VICI Properties closed at $23.76 on October 23, 2026: 9.7 times the midpoint of its 2026 cash-earnings guidance, 0.90 times book value, a 7.7% dividend yield, 16% lower this year. It says it collected 100% of its rent through 2020, and its largest tenant, Caesars, has agreed to be sold.
In 2020 the Las Vegas Strip’s gaming revenue fell 43%. VICI says it collected every dollar of its rent, in cash and on time, and raised its dividend that September.This workfile does five things. It sets out what VICI owns and what each tenant pays (section 1). It records 2020, the one stress the leases have been through (section 2). It lists what moved the price this year, which was partly interest rates and partly Caesars (section 3). It puts the valuation measures on one page, using the ones a property company is read by (sections 4 and 5). And it sets out what is known and not known about the Caesars sale and about VICI’s debt (sections 6 to 9).
A landlord whose leases run 39.6 years counting renewal options, with rent that rises every year, priced below book value and at 9.7 times cash earnings. What happens to the Caesars regional lease, and where interest rates go, are not answered by any filing. The position taken here rests on the leases and the 2020 record.
VICI owns 103 properties: 63 gaming and 40 other experiential, rented to 16 tenants under 20 lease agreements. All are occupied. Annualized real-estate rent is $3,312.2 million, or $3,597.9 million counting income on loans. The weighted average lease term is 39.6 years, counting renewal options. Most of the leases are triple-net, meaning the tenant pays the property taxes, insurance and upkeep. Caesars and MGM guarantee all the lease payments of their operating tenants.
| Lease | Assets | Rent, $M | Term | Expires | Escalator |
|---|---|---|---|---|---|
| Caesars, regional and Joliet | 16 | 740.5 | 18 years, four 5-year renewals | July 31, 2035 | Greater of 2% or CPI; variable rent in lease years 11 and 16 |
| Caesars, Las Vegas | 2 | 505.7 | 18 years, four 5-year renewals | July 31, 2035 | Same; $35M of Octavius Tower rent is not escalated |
| MGM, master lease | 10 | 736.2 | 25 years, three 10-year renewals | April 30, 2047 | 2% in years 2 to 10, then the greater of 2% or CPI, capped at 3% |
| MGM Grand and Mandalay Bay | 2 | 328.8 | 30 years, two 10-year renewals | February 28, 2050 | 2% in years 2 to 15, then the greater of 2% or CPI, capped at 3% |
| Venetian | 1 | 308.7 | 30 years, two 10-year renewals | about February 2052 (derived) | Greater of 2% or CPI, capped at 3% |
| Hard Rock, Mirage | 1 | 95.5 | 25 years, three 10-year renewals | about December 2047 (derived) | 2% in years 2 to 10, then CPI, capped at 3% |
| Golden | 7 | 87.0 | 30 years, four 5-year renewals | about April 2056 (derived) | 2% from lease year 3 |
Sources: VICI Q2 2026 10-Q, lease note (XBRL pages R16 and R53), and the Q2 supplemental (slides 14, 19 and 20). The Caesars regional figure of $740.5M is before the 20% share of the Joliet property held by a partner ($730.9M after it). Expiry dates marked “derived” are computed from the start date and term. “Lease year 11” of the Caesars leases begins November 1, 2027.
Concentration, on a second basis. The 10-Q’s concentration note, which uses contractual rent and lease revenue instead of the supplemental’s rent roll, puts Caesars at 36% of contractual rent and 35% of lease revenue, MGM at 34% to 35% of contractual rent and 37% of lease revenue, and the Las Vegas Strip at 49% of lease revenue. About half of VICI’s rent therefore comes from outside the Strip, and the Strip’s history covers about half the rent roll.
VICI was formed on October 6, 2017, out of the reorganization of Caesars Entertainment Operating Company, whose plan was confirmed on January 17, 2017 (FY2017 10-K). The original Caesars leases date from that reorganization, which is worth remembering when reading section 6. VICI listed in February 2018, so it has no record from before 2018.
In 2020, casinos in Nevada and most other states closed for weeks. The Strip’s gaming revenue fell from $6.59 billion to $3.73 billion (−43.3%), then rose to $7.08 billion in 2021 (+89.6%). Across the United States, commercial casino revenue fell 31.3% to $29.98 billion, the lowest since 2003, and casinos lost 27% of their operating days (American Gaming Association).
| What VICI reported | Where |
|---|---|
| All tenants paid April 2020 rent in full; no lease modifications or concessions had been agreed. | Q1 2020 release, April 30, 2020 |
| All tenants paid May rent in full; June expected in full. | 8-K, June 1, 2020 |
| Collected 100% of rent in the second quarter and in July. | Q2 2020 release |
| “In 2020, we collected one hundred percent of our rent, in cash, on time.” Relief had not deferred or reduced rent obligations for any tenant. | Q4 2020 release; FY2020 10-K |
The relief that was given was not a rent cut. Caesars (omnibus amendment, June 1, 2020) received lower minimum capital spending for 2020 with credits usable through 2022, on condition that rent was paid. Century had its 2020 capital spending waived and some other spending deferred to the end of 2021. JACK (July 16, 2020) received covenant relief to March 31, 2022, five more years on its lease, and a delay of its rent escalator from 2021 to 2022. That delay is the closest thing to a concession in the record, and VICI does not describe it as one.
| 2019 | 2020 | |
|---|---|---|
| AFFO per share | $1.48 | $1.64 (+10.8%) |
| GAAP earnings per share | $1.24 | $1.75 |
| Dividends declared per share | $1.17 | $1.255 |
| Revolver drawn at year-end | not shown | $0 (undrawn at all four quarter-ends) |
Sources: Q4 2020 release and supplemental. GAAP earnings in 2020 include a $333.4M non-cash gain on a lease modification in the third quarter, excluded from AFFO. The dividend was raised from $0.2975 to $0.33 a quarter (+10.9%), declared September 10, 2020, and was paid in cash throughout. Equity raised in 2020 funded acquisitions, mainly the Eldorado and Caesars transaction that closed July 20, 2020 for about $3.2 billion.
What this does not show. VICI did not exist in 2008 and 2009. Nevada’s statewide gaming win fell 9.7% in 2008 and 10.4% in 2009, and US commercial casino revenue fell a milder 8.4% across 2007 to 2009 (American Gaming Association), but the leases were not tested then. 2020 was a government-ordered shutdown with a sharp recovery, which is a different kind of stress from a tenant that cannot cover its rent. I found no tenant default, lease rejection or rent cut in VICI’s filings since 2018, and every property swap I read left the total rent unchanged.
| Dates | Move | What the record shows |
|---|---|---|
| Aug 4, 2025 | $33.93 | Closing high of the last 24 months. |
| Aug 4 to Dec 31, 2025 | −17.1% | Not traced to one event. Golden Entertainment purchase announced November 6; a brokerage downgrade on November 18 (press report). |
| Mar 2 to Mar 20, 2026 | −11.6% | Rates. The 10-year Treasury yield rose from 4.05% to 4.39% over the same days, and the REIT group fell with it (Vanguard Real Estate ETF −7.5%, Realty Income −9.8%, Gaming and Leisure Properties −7.6%). |
| Apr 30, 2026 | $29.20 | Golden purchase closed (VICI). |
| May 28 to Jun 18, 2026 | −7.2% | Caesars announced its sale on May 28 (Caesars 8-K). The shares then rose to $28.52 on June 12 before falling 7.9% to June 18, with no single cause in the record. |
| Jul 29 to Jul 30, 2026 | −3.0% | Second-quarter results: GAAP earnings of $0.48 a share, AFFO of $0.62 (section 5). |
| Sep 4 to Oct 5, 2026 | −11.4% | The 10-year yield rose from 4.78% to 5.31%. The Federal Reserve raised its target range by 25 basis points to 3.75% to 4.00% on September 16 (12 to 0 vote). The REIT group fell 7% to 12% over the same stretch. |
| Oct 5, 2026 | $22.53 | Closing low. The close on October 23, 2026 is +5.5% above it and −30.0% from the high. |
Price moves are arithmetic on daily closes. Yields are the 10-year Treasury series from market data. The Federal Reserve statement is from federalreserve.gov. Peer moves are from market data over the dates shown.
Rates explain part of the fall, not all. Since August 4, 2025, VICI is down 30.0%. Over the same period Gaming and Leisure Properties, the other casino landlord, is down 16.0%, Realty Income down 1.0% and the Vanguard Real Estate ETF up 3.2% (market data, closes to October 23, 2026). In the two windows where rates moved sharply, the whole group fell together. The rest of VICI’s gap to the group is gaming and Caesars.
| Measure | Reading | Basis |
|---|---|---|
| Price | $23.76 | Close, October 23, 2026 |
| Change this year | −15.5% | From $28.12, close of Dec 31, 2025 (dividends excluded) |
| Change over twelve months | −24.4% | From $31.42, close of Oct 23, 2025 |
| AFFO per share, 2026 guidance | $2.45 to $2.47 | Q2 2026 release; the low end was raised from $2.44. AFFO is adjusted funds from operations, the cash-earnings measure VICI reports in place of net income |
| Price to AFFO | 9.7 | $23.76 / $2.46, the guidance midpoint (AFFO yield 10.4%) |
| GAAP earnings, last four quarters | $2.58 | Sum of the four filed quarters; includes non-cash credit-loss charges (section 5). Price to earnings 9.2 |
| Book value per share | $26.49 | Equity attributable to common stockholders over 1,101.1M shares, June 30, 2026 (10-Q) |
| Price to book | 0.90 | $23.76 / $26.49 |
| Dividend | $1.84 (7.7%) | $0.46 a quarter, declared September 3, 2026; payout 75% of AFFO, cover 1.34 times. 2025 distributions were $1.7475 a share: $1.7019 ordinary income (97%) and $0.0456 return of capital (VICI release, January 23, 2026) |
| Net debt to EBITDA | 4.9 | Net debt over last-quarter annualized adjusted EBITDA of $3,478M, June 30, 2026 (VICI’s definition); its stated target is 5.0 to 5.5 |
Market value of the shares is $26.2 billion (1,101 million shares at $23.76). Adding net debt of $16.9 billion gives an enterprise value of $43.1 billion. Net operating income, taken as the rent roll including loan income ($3,597.9M) less the partner’s share of Joliet rent ($9.6M, which is $740.5M less $730.9M in section 1) and 2025 general and administrative costs ($65.1M), is about $3,523M. That is an 8.2% capitalization rate: a year of operating income is 8.2% of the price paid today for the whole enterprise.
| If the properties are worth at a cap rate of | 7.0% | 7.5% | 8.0% | 8.5% |
|---|---|---|---|---|
| Net asset value per share | $30.33 | $27.29 | $24.62 | $22.27 |
Net asset value = (net operating income / cap rate − net debt) / shares outstanding. The author’s arithmetic on the Q2 2026 supplemental; it uses rent plus loan income and ignores the credit-loss allowance. The cap rate is the whole judgment. For comparison, VICI’s own Golden purchase, which closed April 30, 2026, was priced at a 7.5% cap rate, and its 2022 Venetian purchase at 6.25%, both as stated by VICI. The 10-year Treasury yield on October 23, 2026 was 5.00%, so the 8.2% implied rate sits about 3.2 percentage points above it.
At $23.76 the price equals the net asset value at an 8.2% cap rate, the rate the price itself implies; at 8.0% the value would be $24.62. The discount to the properties is small; the case rests on the 7.7% dividend and the cash earnings behind it.
The Travis Valuation page for VICI, at $23.76 and the statements for the year ended December 31, 2025, opens with a note on reading a real estate company. It tells the reader to weight AFFO, the dividend and payout, price to book and debt to EBITDA, which are the measures used in section 4, and to discount the P/E ratio, the Graham Number and the earnings-based fair values, because depreciation depresses a property company’s reported earnings. The page’s readings are set out below for completeness.
| Method on the page | Value per share |
|---|---|
| Graham Number | $38.50 |
| Graham 1962 formula | $69.04 |
| Graham 1974 formula | $50.38 |
| Earnings power value, version A (earnings over a 9% required return) | $29.00 |
| Earnings power value, version B (seven-year average earnings over the AAA bond yield) | $32.36 |
| Average | $43.86; the page reads 46% undervalued at $23.76 |
| Graham’s test | Reading |
|---|---|
| Adequate size | Pass. Market value about $26.2 billion. |
| P/E at or below 15 | Pass. 9.1 on the fiscal 2025 earnings the page uses ($2.61 a share). |
| P/B at or below 1.5 | Pass. 0.94 on the December 31, 2025 balance sheet the page uses (0.90 on the June 30 book value in section 4). |
| Current ratio | Not applicable. A REIT’s balance sheet is not split into current and long-term items. Liquidity of $2.52 billion and the covenants in section 7 do the same job. |
| Ten years of positive earnings; earnings growth over ten years; twenty years of dividends | Too early to run. VICI has eight years of filed history. Profit in each: yes. Dividend raised in each: yes (sections 4 and 5). |
None of the page’s eight warning signs is triggered: free cash flow and net income are positive; earnings per share, revenue and book value per share did not decline over three years; there is no dividend cut in the history; owner earnings are positive; and total debt does not exceed book equity. The page’s composite score is 4.2 out of 5.
| Item | What the documents say |
|---|---|
| The deal | Caesars agreed on May 27, 2026 (announced May 28) to be bought by an entity of Fertitta Entertainment for $31.00 a share in cash: about $17.6 billion including about $11.9 billion of Caesars’ debt, in Caesars’ own words. The two do not reconcile exactly: at $31.00 on about 204 million shares the equity alone is about $6.3 billion. Neither figure includes the $13.2 billion of long-term financing obligations Caesars carries for its VICI and GLPI leases. A ticking fee of $0.00715 a share a day applies if the deal has not closed by June 26, 2027. Caesars 8-K and Q2 10-Q. |
| Shareholder vote | September 22, 2026: 133,313,001 shares for, 4,276,986 against, 5,687,952 abstaining; 65.4% of shares outstanding voted for. Approved. Caesars 8-K, Item 5.07. |
| Still needed | Antitrust clearance (the FTC issued a request for more information on September 14) and gaming approvals; the state list is in a non-public schedule. A Fertitta lawyer told Nevada regulators “more than a dozen states” and nine to ten months (press). No closing date is stated in any filing. The outside date is May 27, 2027, extendable to November 27, 2027. |
| Financing | Not a condition of the deal. Committed facilities total $6.6 billion; the equity contribution is at least $2.7 billion, including rolled equity. The structure is designed to avoid triggering the change-of-control provisions in Caesars’ existing debt, so that debt stays in place. DEFM14A, filed August 26. |
| The VICI leases in the merger papers | Mentioned twice in the proxy: the forecasts assume triple-net leases with VICI and GLPI with “CPI-based annual escalators and variable rent reset mechanisms,” and an Icahn group letter of July 13 refers to “consent rights under the VICI lease.” No consent, guarantee change, rent reduction or sale-leaseback appears in any merger document read, and third-party consents are not a closing condition. The 10-Q lease note does not mention the sale. The lease exhibits themselves are not covered here. |
| Who guarantees the lease | Caesars Entertainment, Inc. is the parent and guarantor of the lessee, CEOC, LLC (VICI Q2 supplemental). It survives as a wholly owned subsidiary of the buyer. No guarantee from the buyer’s parent is shown. |
| Caesars Q2 2026, $M | 2026 | 2025 (change) |
|---|---|---|
| Las Vegas adjusted EBITDA | 410 | 469 (−12.6%) |
| Las Vegas revenue | 1,017 | 1,054 (−3.5%) |
| Regional adjusted EBITDA | 488 | 439 (+11.2%) |
| Regional revenue | 1,570 | up 9.4% |
| Consolidated adjusted EBITDA | 920 | 955 (−3.7%) |
Source: Caesars Q2 2026 release. Regional revenue includes Caesars Windsor, acquired March 3, 2026, which is leased from the Ontario lottery body and is not a VICI property, so the regional increase is not a like-for-like gain. Debt of $11.8 billion, cash of $965M and liquidity of $2.9 billion at June 30. Cash paid for rent on the GLPI and VICI leases was $686M in the first half of 2026.
The rent cover on the regional lease is not published. Neither VICI nor Caesars gives a coverage ratio for it. On company-wide numbers from the proxy projections, Caesars’ earnings before rent are about 2.6 times its VICI and GLPI rent combined (my arithmetic); the Las Vegas properties lift that average, so the regional lease is tighter. An analyst note from October 2 relaying remarks by VICI management at an industry conference describes the regional cushion as thin (press report). VICI’s annual report says it has held preliminary discussions with Caesars about that lease. On its July 30 call VICI’s chief executive said a conversation about the lease will take place at some point as Caesars sets up its new ownership, and that VICI collects every dollar of rent in the meantime (third-party transcript).
| The rent steps | Date | What it does |
|---|---|---|
| Annual escalator | November 1, 2026 | The greater of 2% or CPI on the Caesars leases (lease year 10 begins). On $1,211M of Caesars rent excluding the Octavius Tower rent, 2% is about $24M a year and 3% about $36M (my arithmetic). |
| First variable-rent reset | November 1, 2027 | The rent is 80% base and 20% variable. The variable part moves by 4% of the change in the casinos’ revenue, comparing the average of lease years 8 to 10 with years 5 to 7. The same reset recurs in lease year 16. |
| June 30, 2026 | |
|---|---|
| Total debt, face value | $17,218.4M |
| Cash | $288.1M |
| Net debt | $16,930.4M |
| Weighted average rate | 4.60% coupon; 4.454% effective |
| Weighted average maturity; fixed-rate share | 5.5 years; 98.4% |
| Liquidity | $2.52 billion ($2,231.6M available on the revolver plus cash) |
| Ratings | Baa3 / BBB- / BBB-, all stable |
Source: VICI Q2 2026 10-Q (debt note) and supplemental (slides 16 and 17). The revolver is drawn in Canadian dollars and sterling only.
| August 2026 offering | Amount | Coupon | Price | Maturity |
|---|---|---|---|---|
| Senior notes | $900M | 5.400% | 99.966 | October 15, 2031 |
| Senior notes | $850M | 5.750% | 98.375 | October 15, 2036 |
The proceeds were to repay $480.5 million of 4.500% notes due September 2026, $19.5 million of 4.500% notes due September 1, 2026, and $1.25 billion of 4.250% notes due December 2026. The new coupons are higher by about 1.0 to 1.5 percentage points. By my arithmetic that adds about $22 million a year of interest, roughly $0.02 a share. In 2027, $750 million of 5.750% notes fall due on February 1 and $750 million of 3.750% notes on February 15. The covenants have wide room: net debt to adjusted assets 34% against a 60% limit, secured debt 6% against 40%, interest cover 4.1 times against 1.5, and unencumbered assets 319% of unsecured debt against 150%.
At year-end 2025 VICI’s debt was 99.2% fixed, and a one-percentage-point move in rates changed its annual interest by about $1.4 million (annual report, Item 7A).
The author has not set pass-or-fail figures for this position. These are the dated events the documents put in front of it.
| Date | Event |
|---|---|
| Oct 28, 2026 | Third-quarter results after the close; conference call Thursday October 29 at 10:00 a.m. ET (VICI release, September 30). |
| Nov 1, 2026 | Caesars lease escalator (section 6). |
| Early December | Board declares the fourth-quarter dividend. Last year it was declared on December 4. |
| Not yet dated | Closing of the Caesars sale, and any announcement about the regional lease. |
| Feb 1 and Feb 15, 2027 | $750 million of notes due on each date. |
| Nov 1, 2027 | First variable-rent reset on the Caesars leases. |
VICI came out of a 15-name list screened between October 12 and 18, cut to five on valuation, history and balance-sheet tests, then to one. The other four finalists are listed with the reason each was not the pick. These are reasons for this week’s choice, not recommendations about those companies.
The author owns shares of VICI Properties.
Stamped to the date of value above. Events after October 23, 2026 are not reflected unless an addendum is added.