VICI Properties, the real estate investment trust formed following last year’s bankruptcy reorganization of Caesars Entertainment, said late Thursday its profits for the second quarter were $139 million, or 38 cents per share.
The REIT, which went public earlier this year, owns the real estate and buildings associated with 20 casino-resorts and golf courses which are then leased back to Caesars Entertainment for operations. REITs don’t pay taxes, but are required by the IRS to return 90 percent of their profits to shareholders.
Deutsche Bank gaming analyst Carlo Santarelli told investors Friday that VICI was immune from all the noise over the last few days surrounding third quarter softness in visitation to the Las Vegas Strip.
“We appreciated management reminding investors that, regardless of Las Vegas Strip trends and investor concerns around the Strip, as long as the mailbox is open, VICI will receive its tenant checks,” Santarelli said.
During the quarter, which ended June 30, said its revenues were $221 million, which included $213.5 million in revenues in the form of lease payments from the casino and golf course operators.
“Our second quarter of 2018 represented our next big step in becoming a best-in-class institutional-quality REIT,” VICI CEO Edward Pitoniak said in a statement.
Last month, VICI announced its first deal outside of Caesars Entertainment, in which the REIT agreed to purchase the land and buildings associated with the Margaritaville casino and resort in Bossier City, La., for $261 million. Regional casino giant Penn National Gaming will pay $115 million for the operations of the property and has agreed to pay annual rent of $23 million for 15 years.
VICI also added two properties associated with Caesars – the Octavius Tower at Caesars Palace in Las Vegas and Harrah’s Philadelphia racetrack and casino. Both transactions were agreed upon as part of the bankruptcy reorganization.
Pitoniak said the company’s initial public offering in the first quarter – which he called the fourth largest REIT IPO ever – gave the company the money to complete the transactions.
“We entered into agreements to improve our foundational leases with Caesars, which we believe will enhance our organic growth in the near term,” Pitoniak said.
Santarelli told investors VICI will remain “aggressive” in the current gaming space acquisition environment.
Howard Stutz is the executive editor of CDC Gaming. He can be reached at hstutz@cdcgamingreports.com. Follow @howardstutz on Twitter.
