Q3 2025 Earnings Call Transcript

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the VICI Properties' Third Quarter 2025 Earnings Conference Call. [Operator Instructions] Please note this conference call is being recorded today, October 31, 2025. I will now turn the call over to Samantha Gallagher, General Counsel with VICI Properties.

Thank you, operator, and good morning. Everyone should have access to the company's third quarter 2025 earnings release and supplemental information. The release and supplemental information can be found in the Investors section of the VICI Properties website at www.viciproperties.com. Some of our comments today will be forward-looking statements within the meaning of the federal securities laws.

Forward-looking statements, which are usually identified by the use of words such as will, believe, expect, should, guidance, intends, outlook, projects or other similar phrases are subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect. Therefore, you should exercise caution in interpreting and relying on them. We refer you to the company's SEC filings for a more detailed discussion of the risks that could impact future operating results and financial condition. During the call, we will discuss certain non-GAAP measures, which we believe can be useful in evaluating the company's operating performance.

These measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. A reconciliation of these measures to the most directly comparable GAAP measure is available on our website in our third quarter 2025 earnings release, our supplemental information and our filings with the SEC. For additional information with respect to non-GAAP measures of certain tenants and/or counter-parties discussed on this call, please refer to the respective company's public filings with the SEC. Hosting the call today, we have Ed Pitoniak, Chief Executive Officer; John Payne, President and Chief Operating Officer; David Kieske, Chief Financial Officer; Gabe Wasserman, Chief Accounting Officer; and Moira McCloskey, Senior Vice President of Capital Markets.

Ed and team will provide some opening remarks, and then we will open the call to questions. With that, I'll turn the call over to Ed.

Thank you, Samantha, and good morning, everyone. I want to start by talking about something we probably won't get asked about much during the upcoming Q&A, and that's our Q3 earnings growth. For Q3 2025, we grew our AFFO per share earnings by 5.3% versus Q3 2024. I want to emphasize our Q3 2025 earnings growth rate, because I want to emphasize the earnings growth that our model is capable of producing even in periods of continuing uncertainty. With our Q3 2025 results, the VICI team continues to demonstrate its resourcefulness and resilience in growing relationships that grow our revenues and profits without, in the case of 2025, significantly growing our capital base.

You will hear more in a moment from John Payne about what the VICI team is doing to continue to grow our portfolio and our income. You will hear from David on our financial results, balance sheet and updated 2025 earnings guidance. Before we turn to John and David, I want to talk about the wider strategic context in which we are producing our results. And by context, I do not mean the state of the market this week is very weak, which has obviously been a rough week for REITs and for gaming operators.

If you wish, we can share our thoughts on this week's market reactions and ructions during the Q&A. By strategic context, I mean the larger context of the world we are living and moreover, we'll be investing in, in the years, not weeks to come. As I've told you before, I do a lot of reading. Some days, I do wonder if I do too much reading.

Two weeks ago, I read a guest post in one of my favorite daily newsletters, Odd Lots. That particular day, the Odd Lots Pop-In was given order to Viktor Shvets, Head of Global Desk Strategy at Macquarie Capital. Viktor starts by quoting Nobel Prize winner Neils Bohr, who is often quoted as having said, "Prediction is very difficult, especially if it is about the future." Viktor does acknowledge that Yogi Berra evidently said something similar. After summarizing the current weird state of our world, Viktor states, "In line with many other prognosticators, I do believe that the next decade will be the most critical period in the transition from yesterday's capitalism toward a yet to be defined alternative system.

Everything is up for grabs in what is likely to be one of the most profound changes since the invention of agriculture with far deeper consequences than even the industrial revolutions had." Viktor goes on to ask, "Then what are rational investment strategies in response to an irrational world caught in violent transition?" Viktor's preferred answer is, "To have strong views rather than no views. This involves joining the revolution and backing instead of fighting secular themes, basing investment strategy on a new world and avoiding the waging of old battles." He states that for the last 10 years, his firm has valued building portfolios around sectors and companies that are, "Supported by long-term structural forces rather than investing based on a heavily degraded reading of economic and capital market cycles." With portfolio construction based in part on rising returns on digital capital he then continues, "Included are several disruptive themes, such as the replacement and augmentation of humans, the flow on impact to social, political and geopolitical arenas and the corresponding need for balm, both metaphysical and real." Okay, did you get all that?

These days, it's hard, at least for me, to determine if Viktor's view is on the outer or inner spectrum of potential outcomes. But a lot of what he says rings true to me and in any case, I believe that in this period, real estate investors should be developing and executing return and risk management strategies that account for the possibility that Viktor will be proven right, that we are in a prolonged period of significant change and that those changes could impact people's desire and need for what Viktor calls balm, both metaphysical and real. And just in case I'm not pronouncing it as clearly as I should, he is saying B-A-L-M, balm and not bomb, B-O-M-B.

And I take balm to mean what people do to seek connection, entertainment, play-based excitement, both psychological and physical wellness and healing. These are the experiential dimensions, the various dimensions of balm. We at VICI have been, are and will continue to be examining, evaluating and potentially investing in through our insight-driven approach, depending, of course, on our determination that these experiences have the investment attributes we rely on. We are mindful, very mindful that at a time like this, it's more important than ever to identify as best we can the risks of oversupply, obsolescence and the other factors that can lead to real estate capital destruction.

And through that identification process to determine what we will and will not invest in. It's an approach that has driven what we've done at VICI in the last few years, an approach that has led to investments made and investments avoided. And as you can see from our Q3 2025 results, it's an approach that is delivering growth where it most counts growth in AFFO per share. With that, I'll turn the call over to John.

John?

Thanks, Ed. Good morning to everyone who's on the call. As Ed laid out, we face a market environment defies easy explanation. But at VICI, we have already faced multiple unprecedented events in our 8-year history.

And through disciplined capital allocation, we have been able to strike the balance between investment, quality and growth. Subsequent to quarter end, we announced that we'll be adding our 14th tenant, Clairvest, in connection with MGM resource agreement to sell the operations of MGM Northfield Park. Upon closing of the transaction, VICI will enter into a new triple-net lease with an affiliate of Clairvest as well as an amendment to the master lease between VICI and MGM Resorts. The Northfield Park lease will have an initial annual base rent of $53 million or $54 million if the transaction closes on or after May 1, 2026. And rent under the MGM Master Lease will decrease by the same amount.

Simply put, this transaction will not change the total amount of rent collected by VICI. Clairvest is a top performing private equity firm out of Toronto, and they are a recognized leader in the gaming sector. Clairvest is a sought-after partner with gaming experience across regional casinos, racetracks, suppliers, technology providers and online gaming globally, having made 17 investments in 37 gaming assets over the last 2 decades. VICI looks forward to further diversifying our tenant roster with a well-respected counterpart in the sector.

Now casino gaming remains the top focus for VICI. We continue to believe in the durability of the sector despite recent noise around Las Vegas. John DeCree at CBRE put it well in his research note earlier this week. Las Vegas has experienced a confluence of idiosyncratic headwinds.

The slowdown in visitation this summer influenced by decreased Canadian travel and reduced capacity from Spirit Airlines is definitely something to monitor. But Las Vegas has endured cycles before, and operators are expecting trends to improve through quarter 4 and into 2026. Headlines emphasize short-term trends, but at VICI, we take the long view. We are still big believers in Las Vegas as one of the world's best destinations with operators who are willing and able to adapt their business to meet consumer demand. With that said, some operators have experienced recent strength in Las Vegas.

The Venetian, one of our tenants, for example, continues to perform remarkably well with record hotel revenues and gaming volumes this summer. Additionally, according to Venetian management, 2026 is on track to be a great year for the Venetians group business, convention cycles in and out of cities each year. But Las Vegas continues to draw solid group demand that supports the segment as other conferences rotate locations. For example, CONEXPO-CON/AGG, America's largest construction trade show that draws nearly 140,000 attendees takes place every 3 years is set to happen in Las Vegas in March of 2026. We believe the convention business in Las Vegas is an underappreciated mitigant to the cyclical nature of leisure-oriented business.

In 2024, convention visitors spent $1,681 per trip. That is 33% higher than the average leisure visitor. And the strength of Las Vegas as a convention city has continued to gain momentum post-pandemic. VICI owns nearly 6 million square feet of convention of conference convention and trade show space on the Las Vegas Strip, and representatives from several blue-chip large cap companies like Amazon, Google, Microsoft, attend conferences in Las Vegas every year.

VICI continues to believe in the strength and resiliency of Las Vegas. Over the last 8 years, VICI has been deliberate with its portfolio construction, and we believe we've made the company better each time we grew bigger. Our multidimensional investment evaluation bolsters the quality of our decisions as real estate owners, and we conduct rigorous analysis with each opportunity that comes across our desk. At any given time, we consistently have multiple ongoing dialogues with gaming and other experiential operators, and what we want to continue to do, which is what has earned its credibility thus far, is maintain a disciplined capital allocation strategy that facilitates quality growth.

We do not aim to grow for growth sakes. We do not seek to compromise creditworthiness to reach for return. We instead engage in selective sustainable capital allocation that can provide long-term growth and withstand potential near-term macro shocks. We are long-term stewards of capital, and VICI aims to make decisions that support sustained and sustainable growth that delivers value to our shareholders.

Now I will turn the call over to David, who will discuss our financial results and guidance. David?

Thanks, John. Touching on our financial results, AFFO per share was $0.60 for the quarter, an increase of 5.3% compared to $0.57 for the quarter ended September 30, 2024. These results once again highlight our highly efficient triple net model given the increase in adjusted EBITDA as a proportion of the corresponding increase in revenue. Our margins run in the high 90% range when eliminating non-cash items. Our G&A was $16.3 million for the quarter and as a percentage of total revenues, was only 1.6%, which continues to be one of the lowest ratios in not only the triple net sector but across all REITs.

On September 4, we declared a dividend of $0.45 per share, representing a 4% increase from the prior dividend amount and our eighth consecutive annual dividend increase since VICI's inception. We are very proud to deliver this consistent increase to our owners. Touching on liquidity and the balance sheet. During the quarter, we settled a total 12.1 million shares under our forward sale agreements and received approximately $376 million in net proceeds with a portion of these proceeds being used to repay $175 million of the outstanding balance on our credit facility.

Our total debt is $17.1 billion, and our net debt to annualized third quarter adjusted EBITDA is approximately 5x at the low end of our target leverage range of 5x to 5.5x. We have a weighted average interest rate of 4.47% as adjusted to account for our hedge activity and a weighted average 6.2 years to maturity. Turning to guidance. We are updating our AFFO guidance for 2025 on a per share basis.

AFFO for the year ending December 31, 2025, is now expected to be between $2.51 billion and $2.52 billion or between $2.36 and $2.37 per diluted common share. Compared to our prior AFFO per share guidance of $2.35 to $2.37 per share, the raise represents an increase of the lower end by $0.01. Based on the midpoint of our updated 2025 guidance, VICI now expects to deliver year-over-year AFFO per share growth of 4.6%. As a reminder, our guidance does not include the impact on operating results from any transactions that have not closed interest income from any loans that do not yet have final draw structures, possible future acquisitions or dispositions, capital markets activity, or other non-recurring transactions or items.

With that, operator, please open the line for questions.

[Operator Instructions] Our first question comes from Anthony Paolone from JPMorgan.

John, I think you mentioned you're at 14 tenants now. And so VICI's kind of unique compared to net lease peers, and that you got a pretty narrow set, and you talk to them all the time. So, can you talk about maybe like how often lease amendments come up? And if they do, how you approach those conversations?

Yes. It's Ed. I'll start off and turn this over to John in just a moment. But where I want to start this morning is by reminding everyone of where we came from, and how we started.

At VICI, we were born with challenges. And what we proved right out of the gate, and I believe, improved ever since is that when we face challenges, we get after them. We focus on making sure we understand the full dimensions of the challenge. And then we work as productively and expeditiously as possible to find the right solutions that deliver the right outcomes for us and our partners.

And we've got obviously a track record of doing that through what we've done in selling assets that our partners wanted to get out of, and we wanted to get out of as well. We have obviously helped tenants get out of assets that they for strategic reasons, wanted to get out of Northfield Park being the most recent example. But I'll turn it over to John because he can further elaborate on the approach we take with our partners and the degree to which we are always focused on making sure that any challenges that exist for them or for us get dealt with, and we can all move on.

Yes, just a little bit to add to what Ed talked about. I mean, we are very fortunate or blessed to now have 14 tenants that allowed us to get into greater detail of strategic growth, or if there tends to be a problem in the business, we can discuss about how we can be beneficial, which is very different than many other REITs that you know Tony, that have 100 or 500 or 1,000 tenants that I'm not that smart to be able to help with 1,000 different tenants to understand how we can be beneficial to them. So, we are very fortunate to have a few, and we can get into greater detailed discussion with them about how to grow again or how to handle a certain situation.

I mean, if I could ask more directly on Caesars, given the comments from them around the regional assets, like how much you approach a situation like that? Or would you use a similar framework to what you've used in the past? Or just any context there?

Yes. I think the framework we've used in the past, Tony, would be the same frameworks we would apply here. We would look across the portfolio on our own and with them determine where do they want to be, where they want to continue to be, where do we want to continue to be, what are the various levers that we can work on our side, on their side to make sure that we end up with an outcome that is a genuine win-win for both parties. We've obviously got time to deal with this, but we also don't want to let this continue to be a distraction.

We've got a business to grow. They have a business to run. And we will work in the way we have worked in the past from our very beginnings to make sure that we find the solutions that work for everybody as quickly as we can. And again, I just want to reiterate our experience in our 8 years of getting after it when a situation needs to be dealt with.

The next question comes from Greg McGinniss from Scotiabank.

John, I was hoping you could talk about some of the more non-gaming conversations you're having these days, and your feelings on potential likelihood of getting deals done. And I'm especially interested if you could touch on collegiate or university level athletic facilities.

Everyone is smiling around the room, because I spent quite a bit of time with experiential operators and have been spending quite a bit of time, as you mentioned, in university sports. I'll touch on that one because it's very interesting. What I would describe, university sports today is going through radical change. And I say that in -- when we talk to athletic directors or CFOs or chancellors, and they tend to nod their head saying, "Yes, John, it's good to know that we are going through radical change." But we've been talking a lot with them about sports infrastructure.

There's a lot of different investment companies getting involved in professional and youth in collegiate sports. But VICI is a little bit different in our pitch to them about how we can accelerate their growth in infrastructure and building, whether it's arenas, stadiums, practice facilities, ice rinks, all of those things. So, it's been a really good educational process for the universities and for VICI as well about how our capital can work in that environment. On the other side, as I -- in my remarks, gaming is still top of the pyramid for us.

We're spending a lot of time with our current tenants and new tenants. And then, there's other experiential operators in mixed use, in attractions, certain resort properties as well that our team has been out kicking the tires a little bit. But university sports is definitely a big opportunity. There isn't a university that we've met with that doesn't have projects that they need to get done, and they are figuring out in this new environment, how they're going to pay for it.

Great. And I think maybe just touching on the gaming side a bit. Is there any potential catalyst or some event that needs to occur to make some inroads into the downtown or local Vegas market?

Yes. This is a market we would love to be in, as you're seeing the results come out every year. I think, I saw a stat the other day that the Nevada locals market or the Las Vegas locals market is now the second biggest market in the United States, which is a market that we sure would like to be in. And we love the regulations and the support from the State of Nevada and making investments in the bricks and mortars.

So, this is an area that we continue to look at. There are obviously some great operators in that space, Red Rock Resorts, Golden, there are some individual owners that own real estate there that we would love to be partners with over time.

The next question comes from Barry Jonas from Truist Securities.

A competitor just noted their expectations for more broadly marketed competitive bidding type gaming M&A processes. Is that your expectation as well? And if yes, do you see VICI participating?

Barry, good to talk to you. Well, we see a lot in gaming. And if there's things out in the market, I think there's a good chance that we're also getting a look. And to answer your question, do we expect to participate?

Look, it depends on a lot of factors. Gaming M&A is complicated. And even though it's a single asset, it's kind of simply M&A given there's three parties, there's a seller, there's a propco and opco buyer and they're complex long-term leases that take a lot of diligence and a lot of work to get things done. So, we would hope to continue to be active and continue to grow.

John just talked about, there's always things we're looking at and pursuing.

And Barry, this is Ed. I'll just add that a week like this for gaming operators, there are the occasional public gaming operators who go, how much more of this do I want to put up with. And so, I think there are a number of factors in play that could, could. I want to emphasize could not necessarily lead to heightened activity.

Got it. Got it. And then, just for a follow-up. Coverage on Northfield Park in the Clairvest transaction looked pretty good. Can you talk maybe how that compared to what 4-wall was in the MGM lease? I guess, what I'm trying to get at is how do you think about the difference in value for a new lease with a smaller tenant versus the pre transaction with a much larger lease and tenant?

Yes. It's a very good question, Barry. And I would generally say that for a single asset, with a single tenant, yes, I think to your implicit point, you generally are going to look for higher coverage than you might have had within a master lease with a much bigger tenant. I think that's pretty much the simple logic of it.

The next question comes from Smedes Rose from Citi.

I guess just on that with Clairvest and as you mentioned, they have a history of some gaming assets in the U.S. and in Canada. Do you -- would you expect to do more deals with them? Do you think that they're actively looking to expand their footprint in the U.S., or is this more of a one-off opportunity for them?

I hope so. I mean, we really enjoyed getting to know them in this process. They're very creative. They've hired a lot of very seasoned operators to work with them in the properties that they've owned not only now, but in the past. So, we're excited to have them as one of our tenants, and we hope to continue to grow that portfolio with them over the coming years for sure.

Okay. And then, I wanted to ask you on the loan book, is there any other -- are there any of the borrowers having any short-term difficulties that you can speak to? Or is everyone current on the payments just given some of the softness we're seeing in a broader economy, particularly across, yes, certain kinds of venues?

Yes. It's Gabe here. I can answer that. Yes, everyone is current on all their obligations under their loans, and we continue to have active asset management and monitor all of our investments. And work with our partners to understand that they're meeting their milestones and their business plans.

The next question comes from Haendel St. Juste from Mizuho.

My question, I guess, it's on the MGM decision to withdraw from the New York City license bidding process. It seemed to surprise a lot of people, including us. Was it a surprise to you? And what do you see as the implications for your Yonkers asset? And then, I guess as part of that, given their decision to withdraw MGM, does that free you up to perhaps partner with some of the other bids?

Yes, Haendel, good to talk to you. Well, certainly, it didn't take us by surprise, because we've obviously been in conversations with them for a while. And what MGM did was look at the situation, the ever-evolving situation in the New York landscape, and make what we agree is a very sound capital allocation decision or capital non-allocation decision based on, again, the changing circumstances. I think, one of the key factors, Haendel, that really became clear in the last few months is that without a Manhattan-based Casino, it was not clear that the remaining bidders would be able to create a casino experience that would become a truly national and international destination.

And thus, if it was going to mainly be a competitive marketplace of three regional gaming assets, competing geographically very close to each other for the same regional marketplace. It wasn't necessarily clear that the resulting economics of that very competitive marketplace would support the kind of capital required to enter the market with the tax regimes that are likely to be in place. And so again, I think MGM took care and took a lot of thought and obviously consulted very closely with us in making that decision. In terms of the aftermath of decision and what it means for us within this marketplace, yes, we have been in dialogue with various contestants in this process over the last couple of years and certainly could be of service to them with capital if we believe that their opportunity was an opportunity that had very good capital fundamentals that it had a legitimate shot to become what it would have to become, which is the most profitable regional casino in America.

And I just want to emphasize that point end, Haendel. The way this is evolving, whatever does get built in New York is going to have to be meaningfully, measurably more profitable than any other regional casino in America, and that includes the finest regional casinos in America, whether we're talking about MGM National Harbor, Encore Boston MGM Detroit or the others, each of which I should emphasize tends to have market dominance and at a lack of competitive supply that will not necessarily exist here in New York.

Appreciate those comments. And if I could ask a follow-up or a question on the -- I guess, there was announcement earlier this week, Cordish is developing a new project down to Virginia, about an hour south of your D.C. National project. I guess, I'm curious on the competitive dynamics there?

I think Richmond is about an hour away with mild traffic. So curious if you think the location, maybe the demographics relative to what your asset offers -- offer you some maybe some insulation.

Yes, it's a good question. The distance may seem like an hour, but if you've been in D.C., welcome to a little bit more traffic. And again, it's a pretty undersupplied market there. And they probably will target very different consumers.

We'll have to see how the new asset that's built by Cordish. I'm sure it will be a wonderful asset as they do a good job in building their assets. But National Harbor is, as Ed just mentioned, if you're going to mention the best or one of the best regional casinos in the United States, MGM has done a fabulous job there. It continues to do a fabulous job.

The numbers continue to be quite successful, and we think they're going to continue to grow there. So, we'll have to watch how that happens. But I do think they're probably a little bit -- the customer base is going to be a little bit different.

The next question comes from David Katz of Jefferies.

I appreciate all the candor, as usual. I wanted to just go back on the sports facilities commentary, John. Not have you negotiate something in this kind of forum. But just out of curiosity, are there any historical cap rate or any kinds of comps or anything like that?

Just out of curiosity, how we would think about the opportunity if someone -- if people like us wanted to sit down and try and develop the TAM and think about what it all means for you?

Yes. I'll start out, David. And I would say that, if you're going to look for a historical precedent for the possible infusion of private capital into real estate, on university land, the corollary would be the development of on-campus student housing by private capital, which has certainly taken place in the past and the American Campus Communities is obviously an example of private capital, a REIT in fact, at the time that they did exactly that. And obviously, we had to make sure they were creating a positive spread between their weighted average cost of capital at the time and whatever cap rate they went on to campus with.

And so, I do think that this landscape of sport infrastructure and college campuses is obviously rapidly evolving in an overall marketplace that is wildly volatile and everybody is trying to get smart as fast as they can. But I think what John and the team are finding, and John, you can elaborate on this, is that the idea of conventional private equity coming on to campus with a 5- to 7-year investment horizon, just doesn't -- John, I mean, it's not that appealing.

Yes, David, good to hear from you. I know you've asked about this sector before. And it is important to understand that this is what I think our company feels great about is finding a space that we think there's a lot of opportunity to deploy capital and we've been spending time getting educated on the space, who are the decision-makers are, what is the magnitude of opportunity where at the same time, hearing from the universities about how they could take our type of capital. And that -- what we're talking about today is we're right in the middle of those processes.

And obviously, state schools run schools are different than private schools, right? And so, we are continuing to refine the way we think about the opportunity. We continue to talk about pricing. And as Ed said, there's other forms of outside capital that are also spending time with the universities.

And so, it's -- like I opened up by saying there's a lot of change going on in collegiate sports right now, and it's just an opportunity we are spending some time because we think there is a magnitude of capital to be deployed.

The next question comes from Rich Hightower at Barclays.

As always, I appreciate the candor on various topics. But Ed, maybe just to ask you a metaphysical question to use this word from earlier in the comments. Obviously, we don't want to focus on short-term movements in the stock price or cost of capital. But in your conversations with investors, what do you think are the major overhangs at this point?

And does most of it revolve around some of the Caesars stuff you mentioned before? Is it other things?

Yes. I mean, I think it's a combination, Rich. I think there's the idiosyncratic factor of that noise, combined, obviously, with what's been a fairly tough period for the RMZ over the course of the year. And I think you put out a good note last night pointing out that, yes, in recent weeks, we have declined more than the RMZ.

But more, I don't know if you want to jump in here about the degree to which we may also somewhat idiosyncratically be seeing a dynamic of first half winners. Well, you can explain better than I can.

Yes. No, thanks, Rich. So, as I was saying, we do think it's a confluence of factors between, yes, this Caesars focus, but also at the same time, when there's been a positioning rotation out of some winners, out of some long positions as the market has rotated into the end of the year. So, the timing has been unfortunate, but we do think it's a combination of factors, not just the one particular overhang.

The next question comes from Chris Darling at Green Street.

So with Six Flags in the news recently, I thought that presents a good opportunity to ask about your broad level of interest in theme park real estate ownership. The pros and cons that might come with those types of assets. And related to that, I'm curious if you've explored the theme park landscape internationally as well as domestically in the U.S.

Yes. John, you want to take that?

Yes, Chris, good to hear from you. To be blunt, yes, it's an area of attractions in the United States are, an area that we have spent a lot of time with. We've not done a transaction, but we have spent quite a bit studying the landscape there, the opportunities there, the accounting treatment there and obviously have followed what is going on in the news with Six Flags. And I think that's the way I can put it.

Yes. And I'm going to ask Gabe to chime in here in a moment. Chris, but one of the things we always do when we look at any particular experiential category, is work to determine the degree to which there's a meaningful amount of real property within the business that is readable. And Gabe, you can opine if you wish, on theme parks and other categories we looked at, ski resorts and other things.

Yes. So, in regards to that, Chris, obviously, there's a lot of real property at these theme parks and a lot of personal property, including the roller coasters and some of the attractions, and we would just make sure any potential investments that we're owning real property and put it in a REIT-friendly structure, but we're confident we could work with our partners to make it work.

Okay. I appreciate those thoughts. And then just maybe a point of clarification on the Northfield lease with Clairvest and maybe a little nuanced here. But as it relates to allocating rents between the new stand-alone lease and then the remaining master lease with MGM, the resulting coverage ratios that you talked about, I guess, I'm interested to understand what are your contractual rights in that regard versus this perhaps being more so just a good faith discussion between all the parties involved.

Yes. I don't know if -- I mean, there are obviously contractual considerations and I'm looking at Samantha to bail me out in case we need to explain any of those. But I think the most fundamental starting point, Chris, is obviously, the economic throw weight of the assay. What rent could it support at a coverage level we're all comfortable with?

That's the starting point. What is the EBITDA before rent of the asset? And what thus would be a level of rent coverage both we and they would be comfortable with.

Yes. And just from a contractual perspective, in any event, however we come to the determination of what rent might come out, we're always protected that we would never find ourselves in an economically disadvantaged position. So, we're always going to have the same amount of rent. When that transaction is completed between the, what we call, severance leases, the new lease with the stand-alone tenant and then our MGM Master Lease and that's contractually provided.

The next question comes from Chad Beynon from Macquarie.

And, Ed, thanks for the comment on Viktor's piece. His reports are absolutely a must read in. He's another person that probably reads multiples of most of us on the call here. So, maybe just wanted to start with the call right on the Caesars Forum Convention Center.

We've kind of eclipse that time period where that begins. It seems like all the commentary from Vegas operators is that conventions, the group pace, the outlook, you talked about some of the citywides is extremely positive. It's obviously some of the leisure concerns that have hurt some of the near-term results. So, with that opportunity, for that call right, how are you guys thinking about timing on that versus other deals?

It's a very good question, and I like your comments about Las Vegas. Because I think you said near-term concerns about leisure customers. And in my opening remarks, I do think we're -- the world is so short term ADD focused that there's times that we don't think step back and think about what a great destination Las Vegas is and will continue to be. We obviously have a variety of things that we evaluate.

You are correct that the opportunity to buy the Caesars Forum Convention Center is live right now. And we're fitting it into all the other things that we look at when is the right time. Is there the right time? And Las Vegas, as I said in my opening remarks, we are big believers in, and we'll continue to make investments over time.

So...

Yes. I just want to jump in and emphasize, Chad, along the same line. The degree to which Vegas is competitive dominance across the American convention trade show and conference space has only increased in the last 5 to 10 years. If you look across the competitive landscape of the big American convention centers in the gateway cities, it's actually kind of a sad story.

First of all, most of the full-service urban hotel product has seen tremendous underinvestment. And a lot of the convention facilities themselves are in need of substantial capital and/or infrastructure. It would have been, for example, here in New York, it would've been a very positive thing for the Javits Center, if the related wind project has gone ahead and created hotel inventory adjacent to Javits. But as we all know, that project didn't happen.

And as a result, Javits is still this conference center, the convention center near pretty much nothing in terms of hospitality infrastructure. And that's just one example among many across the U.S. where Vegas, again, just shines because of the amount of capital put into both the conference convention and trade show facilities, $100 million in the Mandalay Bay. Again, I can't remember exactly how much Venetians put in to the Expo Center. But at any rate, this competitive dominance is only going to grow in the years ahead.

That's great. And then...

Samantha is looking at me with anger, because I used the word, ain't in that way. Go ahead, Chad.

And then moving over to the tribal lending landscape. I know we talked about before the North Fork loan is very different than a traditional loan to a tribe. But how has that evolved? And how is your comfort level working with other drives evolved here?

Yes, Chad, it's David. Good to hear from you. Just to clarify that North Fork is, it's a loan to a tribe. It's a typical lending structure into a tribe.

That's unique about it. There's no security in the real estate, and that goes with anything around tribal gaming. So, we have a lot of relationships with tribes on commercial land. We obviously have a great relationship with Red Rock and the development of what will be a phenomenal asset at Madera, California opening in, kind of, Q3 2026. We do have dialogue with other tribes.

I mean, anything we would do around tribal has to be with a great team, a great asset, but ultimately, it will be a credit investment, right? There's not a way to own gaming real estate that sits on tribal land and actually have security in that asset. And so, we have a very active credit book led by Gabe whose -- you've heard from on this call, and we will continue to look for ways to deploy smart capital with good tribes in the future as the opportunities arise.

The next question comes from John DeCree at CBRE.

It's Colin on for John. Maybe going back to Northfield transaction, I think a lot of us has been relatively excited to see some recent pick-up in M&A. So, curious maybe how those negotiations went considering this became into a single lease, an OpCo asset trading hands, do you guys expect or think we could start seeing some more OpCo trade hands going forward?

Well, your opening question was how did the negotiations go. And we're -- again, in my opening remarks, we're excited to have Clairvest as one of our tenants, and we surely hope that we continue to grow with them. They operate assets, that we own. If you're asking, has there been a pickup in opportunities that we're seeing, for us because we're looking at so many sectors across the gaming and experiential landscapes, there are a lot of different deals that we're looking at.

Do I think there'll be more deals in gaming? I hope so. And I think we'll be there and talking to operators and talking to potential sellers. Colin, I am disappointed that John's not on.

I gave him some love with a quote with the opening. So, it's disappointing to hear that love. So you'll have to pass that along.

He's going to be very disappointed. I didn't hear that, but definitely...

You're not going to get a repeat next quarter. So he's one and done.

Yes. If you're going to be here, turn next time, Colin.

And I guess, maybe the other question, I wanted to double click on is, how comfortable are you guys sort of letting leverage maybe creep below, sort of, the low end of the range that you guys have 5x to 5.5x. I think you have you guys about 5x right now. And obviously, leverage you guys had taken a pretty low going into the MGP acquisition, saving a lot of dry powder for what was quite a material transaction. So, I'm just kind of curious how you're seeing leverage trend from here.

Obviously, you have the escalators. But how are you thinking about it potentially creeping below your low end?

I would say, as a Spanish like to say with tranquility, if it goes lower, that is just fine. If it goes a little higher, it's just fine. But as you remember, Colin, from that dinner we had together in Boston, as important for us as leverage is laddering. And what we like about the 5x debt-to-EBITDA benchmark is that, it means by definition, you have $1 of debt for every $0.20 of EBITDA.

And I'm not going to go through the whole English, major math thing I did at that dinner. But as you and your clients gathered, we like the way in which -- laddering in which roughly no more than 10% of debt comes due in any given year, matches up with 5x debt-to-EBITDA, such as the metrics are such that in the worst case scenario where the credit market window is closed, you could, if necessary, pay off expiring debt with available cash flow after debt service. So, in and around 5x, plus or minus 1/10 here, 1/10 there, again, we don't tend to get highly precise about that. It's more about building a ladder for the future.

And with that, making the best use of the amount of retained cash flow we generate, which as we've spoken about in the past, is now in the $600 million range and gives us firepower that enables the kind of year we're having this year, where we're growing, once again, AFFO per share in this quarter by 5.3% while growing our share count by barely more than 1%.

Great. And yes, Ed, I still think that was one of the best articulated explanations of formulation of a leverage target that you gave when we had that dinner. So, I appreciate it.

The next question comes from Daniel Guglielmo from Capital One.

You all own a lot of properties on the Las Vegas Strip, but not all of them. Based on your experience, what kind of macro or Las Vegas demand environment do properties typically come to market there? And if the opportunity rose, would you expand your ownership on the Strip?

I'll answer the last part of the question. I think for the right property and right operator, absolutely, we would continue to expand our presence not only on the Las Vegas Strip and not only in the locals market that I talked about, but I think all over Nevada. We're big fans of that as well. But as it pertains to when do they come to market, that's very hard to predict.

And it depends on the company and how they're thinking about use of proceeds from the monetization of their real estate. But what I would tell you, to Ed's comments, we will be prepared should there -- should there be an opportunity of an asset in Las Vegas on the Strip that comes to market. But I can't tell you when they're going to come.

Yes. I appreciate that. And then just a follow-up. In the opening remarks, the 3Q earnings growth was mentioned. I think part of that is the competitive annual rent escalators that you all have. On the flip side, tenants do bear increased rent line. So, can you just talk about some of the risks that you all think through on the tenant side in with those kind of rent lines increased for them?

Yes. First of all, Daniel, Q3 2025 wouldn't within itself have had any rent escalations quarter-over-quarter sequentially. And when we think about escalation, what we think about is, again, the supportability of the rent. And so yes, we do not want rent escalation that goes beyond what the tenant can afford to pay over the long term.

And so again, I think we're in an environment right now where things are -- have more or less reached the equilibrium, in terms of rates of inflation, rent escalation and revenue and profit growth. But obviously, we monitor it closely. And again, it doesn't benefit landlords when rent gets beyond what the tenant can pay.

The next question comes from Jim Kammert from Evercore ISI.

Team, if I were thinking about your competitive advantage, let's say, as an example on the university sports, what elements really would differentiate VICI structuring wise or other attributes? Because if I'm being snarky, I would say it's really just the cost of capital, right? I mean university is going to want to take the best deal for them. So, how would VICI differentiate itself from other potential providers of the capital?

Yes. Jim, it's Gabe Wasserman, I can take that one. So, I don't think we're just competing along cost of capital. It's not the only dimension.

It's also on structure. So, as a permanent capital vehicle that wants to own our real estate forever. I think our investment time horizon is very well aligned with our potential university and collegiate partners. And as we compare and contrast our capital and opportunity with private equity folks, we just think that our long-term permanent horizon is just a really good match for potential universities and colleges, and that's really resonated well in the conversations that we've been having.

Yes. I would just add too, Jim, that while, obviously, universities, both public and private can often tap the tax-free bond market. Most universities, we're finding out run in the way that Harvard famously speaks of, which is every tub on its own bottom. And athletic departments in particular, and John and Gabe, elaborate this, athletic departments, especially at this point, are being told you need to be self-funding and self-sustaining.

And no, you're not necessarily going to get to use up whatever envelope we have in the tax-free bond market. Do you want to add to that, John?

No, it's a very good point.

That's great. And then just one quick related question. With most of those opportunities, I know it's very premature, but would they be leasehold interest because you presume the university continue to own the underlying land, or is that not necessarily?

Yes. I think it depends on the university. We're open to both structurally and can make both of them work.

Jim, it's a very good question, and you open by saying, I know, it's premature as we've talked about the university space, and I've been very open that when you're the first kind of week into this space, educating athletic directors and CFOs and chancellors and presidents on our type of capital, the structure then, as Gabe mentioned, is a big factor in the discussions. Can we own the real estate? Can't we own the real estate? What is the duration of the lease?

How much capital of a project can you put in versus a donor? Does your name go on it, does it or don't? I mean, there is a wide variety of things that we are feeling out. And as Sam mentioned, every university, it's different.

And state universities are different than private, and that's why we're taking the time in meeting and really crafting how our capital can work. Obviously, we have not gotten over the finish line with the university sports deal yet. But you can hear that we've been spending some time because we think there is a big opportunity in sports infrastructure and the amount of capital that needs to be put to work.

Our final question today will come from Alec Feygin from Baird.

Kind of wanting to synthesize what we've talked about all the call from the MGM capital allocation decision or the Caesar convention and also how you think about the balance sheet. With VICI taking the long view about capital deployment, kind of what's the philosophy about how VICI weighs deploying money in uncertain times for good opportunities versus waiting and preserving the balance sheet for a potential great opportunity that may or may not come?

Yes. No, it is a wonderful question, and I wish we had more time to do it full justice. Because it is something that our investment committee is always, always deliberating. And I would tell you, Alec, there's no perfect answers, but I would say that because we invest what we believe to be perpetual capital.

We really want to have confidence that 10, 15 and 20 years from now, we or our successors are going to be glad we've made this investment that we invest in the right geography, the right category, the right marketplace, and most importantly, the most -- the best operating partner we could find for that opportunity so that we can always be comfortable, the credit is secure.

We will now hand the call back to Ed for any closing comments.

Thank you, Adam, and I'll just thank everybody for their time today and look forward to continuing the conversation in the weeks and months to come and see you again in February.

This concludes today's call. Thank you very much for your attendance. You may now disconnect your lines.