VICI - Earnings call transcript Q1 2022

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Operator

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the VICI Properties First Quarter 2022 Earnings Conference Call. At this time, all participants are in listen-only mode. Please note that this conference call is being recorded today, May 5, 2022. the Properties. to turn Counsel Gallagher, now VICI of will call Samantha over General I

Samantha Gallagher

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

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

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

these call, in GAAP we evaluating the and During prepared in measures, results not XXXX our reconciliation the measures measures our of with comparable GAAP. most for quarter directly financial and performance. measure to These on our a A release or available believe operating be substitute useful will earnings should is accordance we as non-GAAP the website our information. in be first supplemental company's isolation can discuss certain considered which

and Officer; Officer; Ed measures with the Executive with of Hosting refer counterparties non-GAAP the tenants John Chief President open filings over have Danny Ed Payne, Wasserman, Operating Officer; respect call the and call of team Pitoniak, today, will to provide we With remarks, herein, and information to Financial public to to Chief Officer; will turn the we call Ed. Gabe I'll the Valoy, David opening Kieske, some For Finance. questions. company's additional that, please certain Chief described respective Chief then President and Accounting and/or Vice SEC.

Ed Pitoniak

Samantha, call you, Venetian, and the and Happy highest good estate. scale American acquisition just Cinco real last When one everyone. late earnings de we in our morning, had single Mayo. in our commercial assets The largest on Thank February, of of we held quality closed

today, XX real As speak highest story a of closed real Properties, estate of MGM transformation. our acquisition just American you one VICI's with largest and portfolios acquisition months we of on first we in have of we is story Growth announced since our the A Class quality estate the Venetian, MGP, scale last over investing. The of

geographic become the last further about talking believe we estate Las about portfolio, the current portfolio, the of have of over our leading to Payne and may offensive In the the let balance business sheet. economically a perspective is both diversity the period John proven model spend what's our economic transformation X will But our Kieske world, street transformed timely will from sheet. talk most the We tenant in the years moments uncertainty. defensive been about coming our importantly, over transformation We've the balance our of productive a character owner strip. few and David on of first a with scale transformation talk be me and you real our how also about quality and prove moment, and Vegas and very of what further our

and the VICI COVID-XX rent our VICI's of tenants' collected the business because because last liquidity X operating resiliency crisis and the cash COVID-XX models. of our of operating business proved the proved years, on model tenants. resiliency XXX% the Over COVID in of time our excellence of throughout

for in that may be our ability The operators' outlook year firmly believe economic thin. operate internal cycle X. cash NOI about opportunity coming are and for about markets based grow operating net for incremental and coming. continue high-yield to may or and invest or and we and doing be of but lease incrementally same-store source protection; including to VICI's based to return What when existing all investment-grade constricted Number ability on their our assets costly. the number on shown There whatever credit lease access escalation as the next to the asset CPI cycles, to three, their acquisitions to liquidity capability have intensity whatever the terms number in on four, retention; REIT X may one, period? key view prepared number growth may in see key processes thick five, a revenue, rent; X be it frequency and cost marketing regarding capability operators to we when two, ability Our models number through the growing be capabilities lessen; murky, as funding

And in three, areas: rent. me of for VICI's $XXX same-store point to during number in generates XXXX be investing property us available competitive the net inflation, a funding a each superiority one, net Venetian of showed Pro of net X than enclosed say in internal words lease having Street million earnings million annualization Green NOI NOI other versus in Let of advantage periods $XXX leases. same-store ratio between incrementally analysis that in debt VICI on few would a if times, higher for Point MGP, may payout expand leave forma rates and to VICI's growth. VICI's same-store our dividend XX% into these September more the and -- annually, between when and growth in the incremental about service, growth we capabilities market existing than factoring XX%, Point investment income owned sorry, NOI average. retained that higher number capability. return rates for two, Xx constricted. maintain CPI when lease terms in of higher number

net properties invest of That enable and Our land. acquisitions processes to marketing REITs assets measure, square average many not the average, number in lessen. feet stores of lease existing square whose land our million scale X/XXX on building over around asset to us four, Point on size acres when generally assets. feet, our ways in X.X sit of and available incrementally generally XX,XXX sourcing

us grow portfolio VICI heard business You've our relationships. before our and growing by at say that we our

period about high-yield five, non-gaming operate markets growth advantages give of in David, credit John? We that the existing initiatives. portfolio and to ability attractiveness our the we gaming may our years achieved stronger of are and new the for -- increase pursue and coming coming results investment call we turn high-yield early the competitiveness of gotten finance tighten. a advantages. has financial lease financing. relationships -- grade weeks be work our members of our will the to now and and talk net John, both moreover markets marketing upgrade. could bigger us who generate our up, challenging stronger. investments CMBS will We that VICI balance of Point and the to and experiential investment-grade and and and look that who operating I'll X at great to new outside As the capital are believe stages other we to over space ago. conditions with sheet just fund those processes, talk in white with about their who to during will Kieske, we believe To team, operators refinance confident REITs operators sum about growth with number in bigger as relative will S&P credit Fitch Ferreri their and/or Through Erin David period status businesses a accrue in

John Payne

Ed, to Thanks, everyone. good and morning

of for VICI. of XX,XXX our Class The The last completed portfolio. market-leading first space X Venetian A productive adding XX Ed food and In very beverage and rooms, we to months acquisition February, assets the were noted, on And Vegas with week, closed MGP convention of over outlets square transaction. X.X feet of Las million XXXX hotel as we just hundreds

a are As beginning cross-collateralized MGM we lease to something with cash of guarantee protection on the the to accomplished proud acquire where corporate our a a year the is XX flow structured Resorts having shareholders. inflation lease portfolio in team, very is MGP behalf master from management in and have opportunity

is plan best-in-class sector, roster our unmatched new net our XX tenant operators. in scope size, triple quality we with the portfolio continue base as asset well grow in Our as to and to asset and

Vegas in world. As you of some to productive XX% be Las streets at $XXX consumers remains Vegas that March Las one top has economically continues revenue to levels. know I'm XXXX XX% a that, approximately came and going destination alone may choice approximately by released, of most been levels. from million, above above Vegas recent data the Strip in the XXXX repeat Las the in Gaming in

convention with to business for to strong outlook as city. very the continues room Additionally, business normalize midweek is the revenue returning

its of be Las the the the to cited in On Vegas no rate with in quarter gambling, to first are the possibly City Vegas diversified to continues Side world. and just around centered destination tracking entertainment March and and both ADRs their levels. published business, sports, second call, is occupancy MGM but earnings XXXX longer Caesars by economy The have about that hotel Sell Las pointed above quarter U.S. prove that XX% room entertainment, XX% surveys top and

own and Las XX real trust to estate structure, investment Vegas triple-net are a owning the of a in we of XXX integrated are believers business world-class assets within excited decades As and to total resorts Strip. acres leasing incredibly Vegas and Las the come along now entertainment in big a for

greatly months in cliff results only the assets Downs, the you right continued the and operators, despite strength on and with March first made is X entertainment X the money casino in somehow Several shape general margins the consumer choosing amazing gaming April give many the also with options. wise, healthy, industry In quarter now. of have still reports missed are Boyd other and version. quite the In regional of conference earnings U.S. Churchill have to Caesars it is gambling healthy. extremely having Gaming, and including markets XXXX, of not I'll a the casino releases nutshell, case exaggerated. decline clear wealthy you that MGM regional spend they been casino calls note regional Our their have remained

continue opportunities for think about in transactions what the we and net compelling we industry, will that relentlessly As some VICI, we and to have accretive of for execute complex executed our are largest most fortunate value the deliver shareholders. comes lease working next to

over I our our David, Now call the guidance. who balance sheet our will financial and discuss will to David? turn results,

David Kieske

VICI beginning I'll we in our with the since At XXXX, John. balance energy the start to sheet transforming encapsulates October emerged Thanks, brought sheet. balance our of XXXX. have

equity credit shares time revolving our believe a well balance have and capital equity We Venetian new we we credit all a company. XXXX, balance of with MGP on with of structure of in On to years. actions relentless billion. of Not ahead sheet On have the equity spend closed of years allowed for the We our to forwards, safeguard of XXXX safety we is and derisk take We view These the of and much X The onto and $X.X loan, the of February you provide $X up and February X, a $XX but our of September. billion it funding ensure protection proceeds the These all on offerings closing unsecured to highly total billion draw debt approximately X.X XX, us is of the come. the discussed closed $X after success too and last total for how liquidity million increasing that raised our the billion secured designed on billion bank to billion outstanding of good announcement set shortly repay acquisition announced the and cycles combined facility focus efficient us our through settlement the on early $X.X capital. equity of bringing XXX sheet delayed over we this term time weather announcement to the last to acquisition transaction. acquisitions for partners Venetian overall deserve. -- at important to long-term reminder $X.X

unsecured largest of investment-grade of debt amount X%. blended swaps XX, greatly account cash fund to in Venetian. Fitch, on hand was interest forward rating XX, interest cash starting used We units. capital. offering. revolver, we a proceeds which access after offering hedge executing was offering upgraded and permanent also April On broadening closed On unsecured effective on well drew billion rate locks The as in notional senior bond bond billion debt amount the and $XXX priced on of and majority on senior fund of to used notes $X.X April notional our to BBB- into million for to our by the investment-grade taking of We rate XX, The $X VICI's of the redemption $X REIT ever. On billion comprised our was April The treasury bond a $X.XXX we our MGM's notes, of OP the portfolio, million $XXX acquisition X.XX%. of MGP MGP billion is as S&P

Following repay stock used of and in remaining the revolving VICI's bond has credit to cash approximately that common million plus the outstanding XXX from were shares OP $XXX were under offering by MGP acquisition, hand the outstanding additional facility. has proceeds held million units VICI XX.X company The received MGM million OP the merger. the outstanding on

sheet fact debt of acquisition, positioning and significantly associated to balance EBITDA raise transaction. the the that to incremental bringing sheet debt the our In of the ended funding balance the MGP X.Xx. terms highlights of leverage, we net XXXX with income the This adjusted complete ahead over-equitized closing that to on with the of we QX

As inclusive a our of to run we we the -- pro pro rate our of rata rate, the have debt a transaction, BREIT approximately net adjusted on MGP today, X.Xx. debt for to EBITDA sit $XX.X net JV total of EBITDA debt forma is me, on excuse debt adjusted billion, share run here

account We X.X X.XX%, a taking a and interest have hedge average rate to average of portfolio maturity. weighted into years weighted our

growth for to Total the in or and increase growth $XXX.X year. while an X.X% quarter The approximately share QX AFFO increased our per the income AFFO in was million share. XXXX Just overall touching over per year-over-year, on $X.XX share increased is between XX.X% the AFFO statement. share prior first disparity due AFFO count. AFFO per

added last count weight XXXX agreement of in September the February agreements September, and million million June forward XXXX, shares and Our our added XX.X% shares the increased equity million XX diluted XXXX March settlement sheet September as regular sale of which sheet. approximately the balance which primarily XXX shares balance our sheet, our of a sale balance fully the share portion to XX.X of the settlement to to of result added offering, the X which

continue high XX% highly in eliminating our revenue a model run the strong highlight again in as once of EBITDA increase in results and items. efficient increase corresponding our net triple Our significant proportion adjusted noncash margins given when to the the range

year quarter G&A ratios as lowest and percentage was the $X.X and a was in total one line Our triple for revenues the in X.X%, of million net only expectations with our the sector. of full

Turning to guidance.

our We as as are updating a on XXXX AFFO both share well absolute basis. dollars in guidance per for

accuracy. we nonrecurring our results recorded quarterly acquisitions reminder, as or CECL due future a Accordingly, our on in measuring and to we charge AFFO include represents capital unpredictability not productivity FFO the dispositions, ability does and to And of transactions. financial equity with believe impact and a unable on our our activities basis, operating best evaluating possible income performance we As the AFFO focused forecast any as the pay inherent way past, to of or dividends. other guidance markets which guidance leaves net its have the discussed investments from us is noncash

we Our executed of end. issuance and offering the stock bond of guidance quarter including shares former subsequent incorporates common to the $X closed billion recently XXX.X MGP the MGP to stockholders acquisition, million

XX, please the will we $X.XX $X.XX you expect between With We for line that, the share. diluted December $X.XX ask and year billion for XXXX AFFO open ending or $X.XX billion up and per to questions. between be operator,

Operator

from question first from our Anthony And Instructions]. JPMorgan. Paolone comes [Operator

Anthony Paolone

that and to you is, just recently. you've question growth future looking on thoughts? having are organizing that, have all done past everything My all Has and just conversations it first you getting the guys gotten Congratulations has what profile everything you're just and done stuff done how given increased of on and sort all that discussions your opportunities? it at? you're expanded And the those

Ed Pitoniak

start? John, want to you

John Payne

when Sure. the changed as the company started hear in the we doubt, There's company bit nice and Tony, to always quite we've Well, XXXX from Tony, no you. it's a for a due from folks back size, of thanks that comments, has were magnitude we started and scale, the just think who got company, and I doing. of we assets, attention that we did know were not what to scope, when exactly it

as as is There funnel the So definitely wide for ever it's us. been numerous opportunities. are

talk estate. space. don't we've markets we You've real are done heard own then opportunities, companies about, we lot to that noticed us a estate the obviously, more continue have we'll gaming want to there real in what And experiential in own or pursue of where

talk and with. about experiential we've and David investments Danny, and been real of outside myself, and Ed making gaming contact others in heard in You've estate

we And ownership. we Ed so as build hope real build relationships, in into relationships his that and turn estate comments, we

We're are of into meeting, it we'll about but organizing, right that And we magnitude us. feel all we now, so plays we're And of good see that doing we're traveling. we our opportunities Tony. front the really in see growth, how

Ed Pitoniak

I'll to add Tony, just that.

Las like is are National we very, New think people out, call. when question about Vegas, is Mandalay as points owning Harbor, like that who that no And status every truism helpful, giving And increases that X.X I owning in years got of there or that think are well marquee sort category across it because there you're a in benefits we going John Grand, within in very like known whatever when known like top-of-mind a ago. to were and visibility. Orleans, us Caesars assets like well estate MGM are The we they'll fairly teaming whatever invisible Palace your asset Caesars assets Venetian, real visibility class greater category Bay,

Anthony Paolone

Got it.

maybe rate project And opportunities about asset about just investments? you including volatility hearing of Okay. around to the does a more Mirage. anything of base, in or like some win that? in day timing talk like the change also, the prospects things the there on ground thinking Or to the do environment Can or kind macro the trends And now? the then reinvest those and the for with regards right

Ed Pitoniak

to want you half do can Tony's question David, of second then with the answering start and John add.

David Kieske

we're Fed Sure. -- what to of We right? ago execute. the able to We brings execute offering yesterday. -- fortunate were volatility a get with off new trends, bond the cognizant very weeks we just of and our something couple speak were macro day Every look,

what to talking going to So returns. is magnificent delivers that's able property assets nothing on scale out other our we're these ultimately that work here, I accretive being about And size, ensure loan we're growth to that partner -- invest touched there. of and that complexity rivals in

that make an we to incremental the sure generates capital will We deployed that's accretive that return us.

John Payne

the the team Rock in are licensing our They're pertains it Tony, Hard As through partners and in Nevada. asset. amazing them to going Mirage, developers And state Cincinnati the process we the operators. of obviously with already is

we're and the they go And excited no they so timing yet need of Vegas. with that Rock the for through as have to the But are planned to going process. redevelopment what Hard Mirage Las

Ed Pitoniak

that money, about add I And are just partners more that humble your we years, to I money admitting. want in we're VICI. by is be And cheaper one we oh, than would can very Tony, early borrow thing. -- the told often often that,

simply of capital of before of grown is we the of both learning are cost before credit cost our of cost versus widening cost their their and our already experiential their accounting we've multiple our attractive. many non-gaming, blended And saw to capital cost both recent the day their that and for only debt, of even the saw of gaming helping the And attractive operators cost of in very but across and we understand on debt recent should compared We to couple really not spreads of capital and the cost be of last contraction story is late their more equity. It's months. the the focused how it of better. capital, every blended to tell people what

Anthony Paolone

more and thinking just then related your is And to as guess, growth? very Like what somewhat Okay. one preference you contractual I or think about right you thought quick, What's or Like about now yields that? Or protection last that. do upfront the process more you do of there? how inflation for solving want an yield? the IRR? balance you Or think are

Ed Pitoniak

David, want take do that? you to

David Kieske

basis deal are ultimately, mean, I VICI. started net ultimately, capital capital. more we we're XXX points, for Tony, were But relevant our when XXX lease cost of CPI our is strive Obviously, company like an cost sometimes Yes. today delivering discussions different. inflation is we less, than spread to solving attractive a what spread for. and And to more as they a every basis of sometimes points,

shareholders. over returns also underwriting accretive cash-on-cash that a our We look at and deals the are of to time delivering period ensure terms to of IRR in we incremental our

Operator

comes Allaway from from next question Green Our Spenser Street.

Spenser Allaway

going back minute. for Maybe to a external just growth

there Just think in in execution? and agreements to these? with you put-call the other for place attractiveness on discussion about do regards the have any been has relative And ROFRs how operators, those you eligible of

Ed Pitoniak

John?

John Payne

Yes, Spenser.

he to -- to you Caesars, you're assume on referring the of 'XX. sales the the Las process CEO during another agreement ROFR. there call expects by earnings just Reeg, middle of clear I'll which VICI the ROFRs, the on, pertains governed summer, you has documents. I started refer early by the very Caesars update who and really is was to said, to it in as what the the going be process look, his Vegas Tom As is He

we that is with in them. that the as Strip as also -- is And We're XXX a aware make incredible. process have Vegas, remarks, about we said truly those which works. my land. as XXX own on in acres great Las assets agreements vacant in It sit on have market well The up so do assets I that we opening the of XX Today, is

is really amazing, greatest business gaming campaign their the says stated, is it XX% new simply and ad As I as up when arena on you revenues have earth.

continue estate? additional are in we it to to If needs want to And big accretive a come market is of. so own manner. And we a us very real we our continue fans we'll to study. that to Do that on follow process that. do, We'll

Spenser Allaway

you color. Vegas obviously, operating Vegas but And just have if That's of margins guys operators, know conversations how with the the a just curious been and/or up with in Okay. gained inflation mentioned, held strong, have sense great you regional I pressure? revenue has

John Payne

good released many I a not have not friendly just that percentage margin us, -- margin dollars paid and their question, points. Yes. earnings. reminder rent for necessarily is another It's with

So, more came almost if you one which take in tenants, million with like company our $XX of dollars a year-over-year margin Penn, generated just the earnings out. that

the when to compare So continue businesses businesses other be United strong, the to you it incredibly especially around States.

be couldn't we So happier.

up. in importantly, are As comments their our are their record they've their how Most Ed about his are how up. EBITDA. said seeing tenants, margin dollars adjusted margins business, Many

I think in announced that properties Q run XX all-time set EBITDA. Caesars records

exciting go issues well. perform and I could they Spenser, are very -- to about with our continuing the bit. to see about even on It's going on So that tenant's the macro on,

Ed Pitoniak

obviously, possibly important more inflation, I Spenser versus enjoy the it's But VICI, Spenser with -- key want everyone CPI reprice. the all back continue -- that to ensuring on tenants business to I factor and triple think point, focus that understands our and nets. protection business ability I to like to respect to I just to given that going just to to say top ability are in leases can that what hourly other pertains to superior a in nightly add John's point note the they sure I of lease the make inflation. all add that And respect reprice in constantly think going to to our is even rightly that, constantly produce based they margin in dollars also John we, that, said, is in in one was produce answer point some want their to of demand I'd and leases, One on nightly their leases, on cases,

Operator

Instructions]. [Operator

from Rose from comes Citi. Smedes question next Our

Smedes Rose

cap potential wanted I any ask but little point at seeing real kind transaction are of institutionalization with a the that of of estate capital, at opportunities, sort this cost weighing the look change is Or against as bit of trends in to you rates potential see rising just too it meaningful kind to you you improving and any this operating that out? continued pointed of soon changes? space just

Ed Pitoniak

potential fortunate I do accordingly. both sellers of where to right we're going of tend will probably up And future a and axiomatic take availability so these rates Yes. But very to takes so market, of tide of question, for for we to it over cycles have goes the would pretty it capital carry or that will when of capital. where we'll can time hesitation recalibrate. are go availability sellers very reality I this right? well, guess you be to of really on I buyers, in would enter the It's usually I've period recognize the part rare in credit there's than seen change a a does old, the slack think be experience, now, good it longer of it pays very, the buyers probably actually somewhat a situation what the and -- a cost on them buyers our as is us see have that momentum this a number regarding have We cost to past partners we bit hesitancy what occasions as equity up, that when years some get discussions a the period timely many equilibrium, is -- some when it's right? In of and/or so cost the of think of Smedes. is my of in to a and one the it go cap the re-find up, capital and sellers down, that but up sorry, goes if and It cost time goes take to and tightening,

rate of on or long. -- to it cap rates gaming, the a it where you up stops, more in less given is somewhat expansion this may in see even a be a the of because Smedes, category year interest stasis seeing to as so has or velocity compression that category cap X. sorry cap may slows Now or you over we've seen last perhaps end a been In maybe saying, category go but increasing the as adding compression, rate the were won't

Smedes Rose

I sounds however so, still lining I interesting. That's on But go you just Do wondering, transcript switch Vegas. to gears, thoughts I'm business the have Great. any just year think switch wanted customer very it? strong the or in or like leisure convention next guess, operators. Las is through John, the is of again, over up how it about the and you

John Payne

heard based The we mean they are heard, later and Venetian as there return in them have Caesars, properties in Smedes what convention MGM running this the in who was XXXX. business what that haven't now another Vegas assets yet the largest seeing but of revenue. that year I earnings on in quoting thing Vegas run revenue, quoted April gaming Caesars month record in is we've strong, to had their their their said I room business say I the planning you've Las Yes. very Las earnings, and

getting place in amazing a where they're pretty strong revenue. gaming that's also So

And room diversified travel. revenues, revenue, dollars, And they're I've revenue. destination #X be, getting running seeing customer that pool facilities. And importantly they're the one they're can getting that the argued beauty wants not and substitute getting entertainment goes the credit is found resorts. integrated how now. they a my resorts, you world the our continues the spa to food They're tenants, for I America. colleagues, again, these the has Vegas gamble, to the beverage number most operators it's these only destination to see in consumer, our the of it's with So for mean, revenue, all their and and right coming but these not consumer who in business we're simply

Operator

comes from next Jonas from Securities. Truist question Barry Our

Barry Jonas

scale to and the Given VICI how strategy minimum at size your many all? or of date, perhaps change requirements

Ed Pitoniak

go which I below gotten would underlie And VICI net sort not. of triple a that over a store say I net terms size as $XXX,XXX rent given The question, REIT, do produces of million. line guess VICI year might And your Again, I NOI. triple that's up generally red answer we so no. a think per at will establish not the we $XX about is if in big, asset what average asset enjoy rent. or has

We will but or itself, a larger unto whom operator sale leaseback currently a of asset. own of with whomever may really and the part partner asset asset that we as in the relationship acquisition a want given with evaluate either materiality an that always not of

of So believe given develop deal category we more a or sustainable on we'll will be how And flow. growth that's individual long-term of much partnership on business opportunity we more a would focused than over we or potential model sustained and assets. time, the

Barry Jonas

wider are operators That's And to Great. as what to question, are deals? a holdco extent deals? with of REITs just looking you helpful. there you Great. seeing group gaming competing And maybe follow-up a really do at now then out looking

Ed Pitoniak

to that? want you take David,

John Payne

the to space. knew we've people space. the company, the and ahead jump this Clearly, have the that Realty in. and there I'll us, ever all They've quality about today. ever, casino shutdown transaction for seen be assets. in high we always in mean, time the business COVID going go seen rebounding been resiliency which Wind of the I obviously, records with how talking was toughest we Boston the in the I've of But with it's Income was competition performed started into They've the with model. since getting seen the seen

potential attracted of estate the obviously holdco of So owners that more or real has mentioned. you as the

that that go estate all there are are going So we are every just to competition. more And not into incredible be in there's expecting at folks transaction, space. this real we that interested surprised

Operator

Jay from comes from question SMBC. next Kornreich Our

Jay Kornreich

Thanks MGP everything else. and getting done again for

interest you in and can are pressure you what think coverage, expressing Just rates was interest you may cap kind previously walk about more opportunities through kickers in to inflation, as be there takes us putting to the items rates, that going on rent back puts rate, how rates, and rising leads of what cap like potentially new structuring aggressive? get for of such the question CPI different a but

Ed Pitoniak

want take that? you to do David,

David Kieske

and Yes. -- one size thanks is not the little for I deal fits bit all. a Jay, as mentioned not I earlier, unique mean each question. every

in turn is and up You some what any REITs right? accretive we underwrite X us a hotel last saw or is ultimately to did. under ever transaction if going can't ever X they're deal do our did day into that X the And So would for that that, then and our announce last cap we structure. it or X that an yield. we and X, critical announced probably day that that We is sign ultimately be

that hot for we're the work are: back for So to for to that annual ultimately pushing Vegas us then work that obviously, very and operator. regional, that in, little bit. operators whether bumps super the these escalators one that's and important And regional, push caps and destination for reasonable are are topic for want but CPI the no a we market us a is it's have days, CPI on

And that goal that the conviction in to sure underwriting make day to pay. -- up is we cap duration sure we of with always credit because from we sign into strong XX X value, terms live that a that accretive underwrite that we coming strong our we that rate has with fundamental plus. of There's few we to that obviously, is years market. make -- we so levers want for But operator lease it's the a can are and negotiation a a what

Ed Pitoniak

of be, rent economics, at willing because in the very the be they for they believe that will long Jay, that come. I Board shared is will members, our bit possible. and want and to gentleman, of lower as to that. be important as possible us he a of rent as better the that more with of occupy low We rent we will business the as absolutely many know, very, successful will they the the adages credit the of most just in to And valuable percentage economics regard the the be first who you wisdom able one building a time add of Macnab, the tenant's one should and their Craig low more our a to as be

Jay Kornreich

mean I absolutely. grade comes about as the which may that investment Yes, the with for sense. certainly, of previously then and of benefits the a up a lot opportunities. to it, landlord. cost lower portions the makes spoke of door And guess open becoming of accrued the the follow-up, capital That just more non-gaming I we tenant

about curious now this you're at the about time that status. thinking just you've So achieved investment-grade that how

Ed Pitoniak

David?

David Kieske

X. Yes, tenants, about we We'll to Jay. curve thrilled to the mean Xx our continue very diversify we're continue migrate to, debt over focused to marketing we'll and up talked I time. back Thanks Thanks end to day BBB roadshow upgrade and was Erin her April we're from the able broaden we're definitely But work to agencies, question to spread rating the that day, with another to with Ferreri team. her the that be the leverage debt on here, X.Xx the bring our always on -- work the investing. XX. that we've and does continue get on Erin's to earlier. process, great of that great funnel At asked and the as as we'll been

the we reduced. index credit obviously, So XXX and of to cost has to Class continue shareholders and can with potentially through broaden both only VICI that to so gaming. shareholders cost you -- as our lower occurred to being the and of we converted said, -- the that day in S&P MGP our the curve, diversify up of one and as And of capital frankly, to lower A continue if can the and can Class not be markets outside capital then equity then VICI migrate Jay, inclusion with inclusion, capital, we debt cost funnel

Operator

comes Katz from question from next David Jefferies. Our

David Katz

just or may by of kind to that. it pursue, the phase, come And acquisitions trend year? internal be characterizing talk from I I'm thinking wanted flow a should of we that something or if sources about about right, some that? cash the where of this you next the How accretion -- big is that and of capital is internal that comes out funded

Ed Pitoniak

David, do And… want you to start?

David Kieske

million talked and to rate. cash cash $XXX and flow after free Ed about As dividends mentioned, that's somewhere we've $XXX flow free is run million our true of

kind So X:X think of levering buying you to of power. up $X that billion about

we hand. And June in so like small announced be Century done million deals deal that on 'XX, gaming cash with of that $XXX can the

the to accretion that straight dropped all so bottom line. And

by non-gaming And some front the in the opportunities see stuff were time. you us do of that presented the obviously that us at smaller is of just

see thrilled of have go And to -- cash and do markets $X.X did so equity billion year last flow. that that's we we the those have transformations what for the We're don't to We equity free raise to and that undertook. wouldn't grow, going I to we answers sustained back. and them, David. we Ed question, flow as more continue business and you'll Hopefully of looking done your that said, as sustainable forward. as that's know But think

Ed Pitoniak

just.... I would Katz, David

David Katz

ahead. Just go a please follow --

Ed Pitoniak

Katz, to add I going David look a capital at that as Yes, when cash we was just retained source.

money are we're cash obligation the and raising spread a to as be the We return is investment market if would is of out very cognizant that going as into shareholders' produce it bit that strong equity. use on our the and superior every

David Katz

if can And Right. just follow I up. --

a XX there last these of months-ish? I opportunities of happening is, think you some question landscape my the next is of kinds part that see could

Ed Pitoniak

confident of we Yes. that. very Are we're not? John, I'd say,

John Payne

are. We

at transaction as I reasons as you -- transaction, seriousness, heard tell as are. funnel numerous for say, can't when you I But been ever about that next all next Obviously, wider will be. talked tell our we're it's -- our Sam's me we've We when David our we you've in The smiling size, can't been. busy we're that earlier our me is scope. than ever of --

And within or think that's so I the realistic so. very year next

Operator

from question Our Greg next Scotiabank. from comes McGinniss

Greg McGinniss

billion us valuation, last and that by There's information So also have being interested which the not questions. marketed -- investors been it some marketed to $X leads X Caesars. night Flamingo plus currently The the at is

kind for leverage target then limits desire what investment is widely accretion? imposed, marketed, the is I the of your initial price. for an And rate you first of fact they property and capital that mean passed cost more size, The two, you that would on also immediate being given cap

Ed Pitoniak

on and you Greg Well, far not we the talk that definitely for call. been to and to get at good the asking always will least answer so questions this you, award can

the saying know, on we job record Tom other and describing I what we was a of I just day, I it Reeg think John, think there. John -- did leave don't good

John Payne

more. agree Couldn't

Greg McGinniss

my Well, follow-up. second shot as I a figured, there. I shoot But had to maybe

Ed Pitoniak

do. for Full absolutely marks You asking.

Greg McGinniss

So separately then.

to on for just you current can the being us indication guidance remainder -- what's as the some the based for assuming numbers, of year? So inflation give escalators

Ed Pitoniak

David?

David Kieske

unannounced the David. not to base it’s guidance or this, dispositions acquisitions including capital Similar but activities, escalators. or markets includes Greg, Hey, case

Greg McGinniss

should So could does or CPI of in Or mean we where that think be X%? greater how about X% that? assuming it

David Kieske

so be can't include around else. doing guessing we CPI any we game, the could, that's and predict something probably a because If doesn't It we'd CPI, estimates future.

rate number. the the guidance the So in in that's base leases

Greg McGinniss

Okay. And CPI numbers... the

Ed Pitoniak

going Greg half the period say, And it, the CPI just comes second in Greg, that about the to David? us for of measurement the for early way isn't was key I -- right to think then year,

David Kieske

Yes.

to we For in X. prior July gets at that August and that's compare the and November, November what the September, then factored the numbers bump year, increase look and into

Caesars Caesars Las the Vegas X master lease For lease. the leases, and Caesars the

Operator

Massocca Tallman. John Instructions]. [Operator question And from next our comes Ladenburg from

John Massocca

Las in them. front? of landholdings How of have thinking kind remind those would for a us land on component redevelopment are maybe of prints maybe about some or So or if arose assets monetizing turning more of prices that that on And stories can new development, what you them kind the given the of seen Vegas kind Las even either be process Vegas? or you we've your into opportunities to

Ed Pitoniak

John to take that? want you and perhaps Samantha,

John Payne

Yes.

Las we some XX acres. Those the own. also Caesars incremental are Vegas are Just really to inside that Caesars and as that next reminder, Palace. then XX owns have in master lease, in Vegas of that our X acres -- a are underdeveloped, XX an sits Las we acreage acres there front

or do you would Vegas Strip. Flamingo, would as there our coming in continues front the the that are there we like pertains Bally's. sales and mentioned, the as you It an you of Palace We process As Las should is real alluding completely well behind in significant they been Strip true. them that on partnership develop sure the the particularly near on as Caesars some be can we Caesars to And be The imagine, development. land, if with are land prices you very work and are to it have work behind appropriate or acreage as -- valuable. out, the as land Las development, of were Vegas to estate if make Paris But with to would

that I think acre. one acreage place, just there million small was $XX of took an almost over

see of success you about to into of not EBITDA So this surprising opening the turned when we're incredible statistics. that. generation. And the that in remarks it's operators them excited city resorts heard through and my went the places and I have these how

John Massocca

set about either helpful. in And private traded REITs Okay. any out casino debt seen competitive that I in terms of some the you players maybe there then be bit are that marketplace. would investors all? given not you has little moves in talked of Any the the at public set, mean, Have publicly a of the change kind there, in some or capital. competitive real color of in changed of estate cost

Ed Pitoniak

Yes.

to as like credit net generally. and names as lease lease other and and PE net firms coming seen are Aries are institutional the KKR how new Carlyle there's into on space. the in there's you firms And article So One of X have John, increasing generally. lease I think, of non-traded interest yesterday publicly forms obviously then the that the is and which And been interesting estate. actually too, who going estate would to on. real important point net I or lease-focused of you're actually from most firms think equity increased I'm losing gaming REITs believe, the what is focusing net suggesting to within compelling there that -- recognize, is, there. on there on one exactly we private that it's say, triple real lease, And gaming is, saying, in read PERE is an Any of publication interest net things focusing

estate. incredible is generally net the the attractiveness yet increased point of gaming superiority absolute lease model I key interest because think of real the of and that both the

John Massocca

beginning this. away seen capital at some that kind because, debt that given maybe gravitate short the I But their rate change I cost towards frankly, term, interest the moves of of to financing seen guess demand institutional over the gone since what you've Has all? understand of we've term, year, of fade long had has up? has

Ed Pitoniak

the that may Yes. degree the a the because, as your back John, gave I think probably tide lot and there sitting but which there of the to bit. gold is gone quite rush away slack to example, it might not because ago, up people bit as awful X now Again, point, not a to And there answer dry be powder. CMBS I to an Smedes, has of months goes market an right has have quite are fever a these it been on tightened is

Operator

final our remarks. pass back And like concludes to session. I'd Pitoniak, This Ed to now CEO, Q&A for any over

Ed Pitoniak

is your you, we this this you your scale morning, operator. portfolio for It is of support, and quality time are. closing, given especially week with reporting you magnitude. sector. how of leading in busy VICI In Thank one the become insane going thank and all earnings how has America's in on us much in REIT REITs With economic

for our results. hard now. continue we for work forward again day. Bye report look you when second will connecting We to quarter We to every

Operator

Thank you, call. joining everybody, for today's

may You lines. your disconnect now

VICI Properties (VICI) 5 May 222022 Q1 Earnings call transcript