The operator introduces the VICI Properties Fourth Quarter and Full Year 2023 Earnings Conference Call and turns it over to Samantha Gallagher, the company's General Counsel. She reminds participants that the call is being recorded and directs them to the company's website for the earnings release and supplemental information. She also cautions about forward-looking statements and discusses the use of non-GAAP measures.

The paragraph discusses the achievements of VICI in 2023, including their growth in AFFO per share and their position as one of the income growth leaders among S&P 500 REITs. It also mentions their investments in gaming and non-gaming properties and their focus on portfolio quality, geographic diversity, tenant diversity, and income growth for 2024 and beyond. The upcoming discussion will include the 2024 growth approach and 2023 financial results, as well as the 2024 guidance, which is expected to put VICI in the top half of S&P 500 REITs for AFFO per share growth.

In 2023, the VICI team faced challenges but continued to pioneer and invest in new geographies and categories. They acquired properties in Las Vegas and other states, and their investments were accretive and balanced their balance sheet.

In 2024, VICI Properties invested $1.8 billion with a funding ratio of 8:1 cash and equity to debt. Despite uncertain economic conditions, they have $1.2 billion in cash and equity to continue growing and attracting gaming and experiential operators. They are also launching a digital photo book showcasing their Class A real estate to help investors understand the quality and importance of their assets.

In 2023, VICI successfully navigated a volatile market and deployed $1.8 billion in investments with a 7.7% yield. They prioritize long-term partnerships with growth-oriented operators and have a philosophy of creating value with their tenants. They have a strong focus on growth but also carefully consider opportunities and do not pursue growth for the sake of it. VICI has consistently created value for shareholders through growing AFFO and dividends.

The company has successfully completed $36 billion in transactions in just over six years by working collaboratively with operating partners, constantly researching and assessing new markets, diversifying their portfolio with experiential sectors, and seeking opportunities to grow and improve their portfolio. As they move forward, they will continue to adhere to their proven criteria and maintain prudent underwriting standards.

The company maintains a preference for growth-focused operators and evaluates their track record and use of proceeds before pursuing a transaction. They believe their strong partnerships and balance sheet will allow them to continue making accretive deals. In 2023, they raised over $1.6 billion in forward equity and utilized their ATM program to raise additional funds. This brings their total outstanding forward equity to just under $700 million, strengthening their overall liquidity.

VICI currently has a strong liquidity position of $3.5 billion, with cash, investments, and credit facilities. They do not need to raise additional capital and their debt is within their target leverage range. They have a weighted average interest rate of 4.35% and have entered into forward interest rate swap agreements. Their AFFO per share increased by 8.8% for the quarter and 11.8% for the full-year 2023, making them one of the top performers in the S&P 500 REITs. Their highly efficient triple-net model has resulted in strong margins of over 90%.

The company's G&A for the quarter was $15.3 million, which is a low ratio compared to other REITs. They have initiated AFFO guidance for 2024 and expect growth in AFFO per share. Their guidance does not include the impact of any announced transactions or other non-recurring items. They record a non-cash CECL allowance, making it difficult to forecast net income and FFO accurately. The first question during the call was about the company's deal pipeline, including geographic location, size, and yields.

The speaker acknowledges the current market conditions and the team's efforts to navigate them. They are excited about potential opportunities in both gaming and non-gaming sectors, and the magnitude of their properties, particularly The Venetian, presents unique investment opportunities. The team at The Venetian is focused on maximizing the asset's productivity, especially with the impact of the sphere. This sets them apart from other REITs, as they have a large asset with 300,000 unfinished square feet that can provide growth opportunities. The speaker invites John to add his thoughts.

John Payne and Ed Pitoniak discuss their recent experiences in Las Vegas and their focus on various sectors and locations for potential investments. They mention their pride in their partners' success in Las Vegas and their interest in sectors such as wellness, indoor waterparks, and youth sports. They clarify that while they are exploring different sectors, the casino business remains a top focus for their company. In response to a question about their guidance, David Kieske explains that there is no implied use of proceeds or drawdown from their forward equity and any impact on the share count is minimal.

During a conference call, Barry Jonas from Truist Securities asked about the timing of exercising the Caesars center call option. Edward B. Pitoniak, the operator of the call, stated that they would exercise the option opportunistically and only when it wouldn't create dilution. Barry then asked about the potential for deals on tribal land, which Edward and John had not yet figured out how to make work.

John Payne and Barry Jonas discuss the potential for growth in their business through partnerships with tribes and other commercial operators. They have primarily been focused on the commercial sector, but they continue to study the opportunity to help tribes grow on their land. They also have 13 partners in gaming and non-gaming and are looking to expand their existing partnerships in the near future. The Las Vegas resorts they own with partners, as well as their regional assets, offer potential for growth through new hotel rooms, restaurants, and attractions. The sphere in Las Vegas is seen as a major opportunity for growth, and there are also opportunities to expand in their regional assets, such as the MGM properties in National Harbor and Detroit.

The company is actively seeking new relationships and looking to expand its tenant roster in order to invest in other experiential categories. This allows for growth opportunities that may not be available in the gaming industry due to strict regulatory control.

Caitlin Burrows asks about the company's pipeline and David Kieske explains that their focus is on building relationships and providing growth capital for their partners. He mentions the Homefield opportunity as an example and says they do not have a specific breakdown of loans versus sale leasebacks in their pipeline. Haendel St. Juste asks about the increase in mezzanine lending and construction financing in their capital deployment strategy.

David Kieske, responding to a question from Ravi, discusses the factors that go into determining the spread on mezzanine loans, specifically in regards to development projects. He mentions considering the cost of the senior lender, the duration and funding cadence of the capital, and the equity sponsor. Edward B. Pitoniak adds that mezzanine lending will always be a minor percentage of their assets under management, but it is used strategically to develop relationships and create a steady cadence of capital allocation. He also notes that they are proud of the fact that they were able to allocate capital every month in 2023, compared to earlier years where it was more sporadic due to the nature of their capital allocation tied to gaming acquisitions.

The company has been successful in achieving high spreads and driving earnings growth. They are focused on creating earnings growth through their energetic and pioneering approach. The opportunity with the Indiana assets is not as attractive as before, but they will still consider it if it is accretive. The structure of the deal with Caesars is subject to discussion and they want to ensure both parties are satisfied with rent coverages for the long term.

The speaker asks the CEO of VICI Properties about the scope of their Homefield agreement and the potential for future expansion. The CEO explains that they have spent time studying the youth sports business and have found a strong partner in Homefield. He mentions their initial investment of $110 million and the potential for further development on the current site and other locations. He also notes that they hope to have multiple investments with Homefield and other partners in the future. Another analyst thanks the CEO and asks a question about the company's strategy for scaling to additional locations.

Edward B. Pitoniak discusses how investors should approach non-gaming assets, which may have less transparent financials compared to gaming assets. He explains that the company has a rigorous underwriting process and looks for businesses with lower cyclicality to mitigate risk. In cases where there are no existing cash flows, the company carefully evaluates the strength of the business and its ability to meet rent payments.

The speakers discuss the criteria for ensuring last dollar exposure is at a manageable level and the importance of studying sectors before investing. They also address the balance between maintaining low G&A expenses and investing in a larger acquisitions team.

The investment banks and real estate advisory firms are a valuable resource for the company, and they are rewarded for their work. The company is careful about managing expenses and will add resources if needed. The company is pleased with the performance of Fontainebleau and considers it a beautiful asset. It may take time to build up a database, but the company is proud of the facility.

In this paragraph, the speaker discusses their frustration with the negative media coverage surrounding a recent event they attended in the U.K. They also mention the success of the Super Bowl in Las Vegas and express confidence in the ability of a certain asset to succeed in the long run. The speaker also mentions the stickiness of cap rates and the lack of variability across different experiential asset classes.

The company has been able to acquire income at higher yields, but there is not a lot of trading happening. The market is cautious and uncertain due to volatility and the broader economy. The company has looked into other verticals but has not found any that are a good fit. However, the overall investment opportunity set is expanding, and the company continues to explore new opportunities.

The speaker discusses the potential for growth and innovation in the water experience category, particularly in the adult market. They also mention a tax dispute at MGM National Harbor, but do not provide any details. The speaker then answers a question about the Mirage in Las Vegas, stating that the timing and scope of any changes will be determined by their partner, Hard Rock.

The speaker is discussing the competitive landscape of lending in the experiential placemaking industry over the past few years. They mention that conventional bank financing has decreased as a source of funding for operators in this industry.

The speaker discusses the company's involvement in private credit and how their track record in experiential and underwriting processes has led to them being invited to funding opportunities. They also mention potential growth opportunities in Las Vegas and the possibility of investing in already owned properties, such as the Venetian and MGM property in Yonkers.

Jake Kornreich asks about the company's plans for expanding their non-gaming segment and if they will be taking larger loans in the future. CEO Edward B. Pitoniak explains that while the check sizes may seem small compared to their overall scale, they are still significant investments and they prefer to spread out their risk by not investing in one large asset. Kornreich also asks about the company's leverage, and CFO David Kieske responds that they will continue to decrease their leverage over time.

John DeCree asks Edward B. Pitoniak about the potential for investment in professional sports stadiums in Las Vegas, given the city's growth and the company's ownership of land in the area. Pitoniak emphasizes the value of their position in Las Vegas and the potential for repositioning opportunities. DeCree also asks if the photo book will be available in hard copy.

During a Q&A session, VICI Properties CEO Edward Pitoniak mentions that they have printed a photo book of their properties and encourages anyone interested to contact him. The call then concludes with Pitoniak thanking everyone and directing them to the company's website to view the book. The operator then ends the call.

This summary was generated with AI and may contain some inaccuracies.