Answering the "For-Profit" Charter Question

I always get this question (and seemingly by people who are smart and savvy):

How could anyone make money off charter schools?  

Below is just one explanation of the tip of this iceberg but it's a good one.

This column from the Washington Post's Valerie Strauss and her blog, The Answer Sheet, really says it all.  She posts an interview with the head of Entertainment Properties Trust which is:

“a specialty real estate investment trust (REIT) that invests in properties in select categories which require unique industry knowledge, and offer stable and attractive returns.”

And the website also says this: “Our investment portfolio of nearly $3 billion includes megaplex movie theatres and adjacent retail, public charter schools, and other destination recreational and specialty investments. This portfolio includes over 160 locations spread across 34 states with over 200 tenants.

The head of Entertainment Properties Trust, David Brain, did an jaw-dropping interview with CNBC.  The video and transcript are in the blog thread.  

Well let’s ask David Brain, president and CEO of Entertainment Properties Trust. ....Why would I want to add charter schools into my portfolio?

DB: Well I think it’s a very stable business, very recession-resistant. It’s a very high-demand product. There’s 400,000 kids on waiting lists for charter schools ... the industry’s growing about 12-14% a year. So it’s a high-growth, very stable, recession-resistant business. It’s a public payer, the state is the payer on this, uh, category, and uh, if you do business with states with solid treasuries. then it’s a very solid business

Anchor: Well let me ask you about potential risks, here, to your charter school portfolio, because I understand that three of your nine “Imagine” schools are scheduled to actually lose their charters for the next school year. Does this pose a risk to investors?

DB: Well, occasionally — we have Imagine arrangements on a master lease, so there’s no loss of rents to the company, although occasionally there are losses of charters in certain areas and they’re used to peculiar, ug, particular circumstances. 

Anchor: You’ve invested in retail centers, ski parks, you’ve got charter schools, you’ve got movie theaters.... If you could buy one thing right now, David, one type of asset in real estate, what would it be?

DB: Well, probably the charter school business. We said it’s our highest growth and most appealing sector right now of the portfolio. It’s the most high in demand, it’s the most recession-resistant. And a great opportunity set with 500 schools starting every year. It’s a two and a half billion dollar opportunity set in rough measure annually.

Mr. Brain also said this:

Most of the studies have charter schools at even or better than district public education.

To which Ms. Strauss says:

By the way, it isn’t true that “most of the studies have charter schools at even or better than district public education.”

But why let facts get in the way?