Litt’s Land & Buildings Adds Caesars, Dumps Boyd Gaming

Posted on: February 15, 2022, 08:10h. 

Last updated on: February 15, 2022, 10:47h.

Todd Shriber @etfgodfather Read More
Expertise: Financial, Gaming Business, Mergers and Acquisitions.

Jonathan Litt’s Land & Buildings Investment Management, LLC (L&B) tinkered with its gaming industry exposure in the fourth quarter. It added shares of Caesars Entertainment (NASDAQ:CZR) to its portfolio.

Land & Buildings
Land & Buildings founder Jonathan Litt in a 2020 CNBC interview. His firm bought shares of Caesars in the fourth quarter. (Image: CNBC)

In the final three months of 2021, L&B bought 130,780 shares of Caesars valued at $12.32 million, according to a Form 13 filing with the Securities and Exchange Commission (SEC). This is, at a minimum, the firm’s second encounter with shares of the casino operator, as L&B owned Caesars’ stock in 2020, only to liquidate that position in the first quarter of 2021.

L&B’s fourth-quarter entry into shares of the Harrah’s operator puts the investor behind the eight ball, because gaming equities, including Caesars, slumped in the October through December period amid fears of the omicron variant of the coronavirus crimping travel. The stock is sliding to start 2022, down 13.15 percent year-to-date. It currently represents nearly two percent of L&B’s portfolio.

However, analysts remain bullish on the stock. They cite the operator’s emerging footprints in iGaming and sports wagering, strength on the Las Vegas Strip, and the looming sale of a Sin City asset that some analysts believe could fetch up to $3 billion.

What L&B Could Be Eyeing with Caesars

Litt’s firm is an activist investor with a penchant for emphasizing real estate assets, and L&B has previously pushed for real estate change in the gaming industry.

In 2020, Litt pushed Gaming and Leisure Properties, Inc. (NASDAQ:GLPI) to merge with rival VICI Properties (NYSE:VICI). But that deal didn’t materialize.

Previously, Litt was the architect of the “Restore MGM Resorts” campaign. That pushed the gaming company to unlock value for investors by selling its prime real estate assets. Following the MGM Growth Properties (NYSE:MGP) spin-off in 2016, Litt said further value could be created by bringing all of the gaming company’s properties under the control of the REIT.

L&B hasn’t publicly revealed plans to push for such dramatic change at Caesars. It’s actually unlikely, but the investment firm reentered the stock as the operator is readying to sell a Las Vegas Strip asset – a transaction the company said could occur “early” this year.

Bye-Bye Boyd

In the fourth quarter, L&B eliminated its stake in Boyd Gaming (NYSE:BYD), which previously represented five percent of the investment firm’s portfolio. The money manager bought shares of the regional casino operator in the first quarter of 2021.

During the final three months of 2021, L&B also reduced its stake in VICI, selling almost 77,000 shares of the casino landlord. The investment manager still owns 591,580 shares of the real estate company.

Caesars and VICI are the only gaming equities currently held by New York-based L&B.