VICI Properties Q2 2026 Earnings Call Transcript

Quartr
Provided by Quartr
July 30, 2026

Key Takeaways

  • Positive Sentiment: 2026 AFFO guidance was modestly raised to $2.675 billion–$2.695 billion, or $2.45–$2.47 per diluted share, implying 3.4% year-over-year AFFO per-share growth at the midpoint. Second-quarter AFFO per share increased 4.6% to $0.62.
  • Positive Sentiment: VICI completed several growth transactions, including the $1.16 billion Golden Entertainment sale-leaseback, the Gamehost real estate acquisition in Alberta, and its first build-to-suit investment with Club Med. The Club Med project represents approximately $75 million of total investment and is expected to open in the fourth quarter of 2027.
  • Positive Sentiment: Management cited continued strength across Las Vegas and regional gaming, including rising Strip gaming revenue, strong room rates, 93% second-quarter occupancy at MGM’s Strip assets, and improving regional-market performance supported by new products, entertainment, and operator investments.
  • Positive Sentiment: VICI ended the quarter with approximately $2.5 billion of liquidity and net debt to annualized adjusted EBITDA of about 4.9x, below its 5.0x–5.5x target range. Management said it currently favors deploying capital into investments such as its loan book and growth projects rather than repurchasing shares.
  • Negative Sentiment: The company modified a $90 million leisure and hospitality loan by extending its maturity and reducing the interest rate to 2%, although it receives monthly cash interest, additional collateral, and amortization payments. VICI also said the timing of broader discussions with Caesars remains uncertain while Caesars navigates its ownership transaction.
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Earnings Conference Call
VICI Properties Q2 2026
00:00 / 00:00

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Operator

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the VICI Properties Second Quarter 2026 Earnings Conference Call. At this time, all participants are in listen-only mode. Please note that this conference is being recorded today, July 30, 2026. 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 second quarter 2026 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. I refer you to the company's SEC filings for a more detailed discussion of the risks that could impact future operating results and financial conditions.

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 second quarter 2026 earnings release, in 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, Jeremy Waxman, Chief Accounting Officer, Gabe Wasserman, Managing Director of Business Development and VECS, and Moira McCloskey, 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. Good morning, everyone. For the analysts on the call, we're especially grateful for your presence today because we know that yesterday aftermarket, you dealt with an absolute flood of earnings releases in your coverage area. Again, thank you. In the next few minutes, you'll hear from John Payne on our growth outlook and activities and from David Kieske on our financial results, liquidity, and updated 2026 earnings guidance. To start, I'd like to spend a moment or two talking about how we think about, talk about, and manage the growth of our business. You've heard us say before, frequently, that we grow our business by growing our relationships, by growing new relationships, and by growing the scale of existing relationships.

Ed Pitoniak
Ed Pitoniak
CEO at VICI Properties

Today, I'd like you to take you deeper inside our approach to relationship building. To do that, I'll tell you the story of our new relationship with Club Med, which we announced back in June with the news of our investment in St. Croix, where we've acquired a property initially developed as the Carambola Beach Resort. We first began getting to know Club Med in 2025. It's important to understand how we came to be connected with Club Med. The connection was not direct. In this case, it wasn't about calling up their global headquarters in Paris, nor their North American Caribbean headquarters in Miami. Though believe me, we do regularly make cold calls on experiential operators. We did not receive a flyer saying there was a Club Med property or a Club Med opportunity for sale. We did not get connected through bankers or brokers.

Ed Pitoniak
Ed Pitoniak
CEO at VICI Properties

We connected with Club Med through a company that will remain nameless. This is a leisure and hospitality company we've been courting for partnership since just about the birth of VICI. To date, we haven't been able to find the right opportunity with them, though to be sure, we won't stop trying. We've always worked hard to make our conversations with this unnamed company meaningful and collegial and frequent. In 2025, Club Med asked this unnamed company who they, Club Med, might partner with for financing of the St. Croix opportunity they were pursuing. The unnamed company said to Club Med, "We should connect you with our friends at VICI." In 2025, Club Med connected with John Payne and Erin Furey to get a conversation started. When we commence a conversation with a potential new partner, we are not in sales mode. We are in learning mode.

Ed Pitoniak
Ed Pitoniak
CEO at VICI Properties

With Club Med, John, Erin, and Matt Perkins, and other members of the VICI team set about seeking to understand Club Med's needs, financial, strategic, and cultural needs, not only in St. Croix, but into the future that Club Med envisions for itself. This is an approach that takes time, but we believe in its approach that leads to the strongest foundations upon which to grow together. In this case, St. Croix became the foundation upon which we are building our relationship. When we first announced our new partnership with Club Med and our acquisition of the St. Croix property, the reaction from some was sort of a small deal. I'll offer a couple of quick thoughts on that take.

Ed Pitoniak
Ed Pitoniak
CEO at VICI Properties

First of all, the total projected investment of $75 million into one property is pretty meaningful by net lease standards, given that the typical net lease property tends to cost low single-digit millions. Secondly, to reemphasize the point, when we make a first investment with a new partner, we are highly focused on the foundation we are building for potential future investment. Two weeks ago, a number of us on the VICI team experienced a strong foundation when we joined our Club Med partners on the North Shore of St. Croix for what Club Med calls its first stone ceremony. This ceremony celebrated the ecosystem of relationships that Club Med builds before it creates, in order to create great experiential resorts.

Ed Pitoniak
Ed Pitoniak
CEO at VICI Properties

The Club Med team of global CEO Stéphane Maquaire, North American Caribbean CEO and President Carolyne Doyon, and North American Caribbean Senior Vice President of Development Eileen Kett, brought together the St. Croix governmental, tourism, and developmental officials who've been and will continue to be instrumental in supporting the resort redevelopment, both strategically and financially. As well as the contractors who, over the next 18 months or so, excuse me, will restore this resort to the glory originally envisioned by Laurance Rockefeller while making it a distinctly Club Med experience. What I witnessed on St. Croix made me proud of the new partnership we've created with Club Med and excited for what together will contribute to St. Croix's competitiveness as an experiential destination. What was also clear to me that day on St. Croix is the energy, creativity, and passion that Club Med brings to its growth activities.

Ed Pitoniak
Ed Pitoniak
CEO at VICI Properties

With Club Med having a stated goal of growing its portfolio of destinations from 60-100 over the next few years, I'm hopeful and excited that VICI will find ways to be supportive of and participative in that growth. If we do, it's because we will continue to grow our relationship with Club Med. With that growth, relying on our working every day to understand and better serve their needs, which is what we strive to do with every one of our growth partners. With that, I'll turn the call over to John.

John Payne
John Payne
President and COO at VICI Properties

Thanks, Ed. Good morning to everyone. You just heard Ed tell the story of how our Club Med relation came to be; I'll simply add two things. First, for our business development team, a partnership like this one is the payoff of years of patient relationship building. It's the way we like to grow. Second, the transaction itself marks several firsts for VICI. Our first build-to-suit investment and our first property acquisition in the Caribbean. At closing, we funded the $20 million acquisition of the Carambola Beach Resort, we will fund Club Med's approximately $55 million redevelopment of the resort, which Club Med will operate under its premium Exclusive Collection brand following a targeted opening in the fourth quarter of 2027. As Ed said, we look forward to growing with Club Med for years to come.

John Payne
John Payne
President and COO at VICI Properties

During the quarter, we also brought several previously announced transactions across the finish line. The closing of our $1.16 billion Golden Entertainment sale leaseback, the commencement of our new lease with Clairvest at Northfield Park, and the completion of the acquisition of the Gamehost Real Estate in Alberta for approximately CAD 200 million Canadian dollars alongside our existing partners at PURE. With the completion of these transactions, we've added Clairvest, Golden Entertainment, and Club Med as our 14th and 15th and 16th tenants respectively. This tenant growth was achieved by partnering with experienced and tenured operators. From Clairvest's two decades of investing across 37 gaming assets to Blake Sartini's more than 30 years operating in the Nevada gaming landscape to Club Med's 75 years of all-inclusive operating experience. The closing of the Gamehost transaction reflects the other side of that same discipline.

John Payne
John Payne
President and COO at VICI Properties

Our capital is continuing to serve the growth of partners already on our roster. Turning to the trends across the portfolio we already own, there's no better place to start than Las Vegas. On a year-to-date basis, Strip gaming revenue is running ahead of last year, with room rates continuing to demonstrate the pricing power of this market. The resilience of Las Vegas continues to be reinforced by the ongoing diversification of demand. We've noted many times how this city has transformed itself into an entertainment epicenter with experiences like Sphere. There's been the massive growth in professional sports with the addition of the Golden Knights, the Raiders, F1, the Aces, and the upcoming relocation of the Oakland A's. Now the prospect of an NBA franchise stands to extend the trajectory further. Every new demand driver makes Las Vegas that much harder to bet against.

John Payne
John Payne
President and COO at VICI Properties

There is the convention segment, which we've long viewed as an underappreciated mitigant to the cyclicality of leisure demand, it continues to strengthen. Last month, U.S. News & World Report named Las Vegas the number one convention city in America, with The Venetian ranked the top conference hotel on the entire list. This is a powerful validation of the convention infrastructure our operators continue to invest in, of the nearly 6 million sq ft of conference, convention, and trade show space VICI owns on the Strip. We often say we aim to make VICI bigger only when it makes VICI better. This quarter, we got better. Three tenured and experienced tenants added to our roster, a new market in Las Vegas locals, a new geography and partner in the Caribbean, and continued growth with partners we know well.

John Payne
John Payne
President and COO at VICI Properties

The roster-building, relationship-driven work is what will continue to define VICI in the quarters ahead. Now I'll 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. Touching on the income statement, AFFO per share was $0.62 for the quarter, an increase of 4.6% compared to $0.60 for the quarter ended June 30, 2025. In terms of the balance sheet, our total debt is $17.2 billion, and our net debt to annualized second- quarter adjusted EBITDA is approximately 4.9 times below the low end of our target leverage range of 5x to 5.5x. We have a weighted average interest rate of 4.45%, as adjusted for hedge activity, and a weighted average of 5.5 years to maturity. As of June 30, 2026, we have approximately $2.5 billion in total liquidity, comprised of $288 million in cash and $2.2 billion of availability under our revolving credit facility. Turning to guidance, we are updating AFFO guidance for 2026 in absolute dollars as well as on a per share basis.

David Kieske
David Kieske
CFO at VICI Properties

AFFO for the year ending December 31, 2026, is expected to be between $2.675 billion and $2.695 billion, or between $2.45 and $2.47 per diluted common share. Compared to our prior AFFO per share guidance, the updated guidance represents an increase at the low end of the range by $0.01. Based on the midpoint of our raised 2026 guidance, VICI expects to deliver year-over-year AFFO per share growth of 3.4%. As a reminder, our guidance does not include the impact on operating results from any pending acquisitions without announced expected closing dates, possible future acquisitions or dispositions, and related capital markets activity, or other non-recurring transactions or items. With that, operator, please open the line for questions.

Operator

Ladies and gentlemen, we ask that you please limit yourself to one question and one follow-up. You may get back in the queue as time allows. Our first question comes from the line of Barry Jonas from Truist. Your question, please.

Analyst at Truist

Hi, this is Jeremy on for Barry. Thanks for taking our questions. With Churchill Downs announcing last night that it's looking to sell its regional properties, what are your high-level expectations for regional M&A activity throughout the remainder of the year? Do you see regional valuations market-wide as reasonable at this point?

John Payne
John Payne
President and COO at VICI Properties

This is John. It is good to talk to you. I will talk a little about regional gaming right now. I was adding up the years last night. I have been in or around the regional gaming space for 30 years. My colleagues are laughing at me right now. The business is resilient. There has been a really amazing rebound here over the past six months or so in the regional markets. It is very exciting to see the innovation that is happening around the slot product right now that is helping to drive growth in the regional markets.

John Payne
John Payne
President and COO at VICI Properties

As it pertains to the I think you are referring to the Churchill Downs announcement that they are going to be selling their regional gaming portfolio. There are some assets in their portfolio that I am sure we will take a look at that would be a nice addition to our portfolio.

John Payne
John Payne
President and COO at VICI Properties

I know there are some of our current tenants that are interested in those assets. We will continue to better understand the opportunities there.

Analyst at Truist

Got it. That is very helpful. Should we expect to see more built-to-suit-structure-type deals similar to the Club Med?

John Payne
John Payne
President and COO at VICI Properties

Yeah, Jeremy, it is very common across the net lease universe. It is something that we are excited about. I think we continue to offer solutions to our partners. This is a very attractive solution for those that are in growth mode.

Analyst at Truist

Got it. Thank you.

Operator

Thank you. Our next question comes from the line of Caitlin Burrows from Goldman Sachs. Your question, please.

Caitlin Burrows
Caitlin Burrows
Analyst at Goldman Sachs

Hi. Good morning, everyone. We'll figure out how to phrase it; just considering that your two largest tenants are in the news to potentially be bought, we'll see what happens with them. I guess just considering the time period that we're in right now, I was wondering if you could comment on how your conversations with those tenants today differ from a year or two ago and kind of what's normal course versus what's maybe, I don't know, on hold because their own structure is changing or potentially changing.

Ed Pitoniak
Ed Pitoniak
CEO at VICI Properties

Yeah. Hey, Caitlin, good to hear from you. I would say that our conversations actually haven't fundamentally changed with our partners. We are in constant contact with all of our partners around various interactions involving our businesses. They are obviously in very intense operational businesses day by day, hour by hour. We're always very respectful of that and making sure we don't waste their time. We continue to have very positive conversations around opportunities that we see together, whether with existing assets or incremental opportunities. I'll turn it over to John here because he can give you an example of an opportunity that we are discussing with a partner, despite the fact that that partner is also engaged in some very meaningful activities beyond us.

John Payne
John Payne
President and COO at VICI Properties

Yeah. It's good to talk to you this morning. Ed's referring to the opportunity in Las Vegas with the NBA. I think everyone has seen in the news that the NBA is looking to put another team in Las Vegas. There are many people bidding on that team. We own, in conjunction with our partner Caesars, and we're working with them, 50 acres of land behind Paris Horseshoe Planet Hollywood, and we are developing a plan with Caesars, Sean McBurney in particular, who runs Las Vegas, to house the arena that could be built for the new NBA team. That's just an example of us working with one of our partners. The other thing I'll address is in my opening remarks, I talked about having our 14th, our 15th, and our 16th tenant. We're very different than other triple nets that have hundreds of tenants.

John Payne
John Payne
President and COO at VICI Properties

We have, as you hear, 16, which then allows us to have deeper and more frequent conversations. We're constantly talking to our partners about ways we can grow together, how our assets are performing, et cetera. That's just another example of how we're a little bit different.

Caitlin Burrows
Caitlin Burrows
Analyst at Goldman Sachs

Got it. Okay. I think you probably touched upon it briefly in the prepared remarks, but wondering if you could talk about some of the trends you're seeing more recently in Las Vegas and maybe how they differ and vary between your specific assets and the market overall.

John Payne
John Payne
President and COO at VICI Properties

We continue to be very excited about the market. As I hinted, it's a place that constantly reinvents itself and not only has ways to make money in gaming, but you can hear it is becoming the number one entertainment epicenter, and I'll describe in the world someone can argue with me about that. It is a place that continues to add different reasons to come and visit. We obviously are well invested there. We have numerous assets there. They all continue to have specific reasons why the consumer segment comes to their property, and we really like what the operators are doing, especially event-driven, in creating these unique events that only can be done in Las Vegas. We continue to be really excited, and we continue to like how our tenants are operating their businesses and being creative.

Ed Pitoniak
Ed Pitoniak
CEO at VICI Properties

I'll just build on what John is saying, Caitlin, by pointing out what MGM disclosed yesterday with its Q2 results, that was 93% occupancy for their Strip assets in the second quarter, which is truly an outstanding amount of occupancy given the amount of inventory that MGM has on the Strip. I think that embedded within that was the very meaningful, positive outcome they're getting from being promotional and offering all-inclusive packages at Luxor and Excalibur. These are operators that respond to changing conditions, and they respond, I think, as energetically and creatively as any hospitality and leisure operators I've ever known.

Caitlin Burrows
Caitlin Burrows
Analyst at Goldman Sachs

Thank you.

Operator

Thank you. Our next question comes from the line of Greg McGinniss from Scotiabank. Your question, please.

Greg McGinniss
Greg McGinniss
Analyst at Scotiabank

Hey, good morning.

Ed Pitoniak
Ed Pitoniak
CEO at VICI Properties

Hey, Greg.

Greg McGinniss
Greg McGinniss
Analyst at Scotiabank

I believe most of the free cash flow is spoken for this year with investments to make. As you look ahead, are you considering share repurchases, or do you think you can find more creative investments with this capital?

David Kieske
David Kieske
CFO at VICI Properties

Yeah, Greg, it's a question we get asked a lot, and you have basically answered the question. When we're putting money out at SOFR plus 825, that's a much more attractive use of our capital. That's just for the One Beverly Hills loan; our loan book is close to 9.5% yield. We can find much more attractive uses of that free cash flow. Then Club Med's a very attractive return. Everything we've closed this quarter is a very attractive return. Just the buyback for a REIT, especially a net lease REIT, is growth that is dependent on deploying capital, just not something that makes a lot of sense, especially where we are now in the investment prospects that we have in front of us.

Greg McGinniss
Greg McGinniss
Analyst at Scotiabank

Okay, thanks. We've seen in the news that there are a lot of cities basically pouring billions of dollars of capital into convention facilities. I'm curious what impact you might think this may have on Las Vegas and also whether this represents an investment opportunity for you.

Ed Pitoniak
Ed Pitoniak
CEO at VICI Properties

Greg, it's a good question. I do think that the competitive superiority of Las Vegas as a convention destination is so well established that I don't know that anybody's tremendously worried about new convention supply in other American cities. A large part of that has to do with the ecosystem that Las Vegas represents when it comes to appealing to and serving the needs, both convention needs and leisure and hospitality needs of convention-goers. The entire ecosystem, including airlift, infrastructure, lodging quality and abundance, entertainment quality and abundance, and F&B quality and abundance. There's really no city in America that can come close. I think that probably has also a lot to do with, unfortunately, the somewhat beat-up condition of full-service lodging inventory across so many American city centers. Again, I have a very strong conviction around the competitive superiority of Las Vegas as a convention center destination.

Ed Pitoniak
Ed Pitoniak
CEO at VICI Properties

As to the introduction of new supply in other cities, it could be something we would look at, but it would have to be a situation in which, obviously, we can invest in it accretively, and we would also have very high confidence that that destination can be competitive in what is a very competitive marketplace.

Greg McGinniss
Greg McGinniss
Analyst at Scotiabank

Great. Thank you.

Operator

Thank you. Our next question comes from the line of John DeCree from CBRE. Your question, please.

John DeCree
John DeCree
Analyst at CBRE

Hi. Good morning, everyone. Thank you for taking my question. Wanted to ask a little bit about the kind of shift to private markets for your tenants. I think VICI kind of had a unique exposure to public tenants relative to other REIT asset classes. Ed, John, or David, curious if you find private companies that you work with in the casino space more willing or open to using refinancing relative to public companies. I think the last couple of years, we've just seen public markets kind of undervalue casino operators, curious that the shift we're seeing to private markets is changing the outlook for M&A and refinancing in the casino space.

Ed Pitoniak
Ed Pitoniak
CEO at VICI Properties

Yeah, I think it could. I'll turn it over to John and David in just a moment. John, good to talk to you. It's somewhat understandable given what I think a lot of operators have felt: the somewhat lack of love that they've gotten in the public markets over the last few years. A number of them that we talk to, John can give you more specifics here in a moment, appreciate the fact that in the private markets, they truly can do what they believe are the right things to grow their business over the longer term.

Ed Pitoniak
Ed Pitoniak
CEO at VICI Properties

An example of that is that once they go private, they tend to be not focused on what's going to be the earnings in a given quarter but more focused on if we make any incremental investments, what's going to be the IRR on those investments. We have found, for example, that private operators are more responsive to the use of our capital through our Property Partner Growth Fund, because from an IRR point of view, that capital is very, very attractive to them. I'll turn it over to John now, I think we can confidently say that recent privatizations have left the now private operators feeling quite good about where they are.

John Payne
John Payne
President and COO at VICI Properties

Yeah. I think from the operations side, you were talking about the financing side, just from an operations side, being in a private setting, I think, is quite beneficial for this industry. These are very capital-intensive businesses, there's times, John, I think you know I'm a former or a recovering operator or a former operator, that there were times where I knew something needed to be refurbed, but it was going to be detrimental to a quarter or two quarters. That's really not the way to think about it. To think about these businesseslong-termm when capital needs to be invested, although it may disrupt the business for 60 days, 90 days, or 120 days, you need to do it for the long term.

John Payne
John Payne
President and COO at VICI Properties

IT is changing dramatically in this space. The implementation of new systems and servers can be disruptive to an operation for 30, 60, or 90 days. You need to do it. In a private setting, you don't really worry about those 30, 60, 90 days, where in a public setting you might. I think we're enthusiastic about what we're seeing. We'll see how this all plays out over the coming months or years, but that's my take on how it's affecting the operator's view of their business.

John DeCree
John DeCree
Analyst at CBRE

Thanks, guys. I think you kind of covered my follow-up there as well. I'll hop back in the queue. Appreciate it.

Ed Pitoniak
Ed Pitoniak
CEO at VICI Properties

Thanks, John.

Operator

Thank you. Our next question comes from the line of Chris Darling from Green Street. Your question, please.

Chris Darling
Chris Darling
Analyst at Green Street

Thanks. Good morning. Can you provide an update on the sports infrastructure opportunity? Any discussions you continue to have with universities? Is there anything structural or maybe related to pricing that's top of mind for these institutions? Anything specific that may have possibly prevented deals from closing to date.

John Payne
John Payne
President and COO at VICI Properties

Hey, Chris, it's John. I'll let any of my colleagues who want to jump in here. We've been very active in this space, and I would describe it as really educational. We opened my remarks by talking about being patient and relationship building. I would describe the university space as just that, in that we are explaining that we're long-term infrastructure investors and how we could help a university, particularly in sports, grow over the coming years. I don't think it's, you ask, if there's a pricing or a cost cap; I'd say that's not the reason why we have not announced anything yet. I'd say it's a little bit of us; we're at a point where we're trying to understand, is this the right place for us to be?

John Payne
John Payne
President and COO at VICI Properties

I think many universities are deciding if capital, like VICI's, is the right way to grow their sports business.

Gabe Wasserman
Gabe Wasserman
Managing Director of Business Development and VECS at VICI Properties

Chris, it's Gabe here, just to answer the second half of your question with any kind of structural consideration. A lot of universities want to make sure that that debt and other debt-like instruments aren't on their balance sheet and impacting their credit rating. We've kind of made sure that they understand how flexible VICI's capital can be and that we're a long-term partner and provide a capital solution that works for the university's needs and also works for VICI's.

Chris Darling
Chris Darling
Analyst at Green Street

Okay. Those are all helpful thoughts. That's it for me. Thank you.

Operator

Thank you. Our next question comes from the line of David Katz from Jefferies. Your question, please.

David Katz
David Katz
Analyst at Jefferies

Hi. Good morning, everyone. Thanks for taking my question. I wanted to talk about regional gaming in a broader sense because what we've seen is operators investing internally as they're finding some of those being their best opportunities and adjusting to some of the dynamics that have been going on across the United States. Frankly, what we're seeing, including from your largest regional tenant, some pretty good numbers. My question is, is it a function of them just dialing in their strategies? Is it a function of internal investments? Do you think that it's just an external demand moment that we're seeing show up in those numbers? Specifically as it relates to your tenants, we're most interested.

John Payne
John Payne
President and COO at VICI Properties

Well, David, I'm not sure there's been a person on the phone that's been around gaming longer than myself. I was going to say you, but you've been around a long time.

David Katz
David Katz
Analyst at Jefferies

A little less. Thank you.

John Payne
John Payne
President and COO at VICI Properties

You've watched this. You've watched how resilient these local casinos, these regional casinos, are. I tell people this is the people's country club. What I've noticed over the past couple years.

John Payne
John Payne
President and COO at VICI Properties

The competition has come, whether that's through iGaming or sports betting, and has watched these operators reinvigorate their offerings. I've also watched the manufacturers get even more creative with the products that they have to offer. I think those combinations are paying off this year, and I think they'll pay off in years to come. I think tougher times and more competition, the great operators step up and think differently about their business, how they reward, how they incent, and how they improve their service. All of that plays into why we're seeing an uptick in what everyone described as the regional or local market. I'm quite excited about what I'm hearing from our operators, and I'm quite excited from the technology standpoint, what I'm seeing myself.

Ed Pitoniak
Ed Pitoniak
CEO at VICI Properties

I will just add on to what John says, David, by also pointing out the amount of live entertainment in America now that takes place in regional casinos, both commercial and tribal. To an extent that certainly didn't exist 30 or 40 years ago. I think it's part of the very powerful relevance that regional gaming operators really work hard to achieve in relation to their geographic and demographic market. Then finally, I'll just say that maybe not on this call, but I'd actually love to hear your thoughts on this and what you think are the key drivers of what really appears to be fundamental, foundational strength in regional gaming.

David Katz
David Katz
Analyst at Jefferies

I'm going to ask my follow-up question. I'm going to just very quickly answer yours, which is I think that there is some dialing in of strategies on value propositions and recognizing where the competition is coming from and how to beat them. To that end, we have been able to discuss on this call, in particular, Caesar's regional lease. I'm just wondering if there's any appropriate comment we can make today about whether some of this improvement that we've seen and the backdrop, given that so much else has changed, does that alleviate the need to sort of pursue that conversation in the near term?

Ed Pitoniak
Ed Pitoniak
CEO at VICI Properties

I wouldn't say it alleviates or eliminates. Obviously, that's a conversation that will take place at some point as Caesars continues to develop its new ownership structure in due course. Would remind everybody that we obviously collect every dollar rent in the meantime. Again, I think that we are very appreciative of the hard work that Caesars has been putting into the regional assets and the kind of results we were able to produce in Q2.

David Katz
David Katz
Analyst at Jefferies

Thank you.

Operator

Thank you. Our next question comes from the line of Daniel Guglielmo from Capital One Securities. Your question, please.

Daniel Guglielmo
Daniel Guglielmo
Analyst at Capital One Securities

Hi, everyone. Thank you for taking my questions. As a follow-up to John's question about public versus private gaming operators, I think there's an impression out there that maybe private gaming operators have kind of more like a black box for property owners around information, which I don't think is the case. Can you just talk through some of the information that you all use outside of public earnings and SEC filings that keep you up-to-date on private operator-tenant trends?

David Kieske
David Kieske
CFO at VICI Properties

Yeah, Dan, you're spot on. There's more transparency to the gaming operators than there are across the traditional net-lease landscape because of the monthly reporting that goes on at the state level. Sometimes it's by region, but oftentimes it's by asset. A lot of these private operators have public debt, and they report whether it's through the terminal market or through the high-yield market, there's trading stats on the fixed-income side, and often a lot of your colleagues or other folks across the research report on those private companies. There is improved transparency, whether they are versus a broader triple net lease space.

Samantha Gallagher
Samantha Gallagher
General Counsel at VICI Properties

Yeah. This is Samantha. I'll just add. We spend a lot of time with each of our private tenants making sure that we're getting the necessary reporting through our leases. Gabe sitting here to my right, and he can talk about, we focus on it from an asset management perspective, so we're always meeting with asset management to ask, what do we need from a reporting perspective so that we are able to get the information that we need to monitor tenants in the same way we would with a public tenant.

Gabe Wasserman
Gabe Wasserman
Managing Director of Business Development and VECS at VICI Properties

Yeah, we get property-level financials from all of our borrowers and tenants, as a group, we sit every quarter and go through every single lease and loan investment in the portfolio. Have complete visibility into our tenant's and borrower's financial performance, regardless of whether they are a publicly traded tenant borrower or private.

Daniel Guglielmo
Daniel Guglielmo
Analyst at Capital One Securities

Great. That's really helpful. Thank you. As you mentioned in the opening remarks, Club Med was a new tenant this quarter. The property is in the U.S. Virgin Islands, but they're well-known as an international brand. As you continue to expand into experiential, have international properties, maybe outside of the U.S. and Canada, become more interesting to you all?

Erin Furey
Erin Furey
Senior Vice President of Finance at VICI Properties

Yeah. This is Erin Furey. Dan, it's been a sector or a geography that we've looked at over the last five years, really spending a lot of time mapping and trying to understand the tax and legal structuring, as well as the financing markets that could support investments outside of the U.S. and Canada. St. Croix is a bit of a cheat because it's a U.S. Virgin Island, so it still is a U.S. territory, but it is a geography that we continue to look at expanding.

Daniel Guglielmo
Daniel Guglielmo
Analyst at Capital One Securities

Great. Thank you.

Operator

Thank you. Our next question comes from the line of Wes Golladay from Baird. Your question, please. Wesley, your line is open. You might have your phone on mute. Our next question comes from the line of Ronald Kamdem from Morgan Stanley. Your question, please.

Analyst at Morgan Stanley

Hey, good morning. This is Jenny on for Ron. I just want to dig a little bit on the allowance of credit losses. Since on the 10-Q note, saying a tenant issued a new senior secured debt at a lower credit rating. Maybe just talk a little bit more on that. Is it tenant-specific or macro-driven? I just want to have a better understanding of that. Thank you.

Gabe Wasserman
Gabe Wasserman
Managing Director of Business Development and VECS at VICI Properties

It's Gabe here, and I can answer this one. Our CECL allowance: we look at the senior secured credit rating of our tenants and their parent guarantors. To the extent that the parent guarantor doesn't have senior secured debt, we use a proxy company. For one of our private tenants, we had been using a proxy company historically to estimate the credit rating and their credit profile. Last quarter, they actually issued debt privately, and we used that updated credit rating to estimate the CECL allowance. That's why we saw the big change quarter-over-quarter. The property's performing well. Great insight into the property performance as we just spoke about. Get the monthly financials, and this was just a function of additional information that was out there that we could put into our model.

Analyst at Morgan Stanley

That makes sense. As a follow-up on the watchlist, is anyone else that is kind of on your watchlist right now, or do you feel pretty good on the rest of your tenants?

Gabe Wasserman
Gabe Wasserman
Managing Director of Business Development and VECS at VICI Properties

Sure. We actually don't have a watch list. As we discussed, we go through every single lease and loan in our portfolio on a quarterly basis. We have complete transparency into our borrowers' and tenants' performance. That's why it's really important that we get tenant and borrower-level financials. Our ability to look at every single loan and lease in our portfolio is what we focus on and not individual investments.

Analyst at Morgan Stanley

Got it. Thanks so much.

Operator

Thank you. Our next question comes from the line of Todd Thomas from KeyBanc Capital Markets. Your question please.

Todd Thomas
Todd Thomas
Analyst at KeyBanc Capital Markets

Hi, thanks. I guess just following up on the credit profile or portfolio and the loans. I was wondering if you could provide some additional detail around the loan modification in the quarter. I think it was $90 million. Can you clarify whether this is separate from the golf course development loan that I think last quarter was placed on a non-accrual status?

Gabe Wasserman
Gabe Wasserman
Managing Director of Business Development and VECS at VICI Properties

Sure. We have a $90 million senior secured loan collateralized by a leisure and hospitality asset. It's about 3% of our loan portfolio. During the quarter, we extended the maturity date and reduced the interest rate to 2% on that loan to right-size the yield as the asset continues to ramp. The interest on the loan is being paid monthly in cash. In return, we received additional collateral, and the borrower will be making amortization payments to reduce our loan balance. This is a great example of the active asset management approach that we take with our borrowers and tenants. On the second half of your question, this is a separate loan than the loan we disclosed in Q4 2025, which is on non-accrual status.

Todd Thomas
Todd Thomas
Analyst at KeyBanc Capital Markets

Okay. All right. That's helpful. I wanted to follow up on a prior question around Caesar's. You've previously indicated that both parties would prefer a resolution to move forward rather than allowing it to remain a little bit of an ongoing distraction. I realize gaming operations have improved somewhat, but with the annual rent escalator approaching and CPI still running above the contractual floor, does that create a greater sense of urgency around reaching a broader portfolio solution? Should we think about resolution occurring over the next several quarters rather than years? Any update around that?

Ed Pitoniak
Ed Pitoniak
CEO at VICI Properties

Yeah. Todd, we wouldn't be able to give you any kind of precise timetable. I wouldn't say that's necessarily a major factor. I think the thing to keep in mind is that in the case of Caesars, they're obviously undergoing a very significant M&A transaction with many moving pieces and many stakeholders, including regulatory. How any conversations will fit into that, which again, is a fairly prolonged timescale. I believe Caesars recently, or it might've been Fertitta Entertainment, was indicating a 12-month timeframe for completion of that transaction. There are so many moving pieces. It would be very difficult for anybody to predict with precision a timetable for any conversations that we might have.

Todd Thomas
Todd Thomas
Analyst at KeyBanc Capital Markets

Okay. Thank you.

Operator

Thank you. This does conclude the question and answer session of today's program. I'd like to hand the program back to Ed for any further remarks.

Ed Pitoniak
Ed Pitoniak
CEO at VICI Properties

Well, again, we'll just thank everybody for their time today, both from the sell side and the buy side. We realize it's a very busy time of year. Wish you a good rest of the summer, and we will see you again in late October.

Operator

Thank you, ladies and gentlemen for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.

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