High-Yield Vici Properties Is Aging Well: Why Investors Should Take Note

Company Overview - Vici Properties is a real estate investment trust (REIT) focused on owning casinos, which is a specific niche that has shown to be attractive [1] - The company operates as a landlord, leasing out physical properties, primarily casinos that include gaming, hotels, retail, dining, and convention businesses [2] Business Model - Vici Properties employs a net lease model, where tenants are responsible for most property costs, reducing the company's operational risks and costs [3] - The REIT has grown from approximately 20 properties at its IPO in early 2018 to 93 assets by the end of 2024, with 54 classified as gaming properties [4] Performance During Adversity - The company maintained consistent results during the COVID-19 pandemic, increasing its dividend in 2020 despite tenant shutdowns [5] - Casino operators need to maintain access to properties, making rent payments essential even during difficult times [6] Lease Structure and Inflation Protection - Vici Properties has an average lease length of 40 years, significantly longer than most net lease REITs [7] - Currently, 42% of its rent is protected by inflation-linked rent escalators, with plans to increase this to at least 90% by 2035 [8] Future Growth Potential - While there is a limit to the number of casinos Vici Properties can acquire, the increasing role of inflation-linked leases provides a solid foundation for future growth [9] - The rent roll from casinos is expected to grow reliably, offering a long runway for dividend growth for investors [9]