VICI - Earnings call transcript Q3 2019

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Operator

Good day ladies and gentlemen thank you for standing by. Welcome to the VICI Properties Third Quarter 2019 Earnings Conference Call. [Operator Instructions] Please note that this conference call is being recorded today November 1 2019.

I will now turn the call over to Samantha Gallagher General Counsel with VICI Properties. Go ahead.

Samantha Gallagher

good and operator you morning. Thank access Everyone XXXX company's quarter the release should and have earnings supplemental third to information. website The release section Properties Investors found in www.viciproperties.com. and supplemental information of can the be the at VICI

today Some federal the will of laws. our be statements meaning securities within forward-looking of the comments

differ as other and which statements to similar actual subject numerous risks such phrases that identified should could guidance results use of by are from Forward-looking expect the intends uncertainties cause usually words are will materially projects and what to we operating should future risks you more exercise caution on them. the in relying impact expect. Therefore SEC results a interpreting and I the for of could and refer filings financial discussion you condition. detailed that to company's

quarter Officer; XXXX Financial and third will can Officer; then have and A Ed Gabe some remarks Payne with certain we for open a supplemental company's available the most Chief provide we which our be Executive directly opening should the evaluating as results and questions. Chief Pitoniak discuss release be call Chief and accordance today these in we'll performance. in prepared our measures in believe we GAAP information. Hosting call Ed and GAAP. President Officer. These Accounting John David is Chief operating our Kieske Operating measures measure substitute reconciliation the earnings comparable Wasserman Officer; to team will to the financial concerned of not non-GAAP During measures the or useful isolation call in

to turn With the that I'll over Ed. call

Edward Pitoniak

I'm you continued institutional they an like In Kieske to initiatives. being end over our real quality growth another possesses institutional-grade XXXX charged then in Bellagio. to you third so and the X I'd a opportunity This endured and estate characteristics we few and moments our estate portfolio up tell the on Blackstone John little for shareholders launched distill everyone. the buying balance credit sheet. or estate about quarter of ago X But will spend estate. to mission-critical an morning for results the of endure and tenants replace in whose quality real in that and good news and for weeks estate sheet end time. our mean the Samantha X about VICI David in since decades. charged When ago typify difficult were real years balance equity moment over investing particular will communities gaming and of financial down with VICI referring which will of build to These initiatives and you and economics real for Payne first recent tell was VICI that we to critically the quarter a and have real characteristics relationships institutional and Thank developments may our to what tell the quarter a user two about marketplace quarter

shareholders repeat real and estate of for of gaming GIFs the given be just on purchase Blackstone's validation validation sector. one said doesn't recognition drives in its inevitable, for our recognition that phrase ago this two to XXXX call full real All would more we institutional growing Bellagio our would real use earnings invest for quarter place commercial capital, all along, takes respects, VG that thus until investors said good time sort in value when estate by years a to we or thing would the the And and is valuation. America's our come would beginning achieve America's estate come estate. be the we and investigate welcome, it this that from real that

likely are have time. Institutional Others long. institutional takes make like Blackstone investors so it learning time and Because took will investment real took why asked investors others time Well have Blackstone. take how other for to estate Some move. asked for educated fast decisions.

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Blackstone would then learning. not real learning value And estate noninstitutionalized that out claim investors to the asset highest Strip Vegas can they about doing they The that is institutional have advantage estate real the the real market and of markets positive for accelerated execute real first learn on class call views on they velocity. nor work what If most at estate Strip those Las Vegas class is to It's fact understood investor are retail institutional At other to accrues who do acting previously learn the we before real figure attractive be. Las hard borrowing years estate the is to the of the one investments valuable asset classes VICI leads asset participants that to ready estate investors in cognitive America. so. of process highly equity of arbitrage learning this arbitrage.

how real kind characteristics rate and Vegas investment key of estate are Vegas against have Just Las has estate understanding and capital the the still not -- with able Properties the evidence is Vegas yet an X.X% Las what lent started And investors that. here's refinancing as real at put have our are beginning to Shoppes Grand or ask Canal is Strip appraised Las cap David investment who been Sands There valuable understood a work many accordingly of real institutional into it just estate of recent have sector. he investors estate But real credit of real fact. real Simon estate. long willing Strip of Simon also of

our real about will As they grow. assets demand our including of for and learn sector value the estate gaming

are if the been likely of from non-traded we if we increased believe are those it this bidding But suffers such given And or specific that we for outbid history rising. be tell as a that troubles. We rise will marking risk from means effective Unless at if tenants market assets we traded is to portfolio will. idiosyncrasies none VICI competition values of may. pretty market. We've for assets outbid suffers Will troubled the assets asset governance. troubled you believe we see values may asset for increase asked the get to assets? an it

assets for So we asset improve non-gaming well. us cost our classes as further believe competitiveness values asset and correspondingly that enabling our if rise should of sustain for gaming to capital

Bellagio understandably means to as you we miles Empire. asking The good a put asset around to Northern things. cores flow-through the Inland this the will the markets that believe focus real L.A.'s real Simply high over final with class. real estate of to An asset at my Some as in bring the class biggest Bellagio time Jersey the time. example. what transaction estate Take logistics mission-critical gaming thanks are estate. market interest appreciate as increased on association folks it of class estate for time real means gaming trade estate an spent investment focus proximate regional began e-commerce and such initial New the the When urban great of was I and to nature real distribution on real

bull's the of the mission-critical real nature understanding regions. investment geographic other include grew this As eye estate grew to of also

will deal distribution center we announced Take Monday as an Amazon by the example acquisition X.X% gaming announced across of mid-Atlantic this a estate. play Racino Cleveland believe or suburban Upper same on largely in ripple the logistics week the at Midwest. the the cap out Thistledown We estimated of take portfolio out from for regional street an concentrated sorry, $XXX and million earlier real the really the assets the Prologis dynamic asset

critical to key whom investment in especially kind. As will hurt. between assets to are spoke regional are regional gaming market of in regional of do refusal America's also comes gaming network. on great real for be Las regional appreciate Vegas these or those hub of much estate Vegas spokes and national to trade differences will rovers differences degree, the operators, as estate, been assets mission Strip right is There nature real their first to this We've regional about a value that but estate Las asked of not and worth real own be be now Caesars determined velocity

likely answer Our there simply aren't refusal now. more a where believe a worth they're rights to in of we be many offers. marketplace worth first aren't lot is that

Strip Caesars if opco real estate Las X indeed Las entirety estate or is that in there and the decides propco. real to likely If Vegas is investor assets to both more X Vegas institutional of Strip interest sell be and

quarter. window an but ROFRs us acquire decision opportunity believe best of and partner us exclusive that their total operator ROFRs the These with give with find of we Caesars make to the value can asset. window and time to who an must will bear without to should for exclusive shareholders an these excitement necessarily consummate to a process. grows VICI's in prolonged a the at our having around fair cost market price enable creation with quick and value marketing every and us of transaction risk All opportunity Caesars execution with a with all Caesars

John. share now will recent exciting with on you John Over to developments. And you

John Payne

and everyone. morning to good Ed Thanks

the and the quarter We future with very XX excited first officially we JACK third closed International. leadership. partnership close Hard to and of property During XXXX in under Hard this Casino the on we on of the happy announced September Rock's about we Rock Cincinnati acquisition are were acquisition

our and XXXX Racino this you with JACK Thistledown As week sale-leaseback will earlier of many know in transaction Cleveland a Jack fourth transaction Entertainment. which acquire Casino we announced and we JACK of

a partnership will Ohio Entertainment on our in as will to The $XX.X We real rent about for of will $X.X roster. Cleveland of to which with footprint excited two cap one the and over million of since ways long-term years and fifth state investment they XXXX look our annualized transactions urban their the concentrate to of billion gaming. to with portfolio. our markets a estate across company for fastest-growing healthiest our with Ventures announced an formed the We're will family X.X% regional team tenant billion. further country and and JACK companies expand our The transaction in and of in just very add $X.X assets at we was total are Jack our million beginning select partner transactions the Rock rate within ago announced transaction paying total total the and attractive represents $XXX to brings add

transactions how complex a We announced many period in short we've so are often time. such of asked

our operators' been understanding have ability started As I've we and we structure principal underlying focus tenant's executing our finally keys the our the to success independence business to since needs. willingness our on meet deals the our true deep said deals and fair company our what to consider of

Over will possible. the on coming months our as we pending remaining quickly transactions and efficiently as closing focus

peers have our significant to future. We this and pipeline amongst best continue in on heading consistently profile to we into build XXXX the the us believe growth allows our growth embedded

to sectors continue as about learning through time with geographic goal best-in-class a also invest We including engagement toward gaming outside sector and and operators tenant we diversification. of our building work of REIT with

believe we've to continue their as this transactions us operating our capital. We financial we We and will with not but we their to and source to deals consider partners shareholders have the merits have investment our acquisitions accretive have on ability that demonstrated proven who also only discipline increasing entrusted to-date strategic evaluate universe. announced our and the to execute

who and sheet will will I discuss David our that call financial balance turn With over the results. to

David Kieske

highlights before John. quarterly few and of Thanks results turning first to cover I'll a markets financial balance our capital the activity. sheet from our

taxes the in of property acquisition tenant presented Cincinnati $XXX.X are September to revenue included Cash was required million longer related the closed January X.X% the 'XX. be million over $XXX.X no which X total under 'XX million. XXX our rent on increased excluding quarter the Our leases ASC revenues 'XX from QX statement of as income QX and which XXXX to for on $X.X reimbursement JACK to

accounting one million to incurred under are costs Cincinnati $X was was quarter in the in triple-net with the only G&A the revenues JACK primarily leases million required the sector. projections and expensed transaction new guidance. related documenting to legal of and the total and approximately represents the the for quarter transaction. We ratios is $X.X for and full the expenses for quarter the which leasing year a These in Our as Eldorado costs be with associated X% our line of lowest percentage of

$X.XX diluted for AFFO quarter share $XXX.X Our was a or on the basis. fully per million third

increased prior per from year June share issuances share over our decreased XXXX. of approximately increased given diluted X% XX.X% equity year-over-year and dilution the in and AFFO November AFFO XXXX while related of count the in

our Our triple-net was EBITDA results of adjusted model. to approximately efficient AFFO while once again Flow-through flow-through revenue cash revenue highly highlight to approximately cash of was XXX% XX%.

additional of which cash point rent lease the under to As our transparency heading by is financial materials. a our the always we welcome detailed supplement any located the menu for you our in Investors of section on website feedback outline including Financials. We quarterly revenue

Moving sheet on balance our and to activities. funding

way $X.X The a follow-on of net we regular million reminder completed count $XX.X upsized of total approximately on price offering net shares common billion and of billion. to XXX resulting for XX. comprised approximately an XX proceeds being our share a June share of on added was share of offering $X in sold As offering such immediate a stock June per XX at million proceeds shares

We settlement also component raise of the billion. entered net $X.X agreements forward anticipated into shares. the for the is forward proceeds additional offering to of Upon XX sale approximately million

to or whole forward ability September tranches at in in settle and transaction the now any time retain We the XX between XXXX.

with our approach have offering the to de-risk shareholders locking to sheet we With and some on attractive transactions certainty in that near-term long-term announced objective ensures the provide effectively believe this continue this funding balance the flexibility was sheet but Our very capital immediately and by we needed have with for we prospective announced the June the deals. dilution growth. to balance close

debt the Century the of Palace close We unsecured CMBS and Vegas. remainder as loan bonds the the the leverage-neutral to of and basis. intend to refinancing a the existing For combination a long-term currently needed well funding through on Eldorado secured access transactions Cleveland/Thistledown of Las on loan as markets term Caesars

in We $X.X our rate future and of debt have years $X.X million Our our weighted four,.three billion expense. debt of is a and with with total to until approximately maturing investments billion liquidity the of our billion X% with and approximately outstanding cash weighted availability no interest providing debt ended quarter we approximately at fixed is quarter average floating including under of XXXX. $X debt short-term revolver. $XXX our XX% end X.XX% average remaining was the clarity interest maturity of The

equity This $X.X billion in I billion component liquidity does not include of $X.X the above. referenced forward

our target net the was Xx end XX to debt EBITDA September of X.Xx approximately as Finally of X.Xx. LTM well low below of long-term our to

continue and transactions to Regarding XXXX. in our we to the growth acquisition pursue consistent close announced work have activity accretive we

mentioned the equity XX basis. JACK balance a that our additional to respect on With Cleveland October approximately JACK any sheet. the cash September announced rent Cincinnati on cap leverage-neutral this need acquisition on transaction will rate. to annual million John Thistledown on using adding cash XXth Cincinnati we X.X% transaction we funded in We not a closed $XX.XX As on JACK fund at we

in Between just transactions successful basis. As raised follow-on June portfolio we pending announced century increasing Cleveland prudently rental our over JACK in the add run rents X we annual all a and required had on will annualized XXXX cash offering. Eldorado XX% funding income our mentioned approximately rate $XXX by equity the I Thistledown million the

to to Thistledown and in to our by on JACK of as provide targeted a expect half the In the per timing we basis well continue absolute we in century portfolio and transaction is close Cleveland guidance XXXX. dollars to share will present close expect transparency. year-end Eldorado additional the With XXXX early first terms to guidance to respect of in close as

object reflect deferred acceleration our closing bridge the year XX. the September the on fees facility in billion Cincinnati of transaction. Eldorado And We $X.X guidance XXXX been to incurred financing have a full that the connection updating are with for

or shares sale of required pressure the that $X from per calculation diluted to of impact share. $X million XX now and the in We XX dollar be XX common estimates between guidance dilutive stock estimate treasury million, of XXX,XXX,XXX or on earnings as XX agreements XXX to additional as the stock included shares per expect forward issued are share XX, an to The well be million the XXX of our dollar per under June the versus to prior reflected million share, XX method. additional

paid the not any increase guidance during prospective annual dividend $X.XXXX dividend October per our always stockholders XX. September on in was announced As in of We our the a on dividend third does on XX reflect row second acquisitions quarter. the of The X.X% of a from increase representing we annualized On an or annualized pending markets an paid record activities. share our dividends prior $X.XX of dividend. capital the to for based year dividend a

line that please With open for questions. operator the

Operator

from first comes Carla [Operator Santarelli Bank. question Instructions] from Your Deutsche

line open. is Your

Carla Santarelli

that your some more this which cost affects deals. your your more is people you Has the come guys with exactly kind tenor what now into space as doing? the and much not comfortable suspected and Hey How you questions on recent going it get debate the you Ed upcoming get but changed guys, morning time get. the of When as I ready And how entrants just cost into referring kind and all quite how work. think space of of the in for it are of kind discussions good potentially very to do debt Blackstone with entrants incremental are mired commentary you you be milling the Meaning some think equity affects for it were been you've -- trading it and deal thank But about to you you capital obviously multiple. guess others we think presumably all of the lenders around affects doing in side? do to your could on for

Edward Pitoniak

it's think Carla question. a it in sorry credit real the think way a can great apply new and presume arbitrage term credit that as believe markets This characteristics well. we will And comments resemble more used the opening credit to I cognitive is characteristics Yes. our we estate my in I such the understand to asset it. Because credit estate that the class to have understand real underwriting. to way obviously real have And -- work that the had real equity could investors to at estate credits estate work had they real it in least lenders quality need to much will over our our key of assets that their start our tenants quality. time underwrite that I and estate market you key of through institutional understand a investment to in

Carla Santarelli

implied just David I said but the want guys then -- make guidance fairly not provided. And expect you fourth quarter I'm know Great. XXX% The I'm to you guidance sure in Century but to your close know sure this certainly answer I correct? to included you I clear.

David Kieske

That's has guidance. right Carla. everything that is been clear just not And included announced survey is the in

So recently updated Century in has Eldorado guidance some fees. announced Cincinnati or deferred as well the guidance the as some include not Cleveland/Thistledown changes for been closing financing does But the transaction.

Carla Santarelli

Great. guys. Thank you Appreciate

Operator

Your comes next from from DeCree John Union Gaming. question

open. Your line is

John DeCree

transaction the in prepared There Good all really morning, helpful. a remarks about and Strip the the Bellagio you other colors. spoke Rio. X and your for around transactions Circus which were Thanks Circus lot guys. in was Ed

there's on little those? And if on drew and wondering could Las us land. of the development Strip I your come some bit some World thoughts opportunity a those think kind was you I development a Resorts of with Vegas. that give

types of look and So thoughts in development opportunities the on just you for your what context that Strip projects like yourself? wanted the to and on get see VICI additional those of I

Edward Pitoniak

this and Payne. I'll Yes colleague then to my John John over start turn it I'll

owners Rio Vegas. the to global there market tremendous from need it see Circus absolutely the we Circus I in place Las the take when And case but opportunities. opportunity support see both as the that locals. we for turn the truly The in obviously fundamentals instances. succeed. I both wish think of to place different we as They're and the assets think of we and of very participate visitor it best of volume is redevelopment comes to so the a didn't believe just that X those activity this are operators to color. point believers smart take us are particular can repositioning a think whole does of segments. those further or the we new so those with at a I'll that infrastructure compelling -- there point Vegas strong John very being continue will Strip for And Las we downtown investors beyond and his starting both over in many city to they In those And

John Payne

question. X for long-term. remarks development Look of refer opens it. watch we're think he a Vegas up. John Las great did his almost excited have new touched I Yes. Caesars the And ROFRs with on opening to we that And Ed to the about quite In all in how continue the we'll

be has a market there demographics continue Las development wide And know that decade. age new this to and exciting destination resort for just to been you Vegas world-class a to Ed as said that it'll variety and of into As caters be not market product groups. new in add almost

see to excited those we're So open.

John DeCree

a a follow-up. think you. question right portfolio thought for taking a location quick kind and is you on to to this point? or market concern Las And now or exposure about whole at maybe That's be the much something agnostic ROFRs there too is would Las Strip you map With a helpful. like any of John for about and still Vegas stay your X that focused kind to that singular of open Vegas. Is your

John Payne

today portfolio it and and have how continuing obviously. think we exposure and pie. like also our we we is large what we're grow mean exposure Las Vegas diverse have do we our regional that I to No. is about And about

like we really market in from the this see like like we diverse like the downtown Strip as we locals so continue the to we've be said well. Vegas start And different we and markets. to we realized the company we opportunity Las many of And

there. we other to our Vegas. we grow opportunities we'll continue evaluate Las plan so to And of to there's don't think outside overexposure also continue ways But because company in

John DeCree

Very helpful. all again And activity. it. I appreciate successful congratulations the on

- Pitoniak Edward A

Thank you, john.

Operator

Your Barry comes from Jonas from next SunTrust. question

is open. line Your

Barry Jonas

morning.Just X good guys, maybe questions. Hey,

talk were on for than what the lower we the especially we can came a thinking First margin. operations quarter? in bit about It golf little

any there? Just And maybe going color about right to the what's think forward. way business that

Edward Pitoniak

take John do to you want that?

John Payne

Sure. Vegas we courses can a It place remember us ways golf as course excited off. where were is Las little we've it. to was these for is a team particular casino about But the almost Las and only the And run Again courses variety the put they're quarter areas Remember of see business quarter we've where in now particularly third in as in of operations where we in reseating. by areas quite the in nice the not use Vegas going we stand-alone. also see the we seen run due in amenities and and out to but two there other weddings in close run it's been now years facility growth were differently. casino the on

in of So going the quite XXXX. business to in about but the see a we little off good that we're consistency feel quarter the

Edward Pitoniak

their have the substantially markets in The to revenue I was the of -- have terms just outperformed the add courses strongly on revenues golf this quite And Barry both side rounds and year. grown side. revenue on revenues actually going

Barry Jonas

about gaming future. potential comments interesting look in really the to then the of deal with is and some think I And the Great. work the Rock together

Just sooner non-gaming be asking the is moving any than this color there could something to sort would standard great. that question point? later of happen non-gaming Or at just

Edward Pitoniak

developments seeing in. number a to of very Group. but John comes very and JACK happen. it Group Bedrock in affiliated very our And and of opportunities their We're in a Detroit Yes I the when with sectors. so across asset has through excited to companies our Cleveland. We're compelling going and to it I'll Bedrock John also on the about We're Detroit partnering be is downtown be jump we're in much non-gaming And ago. so JACK who about there excited again around Thistle both exciting. what Cleveland start on in with Barry and and can will And go were week very Cleveland. excited the assets have obviously Gilbert

seen You related a that experiential have might is of project anything to to not with. -- an and Greektown just they would with asset next in big our that announced it Steve Ross Casino But part we their to make do right do have parcel Detroit the partner extent valuable that? landscapes. urban that be assets ability top experiential love John of you would obviously ever we potentially they and build so. to color could do we a want some to add on And that to it's

John Payne

you think it. nailed I No

they've it's have to The what come with them. but Detroit. they not but whether that around creative team we very decade just successful what to the it exciting. being in excited acquired we think in do this and they developers the think partners I up incredibly do is over on or with and merchant more so associated We next in Cleveland that will to land We're open opportunities decide us. assets be for partners done

Barry Jonas

Great. so guys. much, Thanks

Operator

Daniel from Your comes Instinet. Adam Nomura next from question

Your line is open.

Daniel Adam

my morning. for questions. Hey, guys. Good Thanks taking

exists ultimately? congratulations on gaming another the is you off think scale arbitrage which first maybe that announcing in deal with be you So other do that and actually REITs my And to want to does question yet large to how first big quarter related accretive VICI leads which can? the sense make gaming rate opportunity cap merger within to and the while a still exploit accelerate your of one horizontal me

Edward Pitoniak

to Daniel you. Yes to good talk

of grow while VICI mean at we strategy is way can years which be we has these getting I pursue. and simply risk energy has big team would a opportunities demonstrated of we've a risk-adjusted be the capacity. for of does amount got spectrum big should how a ever terms not continuing a say bigger value as is it And been terms should can of be bigger in In it that that put getting of shareholder value at or how to tremendous not look amount shareholder tremendous of opportunities in in the sake two to a full across that as truly

shareholder every exactly of right We pursuing last plate months. XX always have strategy been increase be these to think option And we've will the value. full really we looking at got nice kind we've now a we pursuing

Daniel Adam

great MGM other question focus sale wondering That's related it's on vocal extent increasingly I you worth. reconsider. totally maybe leasebacks consider owner think then strategy for previously second agree who wouldn't operators light. becoming And the Okay. strategic MGM's shift asset what what my I'm to to to lead to and will is

Edward Pitoniak

Yes as -- creating. this the going Daniel. say have a will and of of wish a we but them the of that. to strategy them on deal did There I Blackstone. And transaction the I number strategy. did like we development they that with apologize pat And with evidence Yes people are they tell. an compelling best. in we time give execution obviously obviously the the for a them I is wish very think again MGM sound answer involved smart they think really we I to sincerely and -- very a wish And think We asset-light And with only opportunity they best. very time thank that I value believe can will them be goes favor and congratulate that us demonstrate tremendous

Operator

comes question Rose Smedes next from Citi. Your from

Your line is open.

Smedes Rose

versus scarcity about valuation trying to And tax to a which to sort is particularly just or comments putting the wanted in states ask How do you underlying either available cetera the et your regional me underwrite -- of license I just value some Las in those basis about it estate of more raising conduct related more are gambling the value around more alternate to just be regionally Vegas. well revenues. connected operators I around state or value like seems gambling than become often sort on expanding regulations Las Vegas to purpose. markets the raising real of on a licenses I'm aside. interested guess think taxes guess risk more more for would some of of I the that to you you.Ed And bit little versus thank Hi, maybe

Edward Pitoniak

in to Smedes want rationally license put question. license. the But I what subject is unfolding the see good When to for the we think can in Yes. tell of those to up the a don't participants is risk. will it's actually the in market and the that value adequately through Illinois. unfolded degree And I because think that a Pennsylvania very license to absolutely of a risk a is in Well would well we the supplied. appears which buy be it's be acting jurisdiction market expansion And value there has to and terms very interesting licenses jurisdictions incremental indeed agree auction

to it So truly reproduce while real is I it may mission-critical balance It or right whose now rational to is jurisdiction intrinsic want supply. to least increase supply-demand compelling. estate may when uses and a terms given so the not the being at in And is then economics even it a think expensive very to comes for it real it you market alternative very when is to of have operators have real reproduce are the of absolutely time estate. it's difficult might bespoke mission-critical value estate

They're it. occupy going continue want to to to

of So assets in incomparable tenant I solid an location. regional of MGM in I very City. a a where south say. valued a could at one Bellagio. say America degree It's even rate I would occupant. would value rational for shouldn't be cap differences XX-hour just is National of the to real the good something It's not a there estate in kind while I argument is may assets But be believe of differences of I good especially incomparable solid piece going probably I'm And that that be in which say reiterate make will there great Harbor that regions regional could

I is think to losing there's that can sight debate assets. potentially the very of underwrite healthy And good the around people deserve degree regional think strip and to real exciting a discount and had how gaming substantial they assets be value. a to energetic on very which

Smedes Rose

I Okay, appreciate thank you. that.

Operator

question comes Ladenburg John next from Massocca Your Thalmann. from

open. line is Your

John Massocca

demand? for have of as follow-up real Does what and seeing a valuation I Vegas maybe demand gaming capital a at it's question. sources as given could potentially Strip for I more though -- you're or It's but gaming. of put Vegas are is that that in probably just are the and played the is know understand in institutional market. assets same going familiar you up early Vegas kind you here just money out quickly seeing more -- terms that regional when other Vegas other Bellagio So view with out from you're of your you looking has competition regional mean market? in guys gaming from estate -- a been to how seeing more we're having work I transaction last a between to announced market can shaping kind the days

Edward Pitoniak

Yes.

I John First mean regional if -- all should that valued to equally clarify same I that. to to I'm suggest say want I as seem Vegas be assets. didn't that I sorry the or of assets

could argument For be defeated could believe I regional be and assets assets assets. it considered there even select could are argument more regional potentially than even that strip an I I the or valuable make as select good valuable in

generally assets probably Vegas discount speaking to at like slight determined think I or will estate. to it regional be Las real again sounds trade

at of how regional is I In ago. it transaction highlight real light Bellagio estate is market should the the X of about think looking terms only I weeks that in

later. had on when the and So it's on somebody and I rerated yet X tell -- a Friday was you on although call you called made a the somebody that days I soon tell on haven't -- announcement from little guys will Blackstone think too we Tuesday to said

think Vegas as interest focus REIT seen real this value they bit as see time. will like other good intrinsic outside very estate realize I estate is people in regional again a of because will will real But that very the has And increased realize of that their there nature very and well. Las value think it EPR of I So you indications parties take gaming in otherwise. you've of a little from

John Massocca

was And then there. collateralizing describe color as of and Okay understood. properties transaction loan? specifically what that with announced regards Cleveland part are the Thistledown you a Just to the the types Jack maybe can of loan

Edward Pitoniak

David?

David Kieske

it's lien Garage as which Company the is and a Ohio all on a first Ventures it's secured Rock May Building Higbee -- guarantor. Yes our part the ultimately of

John Massocca

prevent on forward of old way equity But before the lastly is raised can to volume? put There's from would then putting I saw that deal you that capital about a another forward you you Is with to the down. a putting like current in take it? say new pipeline fund anything that you would of maybe a in the from one today. And place. existing place that if forward another you understood. -- equity there correct you kind in new could structurally with influx the you understand Okay needed equity if structural a nothing in one think prevent place one transaction

David Kieske

have No at you time. others multiple see agri in the forwards do outstanding same

It's the So there's nothing equity a an no out just derivative structurally -- it's there. offering with component.

could So out if sure. was to we there there something your point

John Massocca

Oh, for it that's me. much. very you Thank

Operator

comes from from Jefferies. question David Katz Your next

open. is line Your

David Katz

the non-gaming some I growing of want for appropriately real to or good morning, I the John. Hi, alternative for of that about forms prospects contiguous commentary into or estate. everyone.Question heard sure make

bit opportunities three or just should said a do and I leaves next evolution it have thinking there. over we much wanted years may is this you that next something you that over say to the longer-term the a two further decade which be a think evolve quite that think ask or about? latitude little of is I or go occur could

John Payne

David my The and I'm clarify venture them to develop. referring glad good the the to to and with with working Rock decade Yes comments. partnership companies family of to was question

than to near-term I As about it the my hospitality more that. pertains comments experiential in and think

those we've there are be I sectors opportunities great sectors spending continue to continue diversify that there clarifies tenants understanding are my certain better So to clear time portfolio quite to your diversification. understanding sector our to and and have point about two we in goal with time the and or been spending to think comments. us for three That years operators opportunities geographic

David Katz

just a but the And follow which intended the hub as Should to other involves things is we or and using link project. an gaming I a developer of gaming up of of owners just owner an Got like has variety asset a it. or that that does can assets think a is example other a bridge or entirety about really the properties bridge necessary classes as link? within if have Pompano casino a gaming as project also it who or

John Payne

guess but I would way it. like that the have link put that it No we doesn't is be link to I

a we does we gaming if that that's others developing are assets a are understand be can we We'll have and So adjacent are experiential and sure by or But facilities for they're to involved us. study that do. to we or linked hospitality there that no -- right and opportunities it be to own operator gaming means like facility.

kind But our In areas fact where we're -- that's linked. really more so are. not of time of are spending we that on

David Katz

very you Thank Perfect. much.

John Payne

Thanks, David.

Operator

you. Thank

question Your from Morgan Thomas comes next from Allen Stanley.

open. line is Your

Thomas Allen

Thank you.

point that private you So your public don't I remarks think always that the initial made in happens. converge and market values eventually.

it what doesn't so you do? if And do

Edward Pitoniak

public collection. again for continues of public don't. market I market public tend private is can better disparity hotels in else excess or unless see than would players right in where a public any the the you a to them point estate values. there's market exists does undervalue right is when not more value real will are absolutely situations than if in market willing inherently There to to you you be to And options suppose over that of the case Yes. you're mean does And pay And tend with starts values even the know private they Thomas. be condition up a in to But I market assets. It the public the nothing today. may No sector time. pay the one correct of scoop market be as now private wrong which permanent portfolios when assets it market If underpriced me. something

Thomas Allen

do And have you ever about with people assets? selling single conversations

Edward Pitoniak

after And very as own Yes continues part. the we've what for our is in on not still or believe frustration understanding because sort made their years very else we're we because are we not in quarter-by-quarter. them various state strategic two excited occasionally proposition impatient reasons somebody two value do own. market any it's market's obviously but this to about progress also in of they're interested such valuing we're it's we feel about And excited the to how at We is we that of point of years the grow undervalued us.

equity certainly overall and the progress Thank RMZ there the and impatient being market not we're occasional While noise in at we Thomas. is made in point. like the this you,

Operator

comes from question Rich Hightower Evercore. next from Your

Your open. line is

Rich Hightower

to you of for Thanks a referred want question. I ripple here. on and mentioned care have is the cap ground question hard CPLV obviously a effect a Bellagio you again structure maybe about the thanks between side least addition cap covered other your what Ed a this for and on current think to in the Strip its of given a at other lot we similarities. to of if at wonder differences I But lot that rate sort rates spread as and that answer the of taking gander to We the in But times.

Edward Pitoniak

a fair question. right And It's definitely a be It's my fool a highly to you mind. very question. I've a mulled over good tell a I'd question I answer it's that in very Rich confident own asset at this and on you well. I know -- you each with very that say would merits opportunity I class its real and its own any true But think estate In particularities. now. Rich have look

what the look should at case cap property location lease particularities at rate be the quality what rate in look you X.XX% cap evaluate tenant right? X.XX%. look the in will would asset. as doing Palace Caesars management fact would got simply say love doing Flamingo credit. be in most that out otherwise we been Caesars other great believe cap that asset land lease really its And with at commercial the front those the the we the acres the about asset to Boulevard And American the strip X and about asset Strip. relation excited investor deck the underutilized or as estate So And X We any with be any it'd also ask other intersection I that the cap of new its have were that associated that okay it's credit absolutely it. the quality rate the end acres CPLV relation love what Vegas of are our would Las talk real the with We're being has you the We're an that to not Caesars very higher whether X terms but and would of the it. then we at only Bellagio in about in its would its you team what of very acres trading tenant known the you you excited

out love asset. yes it that just I'm going at. the leave hell We to So of

Rich Hightower

on the to said interesting a of here perspective actually as hear that's source there's couple other VICI moving REITs potential have get certain over you But it's as of on questions a asset and been too selling of you lot Is but about of and that. point? your not to horizon that the maybe today a asked. space time combining another kind about And that look two, get think parts that it's that at for about the opportunities a maybe of size follow-up of new equity on what recycling is in I and source question the they No as mean five think at four, as good. next I'll do and some -- as they deals lot a getting resides. private into you the assets players machine to that years equity as think think VICI market that over additional do possibility working three, a you are direction. what but

Edward Pitoniak

a be be would to given I it more be the is than in weren't It portfolio if estate might someone portfolio always to don't we Rich. asset should us. if managers very definitely we worth think else good real asking

over in our if did asset doing management So rigorous jobs of not portfolio we we that engage be kind would time not by asset.

the asset I liquid further will confidence. to evidence and it it with there the class and think an asset Rich that be be the can confidence give is participants point And your market further in values established assets a of maturation as of to will so market class that

Rich Hightower

thank you. Perfect,

Operator

comes question Rose last Citi. from your And from Smedes

open. is Your line

Michael Bilerman

But of have Michael cap to Ed bit your Hey, justify it in coming what Bilerman sort some estate. and rate also real don't of capital. Smedes. cost did with to well. rate of Blackstone if decline And about the paying commensurate you as It's your little sort own of cap they a compression wanted talk with leads certainly that of a comments value here opening in

create to be Your accretion. investment level same going are the to and spreads narrow won't of you able

makes one the get hand level own the it's cost to real capital? institutional accretion going aspect? to generate more if it your of how perhaps of sort But so also justifying the the think of of it And that And on do difficult you're same lift quality about guess not estate. same in I you

Edward Pitoniak

to case just strategic only we getting to we cost were assets that gaming week operators relationships Payne's But market advantage. the this glad at of which would tell. I and looking we're cases in that relationships assets Yes. sector on are some not I'll count It'll some be Michael made especially have No that as can we on market core. John to call. give marking if a you that really with that. will have lot And to that put us afford in bidding in the improvements about tremendous we -- to with forge again capital to will the go the have scripted may seen our go on the happen our will ability is we If the and have you to say bidding across I remarks you've time a would think it remarks to Michael. competitive this value back go advantage back and

shrewd prices. that at out. that We're to acquirers raised right of energetic could a play our that If continue question part the it hopeful can You've won't. on assets and confident we we're very demonstrate

Michael Bilerman

gives net traditional that you and about REITs. ones been able investing Their money advantages competitive of right? their that have added able I to bonus to? But those distinguish the that's relationships cost you been his look big that's get you net relationship-based cost your underlying when model think I so relative guess you of for and the then to John lease at value. you eventually just Payne an to money. When trade at where to premiums the we as the want themselves to mentioned have what And lease the And the companies

Edward Pitoniak

right. Yes you are absolutely

is it cost You think demonstration advantage. which of do capital to turn right. competitive process the this I are the of advantage iterative in improve absolutely competitive increases And where tends that

want patient. achieve guess is what dynamics want. virtuous we So be cycle And you choose to whichever again metaphor or we dynamics Michael I will flywheel

than valued the market valuing get our should not the we is skis at We higher will out not to try we should somehow order that to terms to demonstrate us paying paying be time. of what over in be in world

Michael Bilerman

You mentioned skis. Where terms now are right of of verticals gaming? in you outside other

Edward Pitoniak

means highly filters: look and facing place think secular which of it's to outside it what one That's many when through again sectors at really in the that investigating. the of it Relentlessly I principal box at is X key If and house. we cyclical that so Amazon put can right every And secular -- what interesting; threat we sector look look business is is now. place a a we're it energetically gaming in not it Is Michael is experienced that sector? a your to risk you vulnerable based if are will frankly we ship as sector

experience that an the returns. going poor forward. has be that for What characteristics. durable it vulnerable obviously the would offering excited lead going which and those there to to The for oversupply about sector end-user thus an estate sectors at the we're overinvestment economics is backward supply-demand of Is have durable to a which is to third likely number of is would then lead decades one we're is identifying And that heart poor a proven decades be to dynamics. and operator is real finally

Ski couple achieving sluggish may it surely have have of Some macro can things an very or macro of does against of a mentioned other demonstrating the competitive and the tremendous X are macro advantages past may trends otherwise among awful but create be because you decades trends. you them who effect. tremendous lot got they they're not not players backdrop very that an network through successful of value over

Michael Bilerman

that to a feel that it the potential there's recognize and business? for you secular gaming feel longer-term that that's And in don't gaming threat the but The right? hard more avenue. increases You to I [indiscernible] like don't online

Edward Pitoniak

exactly. yes Yes this XXXX. it's cost little been At be point gaming U.S. not online really And appear now to visitation. has active evidence very the does since in brick-and-mortar it there's that it

and those they that awful You case take go Hoboken is of facility. do house. to of house through the But think get sports the where so a to the large at brick-and-mortar there place train a lot human and the out Hoboken by including urge betting is the pretty least enduring in Jersey mobile reason But have examples surface get like casinos is can revenue path New one. people is we out of funneling to the an in activity who to bet. And the back

Michael Bilerman

separate time. appreciate Well I taking and the but than a to just that's train those your a VPN Hoboken private issue. rather Thanks. should people get

A - Pitoniak Edward

Michael. Thanks,

Operator

no the further I'll There turn call are over back presenters. the questions. to

Edward Pitoniak

ever we much very of than operator. the real you VICI about more at estate In Thank are institutionalization this asset closing excited class.

plans repeat significant slowing the evidenced by I year-to-date our in we in our and strides strategy no as activity make down. no of to executing continue We have

your Our time to and believe and results. positioned all. today. our superior you we our we continue report Thanks driving our to to again forward are continues update value. fourth continued and providing Thank We growth robust pipeline progress growing year-end we look when portfolio quarter for an be shareholder on well

Operator

conference gentlemen, participating. Thank call. and Ladies you concludes for this today’s

now You disconnect. may

VICI Properties (VICI) 1 Nov 192019 Q3 Earnings call transcript