Q1 2025 VICI Properties Inc Earnings Call
Okay.
Okay.
Okay.
Okay.
During the day.
Yeah.
Okay.
Yeah.
Yes.
Okay.
Okay.
Unknown Executive: Good day ladies and gentlemen, thank you for standing by.
Speaker Change: Good day, ladies and gentlemen, thank you for standing by welcome to the Vg properties first quarter 2025 earnings conference call. At this time all participants are in listen only mode. Please note that this conference call is being recorded today may five 2025.
Unknown Executive: Welcome to the VICI Properties first quarter 2025 earnings conference call. At this time all participants are in listen only mode and please note that this conference call is being recorded today, May 1st 2025.
Samantha Gallagher: I will now turn the call over to Samantha Gallagher, General Counsel with VICI Properties. Thank you, operator, and good morning. Everyone should have access to the company's first quarter 2025 earnings release and supplemental information. The release and supplemental information can be found in the investor section of the VICI Properties website at www.viciproperties.com.
Samantha Gallagher: I'll now turn the collaborative Samantha Gallagher General counsel with Vinci properties.
Speaker Change: Thank you operator, and good morning, everyone should have access to the company's first quarter 2025 earnings release and supplemental information.
Speaker Change: Police and supplemental information can be found in the investors section of the BG properties website at Www Dot Beachy property Dot com.
Samantha Gallagher: Some of our comments today will be forward-looking statements within the meaning of the federal securities laws. Forward-looking statements, which are usually identified by the use of words such as will, believe, expect, should, guidance, intends, outlook, projects, or other similar phrases, are subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect. Therefore, you should exercise caution in interpreting and relying on them.
Speaker Change: Our comments today will be forward looking statements within the meaning of the federal Securities laws.
Speaker Change: Forward looking statements, which are usually identified by the use of words, such as will believe expect should guidance intends outlook projects or other similar phrases are subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect.
Speaker Change: Therefore, you should exercise caution in interpreting and relying on them I refer you to the company's SEC filings for a more detailed discussion of the risks that could impact future operating results and financial condition.
Samantha Gallagher: I refer you to the company's SEC filing for a more detailed discussion of the risks that could impact future operating results and financial conditions. During the call, we will discuss certain non-GAAP measures, which we believe can be useful in evaluating the company's operating performance. These measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. A reconciliation of these measures to the most directly comparable GAAP measure is available on our website in our first quarter 2025 earnings release, our supplemental information, and our filings with the SEC.
Speaker Change: During the call we will discuss certain non-GAAP measures, which we believe can be useful in evaluating the company's operating performance. These measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP.
Speaker Change: A reconciliation of these measures to the most directly comparable GAAP measure is available on our website in our first quarter 2025 earnings release, our supplemental information in our filings with the SEC for additional information with respect to non-GAAP measures a certain tenants and our Counterparties discussed on this call. Please refer to the respective companies public filings with the SEC.
Samantha Gallagher: For additional information with respect to non-GAAP measures of certain tenants and or counterparties discussed on this call, please refer to the respective company's public filings with the SEC.
Samantha Gallagher: Hosting the call today, we have Ed Pitoniak, Chief Executive Officer, John Payne, President and Chief Operating Officer, David Kieske, Chief Financial Officer, Gabe Wasserman, Chief Accounting Officer, and William McCluskey, Senior Vice President of Capital Markets. Ed and team will provide some opening remarks, and then we will open the call to questions.
Speaker Change: Hosting the call today, we have Ed Petrone Act, Chief Executive Officer, John Payne, President and Chief Operating Officer, David <unk>, Chief Financial Officer, Gabe Wasserman, Chief Accounting Officer, and Bryan Mccarthy Senior Vice President of capital markets and team will provide some opening remarks, and then we will open the call to questions with that.
Ed Pitoniak: With that, I'll turn the call over to Ed. Thank you, Samantha, and good morning, everyone.
Speaker Change: I will turn the call over to Ed.
Speaker Change: Thank you Samantha and good morning, everyone.
Ed Pitoniak: Over the next few minutes, John will talk to you about our exciting new relationship with Red Rock Resorts and our other growth activities, and then David will discuss our recent refinancing, our results, and our increased guidance. To start, I'd like to share my thoughts on what we at VICI anchor to in all times, especially in periods of high volatility and low certainty, and that is working to ensure that we maintain our ability to sustain and grow the current cash income we distribute to our stockholders in the form of our dividends. For a REIT management team, that should of course be standard operating procedure and because of that one might think that the sustaining and growing of dividends would be top of mind for REIT investors as well.
Speaker Change: Over the next few minutes, John will talk to you about our exciting new relationship with Red rock resorts and our other growth activities and then David will discuss our recent refinancing our results and our increased guidance.
Speaker Change: To start I'd like to share my thoughts and what we as BG anchor to in all times, especially in periods of high volatility and low certainty and that is working to ensure that we maintained our ability to sustain and grow the current cash income we distribute to our stockholders in the form of our dividend.
Speaker Change: <unk>.
Speaker Change: For a REIT management team that should of course be standard operating procedure and because of that one might think.
Speaker Change: Sustaining and growing dividends would be top of mind for REIT investors as well again, one would think and yet.
Ed Pitoniak: Again, one would think and yet When we meet with our investors, which we do with great frequency, many of them will end the meeting by asking, is there anything we didn't ask about that other investors are asking about? When we are asked this question, we often answer with, well, you didn't ask about our dividend, but don't feel bad because very few investors do.
Speaker Change: We will meet with our investors, which we deal with great frequency. Many of them will end the meeting by asking is there anything we didn't ask about and other investors are asking about.
Speaker Change: When we are asked this question, we often answered with well you didn't ask about our dividend, but don't feel that because very few investors do.
Ed Pitoniak: Call it old fashioned, but I believe strongly that dividends should always be a top of mind topic, especially for REITs, but frankly, for most equity investors. As I'm sure you all know, over the long term, the last 100 years, dividends have contributed about one-third of the S&P 500's total return, and that's despite the fact that the long-term dividend yields of the S&P 500 has averaged under 2% over the last 30 years. Given the greater dividend yield of REITs, dividends, of course, matter even more to REIT total returns. As of yesterday's close, the trailing five-year total return of the RMC REIT index was 54 percent, of which 27 percent was price return and 27 percent was dividend return.
Speaker Change: Call me old fashion, but I believe strongly that dividends should always be a top of mind topic, especially for rights, but frankly for most equity investments.
Speaker Change: As I'm sure you all know over the long term. The last 100 years dividends have contributed about one third of the S&P 500, total return and Thats. Despite the fact that the long term dividend yields of the S&P 500 has averaged under 2% over the last 30 years.
Speaker Change: Given the greater dividend yields of rights dividends of course matter, even more to REIT total returns as of yesterday's close the trailing five year total return of the RMC REIT index was 54% of.
Speaker Change: Of which 27% was price return and 27% was dividend return.
Ed Pitoniak: Over that same five-year period, which I should note started in the spring 2020 COVID drawdown for stocks, VICI has generated 138 percentage points of total return, of which 84 points come from price return and about 54 points come from dividend return. I will also note that during that same five-year period, the S&P 500 generated 106 percentage points of return, of which 91 points were price return and 15 points were dividend return. As you can see, over that five-year period, dividends were a major factor, and VICI outperformed the S&P 500 by a margin of over 30 percentage points or by about 30 percent.
Speaker Change: Over that same five year period, which I should note started in the spring 2020, Covid drawdown for stocks Bgs.
Speaker Change: <unk> has generated 138 percentage points of total return.
Speaker Change: 84 points come from price return and about 54 points come from dividend return.
Speaker Change: I would also note that during that same five year period. The S&P 500 generated 106 percentage points of return of which 91 points for price return and 15 points, where dividend return and as you can see over that five year period dividends were a major factor in VK outperformed the S&P 500.
Speaker Change: Our margin of over 30 percentage points or by about 30%.
Ed Pitoniak: Over the last year or two, especially given the MAG-7's dominance of investor mind and market share, dividends didn't get a lot of attention. But it's been interesting in recent weeks amidst the volatility of both equity and credit markets to see dividends being talked about again.
Speaker Change: Over the last year or two especially given the Mag <unk> dominance of investor minded market share dividends didn't get a lot of attention.
Speaker Change: But it's been interesting in recent weeks amidst the volatility of both equity and credit markets to see dividends being talked about again.
Ed Pitoniak: One of my favorite readings each week is Michael Hartnett's weekly flow show bulletin, which tends to come out late Thursday evening, early Friday morning. In an April 11 bulletin, in this inimitably cryptic way, Michael made the following points, and I quote, On portfolios, we say, A, own credit, e.g., long-dated, high-quality U.S. corporate bonds, many yielding 5% to 6%. B, own equity income. Seventy-one companies within the S&P 500 have a dividend yield greater than 4%. Forty-one have a dividend yield greater than 5%. Buy stocks that can defend dividend, unquote. Did you get that? Did you get Michael's point that as of his writing on April 11th, only 71 companies in the S&P 500 had dividend yields above 4% and only 41 had dividends above 5%?
One of my favorite readings, each week as Michael Hart Nets weekly flow show Bulletin, which tends to come out late Thursday evening early Friday morning in the <unk>.
Speaker Change: April 11th Bulletin is admittedly immunity bleeding cryptic way Michael made the following points and I quote.
Speaker Change: On portfolios, we say a one credit EG long dated high quality U S corporate bonds, many yielding 5% to 6% B on an equity income 71 companies within the S&P 500 have a dividend yield greater than 4% 41 have a dividend yield greater than 5%.
Speaker Change: Buy stocks that can defend dividend unquote.
Speaker Change: Did you get that did you get Michael's point that as it is riding on April 11th only 71 companies in the S&P 500 had dividend yields about 4% and only 41 had dividends above 5%.
Ed Pitoniak: What's notable about those dividend yields, especially the greater than 5% dividend yield, is that those yields are comfortably above the current rate of inflation and then thus generate a meaningful real return in a world where real return matters as much as ever. As a fellow VICI stockholder, it gladdens me to point out that as an S&P 500 stock, VICI currently offers a dividend yield greater than 5%. And we believe that that dividend yield is, to paraphrase Michael Hartnett, a defended dividend.
Speaker Change: What's notable about those dividend yields, especially the greater than 5% dividend yield is at those yields are comfortably above the current rate of inflation and then thus generate a meaningful real return in <unk>.
Speaker Change: World, where real return matters as much as ever.
Speaker Change: As a solid beachy stockholder gladden as me to point out that as an S&P 500 stock currently offers a dividend yield greater than 5% and.
Speaker Change: And we believe that that dividend yield is to paraphrase Michael Hart net a defended dividend.
Ed Pitoniak: In the coming weeks and months, equity market volatility may die down, or it may not. Who really knows? But whether market volatility dies down or not, a well defended dividend can and I believe likely will be a significant contributor to total return for the market as a whole and for VICI and its stockholders. Everything we do at VICI is ultimately about total return in all of its key components.
Speaker Change: In the coming weeks and months equity market volatility may die down or it may not who really knows.
Speaker Change: The weather market volatility dies down or not well defended dividend can and I believe likely will be a significant contributor to total return for the market as a whole and for <unk> and its stockholders.
Speaker Change: Everything we do with BT is ultimately about total return in all of its key components and so now I will turn the call over to John and David who will talk further about what we're doing to drive total return over the near and long term through our growth activities and through balance sheet and cost of capital optimization John.
John Payne: And so now I'll turn the call over to John and David, who will talk further about what we're doing to drive total return over the near and long term through our growth activities and through balance sheet and cost of capital optimization. John. Thanks, Ed. Good morning to everyone. VICI is very proud of our core ability to develop relationships and convert them into valuable long-term investment partnerships. Not only were we able to successfully do this with Kane and Eldridge teams in connection with one Beverly Hills earlier in the first quarter, but subsequent to quarter end, we closed our first transaction in partnership with Red Rock Resorts connected to the development of a casino on tribal land in Central California.
John: Thanks, and good morning to everyone.
Speaker Change: She is very proud of our core ability to develop relationships and convert them into valuable long term investment partnerships not only were we able to successfully do this with kayne and Eldridge teams in connection with one Beverly Hills earlier in the first quarter, but subsequent to quarter end, we closed our first transaction in partner.
Speaker Change: Ship with Red rock resorts connected to the development of a casino on tribal land in Central California as.
John Payne: As announced in our earnings release last night on April 4th, VICI committed up to $510 million of a delayed draw term loan facility for the development of the North Fork Mono Casino and Resort, which will be developed and managed by Red Rock Resorts. Red Rock is a premier gaming development and management company that operates productive assets in attractive geographies, and they've developed over $9 billion of regional gaming and entertainment destination. They are also an established leader in Native American gaming, have developed and managed tribal casinos for over 20 years. Red Rock broke ground on the North Fork project in September 2024 and expects it to be completed by September of 2026.
Speaker Change: As announced in our earnings release last night on April four EG committed up to $510 million of a delayed draw term loan facility for the development of the North Fork Mono casino and resort, which will be developed and managed by Red Rock resorts Red Rock is a premier gaming development.
Speaker Change: And management company that operates productive assets in attractive geographies and they've developed over $9 billion of regional gaming and entertainment destinations.
Speaker Change: They were also an established leader in Native American gaming have developed and managed tribal casinos for over 20 years Red Rock broke ground on the North Fork project in September 2024, and expects it to be completed by September of 2026. Upon completion the casino is expected.
John Payne: Upon completion, the casinos expected to feature 2400 slot machines, 40 table games, two restaurants, three bars, a food hall and a small retail offering. The 305 acre site located in Madera, California, directly adjacent to Highway 99, where 4.2 million people live within a two hour drive of the North Fork site. This transaction established a formal relationship between VICI and Red Rock and represent Red Rock's first partnership with a REIT. For VICI, it represents our first gaming investment on tribal land and our second investment on tribal land overall, with the first being our Great Wolf Northeast loan announced in February of 2023.
Speaker Change: The future 'twenty 400 slot machines 40 table games, two restaurants, three bars of food Hall, and the small retail offering the 305 acre site located in Madera, California directly adjacent to highway 99 were four 2 million people.
Speaker Change: We'll live within a two hour drive of the North site.
Speaker Change: This transaction, establishing formal relationship between DG and Red rock and represent Red rocks first partnership with a REIT for Vg. It represents our first gaming investment on tribal land and our second investment on travel and overall with the first being our great northern.
Speaker Change: Sloan announced in February of 2023, London on tribal land in partnership with a high quality gaming operator in Red rock demonstrates <unk> ability to drive high quality opportunities for continued investment in the gaming sector.
John Payne: Lending on tribal land in partnership with a high quality gaming operator in Red Rock demonstrates VICI's ability to drive high quality opportunities for continued investment in the gaming sector. Another benefit of VICI's relationship based approach is that it fosters close communication with each of our tenants. Having just 13 tenants and eight financing partners on our roster allows us to maintain consistent and frequent dialogue with all of them, which is particularly advantageous during this volatile time, such as these. We believe this level of communication, coupled with the monthly financial reporting received from the majority of our tenants, provides VICI with strong oversight of our portfolio.
Speaker Change: Another benefit of <unk> relationship based approach is that it fosters close communication with each of our tenants, having just 13 tenants and eight financing partners on our roster allows us to maintain consistent and frequent dialogue with all of them, which is particularly advantageous during this.
Speaker Change: <unk> times such as these we believe this level of communication coupled with the monthly financial reporting received from a majority of our tenants provides <unk> with strong oversight of our portfolio looking across our portfolio. We continue to be big believers in Las Vegas.
John Payne: Looking across our portfolio, we continue to be big believers in Las Vegas, as there are just so many unique demand drivers that continue to fuel the city's activity. For example, over the Easter weekend, Las Vegas hosted WWE's WrestleMania at Allegiant Stadium, drawing nearly 125,000 fans and marking the largest gate for any event in WWE history. T-Mobile Arena has recently hosted packed houses for Stanley Cup playoff games, and the musical talent at The Sphere remained a compelling draw for the city. Additionally, during the first quarter, tens of thousands of guests attended conferences hosted by companies like Home Depot and Adobe flooded the city with activity.
Speaker Change: There are just so unique demand drivers that continue to fuel the city of activity.
Speaker Change: For example over the Easter weekend, Las Vegas hosts Wwe's Wrestlemania at Allegiant Stadium, drawing nearly a 125000 sands and marking the largest gabe for any event in WWE history T. Mobile Arena has also hosted as recently hosted packed.
Speaker Change: Houses, where Stanley Cup playoff games and the musical talent at the sphere remains a compelling draw for the city.
Additionally, during the first quarter tens of thousands of guests attending conferences hosted by companies like home depot, and Adobe flooded the city with activity, while a potential international travel slowdown has come into question. We would note that only 12% of Las Vegas visitation in 2002.
John Payne: While a potential international travel slowdown has come into question, we would note that only 12% of Las Vegas visitation in 2024 was from international travelers. It is also possible Las Vegas may benefit from a domestic trade-down effect if Americans forego international destinations. In regional gaming, we continue to monitor the landscape. And based on prior periods of heightened market volatility, we expect performance to be relatively resilient. Property performance will vary based on geography and asset. And at VICI, we focus on working with our tenants so they feel positioned to continue to successfully operate the properties we own.
Speaker Change: <unk> four was from international travel travelers. It is also possible Las Vegas may benefit from a domestic trade down effect of Americans will go international destinations.
Speaker Change: In regional gaming, we continue to monitor the landscape and based on prior periods of heightened market volatility. We expect performance to be relatively resilient property performance will vary based on geography, and asset and a beachy, we focus on working with our tenants. So they feel positioned to continue to successful.
Speaker Change: We operate the properties we own.
John Payne: Like I said, partnership is at the core of what we do. It is one of the key factors underlying our success in building this company as it drives current and future opportunities and allows our team to consistently seek to create value for our shareholders.
Speaker Change: Like I said partnership is at the core of what we do it as one of the key factors underlying our success in building. This company as it drives current and future opportunities and allows our team to consistently seek to create value for our shareholders now I will turn the call over to David who will discuss our financials.
David Kieske: Now I will turn the call over to David, who will discuss our financial results and guidance. David. Thanks, John. It's great to speak with everyone today. We greatly appreciate your time.
Speaker Change: <unk> and guidance David Thanks, John it's great to speak with everyone today and we greatly appreciate your time, starting with our Q1 capital markets activity and balance sheet.
David Kieske: Starting with our Q1 Capital Market Activity and Balance Sheet, at the end of the quarter, we very successfully addressed all of our 2025 maturities, and now we have no debt maturing until September of 2026. On March 26, we priced our bond offering and at its peak, our order book was six times oversubscribed. We issued $400 million of three-year notes at a coupon of 4.75%, and $900 million of 10-year notes at a coupon of 5.625%, or a blended coupon of 5.34%, including the impact of our hedging program. During the quarter, we also sold 7.8 million shares, raising $254 million in gross proceeds under our ATM via the Forward.
David: At the end of the quarter, we very successfully addressed all of our 2025 maturities and now we have no debt maturing.
Speaker Change: Till September of 2026.
On March 26, we placed our bond offering and at its peak order book was six times oversubscribed.
Speaker Change: <unk> $400 million.
Speaker Change: Year notes at a coupon of 475% and $900 million opinion notes at a coupon of 565% are blended coupon of 534%, including the impact of our hedging program. During the quarter. We also sold $7 8 million shares raising $254 million.
David Kieske: And as I mentioned on our last call, in February, we recast our $2.5 billion unsecured multi-currency revolving credit facility and extended the maturity until 2029, providing us additional duration and an ample source of liquidity. We have approximately $3.2 billion in total liquidity, comprised of approximately $334 million in cash, $625 million under our standing forwards, Our net debt to annualized first quarter adjusted EBITDA, excluding the impact of unsettled forward equity, is approximately 5.3 times within our target leverage range of five to five and a half. Taking into account our recent bond refinancing activity, we have a weighted average interest rate of 4.47% as adjusted to account for our hedge activity and a weighted average 6.7 years to maturity.
Speaker Change: Those proceeds under our ATM via the forward.
Speaker Change: As I mentioned on our last call in February we recast our $2 5 billion unsecured multi currency revolving credit facility and extended the maturity until 2029, providing us additional duration and an ample sources of liquidity.
Speaker Change: We have approximately $3 $2 billion in total liquidity comprised of approximately $334 million in cash $625 million under our semi forwards and $2 3 billion of availability under our revolving credit facility.
Speaker Change: Net debt to annualized first quarter adjusted EBITDA, excluding the impact of unsettled forward equity is approximately five three times within our target leverage range of five to five and a half.
Speaker Change: Taking into account our recent bond refinancing activity with a weighted average interest rate of 447% as adjusted to account for our hedge activity and a weighted average six seven years to maturity.
David Kieske: Our proactive risk management of our cost and capital of our balance sheet and of our liquidity profile through volatile markets allows our team to stay focused on building relationships and our investment pipeline. This allows VICI to continue pursuing our sustained and sustainable return goals for our shareholders without having to go pencils down for any period of time.
Speaker Change: Our proactive risk management of our cost of capital of our balance sheet, our liquidity profile through volatile markets allows our team to stay focused on building relationships and our investment pipeline. This allows <unk> to continue pursuing our sustained and sustainable return goals for our shareholders without having to go.
Speaker Change: Pencils down for any period of time.
David Kieske: Just touching on the income statement, AFFO per share was 58 cents to the quarter, an increase of 4.3% compared to 56 cents to the quarter ended March 31, 2024. Our results once again highlight our highly efficient triple net model, given the increase in adjusted EBITDA as a proportion of the corresponding increase in revenue.
Speaker Change: Just touching on the income statement.
Speaker Change: <unk> per share was 58 cents for the quarter, an increase of four 3% compared to 56 for the quarter ended March 31 2024.
Speaker Change: Our results once again highlight our highly efficient triple net model given the increase in adjusted EBITDA as a proportion of the corresponding increase in revenue our margins continue to run strong in the high 90% range when eliminating noncash items.
David Kieske: Our margins continue to run strong in the high 90% range when eliminating non-cash items. Our G&A was $14.9 million for the quarter, and as a percentage of total revenues, was only 1.5%, which continues to be one of the lowest ratios in not only the triple net sector, but across all REITs.
Speaker Change: G&A was $14 9 million for the quarter and as a percentage of total revenues was only one 5% which continues to be one of the lowest ratios in not only the triple net sector, but across all <unk>.
David Kieske: Turning to guidance, and as we noted in our release last night, we are raising our AFFO guidance for 2025 in both absolute dollars, as well as on a per-share basis. AFFO for the year ending December 31, 2025 is now expected to be between $2.47 billion and $2.5 billion, or between $2.33 cents and $2.36 cents per diluted common share. Compared to our prior AFFO per-share guidance from 2032 to 2035, the raise represents an increase of a penny at both ends of the range. Based on the midpoint of our increased 2025 guidance, VICI now expects to deliver year-over-year ASFO per share growth of 3.8%.
Speaker Change: Turning to guidance and as we noted in our release last night, we are raising our <unk> guidance for 2025 in both absolute dollars as well as on a per share basis <unk> for the year ending December 31 2025.
Speaker Change: Now expected to be between $2 47 billion and $2 5 billion or between $2 33.
Speaker Change: $2 36 per diluted common share.
Speaker Change: Third to our prior <unk> <unk> per share guidance of $2 32 to $2 35.
Speaker Change: Rays represents an increase of a penny at both ends of the range.
Speaker Change: Just on the midpoint of our increased 2025 guidance <unk> now expects to deliver year over year <unk> per share growth of three 8%.
Unknown Executive: Just as a reminder, our ASFO per share guidance, or ASFO guidance, excuse me, does not include the impact on operating results for many transactions that have not closed, interest income for many loans that do not yet have final draw structures, possible future acquisitions or dispositions, capital markets activity, or other non-recurring transactions or items. With that, operator, please open the line for questions. As a reminder, if you'd like to ask a question on today's call, please press star followed by one on your telephone keypad now to enter the queue. When preparing to ask your question, please ensure you are unmuted locally.
Speaker Change: Just as a reminder, our <unk>.
Speaker Change: Per share guidance or ethical guidance excuse me does not include the impact on operating results from any transactions that have not closed interest income for many loans that do not yet final draft structures possible future acquisitions or dispositions.
Speaker Change: Market's activity or other nonrecurring transactions are items.
Speaker Change: With that operator, please open the line for questions.
Speaker Change: Okay.
Speaker Change: I wonder if you'd like to ask a question on todays call. Please press star followed by one on your telephone keypad now turn to the queue.
Steve Sacra: And our first question comes from Steve Sacra from Abercroft ISI. Steve, your line is open, please go ahead. Yeah, thanks. Good morning.
Speaker Change: <unk> asked a question please ensure you're on mute locally.
Steve: And our first question comes from Steve <unk> from Evercore ISI, Steve. Your line is open. Please go ahead.
Steve Sacra: I guess I wanted to focus on the newest deal, and maybe just get a little bit more color on, you know, kind of the, I guess, the draw of the property, given the location, you know, it's reasonably far from, say, the Bay Area. I heard, I think, John's comments about the local population. But I guess, is it fair to assume that you're, you know, that this resort is really being designed to just tap that central California market? Do you expect other kind of draws into the area? You know, just trying to get a better feel for kind of what's going to attract people there?
Steve: Yes. Thanks, Good morning, I guess I wanted to focus on the newest deal and maybe just get a little bit more color on.
Steve: Kind of the I guess the draw of the property given the location, it's reasonably far from say the Bay area.
Steve: I think John's comments about the local population, but I guess is it fair to assume that your this resort as really being designed to just tap that central California market do you expect other kind of draws into the area.
Speaker Change: Just trying to get a better feel for kind of what's going to attract people that are and then secondly, given that it's an Indian land how does the collateral work to the extent something doesn't work out I don't think you can own.
Steve Sacra: And then secondly, given that it's on Indian land, how does the collateral work, to the extent something doesn't work out? I don't think you can own, you know, property on casino land. So just trying to understand sort of the protections VICI has in the lending structure.
Steve: Property on casino and so I'm, just trying to understand sort of the protections Vinci has in the lending structure.
John Payne: Sure, Steve.
John Payne: John Payne talking. Nice to talk to you this morning. We've spent a lot of time over the years.
Steve: Sure, Steve John John Payne talked and nice to talk to you. This morning.
Steve: We've spent a lot of time over the years first we'll start with getting to know the operator of the business Red rock resorts.
David Kieske: First, we'll start with getting to know the operator of the business, Red Rock Resorts, this first opportunity to work with them. So we were very excited to work this opportunity and to announce this first deal with Red Rock.
Steve: First opportunity.
Steve: To work with them, but we've known them for years, we've followed what they've done in Las Vegas.
Steve: Watch their developments most recently.
Steve: The Durango facility, that's being built and is already being expanded so we've been incredibly impressed with the way they operate their businesses when they run the facilities and obviously you could argue they are the best developers in the gaming space they've been working on this facility.
Steve: With the nation for over I believe over 20 years and have studied.
Steve: How successful this can be the catchment area as I mentioned in my opening remarks is large and I do think there is.
Steve: What we've seen is there is a last mover advantage, where our new business.
Steve: Can attract new customers and steel customers from from others, particularly when you have a great operator, who understands.
Steve: The way that understands customers the way that red rock, though so.
Speaker Change: We were very excited.
Steve: To work this opportunity into announces.
David Kieske: I'll turn it over to David here, who worked on a lot of the details of this deal. Yeah, Steve, good to talk to you. And just in terms of location, and the location is phenomenal. As John mentioned in his comments, it's right off the Highway 99, four and a half million people go by the site. And the competition in the area is far inferior to the quality of the build that Red Rock is developing here and the draw that this facility will have in the area. And just in terms of other ways that we got comfortable with this, Red Rock went out to raise this capital and we participated in the syndicate of large money center banks.
Steve: The first deal with Red Rock I'll turn it over to David here worked on a lot of the details of this deal yes, Steve good to talk to you and just in terms of location and the location is phenomenal as John mentioned in his comments is right off the highway 99 400 million people know by the site the competition in the area will be far is far.
Steve: Inferior to the quality of the build the Red rock is developing here and the drive at this facility.
Steve: <unk> will have in the area.
Steve: And then just in terms of other ways that we got comfortable with it.
Steve: Red rock went out to.
Steve: To raise this capital and we participated in the syndicate of large money center banks. So.
David Kieske: So, you know, the total loan, $725 million, we're $510 million of that commitment. And just given Red Rock's experience, as John alluded to, there is a guarantee from Red Rock to complete the project. And we felt really good about stepping in and developing a relationship with Red Rock, who is just one of the best developers out there in gaming, as well as travel gaming facilities.
Steve: The total loans $725 million were $510 million of that commitment.
Steve: We've just given red dots experience with John alluded to.
Steve: There is a guarantee from <unk> to complete the project.
We felt really good about stepping in and developing our relationship with Red rock.
Steve: Just one of the best developers out there in gaming as well as travel gaming facilities.
Barry Jonas: The next question comes from Barry Jonas from Truist Securities. Barry, your line is open, please go ahead. I was just curious. Tribal Sale Lease Back has changed at all. Obviously, you've done a lot of work on it, and this deal brings you a little bit closer. Not quite there yet, though. Thanks.
Speaker Change: The next question comes from Barry Jonas from <unk> Securities. Your line is open. Please go ahead.
Barry Jonas: Hey, guys just curious.
Barry Jonas: If your view on travel sale leaseback has changed at all obviously, you've done a lot of work on it and this deal Brexit a little bit closer not quite there yet so thanks.
Ed Pitoniak: Yeah, this is Ed. I'll start and John and David can add in. Tribal sale leasebacks continue to be for us a complex subject we haven't entirely figured out. You know, Steve was right to ask about the collateral on a lending package of a casino on tribal land, but especially with the involvement of Red Rock, we have a high level of confidence that the asset can perform and that our collateral is good. And it's obviously in the interest of the tribe that Red Rock be able to operate the property successfully and that our loan eventually be able to be paid off.
Barry Jonas: Yeah.
John Payne: I'll start and John and David can add in.
Speaker Change: Travel sale leasebacks continue to be for US a complex subject and we haven't been entirely figured out.
Speaker Change: <unk> was right to ask about the collateral or a lot of lending package of a casino on tribal lands, but especially with the involvement of Red rock, we have a high level of confidence that the asset can perform and then our collateral is good and it's obviously in the interest the tribe net red rock being able to operate them.
Speaker Change: Pretty successfully in that our loan eventually be able to be paid off when it comes to a sale leaseback I would say, we still have an exactly figure it out if we can get comfortable with the nuances of owning property on tribal land given the fact as Steve alluded to.
Ed Pitoniak: When it comes to a sale leaseback, I would say we still haven't exactly figured out if we can get comfortable with the nuances of owning property on a tribal land, given the fact, as Steve alluded to, in the event of any kind of default, we, as the owner of the building, would not have the right or the opportunity to operate the gaming, which is obviously the economic engine of the asset. So I would say at this point, we are still very much in a learning phase, but very, very glad to be partnering with the tribe and with Red Rock in this opportunity.
Speaker Change: In the event of any kind of default we as.
Speaker Change: As the owner of the building would not have the right or the opportunity to operate the gaming, which is obviously the economic engine of the asset So I would say at this point.
Speaker Change: We are still very much in the learning phase, but very very glad.
Speaker Change: To be to be partnering with the tribe and with Red rock.
David Kieske: David or John, anything you want to add? Yeah, you've got a lot. Great.
Speaker Change: This opportunity David or John anything you want to add.
Speaker Change: Thank you Caroline.
Barry Jonas: And then just as a follow up, you know, given the macro environment, I'm just curious if you're seeing tariffs impact any of your partners in terms on-campus schedules or else future discussions for our pipeline. Thanks. Yeah, no, it's a very good question, Barry. And, you know, as a general principle, there are obviously general conditions across the construction landscape. And, you know, when it comes to general conditions, you really want to be able to understand, are you partnering with a development company that is very experienced in development through thick and thin? Or are you partnering with an operator with a deep and successful track record of development?
Speaker Change: Great and then just as a follow up given the macro environment I'm, just curious if youre seeing tariffs impact any of your partners in terms of their construction budgets or any impact to drawdown schedules or else future discussions for our pipeline.
Speaker Change: Thanks.
Barry Jonas: Yes, no. It's a very good question Barry.
Speaker Change: As a general principle.
Speaker Change: There are obviously general conditions.
Speaker Change: Cross the construction landscape.
Speaker Change: And when it when it comes to general conditions, you really want to be able to understand are you partnering with a development company.
Speaker Change: It is very experienced in development through thick and thin.
Speaker Change: Or are you partnering with an operator with a deep and successful track record of development. So whether it's came at one Beverly Hills, which is a dedicated development company or Red rock, which is an operating company with a very proven track record as the developer as John pointed out of $9 billion of development.
Barry Jonas: So whether it's Kane at One Beverly Hills, which is a dedicated development company, or Red Rock, which is an operating company with a very proven track record as a developer, as John pointed out, a $9 billion development track record. We're very confident in their ability to manage the variability associated with tariffs, and in particular, get in front of them. And David has been very close to Kane as it's Yeah, they're obviously understanding the magnitude of what they're building, getting ahead of the tariff as best as they possibly can, even developing hedging strategies around, you know, the kind of groundbreaking around hedging, potential future purchases around raw materials.
Speaker Change: Track record.
Speaker Change: We're very confident in their ability.
Speaker Change: To manage the variability associated with tariffs.
Speaker Change: In particular get in front of them and David has been very close to cane as it's gone through the planning and costing of its project.
Speaker Change: Any color on how resourceful and an anticipatory way and then when it comes to the whole tariff.
Speaker Change: They're obviously understanding the magnitude of what they are building.
Speaker Change: Getting ahead of that.
Speaker Change: The tariff is best for us.
Speaker Change: As best as they possibly can even developing hedging strategies around.
John Payne: But knowing that they have the right contingency and the right development experience in place to ultimately get this built gives us comfort.
Speaker Change: Being able to kind of groundbreaking around hedging potential future purchases around raw materials.
Speaker Change: Knowing that they have the right contingency in the rate development experience in place to ultimately get those built gives us comfort.
Barry Jonas: Great. Thanks so much. Appreciate the call.
Speaker Change: Great. Thanks, so much I appreciate the color.
Anthony Paolone: The next question comes from Anthony Paolone from J.P. Morgan. And please go ahead. Your line is open. Great, thanks. Good morning.
Speaker Change: And the next question comes from.
Speaker Change: They belong from Jpmorgan. Please.
Speaker Change: Please go ahead your line is open.
Anthony Paolone: I was wondering if you could talk about what the pipeline has looked like lately in the face of just the macro volatility and whether there have been any changes in the types of things that you're seeing, types of deals that folks want to do or don't want to do, geography, so forth.
Speaker Change: Great. Thanks, good morning.
Speaker Change: I was wondering if you could talk about.
Speaker Change: What the pipeline has looked like lately in the face of just the macro volatility and whether there have been any changes in the types of things that youre seeing.
Speaker Change: Types of deals that folks want to do or don't want to do geography, so forth.
John Payne: Yeah, I'll turn it over to John. And I'm only here, Tony. But, you know, I feel a little bit like we're living in Groundhog Day, because I think at Vici, we've been talking about volatility for a while now. And one could say, Vici, are you ever going to stop talking about volatility? But it seems to have been a reality of our life now for at least a couple of years. And I think we would be foolhardy to, to have a house view at Vici that it's going to die down anytime soon. It certainly affects, I think, on a most fundamental level, Tony, it certainly affects animal spirits around M&A, and the growth ambitions that usually drive M&A.
John Payne: Yes, I'll turn it over to John and then Molly here Tony but.
Speaker Change: Yes.
Speaker Change: I feel a little bit like we're living in Groundhog day, because I think <unk> been talking about volatility for a while now and one can say vtsiom you're ever going to stop talking about volatility.
Speaker Change: But it seems to have been a reality of our lives now for at least a couple of years.
Speaker Change: And I think we would be foolhardy to to have a house view.
Speaker Change: <unk> that is going to die down anytime soon it certainly effects I think on the most fundamental level Tony it certainly affects animal spirits around M&A and the growth ambitions that usually drive M&A I would say across the gaming spectrum.
John Payne: I would say across the gaming spectrum, and narrowly and the experiential spectrum more broadly. These volatile conditions and the uncertainty around both economic conditions and capital financing conditions have somewhat diminished animal spirits around growth. And growth by operators is, we believe, the biggest driver of the demand for our kind of capital and the role our capital can play in operators either developing new assets or through M&A growing their short count.
Speaker Change: Narrowly M&A experiential spectrum more broadly.
Speaker Change: These volatile conditions and the uncertainty around both economic conditions and capital financing conditions have somewhat diminished animal spirits around growth and growth by operators is.
Speaker Change: We believe the biggest driver of the demand for our kind of capital and the role our capital can play in operators, either developing new assets or through M&A growing their store count.
John Payne: And having summarized sort of the general conditions, I'll turn it over to John for a more specific color. Well, Tony, Ed answered that very well. Really, quarter to quarter, things don't change that quickly in the spaces that we look at. My opening remarks talked a lot about relationship-based approach. And my colleagues are always tired of me saying, you don't do a deal at the first lunch. So, we continue to spend time with operators not only in gaming, but in other forms of experiential. We educate them on how our capital can work. And we continue to see if there's opportunities where we can be valuable during this time, ensuring that it's accretive for us and valuable to them.
Speaker Change: Having summarized sort of general conditions, I'll turn it over to John for a more specific color.
Speaker Change: Tony.
Speaker Change: And so that very well.
Speaker Change: Really quarter to quarter things don't change that quickly in the spaces that we look at my opening remarks talked a lot about relationship based approach.
Speaker Change: And my colleagues are always tired of me, saying, we don't do a deal at the first one.
Speaker Change: So we continue.
Speaker Change: To spend time with operators not only in gaming, but in other forms of experiential we educate them on our how our capital can work.
And we continue to see if theres opportunities, where we can be valuable during this time, ensuring that it's accretive for us and valuable to them.
Anthony Paolone: Got it. Thanks.
David Kieske: And then just one follow up on the guidance. How much in committed capital for various projects and loans, etc. is not in the guide because there's not a draw schedule. Just wondering like how much like you kind of have, but just didn't put in at this point. In the guidance Tony, it's about 130 million of committed capital. I'd have to get back to you on what's outside of that. I just kind of know what's in that comprises finishing off Great Wolf Northeast, Homefield, Kalahari starting up as well as obviously the North Fork investment that we just announced.
Speaker Change: Got it.
Speaker Change: And then just one follow up on the guidance how much in committed capital.
Speaker Change: For various projects and loans et cetera.
Speaker Change: Is not in the guide because theres not a draw schedule Im just wondering like how much you kind of have but just didn't put in at this point.
Speaker Change: Okay.
Speaker Change: <unk> 30, it's about $130 million of committed capital I'd have to get back to you on what's outside of that.
Speaker Change: Yeah.
Speaker Change: I'm just kind of what's in that comprises finishing up great Wolf northeast Homefield calories study as well as obviously the north Fork.
David Kieske: Okay, good. No, I'm saying it that way as well. Thanks.
Speaker Change: But we just announced.
David Kieske: Yeah, I think Tony would prefer to say a lot, but we will get back to you with a more precise answer than a lot is outside.
Speaker Change: Okay.
Speaker Change: Thanks, Eric.
Speaker Change: Yeah, I think Toni it'd be fair to say a lot, but we will we'll move it back to you with a more precise answer than a lot of outside.
Speaker Change: Yeah.
Caitlin Burrows: The next question comes from Caitlin Burrows from Goldman Sachs. Caitlin, your line is open. Please go ahead.
Caitlin Burrows: The next question comes from Caitlin Burrows from Goldman Sachs came in your line is open. Please go ahead.
Caitlin Burrows: Hi, first, maybe a follow up on that last question and congrats on the new relationship with Red Rocks. Can you give any details on why you think they came to you for development funding? I think you mentioned that it is part of a larger syndicate and then do you have any insight on how the timing of the funding could play out? Which again, I feel like is what just was asked and maybe the answer is no, but.
Speaker Change: Hi.
Speaker Change: Maybe a follow up on that last question and congrats on the new relationship with Red rocks can you give any details on why you think they came to you for development funding I think you mentioned that it is part of a larger syndicated.
Speaker Change: And then do you have any insight on.
Speaker Change: How the timing of the funding could play out which again I feel like is what just what's asked and maybe the answer is no but confirming.
John Payne: Caitlin, it's John. I'll start and then turn it over to David. That seems the rhythm of this call right now. But look, we have followed with great respect, I guess, of the Red Rock since we started the company. Even before my time when I was a former casino operator for 23 years, I watched Red Rock and watched what they've operated and really watched what they've developed. So as Ed and I started the company back in 2017, he asked me the companies that I had great respect with, and one of them was obviously Red Rocks and went out and started to build a relationship.
John Payne: Caitlin, it's John I'll start and then turn it over to David that seems the rhythm of this call right now.
John Payne: But look we have we have followed.
John Payne: With great respect I guess of the Red rock since we started the company even before my time when I was a former casino operator for 23 years.
John Payne: I watch Red rock and watch what they they've operated and really watch what they've developed so is.
John Payne: And I started the company back in 2017. He asked me the companies that have had great respect with them and one of them was obviously red rocks and went out and started to build a relationship as it.
John Payne: It started that far back and there just hadn't been any opportunity for us to work together. And so as we talked through the years about this opportunity coming to them developing this opportunity, we obviously were in the loop from the start and had a good conversation and we're excited to be a part of it. And then Caitlin, in terms of the funding cadence, this is a construction draw schedule. We put out an initial $75 million upon closing, but it'll be a little bit more regular cadence between now and September 26 when it opens up. So we're excited about the ability to deploy capital on a consistent monthly basis.
John Payne: It has started that far back in there just hasn't been any opportunity for us to work together and so as they as we talked through the years about this.
John Payne: Opportunity come in.
John Payne: To them developing this opportunity we obviously we're in the loop.
Speaker Change: From the start and had a good conversation and we're excited to be a part of it and then Kevin in terms of the funding cadence versus a construction draw schedule.
Speaker Change: We put our initial $75 million upon closing, but it would be a little bit more regular cadence between now and as John said September 26, when it opens up so we're excited about the ability to deploy capital on a consistent monthly basis.
Ed Pitoniak: And I will just add, Caitlin, that for those who don't follow gaming, our REIT analysts and our REIT investors, to understand RedRock, you really need to understand and experience, moreover, the quality of what they build and the quality of their operation. I think, John, it would be fair to say it is strip-level quality, even when it is off-strip as most of their assets, as all of their assets are.
Barry Jonas: And I will just add Caitlin.
Speaker Change: For those who don't follow gaming.
Barry Jonas: Read analysts in a REIT investors.
Barry Jonas: To understand Red rock, you really need to understand and experience. Moreover, the quality of what they build and the quality of their operation.
John Payne: I think John it would be fair to say it is strict level quality.
John Payne: Even when it is off script as most of their assets all as all of their assets are and if you were in Las Vegas, I think we highly encourage you to visit their assets like the red rock sort of anchor.
Caitlin Burrows: And if you are in Las Vegas, I think we highly encourage you to visit their assets like the RedRock sort of anchor in Summerlin or their new asset Durango, which is, as John says, very comparable to what you can expect them to be building with their partners in World4. Got it. And I know that there's limited detail you guys can give us on future. But I know that when you guys establish these relationships, it's not with the intent of doing a single deal. So considering that and all the development Red Rocks has done in the past, I'm wondering how you think about that future opportunity with them?
John Payne: In summary are there new asset and Durango, which as John says very comparable to what you can expect them to be building.
Speaker Change: Our partners at Wells Fargo.
John Payne: Got it.
Speaker Change: And I know that there is limited detail you guys can give us on future, but I know that when you guys establish these relationships, it's not with the intent of doing a single deal. So.
Speaker Change: Considering that and other development Red rocks is done in the past I'm wondering how you think about that future opportunity with them.
Caitlin Burrows: Are you thinking it would be more development? Are there still leaseback opportunities? Something else?
Speaker Change: Do you think it would be more development or their sale leaseback opportunities.
John Payne: Okay, Glenn, right now, there's no other opportunities. It's a one transaction with them. I think the question you're asking is, in the future, if Red Rock was growing their business, would we be interested in helping them grow in a variety of ways, whether it was sell the real estate, whether it was another opportunity to develop? The answer is absolutely yes, for the right opportunity. And obviously, it's got to be accreted for us and work for them. But I hope you hear from our remarks, we have tremendous respect for how they run their company, how they develop their projects, how they build partnerships with tribal nations.
Speaker Change: Something else.
Glen: Okay Glen.
Glen: Right now there is no other opportunities. It's a one one transaction with them I think the question you're asking is in the future if red rock was growing their business or would we be interested in helping them grow in a variety of ways, whether it was sell the real estate, whether it was another opportunity to develop the answer is.
Glen: Absolutely, yes for the right opportunity and obviously its got to be accretive for us and work for them.
Glen: But I hope you hear from our remarks, we have tremendous respect for how they run their company how they develop their projects how they build partnerships with tribal nation.
Caitlin Burrows: We really like all of that. But to be clear, this is one opportunity, and only one opportunity today. But we would hope or we would love the opportunity in the future, but no commitments. Got it.
Glen: Really like all of that but to be clear. This is one opportunity and only one opportunity today, but we would hope or we would love the opportunity in the future with no commitments.
Rich Hightower: The next question comes from Rich Hightower from Barclays. Rich, please go ahead, your line is open. Hey, good morning, guys. Thanks for taking the question here.
Got it thanks.
Speaker Change: The next question comes from Rich Hightower from Barclays Rich. Please go ahead. Your line is open.
Rich Hightower: Just maybe a little more of the nuts and bolts on the tribal side and the deal with Red Rock. But just just to be clear, Red Rock's the borrower. Collateral Package. that VICI would have an interest in. It sounds like it has really nothing to do with the land itself, but it really would be just the construction that sits on top of the land. Just help me understand what that is and a little more about the security if anything might ever go wrong. Obviously, it doesn't sound like it ever would, but just help us understand that.
Rich Hightower: Hey, good morning, guys. Thanks for taking the question here, just maybe a little more of the nuts and bolts on the travel side and the deal with Red rock, but just just to be clear red rocks the borrower.
Speaker Change: The collateral package.
Speaker Change: The Beach you would have an interest in it sounds like has really nothing to do with the land itself, but it really would be just the construction that sits on top of the land. Just just help me understand kind of what that is and a little more about the security of anything might ever go wrong, and obviously doesn't sound like it ever would but just help us under.
Rich Hightower: Then secondly, it does sound like tribal lending is this much bigger opportunity than maybe any of us appreciated sitting here 12 months ago.
Speaker Change: And then secondly, it does sound like private lending.
Speaker Change: Lending is this much.
Speaker Change: Much bigger opportunity than maybe any other sort of appreciated sitting.
David Kieske: Just help us understand how that landscape has evolved and changed now that GLPI has announced a deal. You guys have announced this deal. Just help us understand the moving parts there as well. Yeah, right. It's David. I'll start and then I'll chime in. The borrower is actually the tribe, North North Monterey, Ontario. Red Rocks is the developer and providing the construction guarantee or completion guarantee to get the project built, the oversight and expertise that we talked about that they bring to the table. And so the collateral is the building. But obviously, we talked about in this call and other calls, you know, taking that back is very difficult.
Speaker Change: Sitting here 12 months ago, and just help us understand how that landscape is.
Speaker Change: <unk> all been changed now that <unk> announced the deal you guys have done.
Speaker Change: This deal just help us understand the moving parts there as well please.
David Cane: Yes, it's David I'll start and.
Speaker Change: The borrowers actually the tribe no third.
David Cane: <unk> rancheria.
David Cane: As a developer right into construction guarantee a completion guarantee to get the project built the oversight and expertise.
David Cane: We've talked about what they bring to the table and sort of the collateral is the bill.
David Cane: But.
David Cane: Obviously, we talked about on this call and other calls.
David Kieske: And given the fact that the tribe is the only entity that has the right to operate gaming, so we've got full faith in conviction around Red Rock and their buildings, the fact that they're, you know, putting up there, they put up their balance sheet to provide the initial funding. This loan will complete the funding. And as I mentioned, there's a whole host of money center banks that have come into the soon to get to. to provide the financing for the development here. Yeah, just one other thing to add, Mr. Samantha, with respect to the collateral package, we also have a first priority security interest in the future cash flows and revenues from the gaming activities and includes inclusive of the gaming.
David Cane: Taking that back is very difficult.
David Cane: And given the fact that the trial is the only entity the right to operate gaming. So we've got full.
David Cane: Faith and conviction around red rock and their ability to affect that.
David Cane: Putting up there they've put up their balance sheet to provide the initial funding. This loan will complete the funding and as I mentioned there is a whole host of money center banks that have come into the syndicate.
David Cane: The.
David Cane: Provide the financing for the development here.
Samantha Gallagher: Just one other thing to add this is Samantha with respect to the collateral package. We also have a FERC priority security interest in the future cash flows and revenues from the gaming activity.
Ed Pitoniak: And that's an important point. And also, when we think about lending, tribal lending versus a lease back, it's also thinking about the LTV or the LTC, which is different than your percentage interest when you're looking at what your quote collateral when you already own the building and you can't operate. And so we view them as different when you think about where we are on the spectrum. I think when you're, when you reduce it all to a second. Yeah, I was just gonna say, when you're reduced at all, go ahead. Yeah, this is all this is all dependent on it ultimately operating successfully.
Samantha Gallagher: And as that included inclusive of the gaming and that's an important point and also when we think about lending private lending versus a sale leaseback. So thinking about the LTV or the LTC, which is different than 4% against us when youre looking at what your quote unquote collateral when you already own the building and can operate and so we view them as different when you think about where we are in the risk.
Samantha Gallagher: <unk>.
Samantha Gallagher: And I think when you're when you're dosing at all to if I go ahead sorry.
Speaker Change: Yes, I was just going to say when you reduce it I'll, let it go ahead.
Ed Pitoniak: And again, the involvement of a proven operating partner proven across the gaming landscape broadly, but specifically in tribal gaming and specifically in California, gives us a lot of comfort and I really would not minimize the importance of that completion guarantee either from Red Rock.
Samantha Gallagher: No.
Samantha Gallagher: Yes. This is all this is all dependent on ultimately operating successfully and again the involvement of a proven operating partner proven across the gaming landscape broadly, but specifically in tribal gaming and specifically in California.
Samantha Gallagher: It gives us a lot of comfort and I really would not.
Samantha Gallagher: Minimize the importance of that completion guarantee either primary Brock.
David Kieske: Okay, and then I guess the second part of the question just, you know, maybe more broadly about Tribal Lending Landscape. And, you know, maybe help me understand too, if there were other traditional lending sources for a lot of these projects historically, you know, what has, other than pricing, you know, maybe there's more to it, you know, what has caused the REITs, you know, to kind of have an opening in the way that we've seen in the last, you know, few quarters here? It's definitely something we continue to look at, Rich. I'm not here to say that there's, you know, 20 opportunities out there, but it's definitely a part of our business that we're studying, better understanding, as Ed just walked you through.
Samantha Gallagher: Okay, and then I guess the second part of the question just maybe more broadly about the.
Samantha Gallagher: The tribal lending landscape and.
Samantha Gallagher: Maybe help me understand too if there were other traditional lending sources for a lot of these projects historically.
Samantha Gallagher: What has other than pricing maybe there is more to it what has caused the REIT.
Samantha Gallagher: To kind of have an opening in the way that we've seen in the last few.
Samantha Gallagher: A few quarters here.
Rich Hightower: It's definitely something we continue to look at rich.
Samantha Gallagher: Out here to say that there is.
Samantha Gallagher: 20 opportunities out there, but it's definitely a part of our business that we're studying better understanding as Ed just walk you through not all deals are the same not all deals have.
David Kieske: Not all deals are the same. Not all deals have an operator like Red Rocks running it. But it's something that we're looking at. I don't think you should say this is something the REITs have been looking at just the past two quarters. I think what you should know is, at least from a VICI perspective, these are things that we studied for years. And it doesn't mean that it shows up and we've looked at it for three months. So this is something we've been studying for years. There have been others that have been involved in this type of lending over the decades that tribal casinos have been developed all over the United States.
Samantha Gallagher: And operator like Red rocks running it.
Samantha Gallagher: But it's something that we're looking at I don't think you should say this is something the rights have been looking at just the past two quarters.
Samantha Gallagher: I think what you should know at least from a <unk> perspective. These are the things that we study for years and it doesn't mean that it shows up in and we looked at it for three months. So this is something we've been studying for years. There have been others that have been involved been involved in this type of lending over the decades that.
Ed Pitoniak: But it's something that this particular opportunity was one we were quite excited about and obviously we announced that investment here over the past coming days. You know, just to kind of reiterate what I said to Tony, Rich, you know, growth creates a demand for capital. And, you know, as you look across the U.S. gaming landscape, California is still a relatively young gaming jurisdiction. I think John Gaming has been in California for maybe 20 odd years and it is only tribal gaming in California. So there is still white space on the California gaming map. Tribes are gaining the opportunities to put new stores onto that map.
Samantha Gallagher: Casino had been developed all over.
Samantha Gallagher: The United States.
Samantha Gallagher: But it is something that this particular opportunity was one we were quite excited about and obviously we announced.
Samantha Gallagher: But investment perhaps coming days.
Samantha Gallagher: Just.
Samantha Gallagher: We're kind of reiterate what I said Tony rich.
Samantha Gallagher: <unk>.
Samantha Gallagher: Growth creates a demand for capital.
Samantha Gallagher: <unk>.
Samantha Gallagher: As you look across the U S gaming landscape, California is still a relatively young gaming jurisdiction I think John gaming has been in California for maybe 20 odd years and it is only tribal gaming in California. So there is still white space on the California gaming map.
Samantha Gallagher: Tribes are gaining the opportunities to put new stores onto that map and thats, creating a need for capital that you don't necessarily see everywhere else in the country at this point.
Ed Pitoniak: And that's creating a need for capital that you don't necessarily see everywhere else in the country at this point.
Unknown Executive: All right. Appreciate the call, guys. Thank you.
Samantha Gallagher: Alright, I appreciate the color guys. Thank you.
Smedes Rose: The next question comes from Smedes Rose from City, your line is now open, please go ahead.
Samantha Gallagher: Okay.
Speaker Change: The next question comes from Smedes Rose from Citi. Your line is now open. Please go ahead.
Nick Joseph: Nick Joseph here for Smedes. I was hoping you could touch on your expectations for the Century Casino lease. I know it's a small part of rents overall, but do you feel comfortable that the recent CapEx investments that those properties will help improve Yeah, good, very, very good question. And I'm smiling here because we had part of our organization in the assets, actually, two days ago, visiting the assets, visiting with the team, looking at the new construction, looking at the new casino, that was put in place and talking about the great numbers that are coming out of there.
Speaker Change: Thanks, Nick Joseph here with Smedes I was hoping you could touch on your expectations for the century casino lease I know, it's a small part of rents overall, but do you feel comfortable that the recent capex investments at those properties will help improve coverage.
Speaker Change: Yes, very good question and I'm smiling here, because we had part of our organization and the assets.
Speaker Change: Actually two days ago.
Speaker Change: Assets visiting with the team looking at the new construction looking at the new casino.
John Payne: In my opening remarks, you know, one of the things that's great about VICI and the way that we're structured is that we have constant communication with our operators. We also get for the majority of our operators, we get monthly results. We have conversations with them about how the business is working, how they think about capital. So Century is one of them. But you'd expect or you I think you'd hope that we're having conversations with our large operators and MGM or, or Hard Rock or, or others that that we have assets with. But it is exciting to see that the new development we helped finance, really take off down in Missouri, Missouri properties, and we'll continue to see if there's ways over time, we can put money to work with, with Century as well as with some of our other operators.
Speaker Change: That was put in place and talking about.
Speaker Change: Great numbers that are coming out of there in my opening remarks, one of the things Thats, great about <unk> and the way that we're structured.
Speaker Change: We have constant communication with our operator, we also that for the majority of our operators. We get monthly results, we have conversations with them about how the business is working how they think about capital so essentially as one of them.
Speaker Change: But you would expect thank.
Speaker Change: Thank you would hope that we are having conversations with our large operators and MGM or or hard rock or or others that we have assets with but.
Speaker Change: It is exciting to see the.
Speaker Change: The new development, we helped finance really take off down in the Missouri, Missouri properties and we will continue to see if there's ways over time, we can put money to work with with century as well as with some of our other operators.
John Payne: Thanks. And then I guess just one other. partner you you didn't mention there was Caesars and obviously we've received some questions on the regional casinos and I know there's 10 years remaining on that lease but You know, how are those conversations going if they are, you know, just given current coverage? Yeah, Nick, good to hear from you. I wouldn't say there's any converting conversations of any kind between us and Caesars around regional property performance. We obviously continue to be pleased at the magnitude of capital that Caesars has been and continues to invest in our assets, both on the Las Vegas Strip and in the regions.
Speaker Change: Thanks, and then I guess just one other.
Speaker Change: Partner you you didn't mentioned there with Caesars and obviously, we've received some questions on the regional casinos and I know Theres 10 years remaining on that lease but.
Speaker Change: How are those conversations going if they are.
Speaker Change: Just given.
Speaker Change: Current coverage.
Speaker Change: Yeah, Nick Adam.
Speaker Change: Good to hear from you.
Speaker Change: I wouldn't say, there's any burning conversations if any time between us and Caesars around <unk>.
Speaker Change: Regional property performance, we obviously continue to be pleased at the magnitude of capital. The Caesars has been and continues to invest in our assets both on the Las Vegas strip and in the regions.
John Payne: You are obviously seeing, we're seeing the benefits in real time of the 300 odd million they put into New Orleans, John. Obviously, a couple hundred million into Atlantic City, the recent announcement of 160 million of their capital into Lake Tahoe. We think it's pretty strong evidence of Caesars willingness to continue to invest in these properties and drive this kind of performance that ultimately should lead to rent coverage we're all happy and satisfied with.
Speaker Change: You are obviously seeing we are seeing the benefits in real time.
Speaker Change: 300 odd million dollars put into New Orleans, John Obviously, a couple of hundred million dollars into Atlantic City. The recent announcement of $160 million of their capital into Lake Tahoe. We think this is pretty strong evidence of Caesars willingness to continue to invest in these properties and drive.
Speaker Change: This kind of performance that ultimately should lead to rent coverage, we're all happy and satisfied with.
Unknown Executive: Thank you very much.
David Katz: The next question comes from David Katz at Geoffrey's. David, your line is open. Please go ahead. Hi, morning. Thanks for taking my questions. So with respect to the Red Rock arrangement, I don't know if you're able to sort of characterize what the capital structure, you know, of that property is, you know, setting up to be and or, you know, any comments around pricing, you know, on the loan that that may be helpful. And as a part of that, you know, bigger picture, you know, how you look at you know, opportunities and the risk profile of them.
Speaker Change: Thank you very much.
Speaker Change: The next question comes from David Katz with Jefferies. David Your line is open. Please go ahead.
David Katz: Hi, good morning, Thanks for taking my questions.
David Katz: With respect to the Red rock arrangement.
David Katz: If you were able to sort of characterize what the capital structure.
David Katz: That property is.
David Katz: Setting up to be and or any comments around pricing.
David Katz: On the loan.
David Katz: Maybe helpful and as a part of a bigger picture how.
David Katz: How you would look at.
David Katz: You know, relative to sort of where you were one, two, three years ago, is it, you know, still the same? And, you know, is there some progression and kind of risk profile as you look at stuff today? Right in there, David.
David Katz: Opportunities.
The risk profile of.
David Katz: Relative to sort of where you were one two or three years ago is it still the same.
David Katz: Is there some progression in kind of risk profile as you look at stuff today.
David Kieske: Good to talk to you. Let me start with the loan. You know, as we've talked about the $725 million total facility because of two term loans, a term loan A and a term loan B. Our blended all in yield is so far right around seven. That includes some incremental fees and whatnot on the capital that we've committed. The $725 million total wage on term loan will be the development funding for the project. And then we are comfortable with the capitalization and the support that's coming from, you know, Red Rock and their expertise around getting this open and really the location.
David Katz: Thanks.
Speaker Change: David Good to talk to you.
David Katz: Start with the loan.
David Katz: As we've talked about the $725 million total.
David Katz: Facility.
David Katz: Two term loans.
David Katz: The term loan B, our blended all in.
David Katz: Yield is silver right around seven and includes some incremental fees.
David Katz: On the capital that we've committed to $725 million delayed draw term loan will be will be the development funding for the project.
David Katz: And then we are comfortable with the capitalization and the support that's coming from Red rock and their expertise around getting this open and really the location and you look at the competing product in the areas far far inferior to what the Durango esque style facility that will be built here in Madera, California.
Ed Pitoniak: And you look at the competing product in the area, it's far, far inferior to what the Durango-esque style facility that will be built here in Madera, California. And in terms of our risk appetite, I think we continue, as we talked about at VICI, we have a table of learning. We continue to learn internally and study different opportunities. And as we've noted on this call, we've looked at tribal for years and partnering with the right operator in the right location and doing things with the right guarantees and right structure. We get comfortable with that and the ultimate return that we earn on that capital that we deploy.
David Katz: And then in terms of our risk appetite I think we continue as we talked about with BG. We have a table of learning we continue to learn internally.
David Katz: Steady different opportunities and as we've noted on this call we've looked at Drybulk for for years.
David Katz: And partnering with the right operator in the right location and doing things with the right.
David Katz: Guarantees and the right structure, we get comfortable with that and the ultimate return that we earned on that capital that we deploy it so.
Ed Pitoniak: So, you know, I think we spend a lot of time ensuring that we put our capital out in ways that make sense. And as Ed talked about, protecting the dividend, but also ensuring that we get that capital repaid.
David Katz: <unk>.
David Katz: We.
David Katz: I spend a lot of time, ensuring that we put our capital in ways that makes sense.
Ed Pitoniak: Yeah, and I'll just add, David, that You know, in investing in any category, but in particular in our investment category, general principles only take you so far. And so any kind of general principles we might hold about tribal gaming are just not that useful in us ultimately making investment decisions. And we make investment decisions based entirely on specifics, not generalities. And the specifics of this investment opportunity were very compelling. The involvement of a highly proven, highly successful developer, and also happens to be a highly proven and highly successful operator. Those specifics were incredibly important to making this particular decision.
David Katz: And as Ed talked about protecting the dividend, but also ensuring that we get that capital repaid yeah.
David Katz: And I'll just add David Tibet.
David Katz: We're investing in any category, but in particular in our investment category.
David Katz: General principle is only take you so far and so any kind of general principles, we might hold about travel and gaming.
David Katz: We are just not that useful and as ultimately making investment decisions and we make investment decisions based entirely on specifics not generalities in the specifics of this investment opportunity.
David Katz: Very compelling.
David Katz: <unk> of our highly proven highly successful developer and also happens to be a highly proven and highly successful operator, those specifics were incredibly important.
David Katz: And any future decisions we might make, whether around tribal or commercial will always again be made on the Thank you very much.
David Katz: Two making this particular decision and any future decisions, we might make whether around travel or commercial will always again be made on the specifics.
Hayne Dawson-Just: The next question comes from Hayne Dawson-Just from Mizuho, the line is now open, please go ahead. Hey guys, good morning. I guess I'm curious if we should also be reading into the Red Rock construction loan that perhaps you'd be more comfortable being a construction lender more broadly under the right circumstances and with the right partner. So perhaps can you talk about your appetite? more of that type of loan activity going forward. And also, some thoughts on the underwriting of the loan and the required return that you have there.
David Katz: Thank you very much.
Speaker Change: The next question comes from Haynesville Suntrust from Mizuho. Your line is Natalie from <unk>. Please go ahead.
David Katz: Yeah.
Speaker Change: Hey, guys good morning.
Speaker Change: I guess I'm curious if we should also be reading into.
The Red rock.
Speaker Change: Instructions on that perhaps you'd be more comfortable being a.
Speaker Change: Construction lender.
Speaker Change: Rodley under the right circumstances and with the right partner. So perhaps can you talk about your appetite for doing more of that type of loan activity going forward and also some thoughts on the underwriting of alone in the required return that you have there. Thanks.
John Payne: Thanks. Yeah, I would really reiterate what I just said in response to David, that it would be, it will always be highly specific. We do not have a general strategy around construction funding. We have a general strategy around relationship development and identifying experiential partners we would like to have a relationship with and grow over time. And if helping them finance a development opportunity is the way to start the relationship, we will certainly look at that energetically and yet rigorously. And you can see in both the cane and the Red Rock situation, we are being driven by the opportunity to establish relationships, and not really specifically being driven by a desire to become a construction financier.
Speaker Change: Yes.
Speaker Change: Would really reiterate had no what I just said in response to David.
Speaker Change: B it will always be highly specific we do not have a general strategy around construction funding.
Speaker Change: We have a we have a general strategy around relation develop relationship development and identifying.
Speaker Change: Hi.
Speaker Change: Experiential partners, we would like to have a relationship with an LOE over time and is helping them finance a development opportunity is a way to start the relationship. We will certainly look at that and energetically and yet rigorously and you can see in both the cane in there.
Speaker Change: <unk> situations, we are being driven by the opportunity to establish relationships and not really specifically being driven by a desire to become a construction finance here.
John Payne: Appreciate that, and maybe a follow-up here, just speaking of relationships. I'm curious if there are any real-life opportunities with any of your other partnerships that could be attractive to you here.
Speaker Change: I appreciate that and maybe a follow up here just speaking of relationships I'm curious if there any ROFO opportunities with any of your other partnerships that could be attractive to you here. Thank you.
John Payne: Thank you. I didn't hear exactly the question, but I think that it was, are there opportunities to grow with our current set of 13 tenants and eight financing partners? The answer I'll give you is I hope so. I think that's always been the way we have talked about this and why we don't have 100 tenants right now. We have 13, and I'm sure over time they'll grow to 14, 15, 16. But part of our strategy that we've talked about since we started the company was to invest in the business and help them grow over time while also adding new tenants as well as new financing partners to grow the business accretively.
Speaker Change: Yeah.
Speaker Change: I didn't hear exactly the question, but I think it was are there opportunities to grow with our current <unk>.
Speaker Change: Set of 13 tenants in eight financing partners.
Speaker Change: The answer I'll give you is I hope so I think that's always been the way we've talked about this and why we don't have 100 tenants right now we have 13 and I'm sure over time, they will grow in 2014, 15, and 16, but part of our strategy that we've talked about since we started the company was defined the best in the business and help them.
Speaker Change: ROE over time, while also adding new tenants as well as new financing partners to grow the business Accretively.
Daniel Guglielmo: The next question comes from Daniel Guglielmo from Capital One Securities. Daniel, please go ahead. Your line is open. Hi everyone, thank you for taking my questions. The March and April trend commentary for your big public partners in Las Vegas has been very positive this earnings. Can you give us a sense if you're hearing the same things from the non-public partners on the strip? So I guess the Venetian complex and then maybe Fountain Blue in the investment.
Speaker Change: Okay.
Speaker Change: Thank you.
Speaker Change: The next question comes from Tanya will begin with from capital One Securities can you. Please go ahead. Your line is open.
Speaker Change: Hi, everyone. Thank you for taking my questions.
Speaker Change: March and April trend commentary for your Big public partners in Las Vegas has been very positive. This earnings can you give us a sense if youre hearing the same things from the nonpublic partners on the strip. So I guess, the Venetian complex and then maybe fountain.
John Payne: Yeah, we're very excited. Nice to talk to you, Daniel. We were very excited. Obviously, we see some of the numbers before they become public at times. And we're very excited to see Las Vegas continue to be quite successful and growing. As you heard in my comments, we like Vegas so much because there's so many different, what I call cash registers for and reasons for consumers to come to the city. MGM and Caesars, we're talking about their business. The Venetian has a robust business. I was just out there myself, and I know Ed was as well, enjoying our time at the Sphere and watching how that brings in a whole bunch of new consumers to not only the Venetian, but really brings a new consumer set to Las Vegas, which is great to have a city like that.
Speaker Change: Investment book.
Speaker Change: We're very excited nice to talk to you Daniel we were very excited.
Speaker Change: Obviously, we see some of the numbers before they become become public at times and were very excited to see Las Vegas continue to be.
Speaker Change: And quite successful and growing as you heard in my comments, we like Vegas, so much because theres. So many different what I call cash registers for and reasons for consumers to come to the city.
Speaker Change: MGM Caesars, we're talking about their business. The Venetian has a robust business I was just out there myself and I know Ed was as well enjoying our time at the sphere and watching how that brings in a whole bunch of new consumers to not only the Venetian but really brings a new consumer set.
John Payne: So Daniel, the answer is Vegas seems to be continuing to have a very good run. Part of that, the credit goes to the operators, because they continue to find different ways to attract not only their existing customers, but new customers. And there's no better group than the group that runs Las Vegas. So we're excited to be so invested there and owning those assets, because I know that the people who do will continue to find ways, no matter what the economic conditions are, to grow their business.
Speaker Change: Las Vegas, which is great to have.
Speaker Change: City like that so Daniel the answer is Vegas seems to be continuing to have to have a very good run part of that is the credit goes to the operators because they continue to find different ways to attract not only their existing customers, but new customers and there is no better group.
Speaker Change: Ben.
Speaker Change: The group that runs Las Vegas. So we're excited to be so invested there owning those assets because I know that the people who do we will continue to find ways no matter, what the economic conditions are to grow their business.
Gabe Wasserman: Great. Thank you. That's really helpful. And I did like your point on the potential trade down, you know, more people to Las Vegas. And then on the second one, so you all have a wide range of partners. John, I think you mentioned 21, both big and small with very different risk characteristics.
Speaker Change: Great. Thank you that's really helpful and I did like your point on the potential trade down and more people to Las Vegas.
Speaker Change: And then on the second one so youll have a wide range of partners. John I think you mentioned 21, both big and small with very different risk characteristics and given the confusing macro can you just talk about the team's approach to risk and if theres a formal risk process in place to flag and work through any issues there.
Gabe Wasserman: And given the confusing macro, can you just talk about the team's approach to risk and if there's a formal risk process in place to flag and work through any issues that you see developing over the next few years? Yeah. Hey, Dan, it's Gabe Wasserman here. I can take the first part of that question and others can weigh in as well. But, you know, since we founded the company in 2017, we've had a pretty rigorous risk management process. We meet as a management team every quarter, there's two separate meetings. One is to go over the performance of our tenants and our tenants and the lease investments.
Speaker Change: That you see developing over the next few years.
Speaker Change: Thank you.
Speaker Change: Hey, Dan It's Gabe Wasserman here I can take the first part of that question that others can weigh in as well, but since we founded the company in 2017, we have pretty rigorous risk management process, we meet as.
Speaker Change: As a management team every quarter, there's two separate meetings one is to go over the performance of our tenants and our tenants and the lease investments and there is a separate meeting to go over.
Gabe Wasserman: And there's a separate meeting to go over our borrowers and the performance of our loan investment. So as a management team, a lot of visibility into the performance of our investments and a lot of discussions and rigorous underwriting and monitoring. I appreciate it.
Speaker Change: Borrowers and the performance of our loan investments so as a management team a lot of visibility into the performance of our investments in a lot of.
Speaker Change: Discussions and rigorous underwriting and monitoring.
Ronald Kamdem: The next question comes from Ronald Kamdem. Next question is from Ronald Kamden of Orkin Stanley.
Okay appreciate it.
Ronald Kamdem: Ronald, please go ahead. Hey, good morning. This is Jenny on the wrong. Thanks for taking my question. I think my first one is regarding the Caesars Forum Commission Center call options you have later this year. What is your latest thoughts on the deal? And if you would like to exercise on that. Yeah, very good question. That call becomes live here later in the fall. It's September of this year. I don't have the exact date, but I believe it's late September of this year. I think your question is, do we like the asset? Is it a beautiful asset?
Speaker Change: The next question comes from rental counter.
Speaker Change: Yeah.
Speaker Change: The next question is from Ronald Camden of Morgan Stanley. Please go ahead.
Speaker Change: Hey, Good morning. This is Danny on for Ron. Thanks for taking my question I think my first one is regarding the Caesars Forum Convention Center call options you have later this year.
What is your latest thoughts on the deal and if you would like to exercise on that.
Speaker Change: Yes, very good question that call becomes lines here later in the fall September of this year I don't have the exact date, but I believe it's late September of this year I think your question is do we like the asset.
Ronald Kamdem: How is it performing? It is something that we'll continue to evaluate as that time comes. Caesars built in just a beautiful place and is using it effectively, as my last comments of driving new business and new meeting business there. So we are aware of that opportunity. We've got a window that's quite wide, and we'll study. the opportunity that when, when it comes.
Speaker Change: Beautiful asset how is it performing it is something that we will continue to evaluate at that time comes.
Speaker Change: Caesars Delta just.
Speaker Change: Beautiful place in US is using it effectively is my last comments of of driving new business and new media business. There. So we.
Speaker Change: We are aware of that opportunity.
Speaker Change: Got a window, that's quite wide and we will study.
Ed Pitoniak: Perfect, I have a question regarding the, yeah. Yeah, go ahead, please. Yeah, Jenny, I was just gonna say before you ask your second question, that our decision making is always guided by solving for total return, as I as I spoke of in my opening remarks. And as we look at the building blocks of our total return, those building blocks are dividend yield, same store NOI, levered into AFFO per share, and then external growth. And we we try to optimize our timing around any kind of opportunities like that, such that we are solving fundamentally for sustained and sustainable, superior total return.
Speaker Change: The opportunity to win when it comes.
Speaker Change: Regarding the.
Speaker Change: Yeah go ahead, please yes, Danny I was just.
Speaker Change: Yes, Jamie I was just going to say before you ask your second question.
Speaker Change: That our decision, making is always guided by solving for total return as I as I spoke of in my opening remarks, and as we look at the building blocks of our total return those building blocks to our dividend yield same store NOI levered into <unk> per share and then <unk>.
Speaker Change: External growth and we try to optimize our timing around any kind of opportunities like that such that we are solving fundamentally for sustained and sustainable superior total return. So that really is the calculus of guide so much of our decision making around not only what we <unk>.
Ed Pitoniak: So that really is the calculus that guides so much of our decision making around not only what we invest in, but when we invest. makes sense.
Ed Pitoniak: I think I think the second one is regarding the strategic relationship with Kane International. I'm just curious if there's any incremental conversation this quarter with them? Like what other kind of experiential investment opportunities are you looking to pursue together beyond the one Beverly Hill project? Yeah, well, they are involved in a lot of experiential categories we are fundamentally interested in. And I will just cite one example, and that is their investment in a facility called The St. James, which is just outside of Washington, D.C., and is very much like Chelsea Pierce. They've been very open and energetic about their growth ambitions for The St.
Speaker Change: But when we invest in it.
Speaker Change: Makes sense I.
Speaker Change: The lump on top of the Hill project.
Speaker Change: Yes.
Speaker Change: They are involved in a lot of experiential categories. We are fundamentally interested in and I will just say one example of that is their investment in a facility called that St. James which is just outside of Washington D. C is very much like Chelsea piers they've been very.
Ed Pitoniak: James as ultimately a network of facilities across the country. And we've enjoyed very much the conversations we've had on, I must emphasize, a very preliminary basis on how we might ever be of service to them in growing that network.
Speaker Change: <unk> and energetic about their growth ambitions for the St. James as ultimately a network of facilities across the country and we've enjoyed very much. The conversations we've had on I must emphasize a very preliminary basis on how we might ever be of service to them in growing that network.
Max Maas: Okay, sounds great. Thanks so much.
Max Maas: The next question comes from Max Maas at CBRE. Max, please go ahead, your line is open. Good morning. Thanks for taking my question. Belly's recently had a deal with Star in Australia. You guys have interest in participating in that or maybe in Australia more broadly? If you've been following us for a while, David and I spent some time down under about two years ago visiting Australia and New Zealand and understanding the landscape. Obviously, the market in Australia, particularly where the assets are for the star, has gone through radical change, not only structural issues, but the regulators and the regulations of those businesses have changed and have put a real hurt, I guess is the best way, on the business right now.
Speaker Change: Okay. It sounds great. Thanks, so much.
Speaker Change: The next question comes from Maxmara CBRE Max. Please go ahead your line is open.
Speaker Change: Okay.
Speaker Change: Good morning, Thanks for taking my question.
Speaker Change: Recently I had to deal with Star in Australia, you guys are interested in participating in that or maybe in Australia more broadly.
Speaker Change: If you've been following us for a while David and I spent some time down under.
Speaker Change: About two years ago.
Speaker Change: Visiting Australia, and New Zealand and in understanding the landscape, obviously the market in Australia, particularly where the assets are for the star has gone through a radical change not only structure balance sheet structural issues, but the regulators and the regulations of those business have changed.
Max Maas: I think your question was, would we be involved in an opportunity with the star in Australia?
Speaker Change: But a real hurt I guess is the best way on the business right. Now I think your question was would we be involved in an opportunity with the startup losses.
Ed Pitoniak: The answer is no. Okay, I would say just to add Sorry, Max, I was just going to add that really one key predicate for any investment we ever make is having as high a degree of visibility and confidence around what the future earnings profile of a given asset will be. And right now, given the turmoil in the regulatory landscape and its impact on the economic performance of gaming assets in Australia, it is very difficult to have any visibility or confidence around what kind of money these assets are going to make over the longer term. Understood.
Speaker Change: <unk>.
Speaker Change: Australia the answer is no.
Speaker Change: Okay, I would say just Marty.
Speaker Change: Just to add.
Max: Yes, sorry, Max I was just going to add one.
Speaker Change: One key predicate one key predicate for any investment we ever make is having.
Speaker Change: As high a degree of visibility and confidence around what the future earnings profile of a given asset will be and right now given the turmoil on the.
Speaker Change: In the regulatory landscape and its impact on the economic performance of <unk>.
Speaker Change: Gaming assets in Australia. It is very difficult to have any visibility or confidence around what kind of money. These assets are going to make over the longer term.
Ed Pitoniak: Thank you for that. And maybe zoom out and take it at a higher level. Other than economics and accretion, could you talk about some of your top strategic priorities in your current opportunity set, whether that might be tenant diversification, geographic diversification, or maybe something else You know, I would say there's really a couple of key result areas we really focus on. I've already talked about obviously our ceaseless dedication to building total return on a sustained and sustainable basis. But as well, it's obviously doing what we can, all we can to weatherproof the business as best we can.
Speaker Change: Understood. Thank you for that and maybe zoom out and take it at a higher level.
Speaker Change: Other than economics, and accretion could you talk about some of your top strategic priorities in your current opportunities whether that might be tenant.
Speaker Change: Tenant diversification geographic diversification or maybe something else.
Speaker Change: Yes.
Speaker Change: I would say it is.
Speaker Change: Really.
Speaker Change: Couple of key result areas, we really focus on I've already talked about obviously our thesis dedication.
Speaker Change: Building total return.
Speaker Change: Sustained and sustainable basis, but as well.
Speaker Change: Obviously doing what we can.
Ed Pitoniak: No business is obviously ever absolutely weatherproof. But I am so, so glad and so proud of the work David and the team did, for example, in getting the refinancing done when we got it done. And against this backdrop of volatility and low visibility, a paramount focus of management will continue to be being highly anticipatory of what is potentially coming and being as ready for it as we can and protecting our capital and the cost of our capital.
David Katz: All we can to weatherproof the business as best we can no business, obviously ever absolutely weatherproof, but I am so so glad and so proud of the work David and the team did for example in getting the refinancing done when we got it done.
Speaker Change: Against this backdrop of volatility and low visibility.
Speaker Change: A paramount focus of management will continue to be being highly anticipatory of what is potentially coming and being as ready for it as we can and protecting our capital and the cost of our capital.
Unknown Executive: Great, thank you very much.
Alec Fagan: Our final question today comes from Alec Fagan from Baird.
Alec Fagan: Your line is now open, please go ahead. Hey, good morning. And thanks for taking my question. Just one quick one for me.
Speaker Change: Great. Thank you very much.
Speaker Change: Our final question today comes from Alex taken from Baird. Your line is now open. Please go ahead.
Alec Fagan: There was some news regarding New York gaming I'm curious what your latest thoughts on the New York gaming license process is and what VICI will be doing from now until a decision is ultimately made. Yeah, exciting, exciting times in some of the news that's out there. By no means am I going to predict when a license will be granted or the three licenses will be granted. It does seem like there's momentum moving for the RFPs to be put in by the end of June, early July. I, I think you know that one of the bidders is going to be MGM at the site that we own the real estate in the There are other very exciting opportunities that are in the news that could win one of the licenses.
Alex: Hey, good morning, and thanks for taking my question just one quick one for me.
Speaker Change: There was some news regarding New York gaming.
Speaker Change: I'm curious what your latest thoughts on the New York gaming license processes, and what <unk> be doing from now till decisions ultimately made.
Speaker Change: Yet exciting exciting times in some of the news that's out there.
Speaker Change: By no means am I going to predict when a license will be granted or the free licenses will be granted it does seem like there's momentum moving for the rfps to be put in by the end of June early July.
Speaker Change: I think you know that.
Speaker Change: One of the bidders is going to be MGM at the site.
Speaker Change: We own the real estate in the buildings.
Ed Pitoniak: But we're, we're standing by better understanding the circumstances. Obviously, we're a big fan of the MGM bid simply because the asset is one that is ours and we would hope that we would help our current tenant and MGM grow that should they win one of the three licenses. So, like you, we'll continue to watch and continue to read the paper and better understand as it gets closer.
Speaker Change: There are other very exciting opportunities that are in the news that.
Speaker Change: When one of our licenses, but where we are standing by better understanding the circumstances, obviously, we're a big fan of the MGM bid simply because the asset is one that.
Speaker Change: As ours, and we would hope that we would help our current tenant and MGM grow that should they win one of the three licenses. So like you will continue to watch.
Unknown Executive: That's it for me. Thanks.
Speaker Change: Continue to read the paper and better understand us.
Speaker Change: It gets closer.
Ed Pitoniak: I now hand the floor back to Ed for some closing comments. Yeah, so we know that all of you, whether you're analysts or investors, are incredibly stretched in right now given the volume that company's reporting. So we cannot express deeply enough our thanks for your time and attention this morning and your continued support.
Speaker Change: That's it for me thanks.
Ed: I'll now hand, the floor back to Ed for some closing comments.
Ed: Yes, so we know that.
Ed: All of you, whether you or analysts or investors are incredibly stretched thin right now given the buying of companies reporting. So we cannot express deeply enough. Our thanks for your time and attention. This morning, and your continued support and bye for now.
Unknown Executive: And bye for now.
Unknown Executive: This concludes today's call. Thank you very much for your attendance. You may now disconnect your line.
Ed: This concludes today's call. Thank you very much for your attendance you may now disconnect your lines.
Ed: [music].