{"id":215474,"date":"2022-05-31T08:46:38","date_gmt":"2022-05-31T15:46:38","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=215474"},"modified":"2022-05-31T11:02:23","modified_gmt":"2022-05-31T18:02:23","slug":"casino-reits-compelling-as-inflation-soars-says-hoya-capital","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/casino-reits-compelling-as-inflation-soars-says-hoya-capital\/","title":{"rendered":"Casino REITs Destination for Inflation Protection"},"content":{"rendered":"

Confirming the notion that the real estate sector is a good place to be when inflation is high, as is the case today, Gaming and Leisure Properties (NASDAQ:GLPI) and VICI Properties (NYSE:VICI) are both sharply outperforming the S&P 500, as well as the MSCI US Investable Market Real Estate 25\/50 Index this year.<\/p>\n

\"casino
Tourists near Paris on the Las Vegas Strip. Casino REITs are performing well and could be active in buying more properties. (Image: Bloomberg<\/em>)<\/figcaption><\/figure>\n

Following VICI\u2019s recently completed $17.2 billion purchase<\/a> of MGM Growth Properties, the Caesars Palace owner the GLPI and VICI are the only two publicly traded casino real estate investment trusts (REITs) on the market today.<\/p>\n

Casino REITs have been among the best-performing property sectors this year as the positive tailwinds from the leisure demand recovery – particularly in the critical Las Vegas market — have offset inflation headwinds and economic growth concerns,\u201d<\/strong> according to a new report by Hoya Capital.<\/p><\/blockquote>\n

While the universe of dedicated casino REITs is small, more diversified property companies are entering this space. For example, Realty Income (NYSE:O) announced in February it\u2019s acquiring the property assets of Encore Boston Harbor for $1.7 billion<\/a>, marking its initial foray into gaming real estate.<\/p>\n

Casino REITs: All About Fighting Inflation<\/h2>\n

GLPI and VICI are what\u2019s known as triple-net REITs, meaning the lease terms they sign with clients are usually far longer than what\u2019s seen in other commercial real estate segments.<\/p>\n

\n

As such, market participants tend to treat triple-net REITs on par with longer-dated bonds, meaning these stocks can be vulnerable to rising interest rates. This year, however, investors are focusing more on the inflation-fighting advantages offered by GLPI and VICI. The latter is positive on a year-to-date basis, while the former\u2019s 2022 loss is modest relative to the broader market.<\/p>\n<\/div>\n

The key to GLPI\u2019s and VICI\u2019s success in inflationary environments is derived from pricing power and inflation-linked rent increases that are built into tenant contracts. Take the case of VICI\u2019s contract with MGM, which is now one of the REIT\u2019s largest tenants following the MGP acquisition.<\/p>\n

The initial lease term with MGM, which started in late April, is 25 years, with three 10-year<\/a> tenant renewal options and an initial total annual rent of $860 million. Under the terms of that agreement, rent can increase 2% a year for the first decade, and at a rate of 2% to 3% annually thereafter, indicating VICI investors are gaining more inflation protection<\/strong>.<\/p>\n

More Casino REIT Consolidation<\/h2>\n

While VICI\u2019s purchase of MGP qualifies as mammoth in the casino REIT space, Hoya Capital believes more purchases in the gaming real estate landscape are possible.<\/p>\n

\u201cThe M&A environment remains fertile. VICI Properties closed on its $17.2 billion acquisition of MGM Properties, giving the company a dominant share of the Las Vegas strip,\u201d <\/strong>notes the asset manager.<\/p>\n

Since 2016, GLPI, MGP and VICI acquired nearly 30 gaming properties, and that doesn\u2019t include VICI\u2019s outright acquisition of MGM Growth.<\/p>\n

With some operators still owning all or most of their real estate, it\u2019s possible some look to part with a property or two to raise cash to finance other endeavors. That could open the door for GLPI and VICI to add to their portfolios.<\/p>\n","protected":false},"excerpt":{"rendered":"

Confirming the notion that the real estate sector is a good place to be when inflation is high, as is the case today, Gaming and Leisure Properties (NASDAQ:GLPI) and VICI Properties (NYSE:VICI) are both sharply outperforming the S&P 500, as well as the MSCI US Investable Market Real Estate 25\/50 Index this year. Following VICI\u2019s […]<\/p>\n","protected":false},"author":46,"featured_media":215475,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[10,33810],"tags":[],"acf":[],"yoast_head":"\nCasino REITs Compelling As Inflation Soars, Says Hoya Capital<\/title>\n<meta name=\"description\" content=\"Casino REITs sturdy as inflation spikes and could be active in buying more properties.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.casino.org\/news\/casino-reits-compelling-as-inflation-soars-says-hoya-capital\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Casino REITs Compelling As Inflation Soars, Says Hoya Capital\" \/>\n<meta property=\"og:description\" content=\"Casino REITs sturdy as inflation spikes and could be active in buying more properties.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/casino-reits-compelling-as-inflation-soars-says-hoya-capital\/\" \/>\n<meta property=\"og:site_name\" content=\"Casino.org\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Casino.OrgNews\" \/>\n<meta property=\"article:published_time\" content=\"2022-05-31T15:46:38+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2022-05-31T18:02:23+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/05\/strip4.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"2000\" \/>\n\t<meta property=\"og:image:height\" content=\"1334\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/jpeg\" \/>\n<meta name=\"author\" content=\"Todd Shriber\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@etfgodfather\" \/>\n<meta name=\"twitter:site\" content=\"@Casino_Org\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Todd Shriber\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.casino.org\/news\/casino-reits-compelling-as-inflation-soars-says-hoya-capital\/\",\"url\":\"https:\/\/www.casino.org\/news\/casino-reits-compelling-as-inflation-soars-says-hoya-capital\/\",\"name\":\"Casino REITs Compelling As Inflation Soars, Says Hoya Capital\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/casino-reits-compelling-as-inflation-soars-says-hoya-capital\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/casino-reits-compelling-as-inflation-soars-says-hoya-capital\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/05\/strip4.jpg\",\"datePublished\":\"2022-05-31T15:46:38+00:00\",\"dateModified\":\"2022-05-31T18:02:23+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"Casino REITs sturdy as inflation spikes and could be active in buying more properties.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/casino-reits-compelling-as-inflation-soars-says-hoya-capital\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/casino-reits-compelling-as-inflation-soars-says-hoya-capital\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/casino-reits-compelling-as-inflation-soars-says-hoya-capital\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/05\/strip4.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2022\/05\/strip4.jpg\",\"width\":2000,\"height\":1334,\"caption\":\"Tourists near the Paris on the Las Vegas Strip. 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