{"id":324608,"date":"2024-07-08T03:00:03","date_gmt":"2024-07-08T08:00:03","guid":{"rendered":"https:\/\/www.casino.org\/news\/?p=324608"},"modified":"2024-07-08T09:55:08","modified_gmt":"2024-07-08T14:55:08","slug":"casino-reit-stocks-could-improve-as-interest-rates-stabilize","status":"publish","type":"post","link":"https:\/\/www.casino.org\/news\/casino-reit-stocks-could-improve-as-interest-rates-stabilize\/","title":{"rendered":"Casino REIT Stocks Could Improve as Interest Rates Stabilize"},"content":{"rendered":"

Shares of VICI Properties (NYSE: VICI), and Gaming and Leisure Properties (NASDAQ: GLPI), the two largest casino landlords, are off an average of 11.27% year to date while the S&P 500 is higher by 16.69%. But, some analysts believe gaming real estate investment trusts (REITs) could soon deliver better performances.<\/p>\n

\"\"
Harrah’s on the Las Vegas Strip. Owner VICI Properties and rival Gaming and Leisure Properties earned praise from Truist Securities analyst Barry Jonas. (Image: Reno Gazette-Journal<\/em>)<\/figcaption><\/figure>\n

In a recent note to clients, Truist Securities analyst Barry Jonas cited the familiar headwind of elevated interest rates as one of the primary drags on VICI\u2019s and GLPI\u2019s price action through the first half of 2024. Due to its capital-intensive nature, real estate is one of the sectors most negatively correlated<\/a> to interest rates, and with the Federal Reserve yet to lower borrowing costs, REITs of all stripes have been pinched.<\/p>\n

Year to date, 10-year Treasury yields are higher by 11.17%, weighing on the real estate sector in the process, but those yields slightly declined over the past 90 days. That could be a sign of the rate stability Jonas mentioned as a possible catalyst for the casino REITs.<\/p>\n

(VICI is) well positioned for the next wave of large scale, non-gaming, and\/or international transactions,\u201d wrote Jonas.<\/p><\/blockquote>\n

The analyst is also constructive on Gaming and Leisure, which is smaller than its rival and needs \u201cless to move the needle,\u201d he observed.<\/p>\n

High Rates Not Slowing Casino REIT Activity<\/h2>\n

While the highest interest rates in two decades are weighing on shares of casino REITs, the companies aren\u2019t sitting idly by. Rather, both GLPI and VICI are executing transactions that could be accretive to long-term investors.<\/p>\n

\n

In February, GLPI said it would pay $175 million<\/a> for the property assets of Tioga Downs Casino Resort in Nichols, NY. The acquisition jibes with GLPI\u2019s track record of adding casino real estate in less volatile markets and areas where the acquired venue faces little nearby competition.<\/p>\n<\/div>\n

Jonas said that transaction and other bolt-on buys by GLPI are \u201cindicative of smaller deals that are still getting done despite the lack of rate cuts so far this year\u201d while that REIT and rival VICI are \u201cdemonstrating execution ability despite the lingering interest-rate uncertainty.\u201d<\/p>\n

For its part, VICI has been lauded by Wall Street for its involvement in financing $1 billion in upgrades at the Venetian and Palazzo on the Las Vegas Strip. As part of the financing accord, VICI will increase<\/a> Apollo\u2019s lease obligations at Venetian. Under the existing rental agreement, rent will rise \u201con the first day of the quarter immediately following each capital funding at a 7.25% yield.\u201d<\/p>\n

Eye on Potential Penn Sale<\/h2>\n

Amid frequent, though unconfirmed, scuttlebutt that Penn Entertainment (NASDAQ: PENN) is a takeover target<\/a>, both casino REITs could be worth monitoring, but such a deal would be impactful for GLPI because the regional casino operator is the landlord\u2019s biggest tenant.<\/p>\n

Jonas, who isn\u2019t convinced Boyd Gaming (NYSE: BYD) will make a play for Penn, observed GLPI will have a say in any such transaction should it materialize.<\/strong><\/p>\n

\u201cGLPI\u2019s master lease with PENN has change-of-control provisions that set various conditions for an acquirer and could require GLPI\u2019s approval for any divestitures\/lease modifications,\u201d concluded the analyst.<\/p>\n","protected":false},"excerpt":{"rendered":"

Shares of VICI Properties (NYSE: VICI), and Gaming and Leisure Properties (NASDAQ: GLPI), the two largest casino landlords, are off an average of 11.27% year to date while the S&P 500 is higher by 16.69%. But, some analysts believe gaming real estate investment trusts (REITs) could soon deliver better performances. In a recent note to […]<\/p>\n","protected":false},"author":46,"featured_media":143515,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[10,33810,32093],"tags":[81903,81898,81966],"acf":[],"yoast_head":"\nCasino REIT Stocks Could Improve as Interest Rates Stabilize<\/title>\n<meta name=\"description\" content=\"Casino REIT Stocks Could Improve as Interest Rates Stabilize.\" \/>\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-reit-stocks-could-improve-as-interest-rates-stabilize\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Casino REIT Stocks Could Improve as Interest Rates Stabilize\" \/>\n<meta property=\"og:description\" content=\"Casino REIT Stocks Could Improve as Interest Rates Stabilize.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.casino.org\/news\/casino-reit-stocks-could-improve-as-interest-rates-stabilize\/\" \/>\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=\"2024-07-08T08:00:03+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2024-07-08T14:55:08+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2020\/07\/harrahs-1-scaled.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"5048\" \/>\n\t<meta property=\"og:image:height\" content=\"2852\" \/>\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-reit-stocks-could-improve-as-interest-rates-stabilize\/\",\"url\":\"https:\/\/www.casino.org\/news\/casino-reit-stocks-could-improve-as-interest-rates-stabilize\/\",\"name\":\"Casino REIT Stocks Could Improve as Interest Rates Stabilize\",\"isPartOf\":{\"@id\":\"https:\/\/www.casino.org\/news\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.casino.org\/news\/casino-reit-stocks-could-improve-as-interest-rates-stabilize\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.casino.org\/news\/casino-reit-stocks-could-improve-as-interest-rates-stabilize\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2020\/07\/harrahs-1-scaled.jpg\",\"datePublished\":\"2024-07-08T08:00:03+00:00\",\"dateModified\":\"2024-07-08T14:55:08+00:00\",\"author\":{\"@id\":\"https:\/\/www.casino.org\/news\/#\/schema\/person\/f4cecf70a5032bc4e60eb73fc86d4a85\"},\"description\":\"Casino REIT Stocks Could Improve as Interest Rates Stabilize.\",\"breadcrumb\":{\"@id\":\"https:\/\/www.casino.org\/news\/casino-reit-stocks-could-improve-as-interest-rates-stabilize\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.casino.org\/news\/casino-reit-stocks-could-improve-as-interest-rates-stabilize\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.casino.org\/news\/casino-reit-stocks-could-improve-as-interest-rates-stabilize\/#primaryimage\",\"url\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2020\/07\/harrahs-1-scaled.jpg\",\"contentUrl\":\"https:\/\/www.casino.org\/news\/wp-content\/uploads\/2020\/07\/harrahs-1-scaled.jpg\",\"width\":5048,\"height\":2852,\"caption\":\"Harrah's on the Las Vegas Strip. 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