From a small northwestern observatory…

After a week’s break, we’re back this morning with the gaming and leisure sector.  There are only two REITs in this group, and they’ve performed remarkably similarly over the past year and 5 years.  Both have been steady performers over the recent 5-year span, but like most other REITs, disappointing in the past 12 months.

VICI Properties (VICI) is fairly diversified across the sector. They own or joint ventures 54 gaming facilities and 38 non-gaming “experiential properties”, over 500 restaurants, bars, clubs, & sportsbooks, about 500 retail outlets, and about 60,300 hotel rooms.  They also have 33 acres of undeveloped land in and around Las Vegas, including land at or near “The Strip”, and 4 championship golf courses.  For example, they acquired the MGM Grand/Mandalay Bay joint venture from Blackstone for about $1.3 Billion in January and have entered the “family entertainment” sector with the acquisition of 38 bowling entertainment centers, known as the “Bowlero Portfolio”, slated to close in the 4^th quarter.  Their properties are scattered throughout the US and they have several properties in Alberta, Canada.  Among their holdings are real estate assets leased on a triple-net basis to such tenants as Caesars, Century Casinos, and Hard Rock.  For the 3^rd quarter of this year, they reported EPS of $0.55, compared with $0.34 in the 3^rd quarter of 2022.  FFO per share was $0.54, compared with $0.49 the same quarter last year.   Their stock price is down 8.81% for the past 12 months, but up 33.64% over the past 5 years.  Of course, this 5-year performance included the trough of the pandemic, when their stock tumbled along with other hospitality and gaming interests.  Since that trough, the stock has more than doubled.

Gaming and Leisure Properties (GLPI) is much more focused on gaming. They own 61 gaming and related facilities scattered across 18 states in the US.  For example, they own the Tropicana Las Vegas, Bally’s Casino in Black Hawk, CO and related properties, the DraftKings at Casino Queen in East St. Louis, the Hard Rock Casino in Rockford, IL, and the Ameristar Casino Hotel in Council Bluffs, IA.  All of their attention is on gaming and related properties. For the quarter ending June 30, they reported $0.59 in EPS, compared with $0.61 for the 2^nd quarter of 2022.  FFO, which they do not report on a per-share basis, decreased about 4% in the 2^nd quarter compared to the same quarter last year.  The stock is down 8.82% over the past 12 months, but up 37.35% over the past 5 years.  Much like VICI, their stock has more than doubled since the trough of the pandemic.

So that’s it for today, folks.  Next week I hope to talk about some of the more general issues facing gaming, leisure, and the related hospitality field. 

As always, I’m not an investment advisor, and this is not a solicitation or recommendation to invest in anything. Further, I and the entities I’m involved with may have positions or interests in one or more of the securities discussed here. However, if you have any questions about this, please don’t hesitate to reach out.

John A. Kilpatrick, Ph.D., MAI

john@greenfieldadvisors.com