VICI Properties Q1 2025 Earnings Call Transcript

Quartr
Provided by Quartr
May 1, 2025

Key Takeaways

  • VICI committed $510 million in a delayed-draw term loan to develop the North Fork Mono Casino and Resort with Red Rock Resorts, marking its first tribal-land gaming investment and first partnership with Red Rock.
  • The company raised its full-year 2025 AFFO guidance to $2.33–$2.36 per share (up from $2.32–$2.35), implying 3.8% AFFO per share growth year-over-year.
  • VICI refinanced its debt profile by issuing $400 million of 3-year notes at 4.75% and $900 million of 10-year notes at 5.625%, leaving no maturities until September 2026 and securing ~$3.2 billion of liquidity.
  • First-quarter AFFO per share was $0.58, up 4.3% year-over-year, supported by high triple-net lease margins and one of the lowest G&A ratios in the REIT sector.
  • Management reaffirmed its focus on sustaining and growing a >5% dividend yield, highlighting dividends as a core driver of total return in volatile markets.
AI Generated. May Contain Errors.
Earnings Conference Call
VICI Properties Q1 2025
00:00 / 00:00

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Operator

Okay, ladies and gentlemen, thank you for standing by. Welcome to the VICI Properties First Quarter 2025 Earnings Conference Call. At this time, all participants are in listen-only mode, and please note that this conference call is being recorded today, May 1, 2025. I will now turn the call over to Samantha Gallagher, General Counsel with VICI Properties.

Samantha Gallagher
Samantha Gallagher
General Counsel at VICI Properties

Thank you, Operator, and good morning. Everyone should have access to the company's First Quarter 2025 earnings release and supplemental information. The release and supplemental information can be found in the Investor 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. I refer you to the company's SEC filings for a more detailed discussion of the risks that can impact future operating results and financial condition.

Samantha Gallagher
Samantha Gallagher
General Counsel at VICI Properties

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 First 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 counterparties 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 William Rokoski, Senior Vice President of Capital Markets.

Samantha Gallagher
Samantha Gallagher
General Counsel at VICI Properties

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.

Ed Pitoniak
Ed Pitoniak
CEO at VICI Properties

Thank you, Samantha, and good morning, everyone. Over the next few minutes, John will talk to you about our exciting new relationship with Red Rock Resorts and our other growth activities, and then David will discuss our recent refinancing, our results, and our increased guidance. To start, I'd like to share my thoughts on what we at VICI anchor to in all times, especially in periods of high volatility and low certainty, and that is working to ensure that we maintain our ability to sustain and grow the current cash income we distribute to our stockholders in the form of our dividend. For a REIT management team, that should, of course, be standard operating procedure, and because of that, one might think that the sustaining and growing of dividends would be top of mind for REIT investors as well.

Ed Pitoniak
Ed Pitoniak
CEO at VICI Properties

Again, one would think, and yet, when we meet with our investors, which we do with great frequency, many of them will end the meeting by asking, "Is there anything we didn't ask about that other investors are asking about?" When we are asked this question, we often answer with, "Well, you didn't ask about our dividend, but don't feel bad because very few investors do." Call me old-fashioned, but I believe strongly that dividends should always be a top-of-mind topic, especially for REITs, but frankly, for most equity investments. As I'm sure you all know, over the long term, the last 100 years, dividends have contributed about one-third of the S&P 500's total return, and that's despite the fact that the long-term dividend yield of the S&P 500 has averaged under 2% over the last 30 years.

Ed Pitoniak
Ed Pitoniak
CEO at VICI Properties

Given the greater dividend yield of REITs, dividends, of course, matter even more to REIT total returns. As of yesterday's close, the trailing five-year total return of the RMZ REIT index was 54%, of which 27% was price return and 27% was dividend return, or that same five-year period, which I should note started in the spring 2020 COVID drawdown for stocks. VICI has generated 138 percentage points of total return, of which 84 points come from price return and about 54 points come from dividend return. I will also note that during that same five-year period, the S&P 500 generated 106 percentage points of return, of which 91 points were price return and 15 points were dividend return. As you can see, over that five-year period, dividends were a major factor in VICI outperforming the S&P 500 by a margin of over 30 percentage points or by about 30%.

Ed Pitoniak
Ed Pitoniak
CEO at VICI Properties

Over the last year or two, especially given the Mag 7's dominance of investor mind and market share, dividends did not get a lot of attention. It has been interesting in recent weeks, amidst the volatility of both equity and credit markets, to see dividends being talked about again. One of my favorite readings each week is Michael Hartnett's weekly flow show bulletin, which tends to come out late Thursday evening or early Friday morning. In his April 11th bulletin, in his admittedly cryptic way, Michael made the following points, and I quote, "On portfolios, we say, A, own credit, e.g., long-dated high-quality U.S. corporate bonds, many yielding 5%-6%. B, own equity income. 71 companies within the S&P 500 have a dividend yield greater than 4%. 41 have a dividend yield greater than 5%.

Ed Pitoniak
Ed Pitoniak
CEO at VICI Properties

Buy stocks that can defend dividend." As you get that, as you get Michael's point that as of his writing on April 11, only 71 companies in the S&P 500 had dividend yields above 4%, and only 41 had dividends above 5%. What's notable about those dividend yields, especially the greater than 5% dividend yield, is that those yields are comfortably above the current rate of inflation and thus generate a meaningful real return in a world where real return matters as much as ever. As a fellow VICI stockholder, it gladdens me to point out that as an S&P 500 stock, VICI currently offers a dividend yield greater than 5%, and we believe that that dividend yield is, to paraphrase Michael Hartnett, a defended dividend. In the coming weeks and months, equity market volatility may die down, or it may not. Who really knows?

Ed Pitoniak
Ed Pitoniak
CEO at VICI Properties

Whether market volatility dies down or not, a well-defended dividend can, and I believe likely will, be a significant contributor to total return for the market as a whole and for VICI and its stockholders. Everything we do at VICI is ultimately about total return in all of its key components, and so now I'll turn the call over to John and David, who will talk further about what we're doing to drive total return over the near and long term through our growth activities and through balance sheet and cost of capital optimization. John?

John Payne
John Payne
President and COO at VICI Properties

Thanks, Ed. Good morning to everyone. VICI is very proud of our core ability to develop relationships and convert them into valuable long-term investment partnerships. Not only were we able to successfully do this with Kane and Eldred's teams in connection with One Beverly Hills earlier in the first quarter, but subsequent to quarter end, we closed our first transaction in partnership with Red Rock Resorts connected to the development of a casino on tribal land in Central California. As announced in our earnings release last night on April 4th, VICI committed up to $510 million of a delayed draw term loan facility for the development of the North Fork Mono Casino and Resort, which will be developed and managed by Red Rock Resorts.

John Payne
John Payne
President and COO at VICI Properties

Red Rock is a premier gaming development and management company that operates productive assets in attractive geographies, and they've developed over $9 billion of regional gaming and entertainment destinations. They are also an established leader in Native American gaming, have developed and managed tribal casinos for over 20 years. Red Rock broke ground on the North Fork project in September 2024 and expects it to be completed by September of 2026. Upon completion, the casino is expected to feature 2,400 slot machines, 40 table games, two restaurants, three bars, a food hall, and a small retail offering. The 305-acre site located in Madera, California, directly adjacent to Highway 99, where 4.2 million people live within a two-hour drive of the North Fork site. This transaction established a formal relationship between VICI and Red Rock and represents Red Rock's first partnership with a REIT.

John Payne
John Payne
President and COO at VICI Properties

For VICI, it represents our first gaming investment on tribal land and our second investment on tribal land overall, with the first being our Great Wolf Northeast loan announced in February of 2023. Lending on tribal land in partnership with a high-quality gaming operator in Red Rock demonstrates VICI's ability to drive high-quality opportunities for continued investment in the gaming sector. Another benefit of VICI's relationship-based approach is that it fosters close communication with each of our tenants. Having just 13 tenants and eight financing partners on our roster allows us to maintain consistent and frequent dialogue with all of them, which is particularly advantageous during this volatile time such as these. We believe this level of communication, coupled with the monthly financial reporting received from the majority of our tenants, provides VICI with strong oversight of our portfolio.

John Payne
John Payne
President and COO at VICI Properties

Looking across our portfolio, we continue to be big believers in Las Vegas as there are just so many unique demand drivers that continue to fuel the city's activity. For example, over the Easter weekend, Las Vegas hosted WWE's WrestleMania at Allegiant Stadium, drawing nearly 125,000 fans and marking the largest gate for any event in WWE history. T-Mobile Arena has also recently hosted packed houses for Stanley Cup playoff games, and the musical talent at The Sphere remains a compelling draw for the city. Additionally, during the first quarter, tens of thousands of guests attending conferences hosted by companies like Home Depot and Adobe flooded the city with activity. While a potential international travel slowdown has come into question, we would note that only 12% of Las Vegas visitation in 2024 was from international travelers.

John Payne
John Payne
President and COO at VICI Properties

It is also possible that Las Vegas may benefit from a domestic trade-down effect if Americans forgo international destinations. In regional gaming, we continue to monitor the landscape, and based on prior periods of heightened market volatility, we expect performance to be relatively resilient. Property performance will vary based on geography and asset, and at VICI, we focus on working with our tenants so they feel positioned to continue to successfully operate the properties we own. Like I said, partnership is at the core of what we do. It is one of the key factors underlying our success in building this company as it drives current and future opportunities and allows our team to consistently seek to create value for our shareholders. Now I will turn the call over to David, who will discuss our financial results and guidance. David?

David Kieske
David Kieske
CFO at VICI Properties

Thanks, John. It's great to speak with everyone today, and we greatly appreciate your time. Starting with our Q1 capital markets activity and balance sheet, at the end of the quarter, we very successfully addressed all of our 2025 maturities, and now we have no debt maturing until September of 2026. On March 26th, we priced our bond offering, and at its peak, our order book was six times oversubscribed. We issued $400 million of three-year notes at a coupon of 4.75% and $900 million of 10-year notes at a coupon of 5.625%, or a blended coupon of 5.34%, including the impact of our hedging program. During the quarter, we also sold 7.8 million shares, raising $254 million in gross proceeds under our ATM via the forward.

David Kieske
David Kieske
CFO at VICI Properties

As I mentioned on our last call, in February, we recast our $2.5 billion unsecured multi-currency revolving credit facility and extended the maturity until 2029, providing us additional duration and an ample source of liquidity. We have approximately $3.2 billion in total liquidity, comprised of approximately $334 million in cash, $625 million under our outstanding forwards, and $2.3 billion of availability under our revolving credit facility. Our net debt to annualized first-quarter adjusted EBITDA, excluding the impact of unsettled forward equity, is approximately 5.3 times within our target leverage range of 5-5.5. Taking into account our recent bond refinancing activity, we have a weighted average interest rate of 4.47% as adjusted to account for our hedge activity and a weighted average 6.7 years to maturity.

David Kieske
David Kieske
CFO at VICI Properties

Our proactive risk management of our cost of capital, of our balance sheet, and of our liquidity profile through volatile markets allows our team to stay focused on building relationships and our investment pipeline. This allows VICI to continue pursuing our sustained and sustainable return goals for our shareholders without having to go pencils down for any period of time. Just touching on the income statement, AFFO per share was $0.58 for the quarter, an increase of 4.3% compared to $0.56 for the quarter ended March 31, 2024. Our 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 continue to run strong in the high 90% range when eliminating non-cash items.

David Kieske
David Kieske
CFO at VICI Properties

Our G&A was $14.9 million for the quarter, and as a percentage of total revenues, it was only 1.5%, which continues to be one of the lowest ratios in not only the triple net sector, but across all REITs. Turning to guidance, and as we noted in our release last night, we are raising our AFFO guidance for 2025 in both absolute dollars as well as on a per-share basis. AFFO for the year ending December 31, 2025, is now expected to be between $2.47 billion and $2.5 billion, or between $2.33 and $2.36 per diluted common share. Compared to our prior AFFO per share guidance of $2.32 - $2.35, the raise represents an increase of a penny at both ends of the range. Based on the midpoint of our increased 2025 guidance, VICI now expects to deliver year-over-year AFFO per share growth of 3.8%.

David Kieske
David Kieske
CFO at VICI Properties

Just as a reminder, our AFFO per share guidance, our AFFO guidance, excuse me, does not include the impact on operating results for many transactions that have not closed, interest income for many 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

Thank you. Mr. Ramond, if you'd like to ask a question on today's call, please press star followed by one on your telephone keypad now to enter the queue. When preparing to ask your question, please ensure you are unmuted locally. Our first question comes from Steve Sakwa from Evercore ISI. Steve, your line is open. Please go ahead.

Steve Sakwa
Steve Sakwa
Senior Managing Director at Evercore ISI

Yeah, thanks. Good morning. I guess I wanted to focus on the newest deal and maybe just get a little bit more color on kind of the, I guess, the draw of the property. Given the location, it's reasonably far from, say, the Bay Area. I heard, I think, John's comments about the local population, but I guess, is it fair to assume that this resort is really being designed to just tap that Central California market? Do you expect other kind of draws into the area? Just trying to get a better feel for kind of what's going to attract people there. Secondly, given that it's sitting on Tribal Land, how does the collateral work to the extent something doesn't work out? I don't think you can own property on casino land. Just trying to understand sort of the protections VICI has in the lending structure.

John Payne
John Payne
President and COO at VICI Properties

Sure. Steve, John Payne talking. Nice to talk to you this morning. We've spent a lot of time over the years. First, we'll start with getting to know the operator of the business, Red Rock Resorts. This is our first opportunity to work with them, but we've known them for years. We've followed what they've done in Las Vegas. We've watched their developments. Most recently, the Durango facility that's being built and is already being expanded. We've been incredibly impressed with the way they operate their businesses, the way they run the facilities. Obviously, you could argue they are the best developers in the gaming space. They've been working on this facility with the nation for, I believe, over 20 years and have studied how successful this can be. The catchment area, as I mentioned in my opening remarks, is large.

John Payne
John Payne
President and COO at VICI Properties

I do think there is what we've seen is there's a last mover advantage where new business can attract new customers and steal customers from others, particularly when you have a great operator who understands the way that understands customers the way that Red Rock does. We were very excited to work this opportunity and to announce this first deal with Red Rock. I'll turn it over to David here, who worked on a lot of the details of this deal.

David Kieske
David Kieske
CFO at VICI Properties

Yeah, Steve, good to talk to you. Just in terms of location, and the location is phenomenal. As John mentioned in his comments, it's right off the Highway 99. Four and a half million people go by the site. The competition in the area will be far, is far inferior to the quality of the build that Red Rock is developing here and the draw that this facility will have in the area. Just in terms of other ways that we got comfortable with this, Red Rock went out to raise this capital, and we participated in the syndicate of large money center banks. The total loan, $725 million, we're $510 million of that commitment. Just given Red Rock's experience, as John alluded to, there is a guarantee from Red Rock to complete the project.

David Kieske
David Kieske
CFO at VICI Properties

We felt really good about stepping in and developing a relationship with Red Rock, who is just one of the best developers out there in gaming as well as travel gaming facilities.

Operator

The next question comes from Barry Jonas from Truist Securities. Barry, your line is open. Please go ahead.

Barry Jonas
Barry Jonas
Managing Director at Truist Securities

I was just curious if your view on Tribal Sale-Leaseback has changed at all. Obviously, you've done a lot of work on it, and this deal brings you a little bit closer, not quite there yet. Thanks.

Ed Pitoniak
Ed Pitoniak
CEO at VICI Properties

Yeah. This is it. I'll start, and John and David can add in. Tribal Sale-Leasebacks continue to be, for us, a complex subject. We haven't entirely figured out. Steve was right to ask about the collateral on a lending package of a casino on tribal land, especially with the involvement of Red Rock, we have a high level of confidence that the asset can perform and that our collateral is good. It is obviously in the interest of the tribe that Red Rock be able to operate the property successfully and that our loan eventually be able to be paid off.

Ed Pitoniak
Ed Pitoniak
CEO at VICI Properties

When it comes to a sale leaseback, I would say we still haven't exactly figured out if we can get comfortable with the nuances of owning property on a tribal land, given the fact, as Steve alluded to, in the event of any kind of default, we, as the owner of the building, would not have the right or the opportunity to operate the gaming, which is obviously the economic engine of the asset. I would say at this point, we are still very much in a learning phase, but very, very glad to be partnering with the tribe and with Red Rock in this opportunity. David or John, anything you want to add?

David Kieske
David Kieske
CFO at VICI Properties

Yeah, you covered a lot.

Barry Jonas
Barry Jonas
Managing Director at Truist Securities

Great. Just as a follow-up, given the macro environment, I'm just curious if you're seeing tariffs impact any of your partners in terms of their construction budgets or timing, any impact to maybe drawdown schedules or else future discussions for a pipeline. Thanks.

Ed Pitoniak
Ed Pitoniak
CEO at VICI Properties

Yeah. No, it's a very good question, Barry. As a general principle, there are obviously general conditions across the construction landscape. When it comes to general conditions, you really want to be able to understand, are you partnering with a development company that is very experienced in development through thick and thin, or are you partnering with an operator with a deep and successful track record of development? Whether it's Kane at One Beverly Hills, which is a dedicated development company, or Red Rock, which is an operating company with a very proven track record as a developer, as John pointed out, a $9 billion development track record, we're very confident in their ability to manage the variability associated with tariffs and, in particular, get in front of them.

Ed Pitoniak
Ed Pitoniak
CEO at VICI Properties

David has been very close to Kane as it's gone through the planning and costing of its project. I don't know if you want to add any color on how resourceful and anticipatory they have been when it comes to the whole tariff issue.

David Kieske
David Kieske
CFO at VICI Properties

Yeah. They're obviously understanding the magnitude of what they're building, getting ahead of the tariffs as best as they possibly can, even developing hedging strategies around being a little bit kind of groundbreaking around hedging potential future purchases around raw materials, but knowing that they have the right contingency and the right development experience in place to ultimately get this built gives us comfort.

Barry Jonas
Barry Jonas
Managing Director at Truist Securities

Great. Thanks so much. Appreciate the color.

David Kieske
David Kieske
CFO at VICI Properties

Thank you.

Operator

The next question comes from Anthony Paolone from JP Morgan. Please go ahead. Your line is open.

Anthony Paolone
Anthony Paolone
Executive Director at JP Morgan

Great. Thanks. Good morning. I was wondering if you could talk about what the pipeline has looked like lately in the face of just the macro volatility and whether there have been any changes in the types of things that you're seeing, types of deals that folks want to do or don't want to do, geography, so forth.

Ed Pitoniak
Ed Pitoniak
CEO at VICI Properties

Yeah. I'll turn it over to John in a moment here, Tony, but I feel a little bit like we're living in Groundhog Day because I think at VICI, we've been talking about volatility for a while now. One could say, "VICI, are you ever going to stop talking about volatility?" It seems to have been a reality of our life now for at least a couple of years. I think we would be foolhardy to have a house view at VICI that it's going to die down anytime soon. It certainly affects, I think, on a most fundamental level, Tony, it certainly affects animal spirits around M&A and the growth ambitions that usually drive M&A.

Ed Pitoniak
Ed Pitoniak
CEO at VICI Properties

I would say across the gaming spectrum narrowly and the experiential spectrum more broadly, these volatile conditions and the uncertainty around both economic conditions and capital financing conditions have somewhat diminished animal spirits around growth. Growth by operators is, we believe, the biggest driver of the demand for our kind of capital and the role our capital can play in operators either developing new assets or through M&A growing their store count. Having summarized sort of the general conditions, I'll turn it over to John for more specific color.

John Payne
John Payne
President and COO at VICI Properties

Tony, Ed answered that very well. Really, quarter to quarter, things do not change that quickly in the spaces that we look at. My opening remarks talked a lot about relationship-based approach. My colleagues are always tired of me saying, "You do not do a deal at the first lunch." We continue to spend time with operators not only in gaming but in other forms of experiential. We educate them on how our capital can work. We continue to see if there are opportunities where we can be valuable during this time, ensuring that it is accretive for us and valuable to them.

Anthony Paolone
Anthony Paolone
Executive Director at JP Morgan

Got it. Thanks. Just one follow-up on the guidance. How much in committed capital for various projects and loans, etc., is not in the guide because there's not a draw schedule? Just wondering how much you kind of have but just didn't put in at this point.

John Payne
John Payne
President and COO at VICI Properties

In the guidance, Tony, it's about $130 million of committed capital. I'd have to get back to you on what's outside of that. I just want to know what's and that comprises finishing off Great Wolf Northeast, Homefield, Kalahari starting up, as well as, obviously, the North Fork investment that we just announced.

David Kieske
David Kieske
CFO at VICI Properties

Okay. Good. No, I was going to say it that way as well. Thanks.

Ed Pitoniak
Ed Pitoniak
CEO at VICI Properties

Yeah. I think, Tony, it'd be fair to say a lot, but we will move it back to you with a more precise answer than a lot is outside.

Operator

The next question comes from Caitlin Burrows from Goldman Sachs. Caitlin, your line is open. Please go ahead.

Caitlin Burrows
Caitlin Burrows
VP at Goldman Sachs

Hi. First, maybe a follow-up on that last question and congrats on the new relationship with Red Rock. Can you give any details on why you think they came to you for development funding? I think you mentioned that it is part of a larger syndicate. Do you have any insight on how the timing of the funding could play out, which, again, I feel like is what just was asked, and maybe the answer is no, but confirming?

John Payne
John Payne
President and COO at VICI Properties

Caitlin, it's John. I'll start and then turn it over to David. That seems the rhythm of this call right now. Look, we have followed with great respect, I guess, of the Red Rock since we started the company. Even before my time when I was a former casino operator for 23 years, I've watched Red Rock and watched what they've operated and really watched what they've developed. As Ed and I started the company back in 2017, he asked me the companies that I had great respect with, and one of them was obviously Red Rock and went out and started to build a relationship. It started that far back, and there just hadn't been any opportunity for us to work together.

John Payne
John Payne
President and COO at VICI Properties

As we talked through the years about this opportunity coming to them developing this opportunity, we obviously were in the loop from the start and had a good conversation, and we're excited to be a part of it.

David Kieske
David Kieske
CFO at VICI Properties

Yeah. Caitlin, in terms of just the funding cadence, this is a construction draw schedule. We put out an initial $75 million upon closing, but it'd be a little bit more regular cadence between now and, as John said, September 26th when it opens up. We are excited about the ability to deploy capital on a consistent monthly basis.

Ed Pitoniak
Ed Pitoniak
CEO at VICI Properties

I will just add, Caitlin, that for those who do not follow gaming, our REIT analysts and our REIT investors, to understand Red Rock, you really need to understand and experience, moreover, the quality of what they build and the quality of their operation. I think, John, it would be fair to say it is strip-level quality, even when it is off-strip, as most of their assets are, as all of their assets are. If you were in Las Vegas, I think we would highly encourage you to visit their assets like the Red Rock sort of anchor in Summerlin or their new asset, Durango, which is, as John says, very comparable to what you can expect them to be building with their partners at North Fork.

Caitlin Burrows
Caitlin Burrows
VP at Goldman Sachs

Got it. I know that there's limited detail you guys can give us on future, but I know that when you guys establish these relationships, it's not with the intent of doing a single deal. Considering that and all the development Red Rock Resorts has done in the past, I'm wondering how you think about that future opportunity with them. Are you thinking it would be more development? Are there sale-leaseback opportunities? Something else?

John Payne
John Payne
President and COO at VICI Properties

Caitlin, right now, there's no other opportunity. It's a one transaction with them. I think the question you're asking is, in the future, if Red Rock was growing their business, would we be interested in helping them grow in a variety of ways, whether it was sell the real estate, whether it was another opportunity to develop? The answer is absolutely yes for the right opportunity. Obviously, it's got to be accretive for us and work for them. I hope you hear from our remarks. We have tremendous respect for how they run their company, how they develop their projects, how they build partnerships with tribal nations. We really like all of that. To be clear, this is one opportunity and only one opportunity today, but we would hope or we would love the opportunity in the future, but no commitments.

Caitlin Burrows
Caitlin Burrows
VP at Goldman Sachs

Got it. Thanks.

Operator

The next question comes from Rich Hightower from Barclays. Rich, please go ahead. Your line is open.

Rich Hightower
Rich Hightower
Managing Director at Barclays

Hey, good morning, guys. Thanks for taking the question here. Just maybe a little more of the nuts and bolts on the tribal side and the deal with Red Rock. Just to be clear, Red Rock's the borrower. The collateral package that VICI would have an interest in, it sounds like, has really nothing to do with the land itself, but it really would be just the construction that sits on top of the land. Just help me understand kind of what that is and a little more about the security if anything might ever go wrong. Obviously, it doesn't sound like it ever would, but just help us understand that. Secondly, it does sound like tribal lending is this much bigger opportunity than maybe any of us sort of appreciated sitting here 12 months ago.

Rich Hightower
Rich Hightower
Managing Director at Barclays

Just help us understand how that landscape has evolved and changed now that GLPI has announced a deal. You guys have announced this deal. Just help us understand the moving parts there as well, please.

David Kieske
David Kieske
CFO at VICI Properties

Yeah. Right. It's David. I'll start. I'll just chime in. The borrower is actually the tribe, North Fork Rancheria. Red Rock's the developer and providing the construction guarantee or completion guarantee to get the project built, the oversight, the expertise that we've talked about that they bring to the table. The collateral is the building. Obviously, as we talked about in this call and other calls, taking that back is very difficult given the fact that the tribe is the only entity that has the right to operate gaming. We've got full faith and conviction around Red Rock and their buildings, the fact that they're putting up their balance sheet to provide the initial funding. This loan will complete the funding.

David Kieske
David Kieske
CFO at VICI Properties

As I mentioned, there's a whole host of money center banks that have come into the syndicate to provide the financing for the development here.

John Payne
John Payne
President and COO at VICI Properties

Yeah. Just one other thing to add, this is Samantha. With respect to the collateral package, we also have a first-priority security interest in the future cash flows and revenues from the gaming activities, inclusive of the gaming. That's an important point. Also, when we think about tribal lending versus a sale leaseback, it's also thinking about the LTV or the LTC, which is different than your percentage interest when you're looking at what your "collateral" is when you already own the building and can operate. We view them as different when you think about where we are on the risk spectrum.

Ed Pitoniak
Ed Pitoniak
CEO at VICI Properties

I think when you're reducing it all to effect.

David Kieske
David Kieske
CFO at VICI Properties

Go ahead. Sorry. Yeah.

Ed Pitoniak
Ed Pitoniak
CEO at VICI Properties

Yeah. I was just going to say when you reduce it all to effect. Yeah. This is all dependent on it ultimately operating successfully. Again, the involvement of a proven operating partner, proven across the gaming landscape broadly, but specifically in tribal gaming and specifically in California, gives us a lot of comfort. I really would not minimize the importance of that completion guarantee either from Red Rock.

Rich Hightower
Rich Hightower
Managing Director at Barclays

Okay. I guess the second part of the question, just maybe more broadly about the tribal lending landscape. Maybe help me understand too, if there were other traditional lending sources for a lot of these projects historically, other than pricing, maybe there's more to it, what has caused the REITs to kind of have an opening in the way that we've seen in the last few quarters here?

David Kieske
David Kieske
CFO at VICI Properties

It's definitely something we continue to look at, Rich. I'm not here to say that there's 20 opportunities out there, but it's definitely a part of our business that we're studying, better understanding. As Ed just walked you through, not all deals are the same. Not all deals have an operator like Red Rock Resorts running it. It's something that we're looking at. I don't think you should say this is something the REITs have been looking at just the past two quarters. What you should know is, at least from a VICI perspective, these are things that we study for years. It doesn't mean that it shows up and we've looked at it for three months. This is something we've been studying for years.

David Kieske
David Kieske
CFO at VICI Properties

There have been others that have been involved in this type of lending over the decades that tribal casinos have been developed all over the United States. It is something that this particular opportunity was one we were quite excited about. Obviously, we announced that investment here over the past coming days.

Ed Pitoniak
Ed Pitoniak
CEO at VICI Properties

Yeah. Just to kind of reiterate what I said to Tony, Rich, growth creates a demand for capital. As you look across the U.S. gaming landscape, California is still a relatively young gaming jurisdiction. I think, John, gaming has been in California now for maybe 20-odd years. It is only tribal gaming in California. There is still white space on the California gaming map. Tribes are gaining the opportunities to put new stores onto that map. That is creating a need for capital that you do not necessarily see everywhere else in the country at this point.

Rich Hightower
Rich Hightower
Managing Director at Barclays

All right. Appreciate the call, guys. Thank you.

Operator

The next question comes from Caitlin Burrows from Citi. Your line is now open. Please go ahead.

Nick Joseph
Nick Joseph
Head of Real Estate and Lodging Research Team at Citi

Thanks. It's Nick Joseph here with Caitlin. I was hoping you could touch on your expectations for the Century Casinos lease. I know it's a small part of rents overall, but do you feel comfortable that the recent CapEx investments at those properties will help improve coverage?

John Payne
John Payne
President and COO at VICI Properties

Yeah. Very good question. I am smiling here because we had part of our organization in the assets actually two days ago, visiting the assets, visiting with the teams, looking at the new construction, looking at the new casino that was put in place, and talking about the great numbers that are coming out of there. In my opening remarks, one of the things that is great about VICI and the way that we are structured is that we have constant communication with our operators. We also get, for the majority of our operators, we get monthly results. We have conversations with them about how the business is working, how they think about capital. Century is one of them. You would expect, or I think you would hope that we are having conversations with our large operators in MGM or Hard Rock or others that we have assets with.

John Payne
John Payne
President and COO at VICI Properties

It is exciting to see the new development we helped finance really take off down in the Missouri properties. We'll continue to see if there's ways over time we can put money to work with Century as well as with some of our other operators.

Nick Joseph
Nick Joseph
Head of Real Estate and Lodging Research Team at Citi

Thanks. I guess just one other partner you did not mention there was Caesars. Obviously, we have received some questions on the regional casinos. I know there are 10 years remaining on that lease. How are those conversations going, if they are, just given current coverage?

Ed Pitoniak
Ed Pitoniak
CEO at VICI Properties

Yeah. Nick, good to hear from you. I would not say there is any burning conversations of any kind between us and Caesars around regional property performance. We obviously continue to be pleased at the magnitude of capital that Caesars has been and continues to invest in our assets, both on the Las Vegas Strip and in the regions. You are obviously seeing we are seeing the benefits in real time of the $300 million-odd they put into New Orleans, John. Obviously, a couple hundred million into Atlantic City. The recent announcement of $160 million of their capital into Lake Tahoe, we think, is pretty strong evidence of Caesars' willingness to continue to invest in these properties and drive this kind of performance that ultimately should lead to rent coverage we are all happy and satisfied with.

Operator

Thank you very much. The next question comes from David Gross at Jefferies. David, your line is open. Please go ahead.

David Gross
David Gross
Managing Director at Jefferies

Hi. Morning. Thanks for taking my questions. With respect to the Red Rock arrangement, I don't know if you're able to sort of characterize what the capital structure of that property is setting up to be and/or any comments around pricing on the loan that may be helpful. As a part of that bigger picture, how you look at opportunities and the risk profile of them relative to sort of where you were one, two, three years ago, is it still the same? Is there some progression in kind of risk profile as you look at stuff today? Thanks.

David Kieske
David Kieske
CFO at VICI Properties

A lot in there, David. It's good to talk to you. Let me just start with the loan. As we've talked about, the $725 million total facility comprised of two term loans, term loan A and a term loan B, our blended all-in yield is so far right around 7%. That includes some incremental fees and whatnot on the capital that we've committed. The $725 million dual-tranche term loan will be the development funding for the project. We are comfortable with the capitalization and the support that's coming from Red Rock and their expertise around getting this open. Really, the location, when you look at the competing product in the area, it's far, far inferior to the Durango-esque style facility that will be built here in Madera, California.

David Kieske
David Kieske
CFO at VICI Properties

In terms of our risk appetite, I think we continue as we talk about it at VICI, we have a table of learning. We continue to learn internally and study different opportunities. As we've noted on this call, we've looked at tribal for years. Partnering with the right operator in the right location and doing things with the right guarantees and right structure, we get comfortable with that and the ultimate return that we earn on that capital that we deploy. I think we spend a lot of time ensuring that we put our capital out in ways that make sense. As Ed talked about, protecting the dividend, but also ensuring that we get that capital repaid.

Ed Pitoniak
Ed Pitoniak
CEO at VICI Properties

Yeah. I'll just add, David, that in investing in any category, but in particular in our investment category, general principles only take you so far. Any kind of general principles we might hold about tribal gaming are just not that useful in us ultimately making investment decisions. We make investment decisions based entirely on specifics, not generalities. The specifics of this investment opportunity were very compelling. The involvement of a highly proven, highly successful developer that also happens to be a highly proven and highly successful operator. Those specifics were incredibly important to making this particular decision. Any future decisions we might make, whether around tribal or commercial, will always, again, be made on the specifics.

David Gross
David Gross
Managing Director at Jefferies

Thank you very much.

Operator

The next question comes from Haendel Juste from Mizuho. Your line is now open. Please go ahead.

Haendel Juste
Haendel Juste
Managing Director at Mizuho

Hey, guys. Good morning. I guess I'm curious if we should also be reading into the Red Rock construction loan that perhaps you would be more comfortable being a construction lender more broadly under the right circumstances and with the right partner. Perhaps can you talk about your appetite in doing more of that type of loan activity going forward? Also some thoughts on the underwriting of the loan and the required return that you have there. Thanks.

Ed Pitoniak
Ed Pitoniak
CEO at VICI Properties

Yeah. I would really reiterate what I just said in response to David, that it will always be highly specific. We do not have a general strategy around construction funding. We have a general strategy around relationship development and identifying experiential partners we would like to have a relationship with and grow over time. If helping them finance a development opportunity is the way to start the relationship, we will certainly look at that energetically and yet rigorously. You can see in both the Cain and the Red Rock situation, we are being driven by the opportunity to establish relationships and not really specifically being driven by a desire to become a construction financier.

Haendel Juste
Haendel Juste
Managing Director at Mizuho

Appreciate that. Maybe a follow-up here, just speaking of relationships. I'm curious if there are any road for opportunities with any of your other partnerships that could be attractive to you here. Thank you.

John Payne
John Payne
President and COO at VICI Properties

I didn't hear exactly the question, but I think it was, are there opportunities to grow with our current set of 13 tenants and 8 financing partners? The answer I'll give you is I hope so. I think that's always been the way we have talked about this and why we don't have 100 tenants right now. We have 13. I'm sure over time they'll grow to 14, 15, 16. Part of our strategy that we've talked about since we started the company was to find the best in the business and help them grow over time while also adding new tenants as well as new financing partners to grow the business accretively.

Haendel Juste
Haendel Juste
Managing Director at Mizuho

Thank you.

Operator

The next question comes from Daniel Guglielmo from Capital One Securities. Daniel, please go ahead. Your line is open.

Dan Guglielmo
Dan Guglielmo
Equity Research Analyst at Capital One

Hi, everyone. Thank you for taking my questions. The March and April trend commentary for your big public partners in Las Vegas has been very positive this earnings. Can you give us a sense if you're hearing the same things from the non-public partners on the Strip? I guess the Venetian Resort Las Vegas and then maybe Fontainebleau Las Vegas in the investment book.

John Payne
John Payne
President and COO at VICI Properties

Yeah. We're very excited. Nice to talk to you, Daniel. We were very excited. Obviously, we see some of the numbers before they become public at times. We're very excited to see Las Vegas continue to be quite successful and growing. As you heard in my comments, we like Vegas so much because there's so many different what I call cash registers and reasons for consumers to come to the city. MGM and Caesars were talking about their business. The Venetian has a robust business. I was just out there myself, and I know Ed was as well, enjoying our time at the Sphere and watching how that brings in a whole bunch of new consumers to not only the Venetian, but really brings a new consumer set to Las Vegas, which is great to have a city like that.

John Payne
John Payne
President and COO at VICI Properties

Daniel, the answer is Vegas seems to be continuing to have a very good run. Part of that, the credit goes to the operators because they continue to find different ways to attract not only their existing customers, but new customers. There is no better group than the group that runs Las Vegas. We are excited to be so invested there and owning those assets because I know that the people who do will continue to find ways no matter what the economic conditions are to grow their business.

Dan Guglielmo
Dan Guglielmo
Equity Research Analyst at Capital One

Great. Thank you. That's really helpful. I did like your point on the potential trade down, more people to Las Vegas. On the second one, you all have a wide range of partners. John, I think you mentioned 21, both big and small with very different risk characteristics. Given the confusing macro, can you just talk about the team's approach to risk and if there's a formal risk process in place to flag and work through any issues that you see developing over the next few years? Thank you.

Samantha Gallagher
Samantha Gallagher
General Counsel at VICI Properties

Yeah. Hey, Dan, it's Gabe Wasserman here. I can take the first part of that question. Others can weigh in as well. Since we founded the company in 2017, we've had a pretty rigorous risk management process. We meet as a management team every quarter. There are two separate meetings. One is to go over the performance of our tenants and the lease investments. There is a separate meeting to go over our borrowers and the performance of our loan investments. As a management team, a lot of visibility into the performance of our investments and a lot of discussions and rigorous underwriting and monitoring.

Dan Guglielmo
Dan Guglielmo
Equity Research Analyst at Capital One

Great. Appreciate it.

Operator

The next question comes from Ronald Camden. Oh, jeez. Next question is from Ronald Camden of Morgan Stanley. Ronald, please go ahead.

Jenny Leeds
Jenny Leeds
VP at Morgan Stanley

Hey, good morning. This is Jenny on the run. Thanks for taking my question. I think my first one's regarding the Caesars Forum Convention Center call options you have later this year. What is your latest thoughts on the deal and if you would like to exercise on that?

John Payne
John Payne
President and COO at VICI Properties

Yeah. Very good question. That call becomes live here later in the fall. It's September of this year. I don't have the exact date, but I believe it's late September of this year. I think your question is, do we like the asset? Is it a beautiful asset? How is it performing? It is something that we'll continue to evaluate as that time comes. Caesars built just a beautiful place and is using it effectively as my last comments of driving new business and new meeting business there. We are aware of that opportunity. We've got a window that's quite wide, and we'll study the opportunity when it comes.

Operator

Perfect. I have a couple more regarding the.

Barry Jonas
Barry Jonas
Managing Director at Truist Securities

Yeah. Yeah. Go ahead, please.

Ed Pitoniak
Ed Pitoniak
CEO at VICI Properties

Yeah, Jenny, I was just going to say before you asked your second question that our decision-making is always guided by solving for total return, as I spoke of in my opening remarks. As we look at the building blocks of our total return, those building blocks are dividend yield, same-store NOI levered into AFFO per share, and then external growth. We try to optimize our timing around any kind of opportunities like that such that we are solving fundamentally for sustained and sustainable superior total return. That really is the calculus that guides so much of our decision-making around not only what we invest in, but when we invest in it.

Jenny Leeds
Jenny Leeds
VP at Morgan Stanley

Makes sense. I think the second one is regarding the strategic relationship with Cain International. I'm just curious if there's any incremental conversation this quarter with them. What other kind of experiential investment opportunities are you looking to pursue together beyond the One Beverly Hills project?

Ed Pitoniak
Ed Pitoniak
CEO at VICI Properties

Yeah. They are involved in a lot of experiential categories we are fundamentally interested in. I will just cite one example, and that is their investment in a facility called The St. James, which is just outside of Washington, DC, and is very much like Chelsea Piers. They've been very open and energetic about their growth ambitions for The St. James as ultimately a network of facilities across the country. We've enjoyed very much the conversations we've had on, I must emphasize, a very preliminary basis on how we might ever be of service to them in growing that network.

Jenny Leeds
Jenny Leeds
VP at Morgan Stanley

Okay. Sounds great. Thanks so much.

Operator

The next question comes from Max Marsh at CBRE. Max, please go ahead. Your line is open.

Max Marsh
Max Marsh
Equity Research Associate at CBRE

Good morning. Thanks for taking my question. Bally's recently had a deal with Star in Australia. Do you guys have interest in participating in that or maybe in Australia more broadly?

John Payne
John Payne
President and COO at VICI Properties

If you've been following us for a while, David and I spent some time down under about two years ago visiting Australia and New Zealand and understanding the landscape. Obviously, the market in Australia, particularly where the assets are for the Star, has gone through a radical change. Not only structural issues, but the regulators and the regulations of those businesses have changed and have put a real hurt, I guess is the best way, on the business right now. I think your question was, would we be involved in an opportunity with the Star in Australia? The answer is no.

Max Marsh
Max Marsh
Equity Research Associate at CBRE

Okay.

Ed Pitoniak
Ed Pitoniak
CEO at VICI Properties

I would say just.

Max Marsh
Max Marsh
Equity Research Associate at CBRE

Hey, Mary.

Ed Pitoniak
Ed Pitoniak
CEO at VICI Properties

Yeah. Sorry to add.

Ed Pitoniak
Ed Pitoniak
CEO at VICI Properties

Yeah. Sorry, Max. I was just going to add that really one key predicate for any investment we ever make is having as high a degree of visibility and confidence around what the future earnings profile of a given asset will be. Right now, given the turmoil in the regulatory landscape and its impact on the economic performance of gaming assets in Australia, it is very difficult to have any visibility or confidence around what kind of money these assets are going to make over the longer term.

Max Marsh
Max Marsh
Equity Research Associate at CBRE

Understood. Thank you for that. Maybe to zoom out and take it at a higher level, other than economics and accretion, could you talk about some of your top strategic priorities in your current opportunity set, whether that might be tenant diversification, geographic diversification, or maybe something else?

Ed Pitoniak
Ed Pitoniak
CEO at VICI Properties

I would say there's really a couple of key result areas we really focus on. I've already talked about, obviously, our ceaseless dedication to building total return on a sustained and sustainable basis. As well, it's obviously doing what we can, all we can, to weatherproof the business as best we can. No business is obviously ever absolutely weatherproof. I am so glad and so proud of the work David and the team did, for example, in getting the refinancing done when we got it done. Against this backdrop of volatility and low visibility, a paramount focus of management will continue to be being highly anticipatory of what is potentially coming and being as ready for it as we can and protecting our capital and the cost of our capital.

Max Marsh
Max Marsh
Equity Research Associate at CBRE

Great. Thank you very much.

Operator

Our final question today comes from Alec Feygin from Baird. Your line is now open. Please go ahead.

Alec Feygin
Alec Feygin
Equity Research Associate at Baird

Hey, good morning. Thanks for taking my question. Just one quick one for me. There was some news regarding New York Gaming. I'm curious what your latest thoughts on the New York Gaming license process is and what VICI will be doing from now till decisions ultimately made.

John Payne
John Payne
President and COO at VICI Properties

Yeah. Exciting times in some of the news that's out there. By no means am I going to predict when a license will be granted or the three licenses will be granted. It does seem like there's momentum moving for the RFPs to be put in by the end of June, early July. I think you know that one of the bidders is going to be MGM at the site that we own the real estate in the buildings. There are other very exciting opportunities that are in the news that could win one of the licenses. We are standing by, better understanding the circumstances. Obviously, we're a big fan of the MGM bid simply because the asset is one that is ours, and we would hope that we would help our current tenant at MGM grow that should they win one of the three licenses.

John Payne
John Payne
President and COO at VICI Properties

Like you, we'll continue to watch and continue to read the paper and better understand as it gets closer.

Alec Feygin
Alec Feygin
Equity Research Associate at Baird

Got it. That's it for me. Thanks.

Operator

Hannah Floor, back to Ed with some closing comments.

Ed Pitoniak
Ed Pitoniak
CEO at VICI Properties

Yeah. We know that all of you, whether you're analysts or investors, are incredibly stretched thin right now given the volume that the company is reporting. We cannot express deeply enough our thanks for your time and attention this morning and your continued support. Bye for now.

Operator

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

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