaining to the
acquisition of properties, our capital resources and our results of operations.
Forward-looking statements involve numerous risks and uncertainties and you
should not rely on them as predictions of actual events. There is no assurance
the events or circumstances reflected in the forward-looking statements will
occur. You can identify forward-looking statements by use of words such as "will
be," "intend," "continue," "believe," "may," "expect," "hope," "anticipate,"
"goal," "forecast," or other comparable terms, or by discussions of strategy,
plans or intentions. Forward-looking statements are necessarily dependent on
assumptions, data or methods that may be incorrect or imprecise. EPR's actual
financial condition, results of operations or business may vary materially from
those contemplated by these forward-looking statements and involve various
uncertainties, including but not limited to the factors described below under
"Risk Factors." We caution you not to place undue reliance on any
forward-looking statements, which reflect our analysis only.

RISK FACTORS

Before you invest in our Shares, you should be aware that purchasing our
Shares involves various risks, including those described below. You should
carefully consider these risk factors, together with the other information in
this Prospectus and accompanying Prospectus Supplement, before purchasing our
Shares.

WE CANNOT ASSURE YOU WE WILL CONTINUE PAYING DIVIDENDS AT HISTORICAL RATES

Our ability to continue paying dividends at historical rates will depend on
a number of factors, including our financial condition and results of future
operations, the performance of lease terms by tenants, our ability to acquire,
finance and lease additional properties at attractive rates, and provisions in
our loan covenants.

THERE ARE RISKS ASSOCIATED WITH OUR DEBT FINANCINGS

It is our current policy to maintain a ratio of debt-to-total market
capitalization of less than 50%. Nevertheless, EPR is subject to the customary
risks associated with debt financing, including the risk that interest rates on
our existing Bank Credit Facility or future debt financings may increase (which
could reduce our ability to pay dividends), that our cash flow may be
insufficient to meet debt service requirements, and that we may not be able to
refinance or repay the debt as it becomes due. A portion of our debt financing
is secured by mortgages on certain of our properties, which could be lost in
foreclosure if we fail to meet mortgage payments.

DEBT RESTRICTIONS MAY AFFECT OPERATIONS AND NEGATIVELY AFFECT OUR ABILITY TO
REPAY INDEBTEDNESS AT MATURITY

Our $150 million Bank Credit Facility contains a number of provisions that
restrict the amount of secured debt we can obtain and the amount of dividends we
can pay our shareholders (dividends may not exceed 90% of funds from operations
("FFO") unless a higher amount is necessary to preserve our status as a real
estate investment trust ("REIT")), as well as provisions affecting the
eligibility and value of properties in our borrowing base. The Bank Credit
Facility matures in March 2001. Our $108 million secured mortgage facility does
not mature until July 11, 2028, but is subject to a "hyper-amortization" feature
commencing in 2008 which may require us to repay or refinance that debt at that
time. If we cannot obtain acceptable financing to refinance this indebtedness at
the appropriate time, we may have to sell properties to repay the indebtedness
or certain properties could be foreclosed upon, which could adversely affect our
results of operations and financial condition. If our mortgage facility is
foreclosed upon, this may accelerate our Bank Credit Facility and would cause us
to lose income and asset value.

POTENTIAL ENVIRONMENTAL LIABILITY

Under federal, state and local laws relating to the protection of the
environment ("Environmental Laws"), a current or previous owner of real estate
may be liable for contamination resulting from the presence or discharge of
hazardous or toxic substances on the property. Owners may be required to
investigate and remediate contamination on the property as well as contamination
that has migrated from the property. Environmental Laws typically impose
liability and clean-up responsibility regardless of whether the owner knew of or
caused the contamination. This liability may be joint and several unless the
harm is divisible and there is a reasonable basis to allocate responsibility. An
owner or operator of a property may also be subject to claims by third parties
based on personal injury, property damage or other costs, including
investigation and clean-up costs, resulting from environmental contamination.
Environmental Laws may also impose restrictions on the manner in which a
property is used or transferred. These restrictions may impose expenditures.
Environmental Laws also impose potential liability on parties who arrange the
transportation, disposal or treatment of hazardous or toxic substances, even if
they do not operate the facility at which the substances are disposed of or
treated.

Our leases require tenants to operate the properties in compliance with
Environmental Laws and to indemnify us against environmental liability arising
from the operation of the properties. However, we could be subject to strict
liability by virtue of our ownership of the properties. There is also a risk
that tenants may not satisfy their environmental compliance and indemnification
obligations under the leases. Any of these conditions could have an adverse
effect on our results of operations and financial condition and our ability to
service our debt and pay dividends to shareholders.

GENERAL RISKS OF OWNING REAL ESTATE

Although our lease terms obligate the tenants to bear substantially all of
the costs of operating the properties, EPR is subject to the general risks of
investing in real estate. These include the performance of lease terms by
tenants, changes in economic conditions, local conditions (such as oversupply of
megaplex theatres or other entertainment-related properties), the lease rates we
are able to obtain, the supply and price of quality entertainment properties,
the impact of Environmental Laws, changes in tax, zoning and other laws, and
other real estate risks. In the case of entertainment-themed retail centers
("ETRC's"), we may bear the risk of finding a sufficient number of suitable
tenants to permit the centers to operate profitably and provide a return to the
Company. These centers may also be subject to fluctuations in occupancy rates,
which would also affect our operating results. If we enter into joint ventures
with developers to develop megaplex theatres or ETRC's, we will bear the risk
that the joint venture partner may not perform, which could create delays in
construction or leasing. There is no assurance tenants will elect to renew their
leases. If a tenant does not renew its lease or defaults on its lease
obligations, there is no assurance we could obtain a substitute tenant on
acceptable terms. We may be required to modify a megaplex theatre property in
order to release it, which could entail a significant capital cost. If any such
property is a ground leased property, we would be required to continue making
the ground lease payments or risk losing the property. If we ever desire or are
required to sell or refinance a property, we will be subject to risks arising
from fluctuations in interest rates and real estate values and credit
availability. In addition, real estate investments are relatively illiquid,
which would limit our ability to sell properties if required to meet debt
obligations or generate operating capital.

THE NEED TO RAISE ADDITIONAL CAPITAL TO FUND PROPERTY ACQUISITIONS

Our ability to acquire additional properties will depend on our ability to
obtain additional financing on favorable terms, which will in turn be dependent
on factors such as conditions in equity or credit markets and the performance of
REITs generally. EPR has filed the registration statement, which includes this
Prospectus, for the purpose of raising funds for the acquisition of properties
or paying down debt which may then be used to acquire properties, but the actual
amount of proceeds we will raise under this Prospectus and the Prospectus
Supplements cannot be predicted at this time. We may seek to leverage the
proceeds raised in one or more offerings under this Prospectus and Prospectus
Supplements by incurring additional borrowing or entering into joint ventures,
but the availability of these types of financings cannot be assured.

CONSEQUENCES OF FAILURE TO QUALIFY AS A REIT

Our ability to continue qualifying as a REIT will depend on our compliance
with a number of conditions under the Internal Revenue Code of 1986, as amended
(the "Code"), as well as possible future legislation, new regulations,
administrative interpretations or court decisions. If we fail to maintain our
REIT qualification for any reason, we would be subject to corporate taxation and
would not be entitled to a tax deduction for dividends paid to our shareholders.
This would significantly reduce the funds available for distribution to our
shareholders. In addition, any loss of our REIT status would mean we would no
longer be required to pay dividends to our shareholders.

DEPENDENCE ON A SINGLE TENANT AND LEASE GUARANTOR FOR A SUBSTANTIAL PORTION OF
LEASE REVENUES

Approximately 70% of our properties are leased to America Multi-Cinema,
Inc. or its subsidiaries ("AMC"), a subsidiary of AMC Entertainment, Inc.
("AMCE") which has guaranteed AMC's

performance under those leases. EPR has diversified and expects to continue
diversifying its asset base by entering into lease transactions with a number of
other quality operators, but EPR's revenues and its continuing ability to pay
shareholder dividends remain substantially dependent on AMC's performance under
its leases and AMCE's performance under its guaranty. Peter C. Brown, the
Chairman of our Board of Trustees, is Co-Chairman, President and a director of
AMCE and Executive Vice President and Chief Financial Officer of AMC. Mr. Brown
does not participate in discussions with AMC regarding acquisition or lease
terms.

OPERATING RISKS IN THE ENTERTAINMENT INDUSTRY THAT MAY AFFECT THE OPERATIONS OF
EPR'S TENANTS

The ability of our tenants to operate successfully in the entertainment
industry and remain current on their lease obligations depends on a number of
factors, including the availability and popularity of motion pictures, the
performance of those pictures in tenants' markets, the allocation of popular
pictures to tenants and the terms on which the pictures are licensed. Neither
EPR nor our tenants have control over the operations of motion picture
distributors. Megaplex movie theatres require greater capital expenditures than
the previous generation of multiplex theatres. Our ability to recover our
investment in these properties in the event of a default by tenants under the
leases is uncertain. The success of "out-of-home" entertainment venues such as
megaplex theatres and ETRC's also depends on general economic conditions and the
willingness of consumers to spend time and money on out-of-home entertainment.
The development of megaplex movie theatres has rendered many older multiplex
theatres obsolete. To the extent tenants own or operate a substantial number of
multiplexes, the financial condition of those tenants could be adversely
affected by this trend. Megaplex theatre operators could also be adversely
affected by any overbuilding of megaplex theatres in their markets.

SOME LOSSES ARE NOT INSURED AGAINST

Our leases require tenants to insure the properties against casualty,
workers' compensation claims and other perils. However, there are some risks
(such as hurricanes, earthquakes and wars) that are either not insurable or only
insurable at prohibitive cost. If an uninsured loss occurs, we could lose our
investment in a property and the anticipated lease revenue from the property.

THERE ARE RISKS IF TENANTS BECOME BANKRUPT

If any of our tenants or lease guarantors is the subject of a bankruptcy
proceeding, the tenant or lease guarantor could reject the lease or guaranty,
which could deprive us of the rental revenue from that property and would leave
us only with a limited claim for damages.

THERE ARE RISKS INVOLVED IN REAL ESTATE DEVELOPMENT

Our ETRC development in Westminster, Colorado and any future ETRC's or
other properties we may seek to develop will involve risks not typically
encountered in the purchase and lease-back of megaplex theatres which are
developed by the operator. Although our officers have experience in real estate
development, we do not employ a significant in-house development staff. Although
this permits us to operate more efficiently, it will require us to rely on joint
venture partners or other developers with which we work. There can be no
assurance these parties will successfully develop those properties or that cost
overruns or other problems will not be encountered in the development process.

DEPENDENCE ON EXECUTIVE OFFICERS

EPR's success depends to a large extent upon the experience and abilities
of our executives, including our Chairman, Peter C. Brown, our President, Robert
L. Harris, and our Chief Operating Officer and Chief Financial Officer, David M.
Brain. The loss of any of these executives' services could have a material
adverse effect on the Company.

THE IMPACT OF GOVERNMENT REGULATION

EPR's properties are subject to federal, state and local laws and
regulations, including zoning, public access, environmental and other
regulations and the Americans with Disabilities Act. Although our tenants have
assumed the responsibility to comply with these laws and regulations, the cost
of that compliance adds to our tenants' cost of doing business which could have
an impact on their lease performance. If tenants fail to comply with these laws
or regulations, EPR may be required to do so, which would affect our operating
results and could affect the amount of shareholder dividends.

THE EFFECT OF COMPETITION

Although EPR is the first publicly-held REIT formed exclusively to invest
in entertainment-related properties, EPR faces competition from other suppliers
of capital to the entertainment industry and may in the future be subject to
competition from other entertainment REITs.

ANTI-TAKEOVER PROVISIONS WHICH MAY AFFECT SHAREHOLDER VALUE

There are a number of provisions in EPR's Declaration of Trust, Maryland
law and agreements with AMCE which could make it more difficult for a party to
make a tender offer for our Shares or complete a takeover of EPR which is not
approved by the Board of Trustees. These include provisions for a staggered
Board of Trustees, a limit on beneficial ownership of Shares as described in
"Description of Common Shares," the ability of the Board of Trustees to issue
preferred shares or reclassify preferred or common shares without shareholder
approval, limits on the ability of shareholders to remove trustees without
cause, a requirement for advance notice of shareholder proposals at annual
shareholder meetings, provisions of Maryland law restricting business
combinations and control share acquisitions not approved by the Board of
Trustees, and AMCE's ability to terminate a Right to Purchase Agreement for
additional megaplex theatre properties in the event of a change in control of
EPR. Any or all of these provisions could delay or prevent a change in control
of EPR, even if the change were in the shareholders' interests or offered a
greater return to shareholders.

EFFECT OF MARKET INTEREST RATES ON SHARE PRICES

The annual yield on the price paid for our Shares from dividends paid by
EPR may influence the public market price for our Shares. An increase in market
interest rates may persuade persons who may otherwise invest in our Shares to
seek higher yields from their investments, which may adversely affect the market
price for our Shares.

SHARES AVAILABLE FOR FUTURE SALE

We cannot predict the effect, if any, that future sales of Shares or
exercises of Share options for future sales may have on the market price for our
Shares. Sales of substantial amounts of our Shares, or the perception that those
sales could occur, may adversely affect the market price for our Shares.

BUSINESS AND PROPERTIES

BUSINESS

EPR was formed on August 22, 1997 as a Maryland-incorporated real estate
investment trust. We completed an initial public offering of our Shares on
November 18, 1997.

EPR is a self-administered REIT. Our real estate portfolio currently
consists of 21 megaplex theatre properties located in eleven states and one ETRC
development property located in Westminster, Colorado. We also own land parcels
and related properties adjacent to several of our theatre properties. Our
theatre properties are leased to leading theatre operators, including AMCE,
Consolidated Theatres, Muvico Entertainment LLC ("Muvico") and Edwards Theatre
Circuits, Inc ("Edwards"). We have also agreed to acquire theatre properties to
be operated by Regal Cinemas and Loews Cineplex Entertainment.

Megaplex theatres typically have at least 14 screens with predominantly
stadium-style seating (seating with elevation between rows to provide
unobstructed viewing) and are equipped with amenities that significantly enhance
the audio and visual experience of the patron. We believe the development of
megaplex theatres has accelerated the obsolescence of many existing movie
theatres by setting new standards for moviegoers, who, in our experience, have
demonstrated their preference for the more attractive surroundings, wider
variety of films, superior customer service and more comfortable seating typical
of megaplex theatres.

BUSINESS OBJECTIVES AND STRATEGIES

Our business objectives are to continue enhancing shareholder value by
achieving predictable and increasing FFO per Share (defined as net income plus
depreciation divided by the number of Shares outstanding) and acquiring and
developing a diversified portfolio of high-quality properties leased to
entertainment and entertainment-related business operators, generally under
long-term triple-net leases. We intend to achieve these objectives by continuing
to execute the Growth Strategies, Operating Strategies and Capitalization
Strategies described below:

GROWTH STRATEGIES

- Purchasing additional properties pursuant to existing agreements between EPR
and leading theatre operators.

- Developing or acquiring additional megaplex theatre properties and leasing
those properties to other qualified theatre exhibitors.

- Developing or acquiring, and leasing to qualified operators or master
tenants, ETRC's and single-tenant, out-of-home, location-based entertainment
and entertainment-related properties.

Future Properties. Pursuant to agreements with AMC's parent, AMCE, and with
Edwards, Muvico and others, EPR has the right to acquire and lease back to the
operator a number of existing and future megaplex theatre properties. See
"Tenants and Leases" and "Pending Acquisitions" under "Properties" for a
discussion of these agreements.

Other Megaplex Properties. We intend to pursue acquisitions of other
high-quality properties from operators with a strong market presence and believe
we will continue to have opportunities to purchase megaplex theatres developed
by these operators.

Entertainment-Themed Retail Centers. We intend to pursue acquisitions of
additional ETRC's, which are generally large multi-tenant retail developments
that incorporate such elements as megaplex theatres, restaurants, book and/or
music superstores, interactive entertainment venues and other specialty retail
or leisure-time activities. EPR believes the most important component of an ETRC
is a megaplex theatre because it attracts substantial customer traffic to the
site. ETRC's typically provide a family entertainment experience by creating an
atmosphere of fun and excitement. We believe that by broadening the traditional
retail shopping concept, ETRC's attract a greater number of customers to spend
more time and money at a single location. We also believe access to capital in
this developing market is generally limited for all but the largest
entertainment companies. As a result of the significant capital commitment
involved in developing these projects and the experience and relationships of
our management, we believe we will have opportunities to provide capital to
businesses that seek to develop and operate these properties but would prefer to
lease rather than own the properties. Our ability to finance the acquisition and
development of these properties should enable EPR to grow and diversify its
asset base.

We believe we will have opportunities to provide capital to developers and
operators of entertainment and entertainment-related properties due to our
strong capital base of shareholders' equity, the proceeds to be raised in this
offering and funds available under our Bank Credit Facility. We also believe we
should be in a position to acquire new properties for Shares or a combination of
cash and Shares, creating the opportunity for transactions structured on a
tax-deferred basis to the seller (though a subsidiary partnership or otherwise)
and thereby potentially reducing the price that would be paid in all-cash
transactions. We have filed a registration statement with the Securities and
Exchange Commission for the purpose of registering up to 5,000,000 Shares for
potential issuance in exchange for the acquisition of properties. Any of these
methods would reduce the amount of cash we would otherwise invest in properties.

OPERATING STRATEGIES

- Purchasing single-tenant properties supported by long-term leases or
multi-tenant properties that are substantially leased to minimize the risks
inherent in initial leasing.

- Structuring leases, where possible, on a triple-net or similar basis under
which the tenants bear substantially all operational expenses connected with
the properties.

- Structuring leases for contractual increases in rent and/or percentage rent
based upon a percentage of a tenant's gross sales over a pre-determined
level.

- Developing and maintaining long-term working relationships with theatre,
restaurant, retail and other entertainment-related business operators and
developers.

- Diversifying our asset base by property type and tenant.

Lease Risk Minimization. To avoid initial lease-up risks and produce a
predictable income stream, we intend to acquire single-tenant properties that
are leased under long-term leases or multi-tenant properties that are
substantially leased or leased to a master tenant. We believe our willingness to
make long-term investments in properties offers tenants financial flexibility
and allows tenants to allocate capital to their core businesses.

Lease Structure. We intend to structure leases, where possible, on a
triple-net or similar basis under which the tenants bear the principal portion
of the financial and operational responsibility for the properties. During each
lease term and any renewal periods, we intend to provide for periodic increases
in rent and/or percentage rent based upon a percentage of the tenant's gross
sales over a pre-determined level.

Tenant Relationships. We will seek to develop and maintain long-term
working relationships with theatre, restaurant and other entertainment-related
business operators and developers by providing capital for

multiple properties on a national or regional basis, thereby enhancing
efficiency and value to those operators and to EPR. In addition to existing
tenants, we will target tenants whose competitive position and financial
strength are deemed adequate to meet their obligations throughout the lease
terms.

Portfolio Diversification. EPR will endeavor to further diversify its asset
base by property type and tenant. In pursuing this diversification strategy, we
will target theatre, restaurant, retail and other entertainment-related business
operators which we view as leaders in their market segments and which have the
financial strength to compete effectively and perform under their leases with
the Company. If, as expected, ETRCs include an increasing number of diverse
tenants, we expect to be able to serve the widening demands of this market and
include additional complementary properties in our portfolio.

CAPITALIZATION STRATEGIES

- Employing moderate leverage, including the Bank Credit Facility, to fund
additional acquisitions.

- Pursuing joint venture opportunities and other arrangements to fund
additional property acquisitions.

- Maintaining a debt-to-total capitalization ratio consistent with prudent
management and market expectations.

- Paying regular distributions and periodically increasing distributions to
shareholders to the extent expected increases in FFO and Cash Available for
Distribution (net earnings plus depreciation and amortization minus capital
expenditures and principal payments on indebtedness) are realized.

Moderate Use of Leverage; Debt-to-Total Capitalization. We endeavor to
enhance shareholder return through the moderate use of leverage. As of March 31,
1999, we had a $150 million Bank Credit Facility with approximately $44 million
in loan availability. We may reduce the principal balance of the Bank Credit
Facility with net proceeds from this offering and use advances under the Bank
Credit Facility to finance the acquisition of properties. In addition, we may in
the future obtain additional secured debt and/or refinance our existing
unsecured debt with long-term debt or proceeds from the issuance of additional
equity as circumstances warrant and opportunities to do so become available. We
expect to maintain a debt-to-total capitalization ratio (i.e., total debt as a
percentage of shareholders' equity plus total debt) of less than 50%.

Joint Ventures. We will examine and pursue potential joint venture
opportunities with institutional investors or developers if they are considered
to add value to our shareholders. We may employ higher leverage in such joint
ventures.

Payment of Regular Distributions. We have paid and expect to continue
paying quarterly dividend distributions to our shareholders. Among the factors
the Board of Trustees considers in setting the dividend rate are the Company's
results of operations, including FFO per Share, and the Company's Cash Available
for Distribution. We expect to periodically increase distributions as FFO and
Cash Available for Distribution increase and as other considerations and factors
warrant.

PROPERTIES

The following table lists the Company's properties, their locations,
acquisition dates, number of theatre screens, number of seats, gross square
footage, and the tenant.

BUILDING
ACQUISITION (GROSS
PROPERTY LOCATION DATE SCREENS SEATS SQ. FT) TENANT
-------- ----------------- ----------- ------- ------ --------- ------------

Grand 24(3)............. Dallas, TX 11/97 24 5,067 98,175 AMC
Mission Valley
20(1)(3).............. San Diego, CA 11/97 20 4,361 84,352 AMC
Promenade 16(3)......... Los Angeles, CA 11/97 16 2,860 129,822 AMC
Ontario Mills 30(3)..... Los Angeles, CA 11/97 30 5,469 131,534 AMC
Lennox 24(1)(3)......... Columbus, OH 11/97 24 4,412 98,261 AMC
West Olive 16(3)........ St. Louis, MO 11/97 16 2,817 60,418 AMC
Studio 30(3)............ Houston, TX 11/97 30 6,032 136,154 AMC
Huebner Oaks 24(3)...... San Antonio, TX 11/97 24 4,400 96,004 AMC
First Colony 24(1)...... Houston, TX 11/97 24 5,098 107,690 AMC
Oakview 24(1)........... Omaha, NE 11/97 24 5,098 107,402 AMC
Leawood Town Center 20.. Kansas City, MO 11/97 20 2,995 75,224 AMC
Gulf Pointe 30(2)....... Houston, TX 02/98 30 6,008 130,891 AMC
South Barrington 30..... Chicago, IL 03/98 30 6,210 130,891 AMC
Cantera 30(2)........... Chicago, IL 03/98 30 6,210 130,757 AMC
Mesquite 30(2).......... Dallas, TX 04/98 30 6,008 130,891 AMC
Hampton Town Center 24.. Norfolk, VA 06/98 24 5,098 107,396 AMC
Raleigh Grand 16........ Raleigh, NC 08/98 16 2,596 51,450 Consolidated
Muvico Pompano 18....... Pompano Beach, FL 08/98 18 3,424 73,637 Muvico
Pompano Kmart........... Pompano Beach, FL 11/98 -- -- 80,540 Kmart
Nickels Restaurant...... Pompano Beach, FL 11/98 -- -- 5,600 Nickels
Westminster Promenade... Westminster, CO 10/98 -- -- -- Multi-Tenant
Muvico Paradise 24...... Davie, FL 11/98 24 4,180 96,497 Muvico
Boise Stadium(1)........ Boise, ID 12/98 20 4,734 140,300 Edwards
Aliso Veijo 20.......... Los Angeles, CA 12/98 20 4,352 98,557 Edwards
--- ------ ---------
TOTAL......... 494 97,429 2,302,443

---------------------------

(1) Third party ground leased property. Although EPR is the tenant under the
ground leases and has assumed responsibility for performing the obligations
thereunder, pursuant to the theatre leases, the tenants are responsible for
performing EPR's obligations under the ground leases.

(2) In addition to the theatre property itself, EPR has acquired land parcels
adjacent to the theatre property which EPR intends to ground lease or sell
to restaurant or other entertainment themed operators.

(3) Property is included as security for a $105 million mortgage facility.

All of the properties are owned or ground leased directly by the Company.

PENDING ACQUISITIONS

On July 22, 1998, EPR announced a definitive agreement with Sofran Powder
Springs, Limited Partnership to acquire the Powder Springs 22-screen, 5,194-seat
megaplex theatre in suburban Atlanta, Georgia. EPR intends to acquire the
22-screen theatre in the third quarter of 1999. The theatre will be operated by
Regal Cinemas, based in Knoxville, Tennessee. According to publicly available
information, Regal Cinemas is a national movie exhibitor that operates over 250
theatres in 28 states with more than 2,400 screens.

On February 17, 1999, EPR announced the pending acquisition of the Loews
Woodridge 18 theatre located in Woodridge, Illinois in suburban Chicago. EPR
intends to acquire the 18 screen, 4,343 seat megaplex theatre during the second
quarter of 1999. The theatre will be operated by Loews Cineplex Entertainment
Corporation, the world's largest publicly traded theatre exhibition company
measured by revenues.

TENANTS AND LEASES

EPR acquired an initial portfolio of sixteen megaplex theatre properties
(the "AMC Properties") from subsidiaries of AMCE, including AMC, for an
aggregate purchase price of approximately $362 million. Eleven of the AMC
Properties were acquired in 1997 and five were acquired in 1998. Twelve of the
AMC Properties were described in the Company's IPO Prospectus as the "Initial
Properties" to be acquired by the Company, and four AMC Properties were among
the "Option Properties" described in the IPO Prospectus. The AMC Properties have
an aggregate of 396 screens and 78,160 seats. Each AMC Property is located in a
large metropolitan market and was constructed on or after May 1995. Each AMC
Property was acquired by the Company at a price equal to AMCE's cost of
development and construction.

EPR's existing leases with AMC (the "AMC Leases") provide for aggregate
annual rentals of approximately $38.3 million, or an average annual rental of
approximately $2.4 million per Property. AMC's obligations under each Lease are
guaranteed by AMCE. The Leases have initial terms ranging from 13 to 15 years
(the "Fixed Term") and may be extended upon the same terms and conditions for
four additional five-year terms (each, an "Extended Term") at the option of AMC.
The Leases are triple-net leases that require AMC to pay substantially all
expenses associated with the operation of the Properties, including taxes and
other governmental charges, insurance, utilities, service, maintenance and any
ground lease payments. Each Lease requires that, for a period of ten years, AMC
must operate the Property only as a movie theatre and activities incidental
thereto.

The rental schedules under the AMC Leases provide a stable source of cash
flow while allowing EPR to participate in future revenue growth experienced at
those theatres. Rent for the first year of each Lease is set at a fixed amount
and is subject to increase each year by the percentage increase in the Consumer
Price Index ("CPI") for the previous year, not to exceed 2%. In addition, once
AMC earns revenues in excess of a baseline amount it becomes obligated to pay
annual percentage rent on the basis of such revenues. However, EPR does not
expect to receive any annual percentage rent from AMC for at least five years
after the commencement date of each Lease.

During each Fixed Term, certain of AMC's obligations, including payment
obligations, under each Lease are cross-defaulted to each of the other AMC
Leases until AMCE's senior debt obligations or corporate credit are rated
investment grade or AMC's rental payments to EPR represent less than 50% of
AMC's Lease obligations, but AMC's payment obligations under the Leases and
AMCE's obligations under its guarantees are not secured by any assets of AMC or
AMCE.

Rental amounts for the properties purchased from AMC were determined by the
management of AMCE and EPR and were not negotiated on an arms-length basis. The
rental payments are based on an initial capitalization rate of 10.5%, which EPR
believes reflects the fair market value of the AMC Properties to the Company
based on rates for comparable triple-net lease transactions.

EPR has the option to purchase one additional megaplex theatre property
from AMCE, or its affiliates, located in Livonia, Michigan for a purchase price
equal to AMCE's cost of developing and constructing the property. The Livonia
theatre, when and if acquired by the Company, would be leased to AMC on a
triple-net basis on terms similar to the Company's existing AMC Leases.

Until November 2002, EPR has a right of first refusal and first offer to
purchase and lease back to AMC any megaplex theatre and related entertainment
property acquired or developed and owned (or ground leased) by AMCE or its
subsidiaries, exercisable upon AMCE's intended disposition of the property. This
right to purchase is intended to give the Company access to new projects
developed by AMCE and its

subsidiaries, thereby providing opportunities for future growth, although AMCE
may lease entertainment and entertainment-related properties from owners other
than the Company.

AMCE is one of the leading theatrical exhibition companies in North America
measured by revenues, and is an industry leader in the development of megaplex
theatre complexes. In the fiscal year ended April 2, 1998, AMCE's consolidated
revenues were $846.8 million. As of April 2, 1998, AMCE, through its
subsidiaries, operated 229 theatres with an aggregate of 2,442 screens located
in 23 states, the District of Columbia, Portugal and Japan. Approximately 61% of
the screens operated by AMCE are located in Florida, California, Texas, Missouri
and Michigan and approximately 70% of AMCE's domestic screens are located in
areas among the 20 largest U.S. "Designated Market Areas" (television market as
defined by Nielsen Media Research).

The Company acquired the Raleigh Grand 16 megaplex theatre property in
Raleigh, North Carolina from Real Estate Innovations LLC ("REI") in the third
quarter of 1998. The Lease provides for a base term of 20 years with minimum
annual rental payments and percentage rent payments. The theatre is operated by
Consolidated Theaters. In addition, the Company has the option to acquire, for a
pre-determined price, three additional megaplex movie theatre properties to be
developed by REI and operated by Consolidated Theatres in the South and
Mid-Atlantic regions.

The Company acquired two megaplex theatre properties operated by Muvico in
1998. Leases for the Muvico properties provide for a base term of 20 years with
minimum annual rental payments and percentage rent payments. In addition, the
Company has the option to acquire, for a pre-determined price, five additional
megaplex movie theatre properties, predominantly located in the State of
Florida, to be operated by Muvico.

The Company acquired two megaplex theatre properties from Edwards in the
fourth quarter of 1998. Leases for the Edwards properties provide for a base
term of 20 years with minimum annual rental payments and percentage rent
payments. In addition, the Company has a right of first refusal to acquire four
additional megaplex movie theatre properties currently operated by Edwards in
the State of California. The Company's rights under the agreement include the
ability to match any purchase offer for the sites during the right of first
refusal period.

We continue to evaluate potential megaplex theatre properties for
acquisition and lease-back to quality theatre operators, as well as additional
opportunities to develop or acquire ETRC's.

USE OF PROCEEDS

Unless otherwise indicated in the applicable Prospectus Supplement, EPR
intends to use the net proceeds from any sale of Shares for general corporate
purposes, including the acquisition of properties and repayment of debt. Net
proceeds from the sale of Shares may initially be temporarily invested in
short-term securities.

FEDERAL INCOME TAX CONSEQUENCES

The following summary of material federal income tax consequences is based
on current law and does not intend to deal with all aspects of taxation that may
be relevant to particular shareholders in light of their personal investment or
tax circumstances, or to certain types of shareholders (including insurance
companies, financial institutions and broker-dealers) subject to special
treatment under the federal income tax laws.

EACH PROSPECTIVE INVESTOR IS ADVISED TO CONSULT HIS OWN TAX ADVISOR
REGARDING THE SPECIFIC TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP AND SALE OF
SHARES.

EPR believes it has operated in a manner that permits it to satisfy the
requirements for taxation as a REIT under the applicable provisions of the Code.
EPR intends to continue to satisfy those requirements. No assurance can be
given, however, that these requirements will be met.

The provisions of the Code and the Treasury Regulations thereunder relating
to qualification and operation as a REIT are highly technical and complex. The
following describes the material aspects of the laws that govern the federal
income tax treatment of a REIT and its shareholders. This summary is qualified
in its entirety by the applicable Code provisions, rules and Treasury
Regulations thereunder, and administrative and judicial interpretations thereof.
Armstrong Teasdale LLP has acted as tax counsel to the Company in connection
with the Company's election to be taxed as a REIT.

In the opinion of Armstrong Teasdale LLP, commencing with the Company's
taxable year that ended on December 31, 1997, the Company has been organized in
conformity with the requirements for qualification as a REIT, and its method of
operation has and will enable it to continue to meet the requirements for
qualification and taxation as a REIT under the Code. It must be emphasized that
this opinion is based on various assumptions and is conditioned upon certain
factual representations made by EPR. Moreover, our qualification and taxation as
a REIT depends upon our ability to meet, through actual annual operating
results, distribution levels and diversity of Share ownership, the various
qualification tests imposed under the Code discussed below, the results of which
will not be reviewed by Armstrong Teasdale LLP. Accordingly, no assurance can be
given that the actual results of the Company's operations for any particular
taxable year will satisfy these requirements. See "Failure to Qualify."

In brief, if certain detailed conditions imposed by the REIT provisions of
the Code are satisfied, entities such as EPR that invest primarily in real
estate and that otherwise would be treated for federal income tax purposes as
corporations are generally not taxed at the corporate level on their "REIT
Taxable Income" (generally the REIT's taxable income adjusted for, among other
things, the disallowance of the dividends-received deduction generally available
to corporations) that is currently distributed to shareholders. This treatment
substantially eliminates the "double taxation" (i.e., taxation at both the
corporate and shareholder levels) that generally results from investing in
corporations.

If EPR fails to qualify as a REIT in any year, however, it will be subject
to federal income tax as if it were a domestic corporation, and its shareholders
will be taxed in the same manner as shareholders of ordinary corporations. In
this event, EPR could be subject to potentially significant tax liabilities and
the amount of cash available for distribution to its shareholders could be
reduced.

TAXATION OF THE COMPANY

General

In any year in which EPR qualifies as a REIT, in general, it will not be
subject to federal income tax on that portion of its net income that it
distributes to shareholders. However, EPR will be subject to federal income tax
in these regards: (a) EPR will be taxed at regular corporate rates on any
undistributed REIT Taxable Income, including undistributed net capital gains.
(However, a REIT can elect to "pass through" any of its taxes paid on its
undistributed net capital gain to its shareholders on a pro rata basis), (2)
under certain circumstances, EPR may be subject to the "alternative minimum tax"
on its items of tax preference, (3) if EPR has: (i) net income from the sale or
other disposition of "foreclosure property" which is held primarily for sale to
customers in the ordinary course of business; or (ii) other nonqualifying income
from foreclosure property, it will be subject to tax at the highest corporate
rate on such income, (4) if EPR has net income from "prohibited transactions"
(which are, in general, certain sales or other dispositions of property held
primarily for sale to customers in the ordinary course of business other than
property held for at least four years, foreclosure property and property
involuntarily converted), such income will be subject to a 100% tax, (5) if EPR
fails to satisfy the 75% gross income test or the 95% gross income test (as
discussed below), and has nonetheless maintained its qualification as a REIT
because certain other requirements have been met, it will be subject to a 100%
tax on an amount equal to (a) the gross income attributable to the greater of
the amount by which EPR fails the 75% gross income test or the 95% gross income
test, multiplied by (b) a fraction intended to reflect EPR's profitability, (6)
if EPR fails to distribute during each calendar year at least the sum of: (i)
85% of its ordinary income for that year; (ii) 95% of its capital gain net
income for that year; and (iii) any undistributed taxable income from prior
periods, EPR would be subject to a 4% excise tax on the excess of such required
distribution over the amounts actually distributed, (7) if EPR acquires any
asset from

a C-corporation (i.e., generally a corporation subject to full corporate-level
tax) in a transaction in which the basis of the asset in EPR's hands is
determined by reference to the basis of the asset (or any other property) in the
hands of the C-corporation, and EPR recognizes gain on the disposition of such
asset during the 10 year period beginning on the date on which that asset was
acquired by EPR, then, to the extent of any built-in gain at the time of
acquisition, such gain will be subject to tax at the highest regular corporate
rate.

Requirements for Qualification

The Code defines a REIT as a corporation, trust or association (1) which is
managed by one or more trustees or directors, (2) the beneficial ownership of
which is evidenced by transferable shares, or by transferable certificates of
beneficial interest, (3) which would be taxable as a domestic corporation but
for Sections 856 through 860 of the Code, (4) which is neither a financial
institution nor an insurance company subject to certain provisions of the Code,
(5) the beneficial ownership of which is held by 100 or more persons (the "100
person test"), (6) not more than 50% in value of the outstanding shares of which
is owned, directly or indirectly, by five or fewer individuals (as defined in
the Code) at any time during the last half of each taxable year (the
"closely-held test"), and (7) which meets certain other tests, described below,
regarding the nature of income and assets. The Treasury has proposed legislation
that would also prohibit a REIT from owning securities in a corporation that
represent 10 percent of the corporation's vote or value. The Code provides that
conditions (1) through (4) must be met during the entire taxable year and that
condition (5) must be met during at least 335 days of a taxable year of 12
months, or during a proportionate part of a taxable year of less than 12 months.
Conditions (5) and (6) did not apply until after the first taxable year for
which an election was made by EPR to be taxed as a REIT. In addition, beginning
in 1998, a REIT's failure to satisfy condition (6) during a taxable year will
not result in its disqualification as a REIT under the Code for that taxable
year as long as (i) the REIT satisfies the shareholder demand statement
requirements described in the succeeding paragraph and (ii) the REIT did not
know, or upon exercising reasonable diligence, would not have known, whether it
had failed condition (6). The Treasury has also proposed legislation that would
change condition (6) by preventing any "person" (i.e., a corporation,
partnership or trust) from owning shares of a REIT possessing more than 50% of
the total combined voting power of all classes of voting shares or more than 50%
of the total value of shares of all classes. A REIT must also report its income
for federal income tax purposes based on the calendar year.

In order to assist EPR in complying with the 100 person test and the
closely-held test, EPR has placed certain restrictions on the transfer of its
Shares to prevent further concentration of stock ownership. See "Description of
Common Shares." To evidence compliance with these requirements, EPR must
maintain records which disclose the actual ownership of its outstanding Shares.
In fulfilling its obligations to maintain records, EPR must demand written
statements each year from the record holders of designated percentages of its
Shares disclosing the actual owners of the Shares. A list of those persons
failing or refusing to comply with such demand must be maintained as part of
EPR's records. A shareholder failing or refusing to comply with EPR's written
demand must submit with his or her tax returns a similar statement disclosing
the actual ownership of Shares and certain other information. EPR's Declaration
of Trust provides restrictions regarding the transfer of Shares that are
intended to assist EPR in continuing to satisfy the Share ownership
requirements.

Although EPR intends to satisfy the shareholder demand letter rules
described in the preceding paragraph, its failure to satisfy these requirements
will not result in its disqualification as a REIT but may result in the
imposition of IRS penalties.

In the case of a REIT that is a partner in a partnership, Treasury
Regulations provide that the REIT will be deemed to own its proportionate share
of the assets of the partnership and will be deemed to be entitled to the income
of the partnership attributable to that share. In addition, the character of the
assets and gross income of a partnership shall retain the same character in the
hands of a partner qualifying as a REIT for purposes of Section 856 of the Code,
including satisfying the gross income tests and the asset tests, described
below.

Asset Tests

At the close of each quarter of EPR's taxable year, EPR must satisfy two
tests relating to the nature of its assets. First, at least 75% of the value of
EPR's total assets must be represented by interests in real property, interests
in mortgages on real property, shares in other REIT's, cash, cash items and
government securities (as well as certain temporary investments in stock or debt
instruments purchased with the proceeds of new capital raised by EPR). Second,
although the remaining 25% of EPR's assets generally may be invested without
restriction, securities in this class may not exceed either: (i) 5% of the value
of EPR's total assets as to any one non-government issuer; or (ii) 10% of the
outstanding voting securities of any one issuer. In addition, EPR may own 100%
of "qualified REIT subsidiaries," which are, in general, corporate subsidiaries
100% owned by a REIT. All assets, liabilities and items of income, deduction and
credit of a qualified REIT subsidiary will be treated as owned and realized
directly by EPR.

Gross Income Tests

There are two separate percentage tests relating to the sources of EPR's
gross income which must be satisfied for each taxable year.

The 75% Test. At least 75% of EPR's gross income for each taxable year must
be "qualifying income." Qualifying income generally includes (i) "rents from
real property" (except as modified below), (ii) interest on obligations
collateralized by mortgages on, or interests in, real property, (iii) gains from
the sale or other disposition of interests in real property and real estate
mortgages, other than gain from property held primarily for sale to customers in
the ordinary course of EPR's trade or business ("dealer property"), (iv)
dividends or other distributions on shares in other REIT's, as well as gain from
the sale of those shares, (v) abatements and refunds of real property taxes,
(vi) income from the operation, and gain from the sale, of property acquired at
or in lieu of a foreclosure of the mortgage collateralized by such property
("foreclosure property"), and (vii) commitment fees received for agreeing to
make loans collateralized by mortgages on real property or to purchase or lease
real property.

In addition, rents received from a tenant will not qualify as rents from
real property in satisfying the 75% test (or the 95% test described below) if
EPR, or an owner of 10% or more of EPR, directly or constructively owns 10% or
more of the tenant (a "related party tenant"). In addition, if rent attributable
to personal property, leased in connection with a lease of real property, is
greater than 15% of the total rent received under the lease, then the portion of
rent attributable to such personal property will not qualify as rents from real
property. Moreover, an amount received or accrued generally will not qualify as
rents from real property (or as interest income) for purposes of the 75% and 95%
gross income tests if it is based in whole or in part on the income or profits
of any person. Rent or interest will not be disqualified, however, solely by
reason of being based on a fixed percentage of receipts or sales. Finally, for
rents received to qualify as rents from real property, EPR generally must not
operate or manage the property or furnish or render services to tenants, other
than through an "independent contractor" from whom EPR derives no revenue. The
"independent contractor" requirement, however, does not apply to the extent the
services provided by EPR are "usually or customarily rendered" in connection
with the rental of space for occupancy only, and are not otherwise considered
"rendered to the occupant." For both the related party tenant rules and
determining whether an entity qualifies as an independent contractor, certain
attribution rules of the Code apply, pursuant to which shares of a REIT held by
one entity are deemed held by another.

Under prior law, if a REIT provided impermissible services to its tenants,
all of the rent from those tenants would have been disqualified from satisfying
the 75% test and 95% test (described below). Beginning in 1998, rents will not
be disqualified if a REIT provides de minimis impermissible services. Services
provided to tenants are considered de minimis where income derived from the
services equals 1% or less of all income derived from the property (threshold
determined on a property-by-property basis). For purposes of this 1% threshold,
the amount treated as received for any service shall not be less than 150% of
the direct cost to EPR in furnishing or rendering the services.

The 95% Test. In addition to deriving 75% of its gross income from the
sources listed above, at least 95% of EPR's gross income for each taxable year
must be derived from the above-described qualifying income, or from dividends,
interest or gains from the sale or disposition of stock or other securities that
are not dealer property. Dividends and interest on any obligation not
collateralized by an interest in real property are included for purposes of the
95% test, but not for purposes of the 75% test. Furthermore income earned on
interest rate swaps and caps entered into as liability hedges against variable
rate indebtedness qualify for the 95% test (but not the 75% test). Beginning in
1998, income earned on liability hedges against all of a REIT's indebtedness,
such as options, futures, and forward contracts, will qualify for the 95% test
(but not the 75% test). In certain cases, Treasury Regulations treat a debt
instrument and a liability hedge as a synthetic debt instrument for all purposes
of the Code. If a liability hedge entered into by a REIT is subject to these
rules, income earned thereon will operate to reduce its interest expense, and,
therefore such income will not affect the REIT's compliance with either the 75%
or 95% tests.

Even if EPR fails to satisfy one or both of the 75% or 95% tests for any
taxable year, it may still qualify as a REIT for that year if it is entitled to
relief under certain provisions of the Code. These relief provisions will
generally be available if (i) EPR's failure to comply was due to reasonable
cause and not to willful neglect, (ii) EPR reports the nature and amount of each
item of its income included in the 75% and 95% tests on a schedule attached to
its tax return, and (iii) any incorrect information on this schedule is not due
to fraud with intent to evade tax. It is not possible, however, to state whether
in all circumstances EPR would be entitled to the benefit of these relief
provisions. If these relief provisions apply, EPR will, however, still be
subject to a special tax upon the greater of the amount by which it fails either
the 75% or 95% test for that year.

The 30% Test. Prior to 1998, EPR must have derived less than 30% of its
gross income for each taxable year from the sale or other disposition of (i)
real property held for less than four years (other than foreclosure property and
involuntary conversions), (ii) stock or securities held for less than one year,
and (iii) property in a "prohibited transaction." The 30% test has been repealed
effective for tax years beginning after December 31, 1997.

Annual Distribution Requirements

In order to qualify as a REIT, EPR is required to make distributions (other
than capital gain distributions) to its shareholders each year in an amount at
least equal to (A) the sum of (i) 95% of EPR's REIT Taxable Income (computed
without regard to the dividends paid deduction and the REIT's net capital gain),
and (ii) 95% of the net income (after tax), if any, from foreclosure property,
minus (B) the sum of certain items of non-cash income. Such distributions must
be paid in the taxable year to which they relate, or in the following taxable
year if declared before EPR timely files its tax return for that year and if
paid on or before the first regular distribution payment after such declaration.
To the extent EPR does not distribute all of its net capital gain or distributes
at least 95%, but less than 100%, of its REIT Taxable Income, as adjusted, it
will be subject to tax on the undistributed amount at regular capital gains or
ordinary corporate tax rates, as the case may be. (However, a REIT can elect to
"pass through" any of its taxes paid on its undistributed net capital gain to
its shareholders on a pro rata basis.) Furthermore, if the REIT should fail to
distribute during each calendar year at least the sum of (i) 85% of its ordinary
income for that year, (ii) 95% of its net capital gain for that year, and (iii)
any undistributed taxable income from prior periods, the REIT would be subject
to a 4% excise tax on the excess of such required distribution over the amounts
actually distributed. For these purposes, dividends declared to shareholders of
record in October, November or December of one calendar year and paid by January
31st of the following calendar year are deemed paid as of December 31st of the
initial calendar year.

EPR believes it has made and will make timely distributions sufficient to
satisfy the annual distribution requirements. It is possible that in the future
EPR may not have sufficient cash or other liquid assets to meet the 95%
distribution requirement, due to timing differences between the actual receipt
of income and actual payment of expenses on the one hand, and the inclusion of
such income and deduction of such expenses in computing EPR's REIT Taxable
Income on the other hand. Further, it is possible that, from time to time, EPR
may be allocated a share of net capital gain attributable to any of depreciated
property that exceeds its allocable share of cash attributable to that sale. To
avoid any problem with the 95% distribution requirement, EPR will closely
monitor the

relationship between its REIT Taxable Income and cash flow and, if necessary,
will borrow funds in order to satisfy the distribution requirement. See "Risk
Factors."

If EPR fails to meet the 95% distribution requirement as a result of an
adjustment to its tax return by the IRS, we may retroactively cure the failure
by paying a "deficiency dividend" (plus applicable penalties and interest)
within a specified period.

Failure to Qualify

If EPR fails to qualify for taxation as a REIT in any taxable year and the
relief provisions do not apply, EPR will be subject to tax (including any
applicable alternative minimum tax) on its taxable income at regular corporate
rates. Distributions to shareholders in any year in which EPR fails to qualify
will not be deductible by EPR, nor will they be required to be made. In such
event, to the extent of EPR's current and accumulated earnings and profits, all
distributions to shareholders will be taxable as ordinary income, and, subject
to certain limitations in the Code, corporate shareholders may be eligible for
the dividends-received deduction. Unless entitled to relief under specific
statutory provisions, EPR will also be disqualified from taxation as a REIT for
the four taxable years following the year during which qualification was lost.
It is not possible to state whether EPR would be entitled to such statutory
relief.

TAXATION OF SHAREHOLDERS

Taxation of Taxable Domestic Shareholders

As used herein, the term "U.S. Shareholder" means a holder of Shares who
(for U.S. federal income tax purposes) (i) is a citizen or resident of the
United States, (ii) is a corporation, partnership or other entity created or
organized in or under the laws of the United States or any political subdivision
thereof (except, in the case of a partnership, the Treasury provides otherwise
by regulations), (iii) is an estate the income of which is subject to United
States federal income taxation regardless of its source, or (iv) is a trust
whose administration is subject to the primary supervision of a United States
court and which has one or more United States persons who have the authority to
control all substantial decisions of the trust. Notwithstanding the preceding
sentence, to the extent provided in regulations, certain trusts in existence on
August 20, 1996, and treated as United States persons prior to that date that
elect to continue to be treated as United States persons shall also be
considered U.S. Shareholders.

As long as EPR qualifies as a REIT, distributions made out of its current
or accumulated earnings and profits (and not designated as capital gain
dividends) will constitute dividends taxable to its taxable U.S. Shareholders as
ordinary income. Such distributions will not be eligible for the dividends
received deduction otherwise available with respect to dividends received by
U.S. Shareholders that are corporations. Distributions made by EPR that are
properly designated as capital gain dividends will be taxable to U.S.
Shareholders as gains (to the extent they do not exceed EPR's actual net capital
gain for the taxable year) from the sale or disposition of a capital asset.
Depending on the period of time EPR held the assets which produced the gains,
and on certain designations, if any, which may be made by EPR, such gains may be
taxable to noncorporate U.S. Shareholders at a 20% or 25% rate. U.S.
Shareholders that are corporations may, however, be required to treat up to 20%
of certain capital gain dividends as ordinary income. To the extent EPR makes
distributions (not designated as capital gain dividends) in excess of its
current and accumulated earnings and profits, such distributions will be treated
first as a tax-free return of capital to each U.S. Shareholder, reducing the
adjusted basis which such U.S. Shareholder has in his Shares for tax purposes by
the amount of such distribution (but not below zero), with distributions in
excess of a U.S. Shareholder's adjusted basis in his Shares taxable as capital
gain, provided the Shares have been held as a capital asset (which, with respect
to a non-corporate U.S. Shareholder, will be taxable as long-term capital gain
if the Shares have been held for more than eighteen months, mid-term capital
gain if the Shares have been held for more than one year but not more than
eighteen months, or short-term capital gain if the Shares have been held for one
year or less). Dividends declared by EPR in October, November or December of any
year and payable to a shareholder of record

on a specified date in any such month shall be treated as both paid by EPR and
received by the shareholder on December 31st of that year; provided the dividend
is actually paid by EPR on or before January 31st of the following calendar
year. Shareholders may not include in their own income tax returns any net
operating losses or capital losses of EPR.

Distributions made by EPR and gain arising from the sale or exchange by a
U.S. Shareholder of Shares will not be treated as passive activity income, and,
as a result, U.S. Shareholders generally will not be able to apply any "passive
losses" against such income or gain. Distributions made by EPR (to the extent
they do not constitute a return of capital) generally will be treated as
investment income for purposes of computing the investment interest limitation.
Gain arising from the sale or other disposition of Shares (or distributions
treated as such), will not be treated as investment income under certain
circumstances.

Upon any sale or other disposition of Shares, a U.S. Shareholder will
recognize gain or loss for federal income tax purposes in an amount equal to the
difference between (i) the amount of cash and the fair market value of any
property received on such sale or other disposition, and (ii) the holder's
adjusted basis in the Shares for tax purposes. Such gain or loss will be capital
gain or loss if the Shares have been held by the U.S. Shareholder as a capital
asset and, with respect to a non-corporate U.S. Shareholder, will be long-term
gain or loss if the Shares have been held for more than one year at the time of
disposition. In general, any loss recognized by a U.S. Shareholder upon the sale
or other disposition of Shares that have been held for six months or less (after
applying certain holding period rules) will be treated as a long-term capital
loss, to the extent of capital gain dividends received by such U.S. Shareholder
from EPR which were required to be treated as long-term capital gains.

Backup Withholding

EPR will report to its domestic shareholders and to the IRS the amount of
dividends paid during each calendar year, and the amount of tax withheld, if any
from those dividends. Under the backup withholding rules, a shareholder may be
subject to backup withholding at the rate of 31% with respect to dividends paid
and redemption proceeds unless the shareholder (a) is a corporation or comes
within certain other exempt categories and, when required, demonstrates this
fact, or (b) provides a taxpayer identification number, certifies as to no loss
of exemption from backup withholding, and otherwise complies with applicable
requirements of the backup withholding rules. Notwithstanding the foregoing, EPR
will institute backup withholding with respect to a shareholder when instructed
to do so by the IRS. A shareholder that does not provide EPR with his correct
taxpayer identification number may also be subject to penalties imposed by the
IRS. Any amount paid as backup withholding will be creditable against the
shareholder's federal income tax liability.

TAXATION OF TAX-EXEMPT SHAREHOLDERS

The IRS has issued a revenue ruling in which it held that amounts
distributed by a REIT to a tax-exempt employees' pension trust do not constitute
unrelated business taxable income ("UBTI"). Revenue rulings, however, are
interpretive in nature and are subject to revocation or modification by the IRS.
Based upon the ruling and the analysis therein, distributions by EPR to a
shareholder that is a tax-exempt entity should not constitute UBTI, provided the
tax exempt entity has not financed the acquisition of its Shares with
"acquisition indebtedness" within the meaning of the Code, and that the Shares
are not otherwise used in an unrelated trade or business of the tax-exempt
entity. In addition, REITs generally treat the beneficiaries of qualified
pension trusts as the beneficial owners of REIT shares owned by such pension
trusts for purposes of determining if more than 50% of the REIT's shares are
owned by five or fewer individuals. However, if a pension trust owns more than
10% of the REIT's shares, it can be subject to UBTI on all or a portion of REIT
dividends made to it, if the REIT is treated as a "pension-held REIT." EPR does
not expect to be treated as a "pension-held REIT." Consequently, a pension trust
shareholder should not be subject to UBTI on dividends that it receives from
EPR. However, because the Shares are publicly traded, no assurance can be given
in this regard.

TAXATION OF FOREIGN SHAREHOLDERS

The rules governing U.S. federal income taxation of the ownership and
disposition of Shares by persons who or are not U.S. Shareholders ("Non-U.S.
Shareholders") are complex and no attempt is made in this Prospectus to provide
more than a summary of these rules. Prospective Non-U.S. Shareholders should
consult with their own tax advisors to determine the impact of federal, state,
local and any foreign income tax laws with regard to an investment in EPR,
including any reporting requirements.

Distributions that are not attributable to gain from sales or exchanges by
EPR of "United States real property interests" ("USRPIs"), as defined in the
Code, and not designated by EPR as capital gain dividends will be treated as
dividends of ordinary income to the extent they are made out of current or
accumulated earnings and profits of EPR. Unless such distributions are
effectively connected with the Non-U.S. Shareholder's conduct of a U.S. trade or
business (or, if an income tax treaty applies, are attributable to a U.S.
permanent establishment of the Non-U.S. Shareholder), the gross amount of the
distributions will ordinarily be subject to U.S. withholding tax at a 30% or
lower treaty rate, if applicable. In general, Non-U.S. Shareholders will not be
considered engaged in a U.S. trade or business (or, in the case of an income tax
treaty, as having a U.S. permanent establishment) solely by reason of their
ownership of Shares. If income on Shares is treated as effectively connected
with the Non-U.S. Shareholder's conduct of a U.S. trade or business (or, if an
income tax treaty applies, is attributable to a U.S. permanent establishment of
the Non-U.S. Shareholder), the Non-U.S. Shareholder generally will be subject to
a tax at graduated rates, in the same manner as U.S. shareholders are taxed with
respect to such distributions (and may also be subject to the 30% branch profits
tax in the case of a shareholder that is a foreign corporation). EPR expects to
withhold U.S. income tax at the rate of 30% on the gross amount of any
distributions of ordinary income made to a Non-U.S. Shareholder unless (i) a
lower treaty rate applies and proper certification is provided, or (ii) the
Non-U.S. Shareholder files an IRS Form 4224 with EPR claiming that the
distribution is effectively connected with the Non-U.S. Shareholder's conduct of
a U.S. trade or business (or, if an income tax treaty applies, is attributable
to a U.S. permanent establishment of the Non-U.S. Shareholder).

Pursuant to Treasury Regulations, dividends paid to an address in a country
outside the United States are generally presumed to be paid to a resident of
such country for purposes of ascertaining the withholding requirement discussed
above and the applicability of a tax treaty rate. Under certain income tax
treaties, lower withholding rates generally applicable to dividends do not apply
to dividends from a REIT. Under recently promulgated Temporary Treasury
Regulations, certain Non-U.S. Shareholders who seek to claim the benefit of an
applicable treaty rate will be required to satisfy certain residency
requirements. In addition, certain certification and disclosure requirements
must be satisfied under the effectively connected income and permanent
establishment exemptions discussed in the preceding paragraph.

Unless the Shares constitute a USRPI, distributions in excess of current
and accumulated earnings and profits of EPR will not be taxable to a shareholder
to the extent such distributions do not exceed the adjusted basis of the
shareholder's Shares but rather will reduce the adjusted basis of the Shares. To
the extent such distributions exceed the adjusted basis of a Non-U.S.
Shareholder's Shares, such distributions will give rise to tax liability if the
Non-U.S. Shareholder would otherwise be subject to tax on any gain from the sale
or disposition of his Shares, as described below. If it cannot be determined at
the time a distribution is made whether or not the distribution will be in
excess of current and accumulated earnings and profits, the distributions will
be subject to withholding at the same rate as dividends. If, however, Shares are
treated as a USRPI, then unless otherwise treated as a dividend for withholding
tax purposes as described below, any distributions in excess of current or
accumulated earnings and profits will generally be subject to 10% withholding
and, to the extent such distributions also exceed the adjusted basis of a
Non-U.S. Shareholder's Shares, they will also give rise to gain from the sale or
exchange of the Shares, the tax treatment of which is described below.

Distributions that are designated by EPR at the time of distribution as
capital gain dividends (other than those arising from the disposition of a
USRPI) generally will not be subject to taxation, unless (i) investment in the
Shares is effectively connected with the Non-U.S. Shareholder's United States
trade

or business (or, if an income tax treaty applies, it is attributable to a United
States permanent establishment of the Non-U.S. Shareholder), in which case the
Non-U.S. Shareholder will be subject to the same treatment as U.S. shareholders
with respect to such gain (except that a shareholder that is a foreign
corporation may also be subject to the 30% branch profits tax), or (ii) the
Non-U.S. Shareholder is a non-resident alien individual who is present in the
United States for 183 days or more during the taxable year and either has a "tax
home" in the United States or sold his or her Shares under circumstances in
which the sale was attributable to a U.S. office, in which case the non-resident
alien individual will be subject to a 30% tax on the individual's capital gains.

For each year in which EPR qualifies as a REIT, distributions that are
attributable to gain from sales or exchanges by EPR of USRPIs ("USRPI Capital
Gains"), such as properties beneficially owned by EPR, will be taxed to a
Non-U.S. Shareholder under the provisions of the Foreign Investment in Real
Property Tax Act of 1980 ("FIRPTA"). Under FIRPTA, such distributions are taxed
to a Non-U.S. Shareholder as gain effectively connected with a U.S. trade or
business regardless or whether such dividends are designated as capital gain
dividends. Non-U.S. Shareholders would thus be taxed at the normal capital gain
rates applicable to U.S. shareholders (subject to applicable alternative minimum
tax and a special alternative minimum tax in the case of nonresident alien
individuals) on such distributions. Also, distributions of USRPI Capital Gains
may be subject to a 30% branch profits tax in the hands of a foreign corporate
shareholder not entitled to treaty exemption or rate reduction. EPR is required
by applicable Treasury Regulations to withhold a portion of any distribution
consisting of USRPI Capital Gains. This amount may be creditable against the
Non-U.S. Shareholder's FIRPTA tax liability.

Gain recognized by a Non-U.S. shareholder upon a sale of Shares will
generally not be taxed under FIRPTA if the Shares do not constitute a USRPI.
Shares will not be considered a USRPI if the Company is a "domestically
controlled REIT," or if the Shares are part of a class that is regularly traded
on an established securities market and the holder owned less 5% of the class
sold during a specified testing period. A "domestically controlled REIT" is
defined generally as a real estate investment trust in which at all times during
a specified testing period less than 50% in value of the shares was held
directly or indirectly by foreign persons. EPR believes that it is a
"domestically controlled REIT," and therefore the sale of Shares will not be
subject to taxation under FIRPTA. If the gain on the sale of Shares were to be
subject to taxation under FIRPTA, the Non-U.S. Shareholder would be subject to
the same treatment as U.S. Shareholders with respect to such gain (subject to
applicable alternative minimum tax and a special alternative minimum tax in the
case of nonresident alien individuals), and the purchaser of the Shares may be
required to withhold 10% of the purchase price and remit such amount to the IRS.
However, since Shares are is publicly traded, no assurance can be given in this
regard.

Gain not subject to FIRPTA will be taxable to a Non-U.S. shareholder if (i)
investment in the Shares is effectively connected with a U.S. trade or business
of the Non-U.S. Shareholder (or, if an income tax treaty applies, is
attributable to a U.S. permanent establishment of the Non-U.S. Shareholder), in
which case the Non-U.S. Shareholder will be subject to the same treatment as
U.S. shareholders with respect to such gain, or (ii) the Non-U.S. Shareholder is
a nonresident alien individual who was present in the U.S. for 183 days or more
during the taxable year and has a "tax home" in the U.S., in which case the
nonresident alien individual will be subject to a 30% tax on the individual's
capital gains. If the gain on the sale of Shares were to be subject to taxation
under FIRPTA, the Non-U.S. Shareholder would be subject to the same treatment as
U.S. Shareholders with respect to such gain (subject to applicable alternative
minimum tax and a special alternative minimum tax in the case of nonresident
alien individuals).

If the proceeds of a disposition of Shares are paid by or through a U.S.
office of a broker, the payment is subject to information reporting and backup
withholding unless the disposing Non-U.S. Shareholder certifies as to his name,
address and non-U.S. status or otherwise establishes an exemption. Generally,
U.S. information reporting and backup withholding will not apply to a payment of
disposition proceeds if the payment is made outside the U.S. through a non-U.S.
office of a non-U.S. broker. U.S. information reporting requirements (but not
backup withholding) will apply, however, to a payment of disposition proceeds
outside the U.S. if (i) the payment is made through an office outside the U.S.
of a broker that is either (a) a U.S. person, (b) a foreign person that derives
50% or more of its gross income for certain
20

periods from the conduct of a trade or business in the U.S. or (c) a "controlled
foreign corporation" for U.S. federal income tax purposes, and (ii) the broker
fails to obtain documentary evidence that the shareholder is a Non-U.S.
Shareholder and that certain conditions are met or that the Non-U.S. Shareholder
otherwise is entitled to an exemption.

Final regulations dealing with withholding tax on income paid to foreign
persons and related matters (the "New Withholding Regulations") were recently
promulgated. In general, the New Withholding Regulations do not significantly
alter the substantive withholding and information reporting requirements
described above, but unify current certification procedures and forms and
clarify reliance standards. For example, the New Withholding Regulations adopt a
certification rule under which a Non-U.S. Shareholder who wishes to claim the
benefit of an applicable treaty rate with respect to dividends received from a
U.S. corporation will be required to satisfy certain certification and other
requirements. In addition, the New Withholding Regulations require a corporation
that is a REIT to treat as a dividend the portion of a distribution that is not
designated as a capital gain dividend or return of basis and apply the 30%
withholding tax (subject to any applicable deduction or exemption) to such
portion, and to apply the FIRPTA withholding rules (discussed above) with
respect to the portion of the distribution designed by the REIT as capital gain
dividend. The New Withholding Regulations will generally be effective for
payments made after December 31, 1999, subject to certain transition rules.

EXCEPT AS PROVIDED IN THIS PARAGRAPH, THE DISCUSSION SET FORTH ABOVE IN
"TAXATION OF FOREIGN SHAREHOLDERS" DOES NOT TAKE THE NEW WITHHOLDING REGULATIONS
INTO ACCOUNT. PROSPECTIVE NON-U.S. SHAREHOLDERS ARE STRONGLY URGED TO CONSULT
THEIR OWN TAX ADVISORS WITH RESPECT TO THE NEW WITHHOLDING REGULATIONS.

POSSIBLE LEGISLATIVE OR OTHER ACTIONS AFFECTING TAX CONSEQUENCES

Prospective investors should recognize that the present federal income tax
treatment of an investment in EPR may be modified by legislative, judicial or
administrative action at any time, and that any such action may affect
investments and commitments previously made. The rules dealing with federal
income taxation are constantly under review by persons involved in the
legislative process and by the IRS and the U.S. Treasury Department, resulting
in revisions or regulations and revised interpretations of established concepts
as well as statutory changes. Revisions in federal tax laws and interpretations
thereof could adversely affect the tax consequences of an investment in EPR.

STATE TAX CONSEQUENCES AND WITHHOLDING

EPR and its shareholders may be subject to state or local taxation in
various state or local jurisdictions, including those in which it or they
transact business or reside. The state and local tax treatment of EPR and its
shareholders may not conform to the federal income tax consequences discussed
above. Several states in which EPR may own properties treat REITs as ordinary
corporations. EPR does not believe, however, that shareholders will be required
to file state tax returns, other than in their respective states of residence,
as a result of the ownership of Shares. However, prospective shareholders should
consult their own tax advisors regarding the effect of state and local tax laws
on an investment in EPR.

EACH INVESTOR IS ADVISED TO CONSULT WITH HIS OWN TAX ADVISOR REGARDING THE
SPECIFIC TAX CONSEQUENCES TO HIM OF THE OWNERSHIP AND SALE OF SHARES IN AN
ENTITY ELECTING TO BE TAXED AS A REAL ESTATE INVESTMENT TRUST, INCLUDING THE
FEDERAL, STATE, LOCAL, FOREIGN, AND OTHER TAX CONSEQUENCES OF SUCH PURCHASE,
OWNERSHIP, SALE, AND ELECTION AND OF POTENTIAL CHANGES IN APPLICABLE TAX LAWS.

DESCRIPTION OF COMMON SHARES

This summary of our Shares is not meant to be complete and is qualified in
its entirety by reference to our Declaration of Trust and Bylaws, copies of
which have been filed as Exhibits to a Current Report on Form 8-K that was filed
with the SEC on June 7, 1999.

GENERAL

Our Declaration of Trust authorizes us to issue up to 50,000,000 common
shares and up to 5,000,000 preferred shares. As permitted by Maryland law, our
Declaration of Trust permits the Board of Trustees, without shareholder
approval, to amend the Declaration of Trust from time to time to increase or
decrease the aggregate number of shares or the number of shares of any class
that we have authority to issue. Under Maryland law, a shareholder is not
personally liable for the obligations of a REIT solely as a result of his or her
status as a shareholder.

The transfer agent and registrar for our Shares is UMB Bank, n.a.

COMMON SHARES

Holders of our common Shares have the following rights:

- Dividends -- Common shareholders have the right to receive dividends
when and as declared by the Board of Trustees

- Voting Rights -- Common shareholders have the right to vote their
Shares. Each Share has one vote on all matters submitted for shareholder
approval, including the election of trustees. We do not have cumulative
voting in the election of trustees, which means that the holders of a
majority of the outstanding Shares can elect all of the trustees
nominated for election and the holders of the remaining Shares will not
be able to elect any trustees.

Liquidation Rights -- If we liquidate, holders of common Shares are
entitled to receive all remaining assets available for distribution to
shareholders after satisfaction of our liabilities and the preferential rights
of any preferred shares that may be issued in the future.

Other Features -- Our outstanding common Shares are fully paid and
nonassessable. Common shareholders do not have any preemptive, conversion or
redemption rights.

OWNERSHIP LIMIT

Our Declaration of Trust restricts the number of Shares that may be owned
by individual shareholders. Generally, for EPR to qualify as a REIT under the
Code, not more than 50% in value of its outstanding Shares may be owned,
directly or indirectly, by five or fewer individuals (defined in the Code to
include certain entities and constructive ownership among specified family
members) at any time during the last half of a taxable year. The Shares must
also be beneficially owned by 100 or more persons during at least 335 days of a
taxable year. In order to maintain EPR's qualification as a REIT, the
Declaration of Trust contains restrictions on the acquisition of Shares intended
to ensure compliance with these requirements.

Our Declaration of Trust generally provides that any person holding more
than 9.8% of our outstanding Shares (the "Ownership Limit") may be subject to
forfeiture of the Shares owned in excess of the Ownership Limit ("Excess
Shares"). The Excess Shares may be transferred to a trust for the benefit of one
or more charitable beneficiaries. The trustee of that trust would have the right
to vote the Excess Shares, and dividends on the Excess Shares would be payable
to the trustee for the benefit of the charitable beneficiaries. Holders of
Excess Shares would be entitled to compensation for their Excess Shares, but
that compensation may be less than the price they paid for the Excess Shares.
Persons who hold Excess Shares or who intend to acquire Excess Shares must
provide written notice to EPR.

All persons who own more than 5% of the number or value of our outstanding
Shares must provide written notice to EPR containing certain information by
January 31st of each year.

PLAN OF DISTRIBUTION

We may sell Shares:

- through underwriters or dealers;

- through agents;

- directly to one or more purchasers; or

- directly to shareholders.

We may effect the distribution of Shares from time to time in one or more
transactions either:

- at a fixed price or prices which may be changed;

- at market prices prevailing at the time of sale;

- at prices relating to those market prices; or

- at negotiated prices.

For each offering of Shares, the Prospectus Supplement will describe the
plan of distribution.

If we use underwriters in the sale, they will buy the Shares for their own
account. The underwriters may then resell the Shares in one or more transactions
at a fixed public offering price, at the market price in effect at the time of
sale or at a discount from the market price. The obligations of the underwriters
to purchase the Shares will be subject to certain conditions. The underwriters
will be obligated to purchase all the Shares offered if they purchase any
Shares. Any public offering price and any discounts or concessions allowed or
re-allowed or paid to dealers may be changed from time to time.

If we use dealers in the sale, we will sell Shares to those dealers as
principals. The dealers may then resell the Shares to the public at the market
price or other prices to be determined by the dealers at the time of resale. If
we use agents in the sale, they will use their reasonable best efforts to
solicit purchasers for the period of their appointment. If we sell directly, no
underwriters or agents would be involved. We are not making an offer of Shares
in any state that does not permit such an offer.

Underwriters, dealers and agents that participate in the distribution of
Shares may be deemed to be underwriters as defined in the Securities Act. Any
discounts, commissions or profit they receive when they resell the Shares may be
treated as underwriting discounts and commissions under the Securities Act. We
may have agreements with underwriters, dealers and agents to indemnify them
against certain civil liabilities, including certain liabilities under the
Securities Act, or to contribute to payments that they may be required to make.

We may authorize underwriters, dealers or agents to solicit offers from
institutions in which the institution contractually agrees to purchase the
Shares from us on a future date at a specified price. This type of agreement may
be made only with institutions that we specifically approve. These institutions
could include banks, insurance companies, pension funds, investment companies
and educational and charitable institutions. The underwriters, dealers or agents
will not be responsible for the validity or performance of these agreements.

To facilitate an offering of the Shares, certain persons participating in
the offering may engage in transactions that stabilize or maintain the price of
the Shares. This may include over-allotments or short sales of the Shares, which
involve the sale by persons participating in the offering of more Shares than
EPR has sold to them. In those circumstances, these persons would cover the
over-allotments or short positions by purchasing Shares in the open market or by
exercising an over-allotment option which may be granted to them by EPR. In
addition, these persons may stabilize or maintain the price of the Shares by
bidding for or purchasing Shares in the open market or by imposing penalty bids,
under which selling concessions allowed to dealers participating in the offering
may be reclaimed if the Shares they sell are repurchased in stabilization
transactions. The effect of these transactions may be to stabilize or maintain
the market price of the Shares at

a level above that which might otherwise prevail in the open market. These
transactions, if commenced, may be discontinued at any time.

Underwriters, dealers or agents may engage in transactions with us and may
perform services for us in the ordinary course of business.

LEGAL MATTERS

Armstrong Teasdale LLP, Kansas City, Missouri, will issue an opinion about
the legality of the Shares and EPR's qualification and taxation as a REIT under
the Code. In addition, the description of EPR's taxation and qualification as a
REIT under the caption "Federal Income Tax Consequences" will be based upon the
opinion of Armstrong Teasdale LLP. Underwriters, dealers or agents who we
identify in a Prospectus Supplement may have their counsel give an opinion on
certain legal matters relating to the Shares or the offering.

EXPERTS

The consolidated financial statements and schedule of EPR appearing in our
Annual Report on Form 10-K for the year ended December 31, 1998, have been
audited by Ernst & Young LLP, independent auditors, as stated in their report
thereon included in the Annual Report on Form 10-K and incorporated in this
Prospectus by reference. Such consolidated financial statements and schedule are
incorporated by reference in reliance on the report given upon the authority of
that firm as experts in auditing and accounting.

2,000,000 COMMON SHARES

ENTERTAINMENT PROPERTIES TRUST

PROSPECTUS SUPPLEMENT

FRIEDMAN BILLINGS RAMSEY

FEBRUARY 4, 2002