Vici Properties, with its robust portfolio, stands among the top owners of gaming, hospitality, and entertainment hotspots across the nation. Its real estate holdings feature some of the most well-known casinos on the Las Vegas Strip, including Caesars Palace and The Venetian Resort. These properties generate remarkably stable rental income, thanks in large part to long-term triple net leases with their tenants. This setup enables Vici Properties, a real estate investment trust (REIT), to offer an attractive dividend yield, which is currently at 5.6%.
Despite already being a dominant force in experiential real estate, Vici Properties is not resting on its laurels. Last year, the company seized numerous opportunities to deploy capital, enhancing its revenue streams for investors. This trend looks set to continue into this year, paving the way for potential growth in the REIT’s already impressive dividend.
Vici Properties recently shared its financial outcomes for the fourth quarter and the full year of 2024. The figures were promising; the REIT reported $2.4 billion, or $2.26 per share, in adjusted funds from operations (FFO), marking increases of 8.4% and 5.1%, respectively. These strong results enabled the company to boost its dividend by 4.2% last year, marking the seventh successive raise since going public in 2018. On an annual basis, Vici’s dividend growth of 7% far outpaces the 2.2% average seen among other REITs focused on net lease real estate.
This success is partly driven by rising rental income, with 40% of its leases tied to inflation. In an era of elevated inflation, the REIT benefits from notable rental increases on these properties.
Additionally, Vici Properties undertook $1.1 billion of new investments last year, achieving an impressive average initial yield of 8.1%. Among these ventures:
- Homefield: A deal to provide a construction loan up to $105 million for the development of a Margaritaville Resort in Kansas City was made, along with options to purchase related facilities.
- The Venetian Resort, Las Vegas: Vici Properties committed up to $700 million for renovation efforts through a partner property growth fund strategy, leading to increased rent agreements aligned with the investment.
- Great Wolf Resorts: The REIT initiated a $250 million mezzanine loan supported by a collection of nine properties.
These investments not only bolster the company’s income but also pave the way for future growth. Looking ahead to 2025, Vici Properties continues its momentum with innovative investment strategies. Establishing a strategic alliance with Cain and Eldridge Industries, the REIT’s inaugural venture is a $300 million mezzanine loan for the One Beverly Hills development—a mixed-use project featuring a luxurious Aman Hotel, high-end retail outlets, and botanical gardens.
Vici’s strategy of relationship-driven investments promises further opportunities. It aims to collaborate with Cain and Eldridge to explore future experiential investment ventures. The REIT also holds acquisition options for various properties, courtesy of sale-leaseback transactions with partners like Homefield. Furthermore, it can extend funding for property enhancements, such as those at The Venetian Resort, and continue supporting partners like Great Wolf Resorts with much-needed capital.
All these factors contribute to Vici Properties being a compelling choice for growth and income. It consistently delivers investors a profitable and upward-trending income stream. While already a leader, its ongoing expansion efforts suggest continued portfolio and dividend growth, making it a strong long-term investment for those eyeing rising passive income and capital appreciation.
