VICI Properties Inc.

Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Vici Properties second quarter 2023 earnings conference call. At this time, all participants are in listening mode. Please note that this conference call is being recorded today, July 27th, 2023. And I'll turn the call over to Samantha Gallagher, General Counsel with Vici Properties.

Thank you, Operator, and good morning. Everyone should have access to the company's second quarter 2023 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, intends, 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 condition. 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 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 our counterparties discussed on this call, please refer to the respective company's public filings with the SEC. 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 Moira McCluskey, Senior Vice President of Capital Markets. Ann 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 Ann.

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. Over 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 VG team is conducting this call from Canyon Ranch Lenox in the beautiful Berkshires in Massachusetts. The key elements of our expanded Canyon Ranch partnership are Vici 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 Vichy'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 Vichy owning the resort real estate under a long-term triple net lease. Canyon Ranch has nearly 45 years of operating history. It serves a highly affluent clientele that invests vigorously through all cycles in medical and holistic life enhancement experiences and services. With only two established destination resort locations, We believe Canyon Ranch is positioned to significantly expand its clientele and its geography, domestically and internationally. We are investing in Canyon Ranch to help fund and energize that expansion, gaining through our partnership the opportunity to fund the acquisition and integration of new Canyon Ranch resorts. Under the leadership of CEO Jeff Kooster, the Canyon Ranch team is poised to grow its brand reach and network breadth, both programmatically and geographically. And of all the elements of our expanded partnership with Canyon Ranch, John Goff, Canyon Ranch's owner, and I are most excited about network expansion in the years ahead. Both John Goff and I believe that the conventional resort sector could see elements of distress in the next few years, less to do with operating performance and more to do with refinancing constriction. As we have pointed out in our transaction deck, which can be found at www.vgproperties.com, More than $37 billion of resort and hotel CMBS financing will come due from 2024 through 2028. And I should point out that that's only a fraction of the overall mortgage financing on US hotels and resorts during this period. We believe that within those billions of dollars are resorts that could meet Canyon Ranch's conversion criteria. The conversion of a conventional resort to a Canyon Ranch resort has the potential to be transformative thanks to the capital and operating dynamics of the Canyon Ranch economic model. The Canyon Ranch model centers on maximizing the guest experience of space, indoors and out, and maximizing the guest experience of time through Canyon Ranch's holistic wellness and life enhancement offerings. This maximization of experiences leads to a revenue intensity within the Canyon Ranch model that surpasses the economic intensity of a conventional resort. potentially giving Canyon Ranch and Beachy competitive advantage in acquiring and realizing value out of resort locations meeting our criteria. I believe our growth opportunity with Canyon Ranch is a generational opportunity in multiple senses of generational. Wellness is a secular growth trend that is multi-generational in its consumer profile and generational in terms of its secular outlook and growth opportunity. and Canyon Ranch Resorts are real estate built to last for generations. At Vichy, we invest in partnerships and real estate assets that will preserve and grow value for many generations to come. As you look across the spectrum of S&P 500 REITs, ask yourself, is the real estate of high quality and generational durability real? And does the real estate enjoy the benefit of cultural and demographic tailwinds that will sustain and grow the value of the real estate for generations to come? With Vici, I believe you get high-quality, enduring real estate occupied by operators serving multiple generations of customers for generations to come. We believe our expanded partnership with Canyon Ranch is a superb example of this value proposition. With that, over to you, John Payne.