VICI Properties: A Year of Growth and Diversification in Experiential Real Estate

VICI Properties, an experiential real estate investment trust, has marked a year of remarkable growth and diversification in its portfolio of gaming, hospitality, entertainment and leisure assets. The company has announced and completed several strategic transactions in 2023, expanding its footprint across the US and abroad, and increasing its annual rent by over $1.0 billion.

A Leader in Gaming and Hospitality Real Estate

VICI Properties owns and acquires some of the most iconic and marquee properties in the gaming and hospitality industry, such as Caesars Palace, MGM Grand, and Hard Rock Hotel & Casino. The company leases its properties to leading operators, such as Caesars Entertainment, MGM Resorts, Hard Rock International, and Penn National Gaming, under long-term and triple-net lease agreements.

As of December 31, 2023, VICI Properties had 43 properties in its portfolio, comprising approximately 19,200 hotel rooms and more than 200 restaurants, bars, nightclubs and sportsbooks. The company’s properties are located in 16 states, including Nevada, New Jersey, Louisiana, Mississippi, Indiana, Ohio, and Colorado.

In 2023, VICI Properties completed the $17.2 billion acquisition of MGM Growth Properties LLC, adding 15 properties to its portfolio, including Mandalay Bay, The Mirage, and Borgata. The transaction also diversified VICI Properties’ tenant base, adding MGM Resorts as its second largest tenant.

VICI Properties: A Year of Growth and Diversification in Experiential Real Estate

Expanding into New Experiential Categories

VICI Properties has also ventured into new experiential categories, such as bowling, waterparks, sports, and golf, to further diversify its portfolio and capture new growth opportunities. The company has announced and completed several transactions in 2023, involving sale leaseback, mezzanine loan, and construction loan arrangements with various partners.

Some of the notable transactions include:

The acquisition of 38 bowling entertainment centers in a $432.9 million sale leaseback transaction with Bowlero, the world’s largest owner and operator of bowling centers.
The agreement to provide an up to $212.2 million mezzanine loan to Kalahari to fund the development of an indoor waterpark resort in Thornburg, Virginia, with an option to acquire the property upon completion.
The acquisition of the leasehold interest of Chelsea Piers in New York City for a total purchase price of $342.9 million, adding a premier sports and entertainment complex to its portfolio.
The agreement to provide an up to $100.0 million delayed draw loan facility for the development of Cabot Saint Lucia, a luxury golf resort in the Caribbean, and a £9.0 million loan for the redevelopment of Cabot Highlands, a golf course in Scotland, with an agreement in principle to provide additional development financing, subject to the negotiation of definitive documentation and other deal terms.
The agreement to provide an up to $105.0 million construction loan to Homefield Kansas City to fund the development of a Margaritaville Resort in Kansas City, Kansas, and entered into a call right agreement that provides the company with a call option on the resort and other sports facilities in the area.

Establishing a Presence in International Markets

VICI Properties has also made its first international investments in 2023, expanding its reach beyond the US market. The company has partnered with Apollo Global Management and Vici UK Bidco Limited to acquire William Hill PLC, a leading sports betting and gaming company in the UK and Europe. The transaction, valued at approximately $4.0 billion, is expected to close in the first half of 2024, subject to regulatory approvals and other customary closing conditions.

VICI Properties will acquire William Hill’s non-US businesses, comprising over 1,400 betting shops in the UK and Ireland, and online operations in several European countries. The company will lease back the betting shops to Apollo, which will operate the non-US businesses under the William Hill brand.

VICI Properties has also invested in Cabot Saint Lucia and Cabot Highlands, as mentioned above, marking its entry into the luxury golf resort segment in the Caribbean and Europe.

A Strong Financial Performance and Outlook

VICI Properties has delivered a strong financial performance in 2023, reflecting its resilient and diversified portfolio, and its ability to execute on its growth strategy. The company reported total revenues of $3.6 billion, an increase of 38.9% year-over-year, and net income attributable to common stockholders of $2.5 billion, an increase of 124.9% year-over-year. The company also reported AFFO of $2.2 billion, an increase of 29.1% year-over-year, and AFFO per share of $2.15, an increase of 11.8% year-over-year.

The company has also maintained a strong balance sheet and liquidity position, with $1.9 billion of cash and cash equivalents, and $2.9 billion of availability under its revolving credit facility, as of December 31, 2023. The company has also raised $695.7 million of gross proceeds in forward equity under its ATM program in 2023 and 2024, to fund its growth initiatives and reduce its leverage.

The company has established its guidance for the full year 2024, expecting total revenues of $4.1 billion to $4.2 billion, net income attributable to common stockholders of $2.7 billion to $2.8 billion, and AFFO of $2.5 billion to $2.6 billion. The company has also declared a quarterly cash dividend of $0.36 per share for the fourth quarter of 2023, payable on January 7, 2024, to stockholders of record as of December 30, 2023.

VICI Properties is well-positioned to continue its growth and diversification in the experiential real estate sector, leveraging its strong portfolio, financial profile, and strategic partnerships. The company is committed to creating long-term value for its stockholders, tenants, and communities.