VICI Properties, Inc. (VICI) Q2 2023 Earnings Call Transcript

Prepared Remarks

Questions and Answers

Call Participants

Prepared Remarks:

Operator

[Abrupt Start]

a detailed discussion of the risks that could impact future operating results and financial [indiscernible] results, prepared in accordance with GAAP. A reconciliation of these measures to the most directly comparable GAAP measure is available on our website and our second quarter 2023 earnings release, 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; Gabe Wasserman, Chief Accounting Officer; and Moira McCloskey, Senior Vice President of Capital Markets, and 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.

Edward Pitoniak

Thank you, Samantha, and good morning, everyone. We're excited to talk this morning about our Q2 2023 results featuring a year-over-year AFFO per share growth of 11.9%, which we believe will be among the higher growth rates for S&P 500 REITs for Q2 2023, and yet at one of the lowest price to earnings growth ratios, PEG or PEG plus yield ratios among the S&P 500 REITs. For the course of the call, John will share with you what we're doing strategically to continue our growth, and David will give you details on our liquidity position, our Q2 2023 results and our updated earnings outlook to year-end.

I will now spend a few minutes on the exciting news we shared last night with the announcement of our significantly expanded growth partnership with Canyon Ranch, a legendary and leading brand in the place-based wellness sector. Indeed, I'm excited to say that the VICI team is conducting this call from Canyon Ranch Lennox in the beautiful Berkshires in Massachusetts. The key elements of our expanded Canyon Ranch partnership are BG making an up to $150 million preferred equity investment in the Canyon Ranch operating company to support the expansion of the Canyon Ranch operating and digital platforms as well as enhancements to the Tucson and Lenox assets. VICI also intends to provide approximately $150 million of mortgage financing secured by Canyon Ranch Tucson and Canyon Ranch Lenox to refinance Canyon Ranch's existing CMBS debt. With this refinancing serving as a bridge to enhancing VICI's embedded growth pipeline by specifically allowing for VICI's conversion of its existing purchase options on Canyon Ranch Tucson and Canyon Ranch Lenox, which are converting to call rights, whereby VICI can elect to acquire the real estate assets of Canyon Ranch Tucson and Canyon Ranch Lenox in the coming years, subject to certain conditions, with Canyon Ranch continuing to operate the assets under long-term triple net leases. This also includes VICI's previously announced commitment to provide up to $200 million of development funding for Canyon Ranch Austin, which is scheduled to open between 2025 and 2026 with a call right to own the real estate upon stabilization. And finally, the joint development of a strategy of identifying and potentially acquiring conventional resorts that have conversion potential to new Canyon Ranch resorts with Canyon Ranch operating the resorts and VICI owning the resort real estate under a long-term triple net lease.