Executive Summary / Key Takeaways

• VICI Properties ($VICI) stands as a leading experiential real estate investment trust (REIT), distinguished by its robust triple-net lease model, which consistently delivers high revenue flow-through to earnings and maintains exceptionally low general and administrative costs.
• The company reported strong Q3 2025 results, with AFFO per share growing 5.3% year-over-year, and has raised its full-year 2025 AFFO guidance to $2.36-$2.37 per diluted common share, signaling continued growth and resilience amidst macroeconomic uncertainties.
• VICI's strategic focus on relationship-based partnerships has driven significant diversification beyond traditional gaming into other high-quality experiential sectors, including luxury hospitality, entertainment, and university sports infrastructure, broadening its total addressable market.
• A meticulously managed balance sheet, characterized by investment-grade credit ratings from all three major agencies, a low net debt to adjusted EBITDA ratio of approximately 5x, and a well-laddered debt maturity profile, underpins VICI's financial stability and capital markets independence.
• The company's unique blend of irreplaceable assets, contractual rent escalations, and proactive capital deployment strategies positions it for sustained long-term growth and a defended dividend, offering compelling total return potential for investors.

The Enduring Power of Experiential Real Estate

VICI Properties Inc. has rapidly ascended to become an S&P 500 experiential real estate investment trust, carving out a unique niche in the ownership of market-leading gaming, hospitality, wellness, entertainment, and leisure destinations. Formed in October 2017 and completing its IPO in 2018, VICI initially confronted a challenging balance sheet, burdened by high leverage and short-tenure debt. Through disciplined financial management, including the retirement of second-lien notes and secured debt following the MGM Growth Properties (MGP) acquisition in 2022, VICI transformed its financial profile, achieving investment-grade credit ratings across all three major agencies by November 2024. This journey underscores a foundational commitment to financial prudence and strategic growth that continues to define the company.

VICI's core business model is centered on long-term, triple-net lease agreements, under which tenants bear responsibility for all property-related operating expenses, including taxes, insurance, maintenance, and capital expenditures. This structure provides VICI with a highly predictable and stable revenue stream, insulating its rental income from the operational volatilities faced by its tenants. As of September 30, 2025, VICI's portfolio boasts 93 experiential assets, including 54 gaming and 39 other experiential properties across the United States and Canada, all 100% leased with a weighted average lease term of approximately 40 years.

The company's "technological differentiation" in the REIT space is not rooted in traditional hardware or software development, but rather in its sophisticated, data-driven approach to asset management, risk assessment, and capital deployment. VICI employs a discounted cash flow model to estimate credit losses for its lease and loan investments, leveraging a nationally recognized data analytics firm to project probability of default (PD) and loss given default (LGD) for its tenants and guarantors. This analytical rigor, combined with its innovative Partner Property Growth Fund strategy, allows VICI to strategically co-invest with tenants in value-enhancing capital improvements, such as the Venetian Capital Investment, effectively using its capital to drive incremental rent increases and enhance asset value. Furthermore, VICI's model facilitates tenant-led "experiential innovation" within its properties, adapting to evolving consumer preferences for entertainment, wellness, and sports, thereby maintaining the competitive edge and relevance of its physical assets in a digitally transforming world.

Strategic Expansion and Partnership-Driven Growth

VICI's growth narrative is deeply intertwined with its strategy of cultivating and expanding relationships with best-in-class operators. This approach has led to significant portfolio diversification and the broadening of its total addressable market (TAM). Subsequent to Q3 2025, VICI added Clairvest Group Inc. (CVG) as its 14th tenant through a new triple-net lease for MGM Northfield Park, following MGM's sale of operations. This transaction, while not altering VICI's total rent collected, diversifies its tenant roster with a recognized leader in the gaming sector.

The company's strategic initiatives extend beyond traditional gaming. In February 2025, VICI initiated a new relationship with Cain International and Eldridge Industries, providing a $300 million mezzanine loan for the One Beverly Hills luxury experiential development, later increasing its commitment by $150 million in June 2025. This partnership exemplifies VICI's intent to participate in high-quality, differentiated placemaking across luxury hospitality and residential sectors. Additionally, VICI expanded its tribal land investments by committing up to $510 million for the North Fork Mono Casino Resort development with Red Rock Resorts , a premier gaming developer and operator. These debt investments are often strategic, offering potential future conversion into real estate ownership, further illustrating VICI's flexible capital deployment.

Management emphasizes that "casino gaming remains the top focus for VICI", but the company is also actively exploring opportunities in "university sports" infrastructure, recognizing a significant need for capital in arenas, stadiums, and practice facilities. This proactive engagement in diverse experiential sectors, coupled with its "track record of 100% rent collection in cash on time since inception", positions VICI as a preferred capital partner for growth-minded operators.

Financial Fortitude and Performance

VICI's financial performance in Q3 2025 underscores the effectiveness of its highly efficient triple-net model. Total revenues increased 4.4% year-over-year to $1.01 billion, contributing to a 5.3% growth in AFFO per share to $0.60 compared to Q3 2024. For the nine months ended September 30, 2025, total revenues reached $2.99 billion, up from $2.87 billion in the prior year period. This growth was primarily driven by incremental rent increases from the Venetian Capital Investment and annual rent escalators across its lease portfolio, alongside increased interest income from new loan originations.

The company's operating efficiency is notable, with general and administrative (G&A) expenses remaining exceptionally low at 1.6% of total revenues for Q3 2025. VICI's margins consistently run in the high 90% range when non-cash items are excluded, reflecting the inherent efficiency of its triple-net lease structure. Net income attributable to common stockholders for Q3 2025 was $762.04 million, increasing to $2.17 billion for the nine months ended September 30, 2025.

VICI maintains a robust liquidity position, with $3.10 billion in total liquidity as of September 30, 2025, comprising cash and cash equivalents, capacity under its $2.5 billion Revolving Credit Facility, and net proceeds from outstanding forward sale agreements. The company's total debt stands at $17.10 billion, with a net debt to annualized Q3 adjusted EBITDA of approximately 5x, placing it at the low end of its target leverage range of 5x to 5.5x. With a weighted average interest rate of 4.47% (adjusted for hedges) and a weighted average maturity of 6.2 years, VICI has strategically laddered its debt, ensuring no significant maturities until September 2026. This disciplined approach to capital management provides "capital markets independence," enabling internally funded growth without significant reliance on external equity or credit markets.

Competitive Edge in a Dynamic Market

VICI operates in a competitive landscape that includes other gaming REITs like Gaming and Leisure Properties, Inc. (GLPI), hospitality REITs such as Host Hotels & Resorts, Inc. (HST), and broader experiential REITs like EPR Properties (EPR). VICI's market positioning is qualitatively strong, often described as a leader due to its extensive and geographically diverse portfolio of integrated gaming and hospitality assets. While direct quantitative market share comparisons are challenging to ascertain, VICI's strategic adaptability and operator relationships provide a distinct edge.

Compared to GLPI, VICI's portfolio extends beyond gaming to include a broader mix of hospitality and entertainment, offering more diversified revenue streams. VICI's larger-scale properties, particularly on the Las Vegas Strip, provide a comprehensive experiential package that qualitatively enhances its appeal in full-service destinations. In terms of valuation, VICI's TTM P/E ratio of 11.56 is lower than GLPI's 16.47, suggesting a potentially more attractive entry point for investors.

Against HST, VICI differentiates itself by integrating gaming and entertainment, offering a specialized experiential focus versus HST's broader luxury hotel emphasis. VICI's multi-use properties, especially in Las Vegas, may offer greater operational efficiency and stronger customer retention. VICI's TTM P/E also appears more favorable than HST's 17.06. Similarly, when compared to EPR, VICI's portfolio is more heavily weighted towards large-scale gaming and hospitality, contrasting with EPR's more fragmented entertainment venues. VICI's TTM P/E is significantly lower than EPR's 21.53, indicating a potential valuation advantage.

VICI's competitive advantages, or "moats," stem from its strong brand, diversified portfolio, and long-term, inflation-protected lease structures. These attributes translate into enhanced customer loyalty for its tenants and recurring revenue for VICI, contributing to superior margins and growth. The company's ability to engage in deep, relationship-based partnerships, as demonstrated with Cain International and Red Rock Resorts (RRR), further strengthens its competitive standing by securing future investment opportunities and expanding its reach into new experiential verticals. This approach allows VICI to "widen our TAM without diluting our quality".

Outlook and Risks: Charting the Future

VICI's outlook for 2025 remains positive, with management updating its AFFO guidance for the year to between $2.51 billion and $2.52 billion, or $2.36 to $2.37 per diluted common share. This represents an expected year-over-year AFFO per share growth of 4.6% at the midpoint. This guidance reflects confidence in the company's operational performance, the stability of its lease agreements, and the accretive impact of recent investments.

However, the investment landscape is not without risks. Macroeconomic volatility, including interest rate fluctuations, inflation, and the threat of recession, continues to pose challenges for VICI and its tenants. Tenants also face potential shifts in consumer confidence and spending, increased competition, and supply chain issues. VICI's significant tenant concentration, with MGM (MGM) and Caesars (CZR) accounting for 38% and 36% of lease revenues respectively, and its concentration in the Las Vegas market (49% of lease revenues), represent notable credit risks.

Management is acutely aware of these risks, emphasizing the importance of identifying "oversupply, obsolescence and the other factors that can lead to real estate capital destruction". VICI's strategy of long-term leases with corporate guarantees serves as a powerful risk mitigant, allowing operators to pay rent from their total system earnings, thereby limiting idiosyncratic risk. The company also benefits from new U.S. tax law changes, such as bonus depreciation, which incentivize tenants to invest further in properties, enhancing asset value and long-term credit quality. VICI's disciplined capital allocation and focus on high-quality, irreplaceable assets, combined with its robust balance sheet, are designed to weather potential macro shocks and ensure sustained growth.

Conclusion

VICI Properties has established itself as a formidable force in the experiential real estate sector, transforming initial balance sheet challenges into a foundation of financial strength and strategic agility. Its core investment thesis is built upon a highly efficient triple-net lease model, a diversified portfolio of market-leading assets, and a partnership-driven growth strategy that extends across gaming, luxury hospitality, and emerging experiential categories. The company's consistent AFFO per share growth, robust liquidity, and meticulously managed debt profile underscore its ability to generate predictable cash flows and a "defended dividend" for shareholders.

In a dynamic and often uncertain market, VICI's commitment to disciplined capital allocation, its data-driven approach to risk management, and its proactive engagement with tenants to foster innovation within its properties provide a compelling competitive advantage. While macroeconomic headwinds and tenant concentration risks warrant careful monitoring, VICI's strategic positioning, strong financial health, and continuous pursuit of high-quality, relationship-based investment opportunities make it a compelling long-term holding for discerning investors seeking both income stability and growth in the evolving experiential economy.