VICI Properties' Q2 2025: Navigating Contradictions in Investment Strategies and Market Dynamics

Tribal sale-leasebacks and investment strategy, macroeconomic impacts on construction budgets and timing, lack of high-quality real estate acquisition opportunities, development funding and recycling capital, impact of iGaming on capital deployment are the key contradictions discussed in VICI Properties' latest 2025Q2 earnings call.



Dividend and Total Return Focus:
- VICI Properties emphasized the importance of its dividend in creating value for shareholders, contributing approximately 16% of total returns from 1936 to 2021.
- The company believes a rising contribution to total return from dividends is compelling due to aging demographics and sticky inflation risks, aligning with the analysis of Savita Subramanian from BofA.

Financial Performance and Guidance:
- VICI reported FFO per share of $0.60, an increase of 4.9% compared to the previous quarter, with an adjusted EBITDA growth rate over 5x higher than the average projected rate for net lease REITs.
- The company raised its 2025 AFFO guidance to between $2.5 billion and $2.52 billion or per diluted share between $2.35 and $2.37, representing a 4.4% year-over-year growth in AFFO per share.

Investment in Gaming and Experiential Assets:
- VICI announced investments in gaming projects like the North Fork Mono Casino Resort and the One Beverly Hills development, and reported no debt maturities until the second half of 2026.
- The investments are part of the company's strategy to partner with best-in-class operators and leverage its capital to support growth, with a focus on creating long-term relationships in both gaming and non-gaming sectors.

Las Vegas Market and Tenant Performance:
- VICI's Las Vegas real estate portfolio is positioned well despite temporary moderation in visitation and gross gaming revenue, with operators adjusting to attract lower-end consumers.
- The company highlighted the resilience of higher-end consumers and the impact of long-term leases, corporate guarantees, and the group segment's forward booking visibility, which provide insulation from cyclical fluctuations.