VICI Properties Inc.

Good day, ladies and gentlemen. Thank you for standing by. Welcome to the Vichy Properties Second Quarter 2021 Earnings Conference Call. At this time, all participants are in listen-only mode. Please note that this conference call is being recorded today, July 29, 2021. I will now turn the call over to Samantha Gallagher, General Counsel with Vichy Properties.

Thank you, Operator, and good morning. Everyone should have access to the company's Second Quarter 2021 earnings release and supplemental information. The release and supplemental information can be found in the investor section of the VG Properties website at www.vgproperties.com. Some of our comments today will be forward-looking statements within the meaning of the federal securities laws. Forward-looking statements, which are usually identified by the use of words such as will, believe, expect, should, guidance, intend, outlook, projects, or other similar phrases are subject to numerous risks and uncertainties that could cause actual results to differ materially from what we expect. Therefore, you should exercise caution in interpreting and relying on them. I refer you to the company's SEC filings for a more detailed discussion of the risks that could impact future operating results and financial conditions. During the call, we will discuss certain non-GAAP measures, which we believe can be useful in evaluating the company's operating performance. These measures should not be considered in isolation or as a substitute for our financial results prepared in accordance with GAAP. A reconciliation of these measures to the most directly comparable GAAP measure is available on our website in our second quarter 2021 earnings release and our supplemental information. Hosting the call today, we have Ed Petoniak, Chief Executive Officer, John Payne, President and Chief Operating Officer, David Kieske, Chief Financial Officer, Gabe Wasserman, Chief Accounting Officer, and Danny Deloy, Vice President of Finance. Ed 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.

Thanks, Samantha. Good morning, everybody, and thanks for joining us on today's call. We're excited to talk about our quarter. John will provide an update on the environment for our operating partners, and David will summarize the outstanding growth that our second quarter results represent and briefly address our exciting new financing partnership with Great Wolf Resorts. But first, I want to address a topic we've talked a lot about at VT since VT's emergence in the fall of 2017, and that's the topic of real estate asset class institutionalization. At VT, we've been saying since day one in October of 2017 that gaming real estate deserves to be, and we believe is proving to be, the next great institutionalization story in American commercial real estate. When we talk about real estate asset class institutionalization, we're talking about the process of institutional capital determining that an asset class is or isn't worthy of their investments. worthy based on the quality and demand characteristics of the real estate, worthy based on the quality of the occupant's business and its credit. This determination process requires learning, and learning takes time and hard work. Most active asset management shops do not have a lot of excess analytical capacity or excess time to dig deep on new asset sectors. And there's no question that it's active managers who pioneer investment in the listed equities of new real estate asset classes. Where active managers go, index managers follow. Active institutional real estate investment capital has had to do a lot of new learning over the last 10 years for real estate investment sectors as varied as cell towers, data centers, final mile logistics, single family rental homes, manufactured housing, medical office and labs, and of course, gaming. In some of these asset classes, institutional investors have the advantage of already knowing the underlying tenants, either because the tenants already occupied other well-established real estate asset classes or because the tenants included America's biggest investment companies. In the case of gaming real estate, many investors, especially dedicated REIT investors, were starting from square one in understanding gaming operators as tenants and, ultimately, as real estate leasing credits. For that reason, our first few years at Beachy were largely focused on helping investors, both dedicated degree and generalist investors, understand our tenants' businesses, their marketplaces, their economics, their balance sheets, their outlooks, their resilience, and their overall creditworthiness. The very positive news is that gaming operators, as real estate tenants, have proven themselves to be highly resilient, place-based leisure operators through the COVID-19 pandemic and beneficiaries of the secular tailwind that sports betting represents. With our operators fully validated as an institutional quality tenant, as we believe they are, I want to turn the focus to the other key dimension of gaming real estate's institutionalization dynamic, and that's the quality of our real estate assets as real estate, as physical constructions. And let's start with scale. Our assets are big, really big. Post Forma, for our Venetian transaction, Vici owns 63 million square feet of built real estate And with 28 properties, our average property measures 2.3 million square feet. Compare that to the largest conventional triple net reef, where the average owned store measures 17,000 square feet. So again, that's 2.3 million square feet compared to 17,000 square feet. And why does scale matter? Because large scale tends to correlate to spatial complexity, multifunctionality, abundant reprogramming capacity, and high replacement costs, all of which add to mission criticality. Gaming operators can't simply relocate to the nearest slab on grade filled up box. Our real estate isn't where in and out transactions happen. Our real estate is where experiences happen within built environments that aren't built simply to lease but built to last. These big buildings and the ample land parcels around them also create an opportunity for incremental capital investment for our tenants and potentially for us. And that kind of incremental same store capital investment opportunity isn't likely to be available in the typical smaller box owned by a triple net REIT. The only other asset classes that combine this kind of scale with high-quality finish and indispensability are Class A office and Class A malls. But in the case of gaming real estate, investors can own large-scale and high-quality indispensable assets in a triple net lease structure. The benefits of transparency and cash flow predictability is the triple net structure inherently offers. Our big assets also produce big rent. Our average annual rent per property pro forma for the Venetian closing will be $55 million. In comparison, rent per store at the largest conventional triple net REIT is $260,000 based on public filings. Again, $55 million versus $260,000. By a long margin, we believe gaming real estate assets produce the highest rent per property among triple net REITs. This concentration of value in large assets may mean concentration of risk, but we believe this risk is offset by the high quality of these assets. we would rather have value concentrated in high-quality non-commodity assets than dispersed across conventional commodity triple net boxes. Another essential institutional characteristic of game or real estate is lease duration. VCH's weighted average lease duration right now is approximately 34 years, and the Venetian lease, upon closing, will effectively be 50 years in duration, including renewal options. And in the case of Vici, these long leases include rent escalation and pro forma for the Venetian closing, 95% of our rent roll will have CPI kickers. These key characteristics of Vici's gaming real estate, scale, quality, indispensability, long life, lease length, and inflation mitigation, make gaming real estate what we believe is superior investment for all investors seeking total return. But these characteristics, we believe, are especially valuable for investors who must manage long-dated liabilities. When you combine the long-lived nature of our assets with our long-dated leases, we offer a truly long-dated income-producing asset to offset those long-dated liabilities. All of these investment characteristics of gaming real estate give us great confidence when it comes to expressing our fundamental belief that gaming real estate is the highest quality, largest scale real estate that can currently be owned within a triple net structure. I'll repeat our belief. Gaming real estate is the highest quality, largest scale real estate that can currently be owned within a triple net structure. Consider the choice between Caesars Palace, Las Vegas, a 9 million square foot asset on 82 acres on the Las Vegas Strip, the most dynamic experiential street in America, or a discount store that sits on a fraction of an acre on a secondary road in a secondary market. You can decide which you prefer. And with that, I'll turn it over to John Payne. John?