- Earnings call transcript Q3 2022

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Operator

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the VICI Properties Third Quarter 2022 Earnings Conference Call. [Operator Instructions] Please note that this conference call is being recorded today, October 28, 2022. I will now turn the call over to Samantha Gallagher, General Counsel with VICI Properties.

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.vicipropertys.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

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

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

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

Ed Pitoniak

good Samantha morning everyone. you, and Thank

revenue activities that I activation. and create we I of that quarter The by in in impact realized the increase XX% QX VICI, included and in since realized X.X% annual The the of per benefits a incremental full year-over-year; our in manifesting emergence dividend compound realization growth versus realization, third especially in AFFO XXXX quarter we By our of both X.X% growing allocation QX of Venetian full growing key in activation, and of mean by XXXX. our to same VICI XXXX. giving capital for continuing growing XXX% for our XXXX of year-over-year; the opportunities a X.X%, XXXX, quarter our non-gaming. acquisitions And by AFFO MGP; share October a rate impact the continue magnitude was VICI mean dividend announcing by growth of XXXX,

QX activities Great experiential our financings Resorts; with in million announcing operating $XXX and high-quality in our Our invested XXXX, million a real with in have of $XXX.X acquisition million announcing announcing additional partnership early an financing high-quality $XXX segments. within Canyon of relationships Ranch. QX we Gap partnership key with partners growth In included Rocky Wolf Resort; estate Casino

to just deployed are this as approximately going-in I investment $XXX our mentioned, the XXXX plus announced of nearly capital year-to-date Our ones capital million in of time. X.X%, generate unlevered allocation average June expected investment on commitments, is Cabot yield weighted a over

creates week. growth over apex and in a many devoted. to purest golf these are moat we category’s most will we in activities able When of who golf. qualities cycles Before great Ranch, believe, are expertise accumulation the with that words about of want knowledge strong clientele, that about rarest real we that At with to which realization and our as partnership is parameatal and represent announced to to resorts and and new willing pyramids pay new say the those loyal David at we We and elements valuable call are I premium within Golf through talk places. places pilgrimage just the back realizations category, especially estate call partnership one. experience. in about investors, Kieske, experiences, categories, I tend Payne of what and the Canyon for of last experiential you financial the These the announced are our Pilgrim’s June, are experience to of turn belief thesis in few experiences in heard with John Cabot results, our and/or me attract experiential the talk simple, these which of shape. power our powerful they to outlook, our value. Places are want VICI, we and all Cabot of operates a experiences investing that a purest pilgrimage And

that believe for partner excited note in been, the Farms. Cabot destination we Cabot. We It Canyon wellness Ranch Cabot to place with will be to a of this is, on with decades well category destination come, leader, It’s and creating week. Las the experiential is is people and on pilgrimage we subsequent market opportunities was busiest earth. on resort are partner XXXX. of a just Of and born operating Vegas definition personal there seeking of pilgrimage Apex experiences wellness. I can Canyon represents also Ranch proud for experiences and I an brand many kinds. and was creation performance, the our next us pilgrimage the In the as of has Citrus believe Strip all The

mind performance of former traveled way Goff, Canyon now, improvements lifestyle former and an Research the that humid a and Estate includes at Under through investment Kuster, For important betterment make, American Ranch Ranch make coach renowned team, Innovation CEO, the themselves Resorts a a This is of Therapy a a Canyon Ranch body, of John creation example, former team can investing has great The nationally Philadelphia Chairman Canyon a they in team with authority. and Ralph experiences spirit. Medicine Canyon for behavioral the Soccer American a clientele clientele, of owner, order physicians team; wellness School an spiritual Crescent investment premium Surgeon Ranch the fields; Head in and for Canyon U.S. their real of to and of the themselves, medicine Chef Ranch at the by this lives, in U.S. formerly nearly years trust Committee; Real legend innovator. The Head Olympic to clientele existential investment a Principal Jeff Physical most takes at Canyon XX to Divinity therapists; and Women’s Lauren. pioneered seriousness. all Sports strength trust cyclicals estate the willing integrated strength obtain make to has appointed XXers; team Canyon Committee; General, to and and leadership Ranch’s and active Canyon they North with National U.S. former able Head through Ranch his built the and and former of U.S. Ranch. Dietitian have the life Harvard who Olympic for pay the in

can for resorts, are in and opportunities capital economic productive model, revenue demographic beach sorts. and Canyon we have dollar in tailwinds. to benefit will growth my many that on the for Canyon manifold you most Canyon cultural domestically The come ski Canyon and have returns among excited compelling in from and capital I very Ranch, tell be funding on the positive margins experience intensity we ski decades capital. As partner resorts this is the you, resorts, worked Ranch’s are I growth. both invested, operating and and across I now believe internationally golf invested and based to resorts, Ranch seen greatly know, highly Ranch heli per of casino capital of

playing speak You Ranch’s role can he Canyon VICI sees hear John the Goff in growth. of

segment Money on Mad Jim found John that clip at XX. www.viciproperties.com. the website, watch with October you Cramer did be and I can That our If

with estate Finally, ultimately of future, in into dynamic to are opportunity us invest least Austin, excited invest areas, for most in at enables one that, the to us through we the about cannot own America’s first a it Ranch, we because investment region Canyon real high-quality Texas, gaming. capital particularly and gives metropolitan our foreseeable

over me who and to our John growth the call Payne, outlook will activities. now talk about John? turn Let

John Payne

morning, It’s good Good to to Ed. be Thanks, everyone. morning. talking you this

Rocky increase acquisition cap the announced of the with During in tenant, Century Gap acquisition million, Resort a with under Casino existing Century representing quarter, closing, Upon our master rent third X.X% by $XX.X rate. our partnership we Casinos. lease will

all Century, being combined Golden of cost Given to asset. master work VICI, and seller we structure transaction that Entertainment, involved, able and were our three lease the existing our of the with parties our leverage a to capital that Century for relationship

acquired of relationship And portfolio. operating our as firsthand their asset expanding look in regional three focus about XXXX. another assets we Rocky we Gap, We since adding are excited have to closing the witnessed our destination Century remarkable to regional jointly forward we relentless with upon

outlook busy team partners we I that something a quarter, on together introduced of is Moving and the and scenes. able just the come forging and time. will say, relationships touched transactions our undertake would point to in behind Great to effort for often our repeat are sectors. potential ever out discuss asked I transactions Cabot the how Ranch our variety Canyon represent not that a Wolf, environment growth, are the appears the real partnerships the Throughout we we today transaction to overnight. which fraction third of often I company in as simply do Ed as across remained

entire the operators. capital our as choice position fact, ways and in involved to gaming In is partner company actively finding of VICI experiential for

to can at As any fluctuations capital you time. make cost market given imagine, capital our pinpoint of challenging exact it can

strive can ties. in to for discipline to every thanks remaining With do landscape to for we encourage we control, our we success, underwriting, transaction transaction our work ultimately remains tenants is which remain our one, zero-sum. win not underwriting that However, can VICI, is existing to it’s the competitive is disciplined and we focus accretion and said, stress PropCo finding of speak understand on The to landscape time. transactions necessarily and competitive. can potential real team, partners to own important We to approach. position I core in our adjust And at Two, ourselves the what our seller that partnership create rigorous that and process. believe expectations ways the believe third, not we for

believe can uncover We be our not to have scenarios a to adapt of may that obvious competitors. to we learned variety opportunities and

to believe for Just create our ago, a track the wholeheartedly we focus shareholders. billion since the record, started we We to of relentless value our over speaks transaction, long-term company. that which $XX includes and crossed our few weeks mark X-year dedication

grow the to to for We accretively our adhere will to-date continue for will that to years company approach responsible is to strive success and come. the

Now, and I who turn will discuss the over financial call our to capital. David? David, will to results access

David Kieske

John. Thanks,

are and not clearly seen are a and where market market rates the ongoing have but macro backdrop in news, to volatile many rising inflation not buyers also factoring financial adjust dominating we into only the We years. requiring to environment in a sellers transaction interest

X cost of capital. John October And our As maintaining old disciplined been since spread have in X. on turned mentioned, VICI our a we positive years inception, to

the focused we So in VICI in on where their environment X%, everything have is never north younger XX-year treasury of even many that discipline rate seen a is in investors rate maintaining pursue. an lifetime,

to until that XXXX turbulent like Century, since Great times and did built floating no a balance capital sheet with and to the weather We maturities quarter. leading liquidity debt, these we rate with are second accretively Wolf with Ranch ample Canyon operators we have no deploy fortunate

September $XXX and $X of proceeds net credit of total forward as of VICI’s terms agreements, draw revolving In we cash of term available the loan. of in short-term availability liquidity, billion million XX, of sheet, approximately equivalents $XXX liquidity million billion and delayed comprised estimated our $X.X and in availability had investments, under cash, settlement under billion sale of $X.X our balance outstanding upon facility,

value million million of sold aggregate program. after fees ATM During X.X $XXX under approximately the with shares an we our quarter,

forward a are agreement on All sheet. of and not as to such our balance sale shares were the sold subject reflected

ended leverage, debt total terms quarter debt. we the of of of BREIT our pro $XX.X rata In of billion, with share inclusive the JV

EBITDA adjusted full a to rent of the X.Xx. debt for MGP transaction approximately net year forma from is Our pro

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

year-over-year, feat a the proud share. statement, approximately in we the delivering AFFO increased efforts all $X.XX third this income while X.X% to in as million we over prior per year-over-year, thank XX% or QX the quarter AFFO our want year. mentioned, I per Ed growth. the VICI Total doubled Turning entire increased for was AFFO to $XXX revenue share team of very are for GAAP and their

AFFO share reminder, increased our shares per AFFO acquisition disparity between is to Venetian the the QX overall transformative to this a QX share As Resort due count and raised our increase in and which consummate from acquisition our growth equity in during the of of of issued during an year. growth MGP primarily

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

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

on in for share absolute ended and $X.XXX XX, December guidance as share. $X.XXX AFFO for a be Turning year as dollars $X.XX expected the and between between $X.XX to per to billion are updating guidance, XXXX per AFFO billion or common well XXXX diluted basis. we both is

Caesars, reflects for guidance Las beginning November X.X% lease lease regional Vegas updated uncapped master under XXXX. with the master effective and CPI Our year receive lease lease VICI the X, our will on escalation that of

reflect estimates ATM million related impact our QX share treasury accounting per shares under XX.X to sold during pending QX. the and of the Additionally, program the forward

include our or As dispositions, possible does guidance non-recurring the not from other transactions. capital markets on operating reminder, results future a or acquisitions impact any activity

our its ability the questions. the to performance CECL inherent record have Session unable of quarterly is charge leaves that, open AFFO accuracy. with represents believe for dividends. income evaluating in AFFO-focused and our which unpredictability Accordingly, forecast financial Megan, to the our line as pay measuring to we of we best way a please past investments net and With basis, us discussed due productivity equity Question-and-Answer and you, As FFO guidance with a on the non-cash we

Operator

[Operator Instructions] Our first comes Anthony Paolone. the from question line of

now is open. line Your

Anthony Paolone

just wondering can about happening good just the efforts coming and also your how you was appetite that and to around your morning. that’s investments around what Thank look at I you given and talk world? internationally on

Ed Pitoniak

want you to start? do John,

John Payne

talk Good Nice are you. Tony, you? Sure. how morning, to to

this would right grow it, the process study and would in real Tony. the we announce we’re spending on for internationally you’ve only the in countries to markets real like their we we’re also have in we’re laws years, focused experiential to for grow we’ve been years, middle always it’s have at that in So something this past where we where talk it’s own and the us U.S. obviously, of definitely our we that domestically own but that in casino of grown, and and think sector underwriting the us been but middle the the but Nothing we understanding heard understanding estate to couple in about X of not positioned interest company time, sector the first to and of time estate, outside and the internationally. and

Anthony Paolone

you. thank Great,

Operator

Thank you.

next ISI. from with comes Steve question Our Evercore Sakwa

is open. Your line

Steve Sakwa

hear you Can me? Great.

Ed Pitoniak

Yes.

Steve Sakwa

cost you of I if Okay, where with big opportunities? you’re just about have even Ed, change was public and Ranch debt Or maybe cost Cabot is it less side companies in and capital where the their like capital private Canyon is more available? of of that gaming maybe sort could thanks. the more a companies of seen talk it markets? Is seeing with on some wondering

Ed Pitoniak

is now. do talk markets. we’re a implicit to on really seeing you. that Yes. has of think though, and fishing sides. I I would your, question, It’s credit richer I the ground state both good opportunities to to And the side, with good private say probably Steve, the say even right to point would

those you in near of real telling is do real of missing lot a especially seen degree to changed, John of that up this we’re you’ve the hurt. were it, credit to was be at which sent a to which what bank estate up of that would credit-focused. analyst, you’re has last changed the of time, has it week, world well. United the As the say be IG they from call JPMorgan, and a funky U.S. then night don’t midterm pick how an thought to an EKG, that of capital as if us the last gotten believe as cycle point and me I world and trading to most the since REIT I’ve if their I at would graphs Streeter read in And where credits volatility you was the been know, would is worst lot a allocation to John at always when the the And patient emphasizing be year to reading still dried call XXXX the not going I from credit. given memo this Blackstone credit, And transcript effectively he the little indication e-mails opportunity treasury sellers estate performance And saw radically with was intelligence, on Mark because America of listen the of has radically. saying I is that States in these any was that I Hartnett have Gray a startup. as world

And of put point, we billion your $X.X got very to billion Steve, is, just over market if of as we’ve and the have you got work. David that to don’t tough effective almost So We’ve it’s are to like credit state of emphasized, to liquidity. the $X capital. excited cash, access

people most have in other capital fact We public. frankly, cases, to will the that on will operators estate to lot a in don’t. capitalize with we of with ownership to, near when the put it And go in cases. credit midterm some in into order private it in and real both conversion

Steve Sakwa

I other on could development risk probably acquisition maybe yields but and those help not your you’re I you ask yields sense question, deals know more yields versus us which on, you one and If for just Canyon that Ranch, yields, road get about say, a broad Cabot think carry giving the stabilized individual clearly kind might of could for. Okay.

just development maybe thinking So you versus stabilized on how are about yields acquisitions?

Ed Pitoniak

associated going X.X% to XXX been clearly, that I’ll think that and risk. risk compensated for do nearly the million that and to with the Well, need comfort back QX And our early for we the is that for development. just compensated Steve, adequately we’ve unlevered of have people some yield go Yes. yield capital we in deployed to I unlevered X.X% give QX in be

Steve Sakwa

Great, thanks.

Ed Pitoniak

Thank you, Steve.

Operator

Thank you.

Our line next the Milligan James. of question R.J. Raymond comes with from

line Your is now open.

R.J. Milligan

changing good Hey, certainly, and I’m cost guys do the of And do I that capital adjust how sellers’ fairway of expectations on capital. Do always bid-ask the it? of given John’s with cost of today, on that while of remains Certainly, you but and expect that your morning, you cost spread are external the on how relatively capital discipline view growth guys. accretive you assets track appreciate the maintaining only guess do a don’t you pause middle more your wide? record comments deals comments gaming the calculate curious

Ed Pitoniak

you David, start do that? want on to

David Kieske

doing, deal internally, to XX a of the Great, talk you great on a see have the doing debate price basis obviously, what every and day – daily XX, you. hard we is moving market one basis. it’s points, XX, stock right? XX-year to it’s Sure. the this R.J., mean When I

our the So but getting cost of at And right pricing to capital. X%. look, spread we we’re we look now, at look do XX-year at –

X.X% up what capital. we’re hedge to billion in good. net maintain is But well. April, the spread our raised Obviously, our has we really R.J., the X%, our portfolio stock is. cost held So pricing really, it back looks adjusted Debt $X to of going always with at that

deals, $X.X not we does on, touched is that balance term or of on include kind a think sheet, the Rocky cognizant the for not of there the we I your and comment is world in the to just continue Ed implicit Gaps bit loan we mega more around of uncertainty see world that will billion revolver. of while the of done pipeline. around that probably given are deals But spread. large to you’ll going middle is our smaller fairway free the the were liquidity Being of little that the ensure and As that of we’ve going. have a of feel some we good cash just take And which an pause deals past, cash, the that cost do where about ultimately a that deals the maintaining kind the is

than our ensuring greater been it’s year that dialogue in be year it’s we and got and to shareholders. ever we’ve accretion to is been, I relentless can deliver out but continue think than busier ever it’s the for consistent in

R.J. Milligan

Thanks, David. appreciate that. I

ahead, Just follow-up – go as a Ed.

Ed Pitoniak

I of trending. has the say, incredibly obviously, or been was And has capital cost And REITs, the simply for just going very capital volatile. been of R.J. most volatile to negatively just equity while cost debt

We position guessing the unique us has XXX basis, well I’m and are. in with been yesterday, where of a so a year-to-date up having relative are through still XX, held September best-performing we REIT as our equity on S&P

have do to that basis or R.J. our to strength cost competitive represent you, Back we price a So advantage. equity on equity does comparative a

R.J. Milligan

Thanks.

that attractive rates have assets, option gap become to options follow-up, the that as guys you adjust? call a bridge the cap Just of the fairway given spread gaming more until sort do for sort the middle bid-ask of of a

Ed Pitoniak

John?

John Payne

have performance talk we assets, assets. it’s great that R.J., you’re the speaking They the So and I more continue both still assets Indianapolis. into those and casinos been to of two foot going handling Caesars, capital morning. they the When to rebranded has these the our – grow. we have tenant, Indiana in They speaking have of this to you’re on to you call watch continue think nice one

sit continue Those active those. is XXXX. of through XXXX. in put at we all – look So here call the way to October will We the

at we growing like like them. So will what and – over those look in We those assets. them We to business. monitor really will that love said, is Caesars I time. with continue we And doing

R.J. Milligan

guys. you, Thank

Operator

you. Thank

of comes Deutsche Bank. next Santarelli the Carlo with line from Our question

is now open. line Your

Carlo Santarelli

as guys. to obviously balance today parameters absence forma you was wondering, to David, the the environment How change positioning and about just the I in that you pro Thank the much within? want think down current does Hey, operate of transactions. sheet go X.Xx you. of the and rate likely

David Kieske

hope a well. environment current It’s it I to day. the Carlo. you. Look, question, rate is around you’re good Good bounces speak to every

And today so in or the to business done near-term, of run view, we’ve to got deals we drive to accretion, X. or the long-term something mindful be we if right? to since being something impact disciplined but in close ultimately got taking had what price accretive on if and a had how we’ve that would day We’ve

So loan. access balance we’re debt making leverage we go position sheet growth down with term the we and sure that to got maintain as late – through no we maturities revolver. sheet to continue time and cash where until to it’s bringing to access markets, it’s to strength the you got but something balance the the XXXX, and sheet draw have We’ve potentially we free flow. and that our going can over be monitoring of watch. to the something drive to Thankfully, deals through balance We’ve said, funding the have

Carlo Santarelli

David. Thanks, Great.

Operator

Thank you.

of Golladay with comes Wesley Baird. question next from Our the line

Your open. now line is

Wesley Golladay

Hey, morning, good everyone.

a deals. success are with good You guys having follow-on

the looking of maybe a this with potentially to mention bit to rights relative little adjust capital. good seem their negotiation some You good cost But expansion bridge a way sellers Are gap exclusivity to on a get in are did to you as slow point? to pricing. the at pricing you position be to

Ed Pitoniak

kind interested and for the understand and with we relationships very say investments. or investors want I priced, using steady and more to correctly, Canyon opposed they developing the to per pricing enjoy as would If a good leverage question these off allocation that would Obviously, partnerships talk I most enjoy likes when Great you. pipeline a I flow negotiating others, say any form it’s Ranch anything se. our to the enhance your capital that that of mean, pricing. long-term to we us else, and properly to Cabot with developing I But frankly, Wolf about be to we the we’re want give we’re in opportunities. deserve long-term of Wes, of of to satisfied yields

As development across Steve, in this my I good existing unlevered good, a we and pretty with blended remarks is both environment. pretty X.X% think noted in yield assets, yield

wouldn’t a we in that say as In we these as to acquire order partnerships use necessarily do fact, meaning long-term pipeline a I acquire deal. much of to is really pricing growth. good long-term

Wesley Golladay

get options, deals, may think I is, it’s a whether yes, is nominal exclusivity. it’s – to embedded if just will but to I looking to be more you have which this good have it’s get what was you good, just based you like yield, I going initial sounds just you initial naturally like an occurring. relationship going than more wondering looks to to it there the able some – bit may which is was is then and at anything yield it that qualitative kind you and or we’re Yes, lead more other some more currently have at look structural be your an little that maybe slow of adjust value,

Ed Pitoniak

Wes, forming foundational grow documentation to and VICI when our as benefits we continue team, to is one the as of basically as long-term G&A lowest create repeat of partners. factor, we’re And us where got a enables you’ve those partnerships revenue, Yes. small rinse of one team REITs we all that as with is that people especially the couple a big still a with of just among dozen probably the these percentage that

Wesley Golladay

Okay. Great, for thanks everyone. time, the

Ed Pitoniak

Wes. you, Thank

Operator

Thank you.

Anderson SMBC. the of from line question Richard with next Our comes

Your now line is open.

Richard Anderson

morning, Good Thanks. everyone.

is sort of the step on it that ranger, strategy initially And guys investments So these you to and a these a are taking if there way, the some on sort in of put that I lone of these non-gaming investing situation a as sort taking of where can of investments way I curious, I’m role does things. of pulse your in the you all more capital say, should a it if this Wolf, higher to Ranch, so the any did, of Cabot little non-gaming or and at would these willing at on. assets? environment? And risk Great What’s outset for these of Canyon it be taking on in break stack in be bit lower of down appetite

Ed Pitoniak

sure talk step into level last a at if Yes. good last we lot our such asset. over still you. these we it when there to hard dollar we is I’ll and that in a level us of left Richard, David value of work and of comfortable very – exposure to protected to that go well ever last in, dollar situation is the Obviously, did relationships, exposure that stepping we turn dollar means make really very a to to exposure that moment, is we’re a in have with, for we’re that into

I’ll that, for it his thoughts. over Beyond David to turn

David Kieske

Rich. Great as it as we at with thing the talk to The It seen to one to insight gives gives to It us Cabot Yes, have real investments us us operator Canyon a about the estate ownership. path and exposure the seat that a loan table. and you. like you business. these to gives

is XX% where attachment so said, things our And point, – as LTC. like we Wolf the I Great

is, thing point on real right higher VICI and we I know senior the they of willing think be these and broader I with is the our is, think the relationship it’s – operator, but would suits portion to out that to as really again, return build go I estate provide a cost we the even commensurate your and capital the And developing. capital the question right And not doing to refer development, we capital. if is parlance. overall to or would one potentially sponsor right

GMP contracts and high-quality high, very oversight developers by experienced builders. with partnered set very, We’re

meaning our while I lower you pipeline see potentially are the So happens we making we could deviate, robust, development it with go think and sure or higher Captec is that rewarded markets even in on credit that. for could depending the what

Richard Anderson

of the largely function strategies. the question then REIT model Okay. And is focused is a U.S. second

multifamily and a If you’re a so hotel REIT, you’re REIT on.

word that that saying morning. them for is thread You understanding all this of can’t a some I But Hathaway guys model you there what I’m the Berkshire are pilgrimage experiential. more shared – reason of to are pronounce – knitting a common and

in for couple where experience asset or expect substantial a of said I’m estate? should just and these will out. in don’t just you how you have entity real do you investments work the quite curious expand you, a to you individual Are increase on? You some with overall and we people see experiential pitfalls horizons these as so avoid your of how people dozen before classes – working adapt one

Ed Pitoniak

with more them and help get on so I reach lot we for a just want Board. very as so is a And advisers for of we have very in What value nothing Yes. have low relationships I to mind with say, effect team. when an doesn’t say do They are management to do, From have to It’s question your us. can the us a go Richard, our X, has as for of. that order in right though, obviously us. else there it’s we percentage environment question. would small our we believe extend than our a learn you team hey, others. we a top an possibly would is advisers we we a lot we do say, to and both anybody about a know a day good our I it where screamingly about, know best our on structure of treated the revenue. G&A cost category inflationary will question. out of Inflation way our this Richard,

internationally, And but that’s geographies cost because as are if whether categories full our extends way it’s very advisers reach also it’s geographies we curve or we’re experiential with risk in the very a the that we our members of familiar they categories team. up mitigating work effective, quickly. And not and both which so on with learning come

John Payne

gambling to In October that add were different start ‘XX, always to in this, started space I we study this that if If in I sectors John. see one can more in the saw REIT. on we’re you there. in making. our now Ed opportunities focused we that first years, because X investments these spending the we background, the always were important But time Rich, position and REIT the we an this can other is I And thing – as company understand experiential just it’s when

just are new So a starting It’s you to company is not made. at all. this shift these strategy being of see just investments our

Richard Anderson

enough. fair Okay, Thanks, guys.

Operator

you. Thank

Jonas comes next with Barry question from Securities. Our Truist

open. Your now is line

Barry Jonas

I in to point? Great here estate what good on penetrated talk you think at guys. U.S. Hey, get to morning guess capital was Thanks. conditions and inning is just real gaming your bid-ask you to how deals? you. Notwithstanding for addressable market your market current are spreads, hoping thoughts this I

Ed Pitoniak

John?

John Payne

We Well, we it’s heard and there. there no have think there of you you, to is good a we each know other, lot to Yes. opportunity Vegas you say were – me out is place. recently in saw I Barry. still talk

Ed estate opportunities opening There states But market do we we we as is have downtown the as other on You that place that say locations regional Vegas, that in in the is estate. the busy own strip. in obviously there great There own Vegas, Las real there other heard many real no market, this. are not and Las is real is estate. do have

don’t owning I real our tell of what you, but business incredible it opportunity casino inning still So, we grow amount estate. is, would in I to know exactly see

Barry Jonas

then key to And you coverage the ask could if have question Great. here assuming your still Do but I is operators thoughts over move here, time. will over model? am gaming follow-up. OpCo evolved should if I mean maybe I full think just or curious a time, a

Ed Pitoniak

Penn And each asset-light admiration nature estate. We and at of Caesars, the we determine very like to running operator Reeg Yunker the successful in them up Bret think Tom partners obviously, the that lot have are given what’s model. it’s real they MGM business. a think same of maintain way time, to and their the overall incredible of model capital-light, for their where can are ownership I be best they Barry, business demonstrating for

think to the with, key a partner anybody do will I for And do we tell over do And a an gaming compelling you, right. of it’s we that asset the you with If use with if you proceeds non-gaming, you or would what deal, do non-gaming key question we I is sale-leaseback how I is in would proceeds, leaseback one sale think to the be the it interesting time. whether having proceeds. attractive in or us think a with with having controller, relationship are what determinants a whether as will of when be. gaming

Barry Jonas

a guys. Thank you That’s so point. great much Alright.

Ed Pitoniak

Thank you, Barry.

Operator

you. Thank

Thomas KeyBanc. from question Todd line next comes with Our the of

now is line open. Your

Todd Thomas

the wanted Good your spreads. Hi. to Thanks. follow-up and just of cost capital discussion around on I morning. investment

of seller lock volatile underwrite ATM those of market of be capital equity how liquidity of deals? well. negotiating provide investment for up mentioned been that, changing And certainty The cost Clearly, any be equity is in spread may curious consideration? relatively just might been but some transactions Your when consideration that and you in deal has, there or that is on greater has capital or guess issuing advance outlined. cost also and investments lines, even in expectations I the held you underwriting volatile. have it and during general. And here? manage which capital of I am gradually doing But that has flow volatile and there are any along time you have Ed, you you potential your it’s more your to cost potential

Ed Pitoniak

say to, to David the moment. want of already turn we Yes. of of having I have, of I relatively. the Todd, amount good $X.X liquidity relative certainty. especially one we basically cost billion to $X.X talk to capital, equity to emphasize alluded cost the know David a have in you. a over And I the the would benefits it billion of that is degree of we and that will

lot certainty question. lower of time. turn a for liquidity not with to have degree David just further at his will do simply this over absolute your an to much have not thoughts I cost others that of will But it We

David Kieske

Yes. busier thrilled I pipeline me, the implicit I I Xst, who ever are a or I Todd, non-gaming mean than very, your question, as is was tell were mean been down and focused you are world saw think we shutting pulling good to have Goldman Sachs, June or – CIO, we would been conversation and Kellan back. talk more we from to on the you, about Florio we active. excuse in on are doors has we you. our was very opening added

interest to pretty raise our credit and seen. I cut owners, the not we talk or about going can’t in where think brings. is many, of the in our even what deal that. do for in disciplined some but set balance But sheet. August terms a minute on environment, the will remarks last did not highlighted equity capital are than we in able we I environment we a at see be equity forward cost has that because can up liquidity Obviously, But we this have competitive deal deal, up of charts have June the a that and have opportunities. more this continue that’s that set in will are our look sense the not ultimately, And up many make But unique. And still pursue tomorrow going living accretive, constantly forward, we Ed there we in we so balance years, tailwind market of from be right. The the a a ATM, sheet, bolstered if backs a we we we have that of a past. we be and to as going markets we both And do sort capital little doesn’t our the the be our intentions will of his investors, will raising focused bit like to be we on on But and or we will not side. bad been opportunity rate time is around change, in just

Ed Pitoniak

add Todd. I to to your just it’s and to remarks pertinent question. want David’s Hey think I

an not for amount the of their a billion anywhere XX% equal – at balance look does about $X.X should to represent as sheet, you amount, costly very otherwise million our at $XXX there I especially have firepower The as if if that balance And of I $X.X they because cash-like delayed that the total billion balance the – are our big on ATM actually that near or represents XX% that me other the last we undrawn liquidity unsettled. out wrong of of that really make liquidity or balance currently obviously, that firepower referred proceeds enterprise and If outlined are. time of the David David REITs current am they the loan would how very that term you, sheet, hard total the $X.X achieve. hard please billion, to I sheet is here, we cash and is don’t know David, many The are our instruments correct when I to $XX value. sheet, only of remain have say, is equal all about on either is and the liquidity. And very point billion to. of revolver,

Todd Thomas

these made investments recently credit could just talked quick have real follow-up there Blackstone you Okay. I are That’s appreciate here, investments credit types address of of that I helpful. wondering recently. you competitive you more am just clearly, if and If could some you the credit on non-gaming announced that. then other have there. the landscape out and transactions I more that about for the investors

Ed Pitoniak

But our moment. borrower a of a friendlier resembling issue in that’s will would a or think evaluating a in be do I that I we finding lot the terms a with. in David? to turn we partner I David competitive anything are business easier, credit lot it over are situation think fundamental is, to

David Kieske

it. when And put to in matter. order that’s but Yes. I know report, in to mean to it Todd, comes relationships hard down your understand that’s I

that mentioned it was. together. to when it Cramer opportunity referred win if with time He June Jim it’s clip Piers you process. are long-term as our to a see treat ultimately, a And a life. spend we relationships have our view, we Ed respect of competitive. One, and and foster was very a you part not don’t and to lot. And our with CNBC. fund advisors, treat relationships Ed how more build These our XXXX, our to But the Goff well of We on years, fund driven. to with the Ed John did mean good extremely, ability both feel do do together because about that heard win future. and the the to back and Chelsea are and together. want was of John in back to about table we bid was in sides the counterparties we more come we more It talk have that to bullish want extremely do We You for table

Ed Pitoniak

we in And to don’t we Todd. When relationships, partners lending that, are just to see these add our to debt.

or makes We an to are would to seeing by And to our that difference. relationship economic it needs that not pay bills a a not credit debt. only be GP partners makes difference them,

Todd Thomas

Thank Alright. you. Okay.

Operator

you. Thank

with of comes the Scotiabank. from Greg Our next McGinniss line question

Your line now open. is

Greg McGinniss

Hey. morning. Good

quick of couple a here. first, Just ones

to you [ph]? the that escalators days from four CPI-based release away November, able So, are you we given are that expecting are disclose lease

Ed Pitoniak

David?

David Kieske

you. it’s Yes. remarks, my X.X%. to Greg. to was Good in It talk

Greg McGinniss

My make high assets, apologies. also, of today? the capital, the then on current you can you. given X% Indian Thank cost you your call And sense does to rate

Ed Pitoniak

John?

John Payne

grow the this the until watch continues this today, the ‘XX. Caesars, to about earlier This this active bit end of to put we business into is from call operator. talked a capital – I owner continue little that go the call business.

So, we the will of continue business. growth to monitor the

right this time we and will in option. will call for We see capital go the determine the

Greg McGinniss

sector. you are likely opportunity how the where and broadly, investment does sound might like investments it’s think structuring And be spoke could for on was in you wellness dollar Alright. multi-trillion included actually just are final what Thank the then place-based expand you. one right that thinking those you best that earnings just the you side release, hoping me, the concepts about on credit for sector. a then Ed, now? within And I about

Ed Pitoniak

Ranch. in potentially also I similar. research The areas based Ranch of Ranch the together we real estate are would most Tucson Canyon from other places having continent-to-continent Well, it’s really on is intensity internationally dimension contrast and great and done, on really the have we wellness. estate the path the real and but appealing to about Lennox domestically to and model basis Singapore, degree in notable that quite the same a in clear, to credit the Macau the – intensity on for go now focused a that That’s things on Canyon can with of well, the Canyon one estate around of like to place-based gaming. side And that both found of elsewhere on wellness Greg, Obviously, is are U.S., models, right say clear global the is gaming estate own real their Austin we quite a with globe. lot global it’s that real very to with be place-based not

same the from On to, there wellness example, you the much place-based are go again, like Europe and the other is end U.S. Ranch good concept UK for where many of operators amount kind intensity. at estate very hand, with the of as very real high much operating Canyon really the a

Greg McGinniss

you. Thank Okay.

I that would model So, space? the are you similar invest in Canyon and the be looking we of Ranch to seeing operators with other this of to guess then type that types

Ed Pitoniak

– popular they it, right. mean when go in those is enrollment. modern now grew all back in millennia. to Yes. it to back centuries business, great history. the The more towns ancient it back were out that goes goes it historically, The they spa a you And the become about has the started spa it, back that’s say traditions doesn’t This frankly, century, business actually about spa of the European that way the And I spot XXXXs. tradition think experiences the of think

Greg McGinniss

saying? power think has you the are it So, what is same guess then, you I

Ed Pitoniak

I think you, that’s pretty Greg. safe. thank Anyway,

Greg McGinniss

Thanks Yes. Ed.

Operator

you. Thank

line from Katz next David Jefferies. the question of comes Our with

is Your now line open.

David Katz

up Hi and one want specific I just time ground, question. But to so everyone. Covered don’t on lot principle. general very a of pick

might to I that you? classified of operators I never in some My as there counterparties with sense As that XX months concur that? talk Would for conversations. in have end be would kind ago softening who gaming is those to you

Ed Pitoniak

John?

John Payne

matter I just just is Good Hey. And this a time. David. morning of I think would.

think we time that be would I And and But form mean necessarily never work the they of for it and capital when structure work you our any think will about operators, have if Ed now and particularly they the use explaining CFOs about capital companies are why with they And do said be spent we how company. out balance said, partners our as C-suite I think been have you thinking proceeds can should balance of years. gaming in of how and X to that of the Doesn’t grow now for I company, around sheet been it. many great transact. CEOs have have to that can the can sheet. your you different work understand thinking are ways your We all

we at hearing are David, surprising all, that and hearing – hearing we not are are you that, that. So,

David Katz

Apologies, they you until and do, Both finish. please sounds I they consider they should it know that it like are. Ed,

Ed Pitoniak

John’s just remarks. to going was add I David, to Yes. on say, to

on gaming leisure high-yield basis credit a on worst to yield X.XX%, XX.XX%. the XXst, right. October blended yield was the to to blended back go you on was If worst Actually

when very look start capital debt currently are they gaming operators realize operators, high-yield high they yielding X.XX% they at current to or higher, them refinance are and at IG. are attractive. cap yield of our When yield, they very few of our them rates, have whether leisure look credit this So, could it’s that’s or to on that looking their almost all worst to

David Katz

Perfect. very Thank you much.

Operator

Thank you.

of Our the Citi. Smedes next Rose with comes question from line

open. now is line Your

Smedes Rose

ask in you these you a am I – underwrite about at do sort as of But Hi. coming of talked you environment wondering at a in issues look gaming that all, how have and you competitive they of potentially how rent your – or regional Thanks. it’s to do that you, demographic think just to opportunities up markets maybe thinking are I cost coverage recessionary a opportunities? we change about you Would where have when where wanted about, is potentially just markets in in more you capital. in smaller recession, smaller you that have sort those? hit of refinancing you expect as how kind

Ed Pitoniak

Yes. John. me We – turn Anyway, turn role I in Tanger. and his when you, showed we – him up over John to that over we and Michael always your new just our I you will very the Bilerman. enjoyed want to on at friend colleague, Michael just before I acknowledge you, calls, missed wish John, to it best

John Payne

time their and Yes, their we Smedes, spend look a question, the understanding lot the understanding segmentation customers, what all with deals, operators a are different markets the at it’s market, they we very different seeing. good of in all as of

a unique our I time think It’s you know you this tenants. for because follow gaming.

We on what But have of to lot the of depending seeing time this record a business strong on are now, continue strong almost having about call operators And some spent you fluctuations. – market talking talking to, continue and earnings. have business. in gaming see right the to are market all who the are –

comes during market, very Las underwrite. So, their amazing to them as those the in we when the the consumer in in understanding regional unique we have far careful Vegas markets. of the time. grow an of our how from, deal we we will dynamics, tenants that And this and and job markets businesses operating we very type things are whatever continuing be careful at consumer, underwrite look done But all

Smedes Rose

sort at And triple net down as has There from between REITs. many, talked thing to haven’t The in have Okay. ask prior when gaming, And there and the announcements. But I have – a transaction mean really I one Ed, that recent rates we volume been you. I of look – just come deals lot cap moved wanted mean then other cap is buyers. I appreciate aren’t moving. that. about, and but sellers standoff just you in rates just I

class you or I to little quicker that, am in to a maybe they that sort where they things you is I So, wondering, mean of more are they asset sort with or because do willing Are move adjusting a think sort this position not? financing would are of of issues, need agree just move?

Ed Pitoniak

the so you I is geographic know. credit Every whether Smedes. tell, which a – and given to it in, is have saying I of rates be the the hard It’s I considerably have cap tenant what deal location, quality, the specific in asset would are time moved itself, don’t up, market is within the tough gaming backdrop. the saying, its would that implicit asset be would nature

still engaged few over last I a think it’s GLPI amount have early activity months. we the I the bit in limited tell, too of fairly that and generalize to because wouldn’t

Smedes Rose

appreciate Okay. Thank you, it. guys. I

Operator

will now I Pitoniak closing you. over to Q&A remarks. the End back Thank conference turn any of Edward for

Ed Pitoniak

good continue Thank uncertain really you VICI period very much health for to We a again. – superior time us to Again, to In your all. at be closing, thank what believe driving very portfolio well, value. growing while you may shareholder well thank what no, our simply are today. want is with we you positioned during we and

Operator

That concludes third XXXX your the conference you VICI Properties’ Thank call. quarter earnings for participation.

VICI Properties (VICI) 28 Oct 222022 Q3 Earnings call transcript