VICI's Strategic Diversification And GLPI's Future Acquisitions: Goldman Sachs Weighs Investor Sentiments

Goldman Sachs analyst Caitlin Burrows disclosed investor feedback related to both VICI Properties Inc VICI and Gaming and Leisure Properties Inc GLPI acquisition opportunities and other activities.

VICI: The analyst shared investor feedback on the already completed $432.9 million sale-leaseback transaction with Bowlero Corp BOWL.

The analyst said those more constructive on the deal noted that Bowlero is a strong operator and appreciated the company's potential to complete additional property acquisitions. The investor says that as the deal was completed with an investment spread of at least 100 bps, it will be fit for VICI.

Also, Burrows said that the investors queried that if the spread were higher vs. the minimum of 100bps, the bowling alley locations would have been less of a unique destination without the high revenue generation per location.

The analyst writes that beyond the Bowlero deal, VICI has been able to further expand outside the gaming industry by offering construction financing to Kalahari, acquiring the leasehold interest of Chelsea Piers, and expanding its partnership with Cabot, all within Q4 FY23.

The analyst projects VICI to reach AFFOPS growth of 11.6% in 2023 and expects the non-gaming exposure to increase (slowly) going forward, given its activity outside of gaming. 

GLPI: The analyst says the company has limited visibility into future acquisition volumes and timing.

The analyst heard mixed responses on whether investors preferred GLPI as a pure play gaming REIT or VICI as a gaming REIT that it is now diversifying its end use vs. traditional net lease.

The analyst has rated VICI as Buy and GLPI as Neutral. 

Price Action: VICI shares are trading lower by 0.10% at $31.39 and GLPI shares are up 0.62% at $48.73 on the last check Friday. 

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