Las Vegas, Nevada – Gaming REITs, or real estate investment trusts, are entities that own a variety of entertainment and experiential properties, such as casinos, resorts, and hotels. These assets can also extend to include water parks, golf courses, and other leisure facilities that cater to entertainment needs. Typically, these properties operate under long-term triple-net lease agreements, where responsibilities like maintenance, taxes, and insurance are shifted to the tenant.
With the increasing significance of gaming properties in the real estate market, Nareit recently introduced a new sector dedicated to gaming REITs. This sector includes two key players: VICI Properties (NYSE: VICI) and Gaming and Leisure Properties (GLPI). These REITs not only benefit from the rise of e-commerce but also tap into the human desire for entertainment, as highlighted by the World Economic Forum.
One standout in this sector is VICI Properties, which has strategically focused on the vibrant entertainment hub of Las Vegas. The company boasts strong financials, steady growth in shareholder distributions, a generous 6% dividend yield, and an attractive valuation. Despite some concerns about performance post-2021, VICI Properties remains a favorite among investors for various reasons.
Diversifying beyond Las Vegas, VICI Properties owns a portfolio of 93 properties, generating $3.1 billion in annual rent. Notably, a significant portion of this income comes from key operators like Caesars and MGM Resorts. The company’s strategic acquisitions over the years have led to a substantial 330% growth in adjusted EBITDA since 2017.
One of the strengths of VICI Properties lies in its investment in high-quality, iconic properties that have high entry barriers, thus ensuring minimal competition. With a diverse range of assets, including gaming properties in other states and sectors, VICI Properties is positioning itself as a leader in the leisure real estate market.
Moreover, VICI Properties boasts a robust balance sheet with an investment-grade credit rating, low administrative costs, and substantial liquidity. The company’s focus on strict investment criteria, favorable lease terms, and consistent growth in dividend payouts further solidify its position as a top player in the gaming REIT sector.
In conclusion, VICI Properties stands out as a compelling choice for investors seeking long-term growth and reliable income in the gaming REIT sector. With its strategic investments, strong financial health, and commitment to diversification, VICI Properties continues to offer significant opportunities for shareholders looking to build wealth and income-focused portfolios.
